ACUITY INC. (DE) 10-K

Item 8. Financial Statements and Supplementary Data. Index to Consolidated Financial Statements Page Management’s Report on Internal Control over Financial Reporting 32 Report s of Independent Registered Public Accounting Firm 33 Consolidated Balance Sheets as of August 31, 2025 and 2024 37 Consolidated Statements of Comprehensive Income for the years ended August 31, 2025, 2024, and 20 23 38 Consolidated Statements of Cash Flows for the years ended August 31, 20 2 5 , 202 4 , a nd 20 23 39 Consolidated Statements of Stockholders’ Equity for the years ended August 31, 202 5 , 202 4 , and 20 23 40 Notes to Consolidated Financial Statements 41 Note 1 — Description of Business and Basis of Presentation 41 Note 2 — Significant Accounting Policies 42 Note 3 — New Accounting Pronouncements 51 Note 4 — Acquisitions and Divestitures 52 Note 5 — Fair Value Measurements 55 Note 6 — Leases 57 Note 7 — Debt and Lines of Credit 58 Note 8 — Commitments and Contingencies 59 Note 9 — Segment Information 61 Note 10 — Revenue Recognition 63 Note 11 — Share-based Payments 65 Note 12 — Pension and Defined Contribution Plans 68 Note 13 — Special Charges 74 Note 14 — Common Stock and Related Matters 75 Note 15 — Income Taxes 76 Note 16 — Supplemental Disaggregated Information 79 Note 17 — Subsequent Event 80 31 Table of Contents MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING ACUITY INC. The management of Acuity Inc. is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) and 15d-15(f) promulgated under the Securities Exchange Act of 1934. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. The Company’s management assessed the effectiveness of the Company’s internal control over financial reporting as of August 31, 2025. In making this assessment, the Company’s management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control-Integrated Framework (2013 Framework) . Based on this assessment, management believes that, as of August 31, 2025, the Company’s internal control over financial reporting is effective. Management’s assessment of and conclusion on the effectiveness of internal control over financial reporting did not include the internal controls of the acquired business of QSC, LLC (“QSC”), which is included in the Company’s consolidated financial statements as of August 31, 2025 and for the period from the acquisition date of January 1, 2025 through August 31, 2025. As of August 31, 2025, QSC assets and net assets after excluding acquired goodwill and intangible assets constituted 7% of both the Company’s consolidated total assets and net assets. For the year ended August 31, 2025, QSC net sales and pre-tax income constituted 10% of the Company's net sales and 4% of the Company's pre-tax income, respectively. Ernst & Young LLP, the Company’s independent registered public accounting firm, has issued an audit report on its audit of the Company’s internal control over financial reporting. This report dated October 27, 2025 is included within this Form 10-K. /s/ NEIL M. ASHE /s/ KAREN J. HOLCOM Neil M. Ashe Chairman, President and Chief Executive Officer Karen J. Holcom Senior Vice President and Chief Financial Officer 32 Table of Contents Report of Independent Registered Public Accounting Firm To the Shareholders and the Board of Directors of Acuity Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Acuity Inc. (the Company) as of August 31, 2025 and 2024, the related consolidated statements of comprehensive income, cash flows and stockholders' equity for each of the three years in the period ended August 31, 2025, and the related notes (collectively referred to as the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at August 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended August 31, 2025, in conformity with U.S. generally accepted accounting principles. We also have 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 August 31, 2025, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated October 27, 2025 expressed an unqualified opinion thereon. 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 U.S. 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 the critical audit matter does not alter in any way our opinion on the consolidated 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. 33 Table of Contents Acquisition of QSC, LLC – Valuation of Developed Technology Description of the Matter As discussed in Note 4 to the consolidated financial statements, the Company acquired QSC, LLC (QSC) on January 1, 2025, for cash consideration of approximately $1.2 billion. The Company accounted for the acquisition of QSC as a business combination. The acquisition date fair value of the acquired developed technology intangible assets was $434.0 million, substantially all of which was Q-SYS, an audio, video, and control platform. Auditing the Company’s accounting for the Q-SYS developed technology intangible asset was complex due to estimation uncertainty and subjectivity involved in the Company’s determination of fair value. The Company determined the fair value of the Q-SYS developed technology intangible asset based on a multi-period excess earnings method income approach. The estimation uncertainty was primarily due to the sensitivity of the Q-SYS developed technology intangible asset fair value to underlying assumptions about the future performance of QSC. The significant assumptions used to estimate the fair value of the Q-SYS developed technology intangible asset were projected revenues and the discount rate. These significant assumptions include forward-looking considerations and were based on expectations of future economic and market conditions. How We Addressed the Matter in Our Audit We evaluated the design and tested the operating effectiveness of internal controls over the Company’s estimation process supporting the fair value of Q-SYS developed technology intangible asset. For example, we tested management’s review controls over the significant assumptions described above along with the completeness and accuracy of the data utilized in the fair value estimates. Our audit procedures related to the estimated fair value of the Q-SYS developed technology intangible asset included, among others, evaluating the Company's selection of the valuation methodology, evaluating the significant assumptions described above and testing the completeness and accuracy of the underlying data supporting the significant assumptions. We involved our valuation specialists to assist with evaluating the methodology and significant assumptions used by management to determine the fair value estimates. We compared the significant assumptions to historical and current industry, market and economic trends, as well as historical results of QSC and guideline companies within the same industry. /s/ Ernst & Young LLP We have served as the Company’s auditor since 2002. Atlanta, Georgia October 27, 2025 34 Table of Contents Report of Independent Registered Public Accounting Firm To the Shareholders and the Board of Directors of Acuity Inc. Opinion on Internal Control Over Financial Reporting We have audited Acuity Inc.’s internal control over financial reporting as of August 31, 2025, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Acuity Inc. (the Company) maintained, in all material respects, effective internal control over financial reporting as of August 31, 2025, based on the COSO criteria. As indicated in the accompanying Management’s Report on Internal Control over Financial Reporting, management’s assessment of and conclusion on the effectiveness of internal control over financial reporting did not include the internal controls of QSC, LLC (QSC), which is included in the 2025 consolidated financial statements of the Company and constituted 7% of total assets and net assets, excluding the acquired value of goodwill and other intangible assets, as of August 31, 2025 and 10% and 4% of net sales and pre-tax income, respectively, for the year then ended. Our audit of internal control over financial reporting of the Company also did not include an evaluation of the internal control over financial reporting of QSC. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of August 31, 2025 and 2024, the related consolidated statements of comprehensive income, cash flows and stockholders’ equity for each of the three years in the period ended August 31, 2025, and the related notes and our report dated October 27, 2025 expressed an unqualified opinion thereon. Basis for Opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. 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 U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control Over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. 35 Table of Contents Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ Ernst & Young LLP Atlanta, Georgia October 27, 2025 36 Table of Contents ACUITY INC. CONSOLIDATED BALANCE SHEETS (In millions, except per-share data) August 31, 2025 2024 ASSETS Current assets: Cash and cash equivalents $ 422.5 $ 845.8 Accounts receivable, less reserve for doubtful accounts of $ 4.3 and $ 1.9 , respectively 593.9 563.0 Inventories 526.7 387.6 Prepayments and other current assets 108.4 75.1 Total current assets 1,651.5 1,871.5 Property, plant, and equipment, net 343.2 303.9 Operating lease right-of-use assets 97.4 65.6 Goodwill 1,495.5 1,098.7 Intangible assets, net 1,099.0 440.5 Deferred income taxes 23.4 2.3 Other long-term assets 45.2 32.1 Total assets $ 4,755.2 $ 3,814.6 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 454.5 $ 352.3 Current operating lease liabilities 23.3 19.2 Accrued compensation 110.0 110.1 Other current liabilities 258.0 206.3 Total current liabilities 845.8 687.9 Long-term debt 896.8 496.2 Long-term operating lease liabilities 84.3 58.1 Accrued pension liabilities 39.2 37.5 Deferred income taxes 24.9 26.0 Other long-term liabilities 139.3 130.1 Total liabilities 2,030.3 1,435.8 Commitments and contingencies (see Commitments and Contingencies footnote) Stockholders’ equity: Preferred stock, $ 0.01 par value per share; 50.0 shares authorized; none issued — — Common stock, $ 0.01 par value per share; 500.0 shares authorized; 54.9 and 54.6 issued, respectively 0.5 0.5 Paid-in capital 1,164.7 1,115.9 Retained earnings 4,285.8 3,909.8 Accumulated other comprehensive loss ( 76.5 ) ( 114.9 ) Treasury stock, at cost — 24.2 and 23.8 shares, respectively ( 2,649.6 ) ( 2,532.5 ) Total stockholders’ equity 2,724.9 2,378.8 Total liabilities and stockholders’ equity $ 4,755.2 $ 3,814.6 The accompanying Notes to Consolidated Financial Statements are an integral part of these statements. 37 Table of Contents ACUITY INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In millions, except per-share data) Year Ended August 31, 2025 2024 2023 Net sales $ 4,345.6 $ 3,841.0 $ 3,952.2 Cost of products sold 2,267.1 2,059.3 2,239.0 Gross profit 2,078.5 1,781.7 1,713.2 Selling, distribution, and administrative expenses 1,484.9 1,228.4 1,212.9 Special charges 29.7 — 26.9 Operating profit 563.9 553.3 473.4 Other expense: Interest expense (income), net 22.0 ( 4.5 ) 18.9 Miscellaneous expense, net 41.7 9.2 7.8 Total other expense 63.7 4.7 26.7 Income before income taxes 500.2 548.6 446.7 Income tax expense 103.6 126.0 100.7 Net income $ 396.6 $ 422.6 $ 346.0 Earnings per share (1) : Basic earnings per share $ 12.85 $ 13.68 $ 10.88 Basic weighted average number of shares outstanding 30.859 30.885 31.806 Diluted earnings per share $ 12.53 $ 13.44 $ 10.76 Diluted weighted average number of shares outstanding 31.641 31.445 32.164 Dividends declared per share $ 0.66 $ 0.58 $ 0.52 Comprehensive income: Net income $ 396.6 $ 422.6 $ 346.0 Other comprehensive income (loss) items, net of tax: Foreign currency translation adjustments 10.8 ( 5.9 ) 8.5 Defined benefit plans, net of tax 27.6 3.6 4.7 Other comprehensive income (loss) items, net of tax 38.4 ( 2.3 ) 13.2 Comprehensive income $ 435.0 $ 420.3 $ 359.2 ______________________________ (1) Earnings per share is calculated using unrounded numbers. Amounts in the table may not recalculate exactly due to rounding. The accompanying Notes to Consolidated Financial Statements are an integral part of these statements. 38 Table of Contents ACUITY INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (In millions) Year Ended August 31, 2025 2024 2023 Cash flows from operating activities: Net income $ 396.6 $ 422.6 $ 346.0 Adjustments to reconcile net income to cash flows from operating activities: Depreciation and amortization 133.1 91.1 93.2 Pension settlement loss 30.9 — — Share-based payment expense 45.1 46.6 42.0 Asset impairments 16.7 3.0 20.8 Deferred income taxes ( 45.0 ) ( 33.6 ) ( 47.8 ) Changes in operating assets and liabilities, net of acquisitions and divestitures: Accounts receivable 26.3 ( 8.7 ) 114.6 Inventories ( 34.2 ) ( 16.3 ) 115.2 Prepayments and other current assets ( 14.3 ) ( 3.0 ) 21.4 Accounts payable 64.4 66.2 ( 110.5 ) Other operating activities ( 18.2 ) 51.3 ( 16.8 ) Net cash provided by operating activities 601.4 619.2 578.1 Cash flows from investing activities: Purchases of property, plant, and equipment ( 68.4 ) ( 64.0 ) ( 66.7 ) Acquisitions of businesses, net of cash acquired ( 1,189.4 ) — ( 35.5 ) Other investing activities ( 22.9 ) ( 1.1 ) 11.5 Net cash used for investing activities ( 1,280.7 ) ( 65.1 ) ( 90.7 ) Cash flows from financing activities: Repayments on credit facility, net of borrowings — — ( 18.0 ) Borrowings from term loan 600.0 — — Repayments of term loan borrowings ( 200.0 ) — — Repurchases of common stock ( 118.5 ) ( 88.7 ) ( 266.6 ) Proceeds from stock option exercises and other 28.4 13.5 2.7 Payments of taxes withheld on net settlement of equity awards ( 24.6 ) ( 11.1 ) ( 14.2 ) Dividends paid ( 20.6 ) ( 18.2 ) ( 16.8 ) Other financing activities ( 9.3 ) — — Net cash provided by (used for) financing activities 255.4 ( 104.5 ) ( 312.9 ) Effect of exchange rate changes on cash and cash equivalents 0.6 ( 1.7 ) 0.2 Net change in cash and cash equivalents ( 423.3 ) 447.9 174.7 Cash and cash equivalents at beginning of year 845.8 397.9 223.2 Cash and cash equivalents at end of year $ 422.5 $ 845.8 $ 397.9 Supplemental cash flow information: Income taxes paid $ 151.8 $ 155.7 $ 147.2 Interest paid $ 40.5 $ 24.4 $ 27.9 The accompanying Notes to Consolidated Financial Statements are an integral part of these statements. 39 Table of Contents ACUITY INC. CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (In millions except per-share data) Common Stock Outstanding Shares (1) Amount Paid-in Capital Retained Earnings Accumulated Other Comprehensive Loss Items Treasury Stock, at cost Total Balance, August 31, 2022 32.5 $ 0.5 $ 1,036.3 $ 3,176.2 $ ( 125.8 ) $ ( 2,175.4 ) $ 1,911.8 Net income — — — 346.0 — — 346.0 Other comprehensive income, net of tax — — — — 13.2 — 13.2 Share-based payment amortization, issuances, and cancellations 0.2 — 27.8 — — — 27.8 Employee stock purchase plan issuances — * — 1.5 — — — 1.5 Cash dividends of $ 0.52 per share paid on common stock — — — ( 16.8 ) — — ( 16.8 ) Stock options exercised — * — 1.2 — — — 1.2 Repurchases of common stock ( 1.6 ) — — — — ( 269.3 ) ( 269.3 ) Balance, August 31, 2023 31.1 0.5 1,066.8 3,505.4 ( 112.6 ) ( 2,444.7 ) 2,015.4 Net income — — — 422.6 — — 422.6 Other comprehensive loss, net of tax — — — — ( 2.3 ) — ( 2.3 ) Share-based payment amortization, issuances, and cancellations 0.1 — 35.6 — — — 35.6 Employee stock purchase plan issuances — * — 1.5 — — — 1.5 Cash dividends of $ 0.58 per share paid on common stock — — — ( 18.2 ) — — ( 18.2 ) Stock options exercised 0.1 — 12.0 — — — 12.0 Repurchases of common stock ( 0.5 ) — — — — ( 87.8 ) ( 87.8 ) Balance, August 31, 2024 30.8 0.5 1,115.9 3,909.8 ( 114.9 ) ( 2,532.5 ) 2,378.8 Net income — — — 396.6 — — 396.6 Other comprehensive income, net of tax — — — — 38.4 — 38.4 Share-based payment amortization, issuances, and cancellations 0.2 — 20.4 — — — 20.4 Employee stock purchase plan issuances — * — 1.9 — — — 1.9 Cash dividends of $ 0.66 per share paid on common stock — — — ( 20.6 ) — — ( 20.6 ) Stock options exercised 0.1 — 26.5 — — — 26.5 Repurchases of common stock ( 0.4 ) — — — — ( 117.1 ) ( 117.1 ) Balance, August 31, 2025 30.7 $ 0.5 $ 1,164.7 $ 4,285.8 $ ( 76.5 ) $ ( 2,649.6 ) $ 2,724.9 ______________________________ (1) Share activity and balances above calculated using rounded numbers. * Represents shares of less than 0.1 million. The accompanying Notes to Consolidated Financial Statements are an integral part of these statements. 40 Table of Contents ACUITY INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 1 — Description of Business and Basis of Presentation Acuity Inc. (referred to herein as “we,” “our,” “us,” the “Company,” or similar references) is a market-leading industrial technology company. Effective March 26, 2025, we changed our corporate name from Acuity Brands, Inc. to Acuity Inc. We use technology to solve problems in spaces, light, and more things to come. Through our two business segments, Acuity Brands Lighting (“ABL”) and Acuity Intelligent Spaces (“AIS”), we design, manufacture, and bring to market products and services that make a valuable difference in people’s lives. We achieve growth through the development of innovative new products and services, including lighting, lighting controls, building management solutions, and an audio, video, and control platform. We focus on customer outcomes and drive growth and productivity to increase market share and deliver superior returns. We look to aggressively deploy capital to grow the business and to enter attractive new verticals. Acuity Brands Lighting Segment Our mission at ABL is to provide sustainable and intelligent lighting solutions that enrich communities where people live, learn, work, and play. We bring this mission to life through our strategy, which is to increase product vitality, elevate service levels, use technology to improve and differentiate both our products and how we operate the business, and drive productivity. At ABL, our offering combines luminaires with advanced electronics. Our luminaires deliver performance and aesthetic appeal, while our electronics portfolio, featuring drivers and a leading controls platform, provides connectivity and functionality. ABL's portfolio of products includes, but is not limited to the following brands: Aculux TM , American Electric Lighting ® , Cyclone TM , Dark to Light ® , eldoLED ® , Eureka ® , Fresco TM , Gotham ® , Healthcare Lighting ® , Holophane ® , Hydrel ® , IOTA ® , Juno ® , Lithonia Lighting ® , Luminaire LED TM , Luminis ® , Mark Architectural Lighting TM , Nightingale TM , nLight ® , Peerless ® , RELOC ® Wiring Solutions, and SensorSwitch TM . Customers of ABL are located in North America and select international markets that serve new construction, renovation and retrofit, and maintenance and repair applications. Our lighting solutions are sold primarily through a network of independent sales agencies, by internal sales representatives, through electrical distributors and consumer retailers, directly to large corporate accounts, and directly to original equipment manufacturer (“OEM”) customers. Products are delivered directly from our manufacturing facilities or through a network of distribution centers. Acuity Intelligent Spaces Segment Our mission at AIS is to make spaces smarter, safer, and greener through our strategy of connecting the edge with the cloud using disruptive technologies. Through Atrius ® , Distech Controls ® , and QSC ® , we are driving productivity for people who own and manage a space and for the people who utilize a space. Atrius makes data in a space accessible, usable, and actionable. Our data platform and cloud applications for building performance and spatial intelligence aim to maximize occupant and owner experiences. Our Distech Controls intelligent Building Management Systems (“BMS”) provide management of a space through controls, sensors, and software. Our open technology includes products for heating, ventilation, and air conditioning (“HVAC”), refrigeration, lighting, shades, and building access that prioritize end-user outcomes. Q-SYS, our full-stack audio, video, and control platform, unifies data, devices, and a cloud-first architecture to deliver real-time action, experiences, and insights. QSC Audio includes audio technology that enhances experiences for live entertainers and sound reinforcement professionals. AIS goes to market primarily through system integrators. Key customer verticals include retail stores, airports, universities, enterprise campuses, sports venues, themed entertainment, and hospitality, among many other broad applications throughout North America, Europe, and other select international locations. Basis of Presentation We have prepared the Consolidated Financial Statements in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) to present the financial position, results of operations, and cash flows of Acuity Inc. and its wholly-owned subsidiaries. 41 Table of Contents ACUITY INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 2 — Significant Accounting Policies Principles of Consolidation The Consolidated Financial Statements include the accounts of Acuity Inc. and its wholly-owned subsidiaries after elimination of intercompany transactions and accounts. Use of Estimates The preparation of financial statements and related disclosures in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expense during the reporting period. Actual results could differ from those estimates. Revenue Recognition Refer to the Revenue Recognition footnote of the Notes to Consolidated Financial Statements for information related to our revenue recognition accounting policies. Cash and Cash Equivalents Cash in excess of daily requirements may be invested in time deposits and marketable securities and is included in the accompanying balance sheets at fair value. We consider time deposits and marketable securities with an original maturity of three months or less when purchased to be cash equivalents. Accounts Receivable We record accounts receivable at net realizable value. This value includes a reserve for doubtful accounts to reflect our estimate of expected credit losses over the contractual terms of our receivables. Our estimation of current expected credit losses reflects our considerations of historical write-offs, an analysis of past due accounts based on the contractual terms of the receivables, and the economic status of customers, if known. We additionally consider the impact of general economic conditions, including construction spending, unemployment rates, and macroeconomic growth, on our customers' future ability to meet their obligations. We believe that the reserve is sufficient to cover uncollectible amounts; however, there can be no assurance that unanticipated future business conditions of customers will not have a negative impact on our results of operations, financial condition, or cash flows. Concentrations of Credit Risk Concentrations of credit risk with respect to receivables, which are typically unsecured, are generally limited due to the wide variety of customers and markets using our products and services as well as their dispersion across many different geographic areas. No single customer accounted for more than 10% of receivables at August 31, 2025 or August 31, 2024. No single customer accounted for more than 10% of net sales in fiscal 2025, 2024, or 2023. Reclassifications We may reclassify certain prior period amounts to conform to the current year presentation. No material reclassifications occurred during the current period. 42 Table of Contents ACUITY INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Inventories Inventories include materials, direct labor, inbound freight, customs, duties, tariffs, and related manufacturing overhead. Inventories are stated on a first-in, first-out basis at the lower of cost and net realizable value and consist of the following as of the dates presented (in millions): August 31, 2025 2024 Raw materials, supplies, and work in process (1) $ 246.8 $ 222.1 Finished goods 306.7 191.1 Inventories excluding reserves 553.5 413.2 Less: Reserves ( 26.8 ) ( 25.6 ) Total inventories $ 526.7 $ 387.6 _______________________________________ (1) Due to the immaterial amount of estimated work in process and the short lead times for the conversion of raw materials to finished goods, we do not believe the segregation of raw materials and work in process is meaningful information. We review inventory quantities on hand and record a provision for excess or obsolete inventory primarily based on estimated future demand and current market conditions. Although our historical experience related to demand and market conditions have been within expectations, a significant change in customer demand, market conditions, or technology could render certain inventory obsolete and thus could have a material adverse impact on our operating results in the period the change occurs. The following table summarizes the changes in our inventory reserves for the periods presented (in millions): Year Ended August 31, 2025 2024 2023 Beginning balance $ 25.6 $ 25.8 $ 30.9 Additions to reserve 11.9 10.9 16.2 Disposals of reserved inventory ( 10.4 ) ( 11.0 ) ( 20.6 ) Foreign currency translation adjustments ( 0.3 ) ( 0.1 ) ( 0.7 ) Ending balance $ 26.8 $ 25.6 $ 25.8 Assets Held for Sale We classify assets as held for sale when a plan for disposal is developed and approved, the asset is available for immediate sale, an active program to locate a buyer at a price reasonable in relation to current fair value is initiated, and transfer of the asset is expected to be completed within one year. We cease the depreciation and amortization of the assets when all of these criteria have been met and generally reflect balances within Prepayments and other current assets on our Consolidated Balance Sheets . As of August 31, 2025, one of our assets with a carrying value of $ 5.5 million met the criteria to be classified as held for sale. This asset is reflected within Prepayments and other current assets on our Consolidated Balance Sheets as of August 31, 2025. See the Fair Value Measurement footnote of the Notes to Consolidated Financial Statements for further details. We did not have any assets classified as held for sale at August 31, 2024. 43 Table of Contents ACUITY INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Goodwill and Other Intangibles The changes in the carrying amount of goodwill during the periods presented by segment are summarized as follows (in millions): ABL AIS Total Balance as of August 31, 2023 $ 1,014.4 $ 83.5 $ 1,097.9 Foreign currency translation adjustments 0.7 0.1 0.8 Balance as of August 31, 2024 1,015.1 83.6 1,098.7 Additions from acquired businesses — 394.6 394.6 Foreign currency translation adjustments 0.9 1.3 2.2 Balance as of August 31, 2025 $ 1,016.0 $ 479.5 $ 1,495.5 Through multiple acquisitions, we acquired definite-lived intangible assets that are amortized over their estimated useful lives as well as indefinite-lived intangible assets, which consist of trade names that are expected to generate cash flows indefinitely. Significant estimates and assumptions were used to determine the initial fair value of these acquired intangible assets, including, but not limited to, estimated future short-term and long-term net sales and profitability, customer attrition rates, royalty rates, and discount rates. The increase in definite-lived intangible assets in the current fiscal year was due primarily to acquisitions. Refer to the Acquisitions and Divestitures footnote of the Notes to Consolidated Financial Statements for further information. Certain of our intangible assets are attributable to foreign operations and are impacted by currency translation due to movements in foreign currency rates year over year. Summarized information for our intangible assets is as follows as of the dates presented (in millions): August 31, 2025 2024 Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization Definite-lived intangible assets: Developed technology and patents $ 616.7 $ ( 170.5 ) $ 157.5 $ ( 133.3 ) Trademarks and trade names 176.9 ( 29.0 ) 45.5 ( 20.5 ) Distribution networks 61.8 ( 53.7 ) 61.8 ( 51.6 ) Customer relationships 571.1 ( 206.9 ) 428.6 ( 180.1 ) Total definite-lived intangible assets $ 1,426.5 $ ( 460.1 ) $ 693.4 $ ( 385.5 ) Indefinite-lived trade names $ 132.6 $ 132.6 We recorded amortization expense of $ 76.5 million, $ 39.7 million, and $ 42.1 million related to acquired intangible assets during fiscal 2025, 2024 , and 2023, respectively. Amortization expense is generally recorded on a straight-line basis. The following table summarizes the expected amortization expense for the next five fiscal years (in millions): Fiscal Year August 31, 2025 2026 $ 91.7 2027 90.2 2028 85.7 2029 84.8 2030 81.9 44 Table of Contents ACUITY INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Impairment Analyses We test goodwill and indefinite-lived intangible assets for impairment on an annual basis as of the first date of our fourth fiscal quarter (June 1) or more frequently if facts and circumstances indicate an asset is more likely than not impaired, as required by Accounting Standards Codification (“ASC”) Topic 350, Intangibles—Goodwill and Other (“ASC 350”). ASC 350 allows for an optional qualitative analysis for goodwill and indefinite-lived intangible assets to determine the likelihood of impairment. If the qualitative review results in a more likely than not probability of impairment, a quantitative analysis is required. The qualitative step may be bypassed entirely in favor of a quantitative test. Goodwill As of June 1, 2025, the current fiscal year testing date, we performed a qualitative analysis to assess the fair value of our reporting units as prescribed by ASC 350. Our qualitative analysis considered and assessed external factors for each reporting unit such as macroeconomic, industry, cost, and market conditions as well as Company-specific factors, including but not limited to, our actual and planned financial performance. Based on the results of our analysis, we determined there was not a more likely than not probability of impairment for each of our reporting units. Thus, no quantitative test was required for our $ 1.5 billion of goodwill. In fiscal 2024, we performed a qualitative analysis to assess the fair value of our reporting units as prescribed by ASC 350. Our qualitative analysis considered and assessed external factors for each reporting unit such as macroeconomic, industry, cost, and market conditions as well as Company-specific factors, including but not limited to, our actual and planned financial performance. Based on the results of our analysis, we determined there was not a more likely than not probability of impairment for each of our reporting units. Thus, no quantitative test was required for our $ 1.1 billion of goodwill. In fiscal 2023, we used a quantitative analysis to calculate the fair value of our reporting units using a combination of discounted future cash flows and relevant market multiples. The analysis for goodwill did no t result in an impairment charge during fiscal 2023. Indefinite-Lived Intangibles As of June 1, 2025, the current fiscal year testing date, we held eight indefinite-lived intangible assets with an aggregate carrying value of $ 132.5 million. For fiscal 2025, we performed a qualitative analysis to assess our indefinite-lived intangible assets for impairment. Our qualitative analysis considered and assessed external factors such as macroeconomic, industry, cost, and market conditions as well as asset-specific factors, such as each trade name's actual and planned financial performance. Based on the results of our analysis, we determined there was not a more likely than not probability of impairment for all of the indefinite-lived intangible assets, and no quantitative test for these assets was required. As of June 1, 2024, the current fiscal year testing date, we held eight indefinite-lived intangible assets with an aggregate carrying value of $ 135.5 million. For fiscal 2024, we performed a qualitative analysis to assess our indefinite-lived intangible assets for impairment. Our qualitative analysis considered and assessed external factors such as macroeconomic, industry, cost, and market conditions as well as asset-specific factors, such as each trade name's actual and planned financial performance. Based on the results of our analyses, we determined there was not a more likely than not probability of impairment for seven of the indefinite-lived intangible assets, and no quantitative test for these assets was required. 45 Table of Contents ACUITY INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS In the fourth quarter of fiscal 2024, management committed to a plan to rebrand certain products in ABL's portfolio. We determined this plan adversely impacted one trade name. Therefore, we performed a quantitative analysis to compare the fair value of this trade name with its carrying value. We estimated the fair value of this indefinite-lived trade name using the relief-from-royalty method, a fair value model based on discounted future cash flows. Our assumptions in valuing the trade name primarily reflected a projected decline in revenues generated by the trade name due to management’s planned reduction in future use of the asset. We additionally considered other inputs, including theoretical royalty rates and discount rates, in valuing the asset. Based on the results of the indefinite-lived intangible asset analyses for fiscal 2024, we recorded an impairment charge of $ 3.0 million for one indefinite-lived trade name asset within Selling, distribution, and administrative expenses in the Consolidated Statements of Comprehensive Income related to our ABL segment. Any reasonably likely change in the assumptions used in the analysis for the trade name would not be material to the impairment charge recorded or to our financial conditions or results of operations. In fiscal 2023, we recorded an impairment charge of $ 14.0 million for six trade names within Special charges in the Consolidated Statements of Comprehensive Income related to our ABL segment. We also determined five of these trade names no longer had indefinite lives. These trade names were classified as definite-lived as of June 1, 2023 and are amortized over 15 years. The impairment analyses for fiscal 2023 of the other seven indefinite-lived intangible assets indicated that their fair values exceeded their carrying values. Other Long-Term Assets Other long-term assets consist of the following items whose economic benefits are expected to be realized greater than one year from the dates presented (in millions): August 31, 2025 2024 Deferred costs and other assets (1) (2) $ 30.4 $ 12.1 Investments in debt and equity securities 5.1 6.7 Pension plans in which plan assets exceed benefit obligation 9.7 13.3 Total other long-term assets $ 45.2 $ 32.1 _______________________________________ (1) Estimated recoveries of warranty costs, net of estimated credit losses, expected to be recovered greater than one year from the respective balance sheet dates are included in this category. (2) Included within this category are company-owned life insurance investments. We maintain life insurance policies on 48 former employees primarily to satisfy obligations under certain deferred compensation plans. These company-owned life insurance policies are presented net of loans that are secured by these policies. This program is frozen, and no new policies were issued in the three-year period ended August 31, 2025. 46 Table of Contents ACUITY INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Other Current Liabilities Other current liabilities consist of the following as of the dates presented (in millions): August 31, 2025 2024 Customer incentive programs (1) $ 46.5 $ 35.3 Refunds to customers (1) 31.7 28.2 Current deferred revenues (1) 21.4 17.4 Sales commissions 30.8 35.3 Freight costs 13.3 18.1 Product warranty costs (2) 29.4 28.4 Tax-related items (3) 25.3 7.1 Interest on long-term debt (4) 3.8 2.3 Other 55.8 34.2 Total other current liabilities $ 258.0 $ 206.3 ____________________________________ (1) Refer to the Revenue Recognition footnote of the Notes to Consolidated Financial Statements for additional information. (2) Refer to the Commitments and Contingencies footnote of the Notes to Consolidated Financial Statements for additional information. (3) Includes accruals for income, property, sales and use, and value added taxes. (4) Refer to the Debt and Lines of Credit footnote of the Notes to Consolidated Financial Statements for additional information. Other Long-Term Liabilities Other long-term liabilities consist of the following as of the dates presented (in millions): August 31, 2025 2024 Deferred compensation and postretirement benefits other than pensions (1) $ 51.6 $ 47.2 Deferred revenues (2) 38.0 41.5 Unrecognized tax position liabilities, including interest (3) 20.9 25.7 Product warranty costs (4) 14.7 9.1 Other 14.1 6.6 Total other long-term liabilities $ 139.3 $ 130.1 ____________________________________ (1) We maintain several non-qualified retirement plans for the benefit of eligible employees, primarily deferred compensation plans. The deferred compensation plans provide for elective deferrals of an eligible employee’s compensation and, in some cases, matching contributions by the organization. We maintain life insurance policies on certain former officers and other key employees as a means of satisfying a portion of these obligations. (2) Refer to the Revenue Recognition footnote of the Notes to Consolidated Financial Statements for additional information. (3) Refer to the Income Taxes footnote of the Notes to Consolidated Financial Statements for additional information. (4) Refer to the Commitments and Contingencies footnote of the Notes to Consolidated Financial Statements for additional information. Shipping and Handling Fees and Costs We include shipping and handling fees billed to customers in Net sales in the Consolidated Statements of Comprehensive Income . Refer to the Revenue Recognition footnote of the Notes to Financial Statements for further information. When a product is sold, the associated shipping and handling costs are recorded in the Consolidated Statements of Comprehensive Income based on their function. Costs associated with inbound freight and freight between manufacturing facilities and distribution centers are generally recorded in Cost of products sold. Other shipping and handling costs, which primarily include amounts incurred to transfer finished goods to a customer's desired location, are included in Selling, distribution, and administrative expenses and totaled $ 141.1 million, $ 134.2 million, and $ 141.7 million in fiscal 2025, 2024, and 2023, respectively. 47 Table of Contents ACUITY INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Share-based Payments We account for stock options, restricted stock, performance stock units, and stock units representing certain deferrals into the Nonemployee Director Deferred Compensation Plan (referred to as the “Director Plan” and discussed further in the Share-based Payments footnote) based on their grant-date fair values estimated under the provisions of ASC Topic 718, Compensation—Stock Compensation (“ASC 718”). We generally recognize compensation cost for share-based payment transactions on a straight-line basis over an award's requisite service period as defined by ASC 718. We apply the accelerated attribution method in certain circumstances, such as when a performance stock unit is subject to graded vesting. For awards subject to a market condition, we consider both actual and derived service periods, as well as the expected performance period, to determine the appropriate compensation recognition method. We have recorded share-based payment expense, net of estimated forfeitures, in Selling, distribution, and administrative expenses in the Consolidated Statements of Comprehensive Income . Share-based payment expense includes expense related to restricted stock, performance stock units, options issued, and stock units deferred into the Director Plan. We recorded $ 45.1 million, $ 46.6 million, and $ 42.0 million of share-based payment expense for the years ended August 31, 2025, 2024, and 2023, respectively. The total income tax benefit recognized for share-based payment expense was $ 12.2 million, $ 8.3 million, and $ 7.2 million for the years ended August 31, 2025, 2024, and 2023, respectively. Excess tax benefits and/or expense related to share-based payment awards are reported within Income tax expense on the Consolidated Statements of Comprehensive Income . We recognized net excess tax benefits related to share-based payment cost of $ 6.0 million, $ 1.5 million, and $ 1.5 million for the years ended August 31, 2025, 2024, and 2023, respectively. See the Share-based Payments footnote of the Notes to Consolidated Financial Statements for more information. Property, Plant, and Equipment Property, plant, and equipment is initially recorded at cost and depreciated principally on a straight-line basis using estimated useful lives of plant and equipment ( 3 to 40 years for buildings and related improvements and 2 to 15 years for machinery, equipment, and information technology) for financial reporting purposes. Accelerated depreciation methods are used for income tax purposes. Leasehold improvements are amortized over the shorter of the life of the lease or the estimated useful life of the improvement. Land is not depreciated. Depreciation expense amounted to $ 56.6 million, $ 51.4 million, and $ 51.1 million during fiscal 2025, 2024, and 2023, respectively. The balance of property, plant, and equipment consists of the following as of the dates presented (in millions): August 31, 2025 2024 Land $ 22.2 $ 22.3 Buildings and leasehold improvements 235.3 218.7 Machinery, equipment, and information technology 839.4 758.7 Total property, plant, and equipment, at cost 1,096.9 999.7 Less: Accumulated depreciation and amortization ( 753.7 ) ( 695.8 ) Property, plant, and equipment, net $ 343.2 $ 303.9 Research and Development Research and development (“R&D”) expense consists of compensation, payroll taxes, employee benefits, materials, supplies, and other administrative costs, but it does not include all new or enhanced product development costs. R&D expense is expensed as incurred and is included in Selling, distribution, and administrative expenses in our Consolidated Statements of Comprehensive Income . R&D expense amounted to $ 140.2 million, $ 102.3 million, and $ 97.1 million during fiscal 2025, 2024 , and 2023, respectively. 48 Table of Contents ACUITY INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Advertising Advertising costs are expensed as incurred and are included within Selling, distribution, and administrative expenses in our Consolidated Statements of Comprehensive Income . These costs totaled $ 29.2 million, $ 20.1 million, and $ 21.9 million during fiscal 2025, 2024 , and 2023, respectively. Other Expense The following table summarizes the components of Other expense during the periods presented (in millions): Year Ended August 31, 2025 2024 2023 Interest expense (income), net: Interest expense (1) $ 42.5 $ 25.3 $ 27.9 Interest income (2) ( 20.5 ) ( 29.8 ) ( 9.0 ) Interest expense (income), net 22.0 ( 4.5 ) 18.9 Miscellaneous expense, net Non-service components of net periodic pension cost (3) 34.9 4.5 5.0 Foreign currency transaction losses (gains) 1.1 5.3 ( 8.4 ) Loss on sale of business (4) — — 11.2 Other items 5.7 ( 0.6 ) — Miscellaneous expense, net 41.7 9.2 7.8 Other expense $ 63.7 $ 4.7 $ 26.7 ____________________________________ (1) Consists primarily of interest expense on long-term debt, line of credit borrowings, and loans that are secured by and presented net of company-owned life insurance policies on our Consolidated Balance Sheets . (2) Certain cash and cash equivalents are held in interest-bearing accounts. (3) We recorded a settlement loss charge due to pension de-risking activities in fiscal 2025. Refer to the Pensions and Defined Contribution Plans footnote of the Notes to Consolidated Financial Statements for further details. (4) We recorded a loss on the sale of our Sunoptics prismatic skylights business in fiscal 2023. Refer to the Acquisitions and Divestitures footnote of the Notes to Consolidated Financial Statements for further details. Income Taxes We are taxed at statutory corporate rates after adjusting income reported for financial statement purposes for certain items that are treated differently for income tax purposes. Deferred income tax expenses or benefits result from changes during the year in cumulative temporary differences between the tax basis and book basis of assets and liabilities. Refer to the Income Taxes footnote of the Notes to Consolidated Financial Statements for additional information. Foreign Currency Translation The functional currency for foreign operations is generally the local currency where the foreign operations are domiciled. The translation of foreign currencies into U.S. dollars is performed for asset and liability accounts using exchange rates in effect at the balance sheet dates and for revenue and expense accounts using a weighted average exchange rate each month during the year. The gains or losses resulting from the balance sheet translation are included in Foreign currency translation adjustments in the Consolidated Statements of Comprehensive Income and are excluded from net income. Comprehensive Income Comprehensive income represents a measure of all changes in equity that result from recognized transactions and other economic events other than transactions with owners in their capacity as owners. Other comprehensive income (loss) items includes foreign currency translation and pension adjustments. 49 Table of Contents ACUITY INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The following table presents the changes in each component of accumulated other comprehensive loss net of tax during the periods presented (in millions): Foreign Currency Items Defined Benefit Pension Plans Accumulated Other Comprehensive Loss Items Balance as of August 31, 2023 $ ( 65.0 ) $ ( 47.6 ) $ ( 112.6 ) Other comprehensive (loss) income before reclassifications ( 5.9 ) 1.0 ( 4.9 ) Amounts reclassified from accumulated other comprehensive loss (1) — 2.6 2.6 Net current period other comprehensive (loss) income ( 5.9 ) 3.6 ( 2.3 ) Balance as of August 31, 2024 ( 70.9 ) ( 44.0 ) ( 114.9 ) Other comprehensive income before reclassifications 10.8 2.1 12.9 Amounts reclassified from accumulated other comprehensive loss (1) — 25.5 25.5 Net current period other comprehensive income 10.8 27.6 38.4 Balance as of August 31, 2025 $ ( 60.1 ) $ ( 16.4 ) $ ( 76.5 ) _______________________________________ (1) The before tax amounts of the defined benefit pension plan items are included in net periodic pension cost. See the Pension and Defined Contribution Plans footnote for additional details. The following table presents the tax expense or benefit allocated to each component of other comprehensive income (loss) during the periods presented (in millions): Year Ended August 31, 2025 2024 2023 Before Tax Amount Tax (Expense) or Benefit Net of Tax Amount Before Tax Amount Tax (Expense) or Benefit Net of Tax Amount Before Tax Amount Tax (Expense) or Benefit Net of Tax Amount Foreign currency translation adjustments $ 10.8 $ — $ 10.8 $ ( 5.9 ) $ — $ ( 5.9 ) $ 8.5 $ — $ 8.5 Defined benefit pension plans: Actuarial amounts 2.8 ( 0.7 ) 2.1 1.4 ( 0.4 ) 1.0 0.4 — 0.4 Amortization of defined benefit pension items: Prior service cost 0.1 — 0.1 0.1 — 0.1 2.6 ( 0.6 ) 2.0 Actuarial losses 2.6 ( 0.7 ) 1.9 3.3 ( 0.8 ) 2.5 3.0 ( 0.7 ) 2.3 Settlement losses 30.9 ( 7.4 ) 23.5 — — — — — — Total defined benefit plans, net 36.4 ( 8.8 ) 27.6 4.8 ( 1.2 ) 3.6 6.0 ( 1.3 ) 4.7 Other comprehensive income (loss) $ 47.2 $ ( 8.8 ) $ 38.4 $ ( 1.1 ) $ ( 1.2 ) $ ( 2.3 ) $ 14.5 $ ( 1.3 ) $ 13.2 50 Table of Contents ACUITY INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 3 — New Accounting Pronouncements Accounting Standards Adopted in Fiscal 2025 Accounting Standards Update ( “ ASU ” ) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures ( “ ASU 2023-07 ” ) In November 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023-07, which expands reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The amendments in the ASU require that a public entity disclose, on an annual and interim basis, significant segment expenses that are regularly provided to an entity's chief operating decision maker (“CODM”), a description of other segment items by reportable segment, and any additional measures of a segment's profit or loss used by the CODM when deciding how to allocate resources. Annual disclosures are required for fiscal years beginning after December 15, 2023 or our fiscal 2025. Interim disclosures are required for periods within fiscal years beginning after December 15, 2024, or our fiscal 2026. We adopted ASU 2023-07 for the year ended August 31, 2025. We applied the enhanced disclosure requirements retrospectively to all periods presented. Refer to the Segment Information footnote of the Notes to Consolidated Financial Statements for additional details. Accounting Standards Yet to Be Adopted ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Topic 220): Disaggregation of Income Statement Expenses ( “ ASU 2024-03 ” ) In November 2024, the FASB issued ASU 2024-03, which requires public entities to disaggregate specific types of expenses, including disclosures for purchases of inventory, employee compensation, depreciation, and intangible asset amortization, as well as selling expenses. Annual disclosures are required for fiscal years beginning after December 15, 2026, or our fiscal 2028. Interim disclosures are required for periods within fiscal years beginning after December 15, 2027, or our fiscal 2029. Early adoption is permitted. Prospective application is required, and retrospective application is permitted. We are currently assessing the impact of the requirements on our consolidated financial statements and disclosures. ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures ( “ ASU 2023-09 ” ) In December 2023, the FASB issued ASU 2023-09, which expands annual income tax disclosure requirements to include additional information related to the rate reconciliation of our effective tax rates to statutory rates as well as additional disaggregation of taxes paid. The amendments in the ASU also remove disclosures related to certain unrecognized tax benefits and deferred taxes. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, or our fiscal 2026. The amendments may be applied prospectively or retrospectively, and early adoption is permitted. We are currently assessing the impact of the requirements on our consolidated financial statements and disclosures. All other newly issued accounting pronouncements not yet effective have been deemed either immaterial or not applicable. 51 Table of Contents ACUITY INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 4 — Acquisitions and Divestitures Acquisitions The following discussion relates to fiscal 2025 and 2023 acquisitions. There were no material acquisitions during fiscal 2024. Fiscal 2025 Acquisitions QSC, LLC On January 1, 2025, we acquired all of the equity interests of QSC, LLC (“QSC”), a leader in the design, engineering, and manufacturing of audio, video, and control solutions and services, for $ 1.2 billion in cash. This acquisition expands AIS into a cloud-manageable audio, video, and control platform that includes controls, sensors, and software with broad applications across multiple end-markets including education, commercial, hospitality, government, healthcare, and transportation. We funded the transaction using cash on hand and proceeds from our indebtedness. See Debt and Lines of Credit footnote of the Notes to Consolidated Financial Statements for further details on our outstanding borrowings. We accounted for the acquisition of QSC in accordance with ASC Topic 805, Business Combinations (“ASC 805”). Acquired assets and liabilities were recorded at their estimated acquisition-date fair values. Acquisition-related professional fees were expensed as incurred for $ 23.8 million for the year ended August 31, 2025. These costs were recorded in Selling, distribution, and administrative expenses on the Consolidated Statements of Comprehensive Income and were reflected in our unallocated corporate amounts. The following table outlines the preliminary fair values of the assets and liabilities obtained in connection with the QSC acquisition as of January 1, 2025 (in millions): Purchase Price Allocation Consideration transferred: Cash consideration $ 1,240.7 Identifiable assets: Intangible assets 713.9 Inventories 101.9 Property, plant, and equipment 28.4 Operating lease right-of-use assets 24.2 Accounts receivable 55.7 Cash and cash equivalents 51.3 Other assets 45.8 Total identifiable assets 1,021.2 Liabilities assumed: Accounts payable 32.6 Operating lease liabilities 24.2 Deferred tax liabilities 17.6 Other liabilities 100.7 Total liabilities assumed 175.1 Total identifiable net assets 846.1 Goodwill $ 394.6 52 Table of Contents ACUITY INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The estimated fair values and estimated useful lives of identifiable intangible assets as of January 1, 2025 are as follows: Weighted Average Useful Life (Years) Fair Value (in millions) Developed technology and patents (1) 10 $ 434.0 Customer relationships 19 145.0 Trademarks 18 133.0 Other 1 1.9 Total identifiable intangible assets 13 $ 713.9 ____________________________________ (1) Substantially all of the the developed technology intangible assets relates to Q-SYS, an audio, video, and control platform. Assets and liabilities for QSC are reflected in the Consolidated Balance Sheets as of August 31, 2025. The preliminary goodwill is recorded in the AIS segment, and it is primarily comprised of benefits related to expanding AIS’ technology and audio, video, and control solution product portfolios. Approximately $ 350.0 million of the preliminary goodwill is expected to be deductible for tax purposes. Amounts recorded for acquired assets and liabilities 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. These amounts are expected to change as we finalize the allocation. The primary areas of the preliminary acquisition accounting that are not yet finalized relate to income taxes and residual goodwill. The final determination of acquisition-date fair values will be completed as soon as practicable, and within the measurement period of up to one year from the acquisition date as permitted under U.S. GAAP. Any adjustments to provisional amounts that are identified during the measurement period will be recorded in the reporting period in which the adjustment is determined. We recorded measurement period adjustments to goodwill during fiscal 2025 of $ 31.1 million, primarily for updated amounts of consideration transferred for the purchase of QSC, additional information obtained related to the fair values of identified intangible assets, including the useful lives of those assets, and additional information obtained regarding acquired tax-related assets and liabilities. We additionally recorded cumulative catch-up amortization of $ 6.9 million during our fourth quarter of fiscal 2025 related to measurement period adjustments for acquired intangible assets. Other measurement period adjustments, including the income statement impact to prior period results, were not material. The operating results of QSC have been included in our consolidated financial statements since the date of acquisition. The following table provides the amount of QSC net sales and net income included within our consolidated financial statements since the acquisition date (in millions): Year Ended August 31, 2025 Net sales $ 428.6 Net income (1) 14.4 ____________________________________ (1) Net income for the year ended August 31, 2025 includes preliminary pre-tax nonrecurring acquisition date fair value adjustments to inventory of $ 29.6 million and amortization of acquired intangible assets of $ 42.1 million . 53 Table of Contents ACUITY INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS We have included unaudited pro forma financial information to show the impacts of the QSC acquisition to our consolidated results assuming the acquisition closed as of the first day of our prior fiscal year. The unaudited pro forma information is not necessarily indicative of our results of operations had the acquisition been completed on this date, neither is it necessarily indicative of our future results. Amounts in the table below combine our previously reported results with QSC’s results for the corresponding periods as well as adjustments for purchase accounting, accounting policy alignments, changes to our capital structure, including additional interest expense associated with borrowings to fund the acquisition, and other nonrecurring items that were incurred in connection with the acquisition, assuming they occurred as of September 1, 2023 (in millions): Year Ended August 31, 2025 2024 Revenue $ 4,546.3 $ 4,376.1 Net income (1) 436.0 355.7 ______________________________ (1) Pro forma net income for the year ended August 31, 2024 includes preliminary pre-tax nonrecurring acquisition date fair value adjustments to inventory of $ 29.6 million and acquisition-related costs of $ 23.8 million. We did not have any other significant nonrecurring pro forma adjustments directly attributable to the acquisition. M3 Innovation, LLC On May 1, 2025, we acquired certain assets of M3 Innovation, LLC (“M3 Innovation”), a sports lighting startup that uses innovative technology to lower the overall cost of the installation and operation of sports lighting solutions. The assets have been included in ABL's financial results since the date of acquisition and did not have a material impact to our consolidated financial condition, results of operations, or cash flows. Fiscal 2023 Acquisitions KE2 Therm Solutions, Inc. On May 15, 2023, using cash on hand, we acquired all of the equity interests of KE2 Therm Solutions, Inc. (“KE2 Therm”). KE2 Therm develops and provides intelligent refrigeration control solutions that deliver the precision of digital controls to promote safety, efficiency, and reliability, while delivering cost savings to the customer. This acquisition expanded AIS's technology and controls product portfolio and reached new customers. We accounted for the acquisition of KE2 Therm in accordance with ASC 805. We finalized the acquisition accounting for the KE2 Therm acquisition during the third quarter of fiscal 2024. There were no material measurement period adjustments during fiscal 2024. Acquired assets and liabilities were recorded at their estimated acquisition-date fair values. Acquisition-related costs were expensed as incurred and were not material to our financial statements. The aggregate purchase price of this acquisition reflects goodwill within the AIS segment of $ 15.0 million, which is not deductible for tax purposes. The goodwill was comprised of expected benefits related to expanding AIS's technology and controls product portfolio as well as the trained workforce acquired with these businesses and expected synergies from combining KE2 Therm with our current businesses. We additionally recorded gross intangible assets of $ 18.0 million, which reflects estimates for definite-lived intangibles with an estimated weighted average useful life of approximately 15 years. The operating results of KE2 Therm have been included in our financial statements since the date of acquisition and are not material to our consolidated financial condition, results of operations, or cash flows. 54 Table of Contents ACUITY INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Divestitures There were no divestitures during fiscal 2025 or 2024. The following discussion relates to fiscal year 2023 activities. We sold our Sunoptics prismatic skylights business in November 2022. We transferred assets with a total carrying value of $ 15.1 million, which primarily consisted of intangibles with definite lives, inventories, and allocated goodwill from the ABL segment. We recognized a pre-tax loss on the sale of $ 11.2 million within Miscellaneous expense, net on the Consolidated Statements of Comprehensive Income . Additionally, during fiscal 2023 we recorded impairment charges for certain retained assets as well as associate severance and other costs related to the sale. These items are included within Special charges on the Consolidated Statements of Comprehensive Income . See the Special Charges footnote of the Notes to Consolidated Financial Statements for further details. Note 5 — Fair Value Measurements We determine fair value measurements based on the assumptions a market participant would use in pricing an asset or liability. ASC Topic 820, Fair Value Measurement (“ASC 820”), establishes a three-level hierarchy that distinguishes between market participant assumptions based on (i) unadjusted quoted prices for identical assets or liabilities in an active market (Level 1), (ii) quoted prices in markets that are not active or inputs that are observable either directly or indirectly for substantially the full term of the asset or liability (Level 2), and (iii) prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement (Level 3). We utilize valuation methodologies to determine the fair values of our financial assets and liabilities in conformity with the concepts of “exit price” and the fair value hierarchy as prescribed in ASC 820. All valuation methods and assumptions are validated at least quarterly to ensure the accuracy and relevance of the fair values. 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. In the event of a transfer in or out of a level within the fair value hierarchy, the transfers would be recognized on the date of occurrence. We may from time to time be required to remeasure the carrying value of certain assets and liabilities to fair value on a nonrecurring basis. Such adjustments typically arise if we determine that certain of our assets are impaired. Financial Instruments Recorded at Fair Value The following table summarizes balances and the fair value hierarchy level of our financial instruments recorded at fair value on a recurring basis as of the dates presented (in millions): August 31, 2025 2024 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Cash and cash equivalents $ 422.5 $ — $ — $ 422.5 $ 845.8 $ — $ — $ 845.8 Assets in fair value hierarchy 422.5 — — 422.5 845.8 — — 845.8 Other investments (1) 5.1 6.7 Total $ 422.5 $ — $ — $ 427.6 $ 845.8 $ — $ — $ 852.5 ____________________________________ (1) Includes strategic investments in privately-held entities over which we do not exercise significant influence or control and without readily determinable fair values. Amounts are recorded at cost less any impairment adjusted for observable price changes, if any. 55 Table of Contents ACUITY INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Nonrecurring Fair Value Measurements The following table summarizes information related to our nonrecurring fair value measurements as of the dates presented (in millions): Measurement Date Fair Value Hierarchy Level Fair Value Long-lived intangible assets May 31, 2025 Level 3 $ — Assets held for sale May 31, 2025 Level 3 5.5 Total assets at nonrecurring fair value $ 5.5 Long-Lived Intangible Assets During the third quarter of fiscal 2025, we took actions to accelerate productivity efforts, including the elimination of certain brands, which triggered an impairment test for the related intangible assets. Accordingly, we assessed the recoverability of these assets using an undiscounted cash flow model and concluded the carrying values of the assets were not fully recoverable. Based on the significant change in expected use of these assets, we determined their fair values were de minimis at May 31, 2025, and recorded impairment charges of $ 14.7 million. These charges are reflected within Special Charges on the Consolidated Statements of Comprehensive Income and relate to our ABL segment. Long-lived Assets Held for Sale During the third quarter of fiscal 2025, we determined one of our assets, included within property, plant, and equipment, with a carrying value of $ 7.5 million met the criteria to be classified as held for sale and is expected to be sold within one year. We concluded the carrying value exceeded the fair value less cost to sell of this asset, which resulted in an impairment charge of $ 2.0 million. This charge is reflected within Special Charges on the Consolidated Statements of Comprehensive Income and relates to our ABL segment. Fair values and costs were measured primarily using recent sales of comparable assets. As of August 31, 2025, the carrying value of the asset was $ 5.5 million . Any reasonably likely change in the assumptions used in the analyses for the assets impaired during fiscal 2025 would not be material to our financial condition or results of operations. Disclosures of Fair Value of Financial Instruments Disclosures of fair value information about financial instruments, for which it is practicable to estimate that value, are required each reporting period in addition to any financial instruments carried at fair value on a recurring basis as prescribed by ASC Topic 825, Financial Instruments (“ASC 825”). In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. Fair value for our senior unsecured public notes 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. The estimated fair value of our senior unsecured public notes was $ 446.7 million and $ 429.7 million as of August 31, 2025 and 2024, respectively. We had $ 400.0 million as of August 31, 2025 and no borrowings as of August 31, 2024 outstanding under our credit agreement. Such borrowings are variable-rate instruments that reset on a frequent short-term basis; therefore, we estimate that any outstanding carrying values of these instruments, which are equal to their face amounts, approximate their fair values. See Debt and Lines of Credit footnote of the Notes to Consolidated Financial Statements 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. 56 Table of Contents ACUITY INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 6 — Leases We lease property and equipment under operating lease arrangements, most of which relate to distribution centers, manufacturing facilities, and offices. We include both the contractual term as well as any renewal option that we are reasonably certain to exercise in the determination of our lease terms. For leases with a term of greater than 12 months, we value lease liabilities as the present value of the lease payments over the related term. Related assets are equal to the calculated lease liabilities adjusted for incentives and other items as prescribed by ASC Topic 842, Leases (“ASC 842”). Lease payments generally consist of fixed amounts, and variable amounts based on a market rate or an index are not material to our consolidated lease cost. We have elected to use the practical expedient present in ASC 842 to not separate lease and non-lease components for all significant underlying asset classes and instead account for them together as a single lease component in the measurement of our lease liabilities. We apply the short-term lease exception to leases with a term of 12 months or less and exclude such leases from our Consolidated Balance Sheets . Payments related to these short-term leases are expensed on a straight-line basis over the lease term and are reflected as a component of lease cost within our Consolidated Statements of Comprehensive Income . Generally, the rates implicit in our leases are not readily determinable. Therefore, we discount future lease payments using our estimated incremental borrowing rate at lease commencement. We determine this rate based on a credit-adjusted risk-free rate, which approximates a secured rate over the lease term. The weighted average discount rate for operating leases was 4.3 % and 3.7 % as of August 31, 2025 and 2024, respectively. The following table presents the future undiscounted payments due on our operating lease liabilities as well as a reconciliation of those payments to our operating lease liabilities recorded as of the date presented (in millions): Fiscal year August 31, 2025 2026 $ 27.1 2027 26.4 2028 21.8 2029 17.7 2030 15.3 Thereafter 13.2 Total undiscounted lease payments 121.5 Less: Discount due to interest ( 13.9 ) Present value of lease liabilities $ 107.6 The weighted average remaining lease term for our operating leases was 4.96 years as of August 31, 2025. Lease cost is recorded within Cost of products sold, and may be capitalized into inventory as manufacturing overhead, or Selling, distribution, and administrative expenses in the Consolidated Statements of Comprehensive Income based on the primary use of the related right of use (“ROU”) asset. The components of total lease cost were as follows during the periods presented (in millions): Year Ended August 31, 2025 2024 2023 Operating lease cost $ 26.2 $ 23.5 $ 22.3 Variable lease cost 5.4 3.8 4.2 Short-term lease cost 4.0 3.8 3.6 Total lease cost $ 35.6 $ 31.1 $ 30.1 Cash paid for operating lease liabilities during the year ended August 31, 2025, 2024, and 2023 was $ 26.4 million, $ 22.9 million, and $ 20.1 million, respectively. ROU assets obtained in exchange for lease liabilities during the year ended August 31, 2025 and 2024 were $ 52.5 million and $ 3.4 million, respectively. ROU assets obtained in fiscal 2025 include $ 24.2 million from the acquisition of QSC. 57 Table of Contents ACUITY INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS We have no significant leases that have not yet commenced as of August 31, 2025 that create significant rights and obligations. We have subleased certain properties. Lease income from these subleases is recognized in the Consolidated Statements of Comprehensive Income as it is earned and is not material to our consolidated results of operations. We do not have any other significant transactions in which we are the lessor. In connection with our fiscal 2023 sale of our Sunoptics prismatic skylights, we retained certain assets, primarily ROU assets, that we did not plan to continue using in our manufacturing operations. Accordingly, we assessed the recoverability of these assets using an undiscounted cash flow model and concluded that the carrying values of the assets were not fully recoverable, which triggered an impairment test for these assets. We recorded an impairment charge of $ 4.3 million for these assets using a discounted cash flow model to estimate their fair values in fiscal 2023. The impairments were recorded within Special charges in the Consolidated Statements of Comprehensive Income and pertained to our ABL segment. See the Special Charges footnote of the Notes to Consolidated Financial Statements for further details on the fiscal 2023 impairments. The recoverability and impairment tests required significant assumptions including estimated future cash flows, the identification of assets within each asset group, and the determination of an appropriate discount rate. Note 7 — Debt and Lines of Credit Our debt is carried at the outstanding balance net of any related unamortized discounts and deferred costs and consists of the following as of the dates presented (in millions): August 31, 2025 2024 Senior unsecured public notes due December 2030, principal $ 500.0 $ 500.0 Senior unsecured public notes due December 2030, unamortized discount and deferred costs ( 3.2 ) ( 3.8 ) Long-term borrowings under credit agreement 400.0 — Total debt outstanding $ 896.8 $ 496.2 Long-term Debt On November 10, 2020, Acuity Brands Lighting, Inc., a wholly-owned operating subsidiary of Acuity Inc., issued $ 500.0 million aggregate principal amount of 2.150 % senior unsecured notes due December 15, 2030 (the “Unsecured Notes”) at a price equal to 99.737 % of their face value. Interest on the Unsecured Notes is paid semi-annually in arrears on June 15 and December 15 of each year. At issuance we recorded $ 4.8 million of deferred issuance costs related to the Unsecured Notes as a direct deduction from the face amount of the Unsecured Notes. These issuance costs are amortized over the 10 -year term of the Unsecured Notes. The Unsecured Notes are fully and unconditionally guaranteed on a senior unsecured basis by Acuity Inc. and ABL IP Holding LLC, a wholly-owned subsidiary of Acuity Inc. Lines of Credit On June 30, 2022, we entered into a credit agreement (the “Credit Agreement”) with a syndicate of banks that provides us with a $ 600.0 million five-year unsecured revolving credit facility (the “Revolving Credit Facility”) with the ability to request an additional $ 400.0 million of borrowing capacity. We had no short-term borrowings outstanding under the Revolving Credit Facility at August 31, 2025 and 2024, respectively. On November 25, 2024, we entered into an amendment to the Credit Agreement that, among other things, provided for a delayed draw term loan facility of up to $ 600.0 million (the “Term Loan Facility”), which could be drawn in a single borrowing at any time, subject to certain conditions. In connection with the acquisition of QSC, we incurred an aggregate $ 600.0 million in indebtedness under the Term Loan Facility. In fiscal 2025, we voluntarily repaid $ 200.0 million of the outstanding obligation. We had $ 400.0 million in borrowings outstanding under the Term Loan Facility at August 31, 2025. 58 Table of Contents ACUITY INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The Term Loan Facility will mature on June 30, 2027, which is the maturity date of the revolving loans and commitments under the existing Credit Agreement. Borrowings under the Term Loan Facility bear interest at an adjusted term Secured Overnight Financing Rate (“SOFR”), adjusted daily simple SOFR rate, or base rate, at the Company’s option, plus an applicable margin. The applicable margin is based on, at our option, the Company’s leverage ratio or ratings level, each as defined in the Credit Agreement, and ranges from 0.875 % to 1.375 % (for SOFR-based loans) and from 0 % to 0.375 % (for base rate loans). The covenants and events of default that apply to the revolving loans and commitments under the Credit Agreement also apply to the Term Loan Facility, and borrowings under the Term Loan Facility are guaranteed by the Company and the subsidiaries of the Company that guarantee the revolving loans and commitments. We were in compliance with all financial covenants under the Credit Agreement as of August 31, 2025. At August 31, 2025, we had additional borrowing capacity under the Credit Agreement of $ 595.8 million under the most restrictive covenant in effect at the time, which represents the full amount of the Revolving Credit Facility less outstanding letters of credit of $ 4.2 million issued under the Revolving Credit Facility, primarily for securing collateral requirements under our casualty insurance premiums. None of our existing debt instruments include provisions that would require an acceleration of repayments based solely on changes in our credit ratings. 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 . Note 8 — Commitments and Contingencies Self-Insurance Our policy is to self-insure up to certain limits traditional risks, including workers’ compensation, comprehensive general liability, and auto liability. Our self-insured retention for each claim involving workers’ compensation, comprehensive general liability (including product liability claims), and auto liability is limited per occurrence of such claims. A provision for claims under this self-insured program, based on our estimate of the aggregate liability for claims incurred, is revised and recorded annually. The estimate is derived from both internal and external sources including, but not limited to, our independent actuary. We are also self-insured up to certain limits for certain other insurable risks, primarily physical loss to property and business interruptions resulting from such loss lasting two days or more in duration. Insurance coverage is maintained for catastrophic property and casualty exposures, as well as those risks required to be insured by law or contract. We are fully self-insured for certain other types of liabilities, including environmental, product recall, warranty, and patent infringement. Actuarial estimates used are subject to uncertainty from various sources including, among others, changes in claim reporting patterns, claim settlement patterns, actual claims, judicial decisions, legislation, and economic conditions. Although we believe that the actuarial estimates are reasonable, significant differences related to the items noted above could materially affect our self-insurance obligations, future expense, and cash flows. We are also self-insured for the majority of our medical benefit plans up to certain limits. We estimate our aggregate liability for claims incurred by applying a lag factor to our historical claims and administrative cost experience. The appropriateness of our lag factor is evaluated annually and revised as necessary. Leases We lease certain of our buildings and equipment under noncancellable lease agreements. Please refer to the Leases footnote of the Notes to Consolidated Financial Statements for additional information. Collective Bargaining Agreements Approximately 58 % of our total work force is covered by collective bargaining agreements. Collective bargaining agreements representing approximately 48 % of our work force will expire within one year, primarily due to annual negotiations of union contracts in Mexico. Litigation We are subject to various legal claims arising in the normal course of business, including without limitation, patent infringement, contract disputes, employment matters, and product liability claims. Based on information currently 59 Table of Contents ACUITY INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS available, it is the opinion of management that the ultimate resolution of pending and threatened legal proceedings will not have a material adverse effect on our financial condition, results of operations, or cash flows. However, in the event of unexpected future developments, it is possible that the ultimate resolution of any such matters, if unfavorable, could have a material adverse effect on our financial condition, results of operations, or cash flows in future periods. We establish estimated liabilities for legal claims when associated costs become probable and can be reasonably estimated. The actual costs of resolving legal claims may be substantially higher than the amounts accrued for such claims. However, we cannot make a meaningful estimate of actual costs to be incurred that could possibly be higher or lower than the accrued amounts. Environmental Matters Our operations are subject to numerous comprehensive laws and regulations relating to the generation, storage, handling, transportation, and disposal of hazardous substances, as well as solid and hazardous wastes, and to the remediation of contaminated sites. In addition, permits and environmental controls are required for certain operations to limit air and water pollution, and these permits are subject to modification, renewal, and revocation by issuing authorities. On an ongoing basis, we invest capital and incur operating costs relating to environmental compliance. Environmental laws and regulations have generally become stricter in recent years. We are not aware of any pending legislation or proposed regulation related to environmental issues that would have a material adverse effect. The cost of responding to future changes may be substantial. We establish accruals for known environmental claims when the associated costs become probable and can be reasonably estimated. The actual cost of environmental issues may be substantially higher than that accrued due to difficulty in estimating such costs. Guarantees and Indemnities We are a party to contracts entered into in the normal course of business in which it is common for us to agree to indemnify third parties for certain liabilities that may arise out of or relate to the subject matter of the contract. In most cases, we cannot estimate the potential amount of future payments under these indemnities until events arise that would result in a liability under the indemnities. Product Warranty Costs Our products generally have a standard warranty term of five years that assure our products comply with agreed upon specifications. We record an accrual for the estimated amount of future warranty costs in accordance with ASC Topic 450, Contingencies (“ASC 450”) when the related revenue is recognized and when costs are deemed to be probable and can be reasonably estimated. Liabilities related to product warranty costs are subject to uncertainty because they require estimates of future costs. Estimated future warranty costs are primarily based on historical experience, including the number and costs of identified warranty claims as well as the period of time between the shipment of products and our settlement of related claims. Any estimated or actual loss recoveries that offset our costs and payments are reflected as assets and included within Other current assets or Other long-term assets based on the timing of receipt of recovery. Recoveries are recorded net of allowances for credit losses. Although we assume that historical experience will continue to be the best indicator of future warranty costs, we cannot assure that future warranty costs will not exceed historical amounts, and/or loss recoveries will not be fully collectible. If actual future warranty costs exceed recorded amounts, or recoveries are no longer collectible, adjustments to our accruals and/or receivables may be warranted, which could have a material adverse impact on our results of operations and cash flows. 60 Table of Contents ACUITY INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Estimated liabilities for product warranty costs are included in Other accrued liabilities or Other long-term liabilities on the Consolidated Balance Sheets based upon when we expect to settle the incurred warranty. The following table summarizes changes in the estimated liabilities for product warranty costs during the periods presented (in millions): Year Ended August 31, 2025 2024 2023 Beginning balance $ 37.5 $ 31.6 $ 27.3 Product warranty costs (1) 36.5 49.4 47.0 Payments and other deductions (1) ( 37.7 ) ( 43.5 ) ( 42.7 ) Acquired warranty and recall liabilities 7.8 — — Ending balance $ 44.1 $ 37.5 $ 31.6 ____________________________ (1) Amounts exclude any estimated or actual loss recoveries. Note 9 — Segment Information We present our financial results of operations for our two reportable segments, ABL and AIS, consistent with how our CODM, Neil Ashe, Chairman, President and Chief Executive Officer, evaluates operating results, assesses performance, and allocates resources within the Company. See Description of Business and Basis of Presentation footnote of the Notes to Consolidated Financial Statements for further details on how we identify our reportable segments. For both segments, our CODM uses segment operating profit as the measurement of segment profit to allocate resources and assess performance. Our CODM considers target-to-actual differences in operating profit when making decisions on how to allocate capital and resources. Additionally, he considers segment operating profit when evaluating employee compensation and personnel allocations. We allocate certain working capital assets and capital expenditures to our segments primarily to assess each segment's contribution to our consolidated operating cash flows and capital expenditures. Segment assets include accounts receivable and inventory. Unallocated assets are presented in corporate as a reconciling item to our total consolidated assets. 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 . Corporate expenses that are primarily administrative in function and benefit the Company on an entity-wide basis are not allocated to segments. These include expenses related to governance, policy setting, compliance, and certain other shared services functions. Additionally, net interest expense (income), net miscellaneous expense, and income tax expense are not allocated to segments. 61 Table of Contents ACUITY INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The following table presents financial information by operating segment for the periods presented (in millions): Year Ended August 31, 2025 ABL AIS Corporate Eliminations Total Net sales $ 3,612.2 $ 764.3 $ — $ ( 30.9 ) $ 4,345.6 Cost of goods sold 1,957.7 340.3 — ( 30.9 ) 2,267.1 Selling, distribution, and administrative expenses 1,034.2 347.9 102.8 — 1,484.9 Special charges 29.7 — — — 29.7 Operating profit $ 590.6 $ 76.1 $ ( 102.8 ) $ — 563.9 Interest expense, net 22.0 Miscellaneous expense, net 41.7 Income before income taxes $ 500.2 Supplemental Information: Depreciation and amortization $ 71.0 $ 59.7 $ 2.4 $ — $ 133.1 Segment assets 906.1 214.5 3,634.6 — 4,755.2 Capital expenditures 55.1 10.4 2.9 — 68.4 Year Ended August 31, 2024 ABL AIS Corporate Eliminations Total Net sales $ 3,573.4 $ 291.9 $ — $ ( 24.3 ) $ 3,841.0 Cost of goods sold 1,960.9 122.7 — ( 24.3 ) 2,059.3 Selling, distribution, and administrative expenses 1,029.7 125.6 73.1 — 1,228.4 Operating profit $ 582.8 $ 43.6 $ ( 73.1 ) $ — 553.3 Interest income, net ( 4.5 ) Miscellaneous expense, net 9.2 Income before income taxes $ 548.6 Supplemental Information: Depreciation and amortization $ 74.7 $ 15.3 $ 1.1 $ — $ 91.1 Segment assets 883.9 67.6 2,863.1 — 3,814.6 Capital expenditures 55.1 3.6 5.3 — 64.0 Year Ended August 31, 2023 ABL AIS Corporate Eliminations Total Net sales $ 3,722.8 $ 252.7 $ — $ ( 23.3 ) $ 3,952.2 Cost of goods sold 2,152.5 109.8 — ( 23.3 ) 2,239.0 Selling, distribution, and administrative expenses 1,035.8 110.8 66.3 — 1,212.9 Special charges 25.0 — 1.9 — 26.9 Operating profit $ 509.5 $ 32.1 $ ( 68.2 ) $ — 473.4 Interest expense, net 18.9 Miscellaneous expense, net 7.8 Income before income taxes $ 446.7 Supplemental Information: Depreciation and amortization $ 77.4 $ 14.4 $ 1.4 $ — $ 93.2 Segment assets 870.4 53.7 2,484.4 — 3,408.5 Capital expenditures 60.2 3.5 3.0 — 66.7 62 Table of Contents ACUITY INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 10 — Revenue Recognition We recognize revenue when we transfer control of goods and services to our customers. Revenue is measured as the amount of consideration we expect to receive in exchange for goods and services and is recognized net of rebates, sales incentives, product returns, and discounts to customers. We allocate the expected consideration to be collected to each distinct performance obligation identified in a sale based on its standalone selling price. Sales and use taxes collected on behalf of governmental authorities are excluded from revenues. Payment is generally due and received within 60 days from the point of sale. In some instances, such as for software as a service agreements, payment is made prior to the transfer of control of goods and services. Payment terms generally do not extend beyond one year, and we apply the significant financing component practical expedient within ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”). Accruals for cash discounts to customers are estimated using the expected value method based on historical experience and are recorded as a reduction to sales. Our standard terms and conditions of sale generally allow for the return of certain products within four months of the date of shipment. We also provide for limited product return rights to certain distributors and other customers, primarily for slow moving or damaged items subject to certain defined criteria. The limited product return rights generally allow customers to return resalable products purchased within a specified time period and subject to certain limitations, including, at times, when accompanied by a replacement order of equal or greater value. At the time revenue is recognized, we record a refund liability for the expected value of future returns primarily based on historical experience, specific notification of pending returns, or contractual terms with the respective customers. Although historical product returns generally have been within expectations, there can be no assurance that future product returns will not exceed historical amounts. A significant increase in product returns could have a material adverse impact on our operating results in future periods. Refund liabilities recorded under ASC 606 relating to rights of return, cash discounts, and other miscellaneous credits to customers were $ 31.7 million and $ 28.2 million as of August 31, 2025 and 2024, respectively, and are reflected within Other accrued liabilities on the Consolidated Balance Sheets . Additionally, we recorded right of return assets for products expected to be returned to our facilities, which are included within Prepayments and other current assets on the Consolidated Balance Sheets . Such assets totaled $ 3.4 million and $ 4.5 million as of August 31, 2025 and 2024, respectively. We also maintain one-time and ongoing promotions with certain customers, which may include rebate, sales incentive, marketing, and trade-promotion programs with customers that require us to estimate and accrue the expected costs of such programs. These arrangements may include volume rebate incentives, cooperative marketing programs, merchandising of our products, introductory marketing funds for new products, and other trade-promotion activities conducted by the customer. Costs associated with these programs are generally estimated based on the most likely amount expected to be settled based on the context of the individual contract and are reflected within the Consolidated Statements of Comprehensive Income in accordance with ASC 606, which in most instances requires such costs to be recorded as reductions of revenue. Amounts due to our customers associated with these programs totaled $ 46.5 million and $ 35.3 million as of August 31, 2025 and 2024, respectively, and are reflected within Other accrued liabilities on the Consolidated Balance Sheets . Costs to obtain and fulfill contracts, such as sales commissions, are generally short-term in nature and are generally expensed as incurred. Nature of Goods and Services Products Substantially all of the revenues for the periods presented were generated from short-term contracts with our customers to deliver only tangible goods such as luminaires, lighting controls, building system controls, and audio, video, and control platform products. We record revenue from these contracts when the customer obtains control of those goods. For sales designated free on board shipping point, control is transferred and revenue is recognized at the time of shipment. For sales designated free on board destination, customers take control and revenue is recognized when a product is delivered to the customer’s delivery site. 63 Table of Contents ACUITY INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Professional Services We collect fees associated with training, installation, and technical support services, primarily related to the set up of our lighting and building technology solutions. We recognize revenue for these one-time services at the time the service is performed. We also sell certain service-type warranties that extend coverages for products beyond their base warranties. We account for service-type warranties as distinct performance obligations and recognize revenue for these contracts ratably over the life of the additional warranty period. We allocate transaction price to our service-type warranties largely based on expectations of cost plus margin based on our estimate of future claims. Claims related to service-type warranties are expensed as incurred. Software Software sales include licenses for software, data usage fees, and software as a service arrangements. We recognize revenue for software based on the contractual rights provided to a customer, which in certain instances results in the recognition of revenue ratably over the contractual service period. Contracts with Multiple Performance Obligations A small portion of our revenue was derived from the combination of any or all of our products, professional services, and software. Significant judgment may be required to determine which performance obligations are distinct and should be accounted for separately. We allocate the expected consideration to be collected to each distinct performance obligation based on its standalone selling price. Standalone selling price is generally determined using a cost plus margin valuation when no observable input is available. The amount of consideration allocated to each performance obligation is recognized as revenue in accordance with the timing for products, professional services, and software as described above. Shipping and Handling Activities We account for shipping and handling activities for customers as activities to fulfill the promise to transfer products to our customers. As such, we do not consider shipping and handling activities to be separate performance obligations, and we expense these costs as incurred. Contract Balances Our rights related to collections from customers are unconditional and are reflected within Accounts receivable on the Consolidated Balance Sheets . We do not have any other significant contract assets. Contract liabilities arise when we receive cash or an unconditional right to collect cash prior to the transfer of control of goods or services. The amount of transaction price from contracts with customers allocated to our contract liabilities consists of the following as of the dates presented (in millions): August 31, 2025 2024 Current deferred revenues $ 21.4 $ 17.4 Non-current deferred revenues 38.0 41.5 Current deferred revenues primarily consist of upfront fees collected for service-type warranties, time-bound software licenses, software as a service arrangements, and professional fees and are included within Other current liabilities on the Consolidated Balance Sheets . These services are expected to be performed within one year. Revenue earned from beginning contract balances during the year ended August 31, 2025 approximated the current deferred revenue balance at August 31, 2024. Non-current deferred revenues primarily consist of long-term service-type warranties, which are typically recognized ratably as revenue between five years and ten years from the date of sale, and are included within Other long-term liabilities on the Consolidated Balance Sheets. Unsatisfied performance obligations that do not represent contract liabilities are expected to be satisfied within one year from August 31, 2025 and consist primarily of orders for physical goods that have not yet been shipped. 64 Table of Contents ACUITY INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Disaggregated Revenues Our ABL segment's luminaires and electronics are sold primarily through independent sales agents who cover specific geographic areas and market channels, by internal sales representatives, through consumer retail channels, directly to large corporate accounts, and through other distribution methods, including directly to OEM customers. AIS sells predominantly to system integrators. The following table shows revenue from contracts with customers by sales channel and reconciles to our segment information for the periods presented (in millions): Year Ended August 31, 2025 2024 2023 ABL: Independent sales network $ 2,646.8 $ 2,551.7 $ 2,671.0 Direct sales network 411.4 397.0 414.4 Retail sales 170.7 190.3 194.9 Corporate accounts 156.7 205.9 200.3 OEM and other 226.6 228.5 242.2 Total ABL 3,612.2 3,573.4 3,722.8 AIS 764.3 291.9 252.7 Eliminations ( 30.9 ) ( 24.3 ) ( 23.3 ) Total $ 4,345.6 $ 3,841.0 $ 3,952.2 Note 11 — Share-based Payments Omnibus Stock Compensation Incentive and Directors’ Equity Plans In January 2022, our stockholders approved the Amended and Restated Acuity Inc. 2012 Omnibus Stock Compensation Incentive Plan (the “Stock Incentive Plan”), which, among other things, increased the total number of shares authorized for issuance pursuant to the Stock Incentive Plan from 2.7 million to 3.6 million, with a corresponding increase to shares available for grant. The Compensation and Management Development Committee of the Board of Directors (the “Compensation Committee”) is authorized to issue awards consisting of incentive and non-qualified stock options, stock appreciation rights, restricted stock awards, restricted stock units, performance stock awards, performance stock units, stock bonus awards, and cash-based awards to eligible employees, non-employee directors, and outside consultants. Shares available for grant under the Stock Incentive Plan were approximately 0.6 million, 0.7 million, and 1.0 million at August 31, 2025, 2024, and 2023, respectively. Any shares subject to an award under the Stock Incentive Plan that are forfeited, canceled, expired, or settled for cash will be available for future grant under the Stock Incentive Plan. Our share-based payment awards are valued based on their grant date fair values as described further below. We recognize compensation cost for share-based payment transactions in accordance with ASC 718. For most of our awards, compensation cost is recognized on a straight-line basis over the award's requisite service period. We apply the accelerated attribution method in certain circumstances, such as when a performance stock unit is subject to graded vesting. For awards subject to a market condition, we consider both actual and derived service periods, as well as the expected performance period, to determine the appropriate compensation recognition method. 65 Table of Contents ACUITY INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Compensation expense recognized related to our share-based payment awards during the periods presented is summarized as follows (in millions): Year Ended August 31, 2025 2024 2023 Restricted stock awards and units $ 24.0 $ 23.9 $ 19.6 Performance stock units 18.9 18.6 15.2 Stock options 0.7 2.6 5.7 Director stock units 1.5 1.5 1.5 Total share-based payment expense $ 45.1 $ 46.6 $ 42.0 Restricted Stock As of August 31, 2025, we had approximately 0.2 million shares outstanding of restricted stock to officers, directors, and other key employees under the Stock Incentive Plan. Grants awarded beginning in fiscal 2022 vest primarily over a three-year period, and grants awarded prior to fiscal 2022 vest primarily over a four-year period. Our restricted stock grants are valued at the closing stock price on the date of the grant. Activity related to restricted stock awards during the periods presented was as follows (in millions, except per share data): Number of Shares Weighted Average Grant Date Fair Value Per Share Outstanding at August 31, 2022 0.3 $ 144.51 Granted 0.2 $ 175.23 Vested ( 0.1 ) $ 140.85 Forfeited ( 0.1 ) $ 163.37 Outstanding at August 31, 2023 0.3 $ 159.33 Granted 0.2 $ 168.74 Vested ( 0.2 ) $ 153.74 Forfeited — * $ 154.90 Outstanding at August 31, 2024 0.3 $ 167.39 Granted 0.1 $ 295.56 Vested ( 0.2 ) $ 166.16 Forfeited — * $ 204.37 Outstanding at August 31, 2025 0.2 $ 229.73 ___________________________ * Represents shares of less than 0.1 million. As of August 31, 2025, there was $ 34.9 million of total unrecognized compensation cost related to unvested restricted stock, which is expected to be recognized over a weighted-average period of 1.4 years. The total fair value of stock vested during the years ended August 31, 2025, 2024, and 2023 was approximately $ 26.2 million, $ 22.9 million, and $ 19.9 million, respectively. Performance Stock Units As of August 31, 2025, we had approximately 0.3 million performance stock units outstanding to officers and other key employees under the Stock Incentive Plan. Our performance stock units vest over a three-year period. 66 Table of Contents ACUITY INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For most of these grants, the actual number of performance stock units earned for these awards will be determined at the end of the related performance period based on the level of achievement of established performance thresholds. Such grants are valued at the closing stock price on the date of grant. We recognize compensation expense for these grants proportionately over the requisite service period for each employee when it becomes probable that the performance metric will be satisfied. A small subset of our performance stock units granted in fiscal 2025, 2024, and 2023 have a payout based on a total shareholder return relative to a peer group index over a three-year period. These awards are valued using a Monte-Carlo simulation and are expensed over the longer of the requisite service period and the derived service period. Stock compensation may be accelerated if a market condition is met prior to the derived service period lapsing. All inputs into the Monte Carlo simulation are estimates made at the time of grant, which are summarized in the table below. Actual realized value of each award could materially differ from these estimates, without impact to future reported net income. Dividends were assumed to be reinvested on the ex-dividend date for us and peer companies. Expected volatility was based on historical volatility of our stock as well as our peer group. The risk-free interest rate was based on the U.S. Treasury yield consistent with the derived performance period. 2025 2024 2023 Dividend yield — % — % — % Expected volatility 33.1 % 34.6 % 46.7 % Risk-free interest rate 4.0 % 4.9 % 4.5 % Fair value of awards $ 470.66 $ 241.39 $ 254.19 Activity related to performance stock units during the periods presented was as follows (in millions, except per share data): Number of Shares Weighted Average Grant Date Fair Value Per Share Outstanding at August 31, 2022 0.2 $ 145.46 Granted 0.1 $ 186.78 Vested ( 0.1 ) $ 124.29 Forfeited — * $ 195.67 Outstanding at August 31, 2023 0.2 $ 171.01 Granted 0.2 $ 172.98 Vested ( 0.1 ) $ 91.36 Outstanding at August 31, 2024 0.3 $ 186.66 Granted 0.1 $ 321.59 Vested ( 0.1 ) $ 207.02 Forfeited — * $ 178.82 Outstanding at August 31, 2025 0.3 $ 214.89 ___________________________ * Represents shares of less than 0.1 million. As of August 31, 2025 there was $ 13.6 million of total unrecognized compensation cost related to unvested performance stock units. This cost is expected to be recognized over a weighted-average period of approximately 1.4 years. The total fair value of performance units vested during the years ended August 31, 2025, 2024, and 2023 was $ 14.9 million, $ 5.0 million, and $ 11.5 million, respectively. 67 Table of Contents ACUITY INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Stock Options As of August 31, 2025, we had approximately 0.8 million options outstanding to officers as well as other key current and former employees under the Stock Incentive Plan, all of which were granted in previous fiscal years. Of these options, 0.3 million were granted in fiscal 2021 and become exercisable over a four-year period. Options issued under the Stock Incentive Plan are generally granted with an exercise price equal to the fair market value of our stock on the date of grant, but never less than the fair market value on the grant date, and expire 10 years from the date of grant. Stock option activity during the periods presented was as follows: Outstanding Exercisable Number of Options (in millions) Weighted Average Exercise Price Number of Options (in millions) Weighted Average Exercise Price Outstanding at August 31, 2022 1.1 $ 132.50 0.6 $ 143.15 Exercised — * $ 126.92 Forfeited ( 0.1 ) $ 227.15 Outstanding at August 31, 2023 1.0 $ 131.81 0.9 $ 135.91 Exercised ( 0.1 ) $ 143.92 Outstanding at August 31, 2024 0.9 $ 130.74 0.9 $ 132.48 Exercised ( 0.1 ) $ 195.50 Outstanding at August 31, 2025 0.8 $ 119.81 0.8 $ 119.81 Range of option exercise prices: $ 100.00 - $ 160.00 (average life - 4.6 years) 0.8 $ 117.46 0.8 $ 117.46 $ 210.01 - $ 239.76 (average life - 1.1 years) — * $ 239.76 — * $ 239.76 ___________________________ * Represents amounts of less than 0.1 million. The total intrinsic value of options exercised during the years ended August 31, 2025, 2024, and 2023 was approximately $ 13.9 million, $ 6.6 million, and $ 0.5 million, respectively. As of August 31, 2025, the total intrinsic value of options outstanding and exercisable was $ 166.1 million. As of August 31, 2025, there was no intrinsic value of options expected to vest. As of August 31, 2025, there was no unrecognized compensation cost related to unvested options. Director Deferred Stock Units In January 2022, the total remaining shares available for issuance under the Director Plan were transferred into the Stock Incentive Plan. As of August 31, 2025, approximately 27,000 stock units were deferred but undistributed under the Director Plan. Employee Stock Purchase Plan Employees are able to purchase, through payroll deduction, common stock at a 5 % discount on a monthly basis. There were 1.5 million shares of our common stock reserved for purchase under the plan, of which approximately 1.0 million shares remain available as of August 31, 2025. Employees may participate at their discretion. Note 12 — Pension and Defined Contribution Plans Company-sponsored Pension Plans We have several pension plans, both qualified and non-qualified, covering certain hourly and salaried employees. Benefits paid under these plans are based generally on employees’ years of service and/or compensation during the final years of employment. We historically have made at least the minimum annual contributions to the plans to the extent indicated by actuarial valuations and statutory requirements. Plan assets are invested primarily in fixed income and equity securities. 68 Table of Contents ACUITY INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS In the fourth quarter of fiscal 2025, we completed full and partial settlements of our domestic qualified defined benefit plans through the purchases of nonparticipating annuities and lump sum elections. Additionally, we terminated one of our international pension plans. As a result of these transactions, we recognized one-time, non-cash pension settlement charges totaling $ 30.9 million in the fourth quarter of fiscal 2025. These pension settlement charges are primarily related to the accelerated recognition of actuarial losses included within Miscellaneous expense, net in the C onsolidated Statements of Comprehensive Income . The combined financial impact of the settlements and de-risking activities taken overall are reflected in the accompanying tables and disclosures within this note. The following tables reflect the status of our domestic (U.S. based) and international pension plans as of the dates presented (in millions): Domestic Plans International Plans August 31, August 31, 2025 2024 2025 2024 Change in benefit obligation: Benefit obligation at beginning of year $ 163.8 $ 159.8 $ 34.0 $ 34.6 Service cost 4.6 3.6 0.8 0.9 Interest cost 7.8 7.8 1.9 2.0 Actuarial (gains) losses ( 12.1 ) 3.7 ( 2.2 ) ( 0.1 ) Settlements ( 95.2 ) — ( 1.4 ) — Benefits paid ( 12.2 ) ( 11.1 ) ( 2.4 ) ( 1.9 ) Other — — 1.2 ( 1.5 ) Benefit obligation at end of year 56.7 163.8 31.9 34.0 Change in plan assets: Fair value of plan assets at beginning of year 134.5 132.7 34.6 32.1 Actual (loss) return on plan assets ( 1.6 ) 9.5 ( 3.2 ) 3.2 Employer contributions 0.9 3.4 1.0 — Benefits paid ( 12.2 ) ( 11.1 ) ( 1.6 ) ( 1.3 ) Settlements ( 95.2 ) — ( 2.6 ) — Other — — 0.7 0.6 Fair value of plan assets at end of year 26.4 134.5 28.9 34.6 Funded status at the end of year $ ( 30.3 ) $ ( 29.3 ) $ ( 3.0 ) $ 0.6 Amounts recognized in the consolidated balance sheets consist of: Non-current assets $ 5.4 $ 8.4 $ 4.3 $ 4.9 Current liabilities ( 3.4 ) ( 4.2 ) ( 0.4 ) ( 0.3 ) Non-current liabilities ( 32.3 ) ( 33.5 ) ( 6.9 ) ( 4.0 ) Net amount recognized in consolidated balance sheets $ ( 30.3 ) $ ( 29.3 ) $ ( 3.0 ) $ 0.6 Accumulated benefit obligation $ 55.6 $ 162.5 $ 29.0 $ 31.8 Pre-tax amounts in accumulated other comprehensive loss: Prior service cost $ — $ ( 0.1 ) $ ( 0.2 ) $ — Net actuarial loss ( 4.8 ) ( 43.5 ) 12.4 ( 8.8 ) Amounts in accumulated other comprehensive loss $ ( 4.8 ) $ ( 43.6 ) $ 12.2 $ ( 8.8 ) Pensions plans in which benefit obligation exceeds plan assets: Projected benefit obligation $ 35.7 $ 37.7 $ 7.3 $ 4.3 Accumulated benefit obligation 34.6 36.4 4.4 2.9 Pensions plans in which plan assets exceed benefit obligation: Projected benefit obligation $ 21.0 $ 126.1 $ 24.6 $ 29.7 Accumulated benefit obligation 21.0 126.1 24.6 28.9 Plan assets 26.4 134.5 28.9 34.6 69 Table of Contents ACUITY INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Service cost of net periodic pension cost is allocated between Cost of products sold, and may be capitalized into inventory as labor costs, and Selling, distribution, and administrative expenses in the Consolidated Statements of Comprehensive Income based on the function of the employee's services. All other components of net periodic pension cost are included within Miscellaneous expense, net in the Consolidated Statements of Comprehensive Income . We utilize a corridor approach to amortize cumulative unrecognized actuarial gains or losses over either the average expected future service of active participants or average life expectancy of plan participants based on each plan’s composition. The corridor is determined as the greater of the excess of 10 % of plan assets or the projected benefit obligation at each valuation date. Amounts related to prior service cost are amortized over the average remaining expected future service period for active participants in each plan. Net periodic pension cost during the periods presented included the following components before tax (in millions): Domestic Plans International Plans 2025 2024 2023 2025 2024 2023 Service cost $ 4.6 $ 3.6 $ 3.8 $ 0.8 $ 0.9 $ 0.8 Interest cost 7.8 7.8 7.4 1.9 2.0 1.6 Expected return on plan assets ( 6.7 ) ( 6.7 ) ( 7.5 ) ( 1.7 ) ( 2.0 ) ( 2.1 ) Amortization of prior service cost — 0.1 2.6 0.1 — — Recognized actuarial loss 1.6 1.7 2.4 1.0 1.6 0.6 Settlement loss (gain) 33.2 — — ( 2.3 ) — — Net periodic pension cost $ 40.5 $ 6.5 $ 8.7 $ ( 0.2 ) $ 2.5 $ 0.9 Weighted average assumptions used in computing the benefit obligation are as follows: Domestic Plans International Plans 2025 2024 2025 2024 Discount rate 5.3 % 4.9 % 6.9 % 5.9 % Rate of compensation increase 5.0 % 5.0 % 4.5 % 3.4 % Weighted average assumptions used in computing net periodic pension cost are as follows: Domestic Plans International Plans 2025 2024 2023 2025 2024 2023 Discount rate 4.9 % 5.1 % 4.4 % 5.9 % 5.9 % 4.9 % Expected return on plan assets 5.3 % 5.3 % 5.5 % 5.4 % 4.7 % 6.4 % Rate of compensation increase 5.0 % 5.0 % 5.0 % 3.4 % 3.5 % 3.5 % It is our policy to adjust, on an annual basis, the discount rate used to determine the projected benefit obligation to approximate rates on high-quality, long-term obligations based on our estimated benefit payments available as of the measurement date. We use published yield curves to assist in the development of our discount rates. We estimate that a 100 basis point increase in the discount rate would reduce net periodic pension cost for fiscal 2025 approximately $ 0.3 million for the domestic plans and $ 0.7 million for the international plans. The expected return on plan assets is derived primarily from a periodic study of long-term historical rates of return on the fair value of our various asset classes included in our targeted pension plan asset allocation as well as future expectations. We estimate that each 100 basis point reduction in the expected return on plan assets would result in additional net periodic pension cost of $ 0.8 million and $ 0.3 million for domestic plans and international plans, respectively. We also evaluate the rate of compensation increase annually and adjust if necessary. 70 Table of Contents ACUITY INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Our investment objective for domestic plan assets is to earn a rate of return sufficient to exceed the long-term growth of the plans’ liabilities without subjecting plan assets to undue risk. The plan assets are invested primarily in fixed income securities. We conduct a periodic strategic asset allocation study to form a basis for the allocation of pension assets between various asset categories. Specific allocation percentages are assigned to each asset category with minimum and maximum ranges established for each. The assets are then managed within these ranges. At August 31, 2025, the U.S. targeted asset allocation approximated 70 % fixed income securities, 15 % real estate securities, and 15 % equity securities. Our investment objective for the international plan assets is to cover the value of the plans’ liabilities. At August 31, 2025, the international asset target allocation approximated 100 % guaranteed insurance policies. Our pension plan asset allocation by asset category as of the dates presented is as follows: % of Plan Assets Domestic Plans International Plans 2025 2024 2025 2024 Equity securities 14.0 % 17.2 % — % — % Fixed income securities 71.6 % 77.3 % 0.4 % 93.2 % Multi-strategy investments — % — % — % 6.8 % Real estate 14.4 % 5.5 % — % — % Guaranteed insurance policies — % — % 99.6 % — % Total 100.0 % 100.0 % 100.0 % 100.0 % Domestic Plans' Assets Our pension plan assets are stated at fair value based on quoted market prices in an active market, quoted redemption values, or estimates based on reasonable assumptions as of the most recent measurement period. See the Fair Value Measurements footnote for a description of the fair value guidance under U.S. GAAP. No transfers between the levels of the fair value hierarchy occurred during the current fiscal period. In the event of a transfer in or out of a level within the fair value hierarchy, the transfers would be recognized on the date of occurrence. Certain pension assets valued at net asset value (“NAV”) per share as a practical expedient are excluded from the fair value hierarchy. Investments in pension plan assets as of August 31, 2025 and August 31, 2024 are described in further detail below. Short-term Fixed Income Investments (Level 1) : Short-term investments consist of money market funds, which are valued at the daily closing price as reported by the relevant fund. Mutual Funds (Level 1) : Mutual funds held by the domestic plans are open-end mutual funds that are registered with the Securities and Exchange Commission (“SEC”) and seek to either replicate or outperform a related index. These funds are required to publish their daily net asset value and to transact at that price. The mutual funds held by the domestic plans are deemed to be actively traded. Collective Trust (Level 2) : The collective trust seeks to outperform the overall small-cap stock market and is comprised primarily of small-cap equity securities with quoted prices in active markets for identical investments. The value of this fund is calculated on each business day based on its daily net asset value; however, the collective trust is not deemed to be actively traded. Fixed Income Investments (Level 2) : The fixed income investment seeks to maximize total return by investing primarily in a diversified portfolio of investment-grade fixed income securities, primarily publicly traded corporate bonds as well as U.S. government and municipal bonds. The investment is valued on each business day based on the values of the underlying holdings and is not actively traded. U.S. Treasury Investments (Level 2) : The domestic plans hold several fixed-income U.S. Treasury securities that are valued based on discounted future cash flows using rates currently available for debt of similar terms and maturity. 71 Table of Contents ACUITY INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Real Estate Fund (NAV) : The real estate fund invests primarily in commercial real estate and includes mortgage loans that are backed by the associated property's investment objective. The fund seeks real estate returns, risk, and liquidity appropriate to a core fund. The fund also seeks to provide current income with the potential for long-term capital appreciation. This investment is valued based on the NAV per share, without further adjustment. The NAV, as provided by the fund's trustee, is used as a practical expedient to estimate fair value and is therefore excluded from the fair value hierarchy. NAV is based on the fair value of the underlying investments. Investors may request to redeem all or any portion of their shares on a quarterly basis. Each investor must provide a written redemption request at least sixty days prior to the end of the quarter for which the request is to be effective. If insufficient funds are available to honor all redemption requests at any point in time, available funds will be allocated pro-rata based on the total number of shares held by each investor. All decisions regarding whether to honor redemption requests are made by the fund’s board of directors. The following tables present the fair value of the domestic pension plan assets by major category as of the dates presented (in millions): Fair Value as of Fair Value Measurements August 31, 2025 (Level 1) (Level 2) (Level 3) Assets included in the fair value hierarchy: Fixed-income investments $ 10.9 $ — $ 10.9 $ — U.S. Treasury investments 5.2 — 5.2 — Mutual funds: Domestic large cap equity fund 1.7 1.7 — — Foreign equity fund 1.4 1.4 — — Collective trust: Domestic small cap equities 0.6 — 0.6 — Short-term fixed income investments 2.8 2.8 — — Total assets in the fair value hierarchy 22.6 Assets calculated at net asset value: Real estate fund 3.8 Total assets at net asset value 3.8 Total assets at fair value $ 26.4 Fair Value as of Fair Value Measurements August 31, 2024 (Level 1) (Level 2) (Level 3) Assets included in the fair value hierarchy: Fixed-income investments $ 63.8 — $ 63.8 — US Treasury investments 34.4 — 34.4 — Mutual funds: Domestic large cap equity fund 11.5 11.5 — — Foreign equity fund 6.7 6.7 — — Collective trust: Domestic small cap equities 4.9 — 4.9 — Short-term fixed income investments 5.8 5.8 — — Total assets in the fair value hierarchy 127.1 Assets calculated at net asset value: Real estate fund 7.4 Total assets at net asset value 7.4 Total assets at fair value $ 134.5 72 Table of Contents ACUITY INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS International Plans' Investments During the second quarter of fiscal 2025, we entered into a buy-in insurance policy to transfer our U.K. pension assets to a third-party insurance company. As of August 31, 2025, the remaining plan assets consist primarily of the buy-in insurance policy. The fair value of the related insurance assets are set equal to the insured liabilities, which are comprised of the projected benefit obligations associated with the plan (Level 3). The unobservable inputs for the fair value of the insurance policy include the discount rate and rate of compensation increases utilized in the actuarial valuation of the related projected benefit obligation. In the fourth fiscal quarter of fiscal 2025, we terminated one of our pension plans in Mexico. As a part of this termination, no plan assets remain. The following tables present the fair value of the international pension plan assets by major category as of the dates presented (in millions): Fair Value as of Fair Value Measurements August 31, 2025 (Level 1) (Level 2) (Level 3) Short-term fixed income investments $ 0.1 $ 0.1 $ — $ — Insurance policy 28.8 — — 28.8 Total assets at fair value $ 28.9 Fair Value as of Fair Value Measurements August 31, 2024 (Level 1) (Level 2) (Level 3) Short-term fixed income investments $ 0.2 $ 0.2 $ — $ — Multi-strategy investments 2.3 — 2.3 — Fixed-income investments 32.1 — 32.1 — Total assets at fair value $ 34.6 The following table presents a reconciliation of the beginning and ending balances of the fair value measurements using significant unobservable inputs (Level 3) (in millions): Year Ended August 31, 2025 Beginning balance $ — Purchases 32.0 Unrealized loss ( 3.2 ) Ending balance $ 28.8 We do not expect to contribute to the remaining plans in fiscal 2026 based on the funded status of the plans as well as current legal minimum funding requirements. Benefit payments are made primarily from funded benefit plan trusts. Benefit payments are expected to be paid as follows during the years ending August 31 (in millions): Domestic Plans International Plans 2026 $ 4.1 $ 2.0 2027 4.1 2.1 2028 6.9 2.3 2029 6.0 2.4 2030 4.9 2.6 2031-2035 25.6 16.8 73 Table of Contents ACUITY INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Defined Contribution Plans We have defined contribution plans to which both employees and the Company make contributions. Employer matching amounts are allocated in accordance with the participants’ investment elections for elective deferrals and totaled $ 14.9 million, $ 11.7 million, and $ 11.1 million for the years ended August 31, 2025, 2024, and 2023, respectively. At August 31, 2025, assets of certain domestic defined contribution plans included shares of our common stock with a market value of approximately $ 12.8 million, which represented approximately 2.2 % of the total fair market value of the assets in those defined contribution plans. Note 13 — Special Charges During the year ended August 31, 2025, we recognized $ 29.7 million of pre-tax special charges, which consisted primarily of impairments of long-lived assets as well as employee severance costs related to productivity initiatives. We recognized no pre-tax special charges during the year ended August 31, 2024. During the year ended August 31, 2023, we recognized $ 26.9 million of pre-tax special charges, which primarily included impairment charges of indefinite-lived intangible assets; impairments of certain retained assets associated with our previously owned Sunoptics prismatic skylights business that were not transferred in connection with the sale; and severance and employee-related costs in connection with the Sunoptics divestiture as well as streamlining activities initiated during the fourth quarter of fiscal 2023. The details of the special charges during the periods presented are summarized as follows (in millions): Year Ended August 31, 2025 2023 Impairment charges $ 16.7 $ 18.3 Severance and employee-related costs 7.2 7.7 Other items 5.8 0.9 Total special charges $ 29.7 $ 26.9 As of August 31, 2025, we had $ 0.4 million of remaining accruals related to special charges, which are included in Accrued compensation in the Consolidated Balance Sheets . These amounts related to unpaid severance and employee-related costs from our third quarter fiscal 2025 actions. As of August 31, 2024, there were no remaining accruals related to special charges. 74 Table of Contents ACUITY INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 14 — Common Stock and Related Matters Common Stock Changes in common stock during the periods presented were as follows (amounts and shares in millions): Common Stock Shares Amount (At par) Balance at August 31, 2022 54.2 $ 0.5 Vesting of share-based payment awards (1) 0.2 — Stock options exercised — * — Balance at August 31, 2023 54.4 0.5 Vesting of share-based payment awards (1) 0.1 — Stock options exercised 0.1 — Balance at August 31, 2024 54.6 0.5 Vesting of share-based payment awards (1) 0.2 — Stock options exercised 0.1 — Balance at August 31, 2025 54.9 $ 0.5 ___________________________ * Represents shares of less than 0.1 million. (1) Shown net of cancellations for tax withholdings As of August 31, 2025 and 2024, we had 24.2 million and 23.8 million of repurchased shares, respectively, recorded as treasury stock at an original repurchase cost of $ 2.65 billion and $ 2.53 billion, respectively. Excise taxes on corporate stock repurchases are accounted for as an increase to the cost basis of our share repurchases. During fiscal 2025, we repurchased approximately 0.4 million shares of our outstanding common stock. As of August 31, 2025, the maximum number of shares that may yet be repurchased under the share repurchase program authorized by the Board equaled 3.3 million shares. We may repurchase shares of our common stock from time to time at prevailing market prices, depending on market conditions, through open market or privately negotiated transactions. Preferred Stock We have 50 million shares of preferred stock authorized. No shares of preferred stock were issued in fiscal 2025 or 2024, and no shares of preferred stock are outstanding. 75 Table of Contents ACUITY INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Earnings per Share Basic earnings per share for the periods presented is computed by dividing net earnings available to common stockholders by the weighted average number of common shares outstanding for these periods. Diluted earnings per share is computed similarly but reflects the potential dilution that would occur if dilutive options were exercised, unvested share-based payment awards were vested, and other distributions related to deferred stock agreements were incurred. Common stock equivalents are calculated using the treasury stock method. 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. The following table calculates basic earnings per common share and diluted earnings per common share during the periods presented (in millions, except per share data): Year Ended August 31, 2025 2024 2023 Net income $ 396.6 $ 422.6 $ 346.0 Basic weighted average shares outstanding 30.859 30.885 31.806 Common stock equivalents 0.782 0.560 0.358 Diluted weighted average shares outstanding 31.641 31.445 32.164 Basic earnings per share (1) $ 12.85 $ 13.68 $ 10.88 Diluted earnings per share (1) $ 12.53 $ 13.44 $ 10.76 ____________________ (1) Earnings per share is calculated using unrounded numbers. Amounts in the table may not recalculate exactly due to rounding. Stock options, performance stock awards, and restricted stock awards that were excluded from the diluted earnings per share calculation as the effect of inclusion would have been antidilutive were immaterial for the years ended August 31, 2025, 2024, and 2023. Note 15 — Income Taxes We account for income taxes using the asset and liability approach as prescribed by ASC Topic 740, Income Taxes (“ASC 740”). This approach requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Using the enacted tax rates in effect for the year in which the differences are expected to reverse, deferred tax liabilities and assets are determined based on the differences between the financial reporting and the tax basis of an asset or liability. The Organization for Economic Co-operation and Development (“OECD”) released the Global Anti-base Erosion (“GloBE”) Model Rules for Pillar Two on December 20, 2021, which defined a 15% global minimum tax. Since the model rules have been released, many countries have enacted or continue to consider changes in their tax laws and regulations based on the Pillar Two proposals, of which some are effective for us in fiscal 2025. We are continuing to evaluate the impact of these proposed and enacted legislative changes as new guidance becomes available. Pillar Two as currently enacted did not have a material impact on our financial statements as most jurisdictions in which we operate have an effective tax rate above the 15% threshold. On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted into law, introducing significant changes to corporate income tax rates and deductions. For fiscal year 2025, OBBA did not have a material impact on our financial statements. We continue to evaluate the future impact of the OBBBA for those provisions that are effective after fiscal year 2025. 76 Table of Contents ACUITY INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The provision for income taxes consists of the following components during the periods presented (in millions): Year Ended August 31, 2025 2024 2023 Provision for current federal taxes $ 103.2 $ 113.6 $ 105.8 Provision for current state taxes 23.8 26.6 15.7 Provision for current foreign taxes 21.6 19.4 27.0 Benefit from deferred taxes ( 45.0 ) ( 33.6 ) ( 47.8 ) Total provision for income taxes $ 103.6 $ 126.0 $ 100.7 The following table presents income before income taxes for our domestic and foreign operations for the periods presented (in millions): Year Ended August 31, 2025 2024 2023 Domestic $ 414.8 $ 472.4 $ 367.5 International 85.4 76.2 79.2 Income before income taxes $ 500.2 $ 548.6 $ 446.7 The following table reconciles the provision at the federal statutory rate to the total provision for income taxes during the periods presented (in millions): Year Ended August 31, 2025 2024 2023 Federal income tax computed at statutory rate $ 105.0 $ 115.2 $ 93.8 State income tax, net of federal income tax benefit 14.8 19.7 11.4 Federal permanent differences ( 2.2 ) 2.1 2.2 Foreign permanent differences and rate differential 4.2 2.3 4.4 Research and development tax credits ( 13.7 ) ( 10.1 ) ( 8.3 ) Unrecognized tax benefits ( 4.8 ) 2.0 1.9 Other, net 0.3 ( 5.2 ) ( 4.7 ) Total provision for income taxes $ 103.6 $ 126.0 $ 100.7 77 Table of Contents ACUITY INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Components of the net deferred income tax liabilities as of the dates presented include (in millions): August 31, 2025 2024 Deferred income tax liabilities: Depreciation $ ( 24.7 ) $ ( 21.8 ) Goodwill and intangibles ( 155.1 ) ( 150.2 ) Operating lease right of use assets ( 24.0 ) ( 15.8 ) Other liabilities ( 3.2 ) ( 1.8 ) Total deferred income tax liabilities ( 207.0 ) ( 189.6 ) Deferred income tax assets: Self-insurance 1.8 2.1 Pension 7.1 6.7 Deferred compensation 25.1 24.5 Net operating losses 6.8 7.1 Other accruals not yet deductible 37.0 43.3 Operating lease liabilities 26.4 18.5 Capitalized research and development 98.1 70.1 Other assets 22.7 14.0 Total deferred income tax assets 225.0 186.3 Valuation allowance ( 19.5 ) ( 20.4 ) Net deferred income tax liabilities $ ( 1.5 ) $ ( 23.7 ) As of August 31, 2025, the estimated undistributed earnings from foreign subsidiaries was $ 365.4 million. We have recorded a deferred income tax liability of $ 0.4 million for certain foreign withholding taxes and U.S. taxes related to foreign earnings for which we do not assert indefinite reinvestment. With respect to unremitted earnings and original investments in foreign subsidiaries where we are continuing to assert indefinite reinvestment, any future remittances could be subject to additional foreign withholding taxes, U.S. state taxes, and certain tax impacts relating to foreign currency exchange effects. It is not practicable to estimate the amount of any unrecognized tax effects on these reinvested earnings and original investments in foreign subsidiaries. We account for the tax on Global Intangible Low-Taxed Income (“GILTI”) as a period cost and, therefore, do not record deferred taxes related to GILTI on our foreign subsidiaries. At August 31, 2025, we had federal tax credit carryforwards of approximately $ 11.2 million that begin to expire in 2029, and state tax credit carryforwards of approximately $ 0.5 million that begin to expire in 2027. Approximately $ 11.2 million in federal tax credit carryforwards are subject to a full valuation allowance as we do not expect to realize any future tax benefit. At August 31, 2025, we had federal net operating loss carryforwards of $ 9.1 million that begin to expire in 2029, state net operating loss carryforwards of $ 27.4 million that begin to expire in 2026, and foreign net operating loss carryforwards of $ 15.2 million that begin to expire in 2028. The gross amount of unrecognized tax benefits as of August 31, 2025 and 2024 totaled $ 18.5 million and $ 21.1 million, respectively. The amount of unrecognized tax benefits that would affect the Company's effective income tax rate was $ 18.5 million and $ 21.1 million as of August 31, 2025 and 2024, respectively. We recognize potential interest and penalties related to unrecognized tax benefits as a component of income tax expense; such accrued interest and penalties are not material. With few exceptions, we are no longer subject to United States federal, state, and local income tax examinations for years ended before 2022 or for foreign income tax examinations before 2017. We anticipate that unrecognized tax benefits may decrease within the next 12 months by $ 5.6 million, of which $ 1.3 million is interest, due to the expiring of the statute of limitations. 78 Table of Contents ACUITY INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The following table reconciles the change in the unrecognized income tax benefit (reported in Other long-term liabilities on the Consolidated Balance Sheets ) during the periods presented (in millions): Year Ended August 31, 2025 2024 2023 Unrecognized tax benefits balance at beginning of year $ 21.1 $ 20.1 $ 19.5 Additions based on tax positions related to the current year 5.8 4.2 4.3 Additions for tax positions of prior years — — 1.4 Reductions for tax positions of prior years ( 0.1 ) ( 0.1 ) ( 1.7 ) Reductions due to settlements — — ( 0.5 ) Reductions due to lapse of statute of limitations ( 8.3 ) ( 3.1 ) ( 2.9 ) Unrecognized tax benefits balance at end of year $ 18.5 $ 21.1 $ 20.1 Total accrued interest was $ 2.4 million, $ 4.6 million, and $ 3.3 million as of August 31, 2025, 2024, and 2023, respectively. Income tax penalties of $ 0.8 million were accrued during fiscal 2025. Interest, net of tax benefits, and penalties are included in Income tax expense within the Consolidated Statements of Comprehensive Income . We are routinely under audit from various tax jurisdictions. We do not currently anticipate material audit assessments. Note 16 — Supplemental Disaggregated Information Sales of lighting, lighting controls, building management solutions, and audio, video, and control solutions, excluding services accounted for approximately 99 % of total consolidated net sales in fiscal 2025, 2024, and 2023. Our geographic distribution of net sales, operating profit, income before income taxes, and long-lived assets is summarized in the following table during and as of the periods presented (in millions): Year Ended August 31, 2025 2024 2023 Net sales (1) : Domestic (2) $ 3,756.7 $ 3,262.9 $ 3,412.9 International 588.9 578.1 539.3 Total net sales $ 4,345.6 $ 3,841.0 $ 3,952.2 Long-lived assets (3) : Domestic (2) $ 359.9 $ 295.7 $ 323.8 International 125.9 105.9 107.4 Total long-lived assets $ 485.8 $ 401.6 $ 431.2 _______________________________________ (1) Net sales are attributed to each country based on the selling location. (2) Domestic amounts include amounts for U.S. based operations. (3) Long-lived assets include net property, plant, and equipment, operating lease right-of-use assets, and other long-term assets as reflected in the Consolidated Balance Sheets . 79 Table of Contents ACUITY INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 17 — Subsequent Event On October 8, 2025, we voluntarily repaid an additional $ 100.0 million of our outstanding Term Loan Facility obligation. 80 Table of Contents Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. None.