ATKR filing — read by section

Item 8. Financial Statements and Supplementary Data

Item 8. Financial Statements and Supplementary Data 
 
 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 
 To the shareholders and the Board of Directors of Atkore International Group Inc. 
 Opinion on the Financial Statements 
 We have audited the accompanying consolidated balance sheets of Atkore International Group Inc. and subsidiaries (the "Company") as of September 30, 2020 and 2019, the related consolidated statements of operations, comprehensive income, cash flows, and shareholders' equity, for each of the three years in the period ended September 30, 2020, and the related notes and the schedules listed in the Index at Part IV, Item 15 (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of September 30, 2020 and 2019, and the results of its operations and its cash flows for each of the three years in the period ended September 30, 2020, in conformity with accounting principles generally accepted in the United States of America. 
 We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of September 30, 2020, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated November 19, 2020, expressed an unqualified opinion on the Company's internal control over financial reporting. 
 Change in Accounting Principle 
 As discussed in Note 2 to the financial statements, the Company has changed its method of accounting for leases in 2020 due to the adoption of Financial Accounting Standards Board Accounting Standards Codification 842, Leases , using the modified retrospective method. 
 Basis for Opinion 
 These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the US federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. 
 We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. 
 Critical Audit Matter 
 The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. 
 Goodwill - Refer to Notes 1 and 14 to the financial statements 
 Critical Audit Matter Description 
 The Company’s evaluation of goodwill for impairment involves the comparison of the fair value of each reporting unit to its carrying value. The Company’s goodwill balance was $188 million as of September 30, 2020. The Company considers three valuation approaches: (a) the income approach; (b) the guideline public company method; and (c) the comparable transaction 
 
 45 

 method to estimate the fair value of its reporting units. With respect to the income approach, management makes significant estimates and assumptions related to forecasts of future cash flows, including revenue growth, earnings before interest, income taxes, depreciation, and amortization (EBITDA) margins, and discount rates. The fair value of all reporting units exceeded their respective carrying values and, therefore, no impairment was recognized for the year ended September 30, 2020. 
 We identified goodwill for the Company’s Europe, Middle East, and Africa reporting unit as a critical audit matter because the excess fair value over carrying value is low and minor changes to management’s estimates and assumptions could result in an impairment being recognized. This required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists, when performing audit procedures to evaluate the reasonableness of management’s estimates and assumptions related to forecasts of revenue growth, EBITDA margins, and the selection of the discount rate. 
 How the Critical Audit Matter Was Addressed in the Audit 
 Our audit procedures related to the forecasts of revenue growth and EBITDA margins (“forecasts”), and the selection of the discount rate for this reporting unit included the following, among others: 
 · We tested the design and operating effectiveness of controls over the annual and interim goodwill impairment assessments, including those over the forecasts and the selection of the discount rate. 
 · We evaluated management’s ability to accurately forecast by comparing actual results to management’s historical forecasts. 
 · We performed inquiries of the Company’s executives and those outside of the accounting and finance functions to evaluate the forecasts. 
 · We evaluated the reasonableness of management’s forecasts by comparing the forecasts to: 
 · Historical results. 
 · Internal communications to management and the Board of Directors. 
 · Industry reports. 
 · With the assistance of our fair value specialists, we evaluated the reasonableness of the (1) valuation methodology and (2) discount rate by: 
 · Evaluating whether the fair value models being used are appropriate considering the Company’s circumstances and valuation premise identified. 
 · Testing the source information and the mathematical accuracy of the calculations underlying the determination of the discount rate and developing a range of independent estimates and comparing those to the discount rate selected by management. 
 /s/ Deloitte & Touche LLP 
 
 Chicago, Illinois 
 November 19, 2020 
 
 We have served as the Company's auditor since 2011. 
 
 46 

 ATKORE INTERNATIONAL GROUP INC. 
 CONSOLIDATED STATEMENTS OF OPERATIONS 
 
 Fiscal Year Ended 
 
 (in thousands, except per share data) 
 Note 
 
 September 30, 2020 
 
 September 30, 2019 
 
 September 30, 2018 
 
 Net sales 
 
 $ 
 1,765,421 
 
 $ 
 1,916,538 
 
 $ 
 1,835,139 
 
 Cost of sales 
 
 1,274,107 
 
 1,419,338 
 
 1,397,055 
 
 Gross profit 
 
 491,314 
 
 497,200 
 
 438,084 
 
 Selling, general and administrative 
 
 219,496 
 
 240,660 
 
 226,282 
 
 Intangible asset amortization 
 14 
 
 32,262 
 
 32,876 
 
 32,104 
 
 Operating income 
 
 239,556 
 
 223,664 
 
 179,698 
 
 Interest expense, net 
 
 40,062 
 
 50,473 
 
 40,694 
 
 Loss on extinguishment of debt 
 15 
 
 273 
 
 — 
 
 — 
 
 Other income, net 
 8 
 
 ( 2,777 
 ) 
 
 ( 11,478 
 ) 
 
 ( 27,348 
 ) 
 
 Income before income taxes 
 
 201,998 
 
 184,669 
 
 166,352 
 
 Income tax expense 
 9 
 
 49,696 
 
 45,618 
 
 29,707 
 
 Net income 
 
 $ 
 152,302 
 
 $ 
 139,051 
 
 $ 
 136,645 
 
 Net income per share 
 
 Basic 
 10 
 
 $ 
 3.15 
 
 $ 
 2.91 
 
 $ 
 2.59 
 
 Diluted 
 10 
 
 $ 
 3.10 
 
 $ 
 2.83 
 
 $ 
 2.48 
 
 See Notes to Consolidated Financial Statements 
 
 47 

 ATKORE INTERNATIONAL GROUP INC. 
 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME 
 
 Fiscal Year Ended 
 
 (in thousands) 
 Note 
 
 September 30, 2020 
 
 September 30, 2019 
 
 September 30, 2018 
 
 Net income 
 
 $ 
 152,302 
 
 $ 
 139,051 
 
 $ 
 136,645 
 
 Change in foreign currency translation adjustment 
 
 6,087 
 
 ( 7,490 
 ) 
 
 ( 2,853 
 ) 
 
 Change in unrecognized (loss) income related to pension benefit plans 
 
 ( 6,943 
 ) 
 
 ( 15,437 
 ) 
 
 4,397 
 
 Total other comprehensive (loss) income 
 11 
 
 ( 856 
 ) 
 
 ( 22,927 
 ) 
 
 1,544 
 
 Comprehensive income 
 
 $ 
 151,446 
 
 $ 
 116,124 
 
 $ 
 138,189 
 
 See Notes to Consolidated Financial Statements 
 
 48 

 ATKORE INTERNATIONAL GROUP INC. 
 CONSOLIDATED BALANCE SHEETS 
 
 (in thousands, except share and per share data) 
 Note 
 
 September 30, 2020 
 
 September 30, 2019 
 
 Assets 
 
 Current Assets: 
 
 Cash and cash equivalents 
 
 $ 
 284,471 
 
 $ 
 123,415 
 
 Accounts receivable, less allowance for doubtful accounts of $3,168 and $2,608, respectively 
 
 298,242 
 
 315,353 
 
 Inventories, net 
 12 
 
 199,095 
 
 226,090 
 
 Prepaid expenses and other current assets 
 
 46,868 
 
 34,679 
 
 Total current assets 
 
 828,676 
 
 699,537 
 
 Property, plant and equipment, net 
 13 
 
 243,891 
 
 260,703 
 
 Intangible assets, net 
 14 
 
 255,349 
 
 285,684 
 
 Goodwill 
 14 
 
 188,239 
 
 186,231 
 
 Right-of-use assets, net 
 2 
 
 38,692 
 
 — 
 
 Deferred income taxes 
 9 
 
 687 
 
 577 
 
 Other long-term assets 
 
 2,991 
 
 4,263 
 
 Total Assets 
 
 $ 
 1,558,525 
 
 $ 
 1,436,995 
 
 Liabilities and Equity 
 
 Current Liabilities: 
 
 Accounts payable 
 
 $ 
 142,601 
 
 $ 
 150,681 
 
 Income tax payable 
 
 1,360 
 
 2,157 
 
 Accrued compensation and employee benefits 
 
 32,836 
 
 35,770 
 
 Customer liabilities 
 
 35,802 
 
 44,983 
 
 Lease obligations 
 2 
 
 15,786 
 
 — 
 
 Other current liabilities 
 
 47,785 
 
 53,943 
 
 Total current liabilities 
 
 276,170 
 
 287,534 
 
 Long-term debt 
 15 
 
 803,736 
 
 845,317 
 
 Long-term lease obligations 
 2 
 
 24,143 
 
 — 
 
 Deferred income taxes 
 9 
 
 22,525 
 
 19,986 
 
 Other long-term tax liabilities 
 
 1,619 
 
 3,669 
 
 Pension liabilities 
 5 
 
 40,023 
 
 34,509 
 
 Other long-term liabilities 
 
 11,899 
 
 13,044 
 
 Total Liabilities 
 
 1,180,115 
 
 1,204,059 
 
 Equity: 
 
 Common stock, $0.01 par value, 1,000,000,000 shares authorized, 47,407,023 and 46,955,163 shares issued and outstanding, respectively 
 
 475 
 
 471 
 
 Treasury stock, held at cost, 260,900 and 260,900 shares, respectively 
 
 ( 2,580 
 ) 
 
 ( 2,580 
 ) 
 
 Additional paid-in capital 
 
 487,223 
 
 477,139 
 
 Accumulated deficit 
 
 ( 64,154 
 ) 
 
 ( 200,396 
 ) 
 
 Accumulated other comprehensive loss 
 11 
 
 ( 42,554 
 ) 
 
 ( 41,698 
 ) 
 
 Total Equity 
 
 378,410 
 
 232,936 
 
 Total Liabilities and Equity 
 
 $ 
 1,558,525 
 
 $ 
 1,436,995 
 
 See Notes to Consolidated Financial Statements 
 
 49 

 ATKORE INTERNATIONAL GROUP INC. 
 CONSOLIDATED STATEMENTS OF CASH FLOWS 
 
 Fiscal year ended 
 
 (in thousands) 
 Note 
 
 September 30, 2020 
 
 September 30, 2019 
 
 September 30, 2018 
 
 Operating activities 
 
 Net income 
 
 $ 
 152,302 
 
 $ 
 139,051 
 
 $ 
 136,645 
 
 Adjustments to reconcile net income to net cash provided by operating activities 
 
 Gain on sale of a business 
 
 — 
 
 — 
 
 ( 27,575 
 ) 
 
 Depreciation and amortization 
 
 74,470 
 
 72,347 
 
 66,890 
 
 Amortization of debt issuance costs and original issue discount 
 
 1,876 
 
 1,804 
 
 1,542 
 
 Deferred income taxes 
 9 
 
 4,483 
 
 ( 796 
 ) 
 
 ( 9,008 
 ) 
 
 Loss on extinguishment of debt 
 15 
 
 273 
 
 — 
 
 — 
 
 Provision for losses on accounts receivable and inventory 
 
 5,014 
 
 4,656 
 
 7,241 
 
 Stock-based compensation expense 
 6 
 
 13,064 
 
 11,798 
 
 14,664 
 
 Amortization of right-of-use assets 
 2 
 
 14,803 
 
 — 
 
 — 
 
 Loss on disposal of property, plant & equipment, net 
 
 3,001 
 
 — 
 
 — 
 
 Gain on purchase of business 
 3 
 
 — 
 
 ( 7,384 
 ) 
 
 — 
 
 Other adjustments to net income 
 
 ( 844 
 ) 
 
 ( 1,938 
 ) 
 
 2,023 
 
 Changes in operating assets and liabilities, net of effects from acquisitions 
 
 Accounts receivable 
 
 16,920 
 
 6,026 
 
 ( 44,419 
 ) 
 
 Inventories 
 
 24,642 
 
 9,002 
 
 ( 36,528 
 ) 
 
 Prepaid expenses and other current assets 
 
 ( 11,164 
 ) 
 
 ( 3,054 
 ) 
 
 ( 1,762 
 ) 
 
 Accounts payable 
 
 ( 5,835 
 ) 
 
 ( 21,981 
 ) 
 
 31,667 
 
 Income taxes 
 
 ( 6,261 
 ) 
 
 4,511 
 
 ( 3,179 
 ) 
 
 Accrued and other liabilities 
 
 ( 32,942 
 ) 
 
 ( 2,782 
 ) 
 
 7,243 
 
 Other, net 
 
 ( 5,040 
 ) 
 
 ( 1,566 
 ) 
 
 259 
 
 Net cash provided by operating activities 
 
 248,762 
 
 209,694 
 
 145,703 
 
 Investing activities 
 
 Capital expenditures 
 
 ( 33,770 
 ) 
 
 ( 34,860 
 ) 
 
 ( 38,501 
 ) 
 
 Insurance proceeds for properties, plant and equipment 
 
 2,337 
 
 — 
 
 — 
 
 Proceeds from sale of properties, plant and equipment 
 
 3,920 
 
 80 
 
 349 
 
 Proceeds from divestiture of business 
 
 — 
 
 — 
 
 42,631 
 
 Acquisitions of businesses, net of cash acquired 
 3 
 
 — 
 
 ( 97,999 
 ) 
 
 ( 3,467 
 ) 
 
 Other, net 
 
 — 
 
 ( 322 
 ) 
 
 1,502 
 
 Net cash (used for) provided by investing activities 
 
 ( 27,513 
 ) 
 
 ( 133,101 
 ) 
 
 2,514 
 
 Financing activities 
 
 Borrowings under credit facility 
 15 
 
 — 
 
 39,000 
 
 358,000 
 
 Repayments under credit facility 
 15 
 
 — 
 
 ( 39,000 
 ) 
 
 ( 443,000 
 ) 
 
 Repayments of short-term debt 
 15 
 
 — 
 
 ( 20,980 
 ) 
 
 ( 8,150 
 ) 
 
 Issuance of long-term debt 
 15 
 
 — 
 
 — 
 
 426,217 
 
 Repayments of long-term debt 
 15 
 
 ( 40,000 
 ) 
 
 ( 40,000 
 ) 
 
 ( 1,217 
 ) 
 
 Issuance of common stock, net of taxes withheld 
 6 
 
 ( 2,972 
 ) 
 
 7,374 
 
 20,110 
 
 Repurchase of common stock 
 
 ( 15,011 
 ) 
 
 ( 24,419 
 ) 
 
 ( 411,775 
 ) 
 
 50 

 Fiscal year ended 
 
 (in thousands) 
 Note 
 
 September 30, 2020 
 
 September 30, 2019 
 
 September 30, 2018 
 
 Payments for debt financing costs and fees 
 15 
 
 ( 3,204 
 ) 
 
 — 
 
 ( 5,955 
 ) 
 
 Other, net 
 
 8 
 
 ( 155 
 ) 
 
 ( 161 
 ) 
 
 Net cash used for financing activities 
 
 ( 61,179 
 ) 
 
 ( 78,180 
 ) 
 
 ( 65,931 
 ) 
 
 Effects of foreign exchange rate changes on cash and cash equivalents 
 
 986 
 
 ( 1,660 
 ) 
 
 ( 1,342 
 ) 
 
 Increase (decrease) in cash and cash equivalents 
 
 161,056 
 
 ( 3,247 
 ) 
 
 80,944 
 
 Cash and cash equivalents at beginning of period 
 
 123,415 
 
 126,662 
 
 45,718 
 
 Cash and cash equivalents at end of period 
 
 $ 
 284,471 
 
 $ 
 123,415 
 
 $ 
 126,662 
 
 Supplementary Cash Flow information 
 
 Interest paid 
 
 $ 
 38,791 
 
 $ 
 49,879 
 
 $ 
 39,898 
 
 Income taxes paid, net of refunds 
 
 50,993 
 
 38,698 
 
 41,601 
 
 Capital expenditures, not yet paid 
 
 1,278 
 
 3,719 
 
 916 
 
 See Notes to Consolidated Financial Statements 
 
 51 

 ATKORE INTERNATIONAL GROUP INC. 
 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY 
 For the three year period ended September 30, 2020 
 
 Common Stock 
 
 Treasury Stock 
 
 Additional Paid-in Capital 
 
 Accumulated Deficit 
 
 Accumulated Other Comprehensive Income (Loss) 
 
 Total Equity 
 
 (in thousands) 
 
 Shares 
 
 Amount 
 
 Amount 
 
 Balance as of September 30, 2017 
 
 63,305 
 
 $ 
 634 
 
 $ 
 ( 2,580 
 ) 
 
 $ 
 423,232 
 
 $ 
 ( 42,433 
 ) 
 
 $ 
 ( 17,982 
 ) 
 
 $ 
 360,871 
 
 Net income 
 
 — 
 
 — 
 
 — 
 
 — 
 
 136,645 
 
 — 
 
 136,645 
 
 Other comprehensive income 
 
 — 
 
 — 
 
 — 
 
 — 
 
 — 
 
 $ 
 1,544 
 
 1,544 
 
 Stock-based compensation 
 
 — 
 
 — 
 
 — 
 
 14,664 
 
 — 
 
 — 
 
 14,664 
 
 Issuance of common stock 
 
 2,795 
 
 28 
 
 — 
 
 20,082 
 
 — 
 
 — 
 
 20,110 
 
 Repurchase of common stock 
 
 ( 19,020 
 ) 
 
 ( 190 
 ) 
 
 — 
 
 — 
 
 ( 411,585 
 ) 
 
 — 
 
 ( 411,775 
 ) 
 
 Balance as of September 30, 2018 
 
 47,080 
 
 472 
 
 ( 2,580 
 ) 
 
 457,978 
 
 ( 317,373 
 ) 
 
 ( 16,438 
 ) 
 
 122,059 
 
 Net income 
 
 — 
 
 — 
 
 — 
 
 — 
 
 139,051 
 
 — 
 
 139,051 
 
 Other comprehensive income 
 
 — 
 
 — 
 
 — 
 
 — 
 
 — 
 
 ( 22,927 
 ) 
 
 ( 22,927 
 ) 
 
 Reclassification of stranded tax benefits (1) 
 
 — 
 
 — 
 
 — 
 
 — 
 
 2,333 
 
 ( 2,333 
 ) 
 
 — 
 
 Stock-based compensation 
 
 — 
 
 — 
 
 — 
 
 11,798 
 
 — 
 
 — 
 
 11,798 
 
 Issuance of common stock 
 
 1,105 
 
 11 
 
 — 
 
 7,363 
 
 — 
 
 — 
 
 7,374 
 
 Repurchase of common stock 
 
 ( 1,230 
 ) 
 
 ( 12 
 ) 
 
 — 
 
 — 
 
 ( 24,407 
 ) 
 
 — 
 
 ( 24,419 
 ) 
 
 Balance as of September 30, 2019 
 
 46,955 
 
 471 
 
 ( 2,580 
 ) 
 
 477,139 
 
 ( 200,396 
 ) 
 
 ( 41,698 
 ) 
 
 232,936 
 
 Net income 
 
 — 
 
 — 
 
 — 
 
 — 
 
 152,302 
 
 — 
 
 152,302 
 
 Other comprehensive loss 
 
 — 
 
 — 
 
 — 
 
 — 
 
 — 
 
 ( 856 
 ) 
 
 ( 856 
 ) 
 
 ASU 2016-2 modified retrospective adoption 
 
 — 
 
 — 
 
 — 
 
 — 
 
 ( 1,053 
 ) 
 
 — 
 
 ( 1,053 
 ) 
 
 Stock-based compensation 
 
 — 
 
 — 
 
 — 
 
 13,064 
 
 — 
 
 — 
 
 13,064 
 
 Issuance of common stock 
 
 846 
 
 8 
 
 — 
 
 ( 2,980 
 ) 
 
 — 
 
 — 
 
 ( 2,972 
 ) 
 
 Repurchase of common stock 
 
 ( 394 
 ) 
 
 ( 4 
 ) 
 
 — 
 
 — 
 
 ( 15,007 
 ) 
 
 — 
 
 ( 15,011 
 ) 
 
 Balance as of September 30, 2020 
 
 47,407 
 
 475 
 
 ( 2,580 
 ) 
 
 487,223 
 
 ( 64,154 
 ) 
 
 ( 42,554 
 ) 
 
 $ 
 378,410 
 
 (1) Due to the adoption of ASU 2018-02. 
 
 See Notes to Consolidated Financial Statements 
 
 52 

 ATKORE INTERNATIONAL GROUP INC. 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
 (dollars in thousands, except share and per share data) 
 
 1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 
 
 Basis of presentation 
 
 Organization and Ownership Structure — Atkore International Group Inc. (the "Company" or "Atkore") is a leading manufacturer of Electrical Raceway products primarily for the non-residential construction and renovation markets and Mechanical Products & Solutions ("MP&S") for the construction and industrial markets. Electrical Raceway products form the critical infrastructure that enables the deployment, isolation and protection of a structure's electrical circuitry from the original power source to the final outlet. MP&S frame, support and secure component parts in a broad range of structures, equipment and systems in electrical, industrial and construction applications. 
 
 The Company was incorporated in the State of Delaware on November 4, 2010. Atkore is the sole stockholder of Atkore International Holdings Inc. ("AIH"), which in turn is the sole stockholder of Atkore International, Inc. ("AII"). 
 
 Holders of common stock are entitled to cast one vote for each share held of record on all matters submitted to a vote of the stockholders. Additionally, holders of common stock are entitled to receive, on a pro rata basis, dividends and distributions, if any, that the Company’s board of directors may declare out of legally available funds, subject to preferences that may be applicable to preferred stock, if any. 
 
 Share Repurchase Program — In August 2017, the Company's board of directors approved a share repurchase program, under which the Company may repurchase up to an aggregate amount of $ 75.0 million of its outstanding stock. As of December 28, 2018, there were no authorized repurchases remaining under the August 2017 repurchase program. 
 
 On February 5, 2019, the board of directors approved a share repurchase program, under which the Company may repurchase up to $ 50.0 million of its outstanding common stock. As of September 30, 2020, there were $ 35.0 million of authorized repurchases remaining. 
 
 Basis of Presentation — The accompanying audited consolidated financial statements of the Company and all of its subsidiaries included herein have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP"). 
 
 The audited consolidated financial statements include the assets and liabilities used in operating the Company's business. All intercompany balances and transactions have been eliminated in consolidation. The results of companies acquired or disposed of are included in the audited consolidated financial statements from the effective date of acquisition or up to the date of disposal. 
 
 Fiscal Periods — The Company has a fiscal year that ends on September 30. The Company's fiscal quarters typically end on the last Friday in December, March and June as it follows a 4-5-4 calendar. 
 
 Use of Estimates — The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclose contingent assets and liabilities at the date of the consolidated financial statements and report the associated amounts of revenues and expenses. Actual results could differ materially from these estimates. 
 
 Summary of significant accounting policies 
 
 Revenue Recognition — The Company’s revenue arrangements primarily consist of a single performance obligation to transfer promised goods which is satisfied at a point in time when title, risks and rewards of ownership, and subsequently control have transferred to the customer. This generally occurs when the product is shipped to the customer, with an immaterial amount of transactions in which control transfers upon delivery. The Company primarily offers assurance-type standard warranties that do not represent separate performance obligations. 
 
 The Company has certain arrangements that require it to estimate at the time of sale the amounts of variable consideration that should not be recorded as revenue as certain amounts are not expected to be collected from customers, as well as an estimate of the value of products to be returned. The Company principally relies on historical experience, specific 
 
 53 

 customer agreements, and anticipated future trends to estimate these amounts at the time of sale and to reduce the transaction price. These arrangements include sales discounts and allowances, volume rebates, and returned goods. 
 
 The Company has elected to utilize certain practical expedients available under GAAP. The Company records amounts billed to customers for reimbursement of shipping and handling costs within revenue. Shipping and handling costs associated with outbound freight after control over a product has transferred to a customer are accounted for as fulfillment costs and are included in cost of sales. Sales taxes and other usage-based taxes are excluded from revenue. The practical expedient not to disclose information about remaining performance obligations has also been elected as these obligations have an original duration of one year or less. The Company does not evaluate whether the selling price includes a financing interest component for contracts that are less than a year. The Company also expenses costs incurred to obtain a contract, primarily sales commissions, as all obligations will be settled in less than one year. 
 
 The Company typically receives payment 30 to 60 days from the point it has satisfied the related performance obligation. See Note 20, ''Segment Information'' for revenue disaggregated by geography and product categories. 
 
 Cost of Sales — The Company includes all costs directly related to the production of goods for sale in cost of sales in the statement of operations. These costs include direct material, direct labor, production related overheads, excess and obsolescence costs, lower of cost or market provisions, freight and distribution costs, and the depreciation and amortization of assets directly used in the production of goods for sale. 
 
 Selling, General and Administrative Expenses — These amounts primarily include payroll-related expenses for both administrative and selling personnel, compensation expense from stock-based awards, restructuring-related charges, third-party professional services and transactional gains or losses for foreign currency transactions, excluding the foreign exchange exposure for intercompany loan transactions, which is included in Other income, net . 
 
 Cash and Cash Equivalents — The Company considers all highly liquid investments with a maturity of three months or less, when purchased, to be cash equivalents. 
 
 Accounts Receivable and Allowance for Doubtful Accounts — The Company carries its accounts receivable at their face amounts less an allowance for doubtful accounts. The allowance for doubtful accounts receivable reflects the best estimate of losses inherent in the Company's accounts receivable portfolio determined on the basis of historical experience, specific allowances for known troubled accounts and other available evidence. 
 
 Inventories — Inventories are recorded at the lower of cost (primarily LIFO) or market value. The Company estimates losses for excess and obsolete inventory through an assessment of its net realizable value based on the aging of the inventory and an evaluation of the likelihood of recovering the inventory costs based on anticipated demand and selling price. See Note 12, ''Inventories, net.'' 
 
 Property, Plant and Equipment — Property, plant and equipment, net, is recorded at cost less accumulated depreciation. Maintenance and repair expenditures are charged to expense when incurred. Depreciation is calculated using the straight-line method over the estimated useful lives of the related assets as follows: 
 
 Buildings 
 
 4 to 40 years 
 
 Building improvements 
 
 3 to 20 years 
 
 Machinery and equipment 
 
 1 to 20 years 
 
 Leasehold improvements 
 
 Lesser of remaining term of the lease or useful life 
 
 Software 
 
 2 to 10 years 
 
 The internal and external costs incurred to develop internal use computer software during the application development stage of the implementation, including the design of the chosen path, are capitalized. Other costs, including expenses incurred during the preliminary project stage, training expenses, data conversion costs and expenses incurred in the post implementation stage are expensed in the period incurred. Capitalized costs are amortized ratably over the useful life of the software when the software becomes operational. Upgrades and enhancements to internal use software are capitalized only if the costs result in additional functionality. The Company does not plan to sell or market our internal use computer software to third parties. 
 
 Long-Lived Asset and Finite - Lived Intangible Asset Impairments — The Company reviews long-lived assets, including property, plant and equipment and finite-lived intangible assets for impairment whenever events or changes in business circumstances indicate that the carrying amount of the asset may not be fully recoverable. 
 
 54 

 The Company groups assets at the lowest level for which cash flows are separately identified in order to measure an impairment. Recoverability of an asset or asset group is first measured by a comparison of the carrying amount to its estimated undiscounted future cash flows expected to be generated by the asset or asset group. If the carrying amount exceeds its estimated undiscounted future cash flows, an impairment charge is recognized as the amount by which the carrying amount of the asset or asset group exceeds the estimated fair value. If impairment is determined to exist, any related impairment loss is calculated based on the estimated fair value. Impairment losses on assets to be disposed of or held for sale, if any, are based on the estimated proceeds to be received, less costs of disposal. 
 
 The Company also considers potential impairment indicators associated with other finite-lived intangible assets, including its customer relationships, patents, and non-compete agreements. An impairment is recognized if the carrying value of an asset or asset group exceeds the estimated undiscounted future cash flows expected to result from the use of the asset or asset group and its eventual disposition. The Company's key customers are primarily wholesale and national distributors. The terms of these relationships are based on purchase orders and are not contractually based. Customer relationships are amortized on a straight-line basis over their useful lives, ranging from 6 to 14 years. The Company evaluates the appropriateness of remaining useful lives based on customer attrition rates. Other intangible assets are amortized on a straight-lined basis over their estimated useful lives, ranging from 1 to 20 years. The Company did not have a triggering event during fiscal 2020 , 2019 and 2018. 
 
 Goodwill and Indefinite-Lived Intangible Asset Impairments — The Company assesses the recoverability of goodwill and indefinite-lived trade names on an annual basis in accordance with Accounting Standards Codification ("ASC") 350 "Intangibles - Goodwill and Other." The measurement date is the first day of the fourth fiscal quarter, or more frequently, if events or circumstances indicate that it is more likely than not that the fair value of a reporting unit or the respective indefinite-lived trade name is less than the carrying value. The Company can elect to perform a quantitative or qualitative test of impairment. 
 
 For fiscal 2020, 2019 and 2018 Company performed a quantitative impairment assessment for goodwill. Additionally, the economic impacts of the COVID-19 outbreak were more substantial for the Company’s reporting unit related to its operations in Europe, Middle East, and Africa (EMEA), due to the cross-border transactions that occur within those operations, the cross-border interactions needed to fully realize the synergies associated with recent in-region acquisitions and the COVID-19 related closing of these borders. The Company deemed the economic related developments of the outbreak to be a triggering event for the EMEA reporting unit as of March 27, 2020 and performed an interim goodwill impairment test as of that date. The Company calculated the fair value of its six reporting units considering three valuation approaches: (a) the income approach; (b) the guideline public company method; and (c) the comparable transaction method. The income approach calculates the fair value of the reporting unit using a discounted cash flow approach. Internally forecasted future cash flows, which the Company believes reasonably approximate market participant assumptions, are discounted using a weighted average cost of capital (Discount Rate) developed for each reporting unit. The Discount Rate is developed using market observable inputs, as well as considering whether or not there is a measure of risk related to the specific reporting unit’s forecasted performance. The key uncertainties in these calculations are the assumptions used in determining the reporting unit’s forecasted future performance, including revenue growth and EBITDA margins, as well as the perceived risk associated with those forecasts, along with selecting representative market multiples. Fair value under the guideline public company method is determined for each reporting unit by applying market multiples for comparable public companies to the reporting unit’s financial results. Fair value under the comparable transaction method is determined based on exchange prices in actual transactions and on asking prices for controlling interests in public or private companies currently offered for sale by applying market multiples for comparable public companies to the unit’s financial results. The key uncertainties in the guideline public company method and the comparable transaction method calculations are the assumptions used in determining the reporting unit's comparable public companies, comparable transactions and the selection of the market multiples. 
 
 The Company did no t record any goodwill impairments in fiscal 2020, 2019 or 2018. 
 
 As noted above, ASC 350 also requires that the Company test the indefinite-lived intangible assets for impairment at least annually. Under ASC 350, if the carrying value of the indefinite-lived asset is higher than its fair value, then the asset is deemed to be impaired and the impairment charge is estimated as the excess carrying value over the fair value. The Company calculated the fair value of its indefinite-lived intangible assets using the income approach, specifically the relief-from-royalty method. The relief-from-royalty method is used to estimate the cost savings that accrue to the owner of an intangible asset who would otherwise have to pay royalties or license fees on revenues earned through the use of the asset. Internally forecasted revenues, which the Company believes reasonably approximate market participant assumptions, are multiplied by a royalty rate to arrive at the estimated net after tax cost savings. The royalty rate used in the analysis is based on an analysis of empirical, market-derived royalty rates for guideline intangible assets. The net after tax cost savings are discounted using the Discount 
 
 55 

 Rate. The Discount Rate is developed using market observable inputs, as well as considering whether or not there is a measure of risk related to the specific indefinite lived intangible assets' forecasted performance. The key uncertainties in these calculations are the assumptions used in determining the revenue associated with each indefinite-lived intangible asset and the royalty rate. 
 
 The Company did no t record any indefinite-lived asset impairments in fiscal 2020, 2019 or 2018. 
 
 Fair Value Measurements — Authoritative guidance for fair value measurements establishes a three-level hierarchy that ranks the quality and reliability of information used in developing fair value estimates. The hierarchy gives the highest priority to quoted prices in active markets and the lowest priority to unobservable data. In cases where two or more levels of inputs are used to determine fair value, a financial instrument's level is determined based on the lowest level input that is considered significant to the fair value measurement in its entirety. The three levels of the fair value hierarchy are summarized as follows: 
 
 Level 1-inputs are based upon quoted prices (unadjusted) in active markets for identical assets or liabilities which are accessible as of the measurement date. 
 
 Level 2-inputs are based upon quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and model-derived valuations for the asset or liability that are derived principally from or corroborated by market data for which the primary inputs are observable, including forward interest rates, yield curves, credit risk and exchange rates. 
 
 Level 3-inputs for the valuations are unobservable and are based on management's estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques such as option pricing models and discounted cash flow models. 
 
 Income Taxes and Uncertain Tax Positions — The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial reporting and tax basis of assets and liabilities using enacted tax rates in effect for the year it is expected the differences will reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period of the enactment date. 
 
 The Company periodically assesses the realizability of the deferred tax assets. In making this determination management considers all available evidence, both positive and negative, including earnings history, expectations of future taxable income and available tax planning strategies. A valuation allowance is recorded to reduce the Company's deferred tax assets to the amount that is considered more likely than not to be realized. Changes in the required valuation allowance are recorded in income in the period such determination is made. 
 
 Certain tax positions may be considered uncertain requiring an assessment of whether an allowance should be recorded. Provisions for uncertain tax positions provide a recognition threshold based on an estimate of whether it is more likely than not that a position will be sustained upon examination. The Company measures its uncertain tax positions as the largest amount of benefit that is greater than a 50% likelihood of being realized upon examination. Interest and penalties related to unrecognized tax benefits are recorded as a component of income tax expense. See Note 9, ''Income Taxes.'' 
 
 Leases — For fiscal 2019 and 2018, under ASC 840, all leases that are determined not to meet any of the capital lease criteria are classified as operating leases. Operating lease payments are recognized as an expense in the statement of operations on a straight-line basis over the lease term. 
 
 For fiscal 2020, as a result of the adoption of ASC 842, the Company recognizes if an arrangement is a lease at the inception of the contract. The Company determines which party has the right to control an asset during the contract term and recognizes a Right of Use ("ROU") asset and lease obligations based on the present value of the future minimum lease payments over the term of the lease. Refer to Note 2 for further discussion of the Company’s accounting policy for leases. 
 
 Translation of Foreign Currency — For the Company's non-U.S. subsidiaries that report in a functional currency other than United States dollars, assets and liabilities are translated into United States dollars using year-end exchange rates. Revenue and expenses are translated at the monthly average exchange rates in effect during the fiscal year. Foreign currency translation adjustments are included as a component of accumulated other comprehensive loss within the consolidated statements of comprehensive income . 
 
 56 

 Recent Accounting Pronouncements 
 
 A summary of recently adopted Accounting Standards Update ("ASU")s are as follows. Adoption dates are on the first day of the fiscal year indicated below, unless otherwise specified. 
 
 Adopted Guidance 
 
 ASU 
 
 Description of ASU 
 
 Impact to Atkore 
 
 Note 
 
 Adoption Date 
 
 2016-02 Leases (Topic 842) 
 
 The ASU requires companies to use a "right of use" lease model that assumes that each lease creates an asset (the lessee's right to use the leased asset) and a liability (the future rent payment obligations), which should be reflected on a lessee's balance sheet to fairly represent the lease transaction and the lessee's related financial obligations with terms of more than 12 months. 
 
 The Company adopted the guidance in the first quarter of 2020 using the modified retrospective method. See Note 2, "Leases" for further detail. 
 
 2 
 
 2020 
 
 2018-14 Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans 
 
 The ASU amends ASC 715 to add, remove and clarify disclosure requirements related to defined benefit pension and other postretirement plans. 
 
 The Company elected to adopt the guidance early in the quarter ended September 30, 2020. There was no material impact to the consolidated financial statements as a result of the adoption of ASU 2018-14. See Note 5, "Post Retirement Benefits" for further detail. 
 
 5 
 
 2020 
 
 57 

 A summary of guidance not yet adopted are as follows: 
 
 Guidance not yet adopted 
 
 ASU 
 
 Description of ASU 
 
 Impact to Atkore 
 
 Effective Date 
 
 2016-13 Financial Instruments - Credit Losses (Topic 326) 
 
 The ASU adds to U.S. GAAP an impairment model (known as the current expected credit loss (CECL) model) that is based on expected losses rather than incurred losses. Under the new guidance, an entity recognizes as an allowance its estimate of expected credit losses, which the FASB believes will result in more timely recognition of such losses. 
 
 The Company adopted this standard in the first quarter of 2021. The adoption of the standard did not have a material impact on the Company’s consolidated financial statements. The Company implemented the appropriate changes to business processes and controls to support recognition and disclosure under the new standard. 
 
 2021 
 
 2019-12, Simplifying the accounting for income taxes (Topics 740) 
 
 The ASU eliminates certain existing exceptions related to the general approach in ASC 740 relating to franchise taxes, reducing complexity in the interim period accounting for year to date loss limitations and changes in tax laws, and clarifying the accounting for transactions outside of business combination that result in a step up in the tax basis of goodwill. 
 
 Under evaluation. Based on procedures performed to date, the Company does not anticipate the adoption of this ASU to be material to the financial statements. 
 
 2022 
 
 2020-04, Reference rate reform Topic 848: Facilitation of the effects of reference rate reform on financial reporting 
 
 The ASU addresses constituents’ concerns about certain accounting consequences that could result from the global markets’ anticipated transition away from the use of the London Interbank Offered Rate (LIBOR) and other interbank offered rates to alternative reference rates. 
 
 Under evaluation. 
 
 2022 
 
 2. LEASES 
 
 On October 1, 2019, we adopted Topic 842 using the modified retrospective transition method. Topic 842 requires the recognition of lease assets and liabilities for operating leases, in addition to the finance lease assets and liabilities previously recorded on our consolidated balance sheets. Beginning on October 1, 2019, our consolidated financial statements are presented in accordance with the revised policies, while prior period amounts are not adjusted and continue to be reported in accordance with our historical policies. The modified retrospective transition method required the cumulative effect, if any, of initially applying the guidance to be recognized as an adjustment to our accumulated deficit as of our adoption date. As a result of adopting Topic 842 , we recognized additional operating lease assets and liabilities of $ 45,519 and $ 46,941 as of October 1, 2019. The discount rate primarily used to calculate that adjustment was the Company's incremental borrowing rate as of the adoption date, October 1, 2019, as a rate implicit in most contracts was not readily determinable. The Company recorded a cumulative effect adjustment of $ 1,053 to accumulated deficit, net of tax, as a result of the adoption. 
 
 The Company elected the package of practical expedients permitted under the transition guidance within Topic 842, which allowed us to carry forward prior conclusions about lease identification, classification and initial direct costs for leases entered into prior to adoption of Topic 842. Additionally, for leases with a term of 12 months or less, the Company elected the short-term lease exemption, which allowed us to not recognize ROU assets or lease liabilities for qualifying leases existing at transition and new leases we may enter into in the future. Leases with an initial term of 12 months or less are classified as short-term leases and are not recorded on the consolidated balance sheets. The lease expense for short-term leases is recognized on a straight-line basis over the lease term. 
 
 The Company engages in leasing transactions to meet the needs of the business. The Company leases certain manufacturing facilities, warehouses and distribution centers, office space, forklifts, vehicles and other machinery and equipment. The determination to lease, rather than purchase, an asset is primarily contingent upon capital requirements, duration of the forecasted business investment, and asset availability. 
 
 58 

 The Company determines if an arrangement is a lease at inception and all arrangements deemed to be leases are subject to an assessment to determine the classification between finance and operating leases. The Company's significant assumptions and judgments in determining whether a contract is or contains a lease include establishing whether the supplier has the ability to use other assets to fulfill its service or whether the terms of the agreement enable the Company to control the use of a dedicated property, plant and equipment asset during the contract term. In the majority of the Company's contracts where it must identify whether a lease is present, it is readily determinable that the Company controls the use of the assets and obtains substantially all of the economic benefit during the term of the contract. In those contracts where identification is not readily determinable, the Company has determined that the supplier has either the ability to use another asset to provide the service or the terms of the contract give the supplier the rights to operate the asset at its discretion during the term of the contract, in which case the arrangement would not constitute a lease. 
 
 Right-of-use assets and lease obligations are recognized based on the present value of the future minimum lease payments over the lease term as of the commencement date. The Company’s lease agreements have terms that include both lease and non-lease components. Lease component fees are included in the present value of future minimum lease payments. Conversely, non-lease components are not subject to capitalization and are expensed as incurred. Per Topic 842, the contractual interest rate is used to calculate the present value of the future minimum lease payments. However, the majority of the Company’s leases do not provide an implicit rate. Therefore, the Company's significant assumption and judgments in determining the discount rate include determining the incremental borrowing rate. The Company’s incremental borrowing rates are based on the term of the lease, the economic environment of the lease and the effect of collateralization. The valuation of the ROU asset also includes lease payments made in advance of the lease commencement date and initial direct costs incurred to secure the lease and is reduced for lease incentives. The lease terms include options to extend or terminate the lease when it is reasonably certain the Company will exercise the options. 
 
 The Company has certain leasing agreements, related to leased vehicles available to our sales personnel, that contain guaranteed residual value terms, which are not expected to be triggered. The Company’s leasing portfolio does not contain any material restrictive covenants. 
 
 Leases 
 
 (in thousands) 
 
 September 30, 2020 
 
 Assets 
 
 Operating lease assets 
 
 $ 
 37,666 
 
 Finance lease assets 
 
 2,999 
 
 Total right-of-use assets, gross 
 
 $ 
 40,665 
 
 Less: accumulated amortization 
 
 ( 1,973 
 ) 
 
 Right-of-use assets, net 
 
 $ 
 38,692 
 
 Liabilities 
 
 Current liabilities: 
 
 Current portion of operating lease liabilities 
 
 $ 
 15,356 
 
 Current portion of finance lease liabilities 
 
 430 
 
 Lease obligations 
 
 $ 
 15,786 
 
 Noncurrent liabilities: 
 
 Operating lease liabilities 
 
 $ 
 23,354 
 
 Finance lease liabilities 
 
 789 
 
 Long-term lease obligations 
 
 $ 
 24,143 
 
 Total lease obligations 
 
 $ 
 39,929 
 
 Lease Cost 
 
 59 

 The following table summarizes lease costs by type of cost for the fiscal year ended September 30, 2020 . In the consolidated statements of operations, cost of sales and selling, general and administrative expenses included lease costs of $ 14,295 and $ 2,714 respectively. 
 
 (in thousands) 
 
 Fiscal year ended September 30, 2020 
 
 Consolidated Statement of Operations Classification 
 
 Total 
 
 Amortization of right-of-use assets 
 
 $ 
 14,803 
 
 Interest on lease liabilities 
 
 41 
 
 Variable lease costs 
 
 714 
 
 Short term lease costs 
 
 1,451 
 
 Total lease costs 
 
 $ 
 17,009 
 
 Maturity of Lease Liabilities 
 
 The Company's maturity analysis of its lease liabilities as of fiscal year ended September 30, 2020 is as follows: 
 
 (in thousands) 
 
 Financing Leases 
 
 Operating Leases 
 
 2021 
 
 $ 
 422 
 
 $ 
 12,902 
 
 2022 
 
 406 
 
 10,097 
 
 2023 
 
 332 
 
 7,228 
 
 2024 
 
 89 
 
 5,789 
 
 2025 
 
 3 
 
 3,451 
 
 2026 and after 
 
 — 
 
 3,535 
 
 Total lease payments 
 
 $ 
 1,252 
 
 $ 
 43,002 
 
 Less: Interest 
 
 ( 33 
 ) 
 
 ( 4,292 
 ) 
 
 Present value of lease liabilities 
 
 $ 
 1,219 
 
 $ 
 38,710 
 
 Total rental expense on all operating leases was $ 17,077 and $ 17,403 in fiscal 2019 , and 2018 , respectively. The following represents the Company's future minimum rental payments at September 30, 2019 , for agreements classified as operating leases under ASC 840 with non-cancelable terms in excess of one year: 
 
 2020 
 
 $ 
 13,526 
 
 2021 
 
 11,592 
 
 2022 
 
 8,666 
 
 2023 
 
 6,362 
 
 2024 
 
 5,097 
 
 2025 and thereafter 
 
 6,938 
 
 Total 
 
 $ 
 52,181 
 
 60 

 Lease Term and Discount Rate 
 
 Fiscal year ended September 30, 2020 
 
 Weighted-average remaining lease term (years) 
 
 Operating leases 
 
 4.4 
 
 Finance leases 
 
 3.2 
 
 Weighted-average discount rate 
 
 Operating leases 
 
 3.6 
 % 
 
 Finance leases 
 
 3.1 
 % 
 
 Other Information 
 
 (in thousands) 
 
 Fiscal year ended September 30, 2020 
 
 Cash paid for amounts included in the measurement of lease liabilities 
 
 Operating cash flows from operating leases 
 
 12,939 
 
 Operating cash flows from finance leases 
 
 26 
 
 Financing cash flows from finance leases 
 
 500 
 
 3. ACQUISITIONS 
 
 From time to time, the Company enters into strategic acquisitions in an effort to better service existing customers and to attain new customers. The Company had no acquisitions in the year ended September 30, 2020. 
 
 Fiscal 2019 
 
 On August 21, 2019, Atkore Plastic Pipe Corporation, a wholly-owned subsidiary of the Company acquired the assets of Rocky Mountain Pipe ("Cor-Tek"), a manufacturer of PVC conduit for electrical applications, and considered a leading innovator in cellular core extrusion technology for a purchase price of $ 14,835 . In connection with this acquisition, the Company recorded a bargain purchase gain of $ 7,384 , which is reported within other income, net in the Consolidated Statements Of Operations . The Company believes that it was able to acquire the net assets of Cor-Tek for less than fair value as a result of Cor-Tek’s financial difficulties. 
 
 On August 12, 2019, Unistrut Limited, a wholly-owned subsidiary of the Company, acquired Flytec Systems Ltd. and its parent holding company, Modern Associates Ltd., (collectively "Flytec"), a manufacturer of metal surface trunking, including IP4X, perimeter systems, pedestal boxes, as well as underfloor installations and industrial floor trunking. The purchase price was immaterial to the Company. 
 
 On June 3, 2019, AFC Cable Systems, Inc., a wholly-owned subsidiary of the Company acquired the assets of United Structural Products, LLC. ("U.S. Tray"), a manufacturer of welded aluminum and engineered-to-order cable trays for a purchase price of $ 25,507 , net of cash received. The consolidated financial statements include the results of the acquired company from the acquisition date. Net sales and net income of the acquired company included in the consolidated statement of operations for fiscal 2019 were insignificant. As a result of the acquisition, the Company recognized $ 7,295 of goodwill, $ 14,800 of identifiable intangible assets and $ 3,412 of working capital and other net other tangible assets. 
 
 On October 1, 2018, Allied Luxembourg S.a.r.l, a wholly-owned subsidiary of the Company acquired all of the outstanding stock of Vergokan International NV ("Vergokan") for a purchase price of $ 57,899 , net of cash received. Vergokan is a leading manufacturer of cable tray and cable ladder systems, underfloor installations and industrial floor trunking that serves industrial, power and energy, commercial and infrastructure sectors in more than 45 countries. This transaction provides Atkore with an expanded presence in Western Europe and strengthens the Company's electrical portfolio of cable management products within the Electrical Raceway segment. 
 
 61 

 The Company incurred approximately $ 1,140 for acquisition related expenses for its 2019 acquisitions, which were recorded in selling, general, and administrative expenses. All the above acquisitions were funded with cash on hand. 
 
 Fiscal 2018 
 
 On January 8, 2018, AFC Cable Systems, Inc., a wholly-owned subsidiary of the Company, acquired the assets of Communications Integrators, Inc. ("Cii"), a manufacturer of modular, prefabricated power, voice and data distribution systems located in Tempe, Arizona for a total purchase price, including contingent consideration, of $ 3,997 . The Cii acquisition complements Atkore's existing modular and prewired products within the Electrical Raceway segment. 
 
 Purchase Price Allocations 
 
 The purchase price was allocated to tangible and intangible assets acquired and liabilities assumed, based on their fair values. The following table summarizes the Level 3 fair values assigned to the net assets acquired and liabilities assumed as of the acquisition date for fiscal 2019: 
 
 (in thousands) 
 
 Vergokan 
 
 Other 
 
 Total 
 
 Fair value of consideration transferred: 
 
 Cash consideration 
 
 $ 
 58,728 
 
 $ 
 41,641 
 
 $ 
 100,369 
 
 Other liability consideration 
 
 — 
 
 1,400 
 
 1,400 
 
 Total consideration transferred 
 
 58,728 
 
 43,041 
 
 101,769 
 
 Fair value of assets acquired and liabilities assumed: 
 
 Cash 
 
 829 
 
 1,541 
 
 2,370 
 
 Accounts receivable 
 
 8,761 
 
 8,217 
 
 16,978 
 
 Inventories 
 
 11,434 
 
 7,494 
 
 18,928 
 
 Intangible assets 
 
 12,621 
 
 16,400 
 
 29,021 
 
 Fixed assets 
 
 32,490 
 
 19,298 
 
 51,788 
 
 Accounts payable 
 
 ( 18,716 
 ) 
 
 ( 7,608 
 ) 
 
 ( 26,324 
 ) 
 
 Gain on purchase of business 
 
 — 
 
 ( 7,384 
 ) 
 
 ( 7,384 
 ) 
 
 Other 
 
 1,680 
 
 ( 3,412 
 ) 
 
 ( 1,732 
 ) 
 
 Net assets acquired 
 
 49,099 
 
 34,546 
 
 83,645 
 
 Excess purchase price attributed to goodwill acquired 
 
 $ 
 9,629 
 
 $ 
 8,495 
 
 $ 
 18,124 
 
 Goodwill recognized from the Vergokan acquisition is non-deductible for tax purposes. Goodwill recognized from the other acquisitions is tax-deductible and is amortized over 15 years for income tax purposes. The goodwill consists largely of the synergies and economies of scale from integrating these companies with existing businesses. 
 
 The following table summarizes the fair value of intangible assets as of the acquisition date: 
 
 Vergokan 
 
 Other 
 
 ($ in thousands) 
 
 Fair Value 
 
 Weighted Average Useful Life (Years) 
 
 Fair Value 
 
 Weighted Average Useful Life (Years) 
 
 Customer relationships 
 
 $ 
 10,535 
 
 12.0 
 
 $ 
 15,400 
 
 10.0 
 
 Other 
 
 2,086 
 
 9.0 
 
 1,000 
 
 9.0 
 
 Total intangible assets 
 
 $ 
 12,621 
 
 $ 
 16,400 
 
 Net sales and net income of the companies acquired during fiscal 2019 and 2018 are included in the consolidated statement of operations for fiscal 2019 and fiscal 2018 for the post-acquisition periods. Due to the immaterial nature of these acquisitions, both individually, and in the aggregate, the Company did not include the full year pro forma results of operations for the acquisition year or previous years. 
 
 62 

 4. DIVESTITURES 
 
 On March 30, 2018, the Company sold the assets of FlexHead Industries, Inc. and SprinkFLEX, LLC (together "Flexhead"). The Flexhead businesses manufacture commercial flexible sprinkler head connection products for use in a variety of markets, including industrial, commercial, cold storage, institutional and clean room applications. The cash consideration received, net assets divested and resulting gain on sale for the year ended September 30, 2018 are as follows: 
 
 (in thousands) 
 
 Flexhead 
 
 Cash consideration 
 
 $ 
 42,631 
 
 Net assets divested 
 
 15,056 
 
 Gain on sale of a business 
 
 $ 
 27,575 
 
 Net assets divested included $ 2,626 of goodwill. 
 
 5. POSTRETIREMENT BENEFITS 
 The Company has a number of non-contributory and contributory defined benefit retirement plans covering certain United States employees. Net periodic pension benefit cost is based on periodic actuarial valuations that use the projected unit credit method of calculation and is charged to the statements of operations on a systematic basis over the expected average remaining service lives of current participants. The benefits under the defined benefit plans are based on various factors, such as years of service and compensation. For all periods presented, all defined pension benefit plans are frozen, whereby participants no longer accrue credited service. The net periodic (benefit)/cost for the periods presented was as follows: 
 
 Fiscal Year Ended 
 
 (in thousands) 
 September 30, 2020 
 
 September 30, 2019 
 
 September 30, 2018 
 
 Interest cost 
 3,739 
 
 4,665 
 
 4,098 
 
 Expected return on plan assets 
 ( 6,331 
 ) 
 
 ( 6,372 
 ) 
 
 ( 6,416 
 ) 
 
 Amortization of actuarial loss 
 888 
 
 101 
 
 343 
 
 Net periodic (benefit) cost 
 $ 
 ( 1,704 
 ) 
 
 $ 
 ( 1,606 
 ) 
 
 $ 
 ( 1,975 
 ) 
 
 The weighted-average assumptions used to determine net periodic pension (benefit) cost during the period were as follow: 
 
 September 30, 2020 
 
 September 30, 2019 
 
 September 30, 2018 
 
 Discount rate 
 3.1 
 % 
 
 4.2 
 % 
 
 3.7 
 % 
 
 Expected return on plan assets 
 6.3 
 % 
 
 6.3 
 % 
 
 6.4 
 % 
 
 Rate of compensation increase 
 N/a 
 
 N/a 
 
 N/a 
 
 63 

 The change in the benefit obligations, plan assets and the amounts recognized on the consolidated balance sheets was as follows (in thousands): 
 
 Change in benefit obligations: 
 
 Balance as of September 30, 2018 
 
 $ 
 120,957 
 
 Interest cost 
 
 4,665 
 
 Actuarial loss 
 
 17,463 
 
 Benefits and administrative expenses paid 
 
 ( 5,125 
 ) 
 
 Balance as of September 30, 2019 
 
 137,960 
 
 Interest cost 
 
 3,739 
 
 Actuarial loss 
 
 10,476 
 
 Benefits and administrative expenses paid 
 
 ( 5,416 
 ) 
 
 Balance as of September 30, 2020 
 
 $ 
 146,759 
 
 Change in plan assets: 
 
 Balance as of September 30, 2018 
 
 104,454 
 
 Actual return on plan assets 
 
 3,043 
 
 Employer contributions 
 
 1,079 
 
 Benefits and administrative expenses paid 
 
 ( 5,125 
 ) 
 
 Balance as of September 30, 2019 
 
 103,451 
 
 Actual return on plan assets 
 
 6,587 
 
 Employer contributions 
 
 2,114 
 
 Benefits and administrative expenses paid 
 
 ( 5,416 
 ) 
 
 Balance as of September 30, 2020 
 
 $ 
 106,736 
 
 Funded status: 
 
 Funded status as of September 30, 2019 
 
 $ 
 ( 34,509 
 ) 
 
 Funded status as of September 30, 2020 
 
 $ 
 ( 40,023 
 ) 
 
 (in thousands) 
 
 September 30, 2020 
 
 September 30, 2019 
 
 Amounts recognized in the consolidated balance sheets consist of: 
 
 Pension liabilities 
 
 $ 
 ( 40,023 
 ) 
 
 $ 
 ( 34,509 
 ) 
 
 Net amount recognized 
 
 $ 
 ( 40,023 
 ) 
 
 $ 
 ( 34,509 
 ) 
 
 Amounts recognized in accumulated other comprehensive loss (before income taxes) consist of: 
 
 Net actuarial loss 
 
 $ 
 ( 42,367 
 ) 
 
 $ 
 ( 33,035 
 ) 
 
 Total loss recognized 
 
 $ 
 ( 42,367 
 ) 
 
 $ 
 ( 33,035 
 ) 
 
 Weighted-average assumptions used to determine pension benefit obligations at year end: 
 
 Discount rate 
 
 2.5 
 % 
 
 3.1 
 % 
 
 Rate of compensation increase 
 
 N/a 
 
 N/a 
 
 The Company elected to adopt the ASU 2018-14 early in the quarter ended September 30, 2020, which requires a narrative description of the reasons for significant gains and losses affecting the benefit obligation for the period. For the fiscal year ended 2020, the reduction in the discount rate from fiscal year 2019 to 2020 is the primary driver of the change in benefit obligations. 
 
 64 

 The following table summarizes the defined benefit pension plans with accumulated benefit obligations in excess of plan assets: 
 
 (in thousands) 
 
 September 30, 2020 
 
 September 30, 2019 
 
 Accumulated benefit obligation 
 
 $ 
 146,759 
 
 $ 
 137,960 
 
 Fair value of plan assets 
 
 106,736 
 
 103,451 
 
 The following table summarizes the defined benefit pension plans with projected benefit obligations in excess of plan assets: 
 
 (in thousands) 
 
 September 30, 2020 
 
 September 30, 2019 
 
 Projected benefit obligation 
 
 $ 
 146,759 
 
 $ 
 137,960 
 
 Fair value of plan assets 
 
 106,736 
 
 103,451 
 
 In determining the expected return on plan assets, the Company considers the relative weighting of plan assets by class, historical performance of asset classes over long-term periods, asset class performance expectations as well as current and future economic conditions. The Company's investment strategy for its pension plans is to manage the plans on a going-concern basis. Current investment policy is to maximize the return on assets, subject to a prudent level of portfolio risk, for the purpose of enhancing the security of benefits for participants. For the pension plans, this policy targets a 60 % allocation to equity securities and a 40 % allocation to debt securities. 
 
 Pension plans have the following weighted-average asset allocations: 
 
 Asset Category: 
 
 September 30, 2020 
 
 September 30, 2019 
 
 Equity securities 
 
 58 % 
 
 58 % 
 
 Debt securities 
 
 39 % 
 
 40 % 
 
 Cash and cash equivalents 
 
 3 % 
 
 2 % 
 
 Total 
 
 100 % 
 
 100 % 
 
 The Company evaluates its defined benefit plans' asset portfolios for the existence of significant concentrations of risk, such as investments in a single entity, industry, foreign country and individual fund manager. As of September 30, 2020 , there were no significant concentrations of risk in the Company's defined benefit plan assets. 
 
 The Company's plan assets are accounted for at fair value and are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company's assessment of the significance of a particular input to the fair value measurement requires judgment, and may affect the valuation of fair value of assets and their placement within the fair value hierarchy levels. The Company's asset allocations are presented in the table below: 
 
 (in thousands) 
 
 September 30, 2020 
 
 September 30, 2019 
 
 Level 1 
 
 Level 2 
 
 Total 
 
 Level 1 
 
 Level 2 
 
 Total 
 
 United States equity securities 
 
 $ 
 30,738 
 
 $ 
 6,796 
 
 $ 
 37,534 
 
 $ 
 32,545 
 
 $ 
 6,429 
 
 $ 
 38,974 
 
 Non-U.S. equity securities 
 
 21,509 
 
 2,659 
 
 24,168 
 
 18,182 
 
 2,543 
 
 20,725 
 
 Fixed income securities 
 
 34,857 
 
 7,253 
 
 42,110 
 
 35,214 
 
 6,815 
 
 42,029 
 
 Cash and cash equivalents 
 
 2,924 
 
 — 
 
 2,924 
 
 1,723 
 
 — 
 
 1,723 
 
 Total 
 
 $ 
 90,028 
 
 $ 
 16,708 
 
 $ 
 106,736 
 
 $ 
 87,664 
 
 $ 
 15,787 
 
 $ 
 103,451 
 
 Equity securities consist primarily of publicly traded United States and non-U.S. equities. Publicly traded securities are valued at the last trade or closing price reported in the active market in which the individual securities are traded. Certain equity securities are held within commingled funds, which are valued at the unitized net asset value ("NAV") or percentage of the NAV as determined by the custodian of the fund. These values are based on the fair value of the underlying net assets owned by the fund. 
 
 65 

 Fixed income securities consist primarily of government and agency securities, corporate debt securities, and mortgage and other asset-backed securities. When available, fixed income securities are valued at the closing price reported in the active market in which the individual security is traded. Government and agency securities and corporate debt securities are valued using the most recent bid prices or occasionally the mean of the latest bid and ask prices when markets are less liquid. Asset-backed securities including mortgage-backed securities are valued using broker/dealer quotes when available. When quotes are not available, fair value is determined by utilizing a discounted cash flow approach, which incorporates other observable inputs such as cash flows, underlying security structure and market information including interest rates and bid evaluations of comparable securities. As of September 30, 2020 and September 30, 2019 , the Company did not have any Level 3 pension assets. Certain fixed income securities are held within commingled funds, which are valued utilizing NAV as determined by the custodian of the fund. These values are based on the fair value of the underlying net assets owned by the fund. 
 
 Cash and cash equivalents consist primarily of short-term commercial paper, and other cash or cash-like instruments including settlement proceeds due from brokers, stated at cost, which approximates fair value. 
 
 Transfers between levels of the fair value hierarchy are recognized on the actual date of the event or circumstance giving rise to the transfer, which generally coincides with the Company's valuation process. 
 
 Contribution amounts are determined and funded based on laws and regulations and with the assistance of professionally qualified actuaries. The Company contributed $ 2,114 and $ 1,079 to its pension plans for the fiscal years ended September 30, 2020 and September 30, 2019 . The Company anticipates that it will contribute at least the minimum required contribution of $ 1,855 to its pension plans in fiscal 2021 . 
 
 Benefit payments, which reflect future expected service as appropriate, are expected to be paid in each fiscal year as follows: 
 
 (in thousands) 
 
 2021 
 
 $ 
 6,155 
 
 2022 
 
 6,436 
 
 2023 
 
 6,667 
 
 2024 
 
 6,879 
 
 2025 
 
 7,125 
 
 2026 to 2030 
 
 37,448 
 
 Defined Contribution Retirement Plans — The Company also sponsors several defined contribution retirement plans - the 401(k) matching programs. Expense for the defined contribution plans is computed as a percentage of participants' compensation and was $ 3,718 , $ 3,572 and $ 3,600 for the fiscal years ended September 30, 2020 , September 30, 2019 and September 30, 2018 , respectively. 
 
 Multi-Employer Plan — The Company has a liability of $ 5,345 as of September 30, 2020 and $ 5,658 as of September 30, 2019 representing the Company's proportionate share of a multi-employer pension plan which was exited prior to fiscal 2017. 
 
 66 

 6. STOCK INCENTIVE PLAN 
 
 On November 21, 2019, the Company's board of directors approved the Atkore International Group Inc. 2020 Omnibus Incentive Plan (the "2020 Omnibus Incentive Plan"), which was subsequently approved by the Company’s shareholders on January 30, 2020. The 2020 Omnibus Incentive Plan provides for stock purchases and grants of other equity awards, including non-qualified stock options, stock purchase rights, restricted stock, restricted stock units ("RSUs"), performance shares, performance stock units ("PSUs"), stock appreciation rights, dividend equivalents and other stock-based awards to directors, officers, other employees and consultants. The 2020 Omnibus Incentive Plan replaces and succeeds the Atkore International Group Inc. 2016 Omnibus Incentive Plan (the "2016 Omnibus Incentive Plan"). The Company no longer grants awards from the 2016 Omnibus Incentive Plan. Awards previously granted under the 2016 Omnibus Incentive Plan were unaffected by the termination. A maximum of 1.1 million shares of common stock is reserved for issuance under the 2020 Omnibus Incentive Plan, plus the number of shares of common stock remaining available for issuance under the 2016 Omnibus Incentive Plan as of the date of the Company’s 2020 Annual Meeting of Stockholders. All awards have a ten year life. All share-based awards are expected to be fulfilled with new shares of common stock. Stock compensation expense is included in selling, general and administrative in the Company's consolidated statements of operations and was $ 13,064 , $ 11,798 and $ 14,664 for fiscal years 2020 , 2019 and 2018 , respectively. The total income tax benefit recognized for share-based compensation arrangements was $ 3,014 , $ 2,949 and $ 3,681 for fiscal years 2020 , 2019 and 2018 , respectively. 
 
 On May 4, 2018, the Company's board of directors modified the stock awards of a key executive. As part of the modification, the Board extended the date through which the key executive has the right to exercise vested options. In addition, the amendment also accelerated the service vesting period of certain of his unvested stock options, RSUs and PSUs. As a result of these modifications, the Company recorded the entire incremental stock-based compensation expense of approximately $ 0.5 million during the year ended September 30, 2018. 
 
 Stock Options 
 
 In accordance with ASC 718 Compensation - Stock Compensation, stock compensation expense is recorded on a straight-line basis over the requisite service period (generally the vesting period), net of actual forfeitures based on the grant-date fair value of the option under the equity accounting method. 
 
 The assumptions used in the Black-Scholes option pricing model to value the options granted were as follows: 
 
 Fiscal Year Ended 
 
 September 30, 2020 
 
 September 30, 2019 
 
 September 30, 2018 
 
 Expected dividend yield 
 
 — 
 % 
 
 — 
 % 
 
 — 
 % 
 
 Expected volatility 
 
 36 
 % 
 
 45 
 % 
 
 40 
 % 
 
 Range of risk-free interest rates 
 
 1.67 
 % 
 
 2.94% - 3.00% 
 
 2.16% - 2.38% 
 
 Range of expected option lives 
 
 6 years 
 
 6 to 10 years 
 
 1 to 6 years 
 
 Dividends are not paid on the Company's common stock. For grants during fiscal year ended 2020, the expected volatility is based on the Company's stock price volatility. For grants and modifications during fiscal years ended 2019 and 2020, expected volatility is based on historical volatilities of comparable companies. The risk-free interest rate is based on the United States Treasury yield curve in effect at the time of the grant for periods corresponding with the expected life of the options. The expected life of options is estimated using the simplified method due to limited historical exercise activity. The Company does not estimate forfeitures, which are accounted for as they occur. 
 
 67 

 Stock option activity for the period September 30, 2017 to September 30, 2020 was as follows: 
 
 Shares 
(in thousands) 
 
 Weighted-Average Exercise Price 
 
 Weighted-Average Grant Date Fair Value 
 
 Aggregate Intrinsic Value 
 (in thousands) 
 
 Weighted-Average Remaining Contractual Term (in years) 
 
 Outstanding as of September 30, 2017 
 5,158 
 
 $ 
 8.30 
 
 Granted 
 185 
 
 20.01 
 
 8.33 
 
 Exercised 
 ( 2,728 
 ) 
 
 7.55 
 
 $ 
 42,512 
 
 Forfeited 
 ( 10 
 ) 
 
 8.28 
 
 Outstanding as of September 30, 2018 
 2,605 
 
 9.91 
 
 Granted 
 342 
 
 23.45 
 
 11.35 
 
 Exercised 
 ( 985 
 ) 
 
 8.62 
 
 $ 
 16,453 
 
 Forfeited 
 ( 126 
 ) 
 
 12.64 
 
 Outstanding as of September 30, 2019 
 1,836 
 
 12.94 
 
 $ 
 31,957 
 
 Granted 
 67 
 
 37.24 
 
 $ 
 14.05 
 
 Exercised 
 ( 508 
 ) 
 
 8.55 
 
 $ 
 14,548 
 
 Forfeited 
 ( 20 
 ) 
 
 19.13 
 
 Outstanding as of September 30, 2020 
 1,375 
 
 15.66 
 
 11,443 
 
 5.43 
 
 Exercisable as of September 30, 2020 
 1,012 
 
 $ 
 11.99 
 
 $ 
 11,013 
 
 4.48 
 
 As of September 30, 2020 , there was $ 1,289 of total unrecognized compensation expense related to non-vested options granted expected to be recognized over a weighted-average period of approximately 1.2 years. The total fair value of shares vested during fiscal years 2020 , 2019 and 2018 was $ 1,894 , $ 3,038 and $ 9,757 , respectively. 
 
 Cash received from stock option exercises for the fiscal years 2020 , 2019 and 2018 was $ 4,347 , $ 7,374 and $ 20,110 , respectively. The actual tax benefit for the tax deductions from stock option exercises totaled $ 3,681 , $ 4,031 and $ 11,478 , respectively, for fiscal years 2020 , 2019 and 2018 . The Company does not settle any option exercises, under its current stock incentive plan, in cash. 
 
 Restricted Stock Units 
 
 Generally, RSUs granted under the 2020 Omnibus Incentive Plan vest ratably over three years . The fair value of RSU grants was based on the closing price of the Company's common stock on the date of grant. RSU compensation expense is recorded on a straight-line basis over the remaining vesting period. 
 
 68 

 Changes to the Company's nonvested RSU awards for the year ended September 30, 2020 were as follows: 
 
 Shares 
(in thousands) 
 
 Weighted-average grant-date fair value 
 
 Nonvested as of September 30, 2017 
 
 435 
 
 $ 
 19.65 
 
 Granted 
 
 334 
 
 20.86 
 
 Vested 
 
 ( 90 
 ) 
 
 21.95 
 
 Forfeited 
 
 ( 29 
 ) 
 
 20.57 
 
 Nonvested as of September 30, 2018 
 
 650 
 
 $ 
 19.91 
 
 Granted 
 
 361 
 
 19.23 
 
 Vested 
 
 ( 195 
 ) 
 
 21.51 
 
 Forfeited 
 
 ( 142 
 ) 
 
 18.52 
 
 Nonvested as of September 30, 2019 
 
 674 
 
 19.37 
 
 Granted 
 
 166 
 
 37.24 
 
 Vested 
 
 ( 403 
 ) 
 
 19.43 
 
 Forfeited 
 
 ( 32 
 ) 
 
 22.29 
 
 Nonvested as of September 30, 2020 
 
 405 
 
 $ 
 26.44 
 
 As of September 30, 2020 , there was $ 5,185 of total unrecognized compensation expense related to non-vested RSUs granted, expected to be recognized over a weighted-average period of approximately 1.64 years. The total fair value of RSUs vested during fiscal years 2020 , 2019 and 2018 was $ 14,513 , $ 4,271 and $ 1,969 , respectively. 
 
 Performance Share Units 
 
 On November 27, 2017, November 29, 2018 and November 21, 2019 , the Company awarded PSUs whose vesting is contingent upon meeting or exceeding certain market and performance conditions. The performance condition, which was based on an adjusted net income, represented 70 % of the award and the market condition, which was based on Total Shareholder Return ("TSR") of the Company's common stock relative to a peer group represented the remaining 30 % . All PSUs cliff vest at the end of three years based on the satisfaction of the performance conditions. Expense for the performance condition based award is recorded when the achievement of the performance condition is considered probable of achievement and is recorded on a straight-line basis over the requisite service period. If such performance criteria are not met, no compensation cost is recognized and any recognized compensation cost is reversed. Expense for the market condition based award is recorded on a straight-line basis over the explicit service period. 
 
 The grant-date fair value for the performance condition based awards represents the closing stock price on the date of grant. For the grants in fiscal 2020, 2019, and 2018, the closing stock price on the date of grant was $ 37.24 , $ 17.90 and $ 20.01 , respectively. The grant-date fair value for the market condition based awards was determined using the Monte-Carlo method. The assumptions used in the Monte-Carlo method to value the performance share awards granted during the fiscal year ended September 30, 2020 were as follows: 
 
 September 30, 2020 
 
 September 30, 2019 
 
 September 30, 2018 
 
 Expected dividend yield 
 
 — 
 % 
 
 — 
 % 
 
 — 
 % 
 
 Range of expected volatility 
 
 21.45-53.18 
 
 20.69 - 74.26 
 
 17.21 - 79.15 
 
 Risk free interest rates 
 
 1.59 
 % 
 
 2.84 
 % 
 
 1.83% - 2.54% 
 
 Expected life 
 
 3 years 
 
 3 years 
 
 1 -3 years 
 
 Fair value 
 
 $ 
 44.22 
 
 18.84 
 
 $ 13.90 - 26.68 
 
 Dividends are not paid on the Company's common stock. Expected volatility is based on historical volatilities of comparable companies. The risk-free interest rate is based on the United States Treasury yield curve in effect at the time of the grant for periods corresponding with the expected life of the award. The expected life of the award represents the weighted-average period of time that awards granted are expected to be outstanding, giving consideration to vesting schedules and expected exercise patterns. The Company does not estimate forfeitures, which are accounted for as they occur. 
 
 69 

 Changes to the Company's non-vested PSU awards for the year ended September 30, 2020 were as follows: 
 
 Shares 
(in thousands) 
 
 Weighted-average grant-date fair value 
 
 Nonvested as of September 30, 2017 
 
 181 
 
 $ 
 23.87 
 
 Granted 
 
 215 
 
 22.01 
 
 Forfeited 
 
 ( 89 
 ) 
 
 28.53 
 
 Nonvested as of September 30, 2018 
 
 307 
 
 $ 
 21.22 
 
 Granted 
 
 242 
 
 18.17 
 
 Forfeited 
 
 ( 94 
 ) 
 
 20.55 
 
 Nonvested as of September 30, 2019 
 
 455 
 
 $ 
 21.11 
 
 Granted 
 
 115 
 
 40.43 
 
 Vested 
 
 ( 162 
 ) 
 
 25.21 
 
 Adjustment for achieved performance upon issuance 
 
 31 
 
 21.68 
 
 Forfeited 
 
 ( 14 
 ) 
 
 22.82 
 
 Nonvested as of September 30, 2020 
 
 425 
 
 $ 
 25.15 
 
 As of September 30, 2020 , there was $ 2,783 of total unrecognized compensation expense related to non-vested PSUs granted, expected to be recognized over a weighted-average period of approximately 1.60 years. There were no PSUs vested during fiscal years 2019 and 2018 . 
 
 7. RESTRUCTURING CHARGES 
 
 Restructuring charges relate to the streamlining of the Company's cost structure and improving its operations. These actions primarily resulted in workforce reductions, lease termination costs, and other facility rationalization costs. Restructuring reserves are included as a component of other current liabilities . 
 
 Electrical Raceway 
 
 Mechanical Products & Solutions 
 
 Other/Corporate 
 
 (in thousands) 
 Severance (a) 
 
 Other (b) 
 
 Severance (a) 
 
 Other (a) 
 
 Severance (a) 
 
 Total 
 
 Balance as of September 30, 2017 
 $ 
 449 
 
 $ 
 — 
 
 $ 
 278 
 
 $ 
 10 
 
 $ 
 — 
 
 $ 
 737 
 
 Charges 
 536 
 
 1,130 
 
 97 
 
 179 
 
 98 
 
 2,040 
 
 Utilization 
 ( 787 
 ) 
 
 ( 820 
 ) 
 
 ( 178 
 ) 
 
 ( 160 
 ) 
 
 ( 98 
 ) 
 
 ( 2,043 
 ) 
 
 Reversals 
 — 
 
 — 
 
 ( 191 
 ) 
 
 — 
 
 — 
 
 ( 191 
 ) 
 
 Exchange rate effects 
 14 
 
 — 
 
 ( 6 
 ) 
 
 — 
 
 — 
 
 8 
 
 Balance as of September 30, 2018 
 $ 
 212 
 
 $ 
 310 
 
 $ 
 — 
 
 $ 
 29 
 
 $ 
 — 
 
 $ 
 551 
 
 Charges 
 1,047 
 
 2,544 
 
 213 
 
 — 
 
 — 
 
 3,804 
 
 Utilization 
 ( 867 
 ) 
 
 ( 2,854 
 ) 
 
 ( 68 
 ) 
 
 ( 29 
 ) 
 
 — 
 
 ( 3,818 
 ) 
 
 Balance as of September 30, 2019 
 $ 
 392 
 
 $ 
 — 
 
 $ 
 145 
 
 $ 
 — 
 
 $ 
 — 
 
 $ 
 537 
 
 Charges 
 $ 
 1,339 
 
 $ 
 1,892 
 
 $ 
 416 
 
 — 
 
 68 
 
 3,715 
 
 Utilization 
 $ 
 ( 1,175 
 ) 
 
 $ 
 ( 1,892 
 ) 
 
 $ 
 ( 429 
 ) 
 
 — 
 
 ( 52 
 ) 
 
 ( 3,548 
 ) 
 
 Reversals 
 $ 
 ( 369 
 ) 
 
 $ 
 — 
 
 $ 
 ( 60 
 ) 
 
 — 
 
 ( 2 
 ) 
 
 ( 431 
 ) 
 
 Exchange rate effects 
 $ 
 18 
 
 $ 
 — 
 
 $ 
 — 
 
 — 
 
 — 
 
 18 
 
 Balance as of September 30, 2020 
 $ 
 205 
 
 $ 
 — 
 
 $ 
 72 
 
 $ 
 — 
 
 $ 
 14 
 
 $ 
 291 
 
 (a) Fiscal 2020 charges are primarily related to a reduction in force implemented as part of adjusting to the macroeconomic impacts related to the outbreak of the novel coronavirus (COVID-19). Fiscal 2019 and 2018 charges are primarily related to Atkore's commitment to close and consolidate certain facilities as part of its continuing effort to realign its strategic focus. 
 (b) Primarily related to Atkore's commitment to close and consolidate certain facilities as part of its continuing effort to realign its strategic focus. 
 
 70 

 The Company expects to utilize all restructuring accruals as of September 30, 2020 within the next twelve months. The net restructuring charges included as a component of selling, general and administrative expense in the Company's consolidated statements of operations were as follows: 
 
 Fiscal Year Ended 
 
 (in thousands) 
 
 September 30, 2020 
 
 September 30, 2019 
 
 September 30, 2018 
 
 Total restructuring charges, net 
 
 $ 
 3,284 
 
 $ 
 3,804 
 
 $ 
 1,849 
 
 8. OTHER INCOME, NET 
 
 Other income, net consisted of the following: 
 
 Fiscal Year Ended 
 
 (in thousands) 
 
 September 30, 2020 
 
 September 30, 2019 
 
 September 30, 2018 
 
 Gain on purchase of business 
 
 $ 
 — 
 
 $ 
 ( 7,384 
 ) 
 
 $ 
 — 
 
 Gain on sale of a business 
 
 — 
 
 — 
 
 ( 27,575 
 ) 
 
 Undesignated foreign currency derivative instruments 
 
 1,269 
 
 ( 5,384 
 ) 
 
 ( 121 
 ) 
 
 Foreign exchange loss (gain) on intercompany loans 
 
 ( 2,342 
 ) 
 
 2,975 
 
 1,500 
 
 Debt modification costs 
 
 — 
 
 — 
 
 892 
 
 Pension-related benefits 
 
 ( 1,704 
 ) 
 
 ( 1,606 
 ) 
 
 ( 1,975 
 ) 
 
 Other 
 
 — 
 
 ( 79 
 ) 
 
 ( 69 
 ) 
 
 Other income, net 
 
 $ 
 ( 2,777 
 ) 
 
 $ 
 ( 11,478 
 ) 
 
 $ 
 ( 27,348 
 ) 
 
 9. INCOME TAXES 
 
 On March 27, 2020, President Trump signed into U.S. federal law the Coronavirus Aid, Relief and Economic Security ("CARES") Act, which is aimed at providing emergency assistance and health care for individuals, families, and businesses affected by the COVID-19 pandemic and generally supporting the U.S. economy. The CARES Act, among other things, includes provisions related to refundable payroll tax credits, deferment of the employer portion of social security payments, net operating loss carry back periods, modifications to the net interest deduction limitations, and technical corrections to tax depreciation methods for qualified improvement property. There is no material impact to our consolidated financial statements as a result of this legislation. 
 
 On December 22, 2017, "H.R.1," also known as the Tax Cuts and Jobs Act ("TCJA") was signed into law. This legislation provided for significant changes to corporate taxation including, but not limited to, a reduction of the federal corporate tax rate from 35% to 21% , limitations on the deductibility of interest expense and executive compensation, full expensing of the costs of qualified property in the period of acquisition and the elimination of the domestic production activities deduction. The legislation also adopts a new quasi-territorial tax regime and imposes a one-time transition tax on deemed repatriated earnings of certain foreign subsidiaries. 
 
 As part of the enactment of TCJA, the Company recorded a global intangible low-taxed income ("GILTI") provision for the first time beginning in fiscal 2019. The GILTI provision of TCJA requires certain income earned by controlled foreign corporations ("CFCs") to be included currently in the gross income of the CFCs controlling U.S. shareholder. In accordance with accounting standards applicable to income taxes, there is allowed an accounting policy choice of either (1) treating taxes due on U.S. inclusions in taxable income related to GILTI as a current period expense when incurred (the “period cost method”) or (2) factoring such amounts into the Company’s measurement of its deferred taxes (the “deferred method”). The Company has elected the period method. 
 
 71 

 Significant components of income before income taxes and income tax expense for the fiscal years ended September 30, 2020 , September 30, 2019 and September 30, 2018 consisted of the following: 
 
 (in thousands) 
 
 September 30, 2020 
 
 September 30, 2019 
 
 September 30, 2018 
 
 Components of income before income taxes: 
 
 United States 
 
 $ 
 201,784 
 
 $ 
 170,780 
 
 $ 
 155,453 
 
 Non-U.S 
 
 214 
 
 13,889 
 
 10,899 
 
 Income before income taxes 
 
 $ 
 201,998 
 
 $ 
 184,669 
 
 $ 
 166,352 
 
 Income tax expense: 
 
 Current: 
 
 United States: 
 
 Federal 
 
 $ 
 32,335 
 
 $ 
 31,431 
 
 $ 
 26,586 
 
 State 
 
 9,668 
 
 9,800 
 
 8,662 
 
 Non-U.S: 
 
 3,210 
 
 5,183 
 
 3,467 
 
 Current income tax expense 
 
 $ 
 45,213 
 
 $ 
 46,414 
 
 $ 
 38,715 
 
 Deferred: 
 
 United States: 
 
 Federal 
 
 $ 
 5,102 
 
 $ 
 1,123 
 
 $ 
 ( 7,149 
 ) 
 
 State 
 
 49 
 
 ( 340 
 ) 
 
 ( 1,793 
 ) 
 
 Non-U.S: 
 
 ( 668 
 ) 
 
 ( 1,579 
 ) 
 
 ( 66 
 ) 
 
 Deferred income (benefit) tax expense 
 
 4,483 
 
 ( 796 
 ) 
 
 ( 9,008 
 ) 
 
 Income tax expense 
 
 $ 
 49,696 
 
 $ 
 45,618 
 
 $ 
 29,707 
 
 In addition to the change in the U.S. federal statutory rate, the mix of foreign and domestic losses, along with rate reconciling items as outlined below, impact the Company's effective tax rate. Differences between the statutory federal income tax rate and effective income tax rate are summarized below: 
 
 (in thousands) 
 
 September 30, 2020 
 
 September 30, 2019 
 
 September 30, 2018 
 
 Statutory federal tax 
 
 21 
 % 
 
 21 
 % 
 
 25 
 % 
 
 Adjustments to reconcile to the effective income tax rate: 
 
 State income taxes 
 
 4 
 % 
 
 4 
 % 
 
 3 
 % 
 
 Change in tax rates 
 
 — 
 % 
 
 — 
 % 
 
 ( 3 
 )% 
 
 Domestic manufacturing deduction 
 
 — 
 % 
 
 — 
 % 
 
 ( 2 
 )% 
 
 Indemnified uncertain tax benefits 
 
 — 
 % 
 
 — 
 % 
 
 ( 2 
 )% 
 
 Stock-based compensation 
 
 ( 2 
 )% 
 
 ( 1 
 )% 
 
 ( 3 
 )% 
 
 Other 
 
 2 
 % 
 
 1 
 % 
 
 — 
 % 
 
 Effective income tax rate 
 
 25 
 % 
 
 25 
 % 
 
 18 
 % 
 
 The Company's effective tax rate for fiscal 2020 differs from the statutory rate primarily due to state income taxes of $ 7,690 , current year valuation allowance expense of $ 2,099 and limitations on executive compensation of $ 1,243 partially offset by $ 4,203 of excess tax benefit associated with the exercise of stock options. 
 
 The Company's effective tax rate for fiscal 2019 differs from the statutory rate primarily due to state income taxes of $ 7,566 , along with GILTI provisions of $ 953 and withholding taxes of $ 635 , offset by the disallowed gain on the purchase of Cor-Tek of $ 1,551 and $ 1,537 of excess tax benefit associated with the exercise of stock options. 
 
 72 

 The Company's effective tax rate for fiscal 2018 differs from the statutory rate due to a $ 5,466 benefit from the remeasurement of the deferred tax liabilities as a result of the TCJA, a $ 4,091 excess tax benefit associated with the exercise of stock options, a net tax benefit of $ 3,977 from the release of indemnified tax positions and a benefit of $ 3,309 for the domestic manufacturing deduction, partially offset by $ 5,675 of state income tax expense. 
 
 Deferred income taxes result from temporary differences between the amount of assets and liabilities recognized for financial reporting and tax purposes. The components of the net deferred income tax assets are as follows: 
 
 (in thousands) 
 
 September 30, 2020 
 
 September 30, 2019 
 
 Deferred tax assets: 
 
 Accrued liabilities and reserves 
 
 $ 
 26,783 
 
 $ 
 32,664 
 
 Tax loss and credit carryforwards 
 
 15,637 
 
 13,296 
 
 Postretirement benefits 
 
 11,751 
 
 10,315 
 
 Inventory 
 
 5,240 
 
 8,813 
 
 Lease obligations 
 
 9,966 
 
 — 
 
 Other 
 
 174 
 
 916 
 
 $ 
 69,551 
 
 $ 
 66,004 
 
 Deferred tax liabilities: 
 
 Property, plant and equipment 
 
 $ 
 ( 17,648 
 ) 
 
 $ 
 ( 21,312 
 ) 
 
 Intangible assets 
 
 ( 44,774 
 ) 
 
 ( 47,887 
 ) 
 
 Loss on investment 
 
 ( 5,153 
 ) 
 
 ( 4,790 
 ) 
 
 Right-of-use assets, net 
 
 ( 9,546 
 ) 
 
 — 
 
 Other 
 
 ( 4,065 
 ) 
 
 ( 3,660 
 ) 
 
 $ 
 ( 81,186 
 ) 
 
 $ 
 ( 77,649 
 ) 
 
 Net deferred tax liability before valuation allowance 
 
 ( 11,635 
 ) 
 
 ( 11,645 
 ) 
 
 Valuation allowance 
 
 ( 10,203 
 ) 
 
 ( 7,764 
 ) 
 
 Net deferred tax liability 
 
 $ 
 ( 21,838 
 ) 
 
 $ 
 ( 19,409 
 ) 
 
 As of September 30, 2020 , the Company has $ 44,169 of state net operating loss carryforwards which expire beginning in 2020 through 2035. In certain non-U.S. jurisdictions, the Company has net operating loss carryforwards of $ 52,092 which have an expiration period ranging from five years to unlimited. 
 
 Valuation allowances have been established on net operating losses and other deferred tax assets in Australia, France, Asia Pacific, and other foreign and United States state jurisdictions, as a result of the Company's determination that there is less than 50% likelihood that these assets will be realized. Evidence for this determination includes three year cumulative loss positions, future reversal of temporary differences, and expectations of future losses. For fiscal 2019, the Company assessed the need for a continued valuation allowance against deferred tax assets in the Company's Asia Pacific business based on recent taxable income and the expected future performance of the business. As a result, the Company has released a $ 550 valuation allowance against the deferred tax assets of the Asia Pacific business. 
 
 As of September 30, 2020 , the Company had unrecognized tax benefits of $ 1,614 which, if recognized, would positively benefit the effective tax rate. The Company recognizes interest and penalties related to unrecognized tax benefits in income tax expense. As of September 30, 2020 and September 30, 2019 , the Company had accrued interest and penalties of $ 188 and $ 54 , respectively, in the consolidated balance sheets. 
 
 73 

 A reconciliation of the beginning and ending amount of unrecognized tax benefit, excluding interest and penalties, is as follows: 
 
 (in thousands) 
 
 For the period from September 30, 2017 to September 30, 2020 
 
 Balance as of September 30, 2017 
 
 $ 
 3,578 
 
 Additions based on tax positions related to prior years 
 
 893 
 
 Settlements 
 
 ( 3,107 
 ) 
 
 Balance as of September 30, 2018 
 
 1,364 
 
 Additions based on tax positions related to prior years 
 
 244 
 
 Settlements 
 
 ( 814 
 ) 
 
 Balance as of September 30, 2019 
 
 794 
 
 Additions based on tax positions related to prior years 
 
 925 
 
 Additions based on tax positions related to current year 
 
 122 
 
 Settlements 
 
 ( 227 
 ) 
 
 Balance as of September 30, 2020 
 
 1,614 
 
 During fiscal 2020, the balance of unrecognized tax benefits increased by $ 1,047 as a result of federal and various state jurisdictions' uncertain tax positions, partially offset by a decrease of $ 227 as result of completing tax audits and the expiration of the statute of limitations in various state jurisdictions. The related accrued penalties and interest for uncertain tax positions increased by $ 134 . 
 
 During fiscal 2019 , the balance of unrecognized tax benefits decreased by $ 814 as a result of completing state tax audits and the expiration of the statute of limitations in federal and various state jurisdictions, partially offset by an increase of $ 244 , primarily related to various state jurisdictions' uncertain tax positions. The related accrued penalties and interest for uncertain tax positions decreased by $ 25 . 
 
 During fiscal 2018 , the balance of unrecognized tax benefits decreased by $ 3,107 as a result of Tyco completing tax audits and the expiration of the statute of limitations in various state jurisdictions, partially offset by an increase of $ 893 , primarily related to various state jurisdictions' uncertain tax positions. The related accrued penalties and interest for uncertain tax positions decreased by $ 3,139 . 
 
 Many of the Company's uncertain tax positions relate to tax years that remain subject to audit by the taxing authorities. The following tax years remain subject to examination by the major tax jurisdictions as follows: 
 
 Jurisdiction 
 
 Years Open to Audit 
 
 United States 
 
 2018, 2019 and 2020 
 
 The Company's income tax returns are examined periodically by various taxing authorities. The Company is currently under examination in various state jurisdictions. Based on the current status of its income tax audits, the Company believes that it is reasonably possible that there would be no material changes to the unrecognized tax benefits in the next twelve months. 
 
 Other Income Tax Matters —Prior to the passage of the TCJA, foreign undistributed earnings were generally subject to U.S. taxation when repatriated. The TCJA imposed a one-time transition tax on previously untaxed accumulated earnings of foreign subsidiaries. The Company has accumulated earnings and profits deficit, therefore, does not anticipate an additional tax liability as a result of the transition tax. The TCJA adopts a new quasi-territorial tax regime that eliminates U.S income taxes on dividends from foreign subsidiaries. The Company may still be liable for foreign taxes, such as withholding taxes, if earnings are repatriated. 
 
 For the fiscal year ended September 30, 2020 , the Company recorded no additional liability for United States or non-U.S. income taxes on the undistributed income of subsidiaries or for unrecognized deferred tax liabilities for temporary differences related to basis differences in investments in subsidiaries, as such income is expected to be indefinitely reinvested, the investments are essentially permanent in duration, or the Company has concluded that no additional tax liability will arise as a result of the distribution of such income. 
 
 74 

 For the fiscal year ended September 30, 2019 , the Company recorded a liability of $ 635 , for withholding taxes on the planned distribution of income from one of its Europe subsidiaries. The Company did not record income tax or non-income tax expense related to the remaining foreign earnings, and did not record any deferred tax liabilities for any basis differences in investments in subsidiaries as the earnings are expected to be indefinitely reinvested, the investments are essentially permanent in duration, or the Company has concluded that there will be no additional tax liability as a result of the distribution of the income. 
 
 As of September 30, 2020 , certain subsidiaries had approximately $ 59,719 of undistributed income that the Company intends to permanently reinvest. A liability could arise if the Company's intention to permanently reinvest such income were to change and amounts are distributed by such subsidiaries or if such subsidiaries are ultimately disposed of. It is not practicable to estimate the additional income taxes related to permanently reinvested income or the basis differences related to investments in subsidiaries. 
 
 The calculation of the Company's tax liabilities involves dealing with uncertainties in the application of complex tax regulations in a multitude of jurisdictions across its global operations. The Company records tax liabilities for anticipated tax audit issues in the United States and other tax jurisdictions based on the Company's estimate of whether, and the extent to which, additional taxes will be due. These tax liabilities are reflected net of related tax loss carry-forwards. The Company adjusts these reserves in light of changing facts and circumstances. However, due to the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is materially different from the Company's current estimate of the tax liabilities. 
 
 Under the terms of an investment agreement between the Company and Tyco, Tyco has agreed to indemnify and hold harmless the Company and its subsidiaries and their respective affiliates from and against any taxes of the Company with respect to any tax period ending on or before the closing of the Transactions, as well as all tax liabilities relating to events or transactions occurring on or prior to the closing date of the Transactions. In addition, the Company has agreed to indemnify and hold harmless Tyco and its affiliates from and against any liability for any taxes of the Company with respect to any post-Transactions tax period. 
 
 10. EARNINGS PER SHARE 
 
 The Company calculates basic and diluted earnings per common share using the two-class method. Under the two-class method, net earnings are allocated to each class of common stock and participating securities as if all of the net earnings for the period had been distributed. The Company's participating securities consist of share-based payment awards that contain a non-forfeitable right to receive dividends and therefore are considered to participate in undistributed earnings with common stockholders. 
 
 Basic earnings per common share excludes dilution and is calculated by dividing the net earnings allocable to common stock by the weighted-average number of common stock outstanding for the period. Diluted earnings per common share is calculated by dividing net earnings allocated to common stock by the weighted-average number of shares outstanding for the period, as adjusted for the potential dilutive effect of non-participating share-based awards. 
 
 75 

 The following table sets forth the computation of basic and diluted earnings per share: 
 
 Fiscal Year Ended 
 
 (in thousands, except per share data) 
 
 September 30, 2020 
 
 September 30, 2019 
 
 September 30, 2018 
 
 Numerator: 
 
 Net income 
 
 $ 
 152,302 
 
 $ 
 139,051 
 
 $ 
 136,645 
 
 Less: Undistributed earnings allocated to participating securities 
 
 3,356 
 
 3,726 
 
 2,456 
 
 Net income available to common shareholders 
 
 $ 
 148,946 
 
 $ 
 135,325 
 
 $ 
 134,189 
 
 Denominator: 
 
 Basic weighted average common shares outstanding 
 
 47,265 
 
 46,577 
 
 51,791 
 
 Effect of dilutive securities: Non-participating employee stock options (1) 
 
 779 
 
 1,200 
 
 2,298 
 
 Diluted weighted average common shares outstanding 
 
 48,044 
 
 47,777 
 
 54,089 
 
 Basic earnings per share 
 
 $ 
 3.15 
 
 $ 
 2.91 
 
 $ 
 2.59 
 
 Diluted earnings per share 
 
 $ 
 3.10 
 
 $ 
 2.83 
 
 $ 
 2.48 
 
 (1) Stock options to purchase approximately 0.3 million , 0.4 million , and 0.3 million shares of common stock were outstanding during the years ended September 30, 2020 , September 30, 2019 , and September 30, 2018 , respectively, but were not included in the calculation of diluted earnings per share as the impact of these would have been anti-dilutive. 
 
 76 

 11. ACCUMULATED OTHER COMPREHENSIVE LOSS 
 
 The following table presents the changes in accumulated other comprehensive loss by component, net of tax: 
 
 (in thousands) 
 
 Defined benefit pension items 
 
 Currency translation adjustments 
 
 Total 
 
 Balance as of September 30, 2018 
 
 $ 
 ( 6,048 
 ) 
 
 $ 
 ( 10,390 
 ) 
 
 $ 
 ( 16,438 
 ) 
 
 Other comprehensive loss before reclassifications 
 
 ( 15,513 
 ) 
 
 ( 7,490 
 ) 
 
 ( 23,003 
 ) 
 
 Amounts reclassified from accumulated other comprehensive loss 
 
 76 
 
 — 
 
 76 
 
 Net current period other comprehensive loss 
 
 ( 15,437 
 ) 
 
 ( 7,490 
 ) 
 
 ( 22,927 
 ) 
 
 Reclassification of stranded tax benefits (1) 
 
 ( 2,333 
 ) 
 
 — 
 
 ( 2,333 
 ) 
 
 Balance as of September 30, 2019 
 
 $ 
 ( 23,818 
 ) 
 
 $ 
 ( 17,880 
 ) 
 
 ( 41,698 
 ) 
 
 Other comprehensive income (loss) before reclassifications 
 
 ( 7,604 
 ) 
 
 6,087 
 
 ( 1,517 
 ) 
 
 Amounts reclassified from accumulated other comprehensive loss 
 
 661 
 
 — 
 
 661 
 
 Net current period other comprehensive income (loss) 
 
 ( 6,943 
 ) 
 
 6,087 
 
 ( 856 
 ) 
 
 Balance as of September 30, 2020 
 
 $ 
 ( 30,761 
 ) 
 
 $ 
 ( 11,793 
 ) 
 
 $ 
 ( 42,554 
 ) 
 
 (1) Due to the adoption of ASU 2018-02 stranded tax benefits related to its pension plans were reclassified from Accumulated other comprehensive loss and into Accumulated deficit 
 
 The following is a summary of the amounts reclassified from accumulated other comprehensive loss to net income : 
 
 Fiscal Year Ended 
 
 (in thousands) 
 September 30, 2020 
 
 September 30, 2019 
 
 September 30, 2018 
 
 Amortization of defined benefit pension items: 
 
 Amortization of net loss (included within other income, net) 
 $ 
 888 
 
 $ 
 101 
 
 $ 
 343 
 
 Tax expense 
 ( 227 
 ) 
 
 ( 25 
 ) 
 
 ( 14 
 ) 
 
 Net reclassifications for the period 
 $ 
 661 
 
 $ 
 76 
 
 $ 
 329 
 
 12. INVENTORIES, NET 
 
 A majority of the Company records inventory at the lower of cost (primarily last in, first out, or "LIFO") or market or net realizable value, as applicable. Approximately 73 % and 72 % of the Company's inventories are valued at the lower of LIFO cost or market at September 30, 2020 and September 30, 2019 , respectively. 
 
 (in thousands) 
 
 September 30, 2020 
 
 September 30, 2019 
 
 Purchased materials and manufactured parts, net 
 
 $ 
 49,192 
 
 $ 
 52,742 
 
 Work in process, net 
 
 24,113 
 
 21,424 
 
 Finished goods, net 
 
 125,790 
 
 151,924 
 
 Inventories, net 
 
 $ 
 199,095 
 
 $ 
 226,090 
 
 Total inventories would be $ 4,418 lower and $ 3,138 higher than reported as of September 30, 2020 and September 30, 2019 , respectively, if the first-in, first-out method was used for all inventories. During the year ended September 30, 2020, inventory quantities were reduced. This reduction resulted in a liquidation of LIFO inventory quantities carried at net lower costs prevailing in prior years as compared with the cost of 2020 purchases, the effect of which decreased cost of goods sold and increased operating income by approximately $ 1,837 . 
 
 As of September 30, 2020 and September 30, 2019 , the excess and obsolete inventory reserve was $ 14,533 and $ 14,295 , respectively. 
 
 77 

 13. PROPERTY, PLANT AND EQUIPMENT 
 
 As of September 30, 2020 and September 30, 2019 , property, plant and equipment at cost and accumulated depreciation were as follows: 
 
 (in thousands) 
 September 30, 2020 
 
 September 30, 2019 
 
 Land 
 $ 
 20,460 
 
 $ 
 19,897 
 
 Buildings and related improvements 
 129,538 
 
 127,061 
 
 Machinery and equipment 
 332,260 
 
 318,421 
 
 Leasehold improvements 
 9,862 
 
 9,055 
 
 Software 
 27,028 
 
 24,835 
 
 Construction in progress 
 22,736 
 
 21,264 
 
 Property, plant and equipment 
 541,884 
 
 520,533 
 
 Accumulated depreciation 
 ( 297,993 
 ) 
 
 ( 259,830 
 ) 
 
 Property, plant and equipment, net 
 $ 
 243,891 
 
 $ 
 260,703 
 
 Depreciation expense for fiscal years ended September 30, 2020 , September 30, 2019 and September 30, 2018 totaled $ 42,208 , $ 39,471 and $ 34,786 , respectively. 
 
 14. GOODWILL AND INTANGIBLE ASSETS 
 
 Goodwill — C hanges in the carrying amount of goodwill are as follows: 
 
 Segment 
 
 (in thousands) 
 Electrical Raceway 
 
 Mechanical Products & Solutions 
 
 Total 
 
 Balance as of September 30, 2018 
 $ 
 133,566 
 
 $ 
 36,563 
 
 $ 
 170,129 
 
 Goodwill acquired during year 
 18,124 
 
 — 
 
 18,124 
 
 Exchange rate effects 
 $ 
 ( 2,022 
 ) 
 
 — 
 
 $ 
 ( 2,022 
 ) 
 
 Balance as of September 30, 2019 
 $ 
 149,668 
 
 $ 
 36,563 
 
 $ 
 186,231 
 
 Exchange rate effects 
 2,008 
 
 — 
 
 2,008 
 
 Balance as of September 30, 2020 
 $ 
 151,676 
 
 $ 
 36,563 
 
 $ 
 188,239 
 
 Goodwill balances include $ 3,924 and $ 43,000 of accumulated impairment losses within the Electrical Raceway and MP&S segments, respectively, as of September 30, 2020 and September 30, 2019 . 
 
 Intangible Assets — The following table provides the gross carrying value, accumulated amortization, and net carrying value for each major class of intangible assets: 
 
 September 30, 2020 
 
 September 30, 2019 
 
 (in thousands) 
 Weighted Average Useful Life (Years) 
 
 Gross Carrying Value 
 
 Accumulated Amortization 
 
 Net Carrying Value 
 
 Gross Carrying Value 
 
 Accumulated Amortization 
 
 Net Carrying Value 
 
 Amortizable Intangible Assets: 
 
 Customer relationships 
 11 
 
 $ 
 355,735 
 
 $ 
 ( 202,677 
 ) 
 
 $ 
 153,058 
 
 $ 
 353,256 
 
 $ 
 ( 171,777 
 ) 
 
 $ 
 181,479 
 
 Other 
 7 
 
 19,086 
 
 ( 9,675 
 ) 
 
 9,411 
 
 19,086 
 
 ( 7,761 
 ) 
 
 11,325 
 
 Total 
 
 374,821 
 
 ( 212,352 
 ) 
 
 162,469 
 
 372,342 
 
 ( 179,538 
 ) 
 
 192,804 
 
 Indefinite-lived Intangible Assets: 
 
 Trade names 
 
 92,880 
 
 — 
 
 92,880 
 
 92,880 
 
 — 
 
 92,880 
 
 Total 
 
 $ 
 467,701 
 
 $ 
 ( 212,352 
 ) 
 
 $ 
 255,349 
 
 $ 
 465,222 
 
 $ 
 ( 179,538 
 ) 
 
 $ 
 285,684 
 
 78 

 Amortization expense for the fiscal years ended September 30, 2020 , September 30, 2019 and September 30, 2018 was $ 32,262 , $ 32,876 and $ 32,104 , respectively. Expected amortization expense for intangible assets over the next five years and thereafter is as follows (in thousands) : 
 
 2021 
 $ 
 32,267 
 
 2022 
 30,859 
 
 2023 
 30,806 
 
 2024 
 26,287 
 
 2025 
 13,681 
 
 2026 and thereafter 
 28,569 
 
 Actual amounts of amortization may differ from estimated amounts due to additional intangible asset acquisitions, changes in estimated useful lives, impairment of intangible assets, and other events. 
 
 15. DEBT 
 
 Debt as of September 30, 2020 and September 30, 2019 was as follows: 
 
 (in thousands) 
 September 30, 2020 
 
 September 30, 2019 
 
 First Lien Term Loan Facility due December 22, 2023 
 811,540 
 
 $ 
 851,361 
 
 Deferred financing costs 
 ( 7,804 
 ) 
 
 ( 6,569 
 ) 
 
 Other 
 — 
 
 525 
 
 Total debt 
 $ 
 803,736 
 
 $ 
 845,317 
 
 Less: Current portion 
 — 
 
 — 
 
 Long-term debt 
 $ 
 803,736 
 
 $ 
 845,317 
 
 During the three months ended March 29, 2019, the Company made an accelerated repayment of $ 18,680 of principal on the First Lien Loan, which was calculated by a formula based on 2018 excess cash flows and a leverage ratio as defined within the Term Loan Agreement. During the three months ended September 30, 2019, the Company made a voluntary prepayment of $ 40,000 of principal on the First Lien Loan. During the three months ended September 30, 2020, the Company made a voluntary prepayment of $ 40,000 of principal on the First Lien Loan. The voluntary prepayments in the past two years resulted in the removal of all principal payment requirements until the contractual maturity of the debt in fiscal 2024. 
 
 As of September 30, 2020 , future contractual maturities of long-term debt are as follows (in thousands) : 
 
 2021 
 $ 
 — 
 
 2022 
 — 
 
 2023 
 — 
 
 2024 
 812,120 
 
 2025 
 — 
 
 2026 and thereafter 
 $ 
 — 
 
 Term Loan Facility — On April 9, 2014, AII entered into a credit agreement (the "Initial Credit Agreement") for a $ 420,000 First Lien Term Loan Facility (the "Initial First Lien Term Loan Facility") and a credit agreement for a $ 250,000 Second Lien Term Loan Facility (the "Second Lien Term Loan Facility." The Initial First Lien Term Loan Facility was priced at 99.50 % and carried an interest rate of LIBOR plus 3.50 % with a LIBOR floor of 1.00 % . The Second Lien Term Loan Facility was priced at 99.00 % and carried an interest rate of LIBOR plus 6.75 % with a LIBOR floor of 1.00 % . 
 
 79 

 On December 22, 2016, AII entered into an amendment to the Initial Credit Agreement, which amended and restated the Initial Credit Agreement and provided for a new $ 500,000 first lien term loan facility and extended the maturity of the Initial Credit Agreement to December 22, 2023 (the "First Lien Term Loan Facility"). Loans under the First Lien Term Loan Facility bear interest at either LIBOR plus an applicable margin equal to 3.00 % or an alternate base rate plus an applicable margin equal to 2.00 % and are guaranteed by AIH and the United States operating companies owned by AII. The First Lien Term Loan Facility amortizes at a rate of 1.00 % per annum and was priced at 99.75 % . AII used proceeds from the First Lien Term Loan Facility and approximately $ 155,000 of available cash to (i) repay all outstanding loans under the Initial First Lien Term Loan Facility and the Second Lien Term Loan Facility and (ii) pay related fees and expenses, including accrued interest. 
 
 On February 2, 2018 , AII entered into the (i) First Amendment to the Amended and Restated First Lien Credit Agreement, by and among AII, Deutsche Bank AG New York Branch, as administrative agent and collateral agent, and the other financial institutions party thereto to, among other things, decrease the interest margins applicable to the ABR Loans to 1.75 % and Eurodollar Loans to 2.75 % , and (ii) Increase Supplement (the "Increase Supplement") to, among other things, incur incremental first lien secured term loans in aggregate principal amount of $ 425,000 . The Company used the proceeds from the Increase Supplement to 1) repurchase approximately 17.2 million shares of common stock from the CD&R Investor for a total purchase price of approximately $ 375,000 , 2) repay $ 42,000 of outstanding loans under the ABL Credit Facility (as defined below) and 3) pay $ 5,800 in related fees and expenses. The revisions to the First Lien Term Loan were accounted for as a debt modification, resulting in immediate expensing of related financing costs of $ 892 within other income, net on the consolidated statements of operations for the year ended September 30, 2018. 
 
 The First Lien Term Loan Facility contains customary covenants typical for this type of financing, including limitations on indebtedness, restricted payments including dividends, liens, restrictions on distributions from restricted subsidiaries, sales of assets, affiliate transactions, mergers and consolidations. The First Lien Term Loan Facility also contains customary events of default typical for this type of financing, including, without limitation, failure to pay principal and/or interest when due, failure to observe covenants, certain events of bankruptcy, the rendering of certain judgments, or the loss of any guarantee. 
 
 ABL Credit Facility — On December 22, 2016, AII entered into the Fifth Amendment to Credit Agreement and Third Amendment to and Reaffirmation of Guarantee and Collateral Agreement to amend its asset based credit facility (the "ABL Credit Facility"). The amendment, among other things, extended the maturity of the facility to December 22, 2021, decreased the interest rate margins applicable to loans under the facility to (i) in the case of United States dollar-denominated loans, either (x) LIBOR plus an applicable margin ranging from 1.25 % to 1.75 % , or (y) an alternate base rate plus an applicable margin ranging from 0.25 % to 0.75 % or (ii) in the case of Canadian dollar-denominated loans, either (x) the BA rate plus an applicable margin ranging from 1.25 % to 1.75 % or (y) a Canadian prime rate plus an applicable margin ranging from 0.25 % to 0.75 % and decreased the fee payable with respect to unutilized availability under the facility from 0.25 % to 0.375 % depending on the remaining availability under the facility. 
 
 On August 28 2020, AII amended the ABL Credit Facility (the "Amended ABL Facility"). The amendment, among other things, extended the maturity of the facility to August 28, 2023 , and increased the interest rate margins applicable to loans under the facility to (i) in the case of United States dollar-denominated loans, either (x) LIBOR plus an applicable margin ranging from 1.75 % to 2.25 % , or (y) an alternate base rate plus an applicable margin ranging from 0.75 % to 1.25 % , each based on available loan commitments or (ii) in the case of Canadian dollar-denominated loans, either (x) the BA rate plus an applicable margin ranging from 1.75 % to 2.25 % or (y) a Canadian prime rate plus an applicable margin ranging from 0.75 % to 1.25 % , each based on available loan commitments. The Amended ABL Credit Facility bears a commitment fee, payable quarterly in arrears, of 0.375 % per annum. The Amended ABL Credit Facility also bears customary letter of credit fees. The revisions to the ABL Credit Facility were accounted for as a debt extinguishment, resulting in immediate expensing of unamortized financing costs of $ 273 for the year ended September 30, 2020. 
 
 In connection with AII causing Columbia-MBF to become a subsidiary guarantor for the Amended ABL Credit Facility, AII also caused Columbia-MBF to become a subsidiary guarantor for the First Lien Term Loan Facility. 
 
 80 

 The Amended ABL Credit Facility has aggregate commitments of $ 325,000 and is guaranteed by AIH, the United States subsidiaries owned directly or indirectly by AII and certain other restricted subsidiaries of AII that AII causes to be a subsidiary guarantor from time to time including as of the closing date for the Amended ABL Credit Facility, Columbia-MBF, Inc., a corporation formed by amalgamation under the laws of Canada ("Columbia-MBF"). AII's availability under the ABL Credit Facility was $ 265,899 and $ 301,882 as of September 30, 2020 and September 30, 2019 , respectively. Availability under the ABL Credit Facility is subject to a borrowing base equal to the sum of 85 % of eligible accounts receivable plus the lesser of (i) 80 % of eligible inventory of each borrower and guarantor, valued at the lower of cost and fairmarket value and (ii) 85 % of the net orderly liquidation value of eligible inventory, subject to certain limitations. There were no borrowings outstanding under the ABL Credit Facility as of September 30, 2020 and September 30, 2019 , respectively. 
 
 The Amended ABL Credit Facility contains customary representations and warranties and customary affirmative and negative covenants. Affirmative covenants include, without limitation, the timely delivery of quarterly and annual financial statements, certifications to be made by AIH, AII and each of its restricted subsidiaries, payment of obligations, maintenance of corporate existence and insurance, notices, compliance with environmental laws, and the grant of liens. The negative covenants are limited to the following: limitations on indebtedness, dividends and distributions, investments, acquisitions, prepayments or redemptions of subordinated indebtedness, amendments of subordinated indebtedness, transactions with affiliates, asset sales, mergers, consolidations and sales of all or substantially all assets, liens, negative pledge clauses, changes in line of business, changes in charter documents, hedging transactions and maintaining Canadian defined benefit pension plans. The negative covenants are subject to customary exceptions and also permit the payment of dividends and distributions, investments, permitted acquisitions, payments or redemptions of subordinated indebtedness, asset sales and consolidations and sales of all or substantially all assets upon satisfaction of a payment condition. There are no financial covenants included in the Amended ABL Credit Agreement, other than a springing minimum fixed charge coverage ratio of at least 1.0 to 1.0, which will be tested only when specified availability (as defined above) is less than the greater of (A) $ 22,000 and (B) 10.0 % of the lesser of (x) the then applicable borrowing base and (y) the then effective commitments under the Amended ABL Credit Facility, and continuing until such time as specified availability shall have been in excess of such threshold for a period of 30 consecutive days. 
 
 The First Lien Term Loan Facility and the ABL Credit Facility are secured by all of the assets of the U.S. subsidiaries of the Company and, as of the closing date for the Amended ABL Credit Facility, Columbia-MBF. The First Lien Term Loan Facility has priority over all real property, plant and equipment, intellectual property and capital stock of any U.S. subsidiary and Columbia-MBF and any documents or instruments evidencing the foregoing assets. The ABL Credit Facility has first priority over cash and cash equivalents, accounts receivable, inventory and other documents and instruments evidencing the foregoing assets. 
 
 16. FAIR VALUE MEASUREMENTS 
 
 Certain assets and liabilities are required to be recorded at fair value on a recurring basis. 
 
 The Company uses forward currency contracts to hedge the effects of foreign exchange relating to certain of the Company's intercompany receivables denominated in a foreign currency. These derivative instruments are not formally designated as hedges by the Company and the terms of these instruments range from six months to two years . Short-term forward currency contracts are recorded in prepaid expenses and other current assets or other current liabilities and long-term forward currency contracts are recorded in non-trade receivables or other long-term liabilities in the consolidated balance sheets . The fair value gains and losses are included in other income, net within the consolidated statements of operations . See Note 8, ''Other Income, net'' for further detail. 
 
 The total notional amounts of undesignated forward currency contracts were £ 43.3 million, £ 45.0 million and £ 49.1 million as of September 30, 2020 , September 30, 2019 and September 30, 2018 . Cash flows associated with derivative financial instruments are recognized in the operating section of the consolidated statements of cash flows . The fair value of forward currency contracts is calculated by reference to current forward exchange rates for contracts with similar maturity profiles. 
 
 The following table presents the recurring assets and liabilities measured at fair value as of September 30, 2020 and September 30, 2019 in accordance with the fair value hierarchy: 
 
 81 

 September 30, 2020 
 
 September 30, 2019 
 
 (in thousands) 
 Level 1 
 
 Level 2 
 
 Level 3 
 
 Level 1 
 
 Level 2 
 
 Level 3 
 
 Assets 
 
 Cash equivalents 
 $ 
 209,421 
 
 $ 
 — 
 
 $ 
 — 
 
 $ 
 72,132 
 
 $ 
 — 
 
 $ 
 — 
 
 Forward currency contracts 
 — 
 
 2,209 
 
 — 
 
 — 
 
 3,420 
 
 — 
 
 Liabilities 
 
 Forward currency contracts 
 — 
 
 $ 
 102 
 
 — 
 
 — 
 
 $ 
 — 
 
 — 
 
 The Company's remaining financial instruments consist primarily of cash, accounts receivable and accounts payable whose carrying value approximate their fair value due to their short-term nature. 
 
 The estimated fair value of financial instruments not carried at fair value in the consolidated balance sheets were as follows: 
 
 September 30, 2020 
 
 September 30, 2019 
 
 (in thousands) 
 
 Carrying Value 
 
 Fair Value 
 
 Carrying Value 
 
 Fair Value 
 
 First Lien Term Loan Facility due December 22, 2023 
 
 $ 
 812,120 
 
 $ 
 808,060 
 
 $ 
 852,120 
 
 $ 
 853,543 
 
 Total debt 
 
 $ 
 812,120 
 
 $ 
 808,060 
 
 $ 
 852,120 
 
 $ 
 853,543 
 
 In determining the approximate fair value of its long-term debt, the Company used the trading value among financial institutions, which were classified within Level 2 of the fair value hierarchy. The carrying value of the ABL Credit Facility approximates fair value due to it being market-linked variable rate debt. 
 
 17. COMMITMENTS AND CONTINGENCIES 
 
 The Company has obligations related to commitments to purchase certain goods. As of September 30, 2020 , such obligations were $ 130,932 for fiscal 2021 , $ 1,828 for fiscal 2022 and $ 13 thereafter. These amounts represent open purchase orders for materials used in production. 
 
 Insurable Liabilities — The Company maintains policies with various insurance companies for its workers' compensation, product, property, general, auto, and executive liability risks. The insurance policies that the Company maintains have various retention levels and excess coverage limits. The establishment and update of liabilities for unpaid claims, including claims incurred but not reported, is based on management's estimate as a result of the assessment by the Company's claim administrator of each claim and an independent actuarial valuation of the nature and severity of total claims. The Company utilizes a third-party claims administrator to pay claims, track and evaluate actual claims experience, and ensure consistency in the data used in the actuarial valuation. 
 
 Legal Contingencies — The Company is a defendant in a number of pending legal proceedings, some of which were inherited from its former parent, Tyco International Ltd. ("Tyco"), including certain product liability claims. Several lawsuits have been filed against the Company and the Company has also received other claim demand letters alleging that the Company's anti-microbial coated steel sprinkler pipe, which the Company has not manufactured or sold for several years, is incompatible with chlorinated polyvinyl chloride and caused stress cracking in such pipe manufactured by third parties when installed together in the same sprinkler system, which the Company refers to collectively as the " Special Products Claims ." After an analysis of claims experience, the Company reserved its best estimate of the probable and reasonably estimable losses related to these matters. The Company's total product liability reserves for Special Products Claims and other product liability matters were $ 597 and $ 2,424 as of September 30, 2020 and September 30, 2019 , respectively. As of September 30, 2020 , the Company believes that the range of reasonably possible losses for Special Products Claims and other product liabilities is between $ 1,000 and $ 8,000 . 
 
 82 

 During fiscal 2019, after a court judgment was issued in one case between the Company and Tyco regarding the indemnification of expenses, fees and settlement amounts relating to the incompatibility issue, the Company and Tyco entered into a global settlement regarding the issue. The Company agreed to fund the total settlement in exchange for Tyco's agreement to cap the Company's Special Products Claim deductible at $ 12,000 , as opposed to the $ 13,000 cap negotiated within the original indemnity agreement. In conjunction with the payment of that settlement, Tyco and the Company examined the Company's total Special Products Claim payments and agreed that with that settlement payment and payment of a few other legal fee invoices, all of which have now been paid, the Company had met its $ 12,000 deductible obligation related to these Special Products Claims. Tyco, now Johnson Controls, Inc. ("JCI"), has a contractual obligation to indemnify the Company in respect of all remaining and future claims of incompatibility between the Company's antimicrobial coated steel sprinkler pipe and CPVC pipe used in the same sprinkler system. Tyco has defended and indemnified the Company on Special Products Claims as required. 
 
 At this time, the Company does not expect the outcome of the Special Products Claims proceedings, either individually or in the aggregate, to have a material adverse effect on its business, financial condition, results of operations or cash flows, and the Company believes that its reserves are adequate for all remaining contingencies for Special Products Claims. 
 During fiscal 2017, the U.S. Department of Commerce ruled on a scope request in relation to an Antidumping Duty Order for Malleable Iron Pipe Fittings from China. The ruling subjected certain of the Company's imports of conduit fittings within the Atkore Steel Components Inc. ("ASCI") business (acquired in November 2014) to antidumping duties, which are incremental to the duties previously paid upon importation. The Company appealed the scope decision and established an accrual of $ 7,501 during the second quarter of fiscal 2017 for the related contingent liability with the related expense recorded in selling, general and administrative expenses in the Company's consolidated statements of operations which covers the post-acquisition period through the date of the scope ruling. On appeal, the Court of International Trade ordered the U.S. Department of Commerce to re-examine certain aspects of its prior scope ruling, and after doing so, the Department filed an amended scope ruling for the Court of International Trade’s consideration. The amended scope ruling finds the ASCI products at issue in the matter to be outside the scope of the aforesaid Antidumping Duty Order. On August 3, 2018, the Court of International Trade sustained the U.S. Department of Commerce’s new scope determination and entered judgment thereupon. The U.S. Department of Commerce did not appeal the ruling by the Court of International Trade by the October 2, 2018 deadline and in fiscal 2018, the Company reversed $ 7,171 of the related accrual established during the second quarter of fiscal 2017. 
 
 During the year ended September 30, 2020, one of the Company’s manufacturing facilities experienced a flood which resulted in damages to certain property, plant and equipment. This facility is covered under the Company’s property and casualty loss and business interruption insurance policies. The Company has recorded an expense of $ 6,046 for losses related to fully written off property, plant and equipment, with a related insurance recovery of $ 5,046 within selling, general and administrative expenses in its consolidated statements of operations for the year ended September 30, 2020. The Company has begun to receive reimbursement and believes that, other than the $ 1,000 deductible expense under the related insurance claim, it will be reimbursed for substantially all other property, plant and equipment losses in connection with the event under its current insurance policies. 
 
 In addition to the matters discussed above, from time to time, the Company is subject to a number of disputes, administrative proceedings and other claims arising out of the ordinary conduct of the Company's business. These matters generally relate to disputes arising out of the use or installation of the Company's products, product liability litigation, contract disputes, patent infringement accusations, employment matters, personal injury claims and similar matters. On the basis of information currently available to the Company, it does not believe that existing proceedings and claims will have a material adverse effect on its business, financial condition, results of operations or cash flows. However, litigation is unpredictable, and the Company could incur judgments or enter into settlements for current or future claims that could adversely affect its business, financial condition, results of operations or cash flows. 
 
 18. GUARANTEES 
 The Company has outstanding letters of credit totaling $ 9,501 supporting workers' compensation and general liability insurance policies and surety bonds primarily related to performance guarantees on supply agreements and construction contracts, and payment of duties and taxes totaling $ 19,468 as of September 30, 2020 . 
 
 In disposing of assets or businesses, the Company often provides representations, warranties and indemnities to cover various risks including unknown damage to the assets, environmental risks involved in the sale of real estate, liability to investigate and remediate environmental contamination at waste disposal sites and manufacturing facilities, and unidentified tax liabilities and legal fees related to periods prior to disposition. The Company does not have the ability to estimate the 
 
 83 

 potential liability from such indemnities because they relate to unknown conditions. However, the Company has no reason to believe that these uncertainties would have a material adverse effect on the Company's business, financial condition, results of operations or cash flows. 
 
 In the normal course of business, the Company is liable for product performance and contract completion. In the opinion of management, such obligations will not have a material adverse effect on the Company's business, financial condition, results of operations or cash flows. 
 
 19. RELATED PARTY TRANSACTIONS 
 
 In December 2010, CD&R Allied Holdings, L.P. (the "CD&R Investor") acquired a majority stake in the Company (the "CD&R Acquisition"). In connection with the CD&R Acquisition, the Company, AIH and AII entered into a consulting agreement (the "Consulting Agreement") with CD&R. On January 22, 2018, the Company announced a stock repurchase transaction whereby the Company agreed to repurchase from the CD&R Investor, a related party, approximately 17.2 million shares of the Company's common stock, par value $ 0.01 per share, at a per share price equal to $ 21.77 , for a total purchase price of $ 375,000 , subject to the terms and conditions set forth in the stock purchase agreement. Following the stock repurchase transaction in January 2018 and secondary offerings of the Company's common stock in February 2018 and May 2018, the CD&R Investor did not own any of the Company's common stock subsequent to May 2018. 
 
 Prior to the CD&R Investor selling all of its remaining shares of the Company in May 2018, transactions between the Company, CD&R and affiliates of CD&R were considered to be between related parties. In addition to the consulting fees referenced above, affiliates of CD&R own equity positions in one of the Company's customers. Net sales during fiscal 2018 to this customer were $ 6,000 . 
 
 20. SEGMENT INFORMATION 
 The Company has two operating segments, which are also its reportable segments. The Company's operating segments are organized based upon primary market channels and, in most instances, the end use of products. 
 Through its Electrical Raceway segment, the Company manufactures products that deploy, isolate and protect a structure's electrical circuitry from the original power source to the final outlet. These products, which include electrical conduit, armored cable, cable trays, mounting systems and fittings, are critical components of the electrical infrastructure for maintenance, repair and remodel markets. The vast majority of the Company's Electrical Raceway net sales are made to electrical distributors, who then serve electrical contractors and the Company considers both to be customers. 
 Through the MP&S segment, the Company provides products and services that frame, support and secure component parts in a broad range of structures, equipment and systems in electrical, industrial and construction applications. The Company's principal products in this segment are metal framing products and in-line galvanized mechanical tube. Through its metal framing business, the Company designs, manufactures and installs metal strut and fittings used to assemble mounting structures that support heavy equipment and electrical content in buildings and other structures. 
 
 Both segments use Adjusted EBITDA as the primary measure of profit and loss. Segment Adjusted EBITDA is the income (loss) before income taxes, adjusted to exclude unallocated expenses, depreciation and amortization, interest expense, net, gain (loss) on extinguishment of debt, restructuring charges, stock-based compensation, certain legal matters, transaction costs, gain on purchase of business, gain on sale of a business and other items, such as inventory reserves and adjustments, loss on disposal of property, plant and equipment, insurance recovery related to damages of property, plant and equipment, release of indemnified uncertain tax positions, and realized or unrealized gain (loss) on foreign currency impacts of intercompany loans and related forward currency derivatives. 
 
 84 

 Intersegment transactions primarily consist of product sales at designated transfer prices on an arm's-length basis. Gross profit earned and reported within the segment is eliminated in the Company's consolidated results. Certain manufacturing and distribution expenses are allocated between the segments on a pro rata basis due to the shared nature of activities. Recorded amounts represent a proportional amount of the quantity of product produced for each segment. Certain assets, such as machinery and equipment and facilities, are not allocated to each segment despite serving both segments. These shared assets are reported within the MP&S segment. We allocate certain corporate operating expenses that directly benefit our operating segments, such as insurance and information technology, on a basis that reasonably approximates an estimate of the use of these services. 
 
 Fiscal year ended 
 
 September 30, 2020 
 
 September 30, 2019 
 
 September 30, 2018 
 
 (in thousands) 
 External Net Sales 
 
 Inter- segment Sales 
 
 Adjusted EBITDA 
 
 External Net Sales 
 
 Inter- segment Sales 
 
 Adjusted EBITDA 
 
 External Net Sales 
 
 Inter- segment Sales 
 
 Adjusted EBITDA 
 
 Electrical Raceway 
 $ 
 1,328,721 
 
 $ 
 2,554 
 
 $ 
 299,485 
 
 $ 
 1,442,278 
 
 $ 
 1,215 
 
 $ 
 292,585 
 
 $ 
 1,365,067 
 
 $ 
 1,544 
 
 $ 
 255,260 
 
 MP&S 
 436,700 
 
 — 
 
 $ 
 61,152 
 
 474,260 
 
 — 
 
 $ 
 70,040 
 
 470,072 
 
 81 
 
 $ 
 51,339 
 
 Eliminations 
 — 
 
 ( 2,554 
 ) 
 
 — 
 
 ( 1,215 
 ) 
 
 — 
 
 ( 1,625 
 ) 
 
 Consolidated operations 
 $ 
 1,765,421 
 
 $ 
 — 
 
 $ 
 1,916,538 
 
 $ 
 — 
 
 $ 
 1,835,139 
 
 $ 
 — 
 
 Capital Expenditures 
 
 Total Assets 
 
 (in thousands) 
 September 30, 2020 
 
 September 30, 2019 
 
 September 30, 2018 
 
 September 30, 2020 
 
 September 30, 2019 
 
 September 30, 2018 
 
 Electrical Raceway 
 $ 
 17,667 
 
 $ 
 19,856 
 
 $ 
 16,389 
 
 $ 
 835,629 
 
 $ 
 871,771 
 
 $ 
 751,024 
 
 MP&S 
 13,870 
 
 13,934 
 
 14,267 
 
 215,350 
 
 252,708 
 
 291,164 
 
 Unallocated 
 2,233 
 
 1,070 
 
 7,845 
 
 507,546 
 
 312,516 
 
 281,872 
 
 Consolidated operations 
 $ 
 33,770 
 
 $ 
 34,860 
 
 $ 
 38,501 
 
 $ 
 1,558,525 
 
 $ 
 1,436,995 
 
 $ 
 1,324,060 
 
 Presented below is a reconciliation of operating segment Adjusted EBITDA to Income before income taxes : 
 
 Fiscal Year Ended 
 
 (in thousands) 
 September 30, 2020 
 
 September 30, 2019 
 
 September 30, 2018 
 
 Operating segment Adjusted EBITDA 
 
 Electrical Raceway 
 $ 
 299,485 
 
 $ 
 292,585 
 
 $ 
 255,260 
 
 MP&S 
 61,152 
 
 70,040 
 
 51,339 
 
 Total 
 $ 
 360,637 
 
 $ 
 362,625 
 
 $ 
 306,599 
 
 Unallocated expenses (a) 
 ( 34,002 
 ) 
 
 ( 38,217 
 ) 
 
 ( 35,050 
 ) 
 
 Depreciation and amortization 
 ( 74,470 
 ) 
 
 ( 72,347 
 ) 
 
 ( 66,890 
 ) 
 
 Interest expense, net 
 ( 40,062 
 ) 
 
 ( 50,473 
 ) 
 
 ( 40,694 
 ) 
 
 Gain (loss) on extinguishment of debt 
 ( 273 
 ) 
 
 — 
 
 — 
 
 Restructuring charges 
 ( 3,284 
 ) 
 
 ( 3,804 
 ) 
 
 ( 1,849 
 ) 
 
 Stock-based compensation 
 ( 13,064 
 ) 
 
 ( 11,798 
 ) 
 
 ( 14,664 
 ) 
 
 Certain legal matters 
 — 
 
 — 
 
 4,833 
 
 Transaction costs 
 ( 196 
 ) 
 
 ( 1,200 
 ) 
 
 ( 9,314 
 ) 
 
 Gain on purchase of business 
 — 
 
 7,384 
 
 — 
 
 Gain on sale of a business 
 — 
 
 — 
 
 27,575 
 
 Other (b) 
 6,712 
 
 ( 7,501 
 ) 
 
 ( 4,194 
 ) 
 
 Income before income taxes 
 $ 
 201,998 
 
 $ 
 184,669 
 
 $ 
 166,352 
 
 (a) Represents unallocated selling, general and administrative activities and associated expenses including, in part, executive, legal, finance, human resources, information technology, business development and communications, as well as certain costs and earnings of employee-related benefits plans, such as stock-based compensation and a portion of self-insured medical costs. 
 
 (b) Represents other items, such as inventory reserves and adjustments, loss on disposal of property, plant and equipment, insurance recovery related to damages of property, plant and equipment, release of indemnified uncertain tax positions and realized or unrealized gain (loss) on foreign currency impacts of intercompany loans and related forward currency derivatives. 
 
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 The Company's long-lived assets and net sales by geography were as follows: 
 
 Long-lived assets 
 
 Net sales 
 
 (in thousands) 
 
 September 30, 2020 
 
 September 30, 2019 
 
 September 30, 2018 
 
 September 30, 2020 
 
 September 30, 2019 
 
 September 30, 2018 
 
 United States 
 
 $ 
 203,694 
 
 $ 
 219,614 
 
 $ 
 201,101 
 
 $ 
 1,563,258 
 
 $ 
 1,689,194 
 
 $ 
 1,651,636 
 
 Other Americas 
 
 146 
 
 147 
 
 138 
 
 26,421 
 
 33,485 
 
 43,013 
 
 Europe 
 
 41,283 
 
 43,207 
 
 11,090 
 
 132,299 
 
 142,279 
 
 90,915 
 
 Asia-Pacific 
 
 1,759 
 
 1,998 
 
 2,386 
 
 43,443 
 
 51,580 
 
 49,575 
 
 Total 
 
 $ 
 246,882 
 
 $ 
 264,966 
 
 $ 
 214,715 
 
 $ 
 1,765,421 
 
 $ 
 1,916,538 
 
 $ 
 1,835,139 
 
 The table below shows the amount of net sales from external customers for each of the Company's product categories which accounted for 10% or more of consolidated net sales in any of the last three fiscal years: 
 
 Fiscal Year Ended 
 
 (in thousands) 
 
 September 30, 2020 
 
 September 30, 2019 
 
 September 30, 2018 
 
 Metal Electrical Conduit and Fittings 
 
 $ 
 484,476 
 
 $ 
 546,533 
 
 $ 
 517,935 
 
 Armored Cable and Fittings 
 
 306,460 
 
 360,494 
 
 336,388 
 
 PVC Electrical Conduit & Fittings 
 
 308,561 
 
 292,243 
 
 311,811 
 
 Cable Tray & Cable Ladders 
 
 193,306 
 
 199,303 
 
 145,795 
 
 Other raceway products 
 
 35,918 
 
 43,705 
 
 53,138 
 
 Electrical Raceway 
 
 1,328,721 
 
 1,442,278 
 
 1,365,067 
 
 Mechanical Pipe 
 
 244,902 
 
 259,613 
 
 253,381 
 
 Other MP&S products 
 
 191,798 
 
 214,647 
 
 216,691 
 
 MP&S 
 
 436,700 
 
 474,260 
 
 470,072 
 
 Net sales 
 
 $ 
 1,765,421 
 
 $ 
 1,916,538 
 
 $ 
 1,835,139 
 
 Risks and Concentrations 
 
 Concentration of Credit Risk — The Company extends credit to various customers in the retail and construction industries. Collection of trade receivables may be affected by changes in economic or other industry conditions and may, accordingly, impact the Company's overall credit risk. Although the Company generally does not require collateral, the Company performs ongoing credit evaluations of customers and maintains reserves for potential credit losses. As of September 30, 2020, one customer, Sonepar Management US, Inc., represented 11% of the Company's accounts receivable balance due to increased sales in the last 60 days of the year. As of September 30, 2019, no single customer represented more than 10% of the Company's accounts receivable balance. For fiscal 2020, 2019 and 2018, no single customer accounted for more than 10% of sales. 
 
 Concentration of Employees — As of September 30, 2020 , approximately 24 % of the Company's employees were represented by a union under a collective bargaining agreement. All unions are located in either the United States or Canada, with no unions or Worker's Councils at any of the other locations abroad. On July 14, 2020, the Company and the United Steelworkers Union, representing approximately 350 employees, reached agreement on the terms of a new collective bargaining agreement for our largest facility in Harvey, Illinois, which expires in April 2024. The Company believes its relationship with its employees is good. 
 
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 21. QUARTERLY OPERATING RESULTS (UNAUDITED) 
 
 The following table presents unaudited selected quarterly financial data for the years ended September 30, 2020 and September 30, 2019 . The operating results for any quarter are not necessarily indicative of the results of any future period. 
 
 Three Months Ended 
 
 (in thousands, except per share data) 
 December 27, 2019 
 
 March 27, 2020 
 
 June 26, 2020 
 
 September 30, 2020 
 
 December 29, 2018 
 
 March 30, 2019 
 
 June 29, 2019 
 
 September 30, 2019 
 (1) 
 
 Net sales 
 $ 
 447,448 
 
 $ 
 455,654 
 
 $ 
 384,899 
 
 $ 
 477,420 
 
 $ 
 452,028 
 
 $ 
 469,309 
 
 $ 
 493,491 
 
 $ 
 501,710 
 
 Gross profit 
 116,844 
 
 131,603 
 
 95,813 
 
 147,054 
 
 110,256 
 
 117,088 
 
 126,134 
 
 143,722 
 
 Net income 
 34,790 
 
 39,193 
 
 24,078 
 
 54,241 
 
 26,949 
 
 29,555 
 
 36,550 
 
 45,997 
 
 Net income per share 
 
 Basic (2) 
 $ 
 0.72 
 
 $ 
 0.81 
 
 $ 
 0.50 
 
 $ 
 1.12 
 
 $ 
 0.56 
 
 $ 
 0.62 
 
 $ 
 0.77 
 
 $ 
 0.96 
 
 Diluted (2) 
 0.71 
 
 0.80 
 
 0.49 
 
 1.11 
 
 0.54 
 
 0.61 
 
 0.75 
 
 0.94 
 
 (1) Includes a $7,384 gain on the acquisition of Cor-Tek. See Note 3, "Acquisitions" for additional information. 
 
 (2) The sum of the quarters may not equal the total of the respective year's earnings per share due to changes in the weighted average shares outstanding throughout the year. 
 
 22. SUBSEQUENT EVENTS 
 
 On October 22, 2020, the Company acquired the assets of Queen City Plastics, Inc., a manufacturer of PVC conduit, elbows and fittings for the electrical market for an estimated purchase price of $ 7.3 million. 
 
 Subsequent to September 30, 2020, the Company repurchased 637,200 shares for $ 15.0 million reducing the Company's share count to 47,409,886 as of November 13, 2020 . 
 
 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 
 
 None.
Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.
Atkore Inc. 10-K

Item 8. Financial Statements and Supplementary Data
