What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2022-06-30 compared with 2022-04-05 · 145 added, 117 removed, 524 unchanged (33% of the section changed)

3 unchanged sentences

(In millions, except share data)

February 28, 2022 August 31, 2021

May 31, 2022 August 31, 2021

Current assets:

14 unchanged sentences

Accounts payable $ 452.2 $ 391.5

Current maturities of debt 122.0 —

Current operating lease liabilities 16.2 15.9

26 unchanged sentences

(In millions, except per-share data)

Three Months Ended Six Months Ended

February 28, 2022 February 28, 2021 February 28, 2022 February 28, 2021

Three Months Ended Nine Months Ended

May 31, 2022 May 31, 2021 May 31, 2022 May 31, 2021

Net sales $ 1,060.6 $ 899.7 $ 2,895.8 $ 2,468.3

22 unchanged sentences

Defined benefit plans, net of tax 1.2 ( 1.6 ) 3.6 1.7

Other comprehensive income (loss) items, net of tax 6.0 8.4 ( 4.7 ) 14.6

Other comprehensive (loss) income items, net of tax ( 0.6 ) 20.7 ( 5.3 ) 35.3

Comprehensive income $ 105.1 $ 106.4 $ 263.3 $ 243.5

3 unchanged sentences

(In millions)

Six Months Ended

February 28, 2022 February 28, 2021

Nine Months Ended

May 31, 2022 May 31, 2021

Cash flows from operating activities:

19 unchanged sentences

Cash flows from financing activities:

Borrowings on credit facility, net of repayments 122.0 —

Issuance of long-term debt — 493.9

19 unchanged sentences

We use technology to solve problems in spaces and light.

Through our two business segments, Acuity Brands Lighting and Lighting Controls (“ABL”) and the Intelligent Spaces Group (“ISG”), we design, manufacture, and bring to market products and services that make the world more brilliant, productive, and connected.

We achieve growth through the development of innovative new products and services, including lighting, lighting controls, building management systems, and location-aware applications.

7 unchanged sentences

To serve international customers, our sales forces utilize a variety of distribution methods to meet specific individual customer or country requirements.

ABL comprised approximately 95 % of consolidated revenues during the three and six months ended February 28, 2022 and 2021.

ABL comprised approximately 95 % of consolidated revenues during the three and nine months ended May 31, 2022 and 2021.

ISG delivers products and services that make spaces smarter, safer, and greener.

ISG offers building management systems and location-aware applications and sells predominantly to system integrators.

ISG offers building management systems and location-aware applications.

Our building management system includes products for controlling heating, ventilation, and air conditioning (“HVAC”), lighting, shades, and building access that deliver end-to-end optimization of those building systems.

Atrius TM , our intelligent building platform, enhances the occupant experience, improves building system management, and automates labor intensive tasks while delivering operational energy efficiency and cost reductions.

Through a connected and converged building system architecture, our platform delivers different applications, allows clients to upgrade over time with natural refresh cycles, and deploys new capability through both software and hardware updates.

Customers of ISG primarily include system integrators as well as retail stores, airports, and enterprise campuses throughout North America and select international locations.

ISG products and solutions are marketed under numerous brand names, including but not limited to Distech Controls®, Atrius TM , and Rockpile Ventures.

ISG comprised approximately 5 % of consolidated revenues during the three and six months ended February 28, 2022 and 2021.

ISG products and solutions are marketed under numerous brand names, including but not limited to Distech Controls® and Atrius TM .

ISG comprised approximately 5 % of consolidated revenues during the three and nine months ended May 31, 2022 and 2021.

We have prepared the Consolidated Financial Statements in accordance with U.S.

2 unchanged sentences

and its wholly-owned subsidiaries.

These unaudited interim consolidated financial statements reflect all normal and recurring adjustments that are, in the opinion of management, necessary to present fairly our consolidated financial position as of February 28, 2022, our consolidated comprehensive income for the three and six months ended February 28, 2022 and 2021, and our consolidated cash flows for the six months ended February 28, 2022 and 2021.

These unaudited interim consolidated financial statements reflect all normal and recurring adjustments that are, in the opinion of management, necessary to present fairly our consolidated financial position as of May 31, 2022, our consolidated comprehensive income for the three and nine months ended May 31, 2022 and 2021, and our consolidated cash flows for the nine months ended May 31, 2022 and 2021.

Certain information and footnote disclosures normally included in our annual financial statements prepared in accordance with U.S.

6 unchanged sentences

001-16583) (“Form 10-K”).

The results of operations for the three and six months ended February 28, 2022 are not necessarily indicative of the results to be expected for the full fiscal 2022 year due primarily to continued uncertainty of general economic conditions that may impact our key end markets for the remainder of fiscal 2022, seasonality, and the impact of any acquisitions, among other reasons.

The results of operations for the three and nine months ended May 31, 2022 are not necessarily indicative of the results to be expected for the full fiscal 2022 year due primarily to continued uncertainty of general economic conditions that may impact our key end markets for the remainder of fiscal 2022, seasonality, and the impact of any acquisitions, among other reasons.

We are uncertain of the future impact of the ongoing COVID-19 pandemic or recovery of prior deterioration in economic conditions to our sales channels, supply chain, manufacturing, and distribution as well as overall construction, renovation, and consumer spending.

7 unchanged sentences

Reclassifications

We have recast prior period segment and disaggregated revenue information to conform to the current year presentation.

See the Segment Information footnote of the Notes to Consolidated Financial Statements for further details.

No other material reclassifications occurred during the current period.

We may reclassify certain prior period amounts to conform to the current year presentation.

No material reclassifications occurred during the current period.

Note 3 — Acquisitions

1 unchanged sentence

There were no acquisitions during fiscal 2022.

the $ 10.2 million of cash outflows reflected in the fiscal 2022 Consolidated Statements of Cash Flows relate to working capital settlements for fiscal 2021 acquisitions.

The $ 12.2 million of cash outflows reflected in the fiscal 2022 Consolidated Statements of Cash Flows relate to fiscal 2021 acquisitions primarily for working capital settlements.

Fiscal 2021 Acquisitions

1 unchanged sentence

On July 1, 2021, using cash on hand, we acquired certain assets and liabilities of ams OSRAM’s North American Digital Systems business (“OSRAM DS”).

This acquisition is intended to enhance our LED driver and controls technology portfolio and accelerate our innovation, expand our access to market through a more fulsome original equipment manufacturer (“OEM”) product offering, and give us more control over our supply chain.

This acquisition intended to enhance our LED driver and controls technology portfolio and accelerate our innovation, expand our access to market through a more fulsome original equipment manufacturer (“OEM”) product offering, and give us more control over our supply chain.

Rockpile Ventures

6 unchanged sentences

Acquired assets and liabilities were recorded at their estimated acquisition-date fair values, and acquisition-related costs were expensed as incurred.

The aggregate purchase price of these acquisitions reflects preliminary goodwill of $ 10.6 million and definite-lived customer-based intangible assets of $ 6.7 million, which have a preliminary useful life of approximately 11 years.

We finalized the acquisition accounting for the Rockpile Ventures acquisition during the third quarter of fiscal 2022.

There were no material changes to our financial statements as a result of the finalization of the acquisition accounting for the Rockpile Ventures acquisition.

Amounts recognized for the OSRAM DS acquisition are deemed to be provisional until disclosed otherwise, as we continue to gather information related to the identification and valuation of acquired assets and liabilities, including but not limited to tax-related items, final net working capital purchase adjustments, if any, and the residual impacts on the valuation of intangible assets.

The aggregate purchase price of these acquisitions reflects goodwill of $ 10.6 million and definite-lived customer-based intangible assets of $ 6.7 million, which have a preliminary useful life of approximately 11 years.

Goodwill recognized from these acquisitions is comprised primarily of expected synergies from obtaining more control over our supply chain and technology, combining the operations of the acquired business with our operations, and acquiring the associated trained workforce.

As of February 28, 2022, goodwill from these acquisitions totaling $ 7.5 million is expected to be tax deductible.

Amounts recognized for these acquisitions are deemed to be provisional until disclosed otherwise, as we continue to gather information related to the identification and valuation of acquired assets and liabilities, including but not limited to, acquired interests in technology startups, tax-related items, final net working capital purchase adjustments, if any, and the residual impacts on the valuation of intangible assets.

As of May 31, 2022, goodwill from these acquisitions totaling $ 7.5 million is expected to be tax deductible.

Note 4 — New Accounting Pronouncements

15 unchanged sentences

All other newly issued accounting pronouncements not yet effective have been deemed either immaterial or not applicable.

ACUITY BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

Note 5 — Fair Value Measurements

3 unchanged sentences

All valuation methods and assumptions are validated at least quarterly to ensure the accuracy and relevance of the fair values.

There were no

ACUITY BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

material changes to the valuation methods or assumptions used to determine fair values during the current period.

There were no material changes to the valuation methods or assumptions used to determine fair values during the current period.

No transfers between the levels of the fair value hierarchy occurred during the current fiscal period.

2 unchanged sentences

We used quoted market prices to determine the fair value of Level 1 assets and liabilities.

Our cash and cash equivalents (Level 1), which are required to be carried at fair value and measured on a recurring basis, were $ 475.5 million and $ 491.3 million as of February 28, 2022 and August 31, 2021, respectively.

We hold a small number of investments in equity and debt financial instruments totaling $ 9.9 million and $ 5.3 million as of February 28, 2022 and August 31, 2021, respectively.

Our cash and cash equivalents (Level 1), which are required to be carried at fair value and measured on a recurring basis, were $ 318.2 million and $ 491.3 million as of May 31, 2022 and August 31, 2021, respectively.

We hold a small number of investments in equity and debt financial instruments totaling $ 10.4 million and $ 5.3 million as of May 31, 2022 and August 31, 2021, respectively.

We generally account for these investments at fair value on a recurring basis.

Changes in the fair values of these financial instruments during the three and six months ended February 28, 2022 and 2021 were not material to our financial condition, results of operations, or cash flows.

Changes in the fair values of these financial instruments during the three and nine months ended May 31, 2022 and 2021 were not material to our financial condition, results of operations, or cash flows.

Our strategic equity investments represent less than a 20% ownership interest in each of the privately-held entities, and we do not exercise significant influence or control any of the entities.

2 unchanged sentences

During the first quarter of fiscal 2021, we recorded an impairment charge of $ 4.0 million for one of these investments as a recapitalization of the underlying company diluted our holding value.

The impairment charge is reflected in Miscellaneous (income) expense, net for the six months ended February 28, 2021 within our Consolidated Statements of Comprehensive Income.

The impairment charge is reflected in Miscellaneous (income) expense, net for the nine months ended May 31, 2021 within our Consolidated Statements of Comprehensive Income.

Disclosures of Fair Value of Financial Instruments

2 unchanged sentences

Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows.

Fair value for our outstanding debt obligations is estimated based on discounted future cash flows using rates currently available for debt of similar terms and maturity (Level 2).

Our senior unsecured public notes are carried at the outstanding balance, net of unamortized bond discount and deferred costs, as of the end of the reporting period.

Fair value is estimated based on discounted future cash flows using rates currently available for debt of similar terms and maturity (Level 2).

The estimated fair value of our senior unsecured public notes was $ 461.3 million and $ 496.5 million as of February 28, 2022 and August 31, 2021, respectively.

The estimated fair value of our senior unsecured public notes was $ 411.3 million and $ 496.5 million as of May 31, 2022 and August 31, 2021, respectively.

The decrease in fair value is due to increases in market bond yields since the end of fiscal 2021.

See Debt and Lines of Credit footnote for further details on our long-term borrowings.

As of May 31, 2022, we also had $ 122.0 million of short-term borrowings outstanding under our revolving credit facility.

These borrowings are variable-rate instruments that reset on a frequent short-term basis;

therefore, we estimate that the face amounts of these instruments approximate their fair values as of May 31, 2022.

See Debt and Lines of Credit footnote for further details on our outstanding borrowings.

ASC 825 excludes certain financial instruments and all nonfinancial instruments from its disclosure requirements.

Accordingly, the aggregate fair value amounts presented do not represent the underlying value to us.

In many cases, the fair value estimates cannot be substantiated by comparison to independent markets, nor can the disclosed value be realized in immediate settlement of the instruments.

In evaluating our management of liquidity and other risks, the fair values of all assets and liabilities should be taken into consideration, not only those presented above.

In many cases, the fair value estimates cannot be substantiated by comparison to independent markets, nor can the

ACUITY BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

disclosed value be realized in immediate settlement of the instruments.

In evaluating our management of liquidity and other risks, the fair values of all assets and liabilities should be taken into consideration, not only those presented above.

Note 6 — Inventories

2 unchanged sentences

and consist of the following as of the dates presented (in millions):

February 28, 2022 August 31, 2021

May 31, 2022 August 31, 2021

Raw materials, supplies, and work in process (1)

10 unchanged sentences

Property, plant, and equipment consist of the following as of the dates presented (in millions):

February 28, 2022 August 31, 2021

May 31, 2022 August 31, 2021

Land $ 22.3 $ 22.4

4 unchanged sentences

Property, plant, and equipment, net $ 269.2 $ 269.1

During the three months ended February 28, 2022, we sold one building previously classified as held for sale with a carrying value of $ 6.6 million for a gain of approximately $ 2.3 million reflected in Selling, distribution, and administrative expenses within our Consolidated Statements of Comprehensive Income.

During the second quarter of fiscal 2022, we sold one building previously classified as held for sale with a carrying value of $ 6.6 million for a gain of approximately $ 2.3 million reflected in Selling, distribution, and administrative expenses within our Consolidated Statements of Comprehensive Income.

Note 8 — Goodwill and Intangible Assets

1 unchanged sentence

Indefinite-lived intangible assets consist of trade names that are expected to generate cash flows indefinitely.

We recorded amortization expense for definite-lived intangible assets of $ 10.3 million and $ 10.1 million during the three months ended February 28, 2022 and 2021, respectively, and $ 20.6 million and $ 20.2 million during the six months ended February 28, 2022 and 2021, respectively.

We recorded amortization expense for definite-lived intangible assets of $ 10.2 million and $ 10.2 million during the three months ended May 31, 2022 and 2021, respectively, and $ 30.8 million and $ 30.4 million during the nine months ended May 31, 2022 and 2021, respectively.

Amortization expense is generally recorded on a straight-line basis and is expected to be approximately $ 41.2 million in fiscal 2022, $ 40.5 million in fiscal 2023, $ 40.0 million in fiscal 2024, $ 31.9 million in fiscal 2025, and $ 29.1 million in fiscal 2026.

6 unchanged sentences

Foreign currency translation adjustments ( 4.3 ) ( 0.1 ) ( 4.4 )

Balance as of February 28, 2022 $ 1,020.2 $ 72.2 $ 1,092.4

Balance as of May 31, 2022 $ 1,018.5 $ 72.4 $ 1,090.9

ABL ISG Total

Balance as of August 31, 2020 $ 1,012.6 $ 67.4 $ 1,080.0

Additions from acquired businesses — 3.1 3.1

Foreign currency translation adjustments 8.4 4.7 13.1

Balance as of February 28, 2021 $ 1,015.4 $ 68.8 $ 1,084.2

Balance as of May 31, 2021 $ 1,021.0 $ 75.2 $ 1,096.2

Further discussion of goodwill and other intangible assets is included within the Significant Accounting Policies footnote of the Notes to Consolidated Financial Statements within our Form 10-K.

1 unchanged sentence

Other current liabilities consist of the following as of the dates presented (in millions):

February 28, 2022 August 31, 2021

May 31, 2022 August 31, 2021

Customer incentive programs (1)

13 unchanged sentences

(4) Refer to the Debt and Lines of Credit footnote of the Notes to Consolidated Financial Statements for additional information.

(5) Includes an accrual of $ 15.8 million as of February 28, 2022, related to the securities class action matter.

(5) Includes an accrual of $ 15.8 million as of May 31, 2022, related to the securities class action matter.

Refer to the Commitments and Contingencies footnote of the Notes to Consolidated Financial Statements for additional information.

ACUITY BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

Note 10 — Debt and Lines of Credit

8 unchanged sentences

These issuance costs are amortized over the 10-year term of the Unsecured Notes.

As of February 28, 2022, the balance of the Unsecured Notes net of unamortized discount and deferred issuance costs was $ 494.7 million.

ACUITY BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

As of May 31, 2022, the balance of the Unsecured Notes net of unamortized discount and deferred issuance costs was $ 494.8 million.

Lines of Credit

On June 29, 2018, we entered into a credit agreement (the “Credit Agreement”) with a syndicate of banks that provides us with a $ 400.0 million five-year unsecured revolving credit facility (the “Revolving Credit Facility”).

We had no borrowings outstanding under the Revolving Credit Facility as of February 28, 2022 or August 31, 2021.

The Credit Agreement expires in June 2023, and we plan to enter into a new agreement prior to this expiration.

We had $ 122.0 million in short-term borrowings outstanding under the Revolving Credit Facility as of May 31, 2022.

There were no borrowings outstanding under the Revolving Credit Facility as of August 31, 2021.

The Credit Agreement expires in June 2023;

however, we entered into a new agreement prior to this expiration.

See Subsequent Event footnote for further details on the terms of the new agreement.

Generally, amounts outstanding under the Revolving Credit Facility allow for borrowings to bear interest at either the Eurocurrency Rate or the base rate at our option, plus an applicable margin.

13 unchanged sentences

The Credit Agreement generally allows for a Minimum Interest Expense Coverage Ratio of 2.50 and a Maximum Leverage Ratio of 3.50 , subject to certain conditions.

We were in compliance with all financial covenants under the Credit Agreement as of February 28, 2022.

As of February 28, 2022, we had outstanding letters of credit totaling $ 4.1 million, primarily for securing collateral requirements under our casualty insurance programs.

At February 28, 2022, we had additional borrowing capacity under the Credit Agreement of $ 395.9 million under the most restrictive covenant in effect at the time, which represents the full amount of the Revolving Credit Facility less the outstanding letters of credit of $ 4.1 million issued under the Revolving Credit Facility.

We were in compliance with all financial covenants under the Credit Agreement as of May 31, 2022.

As of May 31, 2022, we had outstanding letters of credit totaling $ 4.1 million, primarily for securing collateral requirements under our casualty insurance programs.

At May 31, 2022, we had additional borrowing capacity under the Credit Agreement of $ 273.9 million under the most restrictive covenant in effect at the time, which represents the full amount of the Revolving Credit Facility less the outstanding letters of credit of $ 4.1 million issued under the Revolving Credit Facility and the $ 122.0 million of short-term borrowings outstanding under the Revolving Credit Facility.

Borrowings and repayments on our Revolving Credit Facility with terms of three months or less are reported on a net basis on our Consolidated Statements of Cash Flows .

ACUITY BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

Interest Expense, net

2 unchanged sentences

The following table summarizes the components of interest expense, net for the periods presented (in millions):

Three Months Ended Six Months Ended

February 28, 2022 February 28, 2021 February 28, 2022 February 28, 2021

Three Months Ended Nine Months Ended

May 31, 2022 May 31, 2021 May 31, 2022 May 31, 2021

Interest expense $ 6.6 $ 6.4 $ 19.2 $ 18.4

1 unchanged sentence

Interest expense, net $ 6.2 $ 6.2 $ 18.1 $ 17.7

ACUITY BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

Note 11 — Commitments and Contingencies

1 unchanged sentence

We establish estimated liabilities when the associated costs related to uncertainties or guarantees become probable and can be reasonably estimated.

For the period ended February 28, 2022, no material changes have occurred in our estimated liabilities for self-insurance, litigation, environmental matters, guarantees and indemnities, or relevant events and circumstances, from those disclosed in the Commitments and Contingencies footnote of the Notes to Consolidated Financial Statements within our Form 10-K other than the items discussed below.

For the period ended May 31, 2022, no material changes have occurred in our estimated liabilities for self-insurance, litigation, environmental matters, guarantees and indemnities, or relevant events and circumstances, from those disclosed in the Commitments and Contingencies footnote of the Notes to Consolidated Financial Statements within our Form 10-K other than the items discussed below.

Product Warranty and Recall Costs

7 unchanged sentences

The following table summarizes changes in the estimated liabilities for product warranty and recall costs during the periods presented (in millions):

Six Months Ended

February 28, 2022 February 28, 2021

Nine Months Ended

May 31, 2022 May 31, 2021

Beginning balance $ 20.3 $ 16.1

3 unchanged sentences

Securities Class Action

On October 5, 2021, the parties to the shareholder class action litigation previously disclosed (and further described below) executed a term sheet for settlement of the litigation, subject to documentation of the settlement and approval of the District Court after notice to class members.

On December 2, 2021, the lead plaintiff in the case filed an unopposed motion seeking preliminary approval of the settlement which attaches the settlement stipulation and exhibits thereto.

If the settlement is approved, we expect that the agreed-upon settlement payment of $ 15.8 million will be funded entirely by applicable Directors and Officers liability insurance.

As such, we do not anticipate a significant net loss or cash outflow as a result of the settlement of this matter.

As of February 28, 2022, we reflected a liability for the settlement amount within Other current liabilities and a corresponding receivable for the offsetting insurance proceeds within Prepayments and other current assets on the Consolidated Balance Sheets .

The case was originally filed on January 3, 2018, in the United States District Court for the District of Delaware against the Company and certain of our officers on behalf of all persons who purchased or otherwise acquired our stock between June 29, 2016 and April 3, 2017.

On February 20, 2018, a different shareholder filed a second class action complaint in the same venue against the same parties on behalf of all persons who purchased or otherwise acquired our stock between October 15, 2015 and April 3, 2017.

The cases were transferred on April 30, 2018, to the United States District Court for the Northern District of Georgia and subsequently were consolidated as In re Acuity Brands, Inc.

On October 5, 2021, the parties to the shareholder class action litigation previously disclosed and styled In re Acuity Brands, Inc.

Securities Litigation, Civil Action No.

1:18-cv-02140-MHC (N.D.

On October 5, 2018, the court-appointed lead plaintiff filed a consolidated amended class action complaint (the “Consolidated Complaint”),

Ga.) executed a term sheet for settlement of the litigation, subject to documentation of the settlement and approval of the District Court after notice

ACUITY BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

which supersedes the initial complaints.

The Consolidated Complaint is brought on behalf of all persons who purchased our common stock between October 7, 2015 and April 3, 2017 and alleges that we and certain of our former officers/executives violated the federal securities laws by making false or misleading statements and/or omitting to disclose material adverse facts that (i) concealed known trends negatively impacting sales of our products and (ii) overstated our ability to achieve profitable sales growth.

The plaintiffs seek unspecified monetary damages, costs, and attorneys’ fees.

We dispute the allegations in the complaints.

We filed a motion to dismiss the Consolidated Complaint.

On August 12, 2019, the court entered an order granting our motion to dismiss in part and dismissing all claims based on 42 of the 47 statements challenged in the Consolidated Complaint but also denying the motion in part and allowing claims based on five challenged statements to proceed to discovery.

The Eleventh Circuit Court of Appeals granted the Company permission to file an interlocutory appeal of the District Court’s class certification order, and the briefing of that appeal has been completed.

On October 7, 2021, the Eleventh Circuit Court of Appeals entered an order holding the appeal from the class certification order in abeyance pending a decision from the District Court concerning approval of the proposed settlement.

to class members.

On December 2, 2021, the lead plaintiff in the case filed an unopposed motion seeking preliminary approval of the settlement which attaches the settlement stipulation and exhibits thereto.

On June 7, 2022, following an approval hearing, the District Court entered a judgment approving the settlement and dismissing the action with prejudice.

The agreed-upon settlement payment of $ 15.8 million has been funded entirely by applicable Directors and Officers liability insurance.

As such, we did not incur a significant net loss or cash outflow as a result of the settlement of this matter.

As of May 31, 2022, we reflected a liability for the settlement amount within Other current liabilities and a corresponding receivable for the offsetting insurance proceeds within Prepayments and other current assets on the Consolidated Balance Sheets .

Shareholder Derivative Complaint

7 unchanged sentences

Estimating an amount or range of possible losses or gains resulting from litigation proceedings is inherently difficult, particularly where the matters involve indeterminate claims for monetary damages and are in the stages of the proceedings where key evidential and legal issues have not been resolved.

For these reasons, we are currently unable to predict the ultimate timing or outcome of or reasonably estimate the possible losses or gains or a range of possible losses or gains resulting from the matters described above.

We are subject to various other legal claims arising in the normal course of business, including patent infringement, employment matters, and product liability claims.

34 unchanged sentences

Balance, February 28, 2022 34.8 0.5 1,015.6 2,963.9 ( 102.9 ) ( 1,772.8 ) 2,104.3

Net income — — — 105.7 — — 105.7

Other comprehensive loss — — — — ( 0.6 ) — ( 0.6 )

Share-based payment amortization, issuances, and cancellations — — 9.2 — — — 9.2

Employee stock purchase plan issuances — — 0.4 — — — 0.4

Cash dividends of $ 0.13 per share paid on common stock

— — — ( 4.4 ) — — ( 4.4 )

Repurchases of common stock ( 1.7 ) — — — — ( 296.0 ) ( 296.0 )

Balance, May 31, 2022 33.1 $ 0.5 $ 1,025.2 $ 3,065.2 $ ( 103.5 ) $ ( 2,068.8 ) $ 1,918.6

ACUITY BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

Common Stock Outstanding

24 unchanged sentences

Balance, February 28, 2021 35.7 0.5 977.8 2,635.9 ( 118.1 ) ( 1,563.6 ) 1,932.5

Net income — — — 85.7 — — 85.7

Other comprehensive income — — — — 20.7 — 20.7

Share-based payment amortization, issuances, and cancellations — — 6.2 — — — 6.2

Employee stock purchase plan issuances — — 0.3 — — — 0.3

Cash dividends of $ 0.13 per share paid on common stock

— — — ( 4.6 ) — — ( 4.6 )

Stock options exercised — — 0.8 — — — 0.8

Repurchases of common stock — — — — — ( 2.5 ) ( 2.5 )

Balance, May 31, 2021 35.7 $ 0.5 $ 985.1 $ 2,717.0 $ ( 97.4 ) $ ( 1,566.1 ) $ 2,039.1

Note 13 — Revenue Recognition

2 unchanged sentences

Further details regarding revenue recognition are included within the Revenue Recognition footnote of the Notes to Consolidated Financial Statements within our Form 10-K.

ACUITY BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

Contract Balances

3 unchanged sentences

The amount of transaction price from contracts with customers allocated to our contract liabilities consists of the following as of the periods presented (in millions):

February 28, 2022 August 31, 2021

May 31, 2022 August 31, 2021

Current deferred revenues $ 10.2 $ 7.7

Non-current deferred revenues 53.6 56.7

Current deferred revenues primarily consist of software licenses as well as professional service and sales-type warranty fees collected prior to performing the related service.

Current deferred revenues primarily consist of sales-type warranties, software licenses, and professional service fees collected prior to performing the related service.

Current deferred revenues are included within Other current liabilities on the Consolidated Balance Sheets .

These services are expected to be performed within one year from the dates presented.

Non-current deferred revenues primarily consist of long-term service-type warranties, which are typically recognized ratably as revenue between five and ten years from the date of sale, and are included within Other long-term liabilities on the Consolidated Balance Sheets.

Revenue recognized from beginning balances of contract liabilities during the six months ended February 28, 2022 totaled $ 5.2 million.

Unsatisfied performance obligations that do not represent contract liabilities are expected to be satisfied within one year from February 28, 2022 and consist primarily of orders for physical goods that have not yet been shipped.

ACUITY BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

within Other long-term liabilities on the Consolidated Balance Sheets.

Revenue recognized from beginning balances of contract liabilities during the nine months ended May 31, 2022 totaled $ 6.5 million.

Unsatisfied performance obligations that do not represent contract liabilities are expected to be satisfied within one year from May 31, 2022 and consist primarily of orders for physical goods that have not yet been shipped.

Disaggregated Revenues

2 unchanged sentences

The following table shows revenue from contracts with customers by sales channel and reconciles to our segment information for the periods presented (in millions):

Three Months Ended Six Months Ended

February 28, 2022 February 28, 2021 February 28, 2022 February 28, 2021

Three Months Ended Nine Months Ended

May 31, 2022 May 31, 2021 May 31, 2022 May 31, 2021

Independent sales network $ 725.9 $ 628.0 $ 1,977.0 $ 1,737.4

9 unchanged sentences

We account for share-based payments through the measurement and recognition of compensation expense for share-based payment awards made to employees and directors over the related requisite service period, including stock options, performance stock units, and restricted stock (all part of our equity incentive plan), as well as stock units representing certain deferrals into our director deferred compensation plan or our supplemental deferred savings plan.

ACUITY BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

The following table presents share-based payment expense for the periods presented (in millions):

Three Months Ended Six Months Ended

February 28, 2022 February 28, 2021 February 28, 2022 February 28, 2021

Three Months Ended Nine Months Ended

May 31, 2022 May 31, 2021 May 31, 2022 May 31, 2021

Share-based payment expense $ 9.9 $ 7.1 $ 27.5 $ 22.3

We recognized excess tax benefits of $ 4.4 million related to share-based payment awards during the six months ended February 28, 2022.

We recognized excess tax benefits of $ 4.6 million related to share-based payment awards during the nine months ended May 31, 2022.

Further details regarding our share-based payments are included within the Share-based Payments footnote of the Notes to Consolidated Financial Statements within our Form 10-K.

4 unchanged sentences

Plan assets are invested primarily in fixed income and equity securities.

ACUITY BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

Service cost of net periodic pension cost is allocated between Cost of products sold and Selling, distribution, and administrative expenses in the Consolidated Statements of Comprehensive Income based on the nature of the employee's services.

1 unchanged sentence

Net periodic pension cost included the following components before tax for the periods presented (in millions):

Three Months Ended Six Months Ended

February 28, 2022 February 28, 2021 February 28, 2022 February 28, 2021

Three Months Ended Nine Months Ended

May 31, 2022 May 31, 2021 May 31, 2022 May 31, 2021

Service cost $ 1.3 $ 1.2 $ 3.7 $ 3.7

10 unchanged sentences

The dilutive effects of share-based payment awards subject to market and/or performance conditions that were not met during the period are excluded from the computation of diluted earnings per share.

ACUITY BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

The following table calculates basic earnings per common share and diluted earnings per common share for the periods presented (in millions, except per share data):

Three Months Ended Six Months Ended

February 28, 2022 February 28, 2021 February 28, 2022 February 28, 2021

Three Months Ended Nine Months Ended

May 31, 2022 May 31, 2021 May 31, 2022 May 31, 2021

Net income $ 105.7 $ 85.7 $ 268.6 $ 208.2

5 unchanged sentences

The following table presents stock options, performance stock awards, and restricted stock awards that were excluded from the diluted earnings per share calculation for the periods presented as the effect of inclusion would have been antidilutive (in millions):

Three Months Ended Six Months Ended

February 28, 2022 February 28, 2021 February 28, 2022 February 28, 2021

Three Months Ended Nine Months Ended

May 31, 2022 May 31, 2021 May 31, 2022 May 31, 2021

Stock options 0.1 0.1 0.1 1.0

1 unchanged sentence

Further discussion of our share-based payment awards is included within the Common Stock and Related Matters and Share-based Payments footnotes of the Notes to Consolidated Financial Statements within our Form 10-K.

ACUITY BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

Note 17 — Comprehensive Income

1 unchanged sentence

Comprehensive income includes our net income as well as other comprehensive income (loss) items.

Other comprehensive income (loss) items include foreign currency translation and pension adjustments.

Other comprehensive (loss) income items include foreign currency translation and pension adjustments.

The following table presents the changes in each component of accumulated other comprehensive loss net of tax during the periods presented (in millions):

4 unchanged sentences

Net current period other comprehensive (loss) income ( 8.9 ) 3.6 ( 5.3 )

Balance at February 28, 2022 $ ( 47.3 ) $ ( 55.6 ) $ ( 102.9 )

Balance at May 31, 2022 $ ( 49.1 ) $ ( 54.4 ) $ ( 103.5 )

Foreign Currency Items Defined Benefit Pension Plans Accumulated Other Comprehensive Loss Items

3 unchanged sentences

Net current period other comprehensive income 33.6 1.7 35.3

Balance at February 28, 2021 $ ( 42.2 ) $ ( 75.9 ) $ ( 118.1 )

Balance at May 31, 2021 $ ( 19.9 ) $ ( 77.5 ) $ ( 97.4 )

_______________________________________

5 unchanged sentences

Three Months Ended

February 28, 2022 February 28, 2021

May 31, 2022 May 31, 2021

Before Tax Amount Tax (Expense) Benefit Net of Tax Amount Before Tax Amount Tax (Expense) Benefit Net of Tax Amount

1 unchanged sentence

Defined benefit pension plans:

Tax adjustments — — — — ( 3.2 ) ( 3.2 )

Amortization of defined benefit pension items:

3 unchanged sentences

Total defined benefit pension plans, net 1.5 ( 0.3 ) 1.2 2.2 ( 3.8 ) ( 1.6 )

Other comprehensive income $ 6.4 $ ( 0.4 ) $ 6.0 $ 8.7 $ ( 0.3 ) $ 8.4

Six Months Ended

February 28, 2022 February 28, 2021

Other comprehensive (loss) income $ ( 0.3 ) $ ( 0.3 ) $ ( 0.6 ) $ 24.5 $ ( 3.8 ) $ 20.7

Nine Months Ended

May 31, 2022 May 31, 2021

Before Tax Amount Tax (Expense) Benefit Net of Tax Amount Before Tax Amount Tax (Expense) Benefit Net of Tax Amount

1 unchanged sentence

Defined benefit pension plans:

Tax adjustments — — — — ( 3.2 ) ( 3.2 )

Amortization of defined benefit pension items:

4 unchanged sentences

Note 18 — Segment Information

During the third quarter of fiscal 2021, we completed a realignment of our operations and structure to better support our business strategy.

As a result, beginning in the third quarter of fiscal 2021, we now report our financial results of operations in two reportable segments, ABL and ISG, consistent with how our chief operating decision maker currently evaluates operating results, assesses performance, and allocates resources within the Company.

We have recast historical information to conform to the current segment structure.

We report our financial results of operations in two reportable segments, ABL and ISG, consistent with how our chief operating decision maker currently evaluates operating results, assesses performance, and allocates resources within the Company.

The accounting policies of our reportable segments are the same as those described in the Significant Accounting Policies footnote of the Notes to Consolidated Financial Statements within our Form 10-K.

7 unchanged sentences

ABL ISG Corporate Eliminations (1)

Three Months Ended February 28, 2022

Three Months Ended May 31, 2022

Net sales $ 1,008.4 $ 58.3 $ — $ ( 6.1 ) $ 1,060.6

1 unchanged sentence

Depreciation and amortization 19.6 3.6 0.3 — 23.5

Three Months Ended February 28, 2021

Three Months Ended May 31, 2021

Net sales $ 850.0 $ 55.4 $ — $ ( 5.7 ) $ 899.7

1 unchanged sentence

Depreciation and amortization 21.0 3.7 0.3 — 25.0

Six Months Ended February 28, 2022

Nine Months Ended May 31, 2022

Net sales $ 2,755.1 $ 154.7 $ — $ ( 14.0 ) $ 2,895.8

1 unchanged sentence

Depreciation and amortization 59.8 10.8 0.8 — 71.4

Six Months Ended February 28, 2021

Nine Months Ended May 31, 2021

Net sales $ 2,340.4 $ 139.5 $ — $ ( 11.6 ) $ 2,468.3

5 unchanged sentences

The following table reconciles operating profit by segment to income before income taxes (in millions):

Three Months Ended Six Months Ended

February 28, 2022 February 28, 2021 February 28, 2022 February 28, 2021

Three Months Ended Nine Months Ended

May 31, 2022 May 31, 2021 May 31, 2022 May 31, 2021

Operating profit - ABL $ 149.6 $ 126.5 $ 394.2 $ 326.9

6 unchanged sentences

Note 19 — Subsequent Event

On March 31, 2022 , the Board of Directors authorized the repurchase of additional shares of our common stock, bringing our total authorization to five million shares.

Refer to Part II, Item 5.

Other Information for further details .

On June 30, 2022, we entered into a new revolving credit facility (the “New Revolving Credit Facility”) with a syndicate of banks that replaced the existing Revolving Credit Facility set to expire in June 2023.

The New Revolving Credit Facility, among other things, (i) increases borrowing capacity by $ 200 million to $ 600 million with the ability to request additional capacity of $ 400 million;

(ii) extends the maturity date from June 2023 to June 2027;

(iii) replaces the benchmark reference rate for U.S.

Dollar borrowings from LIBOR to the Secured Overnight Financing Rate (“SOFR”) and for non-U.S.

Dollar borrowings to the applicable benchmark rate for those currencies;

(iv) reduces pricing for borrowings as well as annual facility and administration fees;

(v) adjusts the applicable margin pricing grid mechanics to be based on the better of our public credit ratings or our net leverage ratio;

(vi) increases the Maximum Leverage Ratio financial covenant 25 basis points to 3.75 (subject to temporary increase to 4.25 in the event of a significant acquisition) and allows netting of all unrestricted cash and cash equivalents against debt;

and (vii) removes the Minimum Interest Expense Coverage Ratio financial covenant.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements