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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________________________________________________
Form 10-K
__________________________________________________________
(Mark One)
 
R
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the fiscal year ended August 31, 2016
OR
o
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the transition period from to .

Commission file number 001-16583.
__________________________________________________________
ACUITY BRANDS, INC.
(Exact name of registrant as specified in its charter)
__________________________________________________________
Delaware
 
58-2632672
(State or other jurisdiction of incorporation or organization)
 
(I.R.S. Employer Identification Number)
1170 Peachtree Street, N.E., Suite 2300, Atlanta, Georgia
(Address of principal executive offices)
 
30309-7676
(Zip Code)
(404) 853-1400
(Registrant’s telephone number, including area code)
__________________________________________________________
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class
 
Name of Each Exchange on Which Registered
Common Stock ($0.01 Par Value)
 
New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
__________________________________________________________
Indicate by checkmark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  Yes   þ       No  o
Indicate by checkmark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.  Yes  o       No   þ
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes   þ       No   o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes  þ       No   o
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.    o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large Accelerated Filer   þ
     Accelerated Filer   o
Non-accelerated Filer   o
Smaller Reporting Company  o
 
 
(Do not check if a smaller reporting company)     
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).  Yes  o       No   þ
Based on the closing price of the Registrant’s common stock of $209.43 as quoted on the New York Stock Exchange on February 29, 2016 , the aggregate market value of the voting stock held by nonaffiliates of the registrant was $9,113,731,801 .
The number of shares outstanding of the registrant’s common stock, $0.01 par value, was 44,082,639 shares as of October 26, 2016 .
__________________________________________________________
DOCUMENTS INCORPORATED BY REFERENCE
Location in Form 10-K
 
Incorporated Document
Part II, Item 5
 
Proxy Statement for 2016 Annual Meeting of Stockholders
Part III, Items 10, 11, 12, 13, and 14
 
Proxy Statement for 2016 Annual Meeting of Stockholders
 


Table of Contents

ACUITY BRANDS, INC.
Table of Contents

 
 
Page No.
 
 
 
 
 
 
 



Table of Contents

PART I
Item 1.
Business
($ in millions, except per-share data and as indicated)
Overview
Acuity Brands, Inc. (“Acuity Brands”) is the parent company of Acuity Brands Lighting, Inc. (“ABL”) and other subsidiaries (Acuity Brands, ABL, and such other subsidiaries are collectively referred to herein as the "Company”), and was incorporated in 2001 under the laws of the State of Delaware. The Company is one of the world’s leading providers of lighting and building management solutions for commercial, institutional, industrial, infrastructure, and residential applications throughout North America and select international markets. The Company’s lighting and building management solutions vary from individual devices to intelligent network systems. Individual devices include luminaires, lighting controls, lighting components, controllers for various building systems (including HVAC, lighting, shades and access control), power supplies, and prismatic skylights. Among other benefits, intelligent network systems can optimize energy efficiency and comfort as well as enhance the occupant experience for various indoor and outdoor applications, all the while reducing operating costs. Additionally, the Company continues to expand its solutions portfolio, including software and services, to provide a host of other economic benefits resulting from data analytics that enables the “Internet of Things” ("IoT") and supports the advancement of smart buildings, smart cities, and the smart grid.
As a results-driven, customer-centric company, management continues to align the unique capabilities and resources of the organization to drive profitable growth by providing comprehensive, differentiated, and integrated lighting and building management solutions for customers, driving world-class cost efficiency, and leveraging a culture of operational excellence through continuous improvement.
Lighting and building management solutions vary significantly in terms of functionality and performance and are selected based on a customer's specification, including the aesthetic desires and performance requirements for a given application. The Company’s lighting and building management solutions are marketed under numerous brand names, including but not limited to Lithonia Lighting®, Holophane®, Peerless®, Gotham®, Mark Architectural Lighting™, Winona® Lighting, Juno®, Indy™, AccuLite®, Aculux™, Healthcare Lighting®, Hydrel®, American Electric Lighting®, Carandini®, Antique Street Lamps™, Sunoptics®, RELOC® Wiring Solutions, eldoLED®, Distech Controls®, and Acuity Controls™. As of August 31, 2016 , the Company manufactures products in 17 facilities in North America and three facilities in Europe.
Principal customers include electrical distributors, system integrators, retail home improvement centers, electric utilities, lighting showrooms, national accounts, and energy service companies located in North America and select international markets serving new construction, renovation, and maintenance and repair applications. In North America, the Company’s lighting and building management solutions are sold primarily by independent sales agents, electrical distributors, system integrators, and sales representatives who cover specific geographic areas and market channels. Products are delivered directly or through a network of distribution centers, regional warehouses, and commercial warehouses using both common carriers and a company-managed truck fleet. To serve international customers, the sales forces utilize a variety of distribution methods to meet specific individual customer or country requirements. In fiscal 2016 , sales originated in North America accounted for approximately 96% of net sales. See the Supplemental Disaggregated Information footnote of the Notes to Consolidated Financial Statements for more information concerning the domestic and international net sales of the Company. The Company has one reportable segment serving the North American and select international lighting and building management markets.
Industry Overview
Based on industry sources and government information, the Company estimates that in fiscal 2016 the size of the North American lighting and building management solutions market served by the Company (also referred to herein as “addressable market”) was approximately $19 billion and includes non-portable luminaires (as defined by the National Electrical Manufacturers Association), poles for outdoor lighting, emergency lighting fixtures, daylighting, lighting controls, as well as building management controllers and systems. This market estimate is based on a combination of external industry data and internal estimates, and excludes portable and vehicular lighting fixtures and certain related lighting components, such as lighting ballasts and most lamps. A source of demand for the lighting and building management industry is attributed to the renovation and retrofit of less efficient lighting and building management systems. While the precise size of the North American market is not known, the Company estimates the potential size of the installed base of lighting and building management solutions to be well in excess of $500 billion .
The Company operates in a highly competitive industry that is affected by volatility from a number of general business and economic factors, such as gross domestic product growth, employment levels, credit availability, energy costs, and commodity costs. The Company’s market is based on residential and non-residential construction, both

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new and renovation and retrofit activity, which is sensitive to the volatility of these general economic factors. The Company is not aware of any data that accurately quantifies the split of the non-residential lighting market between new construction and renovation and retrofit activity; however, recent trends developed from industry sources and Company estimates suggest that renovation and retrofit activity represents a growing proportion of the total non-residential lighting market. Construction spending on infrastructure projects such as highways, streets, and urban developments has a material impact on the demand for the Company’s infrastructure-focused lighting and building management solutions. Demand for the Company’s lighting and building management solutions sold through certain retail channels is highly dependent on economic drivers, such as consumer spending and discretionary income, along with housing construction and home improvement spending.
The residential and non-residential market is influenced by: the development of new lighting technologies, including solid-state lighting, electronic drivers, embedded lighting controls, and more effective optical designs and lamps; federal, state, and local requirements for updated energy codes; incentives by federal, state, and local municipal authorities, as well as utility companies, for using more energy-efficient lighting and building management solutions; and design technologies addressing sustainability and facilitating smarter buildings and cities. The Company is a leading provider of integrated lighting and building management solutions based on these technologies and utilizes internally developed, licensed, or acquired intellectual property. Solid-state lighting and digital building management systems provide the opportunity for lighting and building management systems to be integrated in a manner resulting in the optimal platform for enabling the IoT that collect and exchange data to increase efficiency as well as provide a host of other economic benefits resulting from data analytics and other features. The industry’s addressable market is likely to meaningfully expand due to the benefits and value creation provided by intelligent networked lighting and building management systems. New entrants, including both well-established as well as new software and technology companies, therefore continue to develop capabilities and solutions that are both complementary as well as competitive to those of traditional industry participants.    
Products and Solutions
The Company offers a broad portfolio of indoor and outdoor lighting and building management solutions for commercial, institutional, industrial, infrastructure, and residential applications. The portfolio of lighting solutions includes lighting products utilizing fluorescent, light emitting diode ("LED"), organic LED ("OLED"), high intensity discharge, metal halide, and incandescent light sources to illuminate an extensive number of applications as well as standalone and embedded lighting control solutions from simple to sophisticated, wired and wireless. Lighting and controls products and solutions include the following: recessed, surface, and suspended lighting; downlighting; decorative lighting; emergency and exit lighting; track lighting; daylighting; special-use lighting; street and roadway lighting; parking garage lighting; underwater lighting; area pedestrian, flood, and decorative site lighting; landscape lighting; occupancy sensors; photocontrols; relay panels; architectural dimming panels; and integrated lighting controls systems. Building management solutions include products and solutions for controlling HVAC, lighting, shades, and access control that deliver end to end optimization of those building systems. The Company's lighting and building management solutions are designed to enhance the occupant experience, improve the quality of the visual environment, and provide seamless operational energy efficiency and cost reductions, as well as increased digital functionality due to a unique capability to collect vast amounts of data that can better enable the IoT for building owners.
The solutions portfolio of the Company also includes modular wiring, LED drivers, sensors, glass, and inverters sold primarily to original equipment manufacturers ("OEMs"). In addition, the Company provides services across applications that primarily relate to monitoring and controlling lighting and building management systems through network technologies and the commissioning of control systems.
Sales of lighting and building management solutions, excluding services, accounted for approximately 99% of total consolidated net sales for the Company in fiscal 2016 , 2015 , and 2014 .
Sales and Marketing
Sales.   The Company sells lighting and building management solutions to customers in the North American market utilizing numerous sales forces, including internal direct salespeople and independent sales agencies, based on the channel and geography served. The Company also operates separate European sales forces, including independent international sales agencies and system integrators, and an international sales group coordinating export sales outside of North America and Europe.
Marketing.   The Company markets its portfolio and service capabilities to end users in multiple channels through a broad spectrum of marketing and promotional methods, including direct customer contact, trade shows, on-site training, print advertising in industry publications, product brochures and other literature, as well as the internet and

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social media. The Company operates training and display facilities in several locations throughout North America and Europe designed to enhance the lighting knowledge of customers and industry professionals.
Customers
Customers of the Company include electrical distributors, system integrators, retail home improvement centers, electric utilities, utility distributors, national accounts, value-added resellers, government entities and municipalities, lighting showrooms, OEMs, and energy service companies. In addition, there are a variety of other professionals who can represent a significant influence in the product specification process for any given project. These generally include building owners, federal, state, and local governments, contractors, engineers, architects, and lighting designers.
No single customer accounted for more than 10% of net sales in fiscal 2016 . A single customer of the Company, The Home Depot, accounted for approximately 11% and 12% of net sales in fiscal 2015 and 2014 , respectively. These sales include products for resale as well as for lighting its facilities.
Manufacturing and Distribution
The Company operates 20 manufacturing facilities, including nine facilities in the United States, six facilities in Mexico, three facilities in Europe, and two in Canada. The Company utilizes a blend of internal and outsourced manufacturing processes and capabilities to fulfill a variety of customer needs in the most cost-effective manner. Certain critical processes, such as reflector forming and anodizing, high-end glass production, surface mount circuit board production, and assembly are performed (not exclusively) at company-operated facilities, offering the ability to differentiate products through superior capabilities. Other components, such as lamps, LEDs, certain LED light engines, sockets, and ballasts are purchased primarily from third-party vendors. The Company’s investment in its production facilities is focused primarily on improving capabilities, product quality, and manufacturing efficiency as well as environmental, health, and safety compliance. The Company also utilizes contract manufacturing from U.S., Asian, and European sources for certain products. Of total finished goods manufactured and purchased in fiscal 2016 , the Company’s U.S. operations produced approximately 22% , its Mexican operations produced approximately 57% , its European operations produced approximately 3% , and finished product manufactured by others accounted for approximately 18% .
Lighting and building management solutions are delivered directly from manufacturing facilities or through a network of strategically located distribution centers, regional warehouses, and commercial warehouses in North America using both common carriers and a company-managed truck fleet. For international customers, distribution methods are adapted to meet individual customer or country requirements.
Research and Development
Research and development (“R&D”) is defined as the critical investigation aimed at discovery of new knowledge and the conversion of that knowledge into the design of a new product or significant improvement to an existing product. The Company invests in the development of new products and solutions as well as the enhancement of existing offerings with a focus on improving the performance-to-cost ratio and energy efficiency. The Company also develops software applications and capabilities to enhance data analytics offerings. R&D expenses consist of compensation, payroll taxes, employee benefits, materials, supplies, and other administrative costs, but do not include all new product development costs. For fiscal 2016 , 2015 , and 2014 , research and development expense totaled $47.1 , $41.1 , and $35.3 , respectively.
Competition
The Company experiences competition based on numerous factors, including features and benefits, brand name recognition, product quality, product and system design, energy efficiency, customer relationships, service capabilities, and price. The market for lighting and building management solutions and services is competitive and continues to evolve. Certain global and more diversified electrical manufacturers may provide a broader product offering utilizing electrical, lighting, and building management products as well as pricing benefits from the bundling of various offerings. In addition, there have been a growing number of new competitors, from small startup companies to global electronics and software companies, offering new technologies.

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Environmental Regulation
The operations of the Company 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 of the Company’s operations to limit air and water pollution, and these permits are subject to modification, renewal, and revocation by issuing authorities. On an ongoing basis, the Company allocates resources, including investments in capital and operating costs relating to environmental compliance. Environmental laws and regulations have generally become stricter in recent years, and federal, state, and local governments domestically and internationally are considering new laws and regulations, including those governing raw material composition, air emissions, end-of-life product dispositions, and energy efficiency. The Company is not aware of any pending legislation or proposed regulation related to environmental issues that would have a material adverse effect on the Company. The cost of responding to future changes, however, may be substantial.
Raw Materials
The products produced by the Company require certain raw materials, including certain grades of steel and aluminum, electrical and electronic components, plastics, and other petroleum-based materials and components. In fiscal 2016 , the Company purchased approximately 100,000 tons of steel and aluminum. The Company estimates that approximately 8% of purchased raw materials are petroleum-based. Additionally, the Company estimates that approximately five million gallons of diesel fuel were consumed in fiscal 2016 through the Company’s distribution activities. The Company purchases most raw materials and other components on the open market and relies on third parties for providing certain finished goods. While these items are generally available from multiple sources, the cost of products sold may be affected by changes in the market price of raw materials, as well as disruptions in availability of raw materials, components, and sourced finished goods.
The Company does not currently engage in or expect to engage in significant commodity hedging transactions for raw materials, though the Company has and will continue to commit to purchase certain materials for a period of up to 12 months. Significant increases in the prices of the Company’s products due to increases in the cost of raw materials and components could have a negative effect on demand for products and on profitability. While the Company has generally been able to pass along these increases in cost in the form of higher selling prices for its products, there can be no assurance that future disruptions in either supply or price of these materials will not negatively affect future results.
The Company monitors and investigates alternative suppliers and materials based on numerous attributes including quality, service, and price. The Company currently sources raw materials and components from a number of suppliers, but the Company’s ongoing efforts to improve the cost effectiveness of its products and services may result in a reduction in the number of its suppliers. A reduction in the number of suppliers could cause increased risk associated with reliance on a single or limited number of suppliers for certain raw materials, component parts (such as LEDs, lamps, ballasts, and power supplies), and finished goods.
Backlog Orders
The Company produces and stocks quantities of inventory at key distribution centers and warehouses throughout North America and to a much lesser degree, certain European markets. The backlog of orders at any given time is affected by various factors, including seasonality, cancellations, sales promotions, production cycle times, and the timing of receipt and shipment of orders, which are usually shipped within a few weeks of order receipt. Accordingly, a comparison of backlog orders from period to period is not necessarily meaningful and may not be indicative of future shipments.
Patents, Licenses, and Trademarks
The Company owns or has licenses to use various domestic and foreign patents and trademarks related to its products, processes, and businesses. These intellectual property rights are important factors for its businesses. To protect these proprietary rights, the Company relies on copyright, patent, trade secret, and trademark laws. Despite these protections, unauthorized parties may attempt to infringe on the intellectual property of the Company. While patents and patent applications in the aggregate are important to the competitive position of the Company, no single patent or patent application is individually material to the Company.

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Seasonality and Cyclicality
The Company’s business exhibits some seasonality, with net sales being affected by the impact of weather and seasonal demand on construction and installation programs, particularly during the winter months, as well as the annual budget cycles of major customers. Because of these seasonal factors, the Company has experienced, and generally expects to experience, its highest sales in the last two quarters of each fiscal year.
The Company's lighting and building management solutions are sold to customers in both the new construction and renovation and retrofit markets for residential and non-residential applications. The construction market is cyclical in nature and subject to changes in general economic conditions. Sales volume has a major impact on the profitability of the Company. Economic downturns and the potential decline in key construction markets may have a material adverse effect on the net sales and operating income of the Company.
International Operations
The Company manufactures and assembles products at numerous facilities, some of which are located outside the United States. Approximately 73% of the products produced by the Company are manufactured outside the United States, primarily in Mexico and Europe. In addition, the Company sources certain finished goods from third parties with operations outside the United States, primarily in Asia.
Of the products produced by the Company, approximately 70% are manufactured at six facilities in Mexico. These facilities are authorized to operate as Maquiladoras by the Ministry of Economy of Mexico. Maquiladora status allows the Company to import certain items from the United States into Mexico duty-free, provided that such items, after processing, are exported from Mexico within a stipulated time frame. Maquiladora status, which is renewed periodically, is subject to various restrictions and requirements, including compliance with the terms of the Maquiladora program and other local regulations, which have become stricter in recent years.
During fiscal 2016 , net sales initiated outside of the U.S. represented approximately 11% of total net sales. See the Supplemental Disaggregated Information footnote of the Notes to Consolidated Financial Statements for additional information regarding the geographic distribution of net sales, operating profit, and long-lived assets.
Information Concerning Acuity Brands
The Company makes its Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K (and all amendments to these reports) and proxy statements, together with all reports filed pursuant to Section 16 of the Securities Exchange Act of 1934 by the Company’s officers, directors, and beneficial owners of 10% or more of the Company’s common stock, available free of charge through the “SEC Filings” link on the Company’s website, located at www.acuitybrands.com , as soon as reasonably practicable after they are filed with or furnished to the SEC. Information included on the Company’s website is not incorporated by reference into this Annual Report on Form 10-K. The Company’s reports are also available at the Securities and Exchange Commission’s Public Reference Room at 100 F. Street, NE, Washington, DC 20549 or on their website at www.sec.gov . You may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330.
Additionally, the Company has adopted a written Code of Ethics and Business Conduct that applies to all of the Company’s directors, officers, and employees, including its principal executive officer and senior financial officers. The Code of Ethics and Business Conduct and the Company’s Corporate Governance Guidelines are available free of charge through the “Corporate Governance” link on the Company’s website. Any amendments to, or waivers of, the Code of Ethics and Business Conduct for our principal executive officer and senior financial officers will be disclosed on our website promptly following the date of such amendment or waiver. Additionally, the Statement of Responsibilities of Committees of the Board and the Statement of Rules and Procedures of Committees of the Board, which contain the charters for the Company’s Audit Committee, Compensation Committee, and Governance Committee, and the rules and procedures relating thereto, are available free of charge through the “Corporate Governance” link on the Company’s website. Each of the Code of Ethics and Business Conduct, the Corporate Governance Guidelines, the Statement of Responsibilities of Committees of the Board, and the Statement of Rules and Procedures of Committees of the Board is available in print to any stockholder of the Company that requests such document by contacting the Company’s Investor Relations department.
Employees
As of August 31, 2016 , the Company employed approximately 11,800  associates, of which approximately 4,300 were employed in the United States, approximately 7,000 in Mexico, and approximately 500 in other international locations, including Europe, Canada, and the Asia/Pacific region. Union recognition and collective bargaining

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arrangements are in place or in process, covering approximately 8,600  persons (including approximately 2,000 in the United States). Union recognition and collective bargaining arrangements covering approximately 8,100 persons will expire within the next fiscal year. The Company believes that it has a good relationship with both its unionized and non-unionized employees.

Item 1a.
Risk Factors
This filing contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. A variety of risks and uncertainties could cause the Company’s actual results to differ materially from the anticipated results or other expectations expressed in the Company’s forward-looking statements. See “ Cautionary Statement Regarding Forward-Looking Information ” included in Management's Discussion and Analysis of Financial Condition and Results of Operations . These risks include, without limitation:
Risks Related to Economic Factors
General business, political, and economic conditions, including the strength of the construction market, political events, or other factors may affect demand for the Company’s products and services, which could impact results of operations.
The Company competes based on such factors as name recognition and reputation, service, product features, innovation, and price. In addition, the Company operates in a highly competitive environment that is influenced by a number of general business and economic factors, such as economic vitality, employment levels, credit availability, interest rates, trends in vacancy rates and rent values, energy costs, and commodity costs. Sales of lighting and building management solutions depend significantly on the level of activity in new construction and renovation/retrofits. Declines in general economic activity, appropriations, and regulations, including tax policy, may negatively impact new construction and renovation projects, which in turn may impact demand for the Company’s product and service offerings. The impact of these factors could adversely affect the Company’s financial position, results of operations, and cash flows.
The Company’s results may be adversely affected by fluctuations in the cost or availability of raw materials, components, purchased finished goods, or services.
The Company utilizes a variety of raw materials and components in its production process including steel, aluminum, lamps, certain rare earth materials, LEDs, LED drivers, ballasts, wire, electronic components, power supplies, petroleum-based by-products, natural gas, and copper. The Company also sources certain finished goods externally. Future increases in the costs of these items could adversely affect profitability, as there can be no assurance that future price increases will be successfully passed through to customers. The Company generally sources these goods from a number of suppliers. However, there are a limited number of suppliers for certain components and certain purchased finished goods, which on a limited basis results in sole-source supplier situations. Disruptions in the supply of those items could negatively impact the Company’s performance. In addition, the Company's ongoing efforts to improve the cost effectiveness of its products and services may result in a reduction in the number of its suppliers, and in turn, increased risk associated with reliance on a single or limited number of suppliers. Furthermore, volatility in certain commodities, such as oil, impacts all suppliers and, therefore, may cause the Company to experience significant price increases from time to time regardless of the number and availability of suppliers. Profitability and volume could be negatively impacted by limitations inherent within the supply chain of certain of these component parts, including competitive, governmental, and legal limitations, natural disasters, and other events that could impact both supply and price. Additionally, the Company is dependent on certain service providers for key operational functions. While there are a number of suppliers of these services, the cost to change service providers and set up new processes could be significant. Variability in cost and availability of raw materials, components, purchased finished goods, or services could adversely affect the Company’s financial position, results of operations, and cash flows.
Tight credit conditions could impair the ability of the Company and other industry parties to effectively access capital markets, which could negatively impact the Company’s capital position and demand for the Company’s products and services.
The impact of tight credit conditions could impair the ability of real estate developers, property owners, and contractors to effectively access capital markets or obtain reasonable costs of capital on borrowed funds, resulting in depressed levels of construction and renovation projects. The inability of these constituents to borrow money to fund construction and renovation projects may reduce the demand for the Company’s products and services and could adversely affect the Company’s financial position, results of operations, and cash flows.

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In addition to the impact on customers, tight credit conditions could impair the Company’s ability to effectively access capital. This could impair the Company’s ability to refinance debt as it becomes due or to obtain additional credit, if needed. The inability to effectively access capital markets could adversely affect the Company’s financial position, results of operations, and cash flows.
The market price and trading volume of the Company’s shares may be volatile.
The market price of the Company’s common shares could fluctuate significantly for many reasons, including reasons unrelated to the Company’s specific performance, such as reports by industry analysts, investor perceptions, or negative announcements by customers, competitors, or suppliers regarding their own performance, as well as general global economic, industry, and political conditions. SInce management does not provide guidance, the Company's performance could be different than analyst expectations causing a decline in the Company's stock price. To the extent that other large companies within the Company’s industry experience declines in share price, the Company’s share price may decline as well. In addition, when the market price of a company’s shares drops significantly, shareholders could institute securities class action lawsuits against the Company. Such a lawsuit could cause the Company to incur substantial costs and could divert the time and attention of the Company’s management and other resources.
Risks Related to the Company's Strategy
The Company’s results may be adversely affected by its inability to maintain pricing.
Aggressive pricing actions by competitors may affect the Company’s ability to achieve desired revenue growth and profitability levels under its current pricing strategies. The Company may also decide to lower pricing to match the competition. Additionally, the Company may not be able to increase prices to cover rising costs of components and raw materials. Even if the Company were able to increase prices to cover costs, competitive pricing pressures may not allow the Company to pass on any more than the cost increases. Alternatively, if component and raw material costs were to decline, the marketplace may not allow the Company to hold prices at their current levels, which could negatively impact net sales, profitability, and cash flows.
The Company’s inability to effectively introduce new products and solutions could adversely affect its ability to compete and its operating performance.
Continual introductions of new products and solutions, services, and technologies, enhancement of existing products and services, and effective servicing of customers are key to the Company’s competitive strategy. The success of new product and solution introductions depends on a number of factors, including, but not limited to, timely and successful product development, market acceptance, the Company’s ability to manage the risks associated with product life cycles, such as new products and production capabilities, the effective management of purchase commitments and inventory levels to support anticipated product manufacturing and demand, the availability of products in appropriate quantities and costs to meet anticipated demand, and the risk that new products may have quality or other defects in the early stages of introduction. Accordingly, the Company cannot fully predict the ultimate effect of new product introductions and transitions on the Company’s business, financial condition, results of operations, and cash flows.
The Company may pursue future growth through strategic acquisitions, alliances, or investments, which may not yield anticipated benefits.
The Company has strengthened its business through strategic acquisitions, alliances, and investments and may continue to do so as opportunities arise in the future. Such investments have been and may be in start-up or development stage entities. The Company will benefit from such activity only to the extent that it can effectively leverage and integrate the assets of the acquired businesses and alliances, including, but not limited to, personnel, technology, and operating processes. Uncertainty is inherent within the acquisition, alliance, and investment process and unforeseen circumstances arising from recent and future transactions could offset the anticipated benefits. In addition, unanticipated events, negative revisions to valuation assumptions and estimates, diversion of resources and management's attention from other business concerns, and difficulties in attaining synergies, among other factors, could adversely affect the Company’s ability to recover initial and subsequent investments, particularly those related to acquired goodwill and intangible assets or non-controlling interests. Any of these factors could adversely affect the Company’s financial condition, results of operations, and cash flows. In addition, such investment transactions may limit the Company's ability to invest in other activities, which could be more profitable or advantageous.

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The inability to effectively execute its business strategies could adversely affect the Company’s financial condition and results of operations.
Various uncertainties and risks are associated with the implementation of a number of aspects of the Company’s global business strategies, including but not limited to, the development, marketing and selling of new products and solutions, new product development, the development, marketing, and selling of lighting and building management solutions, effective integration of acquisitions, and the development of production capacity related to components such as LED drivers. Those uncertainties and risks include, but are not limited to: diversion of management’s attention; difficulty in retaining or attracting employees; negative impact on relationships with distributors and customers; obsolescence of current products and slow new product development; inability to effectively participate in the emerging opportunities of the Internet of Things utilizing the Company's digital lighting and building management systems; additional streamlining efforts; inability to produce certain components with quality, performance, and cost attributes equal to or better than provided by other component manufacturers; and unforeseen difficulties in the implementation of the management operating structure. Problems with strategy execution could offset anticipated benefits, disrupt service to customers, and impact product quality as well as adversely affect the Company’s financial condition and results of operations. In addition, with the addition of new products and solutions, the Company may encounter new and different competitors that may have more experience with respect to such products and solutions. Any new products and solutions may not achieve the same profit margins as expected and as compared to the Company's historic products and solutions.
The Company may experience difficulties in streamlining activities which could impact shipments to customers, product quality, and the ability to realize the expected savings from streamlining actions.
The Company expects to benefit from its ongoing programs to streamline operations, including the consolidation of certain manufacturing facilities and the reduction of overhead costs, only to the extent that it can effectively leverage assets, personnel, and operating processes in the transition of production between manufacturing facilities. Uncertainty is inherent within the facility consolidation process and unforeseen circumstances could offset the anticipated benefits, disrupt service to customers, and impact product quality.
Risks Related to the Company's Operations
Technological developments, intellectual property issues, and increased competition could affect the Company’s operating profit margins and sales volume.
The Company competes in an industry where technology and innovation play major roles in the competitive landscape. The Company is highly engaged in the investigation, development, and implementation of new technologies and services. Securing key partnerships and alliances as well as employee talent, including having access to technologies, services, and solutions developed by others, and obtaining appropriate patents and the right to utilize patents of other parties all play a significant role in protecting the Company’s freedom to operate and development activities. Additionally, the continual development of new technologies (e.g., LED, OLED, lamp/ballast systems, drivers, lighting controls systems, sensors, communication devices, software, etc.) by existing and new source suppliers — including non-traditional competitors with significant resources — looking for either direct market access or partnerships with competing large manufacturers, coupled with significant associated exclusivity and/or patent activity, could adversely affect the Company’s ability to sustain operating profit margins and desirable levels of sales volume. Also, certain key suppliers of components compete with the Company and could choose to cease supplying the Company, which could temporarily disrupt production by the Company until alternative supplier relationships are established. In addition, there have been a growing number of new competitors, from small startup companies to global electronics companies. Certain global and more diversified electrical manufacturers as well as certain global software and building solution providers may be able to obtain a competitive advantage over the Company by offering broader and more integrated solutions utilizing electrical, lighting, and building automation systems, and small startup companies may offer more localized product sales and support services within individual regions, which could adversely affect on the Company’s business, financial condition, results of operations, and cash flows.
Over the last several years, the Company and others in the industry have received an increased number of allegations of patent infringement from competitors and other non-practicing entity patent holders, often coupled with offers to license such patents for use by the Company. Such offers typically relate to various technologies including certain methods of designing circuits, the use of visible light to communicate data, the use of certain wireless networking methods, and the design of specific products. The Company believes that it does not need or will be able to invalidate or access such patents through licensing, cross-licensing, or other mutually beneficial arrangements, although to the extent the Company is required but unable to enter into such arrangements on acceptable economic terms, it could adversely affect the Company’s business, financial condition, results of operations, and cash flows.

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The Company may be unable to sustain significant customer and/or channel partner relationships.
Relationships with customers are directly impacted by the Company’s ability to deliver quality products and services. The loss of or a substantial decrease in the volume of purchases by certain significant customers could harm the Company’s sales, profitability, and cash flows. The Company has relationships with channel partners such as electrical distributors, independent sales agencies, system integrators, and value-added resellers. While the Company maintains positive, and in many cases long-term, relationships with these channel partners, the loss of a number of these channel partners or a substantial decrease in the volume of purchases from a major channel partner or a group of channel partners could adversely affect the Company’s sales, profitability, and cash flows.
The Company could be adversely affected by disruptions of its operations.
The breakdown of equipment or other events, including labor disputes, strikes, pandemics, cyber-attacks, civil disruptions, or catastrophic events such as war or natural disasters, leading to production interruptions in the Company’s or one or more of its suppliers’ facilities could adversely affect the Company’s financial results and cash flows. Approximately 57% of the Company’s finished products are manufactured in Mexico, a country that periodically experiences heightened civil unrest which could also disrupt supply of products to or from these facilities. Further, because many of the Company’s customers are to varying degrees dependent on planned deliveries from the Company’s facilities, those customers that have to reschedule their own production or delay opening a facility due to the Company’s missed deliveries could pursue financial claims against the Company. The Company may incur costs to correct any of these problems in addition to facing claims from customers. Further, the Company’s reputation among actual and potential customers may be harmed and result in a loss of business. While the Company has developed business continuity plans, including alternative capacity, to support responses to such events or disruptions and maintains insurance policies covering, among other things, physical damage and business interruptions, these policies may not cover all losses. The Company could incur uninsured losses and liabilities arising from such events, including damage to its reputation, loss of customers, and substantial losses in operational capacity, any of which could adversely affect its financial condition, results of operations, and cash flows.
Failure of a Company operating or information system or a compromise of security with respect to an operating or information system or portable electronic device or a violation of data privacy laws or regulations could adversely affect the Company’s results of operations and financial condition or the effectiveness of internal controls over operations and financial reporting.
The Company is highly dependent on various software and automated systems to record and process operational and financial transactions. The Company could experience a failure of one or more of these software and automated systems or could fail to complete all necessary data reconciliation or other conversion controls when implementing a new software system. The Company could also experience a compromise of its security due to many reasons, including technical system flaws, clerical, data input or record-keeping errors, or tampering or manipulation of its systems by employees or unauthorized third parties. Information security risks also exist with respect to the use of portable electronic devices, such as laptops and smartphones, which are particularly vulnerable to loss and theft. The Company may also be subject to disruptions of any of these systems arising from events that are wholly or partially beyond its control (for example, natural disasters, acts of terrorism, cyber attacks, epidemics, computer viruses, and electrical/telecommunications outages). All of these risks are also applicable where the Company relies on outside vendors to provide services, which may operate in a cloud environment. The Company is dependent on the third-party vendors to operate secure and reliable systems which may include data transfers over the internet.
The Company also maintains information technology to support lighting controls systems in certain of its customer offerings, which are integral to the functionality of those integrated systems. In addition to the risks noted above, there are other risks associated with these customer offerings. Customers may be installing software on their networks and utilizing portable electronic devices, which may have security protocol variations that are outside of the Company’s control and could result in a data security compromise.
The Company and certain of its third-party vendors may receive and store personal information in connection with human resources operations, customer offerings, and other aspects of the business. A material network breach in the security of these systems could include the theft of intellectual property, trade secrets, or employee and customer information. To the extent that any disruption or security breach results in a loss or damage to the Company's data, or an inappropriate disclosure of confidential or customer or employee information, it could cause significant damage to the Company's reputation, affect relationships with the Company's customers and employees, lead to claims against the Company, and ultimately harm the Company's business. In addition, the Company may be required to incur significant costs to protect against damage caused by these disruptions or security breaches in the future.

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The Company is also subject to an increasing number of data privacy laws and regulations that prohibit certain transfers of data, including but not limited to transfers within and outside the Company from certain jurisdictions to others. Failure to comply with such laws and regulations could result in the imposition of fines, penalties and other costs. The legal and regulatory data privacy framework is evolving and uncertain. For example, the European Court of Justice’s decision in October 2015 to invalidate the Safe Harbor data privacy program between the United States and the European Union could disrupt the Company's ability to transfer data from Europe to the United States in compliance with applicable law.
Operating system failures, ineffective system implementation or disruptions, failure to comply with data privacy laws or regulations, or the compromise of security with respect to internal or external operating systems or portable electronic devices could subject the Company to liability claims, harm the Company’s reputation, interrupt the Company’s operations, disrupt customer operations, and adversely affect the Company’s internal control over financial reporting, business, financial condition, results of operations, or cash flows.
Changes in the Company's relationship with employees, changes in U.S. or international employment regulations, an inability to attract and retain talented employees, or a loss of key employees could adversely impact the effectiveness of the Company’s operations.
The Company employed approximately 11,800 people as of August 31, 2016 , approximately 7,500 of whom are employed in international locations. As such, the Company has significant exposure to changes in domestic and foreign laws governing relationships with employees, including wage and hour laws and regulations, fair labor standards, minimum wage requirements, overtime pay, unemployment tax rates, workers' compensation rates, citizenship requirements, and payroll taxes, which likely would have a direct impact on the Company's operating costs. Union recognition and collective bargaining agreements are in place or in process covering approximately 73% of the Company's workforce. Collective bargaining agreements representing approximately 69% of the Company's workforce will expire within one year. While the Company believes that it has good relationships with both its unionized and non-unionized employees, the Company may become vulnerable to a strike, work stoppage, or other labor action by these employees that could have an adverse effect on the Company’s business, financial condition, results of operations, or cash flows.
The Company relies upon the knowledge and experience of employees involved in functions throughout the organization that require technical expertise and knowledge of the industry. An inability to attract and retain such employees could adversely impact the Company’s ability to execute key operational functions and could adversely affect the Company’s operations.
There are inherent risks in our solutions and services businesses.
Risks inherent in the sale of solutions and services include assuming greater responsibility for successfully delivering projects that meet a particular customer specification, including defining and controlling contract scope and timing, efficiently executing projects, and managing the performance and quality of the Company’s subcontractors and suppliers. As the Company expands its service offerings, reliance on the technical infrastructure to provide services to customers will increase. If the Company fails to appropriately manage and secure the technical infrastructure required, customers could experience service outages or delays in implementation of services. If the Company is unable to manage and mitigate these risks, the Company could incur liabilities and other losses that would adversely affect the Company’s results of operations.
Risks Related to Legal and Regulatory Matters
The Company is subject to a broad range of standards, laws and regulations in the jurisdictions in which it operates, and the Company may be exposed to substantial disruptions, costs and liabilities associated with the failure to comply with such standards, laws, and regulations.
The Company is subject to a broad range of standards, laws and regulations in the jurisdictions in which the Company operates which could result in increased costs or liabilities or adversely impact the Company's ability to sell its products and solutions. These laws and regulations impose increasingly complex, stringent and costly compliance activities, including but not limited to environmental, health, and safety protection standards and permitting, labeling and other requirements regarding, among other things, electronic and wireless communications, air emissions, wastewater discharges, the use, handling, and disposal of hazardous or toxic materials, the remediation of environmental contamination, and working conditions for the Company’s employees. Some environmental laws, such as Superfund, the Clean Water Act, and comparable laws in U.S. states and other jurisdictions world-wide, impose joint and several liability for the cost of environmental remediation, natural resource damages, third party claims, and

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other expenses, without regard to the fault or the legality of the original conduct, on those persons who contributed to the release of a hazardous substance into the environment. The Company may also be affected by future industry standards, laws or regulations, including those imposed in response to energy, climate change, product functionality, geopolitical, or similar concerns. These standards, laws, or regulations may impact the sourcing of raw materials and the manufacture and distribution of the Company’s products and place restrictions and other requirements or impediments on the products and solutions the Company can sell in certain geographical locations.
The Company may develop unexpected legal contingencies or matters that exceed insurance coverage.
The Company is subject to and in the future may be subject to various claims, including legal claims arising in the normal course of business, which may include without limitation employment claims, product recall, personal injury, network security, data privacy, or property damage claims resulting from the use of the Company's products, services, or solutions or exposure to hazardous materials, contract disputes, or intellectual property disputes. The Company is insured up to specified limits for certain types of losses with a self-insurance retention per occurrence, including product or professional liability, network security, and data privacy claims, and is fully self-insured for certain other types of losses, including environmental, product recall, warranties, commercial disputes, and patent infringement. The Company establishes reserves for legal claims when the costs associated with the claims become probable and can be reasonably estimated. The actual costs of resolving legal claims may be substantially higher or lower than the level of insurance coverage held by the Company and/or the amounts reserved for such claims. In the event of unexpected future developments, it is possible that the ultimate resolutions of such matters, if unfavorable, could adversely affect the Company’s results of operations, financial position, or cash flows. The Company’s insurance coverage is negotiated on an annual basis, and insurance policies in the future may have coverage exclusions that could cause claim-related costs to rise.
If the Company's products are improperly designed, manufactured, packaged, or labeled, the Company may need to recall those items, may have increased warranty costs, and could be the target of product liability claims.
The Company may need to recall products if they are improperly designed, manufactured, packaged, or labeled, and the Company does not maintain insurance for such recall events. Many of the Company's products and solutions have become more complex in recent years and include more sophisticated and sensitive electronic components. The Company has increasingly manufactured certain of those components and products in its own facilities. The Company has previously initiated product recalls as a result of potentially faulty components, assembly, installation, and packaging of its products, and widespread product recalls could result in significant losses due to the costs of a recall, the destruction of product inventory, penalties, and lost sales due to the unavailability of a product for a period of time. In addition, products developed by the Company that incorporate new technologies, such as LED technology, generally provide for more extensive warranty protection which may result in higher costs if warranty claims on these products are higher than historical amounts. The Company may also be liable if the use of any of its products causes harm, and could suffer losses from a significant product liability judgment against the Company in excess of its insurance limits. The Company may not be able to obtain indemnity or reimbursement from its suppliers or other third parties for the warranty costs or liabilities associated with its products. A significant product recall, warranty claim, or product liability case could also result in adverse publicity, damage to the Company’s reputation, and a loss of consumer confidence in its products, which could adversely affect the Company’s business, financial condition, results of operations, and cash flows.
Failure to effectively estimate employer-sponsored health insurance premiums and incremental costs due to the Affordable Care Act could materially and adversely affect the Company's financial condition, results of operations, and cash flows.
In March 2010, the United States federal government enacted comprehensive health care reform legislation, which, among other things, includes guaranteed coverage requirements, eliminates pre-existing condition exclusions and annual and lifetime maximum limits, restricts the extent to which policies can be rescinded, and imposes new taxes on health insurers, self-insured companies, and health care benefits. The legislation imposes implementation effective dates that began in 2010 and extend through 2020 with many of the changes requiring additional guidance and regulations from federal agencies. Possible adverse effects could include increased costs, exposure to expanded liability, and requirements for the Company to revise the ways in which healthcare and other benefits are provided to employees. To date, the Company has experienced increased costs related to such legislation; however, due to the phased-in nature of the implementation and the lack of interpretive guidance, the Company continues to monitor the potential impacts the health care reform legislation will have on the Company’s financial results. Future costs could adversely affect the Company's financial condition, results of operations, and cash flows.

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The Company may not be able to adequately protect its intellectual property.
The Company owns certain patents, trademarks, copyrights, trade secrets, and other intellectual property. In addition, the Company continues to file patent applications, when appropriate. The Company cannot be certain that others have not and will not infringe on its intellectual property rights; however, the Company seeks to establish and protect those rights, which could result in significant legal expenses and adversely affect the Company's financial condition and results of operations.
Compliance with reporting requirements related to the use of conflict minerals, within the meaning of the Dodd-Frank Wall Street Reform and Consumer Protection Act, may result in additional expense, supply chain limitations, or loss of customers.
In July 2010, the United States federal government enacted the Dodd–Frank Wall Street Reform and Consumer Protection Act, which contained provisions regarding the use of certain minerals, including cassiterite, wolframite, coltan, and gold (collectively, "Conflict Minerals"), sourced from the Democratic Republic of Congo and adjoining countries. In August 2012, the SEC adopted annual reporting requirements for public companies that use Conflict Minerals. The number of suppliers who provide conflict-free minerals may be limited, which could have an adverse effect on the Company’s ability to source these products at competitive prices and in sufficient quantities in the future. In addition, due to the complexity and sophistication of the Company's supply chain, compliance with the reporting requirements involves significant efforts and may increase costs. In addition, pressure from customers for more information or due diligence could result in increased costs or potentially the loss of certain customers.
Risks Related to Other Factors

The Company may be subject to risk in connection with third party relationships necessary to operate the Company's business.
The Company utilizes strategic partners and third party relationships in order to operate and grow its business. For instance, the Company utilizes third parties to contract manufacture certain products, as well as perform certain selling, distribution, and administrative functions. The Company cannot control the actions or performance of these third parties and therefore, cannot be certain that the Company or its end-users will be satisfied. Any future actions of or any failure to act by any third party on which the Company’s business relies could cause the Company to incur losses or interruptions in its operations and adversely affect the Company’s financial condition and results of operations.
The Company is subject to risks related to operations outside the United States.
The Company has substantial activities outside of the United States, including sourcing of products, materials, components and purchased finished goods. The Company’s operations, as well as those of key vendors, are therefore subject to regulatory, economic, political, military, and other events in countries where these operations are located, particularly Mexico. In addition to the risks that are common to both the Company’s domestic and international operations, the Company faces risks specifically related to its foreign operations, including but not limited to: foreign currency fluctuations; unstable political, social, regulatory, economic, financial, and market conditions; laws that prohibit shipments to certain countries or restricted parties and that prohibit improper payments to government officials such as the Foreign Corrupt Practices Act and the U.K. Bribery Act; potential for privatization and other confiscatory actions; trade restrictions and disruption; criminal activities; unforeseen increases in tariffs and taxes; corruption; and other changes in regulation in international jurisdictions that could result in substantial additional legal or compliance obligations for the Company. The Company operates six manufacturing facilities in Mexico, which are authorized to operate as Maquiladoras by the Ministry of Economy of Mexico. Maquiladora status allows the Company to import certain items from the United States into Mexico duty-free, provided that such items, after processing, are exported from Mexico within a stipulated time frame. Maquiladora status, which is renewed periodically, is subject to various restrictions and requirements, including compliance with the terms of the Maquiladora program and other local regulations, which have become stricter in recent years.
Certain regulations related to the Maquiladora program became effective in January 2015. Failure to comply with these new regulations could adversely affect the Company’s financial position, results of operations, and cash flows primarily because the Company would in such event be required to pay value-added tax on material imported into Mexico and then seek a refund of those amounts months later after the material is exported from Mexico.
The Company is also subject to certain other laws and regulations affecting its international operations, including laws and regulations such as the North American Free Trade Agreement which, among other things, provide certain beneficial duties and tariffs for qualifying imports and exports, subject to compliance with the applicable classification and other requirements. The evolution of the Company’s products, complexity of its supply chain, and historical reliance

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on third-party vendors such as customs brokers and freight vendors, which may not have had effective processes and controls to enable the Company to fully and accurately comply with such requirements, could subject the Company to liabilities for past, present, or future periods. Such liabilities could adversely affect the Company’s business, financial condition, results of operations, and cash flows.

In June 2016, the United Kingdom (U.K.) held a referendum in which voters approved an exit from the European Union commonly referred to as “Brexit.” As a result of the referendum, it is expected that the British government will begin negotiating the terms of the U.K.’s future relationship with the E.U.  Although it is unknown what those terms will be, it is possible that there will be greater restrictions on imports and exports between the U.K. and E.U. countries and increased regulatory complexities. These changes could cause disruptions to and create uncertainty surrounding the Company's business and the business of existing and future customers and suppliers as well as have an impact on the Company's employees based in Europe, which could adversely affect its business, financial condition, results of operations, and cash flows. The actual effects of Brexit will depend on any agreements the U.K. makes to retain access to E.U. markets either during a transitional period or more permanently.
The Company continues to monitor conditions affecting its international locations, including potential changes in income from a strengthening or weakening in foreign exchange rates in relation to the U.S. dollar. Some of these risks, including but not limited to foreign exchange risk, violations of laws, and higher costs associated with changes in regulation, could adversely affect the Company’s business, financial condition, results of operations, and cash flows.
Risks related to the Company's defined benefit retirement plans may adversely impact results of operations and cash flows.
Significant changes in actual investment returns on defined benefit plan assets, discount rates, and other factors could adversely affect the Company's results of operations and the amount of contributions the Company is required to make to the defined benefit plans in future periods. As the Company's defined benefit plan assets and liabilities are marked-to-market on an annual basis, large non-cash gains or losses could be recorded in the fourth quarter of each fiscal year. In accordance with United States generally accepted accounting principles the income or expense for the plans is calculated using actuarial valuations. These valuations reflect assumptions about financial markets and interest rates, which may change based on economic conditions. Funding requirements for the defined benefit plans are dependent upon, among other things, interest rates, underlying asset returns, and the impact of legislative or regulatory changes related to defined benefit funding obligations. Unfavorable changes in these factors could adversely affect the Company's financial position, results of operations, and cash flows.

Item 1b.
Unresolved Staff Comments

None.


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Item 2.
Properties
The general corporate offices of Acuity Brands are located in Atlanta, Georgia. Because of the diverse nature of operations and the large number of individual locations, it is neither practical nor meaningful to describe each of the operating facilities owned or leased by the Company. The following listing summarizes the significant facility categories as of August 31, 2016 :
Nature of Facilities
Owned
 
Leased
Manufacturing Facilities
12

 
8

Warehouses

 
2

Distribution Centers*
1

 
6

Offices
4

 
17

______________________________________
* The majority of the distribution centers also have certain manufacturing and assembly capabilities.
The following table provides additional geographic information related to the Company’s manufacturing facilities as of August 31, 2016 :
 
United States
 
Mexico
 
Europe
 
Canada
 
Total
Owned
6

 
4

 
1

 
1

 
12

Leased
3

 
2

 
2

 
1

 
8

Total
9

 
6

 
3

 
2

 
20


The Company believes that its properties are well maintained and in good operating condition and that its properties are suitable and adequate for its present needs. During fiscal 2017, the Company expects to make investments to expand capacity at certain manufacturing and other non-manufacturing facilities. In addition, initiatives related to enhancing the global supply chain may result in the future consolidation of certain facilities.
Although a loss at any of the facilities could temporarily impact the Company’s ability to serve the needs of its customers, a substantial loss at the Company’s largest manufacturing facilities in Mexico could have a material, adverse effect on the Company’s financial position, results of operations, and cash flows. The Company believes the financial impact of any loss would be partially mitigated by various insurance programs in place as well as capacity contingencies developed as part of an enterprise-wide contingency plan.


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Item 3.
Legal Proceedings
General
The Company is subject to various legal claims arising in the normal course of business, including, but not limited to, patent infringement, product liability claims, and employment matters. The Company is self-insured up to specified limits for certain types of claims, including product liability, and is fully self-insured for certain other types of claims, including environmental, product recall, and patent infringement. Based on information currently 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 the financial condition, results of operations, or cash flows of the Company. 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 the financial condition, results of operations, or cash flows of the Company in future periods. The Company establishes reserves for legal claims when the costs associated with the claims become probable and can be reasonably estimated. The actual costs of resolving legal claims may be substantially higher than the amounts reserved for such claims. However, the Company cannot make a meaningful estimate of actual costs to be incurred that could possibly be higher or lower than the amounts reserved.
Environmental Matters
The operations of the Company 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 of the Company’s operations to limit air and water pollution, and these permits are subject to modification, renewal, and revocation by issuing authorities. On an ongoing basis, the Company invests capital and incurs operating costs relating to environmental compliance. Environmental laws and regulations have generally become stricter in recent years. The cost of responding to future changes may be substantial. The Company establishes reserves for known environmental claims when the costs associated with the claims become probable and can be reasonably estimated. The actual cost of environmental issues may be substantially higher than that reserved due to difficulty in estimating such costs.

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PART II

Item 5.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
The common stock of Acuity Brands is listed on the New York Stock Exchange under the symbol “AYI”. At October 26, 2016 , there were 2,856 stockholders of record. The following table sets forth the New York Stock Exchange high and low sale prices and the dividend payments for Acuity Brands’ common stock for the periods indicated.
 
Price per Share
 
Dividends
 
High
 
Low
 
per Share
2015
 
 
 
 
 
First Quarter
$143.67
 
$117.19
 
$0.13
Second Quarter
$164.13
 
$127.85
 
$0.13
Third Quarter
$183.53
 
$157.05
 
$0.13
Fourth Quarter
$211.82
 
$174.60
 
$0.13
2016
 
 
 
 
 
First Quarter
$234.43
 
$168.33
 
$0.13
Second Quarter
$241.90
 
$169.42
 
$0.13
Third Quarter
$264.00
 
$209.06
 
$0.13
Fourth Quarter
$280.89
 
$231.89
 
$0.13
The indicated annual dividend rate on the Company's common stock is $0.52 per share. However, all decisions regarding the declaration and payment of dividends are at the discretion of the Board of Directors of the Company (the "Board") and will be evaluated regularly in light of the Company’s financial condition, earnings, growth prospects, funding requirements, applicable law, and any other factors that the Board deems relevant. The information required by this item with respect to equity compensation plans is included under the caption Equity Compensation Plans in the Company’s proxy statement for the annual meeting of stockholders to be held January 6, 2017 , to be filed with the Securities and Exchange Commission pursuant to Regulation 14A, and is incorporated herein by reference.
Issuer Purchases of Equity Securities
In September 2011, the Board authorized the repurchase of two million shares of the Company's outstanding common stock. None of the Company’s outstanding common stock has been repurchased under the current plan; therefore, the maximum number of shares that may yet be purchased under the program equals two million .
Depending on market conditions, shares may be repurchased from time to time at prevailing market prices through open market or privately negotiated transactions. No date has been established for the completion of the share repurchase program and the Company is not obligated to repurchase any shares. Subject to applicable corporate securities laws, repurchases may be made at such times and in such amounts as management deems appropriate. Repurchases under the program can be discontinued at any time management feels additional repurchases are not warranted.
Company Stock Performance
The following information in this Annual Report on Form 10-K is not deemed to be “soliciting material” or to be “filed” with the SEC or subject to Regulation 14A or 14C under the Exchange Act or to the liabilities of Section 18 of the Exchange Act, and will not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent specifically incorporated by reference into such filing.

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The following graph compares the cumulative total return to shareholders on the Company’s outstanding stock during the five years ended August 31, 2016 , with the cumulative total returns of the Standard & Poor’s (“S&P”) 500 Index, the Dow Jones U.S. Electrical Components & Equipment Index, and the Dow Jones U.S. Building Materials & Fixtures Index. The Company is a component of both the S&P 500 Index and Dow Jones U.S. Building Materials & Fixtures Index. The Dow Jones U.S. Electrical Components & Equipment Index is also included in the following graph as the parent companies of several major lighting companies are included in the index.

COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN*
Among Acuity Brands, Inc., the S&P 500 Index,
the Dow Jones US Electrical Components & Equipment Index,
and the Dow Jones US Building Materials & Fixtures Index
AYI-2015831_CHARTX29503A03.JPG

*Assumes $100 invested on August 31, 2011 in stock or index, including reinvestment of dividends.
 
 
Aug-11

Aug-12

Aug-13

Aug-14

Aug-15

Aug-16

 
 
 
 
 
 
 
 
Acuity Brands, Inc.
 
$
100

$
141

$
189

$
275

$
434

$
614

S&P 500
 
$
100

$
118

$
140

$
175

$
176

$
198

Dow Jones US Electrical Components & Equipment
 
$
100

$
124

$
155

$
194

$
175

$
200

Dow Jones US Building Materials & Fixtures
 
$
100

$
150

$
190

$
238

$
275

$
341



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Item 6.
Selected Financial Data
The following table sets forth certain selected consolidated financial data of the Company which has been derived from the Consolidated Financial Statements for each of the five years in the period ended August 31, 2016 . This historical information may not be indicative of the Company’s future performance. The information set forth below should be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations and the Consolidated Financial Statements and the notes thereto.
 
Years Ended August 31,
 
2016 (1)
 
2015 (2)
 
2014 (3)
 
2013 (4)
 
2012 (5)
 
(In millions, except per-share data)
Net sales
$
3,291.3

 
$
2,706.7

 
$
2,393.5

 
$
2,089.1

 
$
1,933.7

Net income
290.8

 
222.1

 
175.8

 
127.4

 
116.3

Basic earnings per share
6.67

 
5.13

 
4.07

 
2.97

 
2.75

Diluted earnings per share
6.63

 
5.09

 
4.05

 
2.95

 
2.72

Cash and cash equivalents
413.2

 
756.8

 
552.5

 
359.1

 
284.5

Total assets (6)
2,948.0

 
2,407.0

 
2,145.4

 
1,888.5

 
1,722.2

Long-term debt
355.0

 
352.4

 
351.9

 
351.6

 
351.2

Total debt
355.2

 
352.4

 
351.9

 
351.6

 
351.2

Stockholders’ equity
1,659.8

 
1,360.0

 
1,163.5

 
993.5

 
834.0

Cash dividends declared per common share
0.52

 
0.52

 
0.52

 
0.52

 
0.52

_______________________________________
(1)
Net Income, Basic Earnings per Share, and Diluted Earnings per Share for fiscal 2016 include a) pre-tax special charges of $15.0 related to streamlining initiatives, b) pre-tax amortization of acquired intangible assets of $21.4 c) pre-tax share-based compensation expense of $27.7, d) pre-tax acquisitions-related items of $10.8, and e) pre-tax impairment of intangible asset of $5.1, totaling $1.21 per share.
(2)
Net Income, Basic Earnings per Share, and Diluted Earnings per Share for fiscal 2015 include a) pre-tax special charges of $12.4 related to streamlining initiatives, b) pre-tax amortization of acquired intangible assets of $11.0, c) pre-tax share-based compensation expense of $18.2, d) non tax-deductible professional fees of $3.2 related to acquisitions, and e) pre-tax net loss on financial instruments of $2.6, totaling $0.74 per share.
(3)
Net Income, Basic Earnings per Share, and Diluted Earnings per Share for fiscal 2014 include a) pre-tax amortization of acquired intangible assets of $11.2, b) pre-tax share-based compensation expense of $17.7, c) pre-tax recoveries of $5.8 associated with fraud at the Company's former freight payment and audit service provider, and d) a pre-tax special charge reversal of $0.2 related to initiatives to simplify and streamline the Company's operations, totaling $0.35 per share.
(4)
Net Income, Basic Earnings per Share, and Diluted Earnings per Share for fiscal 2013 include a) pre-tax amortization of acquired intangible assets of $10.9, b) pre-tax share-based compensation expense of $16.5, c) pre-tax incremental costs of $8.4 incurred due to manufacturing inefficiencies directly related to the Cochran, GA manufacturing facility closure; d) pre-tax costs of $8.1 as a result of fraud at the Company's former freight payment and audit service provider; and e) a pre-tax special charge of $8.5 related to initiatives to simplify and streamline the Company's operations, totaling $0.76 per share.
(5)
Net Income, Basic Earnings per Share, and Diluted Earnings per Share for fiscal 2012 include a) pre-tax amortization of acquired intangible assets of $11.2, b) pre-tax share-based compensation expense of $15.9, c) $13.3 of pre-tax special charges, primarily related to severance and production transfer costs; d) pre-tax non-cash impairments of $1.2 attributable to the abandonment of inventory that was not transferred to other facilities; and e) pre-tax incremental costs incurred due to manufacturing inefficiencies directly related to the Cochran facility closure, which amounted to approximately $3.2, totaling $0.68 per share.
(6)
Fiscal 2015, 2014, 2013, and 2012 amounts include the reclassification of deferred income taxes from short-term to long-term related to the adoption of ASU 2015-17. See the New Accounting Pronouncements footnote for more information.

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Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
($ in millions, except per-share data and as indicated)
The following discussion should be read in conjunction with the Consolidated Financial Statements and related notes included within this report. References made to years are for fiscal year periods.
The purpose of this discussion and analysis is to enhance the understanding and evaluation of the results of operations, financial position, cash flows, indebtedness, and other key financial information of Acuity Brands and its subsidiaries for the years ended August 31, 2016 and 2015 . For a more complete understanding of this discussion, please read the Notes to Consolidated Financial Statements included in this report.
Overview
Company
Acuity Brands, Inc. (“Acuity Brands”) is the parent company of Acuity Brands Lighting, Inc. (“ABL”) and other subsidiaries (Acuity Brands, ABL, and such other subsidiaries are collectively referred to herein as the "Company”). The Company, with its principal office in Atlanta, Georgia, employed approximately 11,800  people worldwide as of August 31, 2016 .
The Company designs, produces, and distributes a broad array of lighting and building management solutions and services for commercial, institutional, industrial, infrastructure, and residential applications for various markets throughout North America and select international markets. The Company's lighting and building management solutions include devices such as luminaires, lighting controls,controllers for various building systems, power supplies, prismatic skylights, and drivers, as well as integrated systems designed to optimize energy efficiency and comfort for various indoor and outdoor applications. The Company is one of the world's leading producers and distributors of lighting and building management solutions, with a broad, highly configurable, diversified product offering. As of August 31, 2016 , the Company operated 20 manufacturing facilities and seven distribution facilities along with two warehouses to serve its extensive customer base.
The Company does not consider acquisitions a critical element of its strategy, but seeks opportunities to expand and enhance its portfolio of solutions, including the following transactions:
On June 30, 2016, using cash on hand and common stock, the Company acquired DGLogik, Inc. ("DGLogik"), a provider of innovative software solutions that enable and visualize the Internet of Things. DGLogik's solutions provide users with the intelligence to better manage energy usage and improve facility performance. DGLogik is headquartered in the San Francisco Bay Area, California.
On December 10, 2015, using cash on hand, the Company acquired Juno Lighting LLC ("Juno Lighting"), a leading provider of downlighting and track lighting fixtures for both residential and commercial applications. Juno Lighting is headquartered in Des Plaines, Illinois.
On December 9, 2015, using cash on hand, the Company acquired certain assets and assumed certain liabilities of Geometri, LLC ("Geometri"), a provider of a software and services platform for mapping, navigation, and analytics.
On September 1, 2015, using cash on hand, the Company acquired Distech Controls Inc. ("Distech Controls"), a provider of building automation solutions that allow for the integration of lighting, HVAC, access control, closed circuit television, and related systems. Distech Controls is headquartered in Quebec, Canada.
On April 15, 2015, using cash on hand, the Company acquired for cash substantially all of the assets and assumed certain liabilities of ByteLight, Inc. ("ByteLight"), a provider of indoor location software for light-emitting diode (“LED”) lighting. ByteLight is headquartered in Boston, Massachusetts.
In addition, during fiscal 2015, the Company made a strategic, non-controlling investment in a company specializing in light sensory networks. 
Strategy
The Company's strategy is to extend its leadership position in the North American market and certain markets internationally by delivering superior lighting and building management solutions. The Company’s lighting and building management solutions vary from individual devices to intelligent network systems. Individual devices include luminaires, lighting controls, lighting components, controllers for various building systems (including HVAC, lighting, shades and access control), power supplies, and prismatic skylights. Among other benefits, intelligent network systems can optimize energy efficiency and comfort as well as enhance the occupant experience for various indoor and outdoor applications, all the while reducing operating costs. Additionally, the Company continues to expand its solutions portfolio, including

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software and services, to provide a host of other economic benefits resulting from data analytics that enables the “Internet of Things” (IoT) and supports the advancement of smart buildings, smart cities, and the smart grid. As a results-oriented, customer-centric company, management will continue to align the unique capabilities and resources of the organization to drive profitable growth through a keen focus on providing comprehensive and differentiated lighting and building management solutions for its customers, driving world-class cost efficiency, and leveraging a culture of continuous improvement.
Throughout fiscal 2016 , the Company believes it made significant progress towards achieving its strategic objectives, including expanding its access to the market, expanding its addressable market, introducing new lighting and building management solutions, and enhancing its operations to create a stronger, more effective organization. The strategic objectives were developed to enable the Company to meet or exceed the following financial goals during an entire business cycle:
Operating profit margin in the mid-teens or higher;
Diluted earnings per share growth in excess of 15% per annum;
Return on stockholders’ equity of 20% or better per annum; and
Cash flow from operations, less capital expenditures, that is in excess of net income.
To increase the probability of the Company achieving these financial goals, management will continue to implement programs to enhance its capabilities at providing unparalleled customer service; creating a globally competitive cost structure; improving productivity; and introducing new and innovative solutions and services more rapidly and cost effectively. In addition, the Company has invested considerable resources to teach and train associates to utilize tools and techniques that accelerate success in these key areas, as well as to create a culture that demands excellence through continuous improvement. Additionally, the Company promotes a “pay-for-performance” culture that rewards various levels of year over year improvement, while closely monitoring appropriate risk-taking. The expected outcome of these activities will be to better position the Company to deliver on its full potential, to provide a platform for future growth opportunities, and to allow the Company to achieve its long-term financial goals. See the Outlook section below for additional information.
Liquidity and Capital Resources
The Company's principle sources of liquidity are operating cash flows generated primarily from its business operations, cash on hand, and various sources of borrowings. The ability of the Company to generate sufficient cash flow from operations or to access certain capital markets, including banks, is necessary to fund its operations and capital expenditures, pay dividends, meet its obligations as they become due, and maintain compliance with covenants contained in its financing agreements.
In recent years, the Company strengthened its liquidity position and extended its debt maturity profile following the issuance of $350.0 of senior unsecured notes due in fiscal 2020 (the “Notes”) and the execution of a $250.0 revolving credit facility scheduled to mature in fiscal 2019 (the “Revolving Credit Facility”). See the Capitalization section below and the Debt and Lines of Credit footnote of the Notes to Consolidated Financial Statements for more information.
Based on its cash on hand, availability under existing financing arrangements, and current projections of cash flow from operations, the Company believes that it will be able to meet its liquidity needs over the next 12 months. Short-term needs are expected to include funding its operations as currently planned, making anticipated capital investments, funding potential acquisitions, paying quarterly stockholder dividends as currently anticipated, paying interest on borrowings as currently scheduled, and making required contributions into its employee benefit plans, as well as potentially repurchasing shares of its outstanding common stock as authorized by the Board of Directors. Two million shares of the Company’s common stock are currently authorized and available for repurchase under the existing repurchase program. The Company expects to repurchase shares on an opportunistic basis. During fiscal 2017 , the Company currently expects to invest approximately 2.5% of net sales in capital expenditures primarily for equipment, tooling, facility enhancements, and new and enhanced information technology capabilities. Additionally, management believes that the Company's cash flow from operations and sources of funding, including, but not limited to, borrowing capacity, will sufficiently support the long-term liquidity needs of the Company.
Cash Flow
The Company uses available cash and cash flow from operations, as well as proceeds from the exercise of stock options, to fund operations and capital expenditures, repurchase Company stock, fund acquisitions, and pay dividends.
The Company’s cash position at August 31, 2016 was $413.2 , a decrease of $343.6 from August 31, 2015 . During the year ended August 31, 2016 , the Company generated net cash from operating activities of $345.7 with additional

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cash received of $14.2 from stock issuances primarily in connection with stock option exercises. Cash generated from operating activities, as well as cash on-hand, was used during the current year primarily to fund acquisitions of $623.2 and capital expenditures of $83.7 as well as pay dividends to stockholders of $22.9 . Foreign currency related items had an unfavorable effect on cash flows of $4.0 during the current year.
During fiscal 2016 , net cash generated from operating activities increased $56.8 to $345.7 compared with $288.9 generated in the prior-year period due primarily to higher net income partially offset by higher operating working capital requirements. Operating working capital (calculated by adding accounts receivable plus inventories, and subtracting accounts payable-net of acquisitions and the impact of foreign exchange rate changes) increased by approximately $53.3 during fiscal 2016 compared to an increase of $38.1 during fiscal 2015 . Operating working capital requirements increased primarily due to greater production and purchases necessary to support the higher level of net sales.
Management believes that investing in assets and programs that will over time increase the overall return on the Company’s invested capital is a key factor in driving stockholder value. The Company invested $83.7 and $56.5 in fiscal 2016 and 2015 , respectively, primarily for new tooling, machinery, equipment, facility enhancements, and information technology.
Contractual Obligations
The following table summarizes the Company’s contractual obligations at August 31, 2016 :
 
 
 
Payments Due by Period (6)
 
Total
 
Less than
One Year
 
1 to 3 Years
 
4 to 5
Years
 
After 5
Years
Debt (1)
$
356.5

 
$
0.2

 
$
0.6

 
$
354.6

 
$
1.1

Interest Obligations (2)
163.8

 
31.9

 
65.3

 
31.4

 
35.2

Operating Leases (3)
60.2

 
15.1

 
21.7

 
13.2

 
10.2

Purchase Obligations (4)
198.6

 
193.8

 
4.8

 

 

Other Long-term Liabilities (5)
42.9

 
4.3

 
6.6

 
3.6

 
28.4

Total
$
822.0

 
$
245.3

 
$
99.0

 
$
402.8

 
$
74.9

___________________________
(1)  
These amounts (which represent the amounts outstanding at August 31, 2016 ) are included in the Company’s Consolidated Balance Sheets . See the Debt and Lines of Credit footnote for additional information regarding debt and other matters.
(2)  
These amounts represent primarily the expected future interest payments on outstanding debt held by the Company at August 31, 2016 and the Company’s outstanding loans related to its corporate-owned life insurance policies (“COLI”), which constitute a small portion of the total amounts shown. COLI-related interest payments included in this table are estimates. These estimates are based on various assumptions, including age at death, loan interest rate, and tax bracket. The amounts in this table do not include COLI-related payments after ten years due to the difficulty in calculating a meaningful estimate that far in the future. Note that payments related to debt and the COLI are reflected in the Company’s Consolidated Statements of Cash Flows .
(3)  
The Company’s operating lease obligations are described in the Commitments and Contingencies footnote.
(4)  
Purchase obligations include commitments to purchase goods or services that are enforceable and legally binding and that specify all significant terms, including open purchase orders.
(5)  
These amounts are included in the Company’s Consolidated Balance Sheets and largely represent other liabilities for which the Company is obligated to make future payments under certain long-term employee benefit programs. Estimates of the amounts and timing of these amounts are based on various assumptions, including expected return on plan assets, interest rates, and other variables. The amounts in this table do not include amounts related to future funding obligations under the defined benefit pension plans. The amount and timing of these future funding obligations are subject to many variables and are also dependent on whether or not the Company elects to make contributions to the pension plans in excess of those required under ERISA. Such voluntary contributions may reduce or defer the funding obligations. See the Pension and Profit Sharing Plans footnote for additional information. These amounts exclude $5.2 of unrecognized tax benefits as the period of cash settlement with the respective taxing authorities cannot be reasonably estimated.
(6)  
Deferred income tax liabilities as of August 31, 2016 were approximately $187.8 . Refer to the Income Taxes footnote for more information. This amount is not included in the total contractual obligations table because the Company believes this presentation would not be meaningful. Deferred income tax liabilities are calculated based on temporary differences between the tax bases of assets and liabilities and their respective book bases, which will result in taxable amounts in future years when the liabilities are settled at their reported financial statement amounts. The results of these calculations do not have a direct connection with the amount of cash taxes to be paid in any future periods. As a result, scheduling deferred income tax liabilities as payments due by period could be misleading, because this scheduling would not relate to liquidity needs.
Capitalization
The current capital structure of the Company is comprised principally of senior unsecured notes and equity of its stockholders. Total debt outstanding, consisting primarily of fixed-rate obligations net of discount and deferred costs, was $355.2 at August 31, 2016 compared with $352.4 at August 31, 2015 . During fiscal 2016, the Company borrowed $2.5 under recently-executed fixed rate long-term bank loans.

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On December 8, 2009, ABL issued the Notes in a private placement transaction with an aggregate principal amount of $350.0. The Notes were subsequently exchanged for SEC-registered notes with substantially identical terms. The Notes bear interest at a rate of 6% per annum and were issued at a price equal to 99.797% of their face value and for a term of 10 years. See the Debt and Lines of Credit footnote of the Notes to Consolidated Financial Statements for more information.
On August 27, 2014, the Company executed the Revolving Credit Facility with a borrowing capacity of $250.0. The Revolving Credit Facility replaced the Company's prior $250.0 revolving credit facility, which was scheduled to mature on January 31, 2017. The Revolving Credit Facility will mature and all amounts outstanding thereunder will be due and payable on August 27, 2019. The Company was compliant with all financial covenants under the Revolving Credit Facility as of August 31, 2016 . As of August 31, 2016 , the Company had outstanding letters of credit totaling $11.0 , primarily for securing collateral requirements under the casualty insurance programs for the Company and providing credit support for the Company's industrial revenue bond. At August 31, 2016 , the Company had additional borrowing capacity under the Revolving Credit Facility of $243.9 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 $6.1 issued under the Revolving Credit Facility. See the Debt and Lines of Credit footnote of the Notes to Consolidated Financial Statements .
During fiscal 2016 , the Company’s consolidated stockholders’ equity increased $299.8 to $1,659.8 at August 31, 2016 from $1,360.0 at August 31, 2015 . The increase was due primarily to net income earned in the period, as well as amortization of stock-based compensation, and stock issuances resulting primarily from the exercise of stock options, partially offset by payment of dividends, pension plan adjustments, and foreign currency translation adjustments. The Company’s debt to total capitalization ratio (calculated by dividing total debt by the sum of total debt and total stockholders’ equity) was 17.6% and 20.6% at August 31, 2016 and 2015 , respectively. The ratio of debt, net of cash, to total capitalization, net of cash, was (3.6)% at August 31, 2016 and (42.3)% at August 31, 2015 as cash on hand continued to exceed debt.
Dividends
Acuity Brands paid dividends on its common stock of $22.9 ( $0.52 per share) in fiscal 2016 and $22.7 ( $0.52 per share) in fiscal 2015 . The indicated quarterly dividend rate is $0.13 per share. However, all decisions regarding the declaration and payment of dividends by Acuity Brands are at the discretion of the Company’s Board of Directors and are evaluated regularly in light of the Company’s financial condition, earnings, growth prospects, funding requirements, applicable law, and any other factors the Company’s Board of Directors deems relevant.

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Results of Operations
Fiscal 2016 Compared with Fiscal 2015
The following table sets forth information comparing the components of net income for the year ended August 31, 2016 with the year ended August 31, 2015 :
 
Years Ended August 31,
 
Increase
 
Percent
 
2016
 
2015
 
(Decrease)
 
Change
Net Sales
$
3,291.3

 
$
2,706.7

 
$
584.6

 
21.6
 %
Cost of Products Sold
1,855.1

 
1,561.1

 
294.0

 
18.8
 %
Gross Profit
1,436.2

 
1,145.6

 
290.6

 
25.4
 %
Percent of net sales
43.6
%
 
42.3
%
 
130

bps
 

Selling, Distribution, and Administrative Expenses
946.0

 
756.9

 
189.1

 
25.0
 %
Special Charge
15.0

 
12.4

 
2.6

 
21.0
 %
Operating Profit
475.2

 
376.3

 
98.9

 
26.3
 %
Percent of net sales
14.4
%
 
13.9
%
 
50

bps
 

Other Expense (Income):
 

 
 

 
 

 
 

Interest Expense, net
32.2

 
31.5

 
0.7

 
2.2
 %
Miscellaneous (Income) Expense, net
(1.6
)
 
1.2

 
(2.8
)
 
233.3
 %
Total Other Expense
30.6

 
32.7

 
(2.1
)
 
(6.4
)%
Income before Provision for Income Taxes
444.6

 
343.6

 
101.0

 
29.4
 %
Percent of net sales
13.5
%
 
12.7
%
 
80

bps
 

Provision for Income Taxes
153.8

 
121.5

 
32.3

 
26.6
 %
Effective tax rate
34.6
%
 
35.4
%
 
 

 
 

Net Income
$
290.8

 
$
222.1

 
$
68.7

 
30.9
 %
Diluted Earnings per Share
$
6.63

 
$
5.09

 
$
1.54

 
30.3
 %
Net sales increased $584.6 , or 21.6% , to $3,291.3 for the year ended August 31, 2016 compared with $2,706.7 reported for the year ended August 31, 2015 . For the year ended August 31, 2016 , the Company reported net income of $290.8 compared with $222.1 for the year ended August 31, 2015 , an increase of $68.7 , or 30.9% . For fiscal 2016 , diluted earnings per share increased 30.3% to $6.63 from $5.09 for the prior-year period.
The following table reconciles certain financial measures prepared in accordance with U.S. generally accepted accounting principles ("U.S. GAAP") to the corresponding non-U.S. GAAP measures referred to in the discussion of the Company’s results of operations, which exclude the impact of acquisition-related items, amortization of acquired intangible assets, share-based compensation expense, impairment of intangible asset, special charges associated primarily with continued efforts to streamline the organization, and net losses associated with financial instruments. Although special charges, amortization of acquired intangible assets, and share-based compensation expense have been recognized in prior periods and could recur in future periods, management typically excludes the impact of these charges during internal reviews of performance and uses these non-U.S. GAAP measures for baseline comparative operational analysis, decision making, and other activities. Primarily due to the impact of the four acquisitions completed during fiscal 2016, the Company experienced noticeable increases in amortization of acquired intangibles, share-based payments used to improve retention and align the interest of key leaders of acquired businesses, and special charges due to activities to streamline and integrate those acquisitions. These non-U.S. GAAP financial measures, including adjusted gross profit and margin, adjusted selling, distribution, and administrative expenses, adjusted operating profit and margin, adjusted other income/expense, adjusted net income, and adjusted diluted earnings per share, are provided to enhance the user’s overall understanding of the Company’s current financial performance. Specifically, the Company believes these non-U.S. GAAP measures provide greater comparability and enhanced visibility into the results of operations. The non-U.S. GAAP financial measures should be considered in addition to, and not as a substitute for or superior to, results prepared in accordance with U.S. GAAP.

23


 
Years Ended August 31,
 
Increase (Decrease)
Percent Change
 
2016
 
2015
 
Gross Profit
$
1,436.2

 
$
1,145.6

 
 
 
Add-back: Acquisition-related items (1)
2.8

 

 
 
 
Adjusted Gross Profit
$
1,439.0

 
$
1,145.6

 
$
293.4

25.6
%
Percent of net sales
43.7
%
 
42.3
%
 
140

bps
 
 
 
 
 
 
 
Selling, Distribution, and Administrative Expenses
$
946.0

 
$
756.9

 
 
 
Less: Amortization of acquired intangible assets
(21.4
)
 
(11.0
)
 
 
 
Less: Share-based compensation expense
(27.7
)
 
(18.2
)
 
 
 
Less: Acquisition-related items (1)
(8.0
)
 
(3.2
)
 
 
 
Less: Impairment of intangible asset
(5.1
)
 

 
 
 
Adjusted Selling, Distribution, and Administrative Expenses
$
883.8

 
$
724.5

 
$
159.3

22.0
%
Percent of net sales
26.9
%
 
26.8
%
 
10

bps
 
 
 
 
 
 
 
Operating Profit
$
475.2

 
$
376.3

 
 
 
Add-back: Amortization of acquired intangible assets
21.4

 
11.0

 
 
 
Add-back: Share-based compensation expense
27.7

 
18.2

 
 
 
Add-back: Acquisition-related items (1)
10.8

 
3.2

 
 
 
Add-back: Impairment of intangible asset
5.1

 

 
 
 
Add-back: Special charge
15.0

 
12.4

 
 
 
Adjusted Operating Profit
$
555.2

 
$
421.1

 
$
134.1

31.8
%
Percent of net sales
16.9
%
 
15.6
%
 
130

bps
 
 
 
 
 
 
 
Other Expense (Income)
$
30.6

 
$
32.7

 
 
 
Add-back: Net loss on financial instruments

 
(2.6
)
 
 
 
Adjusted Other Expense (Income)
$
30.6

 
$
30.1

 
$
0.5

1.7
%
 
 
 
 
 
 
 
Net Income
$
290.8

 
$
222.1

 
 
 
Add-back: Amortization of acquired intangible assets
21.4

 
11.0

 
 
 
Add-back: Share-based compensation expense
27.7

 
18.2

 
 
 
Add-back: Acquisition-related items (1)
10.8

 
3.2

 
 
 
Add-back: Impairment of intangible asset
5.1

 

 
 
 
Add-back: Special charge
15.0

 
12.4

 
 
 
Add-back: Net loss on financial instruments

 
2.6

 
 
 
Total pre-tax adjustments to Net Income
$
80.0

 
$
47.4

 
 
 
Income tax effect
(27.1
)
 
(15.4
)
 
 
 
Adjusted Net Income
$
343.7

 
$
254.1

 
$
89.6

35.3
%
 
 
 
 
 
 
 
Diluted Earnings per Share
$
6.63

 
$
5.09

 
 
 
Adjusted Diluted Earnings per Share
$
7.84

 
$
5.83

 
$
2.01

34.5
%
______________________________  
(1) Acquisition-related items include acquired profit in inventory, professional fees, and certain contract termination costs.

24


Net Sales
Net sales for the year ended August 31, 2016 increased by 21.6% compared with the prior-year period due primarily to an increase in sales volumes of approximately 15% and the favorable impact of acquired revenues from acquisitions of 9% , partially offset by the impact of an unfavorable change in product prices and the mix of products sold ("price/mix") of approximately 2% and unfavorable foreign currency rate changes of less than 1% . Sales volume was higher across most product categories and key sales channels. Sales of LED-based luminaires during the year ended August 31, 2016 increased almost 50% compared to the year-ago period and represented approximately 60% of total net sales. The change in price/mix was due primarily to unfavorable pricing on LED luminaires, reflecting the decline in certain LED component costs, as well as a change in sales channel mix. Due to the changing dynamics of the Company's product portfolio, including the increase of integrated lighting and building management solutions as well as the proliferation of new products due to the adoption of solid-state lighting, it is not possible to precisely quantify or differentiate the individual components of volume, price and mix.
Gross Profit
Gross profit for fiscal 2016 increased $290.6 , or 25.4% , to $1,436.2 compared with $1,145.6 for the prior year. The increase in gross profit was due primarily to additional contribution on higher net sales, lower material and component costs, and improved productivity. These items were partially offset by unfavorable price/mix, acquisition-related items, and specifically in the fourth quarter, certain disruptions in the supply chain. As a result of these factors, gross profit margin increased 130 basis points to 43.6% for the year ended August 31, 2016 compared with 42.3% for the year ended August 31, 2015 .
Adjusted gross profit for fiscal 2016 increased $293.4 , or 25.6% , to $1,439.0 compared with $1,145.6 for the prior year. Adjusted gross profit margin increased 140 basis points to 43.7% compared to 42.3% in the prior year.
Operating Profit
Selling, Distribution, and Administrative (“SD&A”) expenses for the year ended August 31, 2016 increased $189.1 , or 25.0% , to $946.0 compared with $756.9 in the prior year. The increase in SD&A expenses was due primarily to higher costs to support the greater sales volume, including freight and commissions, higher employee-related costs, higher amortization of acquired intangible assets related to recent acquisitions, certain other acquisition-related items, and the impairment of an intangible asset. The increase in employee costs reflects the Company's investments in capabilities related to areas of future growth as well as enhanced customer service. The increase in employee costs also includes increased variable compensation expense as well as share-based compensation expense due primarily to restricted stock issued as part of certain recent acquisitions. These items were partially offset by savings from recent streamlining efforts. Compared with the prior-year period, SD&A expenses as a percent of sales increased 70 basis points to 28.7% for fiscal 2016 from 28.0% in fiscal 2015 . Adjusted SD&A expenses were $883.8 , or 26.9% of net sales, in fiscal 2016 compared to $724.5 , or 26.8% of net sales, in the year-ago period.
The Company recognized pre-tax special charges of $15.0 during fiscal 2016 compared with pre-tax special charges of $12.4 during fiscal 2015 . These charges related primarily to the Company's continued efforts to integrate recent acquisitions, streamline the organization by realigning certain responsibilities primarily within various selling, distribution, and administrative departments, and the consolidation of certain production activities. Further details regarding the Company's special charges are included in the Special Charge footnote of the Notes to Consolidated Financial Statements .
Operating profit for fiscal 2016 was $475.2 compared with $376.3 reported for the prior-year period, an increase of $98.9 , or 26.3% . Operating profit margin increased 50 basis points to 14.4% for fiscal 2016 compared with 13.9% for fiscal 2015 due primarily to higher gross profit, partially offset by higher costs to support greater sales volume, special charges, employee-related costs, including variable incentive compensation, acquisition-related items, and the impairment of an intangible asset.
Adjusted operating profit increased $134.1 , or 31.8% , to $555.2 compared with $421.1 for fiscal 2015 . Adjusted operating profit margin increased 130 basis points to 16.9% compared with adjusted operating profit margin of 15.6% in the year-ago period.
Other Expense (Income)
Other expense (income) for the Company consists principally of net interest expense and net miscellaneous expense (income) which includes gains and losses related to foreign exchange rate changes. Interest expense, net, was $32.2 and $31.5 for the years ended August 31, 2016 and 2015 , respectively. The Company reported net miscellaneous income of $1.6 in fiscal 2016 compared with net miscellaneous expense of $1.2 in fiscal 2015 .

25


Provision for Income Taxes and Net Income
The effective income tax rate was 34.6% and 35.4% for the years ended August 31, 2016 and 2015 , respectively. The Company estimates that its effective tax rate for fiscal 2017 will be approximately 35.5% before any discrete items and assuming the rates in its taxing jurisdictions remain generally consistent throughout the year.
Net income for fiscal 2016 increased $68.7 , or 30.9% , to $290.8 from $222.1 reported for the prior year. The increase in net income resulted primarily from higher operating profit partially offset by higher tax expense.
Adjusted net income for fiscal 2016 increased 35.3% to $343.7 compared with $254.1 in the year-ago period. Adjusted diluted earnings per share for fiscal 2016 was $7.84 compared with $5.83 for the prior-year period, which represented an increase of $2.01 , or 34.5% .
Fiscal 2015 Compared with Fiscal 2014
The following table sets forth information comparing the components of net income for the year ended August 31, 2015 with the year ended August 31, 2014 :
 
Years Ended August 31,
 
Increase
 
Percent
 
2015
 
2014
 
(Decrease)
 
Change
Net Sales
$
2,706.7

 
$
2,393.5

 
$
313.2

 
13.1
 %
Cost of Products Sold
1,561.1

 
1,414.3

 
146.8

 
10.4
 %
Gross Profit
1,145.6

 
979.2

 
166.4

 
17.0
 %
Percent of net sales
42.3
%
 
40.9
%
 
140

bps
 

Selling, Distribution, and Administrative Expenses
756.9

 
680.3

 
76.6

 
11.3
 %
Special Charge
12.4

 
(0.2
)
 
12.6

 
NM

Operating Profit
376.3

 
299.1

 
77.2

 
25.8
 %
Percent of net sales
13.9
%
 
12.5
%
 
140

bps
 

Other Expense (Income):
 

 
 

 
 

 
 

Interest Expense, net
31.5

 
32.1

 
(0.6
)
 
(1.9
)%
Miscellaneous Expense (Income), net
1.2

 
1.3

 
(0.1
)
 
(7.7
)%
Total Other Expense
32.7

 
33.4

 
(0.7
)
 
(2.1
)%
Income before Provision for Income Taxes
343.6

 
265.7

 
77.9

 
29.3
 %
Percent of net sales
12.7
%
 
11.1
%
 
160

bps
 

Provision for Income Taxes
121.5

 
89.9

 
31.6

 
35.2
 %
Effective tax rate
35.4
%
 
33.8
%
 
 

 
 

Net Income
$
222.1

 
$
175.8

 
$
46.3

 
26.3
 %
Diluted Earnings per Share
$
5.09

 
$
4.05

 
$
1.04

 
25.7
 %
NM - not meaningful
 
 
 
 
 
 
 

Net sales increased $313.2, or 13.1%, to $2,706.7 for the year ended August 31, 2015 compared with $2,393.5 reported for the year ended August 31, 2014. For the year ended August 31, 2015, the Company reported net income of $222.1 compared with $175.8 for the year ended August 31, 2014, an increase of $46.3, or 26.3%. For fiscal 2015, diluted earnings per share increased 25.7% to $5.09 from $4.05 for the prior-year period.
The following table reconciles certain U.S. GAAP financial measures to the corresponding non-U.S. GAAP measures referred to in the discussion of the Company’s results of operations, which exclude amortization of acquired intangibles, share-based compensation expense, acquisition-related items, incremental recoveries related to a fraud at a freight service provider, special charges associated primarily with continued efforts to streamline the organization, and net losses associated with financial instruments.

26


 
Years Ended August 31,
 
Increase (Decrease)
Percent Change
 
2015
 
2014
 
Selling, Distribution, and Administrative Expenses
$
756.9

 
$
680.3

 
 
 
Less: Amortization of acquired intangible assets
(11.0
)
 
(11.2
)
 
 
 
Less: Share-based compensation expense
(18.2
)
 
(17.7
)
 
 
 
Add-back: Freight service provider fraud-related recoveries

 
5.8

 
 
 
Less: Acquisition-related items (1)
(3.2
)
 

 
 
 
Adjusted Selling, Distribution, and Administrative Expenses
$
724.5

 
$
657.2

 
$
67.3

10.2
 %
Percent of net sales
26.8
%
 
27.5
%
 
(70
)
bps
 
 
 
 
 
 
 
Operating Profit
$
376.3

 
$
299.1

 
 
 
Add-back: Amortization of acquired intangible assets
11.0

 
11.2

 
 
 
Add-back: Share-based compensation expense
18.2

 
17.7

 
 
 
Less: Freight service provider fraud-related recoveries

 
(5.8
)
 
 
 
Add-back: Acquisition-related items (1)
3.2

 

 
 
 
Add-back/(Less): Special charge
12.4

 
(0.2
)
 
 
 
Adjusted Operating Profit
$
421.1

 
$
322.0

 
$
99.1

30.8
 %
Percent of net sales
15.6
%
 
13.5
%
 
210

bps
 
 
 
 
 
 
 
Other Expense (Income)
$
32.7

 
$
33.4

 
 
 
Add-back: Net loss on financial instruments
(2.6
)
 

 
 
 
Adjusted Other Expense (Income)
$
30.1

 
$
33.4

 
$
(3.3
)
(9.9
)%
 
 
 
 
 
 
 
Net Income
$
222.1

 
$
175.8

 
 
 
Add-back: Amortization of acquired intangible assets
11.0

 
11.2

 
 
 
Add-back: Share-based compensation expense
18.2

 
17.7

 
 
 
Add-back: Acquisition-related items (1)
3.2

 

 
 
 
Less: Freight service provider fraud-related recoveries

 
(5.8
)
 
 
 
Add-back/(Less): Special charge
12.4

 
(0.2
)
 
 
 
Add-back: Net loss on financial instruments
2.6

 

 
 
 
Total pre-tax adjustments to Net Income
$
47.4

 
$
22.9

 
 
 
Income tax effect
(15.4
)
 
(7.9
)
 
 
 
Adjusted Net Income
$
254.1

 
$
190.8

 
$
63.3

33.2
 %
 
 
 
 
 
 
 
Diluted Earnings per Share
$
5.09

 
$
4.05

 
 
 
Adjusted Diluted Earnings per Share
$
5.83

 
$
4.40

 
$
1.43

32.5
 %
Net Sales
Net sales for the year ended August 31, 2015 increased by 13.1% compared with the prior-year period due primarily to an increase in sales volumes of approximately 15%, partially offset by the impact of an unfavorable change in product prices and the mix of products sold ("price/mix") of approximately 1% and unfavorable foreign currency rate changes of 1%. Sales volume was higher across most product categories and key sales channels as the Company realized greater demand for LED-based luminaires. Sales of LED-based luminaires during the year ended August 31, 2015 increased 57% compared to the year-ago period and represented 46% of total net sales. The change in price/mix was due primarily to unfavorable pricing on LED luminaires, reflecting the decline in certain LED component costs, as well as a change in sales channel mix. Due to the changing dynamics of the Company's product portfolio, including the increase of integrated lighting and building management solutions as well as the proliferation of new products due to the adoption of solid-state lighting, it is not possible to precisely quantify volume or differentiate the individual components of price/mix.

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Gross Profit
Gross profit for fiscal 2015 increased $166.4, or 17.0%, to $1,145.6 compared with $979.2 for the prior year. The increase in gross profit margin was due primarily to additional contribution on higher net sales, lower material and component costs, and improved manufacturing productivity. These items were partially offset by unfavorable price/mix and the unfavorable impact of foreign currency rate changes. As a result of these factors, gross profit margin increased 140 basis points to 42.3% for the year ended August 31, 2015 compared with 40.9% for the year ended August 31, 2014.
Operating Profit
Selling, Distribution, and Administrative (“SD&A”) expenses for the year ended August 31, 2015 increased $76.6, or 11.3%, to $756.9 compared with $680.3 in the prior year. The increase in SD&A expenses was due primarily to higher costs to support the greater sales volume, including freight and commissions, and higher employee-related costs, including variable incentive compensation costs, partially offset by savings from recent streamlining efforts. Compared with the prior-year period, SD&A expenses as a percent of sales declined 40 basis points to 28.0% for fiscal 2015 from 28.4% in fiscal 2014. Adjusted SD&A expenses were $724.5 , or 26.8% of net sales, in fiscal 2015 compared to $657.2 , or 27.5% of net sales, in the year-ago period.
During the year ended August 31, 2015, the Company recognized pre-tax special charges of $12.4 related primarily to the Company's continued efforts to streamline the organization by realigning certain responsibilities primarily within various selling, distribution, and administrative departments and the consolidation of certain production activities. During fiscal 2014, the Company recorded a reversal of pre-tax special charges of $0.2 due primarily to lower-than-anticipated costs related to previously-initiated streamlining efforts of $0.6 partially offset by production transfer costs of $0.4. Further details regarding the Company's special charges are included in the Special Charge footnote of the Notes to Consolidated Financial Statements .
Operating profit for fiscal 2015 was $376.3 compared with $299.1 reported for the prior-year period, an increase of $77.2, or 25.8%. Operating profit margin increased 140 basis points to 13.9% for fiscal 2015 compared with 12.5% for fiscal 2014 due primarily to higher gross profit, partially offset by higher costs to support greater sales volume, special charges, and employee-related costs, including variable incentive compensation.
Adjusted operating profit increased $99.1 , or 30.8% , to $421.1 compared with $322.0 for fiscal 2014. Adjusted operating profit margin increased 210 basis points to 15.6% compared with adjusted operating profit margin of 13.5% in the year-ago period.
Other Expense (Income)
Other expense (income) for the Company consists principally of net interest expense and net miscellaneous expense (income) which includes gains and losses related to foreign exchange rate changes. Interest expense, net, was $31.5 and $32.1 for the years ended August 31, 2015 and 2014, respectively. The Company reported net miscellaneous expense of $1.2 in fiscal 2015 compared with $1.3 in fiscal 2014.
Provision for Income Taxes and Net Income
The effective income tax rate was 35.4% and 33.8% for the years ended August 31, 2015 and 2014, respectively. The fiscal 2014 effective tax rate benefited from a reduction in certain income tax reserves which did not recur in fiscal 2015.
Net income for fiscal 2015 increased $46.3, or 26.3%, to $222.1 from $175.8 reported for fiscal 2014. The increase in net income resulted primarily from higher operating profit partially offset by higher tax expense.
Adjusted net income for fiscal 2015 increased 33.2% to $254.1 compared with $190.8 in fiscal 2014. Adjusted diluted earnings per share for fiscal 2015 were $5.83 compared with $4.40 for fiscal 2014, which represented an increase of $1.43 , or 32.5% .

Outlook
Management believes that the execution of the Company's strategy will provide opportunities for continued profitable growth. The Company's strategy is to capitalize on market growth opportunities by continuing to expand and leverage its industry-leading lighting and building management solutions portfolio combined with its extensive market presence and financial strength. Management will continue to drive the creation of a world-class, cost-efficient supply chain and service capability, while also reducing and/or eliminating resources allocated to specific areas of slower and/

28


or declining growth. Management continues to position the Company to optimize short-term performance while investing in and deploying resources for long-term profitable growth opportunities.
During fiscal 2016, the Company recorded a pre-tax special charge of $15.0 for actions initiated to streamline the organization, including the integration of recent acquisitions. These streamlining activities include the consolidation of selected production activities and realignment certain responsibilities, primarily within various selling, distribution, and administrative departments. Management expects to realize annual savings equal to at least twice the amount of the charge and to achieve the full annualized run-rate by the end of the second quarter of fiscal 2017. Management expects to incur additional costs associated with these and potential future integration and streamlining activities in fiscal 2017.
Overall, the economy in North America and certain markets the Company serves in Europe continue to move along at a measured, but sometimes inconsistent pace. The 2016 U.S. presidential election and other events, such as the United Kingdom’s referendum vote to exit the European Union, continue to create uncertainty and volatility. This uncertainty and volatility has the potential to affect consumer and business sentiment which in turn could negatively impact global economic activity. This notwithstanding, management remains bullish regarding the Company’s prospects for continued future profitable growth. Management expects the growth rate for lighting and building management solutions in the North American market, which includes renovation and retrofit activity and comprises approximately 96% percent of the Company’s revenues, will be in the mid-to-upper single digit range for fiscal 2017 based on third-party forecasts and other key leading indicators. The Company’s order rates through the month of September seem to reflect this favorable trend. In addition to the projected growth in the Company’s primary end-markets, management believes that the Company should benefit from recent acquisitions, further growth from the introduction of new lighting and building automation solutions, and expansion in underpenetrated geographies and channels.
From a longer term perspective, management expects that the Company’s addressable markets will experience solid growth over the next decade, particularly as energy and environmental concerns come to the forefront along with emerging opportunities for digital lighting to play a key role in the "Internet of Things" (IoT) through the use of intelligent networked lighting and building automation systems that can collect and exchange data to increase efficiency as well as provide a host of other economic benefits resulting from data analytics. Management remains positive about the future prospects of the Company and its ability to outperform the markets it serves.
Accounting Standards Adopted in Fiscal 2016 and Accounting Standards Yet to Be Adopted
See the New Accounting Pronouncements footnote of the Notes to Consolidated Financial Statements for information on recently adopted and upcoming standards.

Critical Accounting Estimates
Management’s Discussion and Analysis of Financial Condition and Results of Operations addresses the financial condition and results of operations as reflected in the Company’s Consolidated Financial Statements , which have been prepared in accordance with U.S. GAAP. As discussed in the Description of Business and Basis of Presentation footnote of the Notes to Consolidated Financial Statements , the preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenue and expense during the reporting period. On an ongoing basis, management evaluates its estimates and judgments, including those related to revenue recognition; accounts receivable; inventory valuation; depreciation, amortization and the recoverability of long-lived assets, including goodwill and intangible assets; share-based compensation expense; medical, product warranty, and other reserves; income taxes; retirement benefits; litigation; and environmental matters. Management bases its estimates and judgments on its substantial historical experience and other relevant factors, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ from those estimates. Management discusses the development of accounting estimates with the Company’s Audit Committee. See the Significant Accounting Policies footnote of the Notes to Consolidated Financial Statements for a summary of the accounting policies of the Company.

29


The management believes the following represent the Company’s critical accounting policies and estimates:
Revenue Recognition
The Company records revenue when the following criteria are met: persuasive evidence of a sales arrangement exists, delivery has occurred, the Company’s price to the customer is fixed and determinable, and collectability is reasonably assured. In the period of revenue recognition, provisions for certain rebates, sales incentives, product returns, and discounts to customers are estimated and recorded, in most instances, as a reduction of revenue. The Company also maintains one-time or on-going marketing and trade-promotion programs with certain customers that require the Company to estimate and accrue the expected costs of such programs. These items are estimated based on customer agreements, historical trends, and expected demand. Actual results could differ from estimates, which would require adjustments to accrued amounts. See the Significant Accounting Policies footnote of the Notes to Consolidated Financial Statements for additional information about these assumptions and estimates.
Accounts Receivable
The Company records accounts receivable at net realizable value. This value includes an allowance for estimated uncollectible accounts to reflect losses anticipated on accounts receivable balances. The allowance is based on historical write-offs, an analysis of past due accounts based on the contractual terms of the receivables, and economic status of customers, if known. Management believes that the allowance 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 the Company’s results of operations.
Inventories
Inventories include materials, direct labor, in-bound freight, and related manufacturing overhead, and are stated at the lower of cost (on a first-in, first-out or average-cost basis) or market. Management reviews inventory quantities on hand and records a provision for excess or obsolete inventory primarily based on estimated future demand and current market conditions. A significant change in customer demand, market conditions, or technology could render certain inventory obsolete and thus could have a material adverse impact on the Company’s operating results in the period the change occurs.
Goodwill and Indefinite-Lived Intangible Assets
The Company reviews goodwill and indefinite-lived intangible assets for impairment on an annual basis in the fiscal fourth quarter or on an interim basis, if an event occurs or circumstances change that would more likely than not indicate that the fair value of the goodwill and indefinite-lived asset is below its carrying value. All other long-lived and intangible assets are reviewed for impairment whenever events or circumstances indicate that the carrying amount of the asset may not be recoverable. An impairment loss for goodwill and indefinite-lived intangibles would be recognized based on the difference between the carrying value of the asset and its estimated fair value, which would be determined based on either discounted future cash flows or other appropriate fair value methods. The evaluation of goodwill and indefinite-lived intangibles for impairment requires management to use significant judgments and estimates in accordance with U.S. GAAP including, but not limited to, economic, industry, and company-specific qualitative factors, projected future net sales, operating results, and cash flows.
Although management currently believes that the estimates used in the evaluation of goodwill and indefinite-lived intangibles are reasonable, differences between actual and expected net sales, operating results, and cash flows and/or changes in the discount rate or theoretical royalty rate could cause these assets to be deemed impaired. If this were to occur, the Company would be required to record a non-cash charge to earnings for the write-down in value of such assets, which could have a material adverse effect on the Company’s results of operations and financial position, but not its cash flows from operations.
Goodwill
The Company is comprised of one reporting unit with a goodwill balance of $947.8 as of August 31, 2016 . The Company utilized a qualitative assessment to determine the likelihood of impairment of goodwill as of June 1, 2016 . To do this, the Company identified and analyzed macroeconomic, industry, and company-specific factors. Additionally, factors that most affect the fair value of the Company were compared to those used in the previous quantitative impairment test to identify potentially significant variances to further support the reasonableness of the assumptions.
Taking into consideration these factors, the Company estimated the potential change in the fair value of goodwill compared with the previous quantitative impairment test. As a result of this analysis, management believes the estimated

30


fair value of the reporting unit continues to exceed its carrying value by a substantial margin and does not represent a more likely than not possibility of potential impairment. The goodwill analysis did not result in an impairment charge.
Indefinite-Lived Intangible Assets
The Company’s indefinite-lived intangible assets consist of seven trade names with an aggregate carrying value of approximately $135.0 . Management utilized significant assumptions to estimate the fair value of these indefinite-lived trade names using a fair value model based on discounted future cash flows (“fair value model”) in accordance with U.S. GAAP. Future cash flows associated with each of the Company’s indefinite-lived trade names are calculated by applying a theoretical royalty rate a willing third party would pay for use of the particular trade name to estimated future net sales. The present value of the resulting after-tax cash flow is management’s current estimate of the fair value of the trade names. This fair value model requires management to make several significant assumptions, including estimated future net sales (including short and long-term growth rates), the royalty rate, and the discount rate.
Future net sales and short-term growth rates are estimated for each particular trade name based on management’s financial forecasts, which consider key business drivers, such as specific revenue growth initiatives, market share changes, expected growth in non-residential and residential construction markets, and general economic factors, such as credit availability and interest rates. The long-term growth rate used in determining terminal value is estimated at 3.0% for the Company and is based primarily on the Company’s understanding of projections for expected long-term growth in non-residential construction, the Company’s key market, and historical long-term performance. The theoretical royalty rate is estimated primarily using management’s assumptions regarding the amount a willing third party would pay to use the particular trade name and is compared with market information for similar intellectual property within and outside of the industry. Differences between expected and actual results can result in significantly different valuations. If future operating results are unfavorable compared with forecasted amounts, the Company may be required to reduce the theoretical royalty rate used in the fair value model. A reduction in the theoretical royalty rate would result in lower expected future after-tax cash flows in the valuation model. The Company utilized a range of estimated discount rates between 9% and 16% as of June 1, 2016 , based on the Capital Asset Pricing Model, which considers the updated risk-free interest rate, beta, market risk premium, and entity specific size premium.
During fiscal 2016 , the Company performed an evaluation of the fair values of its indefinite-lived trade names. The Company’s expected revenues are based on the Company’s fiscal 2017 expectations and recent lighting market growth estimates for fiscal 2017 through 2021 . The Company also included revenue growth estimates based on current initiatives expected to help the Company improve performance. During fiscal 2016 , estimated theoretical royalty rates ranged between 1% and 4% . During fiscal 2016 , management began to rationalize the Company's portfolio of brands, resulting in the initiation of the phase out of one of the trade names. The Company recognized an impairment charge of $5.1 related to this trade name and concluded the trade name is definite-lived. The indefinite-lived intangible asset analysis did not result in any other impairment charges, as the fair values exceeded the carrying values for each of the other trade names. The estimated fair values of the indefinite-lived intangible assets exceed the carrying values by such a significant amount that any reasonably likely change in the assumptions used in the analyses, including revenue growth rates, royalty rates, and discount rates, would not cause the carrying values to exceed the estimated fair values as determined by the fair value analyses. The Company determined that any estimated potential impairment related to the trade names based on changes in the assumptions, which would be less likely to occur, would not be material to the Company’s financial condition or results of operations.
Definite-Lived Intangible Assets
The Company evaluates the remaining useful lives of its definite-lived intangible assets on an annual basis in the fiscal fourth quarter or on an interim basis, if an event occurs or circumstances change that would warrant a revision to the remaining period of amortization. The Company considers each reporting period whether an event occurred or circumstances changed that would more likely than not indicate that the fair value of the definite-lived asset is below its carrying value. The Company noted no such events or changes during fiscal 2016 or 2015 .
Self-Insurance
The Company self-insures, up to certain limits, traditional risks including workers’ compensation, comprehensive general liability, and auto liability. A provision for claims under this self-insured program, based on the Company’s 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, the Company’s independent actuary. The actuarial estimates are subject to uncertainty from various sources including, among others, changes in claim reporting patterns, claim settlement patterns, judicial decisions, legislation, and economic conditions. Although the Company believes that the actuarial estimates are reasonable, significant differences related to the items noted above could materially affect the Company’s self-insurance obligations, future expense, and cash flow. The Company is also self-insured up to

31


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. The Company is fully self-insured for certain other types of liabilities, including environmental, product recall, warranty, and patent infringement.
The Company is also self-insured for the majority of its medical benefit plans up to certain limits. The Company estimates its aggregate liability for claims incurred by applying a lag factor to the Company’s historical claims and administrative cost experience. The appropriateness of the Company’s lag factor is evaluated and revised, if necessary, annually. Although management believes that the current estimates are reasonable, significant differences related to claim reporting patterns, plan design, legislation, and general economic conditions could materially affect the Company’s medical benefit plan liabilities, future expense, and cash flow.
Income Taxes
The Company uses certain assumptions and estimates in determining the income taxes payable or refundable for the current year, income tax expense, and deferred income tax liabilities and assets, which represent temporary and permanent differences between amounts within the financial statements and the income tax basis. Accounting Standards Codification (“ASC”) Topic 740, Income Taxes (“ASC 740”), requires the evaluation and testing of the recoverability of deferred tax assets. Deferred tax assets are reduced by a valuation allowance if, based on the relevant factors, it is more likely than not that all or some portion of the deferred tax assets will not be realized. Reasonable judgment and estimates are required in determining whether a valuation allowance is necessary and, if so, the amount of such valuation allowance. In evaluating the need for a valuation allowance, the Company considers a number of factors, including, but not limited to: the nature and character of the deferred tax assets and liabilities; taxable income in prior carryback years; future reversals of existing temporary differences; and the length of time carryovers can be utilized.
In light of the multiple tax jurisdictions in which the Company operates, the Company’s tax returns are subject to routine audit by the Internal Revenue Service (“IRS”) and other taxation authorities. The results of these audits at times produce uncertainty regarding particular tax positions taken in the year(s) of review. The Company records uncertain tax positions as prescribed by ASC 740, which requires recognition at the time when it is more likely than not that the position in question will be upheld. Although management believes that the judgment and estimates involved are reasonable and that the necessary provisions have been recorded, changes in circumstances or unexpected events could adversely or positively affect the Company’s financial position, results of operations, and cash flows.
Retirement Benefits
The Company sponsors domestic and international defined benefit pension plans and defined contribution plans and other postretirement plans. Assumptions are used to determine the estimated fair value of plan assets, the actuarial value of plan liabilities, and the current and projected costs for these employee benefit plans and include, among other factors, estimated discount rates, expected returns on the pension fund assets, estimated mortality rates, the rates of increase in employee compensation levels, and, for one international plan, retroactive inflationary adjustments. These assumptions are determined based on Company and market data and are evaluated annually as of the plans’ measurement date. See the Pensions and Defined Contribution Plans footnote of the Notes to Consolidated Financial Statements for further information on the Company’s plans, including the potential impact of changes to certain of these assumptions.
Share-Based Compensation Expense
The Company recognizes compensation cost relating to share-based payment transactions in the financial statements based on the estimated fair value of the equity instrument issued. The Company accounts for stock options, restricted shares, and share units representing certain deferrals into the Director Deferred Compensation Plan or the Supplemental Deferred Savings Plan (both of which are discussed further in the Share-Based Payments footnote of the Notes to Consolidated Financial Statements ) based on the grant-date fair value estimated under the provisions of ASC Topic 718, Compensation — Stock Compensation (“ASC 718”).
The Company employs the Black-Scholes model in deriving the fair value estimates of certain share-based awards and estimates forfeitures of all share-based awards at the time of grant, which are revised in subsequent periods if actual forfeitures differ from initial estimates. Forfeitures are estimated based on historical experience. If factors change causing different assumptions to be made in future periods, estimated compensation expense may differ significantly from that recorded in the current period. See the Significant Accounting Policies and Share-Based Payments footnotes of the Notes to Consolidated Financial Statements for more information regarding the assumptions used in estimating the fair value of stock options.

32


Product Warranty and Recall Costs
The Company records an allowance for the estimated amount of future warranty costs when the related revenue is recognized. Estimated future warranty costs are primarily based on historical experience of identified warranty claims. The Company is fully self-insured for product warranty costs. Historical warranty costs have been within expectations. The Company expects that historical activity will continue to be the best indicator of future warranty costs. There can be no assurance that future warranty costs will not exceed historical amounts or that incorporating new technologies, such as LED components into products, may not generate unexpected costs. Estimated costs related to product recalls based on a formal campaign soliciting repair or return of that product are accrued when they are deemed to be probable and can be reasonably estimated. If actual future warranty or recall costs exceed recorded amounts, additional allowances may be required, which could have a material adverse impact on the Company’s results of operations and cash flow.
Litigation
The Company recognizes expense for legal claims when payments associated with the claims become probable and can be reasonably estimated. Due to the difficulty in estimating costs of resolving legal claims, actual costs could have a material adverse impact on the Company’s results of operations and cash flow.
Environmental Matters
The Company recognizes expense for known environmental claims when payments associated with the claims become probable and the costs can be reasonably estimated. The actual cost of resolving environmental issues may be higher than that reserved primarily due to difficulty in estimating such costs and potential changes in the status of government regulations. The Company is self-insured for environmental matters.
Cautionary Statement Regarding Forward-Looking Information
This filing contains forward-looking statements within the meaning of the federal securities laws. Statements made herein that may be considered forward-looking include statements incorporating terms such as “expects”, “believes”, “intends”, “anticipates” and similar terms that relate to future events, performance, or results of the Company. In addition, the Company, or the executive officers on the Company’s behalf, may from time to time make forward-looking statements in reports and other documents the Company files with the SEC or in connection with oral statements made to the press, current and potential investors, or others. Forward-looking statements include, without limitation: (a) the Company’s projections regarding financial performance, liquidity, capital structure, capital expenditures, and dividends; (b) expectations about the impact of volatility and uncertainty in general economic conditions; (c) external forecasts projecting industry unit volumes; (d) expectations about the impact of volatility and uncertainty in component and commodity costs and availability, and the Company's ability to manage those challenges, as well as the Company’s response with pricing of its products; (e) the Company's ability to execute and realize benefits from initiatives related to streamlining its operations, capitalizing on growth opportunities, expanding in key markets, enhancing service to the customer, and investing in product innovation; (f) the Company’s estimate of its fiscal 2017 annual tax rate; (g) the Company’s future amortization expense; (h) the Company's ability to integrate acquisitions and achieve accretive results, and (i) the Company’s ability to achieve its long-term financial goals and measures. You are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date of this annual report. Except as required by law, the Company undertakes no obligation to publicly update or release any revisions to these forward-looking statements to reflect any events or circumstances after the date of this annual report or to reflect the occurrence of unanticipated events. The Company’s forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from the historical experience of the Company and management’s present expectations or projections. These risks and uncertainties include, but are not limited to, customer and supplier relationships and prices; competition; ability to realize anticipated benefits from initiatives taken and timing of benefits; market demand; litigation and other contingent liabilities; and economic, political, governmental, and technological factors affecting the Company. Also, additional risks that could cause the Company’s actual results to differ materially from those expressed in the Company’s forward-looking statements are discussed in Part I, “Item 1a. Risk Factors” of this Annual Report on Form 10-K, and are specifically incorporated herein by reference.


33


Item 7a.
Quantitative and Qualitative Disclosures about Market Risk
($ in millions)
General.   The Company is exposed to worldwide market risks that may impact the Consolidated Balance Sheets , Consolidated Statements of Comprehensive Income , and Consolidated Statements of Cash Flows due primarily to changing interest and foreign exchange rates as well as volatility in commodity prices. The following discussion provides additional information regarding the market risks of the Company.
Interest Rates.   Interest rate fluctuations expose the variable-rate debt of the Company to changes in interest expense and cash flows. At August 31, 2016 , the variable-rate debt of the Company was solely comprised of the $4.0 long-term industrial revenue bond. A 10% increase in market interest rates at August 31, 2016 , would have resulted in a de minimus amount of additional annual after-tax interest expense. A fluctuation in interest rates would not affect interest expense or cash flows related to the Company’s fixed-rate debt which includes the $350.0 publicly-traded fixed-rate notes. A 10% increase in market interest rates at August 31, 2016 would have decreased the estimated fair value of these debt obligations by approximately $2.9 . See the Debt and Lines of Credit footnote of the Notes to Consolidated Financial Statements contained in this Form 10-K for additional information regarding the Company’s debt.
Foreign Exchange Rates.   The majority of net sales, expense, and capital purchases of the Company are transacted in U.S. dollars. However, exposure with respect to foreign exchange rate fluctuation exists due to the Company’s operations in Mexico and Canada, where a significant portion of products sold are produced or sourced from the United States, and, to a lesser extent, in Europe. Based on fiscal 2016 performance, a hypothetical decline in the value of the Canadian dollar in relation to the U.S. dollar of 10% would negatively impact operating profit by approximately $12 , while a hypothetical appreciation of 10% in the value of the Canadian dollar in relation to the U.S. dollar would favorably impact operating profit by approximately $15 . In addition to products and services sold in Mexico, a significant portion of the goods sold in the United States are manufactured in Mexico. A hypothetical 10% decrease in the value of the Mexican peso in relation to the U.S. dollar would favorably impact operating profit by approximately $9 , while a hypothetical increase of 10% in the value of the Mexican peso in relation to the U.S. dollar would negatively impact operating profits by approximately $12 . The individual impacts to the operating profit of the Company of hypothetical currency fluctuations in the Canadian dollar and Mexican peso have been calculated in isolation from any potential responses to address such exchange rate changes in the Company’s foreign markets.
The Company’s exposure to foreign currency risk related to its operations in Europe is immaterial and has been excluded from this analysis.
Commodity Prices.   The Company utilizes a variety of raw materials and components in its production process including petroleum-based products, steel, and aluminum. In fiscal 2016 , the Company purchased approximately 100,000 tons of steel and aluminum. The Company estimates that approximately 8% of raw materials purchased are petroleum-based and that approximately five million gallons of diesel fuel were consumed in fiscal 2016 . Failure to effectively manage future increases in the costs of these items could have an adverse impact on the Company's results of operations and cash flow.


34

Table of Contents

Item 8.   
Financial Statements and Supplementary Data
Index to Consolidated Financial Statements
 
Page


35

Table of Contents

MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
ACUITY BRANDS, INC.
The management of Acuity Brands, 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, 2016 . 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, 2016 , 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 operations of Juno Lighting LLC and Distech Controls Inc. (collectively, the “2016 Acquisitions”), which are included in the Company’s consolidated financial statements as of August 31, 2016 and for the period from the respective acquisition dates through August 31, 2016 . As of August 31, 2016 , the 2016 Acquisitions constituted less than 15% and 28% of the Company’s tangible assets and net tangible assets, respectively. For the year ended August 31, 2016, the 2016 Acquisitions constituted less than 10% of both the Company's net sales and pre-tax income.
The Company’s independent registered public accounting firm has issued an audit report on their audit of the Company’s internal control over financial reporting. This report dated October 27, 2016 is included within this Form 10-K.

/s/ VERNON J. NAGEL
 
/s/ RICHARD K. REECE
Vernon J. Nagel
Chairman, President, and
Chief Executive Officer
 
Richard K. Reece
Executive Vice President and
Chief Financial Officer



36

Table of Contents

Report of Independent Registered Public Accounting Firm
The Board of Directors and Stockholders
Acuity Brands, Inc.
We have audited the accompanying consolidated balance sheets of Acuity Brands, Inc. as of August 31, 2016 and 2015 , and the related consolidated statements of comprehensive income, cash flows, and stockholders’ equity for each of the three years in the period ended August 31, 2016 . Our audits also included the financial statement schedule listed in the Index at Item 15(a). These consolidated financial statements and schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements and schedule based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Acuity Brands, Inc. at August 31, 2016 and 2015 , and the consolidated results of its operations and its cash flows for each of the three years in the period ended August 31, 2016 , in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Acuity Brands, Inc.’s internal control over financial reporting as of August 31, 2016 , 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, 2016 expressed an unqualified opinion thereon.
/s/  Ernst & Young LLP
Atlanta, Georgia
October 27, 2016

37


Report of Independent Registered Public Accounting Firm
The Board of Directors and Stockholders
Acuity Brands, Inc.
We have audited Acuity Brands, Inc.’s internal control over financial reporting as of August 31, 2016 , 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). Acuity Brands, Inc.’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 conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). 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.
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.
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.
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 the acquired operations of Juno Lighting LLC (“Juno Lighting”) and Distech Controls Inc. (“Distech Controls”) (collectively, the “2016 Acquisitions”), which are included in the company’s 2016 consolidated financial statements of Acuity Brands, Inc. As of August 31, 2016 , the 2016 Acquisitions constituted less than 15% and 28% of the company’s tangible assets and net tangible assets, respectively. For the year ended August 31, 2016, the 2016 Acquisitions constituted less than 10% of both the company's net sales and pre-tax income.
Our audit of internal control over financial reporting of Acuity Brands, Inc. also did not include an evaluation of the internal control over financial reporting of Juno Lighting and Distech Controls.
In our opinion, Acuity Brands, Inc. maintained, in all material respects, effective internal control over financial reporting as of August 31, 2016 , based on the COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Acuity Brands, Inc. as of August 31, 2016 and 2015 , and the related consolidated statements of comprehensive income, cash flows, and stockholders’ equity for each of the three years in the period ended August 31, 2016 of Acuity Brands, Inc. and our report dated October 27, 2016 expressed an unqualified opinion thereon.
/s/  Ernst & Young LLP
Atlanta, Georgia
October 27, 2016

38


ACUITY BRANDS, INC.
CONSOLIDATED BALANCE SHEETS
 
August 31,
 
2016
 
2015
 
(In millions, except share data)
ASSETS
Current Assets:
 

 
 

Cash and cash equivalents
$
413.2

 
$
756.8

Accounts receivable, less reserve for doubtful accounts of $1.7 and $1.3 as of August 31, 2016 and 2015, respectively
572.8

 
411.7

Inventories
295.2

 
224.8

Prepayments and other current assets
41.7

 
20.1

Total Current Assets
1,322.9

 
1,413.4

Property, Plant, and Equipment, at cost:
 

 
 

Land
23.1

 
6.7

Buildings and leasehold improvements
174.4

 
128.4

Machinery and equipment
448.2

 
391.9

Total Property, Plant, and Equipment
645.7

 
527.0

Less — Accumulated depreciation and amortization
377.9

 
352.4

Property, Plant, and Equipment, net
267.8

 
174.6

Other Assets:
 

 
 

Goodwill
947.8

 
565.0

Intangible assets
381.4

 
223.4

Deferred income taxes
5.1

 
3.5

Other long-term assets
23.0

 
27.1

Total Other Assets
1,357.3

 
819.0

Total Assets
$
2,948.0

 
$
2,407.0

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
 

 
 

Accounts payable
$
401.0

 
$
311.1

Current maturities of long-term debt
0.2

 

Accrued compensation
93.9

 
78.2

Accrued pension liabilities, current
1.3

 
1.6

Other accrued liabilities
176.1

 
130.0

Total Current Liabilities
672.5

 
520.9

Long-Term Debt
355.0

 
352.4

Accrued Pension Liabilities, less current portion
119.9

 
83.9

Deferred Income Taxes
74.6

 
31.7

Self-Insurance Reserves, less current portion
7.2

 
6.9

Other Long-Term Liabilities
59.0

 
51.2

Total Liabilities
1,288.2

 
1,047.0

Commitments and Contingencies (see Commitments and Contingencies  footnote)


 


Stockholders’ Equity:
 

 
 

Preferred stock, $0.01 par value; 50,000,000 shares authorized; none issued

 

Common stock, $0.01 par value; 500,000,000 shares authorized; 53,415,687 issued and 43,736,230 outstanding at August 31, 2016; 53,024,284 issued and 43,305,029 outstanding at August 31, 2015
0.5

 
0.5

Paid-in capital
856.4

 
797.1

Retained earnings
1,360.9

 
1,093.0

Accumulated other comprehensive loss items
(139.4
)
 
(110.4
)
Treasury stock, at cost, 9,679,457 shares at August 31, 2016 and 9,719,255 shares at August 31, 2015
(418.6
)
 
(420.2
)
Total Stockholders’ Equity
1,659.8

 
1,360.0

Total Liabilities and Stockholders’ Equity
$
2,948.0

 
$
2,407.0

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

39

Table of Contents

ACUITY BRANDS, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
 
Years Ended August 31,
 
2016
 
2015
 
2014
 
(In millions, except per-share data)
Net Sales
$
3,291.3

 
$
2,706.7

 
$
2,393.5

Cost of Products Sold
1,855.1

 
1,561.1

 
1,414.3

Gross Profit
1,436.2

 
1,145.6

 
979.2

Selling, Distribution, and Administrative Expenses
946.0

 
756.9

 
680.3

Special Charge
15.0

 
12.4

 
(0.2
)
Operating Profit
475.2

 
376.3

 
299.1

Other Expense (Income):
 

 
 

 
 

Interest expense, net
32.2

 
31.5

 
32.1

Miscellaneous (income) expense, net
(1.6
)
 
1.2

 
1.3

Total Other Expense
30.6

 
32.7

 
33.4

Income before Provision for Income Taxes
444.6

 
343.6

 
265.7

Provision for Income Taxes
153.8

 
121.5

 
89.9

Net Income
$
290.8

 
$
222.1

 
$
175.8

 
 
 
 
 
 
Earnings Per Share:
 

 
 

 
 

Basic Earnings per Share
$
6.67

 
$
5.13

 
$
4.07

Basic Weighted Average Number of Shares Outstanding
43.5

 
43.1

 
42.8

Diluted Earnings per Share
$
6.63

 
$
5.09

 
$
4.05

Diluted Weighted Average Number of Shares Outstanding
43.8

 
43.4

 
43.0

 
 
 
 
 
 
Dividends Declared per Share
$
0.52

 
$
0.52

 
$
0.52

 
 
 
 
 
 
Comprehensive Income:
 
 
 
 
 
Net income
$
290.8

 
$
222.1

 
$
175.8

Other Comprehensive Income (Loss) Items:
 
 
 
 
 
Foreign currency translation adjustments
(5.6
)
 
(24.0
)
 
0.7

Defined benefit plans, net
(23.4
)
 
(14.5
)
 
(10.0
)
Other Comprehensive Loss Items, net of tax
(29.0
)
 
(38.5
)
 
(9.3
)
Comprehensive Income
$
261.8

 
$
183.6

 
$
166.5


The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

40

Table of Contents

ACUITY BRANDS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
 
Years Ended August 31,
 
2016
 
2015
 
2014
 
(In millions)
Cash Provided by (Used for) Operating Activities:
 

 
 

 
 

Net income
$
290.8

 
$
222.1

 
$
175.8

Adjustments to reconcile net income to net cash provided by (used for) operating activities:
 

 
 

 
 

Depreciation and amortization
62.6

 
45.8

 
43.4

Share-based compensation expense
27.7

 
18.2

 
17.7

Excess tax benefits from share-based payments
(25.6
)
 
(17.6
)
 
(10.4
)
(Gain) loss on the sale or disposal of property, plant, and equipment
(0.9
)
 
0.7

 
0.3

Asset impairments
5.1

 

 
0.1

Deferred income taxes
(8.2
)
 
2.8

 
(0.2
)
Loss on financial instruments, net

 
2.6

 

Change in assets and liabilities, net of effect of acquisitions, divestitures and effect of exchange rate changes:
 
 
 

 
 

Accounts receivable
(94.6
)
 
(46.1
)
 
(55.4
)
Inventories
(24.0
)
 
(15.1
)
 
(9.0
)
Prepayments and other current assets
(10.5
)
 
0.7

 
(6.6
)
Accounts payable
65.3

 
23.1

 
37.6

Other current liabilities
60.6

 
59.3

 
59.8

Other
(2.6
)
 
(7.6
)
 
(20.0
)
Net Cash Provided by Operating Activities
345.7

 
288.9

 
233.1

Cash Provided by (Used for) Investing Activities:
 

 
 

 
 

Purchases of property, plant, and equipment
(83.7
)
 
(56.5
)
 
(35.3
)
Proceeds from sale of property, plant, and equipment
2.2

 
1.3

 
1.0

Acquisitions of businesses and intangible assets, net of cash acquired
(623.2
)
 
(14.6
)
 

Other investing activities

 
(2.6
)
 

Net Cash Used for Investing Activities
(704.7
)
 
(72.4
)
 
(34.3
)
Cash Provided by (Used for) Financing Activities:
 

 
 

 
 

Issuance of long-term debt
2.5

 

 

Proceeds from stock option exercises and other
14.2

 
11.6

 
8.4

Excess tax benefits from share-based payments
25.6

 
17.6

 
10.4

Dividends paid
(22.9
)
 
(22.7
)
 
(22.5
)
Other financing activities

 
(10.4
)
 
(2.6
)
Net Cash Provided by (Used for) Financing Activities
19.4

 
(3.9
)
 
(6.3
)
Effect of Exchange Rate Changes on Cash
(4.0
)
 
(8.3
)
 
0.9

Net Change in Cash and Cash Equivalents
(343.6
)
 
204.3

 
193.4

Cash and Cash Equivalents at Beginning of Year
756.8

 
552.5

 
359.1

Cash and Cash Equivalents at End of Year
$
413.2

 
$
756.8

 
$
552.5

Supplemental Cash Flow Information:
 

 
 

 
 

Income taxes paid during the period
$
120.7

 
$
106.3

 
$
77.4

Interest paid during the period
$
32.8

 
$
32.2

 
$
32.5


The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

41

Table of Contents

ACUITY BRANDS, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
 
Common
Stock
 
Paid-in
Capital
 
Retained
Earnings
 
Accumulated Other
Comprehensive
Loss Items
 
Treasury
Stock
 
Total
 
(In millions)
Balance, August 31, 2013
$
0.5

 
$
735.5

 
$
740.3

 
$
(62.6
)
 
$
(420.2
)
 
$
993.5

Net income

 

 
175.8

 

 

 
175.8

Other comprehensive loss

 

 

 
(9.3
)
 

 
(9.3
)
Amortization, issuance, and forfeitures of restricted stock grants

 
7.2

 

 

 

 
7.2

Employee Stock Purchase Plan issuances

 
0.4

 

 

 

 
0.4

Cash dividends of $0.52 per share paid on common stock

 

 
(22.5
)
 

 

 
(22.5
)
Stock options exercised

 
8.0

 

 

 

 
8.0

Excess tax benefits from share-based payments

 
10.4

 

 

 

 
10.4

Balance, August 31, 2014
0.5

 
761.5

 
893.6

 
(71.9
)
 
(420.2
)
 
1,163.5

Net income

 

 
222.1

 

 

 
222.1

Other comprehensive loss

 

 

 
(38.5
)
 

 
(38.5
)
Amortization, issuance, and forfeitures of restricted stock grants

 
6.4

 

 

 

 
6.4

Employee Stock Purchase Plan issuances

 
0.5

 

 

 

 
0.5

Cash dividends of $0.52 per share paid on common stock

 

 
(22.7
)
 

 

 
(22.7
)
Stock options exercised

 
11.1

 

 

 

 
11.1

Excess tax benefits from share-based payments

 
17.6

 

 

 

 
17.6

Balance, August 31, 2015
0.5

 
797.1

 
1,093.0

 
(110.4
)
 
(420.2
)
 
1,360.0

Net income

 

 
290.8

 

 

 
290.8

Other comprehensive loss

 

 

 
(29.0
)
 

 
(29.0
)
Common Stock issued from Treasury Stock for acquisition of business


 
8.4

 


 


 
1.6

 
10.0

Amortization, issuance, and forfeitures of restricted stock grants

 
11.1

 

 

 

 
11.1

Employee Stock Purchase Plan issuances

 
0.7

 

 

 

 
0.7

Cash dividends of $0.52 per share paid on common stock

 

 
(22.9
)
 

 

 
(22.9
)
Stock options exercised

 
13.5

 

 

 

 
13.5

Excess tax benefits from share-based payments

 
25.6

 

 

 

 
25.6

Balance, August 31, 2016
$
0.5

 
$
856.4

 
$
1,360.9

 
$
(139.4
)
 
$
(418.6
)
 
$
1,659.8


The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

42

Table of Contents

ACUITY BRANDS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in millions, except per-share data and as indicated)


1.
Description of Business and Basis of Presentation
Acuity Brands, Inc. (“Acuity Brands”) is the parent company of Acuity Brands Lighting, Inc. (“ABL”) and other subsidiaries (Acuity Brands, ABL, and such other subsidiaries are collectively referred to herein as the "Company”). The Company designs, produces, and distributes a broad array of lighting and building management solutions and services for commercial, institutional, industrial, infrastructure, and residential applications for various markets throughout North America and select international markets. The Company's lighting and building management solutions include devices such as luminaires, lighting controls,controllers for various building systems, power supplies, prismatic skylights, and drivers, as well as integrated systems designed to optimize energy efficiency and comfort for various indoor and outdoor applications. The Company has one reportable segment serving the North American lighting market and select international markets.
The Company does not consider acquisitions a critical element of its strategy, but seeks opportunities to expand and enhance its portfolio of solutions, including the following transactions:
On June 30, 2016, using cash on hand and treasury stock, the Company acquired DGLogik, Inc. ("DGLogik"), a provider of innovative software solutions that enable and visualize the Internet of Things. DGLogik's solutions provide users with the intelligence to better manage energy usage and improve facility performance. DGLogik is headquartered in the San Francisco Bay Area, California.
On December 10, 2015, using cash on hand, the Company acquired Juno Lighting LLC ("Juno Lighting"), a leading provider of downlighting and track lighting fixtures for both residential and commercial applications. Juno Lighting is headquartered in Des Plaines, Illinois.
On December 9, 2015, using cash on hand, the Company acquired certain assets and assumed certain liabilities of Geometri, LLC ("Geometri"), a provider of a software and services platform for mapping, navigation, and analytics.
On September 1, 2015, using cash on hand, the Company acquired Distech Controls Inc. ("Distech Controls"), a provider of building automation solutions that allow for the integration of lighting, HVAC, access control, closed circuit television, and related systems. Distech Controls is headquartered in Quebec, Canada.
During the quarter ended May 31, 2015, using cash on hand, the Company acquired substantially all of the assets and assumed certain liabilities of ByteLight, Inc. (“ByteLight”), a provider of indoor location software for light-emitting diode (“LED”) lighting. ByteLight is headquartered in Boston, Massachusetts.
The operating results of these acquisitions have been included in the Company’s consolidated financial statements since the respective dates of acquisition. 
In addition, during fiscal 2015, the Company made a strategic, non-controlling investment in a company specializing in light sensory networks.  This investment was accounted for using the cost method and is reflected in Other long term assets on the Consolidated Balance Sheets .
The Consolidated Financial Statements have been prepared by the Company in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) and present the financial position, results of operations, and cash flows of Acuity Brands and its wholly-owned subsidiaries. References made to years are for fiscal year periods, unless noted otherwise.

2.    Significant Accounting Policies
Principles of Consolidation
The Consolidated Financial Statements include the accounts of Acuity Brands and its wholly-owned subsidiaries after elimination of intercompany transactions and accounts.
Revenue Recognition
The Company records revenue when the following criteria are met: persuasive evidence of an arrangement exists, delivery has occurred, the Company’s price to the customer is fixed and determinable, and collectability is reasonably

43

ACUITY BRANDS, INC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)


assured. Delivery is not considered to have occurred until the customer assumes the risks and rewards of ownership. Customers take delivery at the time of shipment for terms designated free on board shipping point. For sales designated free on board destination, customers take delivery when the product is delivered to the customer’s delivery site. Provisions for certain rebates, sales incentives, product returns, and discounts to customers are recorded in the same period the related revenue is recorded.
The Company also maintains one-time or on-going marketing and trade-promotion programs with certain customers that require the Company to estimate and accrue the expected costs of such programs. These arrangements include cooperative marketing programs, merchandising of the Company’s products, introductory marketing funds for new products, and other trade-promotion activities conducted by the customer. Costs associated with these programs are reflected within the Company’s Consolidated Statements of Comprehensive Income in accordance with the Accounting Standards Codification (“ASC”) Topic 605, Revenue Recognition (“ASC 605”), which in most instances requires such costs be recorded as a reduction of revenue. The liabilities associated with the programs totaled $41.0 and $35.6 of August 31, 2016 and 2015 , respectively, are reflected within Other accrued liabilities on the Consolidated Balance Sheets .
The Company's standard terms and conditions of sale allow returns of certain products within four months of the date of shipment. The Company also provides 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, the Company records a provision for the estimated amount of future returns primarily based on historical experience, specific notification of pending returns, or based on 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 the Company's operating results in future periods.
Revenue is earned on services and the sale of products. Revenue is recognized for the sale of products when the above criteria are met and for services rendered in the period of performance.
Revenue Recognition for Arrangements with Multiple Deliverables
A small portion ( less than 4% ) of the Company's revenues are derived from the combination of any or all of: (i) the sale and license of its products, (ii) fees associated with training, installation, and technical support services, (iii) monitoring and lighting control services, and (iv) providing services related to data analytics. Certain agreements, particularly related to lighting controls systems, represent multiple-element arrangements that include tangible products that contain software that is essential to the functionality of the systems and undelivered elements that primarily relate to installation, monitoring, and lighting control services. The undelivered elements associated with installation, monitoring, and lighting control services are reviewed and analyzed to determine separability in relation to the delivered elements and appropriate pricing treatment based on (a) vendor-specific objective evidence, (b) third-party evidence, or (c) management estimates. If deemed separate units of accounting, the revenue and associated cost of sales related to the delivered elements are recognized at the time of delivery, while those related to the undelivered elements are recognized appropriately based on the period of performance. If the separation criterion for the undelivered elements is not met because the undelivered elements are essential to the functionality of the lighting controls systems, all revenue and cost of sales attributable to the contract are deferred at the time of sale and are both generally recognized on a straight-line basis over the respective contract periods.
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.
Cash and Cash Equivalents
Cash in excess of daily requirements is invested in time deposits and marketable securities and is included in the accompanying balance sheets at fair value. The Company considers time deposits and marketable securities with an original maturity of three months or less when purchased to be cash equivalents.

44

ACUITY BRANDS, INC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)


Accounts Receivable
The Company records accounts receivable at net realizable value. This value includes a reserve for doubtful accounts to reflect losses anticipated on accounts receivable balances. The allowance is based on historical write-offs, an analysis of past due accounts based on the contractual terms of the receivables, and economic status of customers, if known. Management believes that the allowance 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 the Company’s results of operations.
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 the Company’s lighting and building management solutions as well as their dispersion across many different geographic areas. Receivables from The Home Depot were approximately $62.7 and $59.9 at August 31, 2016 and 2015 , respectively. No other single customer accounted for more than 10% of consolidated receivables at August 31, 2016 or 2015 . Additionally, net sales to The Home Depot accounted for approximately 11% and 12% in fiscal 2015 and 2014 , respectively. No single customer accounted for more than 10% of net sales in fiscal 2016 .
Reclassifications
Certain prior-period amounts have been reclassified to conform to the current year presentation, including a reclassification of $23.1 from current deferred income taxes to noncurrent deferred income taxes as of August 31, 2015 on the Consolidated Balance Sheets , related to the adoption of Accounting Standards Update 2015-17. See the New Accounting Pronouncements footnote for more information.
Subsequent Events
The Company has evaluated subsequent events for recognition and disclosure for occurrences and transactions after the date of the consolidated financial statements as of August 31, 2016 .
Inventories
Inventories include materials, direct labor, in-bound freight, and related manufacturing overhead, are stated at the lower of cost (on a first-in, first-out or average cost basis) or market, and consist of the following:
 
August 31,
 
2016
 
2015
Raw materials, supplies, and work in process (1)
$
170.3

 
$
125.7

Finished goods
145.3

 
113.9

 
315.6

 
239.6

Less: Reserves
(20.4
)
 
(14.8
)
Total Inventory
$
295.2

 
$
224.8

_______________________________________
(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, the Company does not believe the segregation of raw materials and work in process to be meaningful information.
Management reviews inventory quantities on hand and records a provision for excess or obsolete inventory primarily based on estimated future demand and current market conditions. A significant change in customer demand or market conditions could render certain inventory obsolete and thus could have a material adverse impact on the Company’s operating results in the period the change occurs.
Assets Held for Sale
The Company classifies assets as held for sale upon the development of a plan for disposal and in accordance with applicable U.S. GAAP and ceases the depreciation and amortization of the assets at that date. The Company is actively marketing the property classified as held for sale. As of August 31, 2016 , the carrying value of the property held for sale was $5.4 , which is included in Prepayments and other current assets on the Consolidated Balance Sheets.

45

ACUITY BRANDS, INC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)


Goodwill and Other Intangibles
Goodwill amounted to $947.8 and $565.0 as of August 31, 2016 and 2015 , respectively. The change in the carrying amount of goodwill during fiscal 2016 is summarized as follows:
Balance as of August 31, 2015
$
565.0

Additions from acquired businesses
381.5

Foreign currency translation adjustments
1.3

Balance as of August 31, 2016
$
947.8

Summarized information for the Company’s acquired intangible assets is as follows:
 
August 31,
 
2016
 
2015
 
Gross Carrying
Amount
 
Accumulated
Amortization
 
Gross Carrying
Amount
 
Accumulated
Amortization
Definite-lived intangible assets:
 

 
 

 
 

 
 

Patents and patented technology
$
112.3

 
$
(39.9
)
 
$
72.7

 
$
(30.3
)
Trademarks and trade names
27.2

 
(10.7
)
 
25.4

 
(9.7
)
Distribution network
61.8

 
(33.0
)
 
61.8

 
(30.8
)
Customer relationships
157.9

 
(29.3
)
 
55.2

 
(20.8
)
Other
4.9

 
(4.8
)
 
5.1

 
(4.7
)
Total
$
364.1

 
$
(117.7
)
 
$
220.2

 
$
(96.3
)
Indefinite-lived trade names
$
135.0

 
 

 
$
99.5

 
 

Through multiple acquisitions, the Company acquired intangible assets consisting primarily of trademarks and trade names associated with specific products with finite lives, definite-lived distribution networks, patented technology, non-compete agreements, and customer relationships, which are amortized over their estimated useful lives. Indefinite-lived intangible assets 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 estimated future net sales, customer attrition rates, royalty rates, and discount rates. The current year increase in the gross carrying amounts for the acquired intangible assets was due primarily to the acquisitions of Distech Controls, Juno Lighting, Geometri and DGLogik (refer to the Acquisitions and Investments footnote), while decreases were due to the impairment of an indefinite-lived trade name and foreign currency translation adjustments.
The Company recorded amortization expense of $21.4 , $11.0 , and $11.2 related to intangible assets with finite lives during fiscal 2016 , 2015 , and 2014 , respectively. Amortization expense is generally recorded on a straight-line basis and is expected to be approximately $23.0 in fiscal 2017 , $23.0 in fiscal 2018 , $23.0 in fiscal 2019 , $22.6 in fiscal 2020 , and $21.2 in fiscal 2021 .
The Company tests goodwill and indefinite-lived intangible assets for impairment on an annual basis or more frequently as facts and circumstances change, as required by ASC Topic 350, Intangibles — Goodwill and Other (“ASC 350”). The goodwill impairment test has three steps: a qualitative review and a two-step quantitative method. The preliminary step allows for a qualitative analysis to determine the likelihood of impairment. If the qualitative review results in a more likely than not probability of impairment, the first quantitative step is required. The first step identifies potential impairments by comparing the fair value of a reporting unit with its carrying value, including goodwill. The fair values can be determined based on a combination of valuation techniques including the expected present value of future cash flows, a market multiple approach, and a comparable transaction approach. If the fair value of a reporting unit exceeds the carrying value, goodwill is not considered impaired and the second step is not necessary. If the carrying value of a reporting unit exceeds the fair value, the second step calculates the possible impairment loss by comparing the implied fair value of goodwill with the carrying value. If the implied fair value of the goodwill is less than the carrying value, an impairment charge is recorded. In fiscal 2016 , a qualitative fair value analysis was used to determine the likelihood of goodwill impairment for the Company’s one reporting unit. The analysis for goodwill did not result in an impairment charge during fiscal 2016 , 2015 , or 2014 .

46

ACUITY BRANDS, INC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)


The impairment test for indefinite-lived trade names consists of comparing the fair value of the asset with its carrying value. The Company estimates the fair value of indefinite-lived trade names using a fair value model based on discounted future cash flows. If the carrying amount exceeds the estimated fair value, an impairment loss would be recorded in the amount of the excess. Significant assumptions, including estimated future net sales, royalty rates, and discount rates, are used in the determination of estimated fair value for indefinite-lived trade names. During fiscal 2016 , management began to rationalize the Company's portfolio of brands, resulting in the initiation of the phase out of one of the trade names. The Company recognized an impairment charge of $5.1 related to this trade name and concluded the trade name is definite-lived. The impairment charge is included in Selling, Distribution, and Administrative Expenses in the Consolidated Statements of Comprehensive Income . The indefinite-lived intangible asset analysis did not result in any other impairment charges, as the fair values exceeded the carrying values for each of the other trade names. None of the analyses for the indefinite-lived trade names resulted in an impairment charge during fiscal 2015 or 2014 .
Other Long-Term Assets
Other long-term assets consist of the following:
 
August 31,
 
2016
 
2015
Deferred contract costs
$
8.3

 
$
10.7

Capitalized software costs (1)
0.8

 
1.6

Investment in noncontrolling affiliate (2)
8.0

 
8.0

Other (3)
5.9

 
6.8

Total
$
23.0

 
$
27.1

_______________________________________
(1)  
The Company recorded amortization expense related to capitalized software costs of $0.3 , $0.4 , and $0.4 in fiscal 2016 , 2015 , and 2014 , respectively.
(2)  
The Company holds an equity investment in an unconsolidated affiliate. This strategic investment represents less than a 20% ownership interest in the privately-held affiliate, and the Company does not maintain power over or control of the entity. The Company accounts for this investment using the cost method. Subsequent to fiscal 2016, this investment was sold resulting in the recognition of a gain.
(3)  
Other - Amounts primarily include deferred debt issuance costs related to its revolving credit facility and company-owned life insurance investments. The Company maintains life insurance policies on 74 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, 2016 .
Other Long-Term Liabilities
Other long-term liabilities consist of the following:
 
August 31,
 
2016
 
2015
Deferred compensation and postretirement benefits other than pensions (1)
$
37.3

 
$
34.1

Long-term warranty obligations
4.9

 
2.5

Unrecognized tax position liabilities, including interest (2)
6.1

 
5.2

Multi-employer pension plan withdrawal liabilities
3.9

 
0.2

Other (3)
6.8

 
9.2

Total
$
59.0

 
$
51.2

_______________________________________
(1)  
Deferred compensation and postretirement benefits other than pensions —  The Company maintains 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 Company. In addition, one plan provides for an automatic contribution by the Company of 3% of an eligible employee’s compensation. The Company maintains life insurance policies on certain current and former officers and other key employees as a means of satisfying a portion of these obligations.
(2)  
See the Income Taxes footnote for more information.
(3)  
Other - Amount primarily includes deferred revenue and deferred rent.

47

ACUITY BRANDS, INC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)


Shipping and Handling Fees and Costs
The Company includes shipping and handling fees billed to customers in Net Sales . Shipping and handling 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 are included in Selling, Distribution, and Administrative Expenses and totaled $124.0 , $105.6 , and $100.9 in fiscal 2016 , 2015 , and 2014 , respectively.
Share-Based Compensation
The Company recognizes compensation cost relating to share-based payment transactions in the financial statements based on the estimated fair value of the equity or liability instrument issued. The Company accounts for stock options, restricted shares, and share units representing certain deferrals into the Director Deferred Compensation Plan or the Supplemental Deferred Savings Plan (both of which are discussed further in the Share-Based Payments footnote) based on the grant-date fair value estimated under the current provisions of ASC Topic 718, Compensation — Stock Compensation (“ASC 718”).
Share-based expense includes expense related to restricted stock and options issued, as well as share units deferred into the Director Deferred Compensation Plan. The Company recorded $27.7 , $18.2 , and $17.7 of share-based expense for the years ending August 31, 2016 , 2015 , and 2014 , respectively. The total income tax benefit recognized for share-based compensation arrangements was $9.6 , $6.4 , and $6.0 for the years ended August 31, 2016 , 2015 , and 2014 , respectively. The Company accounts for any awards with graded vesting on a straight-line basis. Additionally, forfeitures of share-based awards are estimated based on historical experience at the time of grant and are revised in subsequent periods if actual forfeitures differ from initial estimates. The Company did not capitalize any expense related to share-based payments and has recorded share-based expense, net of estimated forfeitures, in Selling, Distribution, and Administrative Expenses .
Benefits of tax deductions in excess of recognized share-based compensation cost are reported as a financing cash flow, rather than as an operating cash flow, in the Company’s Statements of Cash Flows and amounted to $25.6 , $17.6 , and $10.4 for fiscal 2016 , 2015 , and 2014 , respectively.
See the Share-Based Payments footnote for more information.
Depreciation
For financial reporting purposes, depreciation is determined principally on a straight-line basis using estimated useful lives of plant and equipment ( 10 to 40  years for buildings and related improvements and 3 to 15  years for machinery and equipment), while 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. Depreciation expense amounted to $40.9 , $34.4 , and $31.8 during fiscal 2016 , 2015 , and 2014 , respectively.
Research and Development
Research and development (“R&D”) expense, which is expensed as incurred, consists of compensation, payroll taxes, employee benefits, materials, supplies, and other administrative costs, but does not include all new product development costs, and is included in Selling, Distribution, and Administrative Expenses in the Company’s Consolidated Statements of Comprehensive Income . R&D expense amounted to $47.1 , $41.1 , and $35.3 during fiscal 2016 , 2015 , and 2014 , respectively.
Advertising
Advertising costs are expensed as incurred and are included within Selling, Distribution, and Administrative Expenses in the Company’s Consolidated Statements of Comprehensive Income . These costs totaled $18.4 , $12.0 , and $13.3 during fiscal 2016 , 2015 , and 2014 , respectively. The increase during fiscal 2016 is primarily due to the impact of acquisitions.
Service Arrangements with Customers
The Company maintains a service program with one of its retail customers that affords the Company certain in-store benefits, including lighting display maintenance. Costs associated with this program totaled $7.0 , $6.6 , and $6.1 in fiscal 2016 , 2015 , and 2014 , respectively. These costs have been included within Selling, Distribution, and Administrative Expenses in the Company’s Consolidated Statements of Comprehensive Income .

48

ACUITY BRANDS, INC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)


Interest Expense, Net
Interest expense, net , is comprised primarily of interest expense on long-term debt, revolving credit facility borrowings, and loans collateralized by assets related to a company-owned life insurance program, partially offset by interest income on cash and cash equivalents.
The following table summarizes the components of interest expense, net:
 
Years Ended August 31,
 
2016
 
2015
 
2014
Interest expense
$
33.3

 
$
32.6

 
$
32.6

Interest income
(1.1
)
 
(1.1
)
 
(0.5
)
Interest expense, net
$
32.2

 
$
31.5

 
$
32.1

Foreign Currency Translation
The functional currency for the foreign operations of the Company is the local currency. The translation of foreign currencies into U.S. dollars is performed for balance sheet 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.
Miscellaneous Expense (Income), Net
Miscellaneous expense (income), net , is composed primarily of gains or losses on foreign currency items and other non-operating items. Gains or losses relating to foreign currency items consisted of income of $0.8 in fiscal 2016 , expense of $0.7 in fiscal 2015 , and expense of $1.5 in fiscal 2014 .
Income Taxes
The Company is 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.
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 for the Company includes foreign currency translation and pension adjustments.
The following table presents the changes in each component of Accumulated Other Comprehensive Loss Items , net of tax.
 
 Foreign Currency Items
 
 Defined Benefit Pension Plans
 
 Accumulated Other Comprehensive Loss Items
Balance at August 31, 2015
$
(42.1
)
 
$
(68.3
)
 
$
(110.4
)
Other comprehensive loss before reclassifications
(5.6
)
 
(28.7
)
 
(34.3
)
Amounts reclassified from accumulated other comprehensive income

 
5.3

 
5.3

Net current-period other comprehensive loss
(5.6
)
 
(23.4
)
 
(29.0
)
Balance at August 31, 2016
$
(47.7
)
 
$
(91.7
)
 
$
(139.4
)

49

ACUITY BRANDS, INC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)


The following table presents the tax (expense)/benefit allocated to each component of other comprehensive income (expense).
 
Years Ended August 31,
 
2016
 
2015
 
2014
 
 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
$
(5.6
)
 
$

 
$
(5.6
)
 
$
(24.0
)
 
$

 
$
(24.0
)
 
$
0.7

 
$

 
$
0.7

Defined Benefit Pension Plans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Actuarial losses
(42.2
)
 
13.5

 
(28.7
)
 
(27.9
)
 
10.7

 
(17.2
)
 
(18.2
)
 
5.6

 
(12.6
)
Amortization of defined benefit pension items:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Prior service cost (1)
3.1

 
(1.1
)
 
2.0

 
1.4

 
(0.6
)
 
0.8

 
0.8

 
(0.3
)
 
0.5

Actuarial losses (1)
4.9

 
(1.6
)
 
3.3

 
4.1

 
(2.2
)
 
1.9

 
3.1

 
(1.0
)
 
2.1

Total Defined Benefit Plans, net
(34.2
)
 
10.8

 
(23.4
)
 
(22.4
)
 
7.9

 
(14.5
)
 
(14.3
)
 
4.3

 
(10.0
)
Other Comprehensive Income (Loss)
$
(39.8
)
 
$
10.8

 
$
(29.0
)
 
$
(46.4
)
 
$
7.9

 
$
(38.5
)
 
$
(13.6
)
 
$
4.3

 
$
(9.3
)
_______________________________________
(1)  
The before tax amount of these other comprehensive income components is included in net periodic pension cost. See the Pension and Defined Contribution Plans footnote for additional details.

3.    New Accounting Pronouncements
Accounting Standards Adopted in Fiscal 2016
In November 2015, the Financial Accounting Standards Board ("FASB") issued ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes ("ASU 2015-17"), requiring that all tax liabilities and assets be classified as noncurrent in a classified statement of financial position. ASU 2015-17 is effective for annual reporting periods beginning after December 15, 2016. The Company early adopted ASU 2015-17, which resulted in a reclassification of $23.1 from current deferred income taxes to noncurrent deferred income taxes on the Consolidated Balance Sheets as of August 31, 2015.
Accounting Standards Yet to Be Adopted     
In March 2016, the FASB issued ASU No. 2016-09, Improvements to Employee Share-Based Payment Accounting , ("ASU 2016-09"), which will change certain aspects of accounting for share-based payments to employees. ASU 2016-09 is effective for fiscal years (and interim reporting periods within those years) beginning after December 15, 2016. The standard requires that all excess tax benefits and deficiencies currently recorded as additional paid in capital be prospectively recorded in income tax expense. As such, implementation of this standard could create volatility in the Company's effective income tax rate on a quarter by quarter basis. The volatility in the effective income tax rate is due primarily to fluctuations in the Company's stock price and the timing of stock option exercises and vesting of restricted share grants. The standard also requires excess tax benefits to be presented as an operating activity on the statement of cash flows rather than as a financing activity. This element of the guidance may be applied retrospectively or prospectively. The Company intends to implement the standard as required in fiscal 2018.
In February 2016, the FASB issued ASU No. 2016-02, Leases , ("ASU 2016-02"), which requires lessees to include most leases on the balance sheet. ASU 2016-02 is effective for fiscal years (and interim reporting periods within those years) beginning after December 15, 2018. The Company is currently evaluating the impact of the provisions of ASU 2016-02.
In July 2015, the FASB issued ASU No. 2015-16, Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments ("ASU 2015-16"), which simplifies the accounting for measurement-period adjustments to provisional amounts recognized in a business combination. ASU 2015-16 is effective for fiscal years (and interim reporting periods within those years) beginning after December 15, 2016. The provisions of ASU 2015-16 are not expected to have a material effect on the Company's financial condition, results of operations, or cash flows.

50

ACUITY BRANDS, INC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)


In April 2015, the FASB issued ASU No. 2015-05, Customer's Accounting For Fees Paid In A Cloud Computing Arrangement (“ASU 2015-05”), which provides guidance for a customer's accounting for cloud computing costs. ASU 2015-05 is effective for fiscal years (and interim reporting periods within those years) beginning after December 15, 2015. The provisions of ASU 2015-05 are not expected to have a material effect on the Company's financial condition, results of operations, or cash flows.
In May 2014, the FASB issued ASU No. 2014-09, Revenue From Contracts With Customers (“ASU 2014-09”), which outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. ASU 2014-09 is effective for fiscal years (and interim reporting periods within those years) beginning after December 15, 2017. ASU 2014-09 permits the use of either the retrospective or cumulative effect transition method. The Company is currently evaluating the impact of the provisions of ASU 2014-09.
All other newly issued accounting pronouncements not yet effective have been deemed either immaterial or not applicable.

4.    Acquisitions and Investments
The Company does not consider acquisitions a critical element of its strategy but seeks opportunities for growth through acquisitions and investments. In recent years, the Company has acquired or made investments in a number of businesses that participate in the lighting, building management and related markets, including the businesses discussed below. The acquisitions and investments were made with the intent to further expand and complement the Company’s lighting and building management solutions portfolio. The purchased companies were fully incorporated into the Company’s operations.
Fiscal 2016 Acquisitions
DGLogik, Inc.
On June 30, 2016, using cash on hand and treasury stock, the Company acquired DGLogik, Inc. ("DGLogik"), a provider of innovative software solutions that enable and visualize the Internet of Things. DGLogik's solutions provide users with the intelligence to better manage energy usage and improve facility performance. DGLogik is headquartered in the San Francisco Bay Area, California.
Juno Lighting LLC
On December 10, 2015, using cash on hand, the Company acquired for approximately $380 all of the equity interests of Juno Lighting LLC ("Juno Lighting"), a leading provider of downlighting and track lighting fixtures for both residential and commercial applications. Juno Lighting is headquartered in Des Plaines, Illinois. At the time of acquisition, Juno Lighting generated annual revenues of approximately $250 (unaudited).
Geometri LLC
On December 9, 2015, using cash on hand, the Company acquired certain assets and assumed certain liabilities of Geometri, LLC ("Geometri"), a provider of a software and services platform for mapping, navigation, and analytics.
Distech Controls Inc.
On September 1, 2015, using cash on hand, the Company acquired for approximately $240 all of the outstanding capital stock of Distech Controls Inc. ("Distech Controls"), a provider of building automation solutions that allow for the integration of lighting, HVAC, access control, closed circuit television, and related systems. Distech Controls is headquartered in Quebec, Canada. At the time of acquisition, Distech Controls generated annual revenues of approximately $80 Canadian Dollars (unaudited).

51

ACUITY BRANDS, INC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)


Accounting for Fiscal 2016 Acquisitions
The operating results of these acquisitions have been included in the Company's consolidated financial statements since the respective dates of acquisition. Acquisition-related costs were expensed as incurred. Preliminary amounts related to the acquisition accounting for these investments are reflected in the Consolidated Balance Sheets as of August 31, 2016 . The aggregate consideration of these acquisitions was preliminarily allocated as follows:
Consideration
 
Cash paid, net of cash acquired
$
623.2

Shares issued from Treasury Stock
10.0

Total Purchase Price
$
633.2

 
 
Allocation
 
Goodwill
$
381.5

Intangible assets:
 
     Customer-based 1
102.3

     Marketing-related 2
42.3

     Technology-based 3
39.3

 
 
Property and equipment
63.1

Other assets acquired
120.5

Deferred tax liabilities
(58.3
)
Other liabilities assumed
(57.5
)
 
$
633.2

______________________________  
(1) Customer-based intangibles have useful lives between 12 and 20 years, with a weighted average amortization period of approximately 17 years.
(2) Marketing-related intangibles are considered indefinite-lived.
(3) Technology-based intangibles have useful lives between five and 10 years, with a weighted average amortization period of approximately 8 years.
These amounts are deemed to be provisional until disclosed otherwise, as the Company continues to gather information related to the identification and valuation of intangible and other acquired assets and liabilities. These amounts are expected to change as the Company finalizes the allocation.
Proforma results of operations have not been presented because the effects of these acquisitions, individually and in the aggregate, were not material to the Company's consolidated results of operations. The acquisitions represented less than 10% of net sales and pre-tax income on a proforma basis (assuming acquisition transactions were completed as of September 1, 2014) for the years ended August 31, 2016 and 2015 (unaudited).
Goodwill recognized in these acquisitions is comprised primarily of expected benefits related to expanding the Company’s solutions portfolio, including software and services, to provide a host of economic benefits resulting from data analytics that enables the Internet of Things (IoT) and supports the advancement of smart buildings, smart cities, and the smart grid as well as the trained workforce acquired with these businesses and expected synergies from combining the operations of the Company and the acquired businesses. Goodwill from these acquisitions totaling $6.0 is tax deductible.
Fiscal 2015 Acquisition and Investment
On April 15, 2015, using cash on hand, the Company acquired substantially all of the assets and assumed certain liabilities of ByteLight, Inc. (“ByteLight”), a provider of indoor location software for light-emitting diode (“LED”) lighting. The operating results of ByteLight have been included in the Company’s consolidated financial statements since the date of acquisition. Management finalized the acquisition accounting for ByteLight during the fourth quarter of fiscal 2015 and the amounts are reflected in the Consolidated Balance Sheets .

52

ACUITY BRANDS, INC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)


In addition, during fiscal 2015, the Company made a strategic, non-controlling investment in a company specializing in light sensory networks.  This investment was accounted for using the cost method and is reflected in Other long term assets on the Consolidated Balance Sheets .

5.    Fair Value Measurements
The Company determines a fair value measurement based on the assumptions a market participant would use in pricing an asset or liability. ASC Topic 820, Fair Value Measurements and Disclosures ("ASC 820"), establishes a three level hierarchy making a distinction 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).
The following table presents information about assets and liabilities required to be carried at fair value and measured on a recurring basis as of August 31, 2016 and 2015 :
 
Fair Value Measurements as of:
 
August 31, 2016
 
August 31, 2015
 
Level 1
 
Total Fair Value
 
Level 1
 
Total Fair Value
Assets:
 

 
 

 
 

 
 

Cash and cash equivalents
$
413.2

 
$
413.2

 
$
756.8

 
$
756.8

Other
0.5

 
0.5

 
0.5

 
0.5

Liabilities:
 
 
 
 
 

 
 
Other
$
0.5

 
$
0.5

 
$
0.5

 
$
0.5

The Company utilizes valuation methodologies to determine the fair values of its 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.
The Company used quoted market prices to determine the fair value of Level 1 assets and liabilities. 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.
Disclosures of fair value information about financial instruments (whether or not recognized in the balance sheet), 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.

53

ACUITY BRANDS, INC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)


The carrying values and estimated fair values of certain of the Company’s financial instruments were as follows at August 31, 2016 and 2015 :
 
August 31, 2016
 
August 31, 2015
 
Carrying Value
 
Fair Value
 
Carrying Value
 
Fair Value
Assets:
 
 
 
 
 
 
 
Investment in noncontrolling affiliate
$
8.0

 
$
14.4

 
$
8.0

 
$
8.0

Liabilities:
 
 
 
 
 

 
 

Senior unsecured public notes, net of unamortized discount and deferred costs
$
348.7

 
$
388.8

 
$
348.4

 
$
386.4

Industrial revenue bond
4.0

 
4.0

 
4.0

 
4.0

Bank Loans
2.5

 
2.6

 

 

Investment in noncontrolling affiliate represents a strategic investment accounted for using the cost method. The Company based the fair value of the investment on an offer by a third party to purchase the business. The sale transaction subsequently closed in October 2016. (Level 3).
The senior unsecured public notes are carried at the outstanding balance, including bond discounts and deferred costs, as of the end of the reporting period. Fair value is estimated based on discounted future cash flows using rates currently available for debt of similar terms and maturity (Level 2).
The industrial revenue bond is carried at the outstanding balance as of the end of the reporting period. The industrial revenue bond is a tax-exempt, variable-rate instrument that resets on a weekly basis; therefore, the Company estimates that the face amount of the bond approximates fair value as of August 31, 2016 based on bonds of similar terms and maturity (Level 2).
The bank loans are carried at the outstanding balance as of the end of the reporting period. Fair value is estimate based on discounted future cash flows using rates currently available for debt of similar terms and maturity (Level 2).
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 the Company. 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 the Company’s management of liquidity and other risks, the fair values of all assets and liabilities should be taken into consideration, not only those presented above.


54

ACUITY BRANDS, INC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)


6.    Pension and Defined Contribution Plans

Company-sponsored Pension Plans
The Company has 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. The Company makes annual contributions to the plans to the extent indicated by actuarial valuations and statutory requirements. Plan assets are invested primarily in equity and fixed income securities.
The following tables reflect the status of the Company’s domestic (U.S.-based) and international pension plans at August 31, 2016 and 2015 :
 
Domestic Plans
 
International Plans
 
August 31,
 
August 31,
 
2016
 
2015
 
2016
 
2015
Change in Benefit Obligation:
 

 
 

 
 

 
 

Benefit obligation at beginning of year
$
192.2

 
$
171.5

 
$
49.8

 
$
52.5

Service cost
3.6

 
3.1

 
0.1

 
0.1

Interest cost
8.0

 
6.8

 
1.7

 
1.8

Amendments

 
10.5

 

 

Actuarial loss
27.5

 
7.6

 
17.9

 
0.5

Benefits paid
(8.3
)
 
(7.3
)
 
(3.6
)
 
(1.0
)
Other

 

 
(8.6
)
 
(4.1
)
Benefit obligation at end of year
223.0

 
192.2

 
57.3

 
49.8

Change in Plan Assets:
 

 
 

 
 

 
 

Fair value of plan assets at beginning of year
$
123.9

 
$
122.5

 
$
32.6

 
$
35.2

Actual return on plan assets
7.9

 
0.7

 
5.2

 
(0.1
)
Employer contributions
5.3

 
8.0

 
1.1

 
1.1

Benefits paid
(8.3
)
 
(7.3
)
 
(3.6
)
 
(1.0
)
Other

 

 
(5.0
)
 
(2.6
)
Fair value of plan assets at end of year
128.8

 
123.9

 
30.3

 
32.6

Funded status at the end of year
$
(94.2
)
 
$
(68.3
)
 
$
(27.0
)
 
$
(17.2
)
Amounts Recognized in the Consolidated Balance Sheets Consist of:
 

 
 

 
 

 
 

Current liabilities
$
(1.3
)
 
$
(1.5
)
 
$

 
$
(0.1
)
Non-current liabilities
(92.9
)
 
(66.8
)
 
(27.0
)
 
(17.1
)
Net amount recognized in Consolidated Balance Sheets
$
(94.2
)
 
$
(68.3
)
 
$
(27.0
)
 
$
(17.2
)
Accumulated Benefit Obligation
$
220.4

 
$
189.2

 
$
57.3

 
$
49.8

Pre-tax amounts in accumulated other comprehensive income:
 

 
 

 
 

 
 

Prior service cost
$
(10.8
)
 
$
(13.9
)
 
$

 
$

Net actuarial loss
(96.9
)
 
(71.1
)
 
(28.2
)
 
(19.4
)
Amounts in accumulated other comprehensive income
$
(107.7
)
 
$
(85.0
)
 
$
(28.2
)
 
$
(19.4
)
Estimated amounts that will be amortized from accumulated comprehensive income over the next fiscal year:
 

 
 

 
 

 
 

Prior service cost
$
3.1

 
$
3.1

 
$

 
$

Net actuarial loss
5.3

 
3.1

 
3.7

 
2.9




55

ACUITY BRANDS, INC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)


During fiscal 2015, the domestic plans recognized $10.5 related to the following amendments to the Acuity Brands, Inc. 2002 Supplemental Executive Retirement Plan:
An incremental benefit was added for participants who were actively employed by the Company on June 26, 2015 (or who first become a participant on or after June 26, 2015). The incremental benefit provides a monthly benefit for 180 months commencing at age 60 equal to 1.4% of the participant's "average annual compensation" multiplied by his years of credited service not to exceed 10 years, divided by 12. Participants may elect to receive the actuarial equivalent of the incremental benefit in the form of a lump sum cash payment.
The definition of actuarial equivalent (with respect to accrued benefits other than the participant’s vested accrued benefit as of December 31, 2004) was changed. Prior to the amendment, the definition of actuarial equivalent used an interest rate equal to the lesser of 7% per annum or the yield on 10-Year U.S. Treasury Bonds plus 1.50% ; after the amendment, an interest rate equal to the lesser of 2.5% per annum or the yield on 10-Year U.S. Treasury Bonds will be used.
Upon the occurrence of a Section 409A change in control event (as defined in the SERP), the SERP shall be terminated consistent with the requirements of Treasury Regulation section 1.409A-3(j)(4)(ix)(B), and the Company shall, within five (5) days of such an event, pay to each participant a lump sum cash payment equal to the lump sum actuarial equivalent of the participant’s accrued benefit as of such date.
Components of net periodic pension cost for the fiscal years ended August 31, 2016 , 2015 , and 2014 included the following:
 
Domestic Plans
 
International Plans
 
2016
 
2015
 
2014
 
2016
 
2015
 
2014
Service cost
$
3.6

 
$
3.1

 
$
2.4

 
$
0.1

 
$
0.1

 
$
0.1

Interest cost
8.0

 
6.8

 
7.0

 
1.7

 
1.8

 
1.9

Expected return on plan assets
(9.2
)
 
(9.2
)
 
(8.0
)
 
(1.9
)
 
(1.8
)
 
(2.0
)
Amortization of prior service cost
3.1

 
1.4

 
0.8

 

 

 

Settlement

 

 

 

 

 
(0.1
)
Recognized actuarial loss
3.0

 
2.2

 
2.0

 
1.9

 
1.9

 
1.1

Net periodic pension cost
$
8.5

 
$
4.3

 
$
4.2

 
$
1.8

 
$
2.0

 
$
1.0

Weighted average assumptions used in computing the benefit obligation are as follows:
 
Domestic Plans
 
International Plans
 
2016
 
2015
 
2016
 
2015
Discount rate
3.2
%
 
4.3
%
 
2.1
%
 
3.7
%
Rate of compensation increase
5.5
%
 
5.5
%
 
2.8
%
 
3.1
%
Weighted average assumptions used in computing net periodic benefit cost are as follows:
 
Domestic Plans
 
International Plans
 
2016
 
2015
 
2014
 
2016
 
2015
 
2014
Discount rate
4.3
%
 
4.0
%
 
4.8
%
 
2.1
%
 
3.6
%
 
4.5
%
Expected return on plan assets
7.5
%
 
7.5
%
 
7.5
%
 
6.5
%
 
5.6
%
 
6.2
%
Rate of compensation increase
5.5
%
 
5.5
%
 
5.5
%
 
2.8
%
 
3.1
%
 
3.3
%
It is the Company’s 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 the Company’s estimated benefit payments available as of the measurement date. The Company uses a publicly published yield curve to assist in the development of its discount rates. The Company estimates that each 100  basis point increase in the discount rate would result in reduced net periodic pension cost of approximately $1.2 and $1.6 for domestic plans and international plans, respectively. The expected return on plan assets is derived from a periodic study of long-term historical rates of return on the various asset classes included in the Company’s targeted pension plan asset allocation. The Company

56

ACUITY BRANDS, INC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)


estimates that each 100  basis point reduction in the expected return on plan assets would result in additional net periodic pension cost of $1.3 and $0.3 for domestic plans and international plans, respectively. The rate of compensation increase is also evaluated and is adjusted by the Company, if necessary, annually.
The Company’s investment objective for domestic plan assets is to earn a rate of return sufficient to match or exceed the long-term growth of the plans’ liabilities without subjecting plan assets to undue risk. The plan assets are invested primarily in high quality equity and debt securities. The Company conducts 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. During fiscal 2016 , the U.S. targeted asset allocation was 55% equity securities, 40% fixed income securities, and 5% real estate securities. The Company’s investment objective for the international plan assets is also to add value by matching or exceeding the long-term growth of the plans’ liabilities. During fiscal 2016 , the international asset target allocation approximated 60% equity securities, 25% fixed income securities, 10% multi-strategy funds, and 5% real estate securities.
The Company’s pension plan asset allocation at August 31, 2016 and 2015 by asset category is as follows:
 
% of Plan Assets
 
Domestic Plans
 
International Plans
 
2016
 
2015
 
2016
 
2015
Equity securities
55.4
%
 
55.8
%
 
61.1
%
 
64.1
%
Fixed income securities
39.1
%
 
39.1
%
 
25.0
%
 
21.5
%
Multi-strategy investments
%
 
%
 
8.9
%
 
9.5
%
Real estate
5.5
%
 
5.1
%
 
5.0
%
 
4.9
%
Total
100.0
%
 
100.0
%
 
100.0
%
 
100.0
%
The Company’s pension plan assets are stated at fair value from 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.
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.
The following tables present the fair value of the domestic pension plan assets by major category as of August 31, 2016 and 2015 :
 
 
 
Fair Value Measurements
 
Fair Value
as of
 
Quoted Market
Prices in Active
Markets for
Identical Assets
 
Significant
Other
Observable
Inputs
 
Significant
Unobservable
Inputs
Assets
August 31, 2016
 
(Level 1)
 
(Level 2)
 
(Level 3)
Mutual Funds:
 

 
 

 
 

 
 

Domestic large cap equity fund
$
46.5

 
$
46.5

 
$

 
$

Foreign equity fund
12.3

 
12.3

 

 

Real Estate Fund
7.1

 

 

 
7.1

Short-Term Fixed Income Investments
6.2

 
6.2

 

 

Fixed-Income Investments
44.2

 

 
44.2

 

Collective Trust: Domestic small cap equities
12.5

 

 
12.5

 

 
$
128.8

 
 

 
 

 
 


57

ACUITY BRANDS, INC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)


 
 
 
Fair Value Measurements
 
Fair Value
as of
 
Quoted Market
Prices in Active
Markets for
Identical Assets
 
Significant
Other
Observable
Inputs
 
Significant
Unobservable
Inputs
Assets
August 31, 2015
 
(Level 1)
 
(Level 2)
 
(Level 3)
Mutual Funds:
 

 
 

 
 

 
 

Domestic large cap equity fund
$
44.9

 
$
44.9

 
$

 
$

Foreign equity fund
11.9

 
11.9

 

 

Real Estate Fund
6.3

 

 

 
6.3

Short-Term Fixed Income Investments
6.6

 
6.6

 

 

Fixed-Income Investments
41.8

 

 
41.8

 

Collective Trust: Domestic small cap equities
12.4

 

 
12.4

 

 
$
123.9

 
 

 
 

 
 

The following tables present the fair value of the international pension plan assets by major category as of August 31, 2016 and 2015 :
 
 
 
Fair Value Measurements
 
Fair Value
as of
 
Quoted Market
Prices in Active
Markets for
Identical Assets
 
Significant
Other
Observable
Inputs
 
Significant
Unobservable
Inputs
Assets
August 31, 2016
 
(Level 1)
 
(Level 2)
 
(Level 3)
Equity Securities
$
18.5

 
$

 
$
18.5

 
$

Short-Term Investments
0.5

 
0.5

 

 

Real Estate Fund
1.5

 

 

 
1.5

Multi-Strategy Investments
2.7

 

 
2.7

 

Fixed-Income Investments
7.1

 

 
7.1

 

 
$
30.3

 
 

 
 

 
 

 
 
 
Fair Value Measurements
 
Fair Value
as of
 
Quoted Market
Prices in Active
Markets for
Identical Assets
 
Significant
Other
Observable
Inputs
 
Significant
Unobservable
Inputs
Assets
August 31, 2015
 
(Level 1)
 
(Level 2)
 
(Level 3)
Equity Securities
$
20.9

 
$

 
$
20.9

 
$

Real Estate Fund
1.6

 

 

 
1.6

Multi-Strategy Investments
3.1

 

 
3.1

 

Fixed-Income Investments
7.0

 

 
7.0

 

 
$
32.6

 
 

 
 

 
 

Publicly-traded securities are valued at the last reported sales price on the last business day of the period. Investments traded in the over-the-counter market and listed securities for which no sale was reported on the last day of the period are valued at the last reported bid price.
Investments in real estate are stated at estimated fair values based on the fund management’s valuations and upon appraisal reports prepared periodically by independent real estate appraisers. These investments are classified as Level 3 assets within the fair value hierarchy. The purpose of the appraisal is to estimate the fair value of the real estate as of a specific date based on the most probable price for which the appraised real estate will sell in a competitive market under all conditions requisite to a fair sale. Estimated fair value is based on (i) discounted cash flows using certain market assumptions, including holding period, discount rates, capitalization rates, rent and expense growth rates, future capital expenditures and the ultimate sale of the property at the end of the holding period; (ii) direct capitalization method; or (iii) comparable sales method.

58

ACUITY BRANDS, INC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)


The tables below present a rollforward of the domestic and international pension plans’ Level 3 assets for the years ended August 31, 2016 and 2015 :
 
Domestic Real Estate Fund
 
Years Ended August 31,
 
2016
 
2015
Balance, beginning of year
$
6.3

 
$
5.6

Net unrealized gain relating to instruments still held at the reporting date
0.5

 
0.5

Shares purchased, including from dividend reinvestment
0.3

 
0.2

Balance, end of year
$
7.1

 
$
6.3

 
International Real Estate Fund
 
Years Ended August 31,
 
2016
 
2015
Balance, beginning of year
$
1.6

 
$
1.7

Net unrealized loss relating to instruments still held at the reporting date
(0.1
)
 
(0.1
)
Balance, end of year
$
1.5

 
$
1.6

The Company expects to contribute approximately $2.3 and $1.0 during fiscal 2017 to its domestic and international defined benefit plans, respectively. These amounts are based on the total contributions required during fiscal 2017 to satisfy current legal minimum funding requirements for qualified plans and estimated benefit payments for non-qualified plans.
Benefit payments are made primarily from funded benefit plan trusts. Benefit payments are expected to be paid as follows for the years ending August 31:
 
Domestic Plans
 
International Plans
2017
$
7.9

 
$
3.3

2018
8.1

 
3.4

2019
8.3

 
3.5

2020
8.5

 
3.6

2021
11.9

 
3.7

2022-2026
69.0

 
20.0

Multi-employer Pension Plans
The Company contributes to three multi-employer defined benefit pension plans under the terms of collective-bargaining agreements that cover certain of its union-represented employees. The risks of participating in these multi-employer plans are different from single-employer plans in the following aspects:
Assets contributed to the multi-employer plan by one employer may be used to provide benefits to employees of other participating employers.
If a participating employer stops contributing to the plan, the unfunded obligations of the plan may be shared by the remaining participating employers.
If a participating employer chooses to stop participating in some of its multi-employer plans, the employer may be required to pay those plans an amount based on the underfunded status of the plan, referred to as a withdrawal liability.

The Company’s contributions to these plans were $0.7 , $0.5 , and $0.4 for the years ended August 31, 2016 , 2015 , and 2014 , respectively. During fiscal 2016 as a result of closing a facility, the Company withdrew from one of these multi-employer pension plans and incurred a withdrawal liability of $3.9 .

59

ACUITY BRANDS, INC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)


Defined Contribution Plans
The Company also has defined contribution plans to which both employees and the Company make contributions. The cost to the Company for these plans was $6.9 , $5.6 , and $5.3 for the years ended August 31, 2016 , 2015 , and 2014 , respectively. Employer matching amounts are allocated in accordance with the participants’ investment elections for elective deferrals. At August 31, 2016 , assets of the domestic defined contribution plans included shares of the Company’s common stock with a market value of approximately $22.3 , which represented approximately 7.3% of the total fair market value of the assets in the Company’s domestic defined contribution plans.

7.    Debt and Lines of Credit
Debt
The Company’s debt at August 31, 2016 and 2015 consisted of the following:
 
August 31,
 
2016
 
2015
Senior unsecured public notes due December 2019, principal
$
350.0

 
$
350.0

Senior unsecured public notes due December 2019, unamortized discount and deferred costs
(1.3
)
 
(1.6
)
Industrial revenue bond due 2021
4.0

 
4.0

Bank loans
2.5

 

Total debt outstanding
$
355.2

 
$
352.4

Future principal payments of long-term debt are $0.2 , $0.3 , $0.3 , $350.3 , $4.3 , and $1.1 in fiscal 2017 , 2018 , 2019 , 2020 , 2021 , and after 2021 , respectively.
On December 1, 2009, the Company announced a private offering by ABL, Acuity Brands’ wholly-owned principal operating subsidiary, of $350.0 aggregate principal amount of senior unsecured notes due in fiscal 2020 (the “Notes”). The Notes are fully and unconditionally guaranteed on a senior unsecured basis by Acuity Brands and ABL IP Holding LLC (“ABL IP Holding”, and, together with Acuity Brands, the “Guarantors”), a wholly-owned subsidiary of Acuity Brands. The Notes are senior unsecured obligations of ABL and rank equally in right of payment with all of ABL’s existing and future senior unsecured indebtedness. The guarantees of Acuity Brands and ABL IP Holding are senior unsecured obligations of Acuity Brands and ABL IP Holding and rank equally in right of payment with their other senior unsecured indebtedness. The Notes bear interest at a rate of 6% per annum and were issued at a price equal to 99.797% of their face value and for a term of 10 years . Interest on the Notes is payable semi-annually on June 15 and December 15. Additionally, the Company capitalized $3.1 of deferred issuance costs related to the Notes that are being amortized over the 10 -year term of the Notes.
In accordance with the registration rights agreement by and between ABL and the Guarantors and the initial purchasers of the Notes, ABL and the Guarantors filed a registration statement with the SEC for an offer to exchange the Notes for SEC-registered notes with substantially identical terms. The registration became effective on August 17, 2010, and all of the Notes were exchanged.
The $4.0 industrial revenue bond matures in 2021. The interest rate on the $4.0 bond was approximately 0.7% at August 31, 2016 and 0.1% at August 31, 2015 .
The Company also had $2.5 outstanding under fixed-rate bank loans executed during fiscal 2016. These loans have interest rates between 0.8% and 2.0% and mature over seven to 12 years, subject to monthly or quarterly repayment schedules.
Lines of Credit
On August 27, 2014, the Company executed a $250.0 revolving credit facility (the “Revolving Credit Facility”). The Revolving Credit Facility replaced the Company’s prior $250.0 revolving credit facility (the “prior facility”), which was scheduled to mature on January 31, 2017. The Revolving Credit Facility will mature and all amounts outstanding will be due and payable on August 27, 2019.
The Revolving Credit Facility contains financial covenants, including a minimum interest coverage ratio (“Minimum Interest Coverage Ratio”) and a leverage ratio (“Maximum Leverage Ratio”) of total indebtedness to EBITDA (earnings

60

ACUITY BRANDS, INC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)


before interest, taxes, depreciation and amortization expense), as such terms are defined in the Revolving Credit Facility agreement. These ratios are computed at the end of each fiscal quarter for the most recent 12-month period. The Revolving Credit Facility allows for a Maximum Leverage Ratio of 3.50 and a Minimum Interest Coverage Ratio of 2.50 , subject to certain conditions defined in the financing agreement. Generally, amounts outstanding under the Revolving Credit Facility bear interest at a “Eurocurrency Rate”. Eurocurrency rate advances can be denominated in a variety of currencies, including U.S. dollars, and amounts outstanding bear interest at a periodic fixed rate equal to the London Inter Bank Offered Rate (“LIBOR”) for the applicable currency plus a margin as determined by the Company's leverage ratio (“Applicable Margin”). The Applicable Margin is based on the Company’s leverage ratio, as defined in the Revolving Credit Facility, with such margin ranging from 1.000% to 1.575% . Additionally, the Company is required to pay certain fees in connection with the Revolving Credit Facility, including administrative service fees and an annual facility fee. The annual facility fee is payable quarterly in arrears and is determined by the Company’s leverage ratio as defined in the Revolving Credit Facility. This facility fee ranges from 0.125% to 0.300% of the aggregate $250.0 commitment of the lenders under the Revolving Credit Facility.
The Company was compliant with all financial covenants under the Revolving Credit Facility as of August 31, 2016 . As of August 31, 2016 , the Company had outstanding letters of credit totaling $11.0 , primarily for securing collateral requirements under the Company's casualty insurance programs and providing credit support for the Company’s industrial revenue bond (not an outstanding amount under the Revolving Credit Facility). At August 31, 2016 , the Company had additional borrowing capacity under the Revolving Credit Facility of $243.9 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 $6.1 issued under the Revolving Credit Facility.
None of the Company’s existing debt instruments include provisions that would require an acceleration of repayments based solely on changes in the Company’s credit ratings.

8.    Common Stock and Related Matters
(share data presented in whole units except where otherwise indicated)
Common Stock
Changes in common stock for the years ended August 31, 2016 , 2015 , and 2014 were as follows:
 
Common Stock
 
Shares
 
Amount
(Amounts and shares in millions)
 
 
(At par)
Balance at August 31, 2013
52.2

 
$
0.5

Issuance of restricted stock grants, net of forfeitures
0.2

 

Stock options exercised
0.2

 

Balance at August 31, 2014
52.6

 
$
0.5

Issuance of restricted stock grants, net of forfeitures
0.2

 

Stock options exercised
0.2

 

Balance at August 31, 2015
53.0

 
$
0.5

Issuance of restricted stock grants, net of forfeitures
0.1

 

Stock options exercised
0.3

 

Balance at August 31, 2016
53.4

 
$
0.5

As of August 31, 2016 and 2015 , the Company had 9.7  million repurchased shares recorded as treasury stock at an original repurchase cost of $418.6 and $420.2 .
In September 2011, the Company's Board of Directors authorized the repurchase of two million shares of the Company's outstanding common stock. No shares have been repurchased under this plan.
Preferred Stock
The Company has 50 million shares of preferred stock authorized. No shares of preferred stock were issued in fiscal 2016 or 2015 and no shares of preferred stock are outstanding.

61

ACUITY BRANDS, INC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)


Earnings per Share
Basic earnings per share is computed by dividing net earnings available to common stockholders by the weighted average number of common shares outstanding, which has been modified to include the effects of all participating securities (unvested share-based payment awards with a right to receive nonforfeitable dividends) as prescribed by the two-class method under ASC Topic 260, Earnings Per Share (“ASC 260”), during the period. Diluted earnings per share is computed similarly but reflects the potential dilution that would occur if dilutive options were exercised and restricted stock awards were vested. Stock options of approximately 40,000 and 44,000 were excluded from the diluted earnings per share calculation for the years ended August 31, 2016 and 2015 , respectively, as the effect of inclusion would have been antidilutive. Approximately 4,000 and 26,000 shares of restricted stock were excluded from the diluted earnings per share calculation for the years ended August 31, 2016 and 2015 , respectively.
The following table calculates basic earnings per common share and diluted earnings per common share for the years ended August 31, 2016 , 2015 , and 2014 :
 
Years Ended August 31,
 (Amounts and shares in millions, except earnings per share)
2016
 
2015
 
2014
Basic Earnings per Share:
 

 
 

 
 

Net income
$
290.8

 
$
222.1

 
$
175.8

Less: Income attributable to participating securities
(0.4
)
 
(1.0
)
 
(1.6
)
Net income available to common shareholders
$
290.4

 
$
221.1

 
$
174.2

Basic weighted average shares outstanding
43.5

 
43.1

 
42.8

Basic earnings per share
$
6.67

 
$
5.13

 
$
4.07

Diluted Earnings per Share:
 

 
 

 
 

Net income
$
290.8

 
$
222.1

 
$
175.8

Less: Income attributable to participating securities
(0.4
)
 
(1.0
)
 
(1.6
)
Net income available to common shareholders
$
290.4

 
$
221.1

 
$
174.2

Basic weighted average shares outstanding
43.5

 
43.1

 
42.8

Common stock equivalents
0.3

 
0.3

 
0.2

Diluted weighted average shares outstanding
43.8

 
43.4

 
43.0

Diluted earnings per share
$
6.63

 
$
5.09

 
$
4.05


9.    Share-Based Payments
(share data presented in whole units except where otherwise indicated)
Omnibus Stock Compensation Incentive and Directors’ Equity Plans
In January 2013, the Company’s stockholders approved the Acuity Brands, Inc. 2012 Omnibus Stock Compensation Incentive Plan (“2012 Plan”) to replace the Amended and Restated 2007 Acuity Brands, Inc. Long Term Incentive Plan (“2007 Plan”). An aggregate of 2.3 million shares are authorized for issuance under the new plan including 1.9 million previously issuable shares under the 2007 Plan and 400,000 newly authorized shares. In addition, 1.7 million shares that were previously approved by the Company’s stockholders and that are subject to outstanding awards granted under the 2007 Plan are issuable under the 2012 Plan.
Shares available for grant under all plans were approximately 1.6 million , 1.8 million , and 2.1 million at August 31, 2016 , 2015 , and 2014 , respectively. Forfeited shares are returned to the pool of shares available for grant.
Restricted Stock Awards
As of August 31, 2016 , the Company had approximately 444,000  shares outstanding of restricted stock to officers, directors, and other key employees under the 2012 Plan, including restricted stock units granted to foreign employees. The shares vest primarily over a four -year period and are valued at the closing stock price on the date of the grant. Compensation expense recognized related to the awards under the equity incentive plans was $23.7 , $14.8 , and $14.2 in fiscal 2016 , 2015 , and 2014 , respectively.

62

ACUITY BRANDS, INC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)


Activity related to restricted stock awards during the fiscal year ended August 31, 2016 was as follows:
 
Number of
Shares
(in millions)
 
Weighted Average
Grant Date
Fair Value Per
Share
Outstanding at August 31, 2015
0.5
 
$
116.02

Granted
0.2
 
$
209.49

Vested
(0.2)
 
$
94.19

Forfeited
(0.1)
 
$
182.42

Outstanding at August 31, 2016
0.4
 
$
159.50

As of August 31, 2016 , there was $52.6 of total unrecognized compensation cost related to unvested restricted stock, which is expected to be recognized over a weighted-average period of 1.8  years. The total fair value of shares vested during the years ended August 31, 2016 , 2015 , and 2014 , was approximately $18.8 , $14.3 , and $13.0 , respectively.
Stock Options
As of August 31, 2016 , the Company had approximately 258,000 options outstanding to officers and other key employees under the 2012 Plan. Options issued under the 2012 Plan are generally granted with an exercise price equal to the fair market value of the Company’s 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. These options generally vest and become exercisable over a three -year period. The stock options granted under the Directors’ Plan vested and became exercisable one year from the date of grant. Options under the Directors' Plan have an exercise price equal to the fair market value of the Company’s stock on the date of the grant and expire 10  years from that date. As of August 31, 2016 , there were no  options outstanding under the Director’s Plan. Compensation expense recognized related to the awards under the current and prior equity incentive plans was $2.9 , $2.4 , and $2.4 in fiscal 2016 , 2015 , and 2014 , respectively. There was no expense related to the director plan in fiscal 2016 , 2015 , and 2014 .
The fair value of each option was estimated on the date of grant using the Black-Scholes model. The dividend yield was calculated based on annual dividends paid and the trailing 12-month average closing stock price at the time of grant. Expected volatility was based on historical volatility of the Company’s stock, calculated using the most recent time period equal to the expected life of the options. The risk-free interest rate was based on the U.S. Treasury yield for a term equal to the expected life of the options at the time of grant. The Company used historical exercise behavior data of similar employee groups to determine the expected life of options. All inputs into the Black-Scholes model are estimates made at the time of grant. Actual realized value of each option grant could materially differ from these estimates, without impact to future reported net income.
The following weighted average assumptions were used to estimate the fair value of stock options granted in the fiscal years ended August 31:
 
2016
 
2015
 
2014
Dividend yield
0.3%
 
0.4%
 
0.7%
Expected volatility
30.7%
 
33.9%
 
38.4%
Risk-free interest rate
1.4%
 
1.5%
 
1.3%
Expected life of options
4 years
 
4 years
 
5 years
Weighted-average fair value of options
$52.83
 
$37.43
 
$34.37

63

ACUITY BRANDS, INC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)


Stock option activity during the years ended August 31, 2016 , 2015 , and 2014 was as follows:
 
Outstanding
 
Exercisable
 
Number of
Shares
(in millions)
 
Weighted Average
Exercise Price
 
Number of
Shares
(in millions)
 
Weighted Average
Exercise Price
Outstanding at August 31, 2013
0.8
 
$43.16
 
0.5
 
$38.00
Granted
0.1
 
$103.74
 
 
 
 
Exercised
(0.2)
 
$40.31
 
 
 
 
Outstanding at August 31, 2014
0.7
 
$50.58
 
0.5
 
$41.05
Granted
0.1
 
$135.63
 
 
 
 
Exercised
(0.3)
 
$39.35
 
 
 
 
Outstanding at August 31, 2015
0.5
 
$71.95
 
0.3
 
$51.05
Granted
0.1
 
$207.80
 
 
 
 
Exercised
(0.3)
 
$51.34
 
 
 
 
Outstanding at August 31, 2016
0.3
 
$129.85
 
0.1
 
$83.89
Range of option exercise prices:
 
 
 
 
 
 
 
$40.00 - $100.00 (average life - 5.9 years)
0.1

$61.59
 
0.1

$61.59
$100.01 - $160.00 (average life - 7.7 years)
0.1
 
$121.45
 
*
$114.81
$160.01 - $210.00 (average life - 9.2 years)
0.1
 
$207.80
 

$—
_______________________________________
*
Represents shares of less than 0.1.

The total intrinsic value of options exercised during the years ended August 31, 2016 , 2015 , and 2014 was $50.0 , $33.3 , and $16.3 , respectively. As of August 31, 2016 , the total intrinsic value of options outstanding was $37.5 , the total intrinsic value of options expected to vest was $37.3 , and the total intrinsic value of options exercisable was $21.9 . As of August 31, 2016 , there was $3.8 of total unrecognized compensation cost related to unvested options. That cost is expected to be recognized over a weighted-average period of approximately 1.4  years.

Employee Deferred Share Units
The Company previously allowed employees to defer a portion of restricted stock awards granted in fiscal 2003 and fiscal 2004 into the Supplemental Deferred Savings Plan (“SDSP”) as share units. The share units are payable in shares of stock at the time of distribution from the SDSP. As of August 31, 2016 , approximately 10,000 fully vested share units remain deferred, but undistributed, under the 2012 Plan. There was no compensation expense related to these share units during fiscal years 2016 , 2015 , and 2014 .
Director Deferred Share Units
The Company previously required its Directors to defer at least 50% of their annual retainer into the 2006 Nonemployee Director Deferred Compensation Plan ("2006 Plan"). Shares deferred under the 2006 Plan are to be paid in shares at retirement from the Board. In January 2012, the Company's stockholders approved the 2011 Nonemployee Director Deferred Compensation Plan ("2011 Plan"), following the expiration of the 2006 Plan on November 30, 2011. Pursuant to the 2011 Plan, fees deferred by nonemployee directors can be invested in deferred stock units to be paid in shares or credited to an interest-bearing account to be paid in cash at retirement from the Board. 300,000 shares of common stock were reserved for issuance under the 2011 Plan, which incorporated approximately 86,000 shares previously available for grant under the 2006 Plan. Beginning in fiscal year 2013, the deferral requirement was adjusted to 55% of the annual director fees. On September 28, 2012, the 2011 Plan was amended to allow for stock grants in lieu of mandatory deferrals for the non-cash component of a nonemployee director's annual fee if a director exceeds the stock ownership requirement of five-times the annual cash retainer fee. Shares available for issuance under both plans were approximately 400,000 at August 31, 2016 , 2015 , and 2014 . As of August 31, 2016 , approximately 130,000  share units were deferred, but undistributed, under the 2006 Plan and the 2011 Plan.

64

ACUITY BRANDS, INC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)


Compensation expense recognized related to the share units under these plans was $1.1 million , $1.0 million , and $0.8 million in fiscal 2016 , 2015 , and 2014 , respectively.
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 the Company’s common stock reserved for purchase under the plan, of which approximately 1.0 million shares remain available as of August 31, 2016 . Employees may participate at their discretion.

10 .    Commitments and Contingencies
Self-Insurance
It is the policy of the Company to self-insure — up to certain limits — traditional risks, including workers’ compensation, comprehensive general liability, and auto liability. The Company’s 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 the Company’s 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, the Company’s independent actuary. The Company is 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. The Company is fully self-insured for certain other types of liabilities, including environmental, product recall, warranty, and patent infringement. The actuarial estimates are subject to uncertainty from various sources including, among others, changes in claim reporting patterns, claim settlement patterns, judicial decisions, legislation, and economic conditions. Although the Company believes that the actuarial estimates are reasonable, significant differences related to the items noted above could materially affect the Company’s self-insurance obligations, future expense, and cash flow.
The Company is also self-insured for the majority of its medical benefit plans up to certain limits. The Company estimates its aggregate liability for claims incurred by applying a lag factor to the Company’s historical claims and administrative cost experience. The appropriateness of the Company’s lag factor is evaluated and revised annually, as necessary.
Leases
The Company leases certain of its buildings and equipment under noncancelable lease agreements. Future minimum annual lease payments under noncancelable leases are $15.1 , $12.1 , $9.6 , $7.5 , $5.7 , and $10.2 for fiscal 2017 , 2018 , 2019 , 2020 , 2021 , and after 2021 , respectively.
Total rent expense was $17.6 , $16.0 , and $16.5 in fiscal 2016 , 2015 , and 2014 , respectively.
Purchase Obligations
The Company has incurred purchase obligations in the ordinary course of business that are enforceable and legally binding. Obligations for years subsequent to August 31, 2016 include $193.8 in fiscal 2017 and $4.8 in fiscal 2018 . As of August 31, 2016 , the Company had no purchase obligations extending beyond August 31, 2018 .
Collective Bargaining Agreements
Approximately 73% of the Company’s total work force is covered by collective bargaining agreements. Collective bargaining agreements representing approximately 69% of the Company’s work force will expire within one year.
Litigation
The Company is subject to various legal claims arising in the normal course of business, including patent infringement and product recall claims. Based on information currently 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 the financial condition, results of operations, or cash flows of the Company. 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 the financial condition, results of operations, or cash flows of the Company in future periods. The

65

ACUITY BRANDS, INC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)


Company establishes reserves 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 reserved for such claims. However, the Company cannot make a meaningful estimate of actual costs to be incurred that could possibly be higher or lower than the amounts reserved.
Environmental Matters
The operations of the Company 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 of the Company’s operations to limit air and water pollution, and these permits are subject to modification, renewal, and revocation by issuing authorities. On an ongoing basis, the Company invests capital and incurs operating costs relating to environmental compliance. Environmental laws and regulations have generally become stricter in recent years. The Company is not aware of any pending legislation or proposed regulation related to environmental issues that would have a material adverse effect on the Company. The cost of responding to future changes may be substantial. The Company establishes reserves 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 reserved due to difficulty in estimating such costs.
Guarantees and Indemnities
The Company is a party to contracts entered into in the normal course of business in which it is common for the Company 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, the Company cannot estimate the potential amount of future payments under these indemnities until events arise that would result in a liability under the indemnities.
Acquisition-Related Liabilities
During the negotiations related to business combinations, the previous owners of the acquired entity (“acquiree”) typically indemnify the Company for specific unrecognized liabilities of the acquiree in existence as of the date of acquisition. For some acquisitions of businesses, the Company acts in the place of escrow agents in the holding of funds, including accrued interest (collectively, the “holdback funds”), used to fulfill pre-acquisition obligations agreed to be paid by the acquiree. These funds represent consideration given to the previous owners of the businesses acquired and are payable to them, net of any pre-acquisition obligations satisfied within a stated amount of time, at a future date. Any potential pre-acquisition obligations for which the Company may be reimbursed through the holdback funds are usually uncertain as of the date of the change of control. In certain circumstances, the Company is capable of the identification and quantification of particular liabilities including, but not limited to, uncertain tax positions, legal issues, and other outstanding obligations not recognized in the financial statements of the acquired entity. Under ASC Topic 805, Business Combinations , these unrecognized liabilities are recorded as obligations of the Company with a corresponding receivable due from the previous owners as of the date of acquisition and are included as part of the acquisition accounting. The actual costs of resolving pre-acquisition obligations may be substantially higher than the holdback funds or amounts reserved. The Company does not believe that any amounts it is likely to be required to pay under these acquisition-related liabilities, including net holdback funds, will be material to the Company’s financial position, results of operations, or cash flow.
Product Warranty and Recall Costs
The Company records an allowance for the estimated amount of future warranty costs when the related revenue is recognized. Estimated costs related to product recalls based on a formal campaign soliciting repair or return of that product are accrued when they are deemed to be probable and can be reasonably estimated. Estimated future warranty and recall costs are primarily based on historical experience of identified warranty and recall claims. However, there can be no assurance that future warranty or recall costs will not exceed historical amounts or new technology products, which may include extended warranties, may not generate unexpected costs. If actual future warranty or recall costs exceed historical amounts, additional allowances may be required, which could have a material adverse impact on the Company’s results of operations and cash flow.

66

ACUITY BRANDS, INC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)


The changes in product warranty and recall reserves (included in Other accrued liabilities and Other long-term liabilities on the Consolidated Balance Sheets) during the fiscal years ended August 31, 2016 , 2015 , and 2014 are summarized as follows:
 
2016
 
2015
 
2014
Balance at September 1
$
9.6

 
$
8.5

 
$
5.9

Warranty and recall costs
25.7

 
16.1

 
19.5

Payments and other deductions
(20.8
)
 
(15.0
)
 
(16.9
)
Acquired warranty and recall liabilities
1.0

 

 

Balance at August 31
$
15.5

 
$
9.6

 
$
8.5

Trade Compliance Matters
Prior to the close of the acquisition, Distech Controls discovered shipments by it and its subsidiaries during the past five years of standard commercial building control products directly or indirectly to customers in a country that may constitute violations of U.S. and Canadian sanctions or export regulations, including those administered by the U.S. Office of Foreign Asset Control (“OFAC”) and the Export Controls Division of the Canadian Department of Foreign Affairs, Trade and Development ("DFATD"). Distech Controls estimates that it received total revenue of approximately $0.3 from these shipments. Distech Controls has voluntarily self-reported the potential violations to OFAC and DFATD and retained outside counsel that conducted an investigation of the matter and filed a full voluntary disclosure with these agencies. Now that the Company has acquired Distech Controls, the Company has greater access to information regarding Distech Controls’ prior operations and will continue to assess the matter and implement related ongoing compliance and remediation efforts.
The Company intends to fully cooperate with respect to any investigations by governmental agencies of the potential violations. The former shareholders of Distech Controls have jointly agreed to indemnify the Company for damages, if any, as a result of, in respect of, connected with or arising out of the potential violations or any inaccuracy or breach of the representations made by Distech Controls to the Company related thereto, up to a specified aggregate amount, which is not material to the Company's consolidated financial statements. These indemnity obligations are supported by an escrow account containing proceeds from the transaction equal to the specified aggregate amount. The Company currently believes that this indemnity will be sufficient to cover any damages related to the potential violations and the costs and expenses related to the investigation thereof and any related remedial actions. The Company therefore does not expect this matter to have a material adverse effect on the business, financial condition, cash flow, or results of operations of the Company. There can be no assurance, however, that actual damages, costs and expenses will not be in excess of the indemnity or that the Company and its affiliates will not be subject to other damages, including but not limited to damage to the Company's reputation or monetary or non-monetary penalties as permitted under applicable trade laws, that may not be fully covered by the indemnity. Estimated liabilities for legal fees as well as potential fines or penalties related to this matter are included in Other accrued liabilities within the Consolidated Balance Sheets.
The Company discovered through a review of shipment activity that it misclassified certain shipments of component parts to its manufacturing facilities under applicable import/export regulations. Although no claim has been asserted against the Company, the Company is reviewing these shipments to determine the extent of any liabilities and the extent of available remedial measures. The Company is unable at this time to determine the likelihood or amount of any loss associated with the misclassification of these shipments.

67

ACUITY BRANDS, INC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)


11.    Special Charge
During fiscal 2016 and 2015, the Company recorded a pre-tax special charge consisting primarily of severance and employee-related costs, for actions initiated to streamline the organization, including the integration of recent acquisitions. These streamlining activities include the consolidation of selected production activities and realignment of certain responsibilities, primarily within various selling, distribution, and administrative departments. The Company expects that these actions to streamline its business activities, in addition to those taken in previous fiscal years, will allow it to reduce spending in certain areas while permitting continued investment in future growth initiatives, such as new products, expanded market presence, and technology and innovation.
The details of the special charges during the years ended August 31, 2016 and 2015 are summarized as follows:
 
Year ended August 31,
 
2016
 
2015
Severance and employee-related costs
$
9.9

 
$
11.4

Multi-employer pension plan withdrawal costs
3.9

 

Production transfer costs
1.2

 
0.5

Lease termination costs

 
0.5

Special charge
$
15.0

 
$
12.4

As of August 31, 2016 , remaining reserves were $6.6 and are included in Accrued Compensation on the Consolidated Balance Sheets . The changes in the reserves related to these programs during the year ended August 31, 2016 are summarized as follows:
 
Fiscal 2016 Actions
 
Fiscal 2015 Actions
 
Total
Balance as of August 31, 2015
$

 
$
4.9

 
$
4.9

Severance and employee-related costs
10.4

 
(0.5
)
 
9.9

Payments made during the period
(4.0
)
 
(4.2
)
 
(8.2
)
Balance as of August 31, 2016
$
6.4

 
$
0.2

 
$
6.6


12.    Income Taxes
The Company accounts 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 provision for income taxes consists of the following components:
 
Years Ended August 31,
 
2016
 
2015
 
2014
Provision for current federal taxes
$
139.6

 
$
101.5

 
$
77.1

Provision for current state taxes
17.6

 
13.1

 
9.0

Provision for current foreign taxes
5.1

 
4.3

 
4.3

(Benefit) provision for deferred taxes
(8.5
)
 
2.6

 
(0.5
)
Total provision for income taxes
$
153.8

 
$
121.5

 
$
89.9


68

ACUITY BRANDS, INC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)


A reconciliation of the federal statutory rate to the total provision for income taxes is as follows:
 
Years Ended August 31,
 
2016
 
2015
 
2014
Federal income tax computed at statutory rate
$
155.6

 
$
120.3

 
$
93.0

State income tax, net of federal income tax benefit
11.0

 
8.6

 
6.7

Foreign permanent differences and rate differential
(2.0
)
 
(1.4
)
 
(1.0
)
Other, net
(10.8
)
 
(6.0
)
 
(8.8
)
Total provision for income taxes
$
153.8

 
$
121.5

 
$
89.9

Components of the net deferred income tax liabilities at August 31, 2016 and 2015 include:
 
August 31,
 
2016
 
2015
Deferred Income Tax Liabilities:
 

 
 

Depreciation
$
(22.5
)
 
$
(9.6
)
Goodwill and intangibles
(161.6
)
 
(105.1
)
Other liabilities
(3.7
)
 
(4.2
)
Total deferred income tax liabilities
(187.8
)
 
(118.9
)
Deferred Income Tax Assets:
 

 
 

Self-insurance
4.0

 
3.9

Pension
41.7

 
29.2

Deferred compensation
28.9

 
27.5

Net operating losses
14.3

 
15.7

Other accruals not yet deductible
33.5

 
18.8

Other assets
12.3

 
10.6

Total deferred income tax assets
134.7

 
105.7

Valuation Allowance
(16.4
)
 
(15.0
)
Net deferred income tax liabilities
$
(69.5
)
 
$
(28.2
)
The Company currently intends to indefinitely reinvest all undistributed earnings of and original investments in foreign subsidiaries, which amounted to approximately $83.2 at August 31, 2016 ; however, this amount could fluctuate due to changes in business, economic, or other conditions. Earnings is the most significant component of the basis difference which is indefinitely reinvested. If these earnings were distributed to the U.S. in the form of dividends or otherwise or if the shares of the relevant foreign subsidiaries were sold or otherwise transferred, the Company would be subject to additional U.S. income taxes (subject to an adjustment for foreign tax credits) and foreign withholding taxes. Determination of the amount of unrecognized deferred income tax liability related to these earnings or investments is not practicable.
At August 31, 2016 , the Company had state tax credit carryforwards of approximately $1.1 , which will expire between 2018 and 2025 . At August 31, 2016 , the Company had federal net operating loss carryforwards of $24.3 that expire beginning in 2030 , state net operating loss carryforwards of $12.5 that begin expiring in 2028 , and foreign net operating loss carryforwards of $21.2 that begin expiring in 2017 .
The gross amount of unrecognized tax benefits as of August 31, 2016 and 2015 totaled $5.2 and $4.5 , respectively, which includes $3.9 and $2.2 , respectively, of net unrecognized tax benefits that, if recognized, would affect the annual effective tax rate. The Company recognizes 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, the Company is no longer subject to United States federal, state, and local income tax examinations for years ended before 2012 or for foreign income tax examinations before 2010 . The Company does not anticipate unrecognized tax benefits will significantly increase or decrease within the next twelve months.

69

ACUITY BRANDS, INC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)


A reconciliation of the change in the unrecognized income tax benefit (reported in Other long-term liabilities on the Consolidated Balance Sheets ) for the years ended August 31, 2016 and 2015 is as follows:
 
2016
 
2015
Unrecognized tax benefits balance at September 1
$
4.5

 
$
3.0

Additions based on tax positions related to the current year
1.0

 
0.8

Additions for tax positions of prior years
0.5

 
1.5

Reductions due to lapse of statute of limitations
(0.8
)
 
(0.8
)
Unrecognized tax benefits balance at August 31
$
5.2

 
$
4.5

Total accrued interest was $0.9 and $0.7 as of August 31, 2016 and 2015 , respectively. There were no accruals related to income tax penalties during fiscal 2016 . Interest, net of tax benefits, and penalties are included in income tax expense. The classification of interest and penalties did not change during the current fiscal year.

13.    Supplemental Disaggregated Information
The Company has one reportable segment. Sales of lighting and building management solutions, excluding services, accounted for approximately 99% of total consolidated net sales in fiscal 2016 , 2015 , and 2014 . The geographic distribution of the Company’s net sales, operating profit, income before provision for income taxes, and long-lived assets is summarized in the following table for the years ended August 31:
 
2016
 
2015
 
2014
Net sales (1)
 

 
 

 
 

Domestic (2)
$
2,928.3

 
$
2,450.1

 
$
2,155.0

International
363.0

 
256.6

 
238.5

Total
$
3,291.3

 
$
2,706.7

 
$
2,393.5

Operating profit
 
 
 

 
 

Domestic (2)
$
457.6

 
$
364.0

 
$
287.8

International
17.6

 
12.3

 
11.3

Total
$
475.2

 
$
376.3

 
$
299.1

Income before Provision for Income Taxes
 
 
 

 
 

Domestic (2)
$
430.8

 
$
329.4

 
$
257.1

International
13.8

 
14.2

 
8.6

Total
$
444.6

 
$
343.6

 
$
265.7

Long-lived assets (3)
 
 
 

 
 

Domestic (2)
$
254.5

 
$
179.6

 
$
148.3

International
41.4

 
25.6

 
31.2

Total
$
295.9

 
$
205.2

 
$
179.5

_______________________________________
(1)  
Net sales are attributed to each country based on the selling location.
(2)  
Domestic amounts include net sales (including export sales), operating profit, income before provision for income taxes, and long-lived assets for U.S. based operations.
(3)  
Long-lived assets include net property, plant, and equipment, long-term deferred income tax assets, and other long-term assets.


70

ACUITY BRANDS, INC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)


14.    Supplemental Guarantor Condensed Consolidating Financial Statements
In December 2009, ABL, the 100% owned and principal operating subsidiary of the Company, refinanced the then current outstanding debt through the issuance of the Notes. See Debt and Lines of Credit footnote for further information.
In accordance with the registration rights agreement by and between ABL and the guarantors to the Notes and the initial purchasers of the Notes, ABL and the guarantors to the Notes filed a registration statement with the SEC for an offer to exchange the Notes for an issue of SEC-registered notes with identical terms. Due to the filing of the registration statement and offer to exchange, the Company determined the need for compliance with Rule 3-10 of SEC Regulation S-X (“Rule 3-10”). In lieu of providing separate audited financial statements for ABL and ABL IP Holding, the Company has included the accompanying Condensed Consolidating Financial Statements in accordance with Rule 3-10(d) of SEC Regulation S-X since the Notes are fully and unconditionally guaranteed by Acuity Brands and ABL IP Holding. The column marked “Parent” represents the financial condition, results of operations, and cash flows of Acuity Brands. The column marked “Subsidiary Issuer” represents the financial condition, results of operations, and cash flows of ABL. The column entitled “Subsidiary Guarantor” represents the financial condition, results of operations, and cash flows of ABL IP Holding. Lastly, the column listed as “Non-Guarantors” includes the financial condition, results of operations, and cash flows of the non-guarantor direct and indirect subsidiaries of Acuity Brands, which consist primarily of foreign subsidiaries. Eliminations were necessary in order to arrive at consolidated amounts. In addition, the equity method of accounting was used to calculate investments in subsidiaries. Accordingly, this basis of presentation is not intended to present our financial condition, results of operations, or cash flows for any purpose other than to comply with the specific requirements for parent-subsidiary guarantor reporting.

71

ACUITY BRANDS, INC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)


CONDENSED CONSOLIDATING BALANCE SHEETS
 
At August 31, 2016
 
Parent
 
Subsidiary
Issuer
 
Subsidiary
Guarantor
 
Non-
Guarantors
 
Consolidating Adjustments
 
Consolidated
ASSETS
Current Assets:
 

 
 

 
 

 
 

 
 

 
 

Cash and cash equivalents
$
368.2

 
$

 
$

 
$
45.0

 
$

 
$
413.2

Accounts receivable, net

 
503.0

 

 
69.8

 

 
572.8

Inventories

 
274.7

 

 
20.5

 

 
295.2

Other current assets
2.5

 
14.3

 

 
24.9

 

 
41.7

Total Current Assets
370.7

 
792.0

 

 
160.2

 

 
1,322.9

Property, Plant, and Equipment, net
0.3

 
217.8

 

 
49.7

 

 
267.8

Goodwill

 
735.8

 
2.7

 
209.3

 

 
947.8

Intangible assets, net

 
168.1

 
113.4

 
99.9

 

 
381.4

Deferred income taxes
47.5

 

 

 
6.5

 
(48.9
)
 
5.1

Other long-term assets
1.4

 
20.4

 

 
1.2

 

 
23.0

Investments in and amounts due from affiliates
1,347.6

 
299.6

 
200.5

 

 
(1,847.7
)
 

Total Assets
$
1,767.5

 
$
2,233.7

 
$
316.6

 
$
526.8

 
$
(1,896.6
)
 
$
2,948.0

 
 
 
 
 
 
 
 
 
 
 
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
 

 
 

 
 

 
 

 
 

 
 

Accounts payable
$
1.2

 
$
371.3

 
$

 
$
28.5

 
$

 
$
401.0

Current maturities of long-term debt

 

 

 
0.2

 

 
0.2

Accrued liabilities
14.5

 
215.4

 

 
41.4

 

 
271.3

Total Current Liabilities
15.7

 
586.7

 

 
70.1

 

 
672.5

Long-Term Debt

 
352.8

 

 
2.2

 

 
355.0

Deferred Income Taxes

 
95.5

 

 
28.0

 
(48.9
)
 
74.6

Other Long-Term Liabilities
92.0

 
64.8

 

 
29.3

 

 
186.1

Amounts due to affiliates

 

 

 
96.9

 
(96.9
)
 

Total Stockholders’ Equity
1,659.8

 
1,133.9

 
316.6

 
300.3

 
(1,750.8
)
 
1,659.8

Total Liabilities and Stockholders’ Equity
$
1,767.5

 
$
2,233.7

 
$
316.6

 
$
526.8

 
$
(1,896.6
)
 
$
2,948.0


72

ACUITY BRANDS, INC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)


CONDENSED CONSOLIDATING BALANCE SHEETS
 
At August 31, 2015
 
Parent
 
Subsidiary
Issuer
 
Subsidiary
Guarantor
 
Non-
Guarantors
 
Consolidating Adjustments
 
Consolidated
ASSETS
Current Assets:
 

 
 

 
 

 
 

 
 

 
 

Cash and cash equivalents
$
479.9

 
$

 
$

 
$
276.9

 
$

 
$
756.8

Accounts receivable, net

 
365.5

 

 
46.2

 

 
411.7

Inventories

 
208.6

 

 
16.2

 

 
224.8

Other current assets
1.6

 
11.6

 

 
6.9

 

 
20.1

Total Current Assets
481.5

 
585.7

 

 
346.2

 

 
1,413.4

Property, Plant, and Equipment, net
0.3

 
139.8

 

 
34.5

 

 
174.6

Goodwill

 
524.2

 
2.7

 
38.1

 

 
565.0

Intangible assets, net

 
87.4

 
117.3

 
18.7

 

 
223.4

Deferred income taxes
41.9

 

 

 
5.2

 
(43.6
)
 
3.5

Other long-term assets
1.3

 
23.8

 

 
2.0

 

 
27.1

Investments in and amounts due from affiliates
934.7

 
333.5

 
168.5

 

 
(1,436.7
)
 

Total Assets
$
1,459.7

 
$
1,694.4

 
$
288.5

 
$
444.7

 
$
(1,480.3
)
 
$
2,407.0

 
 
 
 
 
 
 
 
 
 
 
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
 

 
 

 
 

 
 

 
 

 
 

Accounts payable
$
0.9

 
$
291.6

 
$

 
$
18.6

 
$

 
$
311.1

Other accrued liabilities
20.4

 
162.7

 

 
26.7

 

 
209.8

Total Current Liabilities
21.3

 
454.3

 

 
45.3

 

 
520.9

Long-Term Debt

 
352.4

 

 

 

 
352.4

Deferred Income Taxes

 
75.3

 

 

 
(43.6
)
 
31.7

Other Long-Term Liabilities
78.4

 
42.7

 

 
20.9

 

 
142.0

Amounts due to affiliates

 

 

 
77.5

 
(77.5
)
 

Total Stockholders’ Equity
1,360.0

 
769.7

 
288.5

 
301.0

 
(1,359.2
)
 
1,360.0

Total Liabilities and Stockholders’ Equity
$
1,459.7

 
$
1,694.4

 
$
288.5

 
$
444.7

 
$
(1,480.3
)
 
$
2,407.0



73

ACUITY BRANDS, INC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)


CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME
 
Year Ended August 31, 2016
 
Parent
 
Subsidiary
Issuer
 
Subsidiary
Guarantor
 
Non-
Guarantors
 
Consolidating Adjustments
 
Consolidated
Net Sales:
 

 
 

 
 

 
 

 
 

 
 

External sales
$

 
$
2,919.7

 
$

 
$
371.6

 
$

 
$
3,291.3

Intercompany sales

 

 
47.4

 
131.2

 
(178.6
)
 

Total Sales

 
2,919.7

 
47.4

 
502.8

 
(178.6
)
 
3,291.3

Cost of Products Sold

 
1,602.2

 

 
379.3

 
(126.4
)
 
1,855.1

Gross Profit

 
1,317.5

 
47.4

 
123.5

 
(52.2
)
 
1,436.2

Selling, Distribution, and Administrative Expenses
47.2

 
834.6

 
3.8

 
112.6

 
(52.2
)
 
946.0

Intercompany charges
(59.5
)
 
50.4

 

 
9.1

 

 

Special Charge

 
15.0

 

 

 

 
15.0

Operating Profit
12.3

 
417.5

 
43.6

 
1.8

 

 
475.2

Interest expense, net
10.5

 
16.1

 

 
5.6

 

 
32.2

Equity earnings in subsidiaries
(289.2
)
 
(3.2
)
 

 
0.2

 
292.2

 

Miscellaneous income, net

 

 

 
(1.6
)
 

 
(1.6
)
Income (Loss) before Provision for Income Taxes
291.0

 
404.6

 
43.6

 
(2.4
)
 
(292.2
)
 
444.6

Provision for Income Taxes
0.2

 
137.7

 
15.6

 
0.3

 

 
153.8

Net Income (Loss)
290.8

 
266.9

 
28.0

 
(2.7
)
 
(292.2
)
 
290.8

 
 
 
 
 
 
 
 
 
 
 
 
Other Comprehensive Income (Loss) Items:
 
 
 
 
 
 
 
 
 
 
 
  Foreign Currency Translation Adjustments
(5.6
)
 
(5.6
)
 

 

 
5.6

 
(5.6
)
  Defined Benefit Pension Plans, net
(23.4
)
 
(11.4
)
 

 
(9.5
)
 
20.9

 
(23.4
)
Other Comprehensive Income (Loss) Items after Provision for Income Taxes
(29.0
)
 
(17.0
)
 

 
(9.5
)
 
26.5

 
(29.0
)
Other Comprehensive Income (Loss)
$
261.8

 
$
249.9

 
$
28.0

 
$
(12.2
)
 
$
(265.7
)
 
$
261.8


74

ACUITY BRANDS, INC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)


CONDENSED CONSOL IDATING STATEMENTS OF COMPREHENSIVE INCOME
 
Year Ended August 31, 2015
 
Parent
 
Subsidiary
Issuer
 
Subsidiary
Guarantor
 
Non-
Guarantors
 
Consolidating Adjustments
 
Consolidated
Net Sales:
 

 
 

 
 

 
 

 
 

 
 

External sales
$

 
$
2,446.9

 
$

 
$
259.8

 
$

 
$
2,706.7

Intercompany sales

 

 
41.2

 
105.5

 
(146.7
)
 

Total Sales

 
2,446.9

 
41.2

 
365.3

 
(146.7
)
 
2,706.7

Cost of Products Sold

 
1,388.0

 

 
276.5

 
(103.4
)
 
1,561.1

Gross Profit

 
1,058.9

 
41.2

 
88.8

 
(43.3
)
 
1,145.6

Selling, Distribution, and Administrative Expenses
34.0

 
684.4

 
4.0

 
77.8

 
(43.3
)
 
756.9

Intercompany charges
(45.4
)
 
39.7

 

 
5.7

 

 

   Special Charge

 
12.4

 

 

 

 
12.4

Operating Profit
11.4

 
322.4

 
37.2

 
5.3

 

 
376.3

Interest expense (income), net
9.9

 
21.8

 

 
(0.2
)
 

 
31.5

Equity earnings in subsidiaries
(221.2
)
 
(5.2
)
 

 

 
226.4

 

Miscellaneous expense (income), net

 
2.8

 

 
(1.6
)
 

 
1.2

Income (Loss) before Provision for Income Taxes
222.7

 
303.0

 
37.2

 
7.1

 
(226.4
)
 
343.6

Provision for Income Taxes
0.6

 
103.5

 
14.9

 
2.5

 

 
121.5

Net Income (Loss)
222.1

 
199.5

 
22.3

 
4.6

 
(226.4
)
 
222.1

 
 
 
 
 
 
 
 
 
 
 
 
Other Comprehensive Income (Loss) Items:
 
 
 
 
 
 
 
 
 
 
 
  Foreign Currency Translation Adjustments
(24.0
)
 
(24.0
)
 

 

 
24.0

 
(24.0
)
  Defined Benefit Pension Plans, net
(14.5
)
 
6.3

 

 
0.5

 
(6.8
)
 
(14.5
)
Other Comprehensive Income (Loss) Items after Provision for Income Taxes
(38.5
)
 
(17.7
)
 

 
0.5

 
17.2

 
(38.5
)
Other Comprehensive Income (Loss)
$
183.6

 
$
181.8

 
$
22.3

 
$
5.1

 
$
(209.2
)
 
$
183.6


75

ACUITY BRANDS, INC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)


CONDENSED CONSOL IDATING STATEMENTS OF COMPREHENSIVE INCOME
 
Year Ended August 31, 2014
 
Parent
 
Subsidiary
Issuer
 
Subsidiary
Guarantor
 
Non-
Guarantors
 
Consolidating Adjustments
 
Consolidated
Net Sales:
 

 
 

 
 

 
 

 
 

 
 

External sales
$

 
$
2,150.6

 
$

 
$
242.9

 
$

 
$
2,393.5

Intercompany sales

 

 
37.2

 
94.8

 
(132.0
)
 

Total Sales

 
2,150.6

 
37.2

 
337.7

 
(132.0
)
 
2,393.5

Cost of Products Sold

 
1,255.5

 

 
250.5

 
(91.7
)
 
1,414.3

Gross Profit

 
895.1

 
37.2

 
87.2

 
(40.3
)
 
979.2

Selling, Distribution, and Administrative Expenses
27.8

 
612.5

 
4.1

 
76.2

 
(40.3
)
 
680.3

Intercompany charges
(39.6
)
 
34.7

 

 
4.9

 

 

Special Charge

 
(0.2
)
 

 

 

 
(0.2
)
Operating Profit
11.8

 
248.1

 
33.1

 
6.1

 

 
299.1

Interest expense (income), net
10.0

 
22.2

 

 
(0.1
)
 

 
32.1

Equity earnings in subsidiaries
(174.2
)
 
(4.0
)
 

 

 
178.2

 

Miscellaneous (income) expense, net

 
(1.6
)
 

 
1.8

 
1.1

 
1.3

Income (Loss) before Provision for Income Taxes
176.0

 
231.5

 
33.1

 
4.4

 
(179.3
)
 
265.7

Provision for Income Taxes
0.2

 
75.5

 
13.1

 
1.1

 

 
89.9

Net Income (Loss)
175.8

 
156.0

 
20.0

 
3.3

 
(179.3
)
 
175.8

 
 
 
 
 
 
 
 
 
 
 
 
Other Comprehensive Income (Loss) Items:
 
 
 
 
 
 
 
 
 
 
 
  Foreign Currency Translation Adjustments
0.7

 
0.7

 

 

 
(0.7
)
 
0.7

  Defined Benefit Pension Plans, net
(10.0
)
 
(3.7
)
 

 
(5.2
)
 
8.9

 
(10.0
)
Other Comprehensive Income (Loss) Items after Provision for Income Taxes
(9.3
)
 
(3.0
)
 

 
(5.2
)
 
8.2

 
(9.3
)
Other Comprehensive Income (Loss)
$
166.5

 
$
153.0

 
$
20.0

 
$
(1.9
)
 
$
(171.1
)
 
$
166.5



76

ACUITY BRANDS, INC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)


CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
 
Year Ended August 31, 2016
 
Parent
 
Subsidiary
Issuer
 
Subsidiary
Guarantor
 
Non-
Guarantors
 
Consolidating Adjustments
 
Consolidated
Net Cash Provided by Operating Activities
$
277.0

 
$
54.8

 
$

 
$
13.9

 
$

 
$
345.7

Cash Provided by (Used for) Investing Activities:
 
 
 
 
 
 
 
 
 
 
 
Purchases of property, plant, and equipment

 
(67.1
)
 

 
(16.6
)
 

 
(83.7
)
Proceeds from sale of property, plant, and equipment

 
0.2

 

 
2.0

 

 
2.2

Investments in subsidiaries
(405.6
)
 

 

 

 
405.6

 

Acquisitions of businesses and intangible assets

 
(393.9
)
 

 
(229.3
)
 

 
(623.2
)
Net Cash (Used for) Provided by Investing Activities
(405.6
)
 
(460.8
)
 

 
(243.9
)
 
405.6

 
(704.7
)
Cash Provided by (Used for) Financing Activities:
 
 
 

 
 

 
 

 
 

 
 

Issuance of long-term debt

 

 

 
2.5

 

 
2.5

Proceeds from stock option exercises and other
14.2

 

 

 

 

 
14.2

Repurchases of common stock

 

 

 

 

 

Excess tax benefits from share-based payments
25.6

 

 

 

 

 
25.6

Intercompany capital

 
405.6

 

 

 
(405.6
)
 

Dividends paid
(22.9
)
 

 

 

 

 
(22.9
)
Net Cash Provided by (Used for) Financing Activities
16.9

 
405.6

 

 
2.5

 
(405.6
)
 
19.4

Effect of Exchange Rate Changes on Cash

 
0.4

 

 
(4.4
)
 

 
(4.0
)
Net Change in Cash and Cash Equivalents
(111.7
)
 

 

 
(231.9
)
 

 
(343.6
)
Cash and Cash Equivalents at Beginning of Year
479.9

 

 

 
276.9

 

 
756.8

Cash and Cash Equivalents at End of Year
$
368.2

 
$

 
$

 
$
45.0

 
$

 
$
413.2


77

ACUITY BRANDS, INC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)


CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
 
Year Ended August 31, 2015
 
Parent
 
Subsidiary
Issuer
 
Subsidiary
Guarantor
 
Non-
Guarantors
 
Consolidating Adjustments
 
Consolidated
Net Cash Provided by Operating Activities
$
212.1

 
$
55.2

 
$

 
$
21.6

 
$

 
$
288.9

Cash Provided by (Used for) Investing Activities:
 
 
 
 
 
 
 
 
 
 
 
Purchases of property, plant, and equipment

 
(41.9
)
 

 
(14.6
)
 

 
(56.5
)
Proceeds from sale of property, plant, and equipment

 
1.3

 

 

 

 
1.3

Investments in subsidiaries
(254.7
)
 
(245.2
)
 

 

 
499.9

 

Acquisitions of businesses

 
(14.6
)
 

 

 

 
(14.6
)
Other investing activities

 
(2.6
)
 

 

 

 
(2.6
)
Net Cash (Used for) Provided by Investing Activities
(254.7
)
 
(303.0
)
 

 
(14.6
)
 
499.9

 
(72.4
)
Cash Provided by (Used for) Financing Activities:
 

 
 

 
 

 
 

 
 

 
 

Proceeds from stock option exercises and other
11.6

 

 

 

 

 
11.6

Excess tax benefits from share-based payments
17.6

 

 

 

 

 
17.6

Intercompany capital

 
245.2

 

 
254.7

 
(499.9
)
 

Dividends paid
(22.7
)
 

 

 

 

 
(22.7
)
Other financing activities

 

 

 
(10.4
)
 

 
(10.4
)
Net Cash Provided by (Used for) Financing Activities
6.5

 
245.2

 

 
244.3

 
(499.9
)
 
(3.9
)
Effect of Exchange Rate Changes on Cash

 
(0.5
)
 

 
(7.8
)
 

 
(8.3
)
Net Change in Cash and Cash Equivalents
(36.1
)
 
(3.1
)
 

 
243.5

 

 
204.3

Cash and Cash Equivalents at Beginning of Year
516.0

 
3.1

 

 
33.4

 

 
552.5

Cash and Cash Equivalents at End of Year
$
479.9

 
$

 
$

 
$
276.9

 
$

 
$
756.8


78

ACUITY BRANDS, INC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)


CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
 
Year Ended August 31, 2014
 
Parent
 
Subsidiary
Issuer
 
Subsidiary
Guarantor
 
Non-
Guarantors
 
Consolidating Adjustments
 
Consolidated
Net Cash Provided by Operating Activities
$
188.7

 
$
35.1

 
$

 
$
9.3

 
$

 
$
233.1

Cash Provided by (Used for) Investing Activities:
 
 
 
 
 
 
 
 
 
 
 
Purchases of property, plant, and equipment

 
(29.2
)
 

 
(6.1
)
 

 
(35.3
)
Proceeds from sale of property, plant, and equipment

 
1.0

 

 

 

 
1.0

Investments in subsidiaries

 
(4.5
)
 

 
4.5

 

 

Net Cash Used for Investing Activities

 
(32.7
)
 

 
(1.6
)
 

 
(34.3
)
Cash Provided by (Used for) Financing Activities:
 

 
 

 
 

 
 

 
 

 
 

Proceeds from stock option exercises and other
8.4

 

 

 

 

 
8.4

Excess tax benefits from share-based payments
10.4

 

 

 

 

 
10.4

Dividends paid
(22.5
)
 

 

 

 

 
(22.5
)
Other financing activities

 

 

 
(2.6
)
 

 
(2.6
)
Net Cash Used for Financing Activities
(3.7
)
 

 

 
(2.6
)
 

 
(6.3
)
Effect of Exchange Rate Changes on Cash

 
(0.1
)
 

 
1.0

 

 
0.9

Net Change in Cash and Cash Equivalents
185.0

 
2.3

 

 
6.1

 

 
193.4

Cash and Cash Equivalents at Beginning of Year
331.0

 
0.8

 

 
27.3

 

 
359.1

Cash and Cash Equivalents at End of Year
$
516.0

 
$
3.1

 
$

 
$
33.4

 
$

 
$
552.5


79

ACUITY BRANDS, INC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)


15.    Quarterly Financial Data (Unaudited)
 
Fiscal Year 2016
 
1st Quarter
 
2nd Quarter
 
3rd Quarter
 
4th Quarter
Net Sales
$
736.6

 
$
777.8

 
$
851.5

 
$
925.5

Gross Profit
$
319.4

 
$
336.9

 
$
377.9

 
$
402.1

Net Income
$
68.4

 
$
65.5

 
$
74.0

 
$
82.9

Basic Earnings per Share
$
1.58

 
$
1.50

 
$
1.70

 
$
1.90

Diluted Earnings per Share
$
1.57

 
$
1.49

 
$
1.69

 
$
1.89

 
Fiscal Year 2015
 
1st Quarter
 
2nd Quarter
 
3rd Quarter
 
4th Quarter
Net Sales
$
647.4

 
$
616.1

 
$
683.7

 
$
759.5

Gross Profit
$
273.0

 
$
255.7

 
$
295.6

 
$
321.3

Net Income
$
51.1

 
$
46.4

 
$
64.5

 
$
60.1

Basic Earnings per Share
$
1.18

 
$
1.07

 
$
1.49

 
$
1.39

Diluted Earnings per Share
$
1.17

 
$
1.07

 
$
1.48

 
$
1.37

Certain amounts in the tables above have been rounded. Accordingly, the sum of the quarters may not be an exact match to the full year amounts.

80


Item 9.
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.

Item 9a.
Controls and Procedures
Disclosure controls and procedures are controls and other procedures that are designed to reasonably ensure that information required to be disclosed in the reports filed or submitted by the Company under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), is recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission’s (“SEC”) rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to reasonably ensure that information required to be disclosed by the Company in the reports filed under the Exchange Act is accumulated and communicated to management, including the principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.
As required by SEC rules, the Company has evaluated the effectiveness of the design and operation of its disclosure controls and procedures as of August 31, 2016 . This evaluation was carried out under the supervision and with the participation of management, including the principal executive officer and principal financial officer. Based on this evaluation, these officers have concluded that the design and operation of the Company’s disclosure controls and procedures were effective at a reasonable assurance level as of August 31, 2016 . However, because all disclosure procedures must rely to a significant degree on actions or decisions made by employees throughout the organization, such as reporting of material events, the Company and its reporting officers believe that they cannot provide absolute assurance that all control issues and instances of fraud or errors and omissions, if any, within the Company will be detected. Limitations within any control system, including the Company’s control system, include faulty judgments in decision-making or simple errors or mistakes. In addition, controls can be circumvented by an individual, by collusion between two or more people, or by management override of the control. Because of these limitations, misstatements due to error or fraud may occur and may not be detected.
During fiscal 2016 , the Company completed its acquisitions of Distech Controls Inc. ("Distech Controls") and Juno Lighting LLC ("Juno Lighting"). SEC guidance permits management to omit an assessment of an acquired business' internal control over financial reporting from management's assessment of internal control over financial reporting for a period not to exceed one year from the date of the acquisition. Accordingly, management has not assessed Distech Controls' or Juno Lighting's internal control over financial reporting as of August 31, 2016 .
Management’s annual report on the Company’s internal control over financial reporting and the independent registered public accounting firm’s attestation report are included in the Company’s 2016 Financial Statements in Item 8 of this Annual Report on Form 10-K, under the headings, Management’s Report on Internal Control over Financial Reporting and Report of Independent Registered Public Accounting Firm as it relates to Internal Control Over Financial Reporting, respectively, and are incorporated herein by reference.
Excluding the acquisitions, there have been no changes in the Company’s internal control over financial reporting that occurred during the Company’s most recent completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
The Company began integrating Distech Controls and Juno Lighting into its existing control procedures from the date of acquisition. The Company does not anticipate the integration of the acquired companies to result in changes that would materially affect its internal control over financial reporting.

Item 9b.
Other Information
None.


81


PART III

Item 10.
Directors, Executive Officers and Corporate Governance
The information required by this item, with respect to directors and corporate governance, is included under the captions Item 1 — Election of Directors and Information Concerning the Board and Its Committees of the Company’s proxy statement for the annual meeting of stockholders to be held January 6, 2017 , to be filed with the Commission pursuant to Regulation 14A, and is incorporated herein by reference.
The information required by this item, with respect to executive officers, will be included under the caption Executive Officers of the Company’s proxy statement for the annual meeting of stockholders to be held January 6, 2017 , to be filed with the Commission pursuant to Regulation 14A, and is incorporated herein by reference.
The information required by this item, with respect to beneficial ownership reporting, will be included under the caption Section 16(a) Beneficial Ownership Reporting Compliance of the Company’s proxy statement for the annual meeting of stockholders to be held January 6, 2017 , to be filed with the Commission pursuant to Regulation 14A, and is incorporated herein by reference.
The information required by this item, with respect to the code of ethics, will be included under the caption Questions and Answers about Communications, Governance, and Company Documents of the Company’s proxy statement for the annual meeting of stockholders to be held January 6, 2017 , to be filed with the Commission pursuant to Regulation 14A, and is incorporated herein by reference.

Item 11.
Executive Compensation
The information required by this item will be included under the captions Compensation of Directors, Information Concerning the Board and Its Committees, Compensation Committee Interlocks and Insider Participation, Report of the Compensation Committee, Compensation Discussion and Analysis, Fiscal 2016 Summary Compensation Table, Fiscal 2016 Grants of Plan-Based Awards, Outstanding Equity Awards at Fiscal 2016  Year-End, Option Exercises and Stock Vested in Fiscal 2016 , Pension Benefits in Fiscal 2016 , Fiscal 2016 Nonqualified Deferred Compensation, Employment Arrangements, Potential Payments upon Termination, and Equity Compensation Plans of the Company’s proxy statement for the annual meeting of stockholders to be held January 6, 2017 , to be filed with the Commission pursuant to Regulation 14A, and is incorporated herein by reference.

Item 12.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The information required by this item will be included under the captions Beneficial Ownership of the Company’s Securities and Equity Compensation Plans of the Company’s proxy statement for the annual meeting of stockholders to be held January 6, 2017 , to be filed with the Commission pursuant to Regulation 14A, and is incorporated herein by reference.

Item 13.
Certain Relationships and Related Transactions, and Director Independence
The information required by this item will be included under the caption Certain Relationships and Related Party Transactions of the Company’s proxy statement for the annual meeting of stockholders to be held January 6, 2017 , to be filed with the Commission pursuant to Regulation 14A, and is incorporated herein by reference.

Item 14.
Principal Accountant Fees and Services
The information required by this item will be included under the caption Fees Billed by Independent Registered Public Accounting Firm of the Company’s proxy statement for the annual meeting of stockholders to be held January 6, 2017 , to be filed with the Commission pursuant to Regulation 14A, and is incorporated herein by reference.



82

Table of Contents

PART IV

Item 15.
Exhibits and Financial Statement Schedules
(a) The following documents are filed as a part of this report:

 
 
 
 
 
 
(2)
Financial Statement Schedules:
 
 
 
Any of Schedules I through V not listed above have been omitted because they are not applicable or the required information is included in the consolidated financial statements or notes thereto
 
(3)
Exhibits filed with this report (begins on next page):
 
 
Copies of exhibits will be furnished to stockholders upon request at a nominal fee. Requests should be sent to Acuity Brands, Inc., Investor Relations Department, 1170 Peachtree Street, N.E., Suite 2300, Atlanta, Georgia 30309-7676
 


83

Table of Contents


INDEX TO EXHIBITS
EXHIBIT 2
(a)
Agreement and Plan of Merger among Acuity Brands, Inc., Acuity Merger Sub, Inc. and Acuity Brands Holdings, Inc., dated September 25, 2007.
 
Reference is made to Exhibit 10.1 of registrant’s Form 8-K as filed with the Commission on September 26, 2007, which is incorporated herein by reference.
 
(b)
Agreement and Plan of Distribution by and between Acuity Brands, Inc. and Zep Inc., dated as of October 31, 2007.
 
Reference is made to Exhibit 2.1 of registrant’s Form 8-K as filed with the Commission on November 6, 2007, which is incorporated herein by reference.
EXHIBIT 3
(a)
Restated Certificate of Incorporation of Acuity Brands, Inc. (formerly Acuity Brands Holdings, Inc.), dated as of September 26, 2007.
 
Reference is made to Exhibit 3.1 of registrant’s Form 8-K as filed with the Commission on September 26, 2007, which is incorporated herein by reference.
 
(b)
Certificate of Amendment of Acuity Brands, Inc. (formerly Acuity Brands Holdings, Inc.), dated as of September 26, 2007.
 
Reference is made to Exhibit 3.2 of registrant’s Form 8-K as filed with the Commission on September 26, 2007, which is incorporated herein by reference.
 
(c)
Amended and Restated Bylaws of Acuity Brands, Inc., dated as of September 30, 2016.
 
Reference is made to Exhibit 3.1 of registrant’s Form 8-K as filed with the Commission on October 5, 2016, which is incorporated herein by reference.
EXHIBIT 4
(a)
Form of Certificate representing Acuity Brands, Inc. Common Stock.
 
Reference is made to Exhibit 4.1 of registrant’s Form 8-K as filed with the Commission on December 14, 2001, which is incorporated herein by reference.
 
(b)
Indenture, dated December 8, 2009, among Acuity Brands Lighting, Inc, as issuer, and Acuity Brands, Inc. and ABL IP Holding LLC, as guarantors, and Wells Fargo Bank, National Association, as trustee.
 
Reference is made to Exhibit 4.1 of registrant’s Form 8-K as filed with the Commission on December 9, 2009, which is incorporated herein by reference.
 
(c)
Form of 6.00% Senior Note due 2019.
 
Reference is made to Exhibit 4.2 of registrant’s Form 8-K as filed with the Commission on December 9, 2009, which is incorporated herein by reference.
EXHIBIT 10(i)
(1)
Tax Disaffiliation Agreement, dated as of October 7, 2005, by and between National Service Industries, Inc. and Acuity Brands, Inc.
 
Reference is made to Exhibit 10 (i)A(17) of the registrant’s Form 10-K as filed with the Commission on November 1, 2005, which is incorporated by reference.
 
(2)
Tax Disaffiliation Agreement between Acuity Brands, Inc. and Zep Inc., dated as of October 31, 2007.
 
Reference is made to Exhibit 10.1 of registrant's Form 8-K as filed with the Commission on November 6, 2007, which is incorporated herein by reference.
 
(3)
5-Year Revolving Credit Agreement, dated as of August 27, 2014 among Acuity Brands, Inc., the Subsidiary Borrowers from time to time parties hereto, the Lenders from time to time parties hereto, JPMorgan Chase Bank, N.A., as Swing Line Lender, LC Issuer and Administrative Agent, Wells Fargo Bank, National Association, as Syndication Agent and Bank of America, N.A., Branch Banking & Trust Company and Keybank National Association, as Co-Documentation Agents.
 
Reference is made to Exhibit 10.1 of registrant’s Form 8-K as filed with the Commission on August 28, 2014, which is incorporated herein by reference.

84

Table of Contents

EXHIBIT 10(iii)A
 
Management Contracts and Compensatory Arrangements:
 
 
 
(1)
Acuity Brands, Inc. 2001 Nonemployee Directors’ Stock Option Plan.
 
Reference is made to Exhibit 10.6 of registrant’s Form 8-K as filed with the Commission on December 14, 2001, which is incorporated herein by reference.
 
(2)
Amendment No. 1 to Acuity Brands, Inc. 2001 Nonemployee Directors’ Stock Option Plan, dated December 20, 2001.
 
Reference is made to Exhibit 10(iii)A(3) of registrant’s Form 10-Q as filed with the Commission on January 14, 2002, which is incorporated herein by reference.
 
(3)
Amendment No. 1 to Stock Option Agreement for Nonemployee Director dated October 25, 2006.
 
Reference is made to Exhibit 99.1 of registrant’s Form 8-K filed with the Commission on October 27, 2006, which is incorporated herein by reference.
 
(4)
Amendment No. 2 to Acuity Brands, Inc. 2001 Non-employee Directors’ Stock Option Plan.
 
Reference is made to Exhibit 10(iii)A(2) of registrant’s Form 10-Q as filed with the Commission on January 4, 2007, which is incorporated herein by reference.
 
(5)
Amendment No. 3 to Acuity Brands, Inc. 2001 Nonemployee Directors’ Stock Option Plans.
 
Reference is made to Exhibit 10(iii)A(3) of registrant’s Form 10-Q as filed with the Commission on July 10, 2007, which is incorporated herein by reference.
 
(6)
Acuity Brands, Inc. Supplemental Deferred Savings Plan.
 
Reference is made to Exhibit 10.14 of registrant’s Form 8-K as filed with the Commission on December 14, 2001, which is incorporated herein by reference.
 
(7)
Amendment No. 1 to Acuity Brands, Inc. Supplemental Deferred Savings Plan.
 
Reference is made to Exhibit 10(iii)A(2) of registrant’s Form 10-Q as filed with the Commission on January 14, 2003, which is incorporated by reference.
 
(8)
Amendment No. 2 to Acuity Brands, Inc. Supplemental Deferred Savings Plan.
 
Reference is made to Exhibit 10(iii)A(8) of the registrant’s Form 10-Q as filed with the Commission on July 14, 2003, which is incorporated by reference.
 
(9)
Amendment No. 3 to Acuity Brands, Inc. Supplemental Deferred Savings Plan.
 
Reference is made to Exhibit 10(iii)A(36) of the registrant’s Form 10-K as filed with the Commission on October 29, 2004, which is incorporated by reference.
 
(10)
Amendment No. 4 to Acuity Brands, Inc. Supplemental Deferred Savings Plan.
 
Reference is made to Exhibit 99.2 of registrant’s Form 8-K filed with the Commission on July 6, 2006, which is incorporated herein by reference.
 
(11)
Amendment No. 5 to Acuity Brands, Inc. Supplemental Deferred Savings Plan.
 
Reference is made to Exhibit 10(iii)A(6) of registrant’s Form 10-Q as filed with the Commission on July 10, 2007, which is incorporated herein by reference.
 
(12)
Amended and Restated Acuity Brands, Inc., 2005 Supplemental Deferred Savings Plan, effective as of January 1, 2010.
 
Reference is made to Exhibit 10 (c) of registrant’s Form 10-Q as filed with the Commission on March 31, 2010, which is incorporated herein by reference.
 
(13)
Acuity Brands, Inc. Executives' Deferred Compensation Plan.
 
Reference is made to Exhibit 10.15 of registrant's Form 8-K as filed with the Commission on December 14, 2001, which is incorporated here in by reference.
 
(14)
Amendment No. 1 to Acuity Brands, Inc. Executives’ Deferred Compensation Plan.
 
Reference is made to Exhibit 10(iii)A(3) of the registrant’s Form 10-Q as filed with the Commission on January 14, 2003, which is incorporated by reference.

85

Table of Contents

 
(15)
Acuity Brands, Inc. 2002 Executives’ Deferred Compensation Plan as Amended on December 30, 2002 and as Amended and Restated January 1, 2005.
 
Reference is made to Exhibit 10(iii)A(61) of the registrant’s Form 10-K as filed with the Commission on November 2, 2006, which is incorporated by reference.
 
(16)
Amendment No. 2 to Acuity Brands, Inc. Nonemployee Director Deferred Compensation Plan.
 
Reference is made to Exhibit 10(iii)A(86) of the registrant’s Form 10-K as filed with the Commission on October 27, 2008, which is incorporated herein by reference.
 
(17)
Amended and Restated Acuity Brands Inc. 2011 Nonemployee Director Deferred Compensation Plan, effective as of December 1, 2012.
 
Reference is made to Exhibit 10(iii)A(68) of the registrant's Form 10-K as filed with the Commission on October 26, 2012, which is incorporated herein by reference.
 
(18)
Acuity Brands, Inc. Senior Management Benefit Plan.
 
Reference is made to Exhibit 10.16 of registrant’s Form 8-K as filed with the Commission on December 14, 2001, which is incorporated herein by reference.
 
(19)
Amendment No. 1 to Acuity Brands, Inc. Senior Management Benefit Plan.
 
Reference is made to Exhibit 10(iii)A(5) of registrant’s Form 10-Q as filed with the Commission on July 10, 2007, which is incorporated herein by reference.
 
(20)
Acuity Brands, Inc. Executive Benefits Trust.
 
Reference is made to Exhibit 10.18 of registrant’s Form 8-K as filed with the Commission on December 14, 2001, which is incorporated herein by reference.
 
(21)
Acuity Brands, Inc. Supplemental Retirement Plan for Executives.
 
Reference is made to Exhibit 10.19 of registrant’s Form 8-K as filed with the Commission on December 14, 2001, which is incorporated herein by reference.
 
(22)
Amendment No. 1 to Acuity Brands, Inc. Supplemental Retirement Plan for Executives.
 
Reference is made to Exhibit 10(iii)A(2) of the registrant’s Form 10-Q as filed with the Commission on April 14, 2003, which is incorporated by reference.
 
(23)
Acuity Brands, Inc. Benefits Protection Trust.
 
Reference is made to Exhibit 10.21 of registrant’s Form 8-K as filed with the Commission on December 14, 2001, which is incorporated herein by reference.
 
(24)
Form of Acuity Brands, Inc., Letter regarding Bonuses.
 
Reference is made to Exhibit 10.25 of registrant’s Form 8-K as filed with the Commission on December 14, 2001, which is incorporated herein by reference.
 
(25)
Acuity Brands, Inc. 2002 Supplemental Executive Retirement Plan, Effective As of January 1, 2003, As Amended and Restated Effective As of June 26, 2015
 
Reference is made to Exhibit 10(iii)A(1) of the registrant’s Form 10-Q as filed with the Commission on July 1, 2015, which is incorporated by reference.
 
(26)
Form of Amended and restated Change in Control Agreement entered into as of April 21, 2006.
 
Reference is made to Exhibit 99.1 of registrant’s Form 8-K filed with the Commission on April 27, 2006, which is incorporated herein by reference.
 
(27)
Letter Agreement relating to Supplemental Executive Retirement Plan between Acuity Brands, Inc. and Vernon J. Nagel.
 
Reference is made to Exhibit 10(iii)A(4) of the registrant’s Form 10-Q as filed with the Commission on July 14, 2003, which is incorporated by reference.
 
(28)
Employment Letter between Acuity Brands, Inc. and Vernon J. Nagel, dated June 29, 2004.
 
Reference is made to Exhibit 10(III)A(1) of the registrant’s Form 10-Q as filed with the Commission on July 6, 2004, which is incorporated by reference.
 
(29)
Amended and Restated Severance Agreement, entered into as of January 20, 2004, by and between Acuity Brands, Inc. and Vernon J. Nagel.
 
Reference is made to Exhibit 10(III)A(2) of the registrant’s Form 10-Q as filed with the Commission on July 6, 2004, which is incorporated by reference.

86

Table of Contents

 
(30)
Amendment dated April 21, 2006 to the Amended and Restated Severance Agreement between Acuity Brands, Inc. and Vernon J. Nagel.
 
Reference is made to Exhibit 99.3 of registrant’s Form 8-K filed with the Commission on April 27, 2006, which is incorporated herein by reference.
 
(31)
Amendment No. 2 to Acuity Brands, Inc. Amended and Restated Severance Agreement between Acuity Brands, Inc. and Vernon J. Nagel.
 
Reference is made to Exhibit 10(iii)A(2) of registrant’s Form 10-Q as filed with the Commission on April 4, 2007, which is incorporated herein by reference.
 
(32)
Amendment No. 3 to Acuity Brands, Inc. Amended and Restated Severance Agreement, between Acuity Brands, Inc. and Vernon J. Nagel.
 
Reference is made to Exhibit 10(iii)A(78) of the registrant’s Form 10-K as filed with the Commission on October 30, 2009, which is incorporated herein by reference.
 
(33)
Amendment No. 4 to Acuity Brands, Inc. Amended and Restated Severance Agreement, between Acuity Brands, Inc. and Vernon J. Nagel.
 
Reference is made to Exhibit 10(iii)A(2) of the registrant's Form 10-Q as filed with the Commission on April 2, 2014, which is incorporated herein by reference.
 
(34)
Form of Incentive Stock Option Agreement for Executive Officers.
 
Reference is made to Exhibit 10(III)A(3) of the registrant’s Form 10-Q filed with the Commission on January 6, 2005 incorporated by reference.
 
(35)
Form of Nonqualified Stock Option Agreement for Executive Officers.
 
Reference is made to Exhibit 10(III)A(4) of the registrant’s Form 10-Q as filed with the Commission on January 6, 2005, which is incorporated by reference.
 
(36)
Premium-Priced Nonqualified Stock Option Agreement for Executive Officers between Acuity Brands, Inc. and Vernon J. Nagel.
 
Reference is made to Exhibit 10(III)A(5) of the registrant’s Form 10-Q as filed with the Commission on January 6, 2005, which is incorporated by reference.
 
(37)
Acuity Brands, Inc. Matching Gift Program.
 
Reference is made to Exhibit 10(III)A(1) of the registrant’s Form 10-Q as filed with the Commission on April 4, 2005, which is incorporated by reference.
 
(38)
Employment Letter dated November 16, 2005 between Acuity Brands, Inc. and Richard K. Reece.
 
Reference is made to Exhibit 10.1 of registrant’s Form 8-K filed with the Commission on November 18, 2005, which is incorporated herein by reference.
 
(39)
Amendment No. 1 to Acuity Brands, Inc. Amended and Restated Severance Agreement between Acuity Brands, Inc. and Richard K. Reece.
 
Reference is made to Exhibit 10(iii)A(81) of the registrant’s Form 10-K as filed with the Commission on October 30, 2009, which is incorporated herein by reference.
 
(40)
Amendment No. 2 to Acuity Brands, Inc. Amended and Restated Severance Agreement between Acuity Brands, Inc. and Richard K. Reece.
 
Reference is made to Exhibit 10 (f) of registrant’s Form 10-Q as filed with the Commission on March 31, 2010, which is incorporated herein by reference.
 
(41)
Amendment No. 3 to Acuity Brands, Inc. Amended and Restated Severance Agreement between Acuity Brands, Inc. and Richard K. Reece.
 
Reference is made to Exhibit 10(iii)A(2) of the registrant's Form 10-Q as filed with the Commission on April 2, 2014, which is incorporated herein by reference.
 
(42)
Amendment No. 4 to Acuity Brands, Inc. Amended and Restated Severance Agreement between Acuity Brands, Inc. and Richard K. Reece.
 
Reference is made to Exhibit 10(iii)A(46) of the registrant's Form 10-K as filed with the Commission on October 29, 2014, which is incorporated herein by reference.
 
(43)
Amendment No. 5 to Acuity Brands, Inc. Amended and Restated Severance Agreement between Acuity Brands, Inc. and Richard K. Reece.
 
Reference is made to Exhibit 10(iii)A(43) of the registrant's Form 10-K as filed with the Commission on October 27, 2015, which is incorporated herein by reference.
 
(44)
Amendment No. 6 to Acuity Brands, Inc. Amended and Restated Severance Agreement between Acuity Brands, Inc. and Richard K. Reece.
 
Filed with the Commission as part of this Form 10-K.

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Table of Contents

 
(45)
Form of Nonqualified Stock Option Agreement for Executive Officers.
 
Reference is made to Exhibit 99.1 of registrant’s Form 8-K filed with the Commission on December 2, 2005, which is incorporated herein by reference.
 
(46)
Amended and Restated Acuity Brands, Inc. Long-Term Incentive Plan.
 
Reference is made to Exhibit A of the registrant’s Proxy Statement as filed with the Commission on November 16, 2007, which is incorporated herein by reference.
 
(47)
Acuity Brands, Inc. Long-Term Incentive Plan Fiscal Year 2008 Plan Rules for Executive Officers.
 
Reference is made to Exhibit 99.1 of the registrant’s Form 8-K as filed with the Commission on January 4, 2008, which is incorporated herein by reference.
 
(48)
Acuity Brands, Inc. 2007 Management Compensation and Incentive Plan.
 
Reference is made to Exhibit B of the registrant’s Proxy Statement as filed with the Commission on November 16, 2007, which is incorporated herein by reference.
 
(49)
Acuity Brands, Inc. Management Compensation and Incentive Plan Fiscal Year 2008 Plan Rules for Executive Officers.
 
Reference is made to Exhibit 99.2 of the registrant’s Form 8-K as filed with the Commission on January 4, 2008, which is incorporated herein by reference.
 
(50)
Form of Nonqualified Stock Option Agreement for Key Employees effective October 24, 2008.
 
Reference is made to Exhibit 10 (i) of registrant’s Form 10-Q as filed with the Commission on April 8, 2009, which is incorporated herein by reference.
 
(51)
Form of Nonqualified Stock Option Agreement for Executive Officers of Acuity Brands, Inc. effective October 24, 2008.
 
Reference is made to Exhibit 10 (j) of registrant’s Form 10-Q as filed with the Commission on April 8, 2009, which is incorporated herein by reference.
 
(52)
Employment Letter dated July 27, 2006 between Acuity Brands, Inc. and Mark A. Black.
 
Reference is made to Exhibit 10 (f) of registrant’s Form 10-Q as filed with the Commission on April 8, 2009, which is incorporated herein by reference.
 
(53)
Severance Agreement dated November 19, 2008, by and between Acuity Brands Lighting, Inc. and Mark A. Black.
 
Reference is made to Exhibit 10(iii)A(1) of the registrant's Form 10-Q as filed with the Commission on January 9, 2015.
 
(54)
Amendment No. 1 to Acuity Brands, Inc. Amended and Restated Severance Agreement between Acuity Brands, Inc. and Mark A. Black.
 
Reference is made to Exhibit 10(iii)A(79) of the registrant’s Form 10-K as filed with the Commission on October 30, 2009, which is incorporated herein by reference.
 
(55)
Amendment No. 2 to Acuity Brands, Inc. Amended and Restated Severance Agreement between Acuity Brands, Inc. and Mark A. Black.
 
Reference is made to Exhibit 10 (d) of registrant’s Form 10-Q as filed with the Commission on March 31, 2010, which is incorporated herein by reference.
 
(56)
Amendment No. 3 to Acuity Brands, Inc. Amended and Restated Severance Agreement between Acuity Brands, Inc. and Mark A. Black.
 
Reference is made to Exhibit 10(iii)A(2) of the registrant's Form 10-Q as filed with the Commission on April 2, 2014, which is incorporated herein by reference.
 
(57)
Amendment No. 4 to Acuity Brands, Inc. Amended and Restated Severance Agreement between Acuity Brands, Inc. and Mark A. Black.
 
Reference is made to Exhibit 10(iii)A(58) of the registrant's Form 10-K as filed with the Commission on October 29, 2014, which is incorporated herein by reference.
 
(58)
Amendment No. 5 to Acuity Brands, Inc. Amended and Restated Severance Agreement between Acuity Brands, Inc. and Mark A. Black.
 
Reference is made to Exhibit 10(iii)A(57) of the registrant's Form 10-K as filed with the Commission on October 27, 2015, which is incorporated herein by reference.
 
(59)
Amendment No. 6 to Acuity Brands, Inc. Amended and Restated Severance Agreement between Acuity Brands, Inc. and Mark A. Black.
 
Filed with the Commission as part of this Form 10-K.
 
(60)
Amended and Restated Change in Control Agreement.
 
Reference is made to Exhibit 10(iii)A(2) of the registrant's Form 10-Q as filed with the Commission on January 9, 2015.

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(61)
Amended and Restated Change in Control Agreement.
 
Reference is made to Exhibit 10(iii)A(84) of the registrant’s Form 10-K as filed with the Commission on October 30, 2009, which is incorporated herein by reference.
 
(62)
Form of Indemnification Agreement.
 
Reference is made to Exhibit 10.1 of registrant’s Form 8-K as filed with the Commission on February 9, 2010, which is incorporated herein by reference.
 
(63)
Acuity Brands, Inc. 2012 Omnibus Stock Incentive Compensation Plan.
 
Reference is made to Exhibit A of the
registrant’s Proxy Statement as filed with the Commission on November 19, 2012, which is incorporated herein by reference.
 
(64)
Acuity Brands, Inc. 2012 Management Cash Incentive Plan.
 
Reference is made to Exhibit B of the
registrant’s Proxy Statement as filed with the Commission on November 19, 2012, which is incorporated herein by reference.
 
(65)
Form of Stock Notification and Award Agreement for restricted stock, effective October 24, 2013.
 
Reference is made to Exhibit 10(iii)A(72) of the registrant's Form 10-K as filed with the Commission on October 29, 2013, which is incorporated herein by reference.
 
(66)
Form of Stock Notification and Award Agreement for stock options, effective October 24, 2013.
 
Reference is made to Exhibit 10(iii)A(1) of the registrant's Form 10-Q as filed with the Commission on April 2, 2014, which is incorporated herein by reference.
 
(67)
Form of Stock Notification and Award Agreement for restricted stock, effective October 27, 2014.
 
Reference is made to Exhibit 10(iii)A(65) of the registrant's Form 10-K as filed with the Commission on October 29, 2014, which is incorporated herein by reference.
 
(68)
Form of Stock Notification and Award Agreement for stock options, effective October 27, 2014.
 
Reference is made to Exhibit 10(iii)A(66) of the registrant's Form 10-K as filed with the Commission on October 29, 2014, which is incorporated herein by reference.
 
(69)
Form of Stock Notification and Award Agreement for stock options, effective April 1, 2016.
 
Reference is made to Exhibit 10(iii)A(1) of the registrant's Form 10-Q as filed with the Commission on April 6, 2016, which is incorporated herein by reference.
 
(70)
Form of Restricted Stock Award Agreement for U.S. Grantees
 
Filed with the Commission as part of this Form 10-K.
 
(71)
Form of Restricted Stock Award Agreement for Non-U.S. Grantees
 
Filed with the Commission as part of this Form 10-K.
 
(72)
Form of Nonqualified Stock Option Award Agreement
 
Filed with the Commission as part of this Form 10-K.
 
(73)
Form of Nonqualified Stock Option Award Agreement for Named Executive Officers
 
Filed with the Commission as part of this Form 10-K.
EXHIBIT 21
 
List of Subsidiaries.
 
Filed with the Commission as part of this Form 10-K.
EXHIBIT 23
 
Consent of Independent Registered Public Accounting Firm.
 
Filed with the Commission as part of this Form 10-K.
EXHIBIT 24
 
Powers of Attorney.
 
Filed with the Commission as part of this Form 10-K.
EXHIBIT 31
(a)
Rule 13a-14(a)/15d-14(a) Certification, signed by Vernon J. Nagel.
 
Filed with the Commission as part of this Form 10-K.
 
(b)
Rule 13a-14(a)/15d-14(a) Certification, signed by Richard K. Reece.
 
Filed with the Commission as part of this Form 10-K.
EXHIBIT 32
(a)
Section 1350 Certification, signed by Vernon J. Nagel.
 
Filed with the Commission as part of this Form 10-K.
 
(b)
Section 1350 Certification, signed by Richard K. Reece.
 
Filed with the Commission as part of this Form 10-K.

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EXHIBIT 101
 
The following financial information from the Company's Annual Report on Form 10-K for the year ended August 31, 2016, filed on October 27, 2016, formatted in XBRL (Extensible Business Reporting Language): (i) the Consolidated Balance Sheets as of August 31, 2016 and 2015, (ii) the Consolidated Statements of Comprehensive Income for the years ended August 31, 2016, 2015, and 2014, (iii) the Consolidated Statements of Cash Flows for the years ended August 31, 2016, 2015, and 2014, (iv) the Consolidated Statements of Stockholders' Equity for the years ended August 31, 2016, 2015, and 2014 and (v) the Notes to Consolidated Financial Statements.
 
Filed with the Commission as part of this Form 10-K.


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Table of Contents

SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
ACUITY BRANDS, INC.
Date:
October 27, 2016
 
By:
/S/  VERNON J. NAGEL
 
 
 
 
Vernon J. Nagel
Chairman, President, and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
 
Signature
 
Title
 
Date
 
 
 
 
 
/s/  VERNON J. NAGEL
 
Chairman, President, and Chief Executive Officer
 
October 27, 2016
Vernon J. Nagel
 
 
 
 
 
 
 
 
/s/  RICHARD K. REECE
 
Executive Vice President and Chief Financial Officer (Principle Financial and Accounting Officer)
 
October 27, 2016
Richard K. Reece
 
 
 
 
 
 
 
 
*
 
Director
 
October 27, 2016
W. Patrick Battle
 
 
 
 
 
 
 
 
 
*
 
Director
 
October 27, 2016
Peter C. Browning
 
 
 
 
 
 
 
 
 
*
 
Director
 
October 27, 2016
James H. Hance, Jr.
 
 
 
 
 
 
 
 
 
*
 
Director
 
October 27, 2016
Gordon D. Harnett
 
 
 
 
 
 
 
 
 
*
 
Director
 
October 27, 2016
Robert F. McCullough
 
 
 
 
 
 
 
 
 
*
 
Director
 
October 27, 2016
Julia B. North
 
 
 
 
 
 
 
 
 
*
 
Director
 
October 27, 2016
Dominic J. Pileggi
 
 
 
 
 
 
 
 
 
*
 
Director
 
October 27, 2016
Ray M. Robinson
 
 
 
 
 
 
 
 
 
*
 
Director
 
October 27, 2016
Norman H. Wesley
 
 
 
 
 
 
 
 
 
 
*BY:
/s/  RICHARD K. REECE
 
Attorney-in-Fact
 
October 27, 2016
 
Richard K. Reece
 
 
 
 

91

Table of Contents

Schedule II

Acuity Brands, Inc.

Valuation and Qualifying Accounts
For the Years Ended August 31, 2016 , 2015 , and 2014
(In millions)
 
Balance at
 
Additions and Reductions Charged to
 
 
 
 
 
Beginning of
Year
 
Costs and
Expenses
 
Other
Accounts
 
Deductions
 
Balance at
End of Year
Year Ended August 31, 2016
 

 
 

 
 

 
 

 
 

Reserve for doubtful accounts
$
1.3

 
0.3

 
0.4

 
0.3

 
$
1.7

Reserve for estimated product returns, net
$
6.2

 
62.6

 
0.9

 
58.8

 
$
10.9

Reserve for estimated cash discounts
$
3.0

 
32.0

 
0.9

 
31.2

 
$
4.7

Reserve for estimated other deductions
$
1.3

 
11.9

 

 
11.5

 
$
1.7

Deferred tax asset valuation allowance
$
15.0

 
(0.2
)
 
1.6

 

 
$
16.4

Year Ended August 31, 2015
 

 
 

 
 

 
 

 
 

Reserve for doubtful accounts
$
1.9

 
0.1

 

 
0.7

 
$
1.3

Reserve for estimated product returns, net
$
4.3

 
44.7

 

 
42.8

 
$
6.2

Reserve for estimated cash discounts
$
2.7

 
21.7

 

 
21.4

 
$
3.0

Reserve for estimated other deductions
$
1.3

 
9.1

 

 
9.1

 
$
1.3

Deferred tax asset valuation allowance
$
13.6

 
(0.4
)
 
1.8

 

 
$
15.0

Year Ended August 31, 2014
 

 
 

 
 

 
 

 
 

Reserve for doubtful accounts
$
1.5

 
0.8

 

 
0.4

 
$
1.9

Reserve for estimated product returns, net
$
1.5

 
35.9

 

 
33.1

 
$
4.3

Reserve for estimated cash discounts
$
2.2

 
19.5

 

 
19.0

 
$
2.7

Reserve for estimated other deductions
$
1.0

 
7.4

 

 
7.1

 
$
1.3

Deferred tax asset valuation allowance
$
12.4

 
0.4

 
0.8

 

 
$
13.6


92
Exhibit 10(iii)A(44)

 

AMENDMENT No. 6
TO
ACUITY BRANDS, INC
AMENDED AND RESTATED SEVERANCE AGREEMENT


THIS AMENDMENT made and entered into as of the 24 th day of October, 2016, by and between ACUITY BRANDS, INC. (the “Company”) and RICHARD K. REECE (“Executive”);

W I T N E S S E T H

WHEREAS, the Company and Executive entered into a Severance Agreement, dated as of April 21, 2006 (“Severance Agreement”), and amended as of October 28, 2009, March 30, 2010, March 28, 2014, October 27, 2014, and October 26, 2015, providing for the payment of certain compensation and benefits to Executive if Executive’s employment is terminated under certain circumstances; and

WHEREAS, the parties now desire to amend the Severance Agreement in the manner hereinafter provided;

NOW, THEREFORE, the Severance Agreement is hereby amended, as follows:

1.
Section 4.2 is hereby amended by deleting “100%” from clause (i) and substituting “120%” in lieu thereof.
2.
This Amendment to the Severance Agreement shall be effective as of the date of this Amendment. Except as hereby modified, the Severance Agreement shall remain in full force and effect.

IN WITNESS WHEREOF, the parties have executed this Amendment as of the day and year first above written.

COMPANY

EXECUTIVE                      ACUITY BRANDS, INC.



______________________________          By: ______________________________
RICHARD K. REECE                  Vernon J. Nagel
Chairman, President and CEO



Exhibit 10(iii)A(59)

AMENDMENT No. 6
TO
ACUITY BRANDS, INC
AMENDED AND RESTATED SEVERANCE AGREEMENT


THIS AMENDMENT made and entered into as of the 24 th day of October, 2016, by and between ACUITY BRANDS, INC. (the “Company”) and MARK A. BLACK (“Executive”);

W I T N E S S E T H

WHEREAS, the Company and Executive entered into a Severance Agreement, dated as of November 19, 2008 (“Severance Agreement”), and amended as of October 28, 2009, March 30, 2010, March 28, 2014, October 27, 2014, and October 26, 2015, providing for the payment of certain compensation and benefits to Executive if Executive’s employment is terminated under certain circumstances; and

WHEREAS, the parties now desire to amend the Severance Agreement in the manner hereinafter provided;

NOW, THEREFORE, the Severance Agreement is hereby amended, as follows:

1.
Section 4.2 is hereby amended by deleting “100%” from clause (i) and substituting “120%” in lieu thereof.
2.
This Amendment to the Severance Agreement shall be effective as of the date of this Amendment. Except as hereby modified, the Severance Agreement shall remain in full force and effect.

IN WITNESS WHEREOF, the parties have executed this Amendment as of the day and year first above written.

COMPANY

EXECUTIVE                      ACUITY BRANDS, INC.



______________________________          By: ______________________________
MARK A. BLACK                      Vernon J. Nagel
Chairman, President and CEO



Exhibit 10(iii)A(70)



ACUITY BRANDS, INC.
2012 Omnibus Stock Incentive Compensation Plan

Restricted Stock Award Agreement for U.S. Grantees

Grantee : /$ParticipantName$/
Grant Type : /$GrantType$/
Grant ID : /$GrantID$/
Grant Date : /$GrantDate$/
Award Amount : /$AwardsGranted$/
Vest Schedule : /$VestingDescription$/
Grantee Level : /$UserCode2$/
Accept By Date : /$AcceptByDate$/

This Restricted Stock Award Agreement for U.S. Grantees (the "Restricted Stock Award Agreement"), including all other appendices and exhibits attached hereto, (collectively the "Agreement") is made by and between Acuity Brands, Inc., a Delaware corporation (the "Company"), and Grantee, effective as of the Grant Date.
RECITALS
WHEREAS , the Company maintains the Acuity Brands, Inc. 2012 Omnibus Stock Incentive Compensation Plan (the "Plan"), under which the Compensation Committee of the Company’s Board of Directors (the “Committee”) has authority to make awards of restricted Shares of the Company’s Common Stock (hereinafter "Restricted Stock") to select employees and members of the Board of Directors of the Company and its Subsidiaries; and
WHEREAS , the Committee has determined that it is in the best interest of the Company and its stockholders to grant Restricted Stock to the Grantee identified above, subject to the terms and conditions set forth in the Plan and this Agreement.
NOW, THEREFORE , in consideration of the mutual covenants hereinafter set forth, the parties agree as follows:
1.
Incorporation by Reference, Etc . The provisions of the Plan are hereby incorporated by reference. Except as otherwise expressly set forth herein, this Agreement shall be construed in accordance with the provisions of the Plan and any capitalized terms not otherwise defined in this Agreement shall have the definitions set forth in the Plan. The Committee shall have final authority to interpret and construe the Plan and this Agreement and to make any and all determinations under them, and its decision shall be binding and conclusive upon the Grantee and the Grantee’s legal representative with respect to any questions arising under the Plan or this Agreement.
2.
Grant of Restricted Stock Award . The Committee on behalf of the Company hereby grants to the Grantee, effective as of the Grant Date, Restricted Stock, equal to the Award Amount set forth above, on the terms and conditions set forth in this Agreement and as otherwise provided in the Plan.
3.
Terms and Conditions .
(a) Restrictions
i.
This award of Restricted Stock is conditioned upon Grantee’s acceptance of the terms of this Agreement, as evidenced by Grantee’s execution of this Agreement or by Grantee’s electronic acceptance of this Agreement in a manner and during the time period allowed by the Company. If the terms of this Agreement are not timely accepted by execution or by such electronic means, the award of Restricted Stock may be cancelled by the Committee.
ii.
Except for death, Disability, or Change in Control, as set forth below, if Grantee remains employed by the Company, a Subsidiary or Affiliate, the Restricted Stock shall vest pursuant to the schedule set forth above.



Exhibit 10(iii)A(70)

For purposes of this Agreement, providing services as an Employee or as a member of the Board of Directors of the Company shall be considered employment.
iii.
If prior to the date on which the Restricted Stock vests and the restrictions with respect to the Restricted Stock lapse (the "Vesting Date"), (i) Grantee dies while actively employed by the Company, or (ii) Grantee has his or her employment terminated by reason of Disability, any Restricted Stock shall become fully vested and nonforfeitable as of the date of Grantee’s death or Disability. The Company shall transfer the Shares to be issued upon vesting of the Restricted Stock, as a result of Grantee's death or Disability, free and clear of any restrictions imposed by this Agreement (except for restrictions set forth in Section (3)(a)(viii)) to Grantee (or, in the event of death, to Grantee's heirs, subject to the applicable laws of descent and distribution) as soon as practical after his or her date of death or termination for Disability.
iv.
Except for death or Disability as provided above, or except as otherwise provided in a severance agreement with Grantee, if Grantee terminates his or her employment or if the Company, or if different, the Subsidiary or Affiliate employing the Grantee (the "Employer"), terminates Grantee prior to the Vesting Date, (even in the case of unfair dismissal and whether or not later to be found invalid or in breach of employment laws in the jurisdiction where Grantee is employed or the terms of Grantee's employment agreement, if any) the Grantee expressly acknowledges that the Restricted Stock shall cease to vest further, the unvested Restricted Stock shall be immediately forfeited, and Grantee shall only be entitled to the Shares of Restricted Stock that have vested prior to the “Date of Termination. ” “Date of Termination” means the last day of active employment of the Grantee with the Employer. For greater certainty, the Date of Termination of the Grantee shall be deemed to be the date on which the notice of termination of employment provided is stated to be effective (in the case of alleged constructive dismissal, the date on which the alleged constructive dismissal is alleged to have occurred), and not during or as of the end of any notice or other period following such date during which the Grantee is in receipt of, or eligible to receive, statutory, contractual or common law notice of termination or any compensation in lieu of such notice or severance pay. The Board or the Committee shall have the exclusive discretion to determine when Grantee is no longer actively providing services for purposes of the Restricted Stock grant (including whether Grantee may still be considered to be providing services while on a leave of absence).
v.
Except as otherwise provided in this Agreement, and subject to the Company's Incentive-Based Compensation Recoupment Policy (described below), on each Vesting Date, Grantee shall own vested Shares of Restricted Stock free and clear of all restrictions imposed by this Agreement (except those restrictions imposed in Section (3)(a)(viii) below). The Company shall transfer the vested Shares of Restricted Stock to an unrestricted account in name of the Grantee as soon as practical after each Vesting Date.
vi.
In exchange for receipt of consideration in the form of the Restricted Stock award pursuant to this Agreement, and other good and valuable consideration, Grantee agrees that Grantee shall comply with the confidentiality, inventions, non-solicitation and non-competition provisions attached hereto as Exhibit B.
vii.
Notwithstanding the other provisions of this Agreement, in the event of a Change in Control prior to the Vesting Date, all Shares of Restricted Stock shall become fully vested and nonforfeitable as of the date of the Change in Control. The Company shall transfer the Shares of Restricted Stock that become vested pursuant to this provision to an unrestricted account in the name of the Grantee as soon as practical after the date of the Change in Control.
viii.
All awards of Restricted Stock designated as "performance-based compensation" within the meaning of Section 162(m) of the Internal Revenue Code of 1986, as amended (the "Code"), whether unvested or vested, shall be subject to the Company's Incentive-Based Compensation Recoupment Policy (the "Recoupment Policy"), such that any award that was made to a Grantee, who is deemed a "Covered Employee" under the Recoupment Policy, within the three (3) year period preceding the date on which the Company announces that it will prepare an accounting restatement under the Recoupment Policy, shall be subject to deduction, clawback or forfeiture, as applicable.
ix.
The Restricted Stock may not be sold, assigned, transferred, pledged, or otherwise encumbered prior to the Vesting Date.





Exhibit 10(iii)A(70)

(b) Stock; Dividends; Voting
i.
The Restricted Stock shall be registered in the name of the Grantee as of the respective Grant Date for such Shares of Restricted Stock. The Company may issue stock certificates or evidence Grantee’s interest by using a restricted book entry account with the Company’s transfer agent. Physical possession or custody of any stock certificates that are issued shall be retained by the Company until such time as the Shares of Restricted Stock are vested. The Company reserves the right to place a legend on such stock certificate(s) restricting the transferability of such certificates and referring to the terms and conditions (including forfeiture) of this Agreement and the Plan.
ii.
During the Period of Restriction in which Grantee holds the Shares of Restricted Stock, Grantee shall be entitled to vote such Restricted Stock and the Company shall credit to a non-interest bearing account on its books for the Grantee any cash dividends paid with respect to such Shares of Restricted Stock while they are so held, and such dividends shall be paid to Grantee if and when Grantee's rights vest at the end of the Period of Restriction. The Company will pay the cash dividends to the Grantee as soon as practical after each Vesting Date. Any dividends credited to Grantee's non-interest bearing account shall be forfeited in the event the Restricted Stock is forfeited.
iii.
In the event of a Share Change (as defined in Section 4.4(a) of the Plan), the number and class of Shares or other securities that Grantee shall be entitled to, and shall hold, pursuant to this Agreement shall be appropriately adjusted or changed to reflect the Share Change, provided that any such additional Shares or additional or different shares or securities shall remain subject to the restrictions in this Agreement.
iv.
Grantee represents and warrants that he or she is acquiring the Restricted Stock for investment purposes only, and not with a view to distribution thereof. Grantee is aware that the Restricted Stock may not be registered under United States ("U.S") federal or any state or foreign securities laws and that in that event, in addition to the other restrictions on the Shares, they will not be able to be transferred unless an exemption from registration is available or the Shares are registered. By making this award of Restricted Stock, the Company is not undertaking any obligation to register the Restricted Stock under any federal, state or foreign securities laws.
(c)
No Right to Continued Employment or Additional Grants. Nothing in this Agreement or the Plan shall be interpreted or construed to confer upon Grantee any right with respect to continuance of employment by the Company or the Employer, nor shall this Agreement or the Plan interfere in any way with the right of the Employer to terminate Grantee’s employment at any time. The Plan may be terminated at any time, and even if the Plan is not terminated, Grantee shall not be entitled to any additional awards under the Plan.
(d)
Responsibility for Taxes.
i.
Grantee acknowledges that, regardless of any action taken by the Company or the Employer, the ultimate liability for all income tax, social insurance, payroll tax, fringe benefits tax, payment on account or other tax-related items related to Grantee’s participation in the Plan and legally applicable to Grantee (“Tax-Related Items”), is and remains Grantee’s responsibility and may exceed the amount actually withheld by the Company or the Employer. Grantee further acknowledges that the Company and/or the Employer (1) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the Restricted Stock, including, but not limited to, the grant or vesting of the Restricted Stock, the subsequent sale of Shares acquired due to applicable restrictions on the Restricted Stock having lapsed and the receipt or payment of any dividends and (2) do not commit to and is under no obligation to structure the terms of the grant or any aspect of the Restricted Stock to reduce or eliminate Grantee’s liability for Tax-Related Items or achieve any particular tax result. Further, if Grantee is subject to Tax-Related Items in more than one jurisdiction, Grantee acknowledges that the Company and/or the Employer may be required to withhold or account for Tax-Related Items in more than one jurisdiction.

ii.
Grantee shall have the right to make such elections under the Code as are available in connection with this award of Restricted Stock. The Company and Grantee agree to report the value of the Restricted Stock in a consistent manner for U.S. federal income tax purposes.




Exhibit 10(iii)A(70)

iii.
Prior to any relevant taxable or tax withholding event, as applicable, Grantee agrees to make adequate arrangements satisfactory to the Company to satisfy all Tax-Related Items.

iv.
In this regard, Grantee authorizes the Company, or their respective agents, at their discretion, to satisfy any applicable withholding obligations with regard to all Tax-Related Items by one or a combination of the following:
1. withholding from Grantee's wages or other cash compensation paid to Grantee by the Company; or

2. withholding from proceeds of the sale of Shares acquired upon vesting of the Restricted Stock either through a voluntary sale or through a mandatory sale arranged by the Company (on Grantee’s behalf pursuant to this authorization); or

3. withholding by canceling (in whole or in part) a number of Shares of Restricted Stock having a fair market value not less than the amount of the Tax-Related Items, provided, that if Grantee is a Section 16 officer under the Exchange Act, then the Committee shall establish the method of withholding from alternatives (1)-(3) herein, and, if the Committee does not exercise its discretion prior to the Tax-Related Items withholding event, then Grantee shall be entitled to elect the method of withholding from the alternatives above.

v.
Depending on the withholding method and subject to Section 17.2 of the Plan, the Company may withhold or account for Tax-Related Items by considering applicable minimum statutory withholding rates or other applicable withholding rates, including maximum applicable rates, in which case Grantee will receive a refund of any over-withheld amount in cash and will have no entitlement to the Common Stock equivalent.

vi.
Grantee agrees to pay to the Company or the Employer, including through withholding from Grantee’s wages or other cash compensation paid to Grantee by the Company and/or the Employer any amount of Tax-Related Items that the Company or the Employer may be required to withhold or account for as a result of Grantee’s participation in the Plan that cannot be satisfied by the means previously described. The Company may refuse to issue or deliver the Shares or the proceeds of the sale of Shares, if Grantee fails to comply with Grantee’s obligations in connection with the Tax-Related Items.
(e)
No Advice Regarding Grant. The Company is not providing any tax, legal or financial advice, nor is the Company making any recommendations regarding Grantee’s participation in the Plan, or Grantee’s acquisition or sale of the underlying Shares of Common Stock. Grantee should consult with his or her own personal tax, legal and financial advisors regarding his or her participation in the Plan before taking any action related to the Plan.
(f)
Governing Law and Venue. Except with respect to Exhibit B, the Restricted Stock grant and the provisions of this Agreement and the validity, interpretation, construction and performance of same shall be governed by, and subject to, the laws of the State of Delaware, without regard to its conflict of law provisions. Any and all disputes relating to, concerning or arising from this Agreement, or relating to, concerning or arising from the relationship between the parties evidenced by the Restricted Stock or this Agreement, shall be brought and heard exclusively in the U.S. District Court for the District of Delaware or the Delaware Superior Court, New Castle County. Each of the parties hereby represents and agrees that such party is subject to the personal jurisdiction of said courts; hereby irrevocably consents to the jurisdiction of such courts in any legal or equitable proceedings related to, concerning or arising from such dispute, and waives, to the fullest extent permitted by law, any objection which such party may now or hereafter have that the laying of the venue of any legal or



Exhibit 10(iii)A(70)

equitable proceedings related to, concerning or arising from such dispute which is brought in such courts is improper or that such proceedings have been brought in an inconvenient forum.
(g)
Imposition of Other Requirements . The Company reserves the right to impose other requirements on Grantee’s participation in the Plan, on the Restricted Stock and on any Shares acquired under the Plan, to the extent the Company determines it is necessary or advisable for legal or administrative reasons, and to require Grantee to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing.
(h)
Severability. The provisions of this Agreement are severable and if any one or more provisions are determined to be illegal or otherwise unenforceable, in whole or in part, the remaining provisions shall nevertheless be binding and enforceable.
(i)
Waiver. Grantee acknowledges that a waiver by the Company of breach of any provision of this Agreement shall not operate or be construed as a waiver of any other provision of this Agreement, or of any subsequent breach by Grantee.
(j)
Pronouns; Including. Wherever appropriate in this Agreement, personal pronouns shall be deemed to include the other genders and the singular to include the plural. Wherever used in this Agreement, the term "including" means "including, without limitation."
(k)
Successors in Interest. This Agreement shall inure to the benefit of, and be binding upon, the Company and its successors and assigns, whether by merger, consolidation, reorganization, sale of assets, or otherwise. This Agreement shall inure to the benefit of Grantee’s legal representatives. All obligations imposed upon Grantee and all rights granted to the Company under this Agreement shall be final, binding, and conclusive upon Grantee’s heirs, executors, administrators, and successors.
(l)
Interpretation. The Committee shall have the sole and absolute authority with respect to the interpretation, construction, or application of this Agreement. Any determination made hereunder shall be final, binding, and conclusive on Grantee and the Company for all purposes.
(m)
Integration. This Agreement, along with any Exhibit hereto, encompasses the entire agreement of the parties related to the subject matter of this Agreement, and supersedes all previous understandings and agreements between them, whether oral or written, except as otherwise described specifically in Exhibit B.  The parties hereby acknowledge and represent, that they have not relied on any representation, assertion, guarantee, warranty, collateral contract or other assurance, except those set out in this Agreement, made by or on behalf of any other party or any other person or entity whatsoever, prior to the execution of this Agreement. 
(n)
Grantee Bound by the Plan. Grantee hereby acknowledges receipt of a copy of the Plan and the prospectus for the Plan, and agrees to be bound by all the terms and provisions thereof.
(o)
Insider Trading/Market Abuse Restrictions. Grantee may be subject to insider trading restriction and/or market abuse laws, which may affect Grantee's ability to acquire or sell Shares or rights to Shares (e.g., Restricted Stock) under the Plan during such times as Grantee is considered to have "inside information" regarding the Company. Any restrictions under these laws or regulations are separate from and in addition to any restrictions that may be imposed under any applicable Company insider trading policy. Grantee is responsible for ensuring Grantee's own compliance with any applicable restrictions and is advised to speak with his or her personal legal advisor on this matter.
(p)
Electronic Delivery and Acceptance . The Company may, in its sole discretion, decide to deliver any documents related to current or future participation in the Plan by electronic means. The Grantee hereby consents to receive such documents by electronic delivery and agrees to participate in the Plan through an on-line or electronic system established and maintained by the Company or any third party designated by the Company. By Grantee’s electronic signature and the electronic signature of the Company's representative,



Exhibit 10(iii)A(70)

Grantee and the Company agree that this Restricted Stock award is granted under and governed by the terms and conditions of the Plan and this Agreement.




Exhibit 10(iii)A(70)


EXHIBIT A
SHARE OWNERSHIP AND RETENTION REQUIREMENT
It is the Company's belief and expectation that executives should own a reasonable amount of Company stock to further align their interests with those of our shareholders. Accordingly, you are expected to adhere to share ownership and share retention requirements in connection with awards under the Plan.
The share ownership requirement is stated as a multiple of your base salary and mandates that you own a an amount of shares with a value equal to the applicable multiple of your base salary.  The share retention requirement is stated as a percentage of shares acquired under the Plan that must be retained, net of the cost of exercising shares and/or the taxes associated with the shares.  You have until four years from first becoming subject to the requirements to satisfy your share ownership requirement.  However, if you do not currently satisfy the share ownership requirement, you are subject to the share retention requirement. 
Your share ownership and retention requirements are set forth below based on the Grantee Level stated on the first page of this Agreement. 
Grantee Level
Ownership Multiple of
Annual Base Salary
Retention Requirement
Percentage
0
4
50%
1
3
40%
2
2
35%
3
1
30%
4 or 5
0.5
20%
6 or 7
0
0
 
Your ownership multiple is multiplied by your annual base salary and your share retention requirement is the percent of net shares acquired through the Plan.  Your Restricted Stock counts toward satisfying your share ownership requirement beginning at the Grant Date.




Exhibit 10(iii)A(70)


EXHIBIT B
CONFIDENTIALITY, INVENTIONS, NON-SOLICITATION
AND NON-COMPETITION PROVISIONS

1.
Definitions.
(a)
“Confidential Information” “Confidential Information” means the following:
i.
data and information relating to the Company’s Business (as defined herein); which is disclosed to Grantee or of which Grantee became aware of as a consequence of Grantee's relationship with the Company; has value to the Company; is not generally known to the competitors of the Company; and which includes trade secrets, methods of operation, names of customers, price lists, financial information and projections, route books, personnel data, and similar information. For purposes of the Confidentiality, Inventions, Non-Solicitation and Non-Competition Provisions (the "Confidentiality Provisions"), subject to the foregoing, and according to terminology commonly used by the Company, the Company’s Confidential Information shall include, but not be limited to, information pertaining to: (1) business opportunities; (2) data and compilations of data relating to the Company’s Business; (3) compilations of information about, and communications and agreements with, customers and potential customers of the Company; (4) computer software, hardware, network and internet technology utilized, modified or enhanced by the Company or by Grantee in furtherance of Grantee’s duties with the Company; (5) compilations of data concerning Company products, services, customers, and end users including but not limited to compilations concerning projected sales, new project timelines, inventory reports, sales, and cost and expense reports; (6) compilations of information about the Company’s employees and independent contracting consultants; (7) the Company’s financial information, including, without limitation, amounts charged to customers and amounts charged to the Company by its vendors, suppliers, and service providers; (8) proposals submitted to the Company’s customers, potential customers, wholesalers, distributors, vendors, suppliers and service providers; (9) the Company’s marketing strategies and compilations of marketing data; (10) compilations of data or information concerning, and communications and agreements with, vendors, suppliers and licensors to the Company and other sources of technology, products, services or components used in the Company’s Business; (11) any information concerning services requested and services performed on behalf of customers of the Company, including planned products or services; and (12) the Company’s research and development records and data. Confidential Information also includes any summary, extract or analysis of such information together with information that has been received or disclosed to the Company by any third party as to which the Company has an obligation to treat as confidential.
ii.
Confidential Information shall not include:
(A) Information generally available to the public other than as a result of improper disclosure by Grantee;
(B) Information that becomes available to Grantee from a source other than the Company (provided Grantee has no knowledge that such information was obtained from a source in breach of a duty to the Company);

(C) Information disclosed pursuant to law, regulations or pursuant to a subpoena, court order or legal process; and/or
(D) Information obtained in filings with the Securities and Exchange Commission.
(b)
“Trade Secrets” has the meaning set forth under Georgia law, O.C.G.A. §§ 10-1-760,et seq.



Exhibit 10(iii)A(70)

(c)
“Customers” means those entities and/or individuals which, within the two-year period preceding the Date of Termination (as that term is defined in the Restricted Stock Award Agreement): (i) Grantee had material contact on behalf of the Company; (ii) about whom Grantee acquired, directly or indirectly, Confidential Information or Trade Secrets as a result of his/her employment with the Company; and/or (iii) Grantee exercised oversight or responsibility of subordinates who engaged in Material Contact on behalf of the Company. Additionally, "Customers" references only those entities and/or individuals with whom the Company currently has a business relationship, or with whom it expended resources to have or resume the same during the two-year period referenced herein.
(d)
"Company" means Acuity Brands, Inc., along with its Subsidiaries or other Affiliates.
(e)
“Company’s Business” means the design, manufacture, installation, servicing, and/or sale of one or more of the following and any related products and/or services: lighting fixtures and systems; lighting control components and systems (including but not limited to dimmers, switches, relays, programmable lighting controllers, sensors, timers, and range extenders for lighting and energy management and other purposes); building management and/or control systems; commercial building lighting controls; intelligent building automation and energy management technologies, products, software and solutions with respect to HVAC systems and HVAC controls and sensors; motorized shading and blind controls; building security and access control and monitoring for fire and life safety; emergency lighting fixtures and systems (including but not limited to exit signs, emergency light units, inverters, back-up power battery packs, and combinations thereof); battery powered and/or photovoltaic lighting fixtures; electric lighting track units; hardware for mounting and hanging electrical lighting fixtures; aluminum, steel and fiberglass fixture poles for electric lighting; light fixture lenses; sound and electromagnetic wave receivers and transmitters; flexible and modular wiring systems and components (namely, flexible branch circuits, attachment plugs, receptacles, connectors and fittings); LED drivers and other power supplies; daylighting systems including but not limited to prismatic skylighting and related controls; organic LED products and technology; medical and patient care lighting devices and systems; indoor positioning products and technology; sensor based information networks; and any wired or wireless communications and monitoring hardware or software related to any of the above. This shall not include any product or service of the Company if the Company is no longer in the business of providing such product or service to its customers at the relevant time of enforcement.
(f)
“Employee Services” shall mean the duties and services of the type conducted, authorized, offered, or provided by Grantee in his/her capacity as an Employee on behalf of the Company within twelve (12) months prior to the Date of Termination.
(g)
“Territory” means the United States. Grantee acknowledges that the Company is licensed to do business and in fact does business in all fifty states in the United States. Grantee further acknowledges that the services she/he has performed on behalf of the Company are at a senior level and are not limited in their territorial scope to any particular city, state, or region, but instead affect the Company's activity within the entire United States. Specifically, Grantee provides Employee Services on the Company's behalf throughout the United States, meets with Company agents and distributors, develops products and/or contacts throughout the country, and otherwise engages in his/her work on behalf of the Company on a national level. Accordingly, Grantee agrees that these restrictions are reasonable and necessary to protect the Confidential Information, trade secrets, business relationships, and goodwill of the Company.
(h)
“Material Contact” shall have the meaning set forth in O.C.G.A. § 13-8-51(10), which includes contact between an employee and each Customer or potential Customer: with whom or which Grantee dealt on behalf of the Company; whose dealings with the Company were coordinated or supervised by Grantee; about whom Grantee obtained confidential information in the ordinary course of business as a result of such employee's association with the Company; and/or who receives products or services authorized by the Company, the sale or provision of which results or resulted in compensation, commissions, or earnings for Grantee within two years prior to the date of the Date of Termination.
(i)
“Termination for Cause” or “Terminated for Cause” shall mean the involuntary termination of Grantee by the Company for the following reasons:



Exhibit 10(iii)A(70)

i.
If termination shall have been the result of an act or acts by Grantee which constitute a felony or any crime involving dishonesty, theft, fraud or moral turpitude;
ii.
If termination shall have been the result of an act or acts by Grantee which are determined, in the good faith judgment of the Company, to be in violation of written policies of the Company;
iii.
If termination shall have been the result of an act or acts of dishonesty by Grantee resulting or intended to result directly or indirectly in gain or personal enrichment to Grantee at the expense of the Company;
iv.
Upon the willful and continued failure by Grantee to substantially perform the duties assigned to Grantee (other than any such failure resulting from incapacity due to mental or physical illness constituting a Disability), after a demand in writing for substantial performance of such duties is delivered by the Company, which demand specifically identifies the manner in which the Company believes that Grantee has not substantially performed his or her duties; or
v.
If termination shall have been the result of the unauthorized disclosure by Grantee of the Company's Confidential Information or violation of any other provision of the Confidentiality Provisions.

(j)
“Inventions” and “Works For Hire.” The term “Invention” means contributions, discoveries, improvements and ideas and works of authorship, whether or not patentable or copyrightable, and: (i) which relate directly to the business of the Company, or (ii) which result from any work performed by Grantee or by Grantee’s fellow employees for the Company, or (iii) for which equipment, supplies, facilities, Confidential Information or Trade Secrets of the Company are used, or (iv) which is developed on the Company’s time. The term “Works For Hire” (“Works”) means all documents, programs, software, creative works and other expressions and information in any tangible medium created, in whole or in part, by Grantee during the period of and relating to his/her employment with the Company, whether copyrightable or otherwise protectable, other than Inventions.
2.
Confidentiality, Inventions, Non-Solicitation and Non-Competition.
(a)
Purpose and Reasonableness of Provisions. Grantee acknowledges that, during the term of his/her employment with the Company and after the Date of Termination, the Company has furnished and may continue to furnish to Grantee Trade Secrets and Confidential Information, which, if used by Grantee on behalf of, or disclosed to, a competitor of the Company or other person, could cause substantial detriment to the Company. Moreover, the parties recognize that Grantee, during the term of his/her employment with the Company, has developed important relationships with customers, sales agents, and others having valuable business relationships with the Company, and that these relationships may continue to develop after the Date of Termination. In view of the foregoing, Grantee acknowledges and agrees that the restrictive covenants contained in this Section 2 are reasonably necessary to protect the Company's legitimate business interests, Confidential Information, and good will.
(b)
Trade Secrets and Confidential Information. Grantee agrees that he/she shall protect the Company's Trade Secrets (as defined in Section 1(b) above) and Confidential Information (as defined in Section 1(a) above) and shall not disclose to any person or entity, or otherwise use or disseminate, except in connection with the performance of his/her duties for the Company, any Trade Secrets or Confidential Information. However, Grantee may make disclosures required by a valid order or subpoena issued by a court or administrative agency of competent jurisdiction, in which event Grantee will promptly notify the Company of such order or subpoena to provide it an opportunity to protect its interests. Grantee’s obligations under this Section 2(b) have applied throughout his/her active employment, shall continue after the Date of Termination, and shall survive any expiration or termination of the Confidentiality Provisions, so long as the information or material remains Confidential Information or a Trade Secret, as applicable.
Grantee further confirms that during his/her employment with the Company, including after the Date of Termination, he/she has not and will not offer, disclose or use on Grantee’s own behalf or on behalf of the Company, any information Grantee received prior to employment by the Company which was supplied to Grantee confidentially or which Grantee should reasonably know to be confidential.



Exhibit 10(iii)A(70)

Nothing in this section prohibits Grantee from reporting possible violations of federal law or regulation to any governmental agency or entity including but not limited to the Department of Justice, the Securities and Exchange Commission, the Congress, and any Inspector General, or making other disclosures that are protected under the whistleblower provisions of federal law or regulation. Grantee does not need the prior authorization of the Company to make any such reports or disclosures, and Grantee is not required to notify the Company that Grantee has made such reports or disclosures.
(c)
Return of Property. On or before the Date of Termination, Grantee agrees to deliver promptly to the Company all files, customer lists, management reports, memoranda, research, Company forms, financial data and reports and other documents (including all such data and documents in electronic form) of the Company, supplied to or created by him/her in connection with his/her employment hereunder (including all copies of the foregoing) in his/her possession or control, and all of the Company’s equipment and other materials in his/her possession or control. Grantee further agrees and covenants not to retain any such property and to permanently delete such information residing in electronic format to the best of his/her ability and not to attempt to retrieve it. Grantee’s obligations under this Section 2(c) shall survive any expiration or termination of the Confidentiality Provisions.
(d)
Inventions. Except to the extent prohibited by state and local laws, Grantee does hereby assign to the Company the entire right, title and interest in any Invention which is or was made or conceived, either solely or jointly with others, during his/her employment with the Company, including after the Date of Termination. Grantee attests that he/she has disclosed (or promptly will disclose, if after the Date of Termination) to the Company all such Inventions. Grantee will, if requested, promptly execute and deliver to the Company a specific assignment of title for any such Invention and will at the expense of the Company, take all reasonably required action by the Company to patent, copyright or otherwise protect the Invention. If Grantee is a resident of the State of California as of the Grant Date, then this Section 2(d) shall not apply to any Invention that qualifies fully as a nonassignable invention under Section 2870 of the California Labor Code.
(e)
Non-Competition . Except as otherwise provided in Section 12 below, in the event that Grantee,
i.
voluntarily resigns from the Company,
ii.
is Terminated for Cause (as defined above), or
iii.
declines to sign a Confidential Severance Agreement and Release offered by the Company in the event of a termination for any reason other than a Termination for Cause (including, for example, as a result of a position elimination),
Grantee acknowledges and agrees that during his/her employment, and for twelve (12) months after the Date of Termination, he/she has not and will not, directly or indirectly, engage in, provide, or perform any Employee Services on behalf of any person or entity (or, if organized into divisions or units, any distinct division or operating unit) in the Territory that derives revenue from providing goods or services substantially similar to those which comprise the Company’s Business. Notwithstanding the foregoing, if the Company terminates Grantee’s employment for any reason other than a Termination for Cause (including, for example, as a result of a position elimination), and Grantee signs a Confidential Severance Agreement and Release offered by the Company, the period covered by this non-competition covenant will be reduced to either: (i) the time within which severance payments are scheduled to be paid to Grantee under such agreement, or (ii) if severance is paid to Grantee in a lump sum, the number of weeks of Grantee’s then-current regular salary that are used to calculate such lump sum payment; provided, however, that the restrictive period calculated hereunder shall not, in any event, exceed twelve (12) months following the Date of Termination.
(f)
Non-Solicitation of Customers. Grantee acknowledges and agrees that during his/her employment, and for twenty-four (24) months after the Date of Termination, Grantee has not and will not directly or indirectly solicit Customers (as defined in Paragraph 1(c) above) with whom he/she had Material Contact (as defined in 1(g) above) for the purpose of providing goods and/or services competitive with the Company’s Business.
(g)
Non-Solicitation of Employees and Agents. Grantee acknowledges and agrees that during his/her employment, and for a period of twenty-four (24) months after the Date of Termination, Grantee has not and



Exhibit 10(iii)A(70)

will not, directly or indirectly, whether on behalf of the Grantee or others, solicit, lure or attempt to hire away any of the Company's employees or agents.
(h)
Non-Solicitation of Sales Agents . Grantee acknowledges and agrees that during his/her employment, and for a period of twenty-four (24) months after the Date of Termination, Grantee has not and will not, directly or indirectly, whether on behalf of the Grantee or others, solicit any of the Company's Sales Agents for the purpose of disrupting their relationship with the Company and/or selling and/or facilitating the sale of products competitive with the Company's Business. For purposes of this Section 2, a "Sales Agent” is any third-party agency, and/or its representatives, with which or whom the Company has contracted for the purpose of facilitating the sale of the Company's products during the last twenty-four (24) months of Grantee's employment with the Company.
(i)
Injunctive Relief. Grantee acknowledges that if he/she breaches or threatens to breach any of the provisions of this Section 2, his/her actions may cause irreparable harm and damage to the Company which could not be compensated in damages. Accordingly, if Grantee breaches or threatens to breach any of the provisions of this Section 2, the Company shall be entitled to seek injunctive relief, in addition to any other rights or remedies the Company may have. The existence of any claim or cause of action by Grantee against the Company, whether predicated on the Confidentiality Provisions or otherwise, shall not constitute a defense to the enforcement by the Company of Grantee’s agreements under this Section 2.
3.
Contract Non-Assignable by Grantee. The parties acknowledge that the Confidentiality Provisions has been entered into due to, among other things, the special skills and knowledge of Grantee, and agree that the Confidentiality Provisions may not be assigned or transferred by Grantee.
4.
Notices. All notices, requests, demands and other communications required or permitted hereunder shall be in writing and shall be deemed to have been duly given when delivered or seven days after mailing if mailed first class, postage prepaid, addressed as follows:

If to the Company:           Acuity Brands, Inc.,                                                      Attention: Corporate Secretary                                                  1170 Peachtree Street, NE Suite 2300                                              Atlanta, Georgia 30309-7676

If to Grantee:          To his or her last known address on file with the Company.

Any party may change the address to which notices, requests, demands and other communications shall be delivered or mailed by giving notice thereof to the other party in the same manner provided herein.
5.
Provisions Severable. If any provision or covenant, or any part thereof, contained in the Confidentiality Provisions is held by any court to be invalid, illegal, or unenforceable, either in whole or in part, such invalidity, illegality or unenforceability shall not affect the validity, legality or enforceability of the remaining provisions or covenants, or any part thereof, in the Confidentiality Provisions, all of which shall remain in full force and effect. Each and every provision, paragraph and subparagraph of Section 2 above is severable from the other provisions, paragraphs and subparagraphs and constitutes a separate and distinct covenant.
The restrictive covenants set forth in Section 2 of the Confidentiality Provisions represent the entire agreement of the parties with respect to the subject matter thereof and supersede any prior agreement with respect thereto; provided, however, that the restrictive covenants described in this Exhibit B shall not supersede those set forth in either: (a) any Executive Severance Agreement applicable to Grantee, if any, or (b) any Confidentiality, Inventions and Non-Solicitation Agreement to which Grantee is a party, if any. To the extent that any Executive Severance Agreement and/or Confidentiality, Inventions and Non-Solicitation Agreement applicable to Grantee include restrictive covenant provisions that conflict with the provisions contained in the Confidentiality Provisions, the provisions that are more restrictive on Grantee will control.



Exhibit 10(iii)A(70)

6.
Waiver . Failure of either party to insist, in one or more instances, on performance by the other in strict accordance with the terms and conditions of the Confidentiality Provisions shall not be deemed a waiver or relinquishment of any right granted in the Confidentiality Provisions or the future performance of any such term or condition or of any other term or condition of the Confidentiality Provisions, unless such waiver is contained in a writing signed by the party making the waiver.
7.
Amendments and Modifications. The Confidentiality Provisions and any Exhibit hereto may be amended or modified only by a writing signed by both parties hereto, which makes specific reference to the Confidentiality Provisions. However, this Section does not affect a court of competent jurisdiction or arbitrator's ability to modify the Confidentiality Provisions pursuant to O.C.G.A. §§ 13-8-51(11); 53(d); or 54 in the event that either party initiates legal proceedings that relate in any way to the Confidentiality Provisions, including any action brought by either party seeking to enforce any provision set forth herein.
8.
Governing Law and Venue .  The validity and effect of the Confidentiality Provisions shall be governed by and construed and enforced in accordance with the laws of the State of Georgia, United States of America, without regard to its conflict of law provisions. Any and all disputes relating to, concerning or arising from the Confidentiality Provisions, or relating to, concerning or arising from the relationship between the parties evidenced by the Confidentiality Provisions, shall be brought and heard exclusively in the U.S. District Court for the District of Delaware or the Delaware Superior Court, New Castle County. Each of the parties hereby represents and agrees that such party is subject to the personal jurisdiction of said courts; hereby irrevocably consents to the jurisdiction of such courts in any legal or equitable proceedings related to, concerning or arising from such dispute, and waives, to the fullest extent permitted by law, any objection which such party may now or hereafter have that the laying of the venue of any legal or equitable proceedings related to, concerning or arising from such dispute which is brought in such courts is improper or that such proceedings have been brought in an inconvenient forum.
9.
Legal Fees. Each party shall pay its own legal fees and other expenses associated with any dispute under the Confidentiality Provisions or any Exhibit hereto.
10.
Tender Back Provision. If, in the context of a lawsuit involving Grantee or any other person or entity arguing on Grantee’s behalf, any court determines that any provisions of Section 2 are void, invalid, illegal, or otherwise unenforceable, Grantee shall be required to immediately return to the Company 70% of all monies paid out under Paragraph 2 of the Restricted Stock Award Agreement, or to return 70% of any unsold shares the Grantee still owns of such Restricted Stock awarded under Paragraph 2 of the Restricted Stock Award Agreement. For purposes of this section, the amount to be paid back shall be determined by ascertaining the value and amount the share(s) sold for at the time that the Grantee actually sold such share(s).
11.
Tolling Period. If Grantee is found by a court to have violated any restriction in Section 2 of the Confidentiality Provisions, he/she agrees that the time period for such restriction shall be extended by one day for each day that he/she is found to have violated the restriction, up to a maximum of 18 months.
12.
Exclusions. The restrictions set forth in Section 2(e) (Non-Competition), Section 2(f) (Non-Solicitation of Customers) and Section 2(h) (Non-Solicitation of Sales Agents) shall not apply where prohibited by state or local law.
***
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

Vernon J Nagel
Chairman, President and CEO


C. Dan Smith
SVP, Treasurer and Secretary

PLEASE RETAIN THIS AGREEMENT AND ALL EXHIBITS FOR YOUR RECORDS.


Exhibit 10(iii)A(71)

ACUITY BRANDS, INC.
2012 Omnibus Stock Incentive Compensation Plan
Restricted Stock Unit Award Agreement for Non-U.S. Grantees
Grantee : /$ParticipantName$/
Grant Type : /$GrantType$/
Grant ID : /$GrantID$/
Grant Date : /$GrantDate$/
Award Amount : /$AwardsGranted$/
Vest Schedule : /$VestingDescription$/
Grantee Level : /$UserCode2$/
Accept By Date : /$AcceptByDate$/

This Restricted Stock Unit Award Agreement for Non-U.S. Grantees (the “Restricted Stock Unit Agreement”), including any special terms and conditions for the Grantee’s country set forth in the Appendix A attached hereto (the Restricted Stock Unit Agreement, the Appendix A and all other appendices attached hereto, collectively, the “Agreement”) is made by and between Acuity Brands, Inc., a Delaware corporation (the “Company”), and Grantee, effective as of the Grant Date.
RECITALS
WHEREAS , the Company maintains the Acuity Brands, Inc. 2012 Omnibus Stock Incentive Compensation Plan (the "Plan"), under which the Compensation Committee of the Company's Board of Director's (the "Committee") has authority to make awards of restricted stock units (hereinafter “RSUs”) payable in Shares of the Company’s Common Stock to select employees and members of the Board of Directors of the Company and its Subsidiaries; and
WHEREAS, the Committee has determined that it is in the best interest of the Company and its stockholders to grant RSUs to the Grantee identified above, subject to the terms and conditions set forth in the Plan and this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants hereinafter set forth, the parties agree as follows:
1.
Incorporation by Reference, Etc. The provisions of the Plan are hereby incorporated by reference. Except as otherwise expressly set forth herein, this Agreement shall be construed in accordance with the provisions of the Plan and any capitalized terms not otherwise defined in this Agreement shall have the definitions set forth in the Plan. The Committee shall have final authority to interpret and construe the Plan and this Agreement and to make any and all determinations under them, and its decision shall be binding and conclusive upon the Grantee and the Grantee’s legal representative with respect to any questions arising under the Plan or this Agreement.
2.
Grant of Restricted Stock Unit Award. The Committee, on behalf of the Company, hereby grants to the Grantee, effective as of the Grant Date, RSUs equal to the Award Amount set forth above, on the terms and conditions set forth in this Agreement and as otherwise provided in the Plan.
3.
Terms and Conditions.
(a)
Restrictions
i.
This award of RSUs is conditioned upon Grantee’s acceptance of the terms of this Agreement, as evidenced by Grantee’s execution of this Agreement or by Grantee’s electronic acceptance of this Agreement in a manner and during the time period allowed by the Company. If the terms of this Agreement are not timely accepted by execution or by such electronic means, the award of RSUs may be cancelled by the Committee.



Exhibit 10(iii)A(71)

ii.
Except for death, Disability or Change in Control as set forth below, if Grantee remains employed by the Company, a Subsidiary or Affiliate, the RSUs shall vest pursuant to the schedule set forth above. For purposes of this Agreement, providing active services as an Employee or as a member of the Board of Directors of the Company shall be considered employment.
iii.
If prior to the date on which the RSUs vest and the restrictions with respect to the RSUs lapse (the "Vesting Date"), (i) Grantee dies while actively employed by the Company, or (ii) Grantee has his or her employment terminated by reason of Disability, any RSUs shall become fully vested and nonforfeitable as of the date of Grantee’s death or Disability. The Company shall transfer the Shares to be issued upon the vesting of the RSUs as a result of Grantee’s death or Disability, free and clear of any restrictions imposed by this Agreement (except for Section 3(a)(viii)) to Grantee (or, in the event of death, to Grantee's heirs, subject to the applicable laws of descent and distribution) as soon as practical after his or her date of death or termination for Disability.
iv.
Except for death or Disability as provided above, or except as otherwise provided in a severance agreement with Grantee, if Grantee terminates his or her employment or if the Company or if different, the Subsidiary or Affiliate employing the Grantee (the "Employer") terminates Grantee prior to the Vesting Date (even in the case of unfair dismissal and whether or not later to be found invalid or in breach of employment laws in the jurisdiction where Grantee is employed or the terms of Grantee's employment agreement, if any) the Grantee expressly acknowledges that the RSUs shall cease to vest further, the unvested RSUs shall be immediately forfeited, and Grantee shall only be entitled to the Shares issued as a result of RSUs that had vested prior to the date of termination.  “Date of Termination” means the last day of active employment of the Grantee with the Employer.  For greater certainty, the Date of Termination of the Grantee shall be deemed to be the date on which the notice of termination of employment provided is stated to be effective (in the case of alleged constructive dismissal the date on which the alleged constructive dismissal is alleged to have occurred), and not during or as of the end of any notice or other period following such date during which the Grantee is in receipt of, or eligible to receive, statutory, contractual or common law notice of termination or any compensation in lieu of such notice or severance pay. The Board or the Committee shall have the exclusive discretion to determine when Grantee is no longer actively providing services for purposes of the RSU grant (including whether Grantee may still be considered to be providing services while on a leave of absence).
v.
No Shares shall be issued to Grantee prior to the Vesting Date. After any RSUs vest, and subject to the Company’s Incentive-Based Compensation Recoupment Policy (described below), the Company shall promptly cause Shares to be issued to an unrestricted account in the name of the Grantee as soon as practical after each Vesting Date, in payment of such vested RSUs. In addition, the Company will cause to be paid in cash the Dividend Equivalents (described below) attributed to the Shares issued as a result of the vesting of the RSUs, as soon as practical after the Vesting Date.
vi.
In exchange for receipt of consideration in the form of the RSU award pursuant to this Agreement and other good and valuable consideration, Grantee agrees that he/she shall comply with the confidentiality, inventions, non-solicitation and non-competition provisions attached hereto as Exhibit C.
vii.
Notwithstanding the other provisions of this Agreement, in the event of a Change in Control prior to the Vesting Date, all RSUs shall become fully vested and nonforfeitable as of the date of the Change in Control. The Company shall transfer the Shares to be issued upon the vesting of the RSUs pursuant to this provision to an unrestricted account in the name of the Grantee as soon as practical after the date of the Change in Control.
viii.
All awards of RSUs designated as "performance-based compensation" within the meaning of Section 162(m) of the Internal Revenue Code of 1986, as amended (the "Code"), whether unvested or vested, shall be subject to the Company`s Incentive-Based Compensation Recoupment Policy (the "Recoupment Policy"), such that any award that was made to a Grantee, who is deemed a "Covered Employee" under the Recoupment Policy, within the three (3) year period preceding the date on which the Company announces that it will prepare an accounting restatement under the Recoupment Policy shall be subject to deduction, clawback or forfeiture, as applicable.
ix.
The RSUs may not be sold, assigned, transferred, pledged, or otherwise encumbered prior to the Vesting Date.




Exhibit 10(iii)A(71)

(b)
Stock; Dividends; Voting
i.
The RSUs granted pursuant to this Agreement do not and shall not entitle the Grantee to any rights of a shareholder of the Company’s Common Stock. The rights of the Grantee with respect to the RSUs shall remain forfeitable at all times prior to the Vesting Date.

ii.
During the period that the Grantee holds RSUs granted pursuant to this Agreement, the Company shall credit to a non-interest bearing account on its books for Grantee, on each date that the Company pays a cash dividend to holders of its Common Stock, an amount equal to the United States ("U.S.") Dollar amount paid per Share of the Company’s Common Stock that is subject to this Agreement and that has not vested (the “Dividend Equivalents”). The Company will cause to be paid in cash the Dividend Equivalents attributed to the RSUs as soon as practical after each Vesting Date. The Dividend Equivalents credited to Grantee’s non-interest bearing account shall be forfeited in the event that the RSUs are forfeited.

iii.
In the event of a Share Change (as defined in Section 4.4(a) of the Plan), the number and class of Shares or other securities that Grantee shall be entitled to, and shall hold, pursuant to this Agreement shall be appropriately adjusted or changed to reflect the Share Change, provided that any such additional Shares or additional or different shares or securities shall remain subject to the restrictions in this Agreement.

iv.
Grantee represents and warrants that he or she is acquiring the RSUs for investment purposes only, and not with a view to distribution thereof. Grantee is aware that the RSUs may not be registered under U.S. federal or any state securities laws and that in that event, in addition to the other restrictions on the Shares, they will not be able to be transferred unless an exemption from registration is available or the Shares are registered. By making this award of RSUs, the Company is not undertaking any obligation to register the Shares under any federal or state securities laws.

(c)
Nature of Grant. In accepting the grant, Grantee acknowledges, understands and agree that:
i.
the Plan is established voluntarily by the Company, it is discretionary in nature and it may be modified, amended, suspended or terminated by the Company at any time, to the extent permitted by the Plan;

ii.
the grant of RSUs is exceptional, voluntary and occasional and does not create any contractual or other right to receive future grants of RSUs, or benefits in lieu of RSUs, even if RSUs have been granted in the past;

iii.
all decisions with respect to future RSUs or other grants, if any, will be at the sole discretion of the Company;

iv.
the RSU grant and Grantee’s participation in the Plan shall not create a right to employment or be interpreted as forming or amending an employment or services contract with the Company and shall not interfere with the ability of the Employer to terminate Grantee’s employment or service relationship (if any);

v.
Grantee is voluntarily participating in the Plan;

vi.
the RSUs and the Shares subject to the RSUs, and the income and value of same, are not intended to replace any pension rights or compensation;




Exhibit 10(iii)A(71)

vii.
the RSUs and the Shares subject to the RSUs, and the income and value of same, are not part of normal or expected compensation for any purposes including, but not limited to, calculating any severance, resignation, termination, redundancy, dismissal, end-of-service payments, bonuses, long-service awards, pension or retirement or welfare benefits or similar payments;

viii.
the future value of the underlying Shares is unknown, indeterminable and cannot be predicted with certainty;

ix.
no claim or entitlement to compensation or damages shall arise from any loss of any right or benefit, or prospective right or benefit, including the forfeiture of RSUs resulting from the termination of Grantee's employment or other service relationship (for any reason whatsoever whether or not later found to be invalid or in breach of employment laws in the jurisdiction where Grantee is employed or the terms of Grantee’s employment agreement, if any), and in consideration of the grant of RSUs, Grantee agrees not to institute any claim against the Company;

x.
unless otherwise agreed with the Company, the RSUs and Shares subject to the RSUs, and the income and value of same, are not granted as consideration for, or in connection with, the service Grantee may provide as a director of a Subsidiary of the Company; and

xi.
the Company shall not be liable for any foreign exchange rate fluctuation between Grantee’s local currency and the U.S. Dollar that may affect the value of the RSUs or of any amounts due to Grantee pursuant to the settlement of the RSUs or the subsequent sale of any Shares acquired upon settlement.

(d)
Responsibility for Taxes.
i.
Grantee acknowledges that, regardless of any action taken by the Company or the Employer, the ultimate liability for all income tax, social insurance, payroll tax, fringe benefits tax, payment on account or other tax-related items related to Grantee’s participation in the Plan and legally applicable to Grantee (“Tax-Related Items”), is and remains Grantee’s responsibility and may exceed the amount actually withheld by the Company or the Employer. Grantee further acknowledges that the Company and/or the Employer (1) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the RSUs or the Dividend Equivalents, including, but not limited to, the grant, vesting or settlement of the RSUs, the subsequent sale of Shares acquired pursuant to such settlement and the receipt or payment of any dividends and/or any Dividend Equivalents and (2) do not commit to and is under no obligation to structure the terms of the grant or any aspect of the RSUs or the Dividend Equivalents to reduce or eliminate Grantee’s liability for Tax-Related Items or achieve any particular tax result. Further, if Grantee is subject to Tax-Related Items in more than one jurisdiction, Grantee acknowledges that the Company and/or the Employer may be required to withhold or account for Tax-Related Items in more than one jurisdiction.

ii.
Prior to any relevant taxable or tax withholding event, as applicable, Grantee agrees to make adequate arrangements satisfactory to the Company and/or the Employer to satisfy all Tax-Related Items.

iii.
In this regard, Grantee authorizes the Company, or their respective agents, at their discretion, to satisfy any applicable withholding obligations with regard to all Tax-Related Items by one or a combination of the following:




Exhibit 10(iii)A(71)

1. withholding from Grantee's wages or other cash compensation paid to Grantee by the Company and/or the Employer; or

2. withholding from proceeds of the sale of Shares acquired upon vesting/settlement of the RSU either through a voluntary sale or through a mandatory sale arranged by the Company (on Grantee’s behalf pursuant to this authorization); or

3. withholding in Shares to be issued upon settlement of the RSU, provided, that if Grantee is a Section 16 officer under the Exchange Act, then the Committee shall establish the method of withholding from alternatives (1)-(3) herein, and, if the Committee does not exercise its discretion prior to the Tax-Related Items withholding event, then Grantee shall be entitled to elect the method of withholding from the alternatives above.

iv.
Depending on the withholding method and subject to Section 17.2 of the Plan, the Company may withhold or account for Tax-Related Items by considering applicable minimum statutory withholding rates or other applicable withholding rates, including maximum applicable rates, in which case Grantee will receive a refund of any over-withheld amount in cash and will have no entitlement to the Common Stock equivalent. If the obligation for Tax-Related Items is satisfied by withholding in Shares, for tax purposes, Grantee is deemed to have been issued the full number of Shares subject to the vested RSUs, notwithstanding that a number of the Shares are held back solely for the purpose of paying the Tax-Related Items.

v.
Finally, Grantee agrees to pay to the Company or the Employer, including through withholding from Grantee’s wages or other cash compensation paid to Grantee by the Company and/or the Employer any amount of Tax-Related Items that the Company or the Employer may be required to withhold or account for as a result of Grantee’s participation in the Plan that cannot be satisfied by the means previously described. The Company may refuse to issue or deliver the Shares or the proceeds of the sale of Shares, if Grantee fails to comply with Grantee’s obligations in connection with the Tax-Related Items.

vi.
Notwithstanding anything in this Section 3(d) to the contrary, for U.S. taxpayer Grantees, to avoid a prohibited acceleration under Code Section 409A, if Shares subject to RSUs will be withheld (or sold on Grantee's behalf) to satisfy any-Tax Related Items arising prior to the date of settlement of the RSUs for any portion of the RSUs that is considered nonqualified deferred compensation subject to Code Section 409A, then the number of Shares withheld (or sold on Grantee's behalf) shall not exceed the number of Shares that equals the liability for Tax-Related Items.

(e)
Data Privacy.
Grantee hereby explicitly and unambiguously consents to the collection, use and transfer, in electronic or other form, of Grantee’s personal data as described in this Agreement and any other RSU grant materials ("Data") by and among, as applicable, the Company and its other Subsidiaries and Affiliates for the exclusive purpose of implementing, administering and managing Grantee’s participation in the Plan.
Grantee understands that the Company may hold certain personal information about Grantee, including, but not limited to, Grantee’s name, home address, email address, telephone number, date of birth, social insurance number, passport or other identification number, salary, nationality, job title, any Shares of stock or directorships held in the Company, details of all RSUs or any other entitlement to Shares awarded,



Exhibit 10(iii)A(71)

canceled, exercised, vested, unvested or outstanding in Grantee’s favor, for the exclusive purpose of implementing, administering and managing the Plan.
Grantee understands that Data will be transferred to Bank of America Merrill Lynch (""Merrill Lynch"), or such other stock plan service provider as may be selected by the Company in the future, which is assisting the Company with the implementation, administration and management of the Plan. Grantee understands that the recipients of the Data may be located in the U.S. or elsewhere, and that the recipients’ country (e.g., the U.S.) may have different data privacy laws and protections than Grantee’s country. Grantee understands that he or she may request a list with the names and addresses of any potential recipients of the Data by contacting his or her local human resources representative. Grantee authorizes the Company, Merrill Lynch and any other possible recipients which may assist the Company (presently or in the future) with implementing, administering and managing the Plan to receive, possess, use, retain and transfer the Data, in electronic or other form, for the sole purpose of implementing, administering and managing his or her participation in the Plan. Grantee understands that Data will be held only as long as is necessary to implement, administer and manage Grantee’s participation in the Plan. Grantee understands he or she may, at any time, view Data, request information about the storage and processing of Data, require any necessary amendments to Data or refuse or withdraw the consents herein, in any case without cost, by contacting in writing his or her local human resources representative. Further, Grantee understands that he or she is providing the consents herein on a purely voluntary basis. If Grantee does not consent, or if Grantee later seeks to revoke his or her consent, his or her employment status will not be adversely affected; the only consequence of refusing or withdrawing Grantee’s consent is that the Company would not be able to grant RSUs or other equity awards to Grantee or administer or maintain such awards. Therefore, Grantee understands that refusing or withdrawing his or her consent may affect Grantee’s ability to participate in the Plan. For more information on the consequences of Grantee’s refusal to consent or withdrawal of consent, Grantee understands that he or she may contact his or her local human resources representative.
(f)
No Advice Regarding Grant. The Company is not providing any tax, legal or financial advice, nor is the Company making any recommendations regarding Grantee’s participation in the Plan, or Grantee’s acquisition or sale of the underlying Shares of Common Stock. Grantee should consult with his or her own personal tax, legal and financial advisors regarding his or her participation in the Plan before taking any action related to the Plan.
(g)
Governing Law and Venue. Except with respect to Exhibit C, the RSU grant and the provisions of this Agreement and the validity, interpretation, construction and performance of same shall be governed by, and subject to, the laws of the State of Delaware, without regard to its conflict of law provisions. Any and all disputes relating to, concerning or arising from this Agreement, or relating to, concerning or arising from the relationship between the parties evidenced by the RSUs or this Agreement, shall be brought and heard exclusively in the U.S. District Court for the District of Delaware or the Delaware Superior Court, New Castle County. Each of the parties hereby represents and agrees that such party is subject to the personal jurisdiction of said courts; hereby irrevocably consents to the jurisdiction of such courts in any legal or equitable proceedings related to, concerning or arising from such dispute, and waives, to the fullest extent permitted by law, any objection which such party may now or hereafter have that the laying of the venue of any legal or equitable proceedings related to, concerning or arising from such dispute which is brought in such courts is improper or that such proceedings have been brought in an inconvenient forum.
(h)
Appendix . Notwithstanding any provisions in this Agreement, the RSU grant shall be subject to any special terms and conditions set forth in any Appendix to this Agreement for Grantee’s country. Moreover, if Grantee relocates to one of the countries included in the Appendix, the special terms and conditions for such country will apply to Grantee, to the extent the Company determines that the application of such terms and conditions is necessary or advisable for legal or administrative reasons. The Appendix constitutes part of this Agreement.
(i)
Imposition of Other Requirements . The Company reserves the right to impose other requirements on Grantee’s participation in the Plan, on the RSUs and on any Shares acquired under the Plan, to the extent the Company determines it is necessary or advisable for legal or administrative reasons, and to require Grantee to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing.



Exhibit 10(iii)A(71)

(j)
Severability. The provisions of this Agreement are severable and if any one or more provisions are determined to be illegal or otherwise unenforceable, in whole or in part, the remaining provisions shall nevertheless be binding and enforceable.
(k)
Waiver. Grantee acknowledges that a waiver by the Company of breach of any provision of this Agreement shall not operate or be construed as a waiver of any other provision of this Agreement, or of any subsequent breach by Grantee.
(l)
Language. If Grantee has received this Agreement or any other document related to the Plan translated into a language other than English and if the meaning of the translated version is different than the English version, the English version will control.
(m)
Pronouns; Including. Wherever appropriate in this Agreement, personal pronouns shall be deemed to include the other genders and the singular to include the plural. Wherever used in this Agreement, the term "including" means "including, without limitation."
(n)
Successors in Interest. This Agreement shall inure to the benefit of, and be binding upon, the Company and its successors and assigns, whether by merger, consolidation, reorganization, sale of assets, or otherwise. This Agreement shall inure to the benefit of Grantee’s legal representatives. All obligations imposed upon Grantee and all rights granted to the Company under this Agreement shall be final, binding, and conclusive upon Grantee’s heirs, executors, administrators, and successors.
(o)
Interpretation. The Committee shall have the sole and absolute authority with respect to the interpretation, construction, or application of this Agreement. Any determination made hereunder shall be final, binding, and conclusive on Grantee and the Company for all purposes.
(p)
Integration. This Agreement, along with any Exhibit hereto, encompasses the entire agreement of the parties related to the subject matter of this Agreement, and supersedes all previous understandings and agreements between them, whether oral or written, except as otherwise described specifically in Exhibit C.  The parties hereby acknowledge and represent, that they have not relied on any representation, assertion, guarantee, warranty, collateral contract or other assurance, except those set out in this Agreement, made by or on behalf of any other party or any other person or entity whatsoever, prior to the execution of this Agreement. 
(q)
Grantee Bound by the Plan. Grantee hereby acknowledges receipt of a copy of the Plan and the prospectus for the Plan, and agrees to be bound by all the terms and provisions thereof.
(r)
Insider Trading/Market Abuse Restrictions. Depending on Grantee's country, Grantee may be subject to insider trading restriction and/or market abuse laws, which may affect Grantee's ability to acquire or sell Shares or rights to Shares (e.g., RSUs) under the Plan during such times as Grantee is considered to have "inside information" regarding the Company (as defined by the laws in Grantee's country). Any restrictions under these laws or regulations are separate from and in addition to any restrictions that may be imposed under any applicable Company insider trading policy. Grantee is responsible for ensuring Grantee's own compliance with any applicable restrictions and is advised to speak with his or her personal legal advisor on this matter.
(s)
Electronic Delivery and Acceptance . The Company may, in its sole discretion, decide to deliver any documents related to current or future participation in the Plan by electronic means. The Grantee hereby consents to receive such documents by electronic delivery and agrees to participate in the Plan through an on-line or electronic system established and maintained by the Company or any third party designated by the Company. By Grantee’s electronic signature and the electronic signature of the Company's representative, Grantee and the Company agree that this RSU is granted under and governed by the terms and conditions of the Plan and this Agreement.




Exhibit 10(iii)A(71)

EXHIBIT A
SPECIAL TERMS AND CONDITIONS FOR GRANTEES OUTSIDE THE U.S.
This Appendix includes additional country-specific terms and conditions that apply to Grantees residing in the countries listed below. This Appendix is part of the Agreement and contains terms and conditions material to participation in the Plan. Unless otherwise provided below, capitalized terms used but not defined herein shall have the same meanings assigned to them in the Plan and the Agreement.
The information is based on the securities and other laws in effect in the respective countries as of August 2016. Such laws are often complex and change frequently. As a result, the Company strongly recommends that the Grantee not rely on the information in this Appendix as the only source of information relating to the consequences of the Grantee’s participation in the Plan because the information may be out of date when the Grantee vests in the RSUs or Shares acquired under the Plan are sold.
In addition, the information contained herein is general in nature and may not apply to the Grantee’s particular situation, and the Company is not in a position to assure the Grantee of a particular result. Accordingly, the Grantee is advised to seek appropriate professional advice as to how the relevant laws in the Grantee’s country may apply to his or her situation.
Finally, if the Grantee is a citizen or resident of a country other than the one in which he or she is currently working or the Grantee transfers employment or residency after the Grant Date, or if the Grantee is considered resident of another country for local law purposes, then the provisions contained herein may not be applicable to the Grantee. The Company shall, in its sole discretion, determine to what extent the terms and conditions included herein will apply under these circumstances.
CANADA
Sale of Shares.
The Grantee acknowledges that he or she is permitted to sell the Shares acquired under the Plan through Bank of America Merrill Lynch or other such stock plan service provider as may be selected by the Company in the future, provided the sale of the Shares takes place outside of Canada through facilities of a stock exchange on which the Shares are listed. The Shares are currently listed on the New York Stock Exchange.
Consent to Receive Information in English for Quebec Employees.
The Grantee acknowledges that it is the express wish of the parties that this Agreement, as well as all documents, notices and legal proceedings entered into, given or instituted pursuant hereto or relating directly or indirectly hereto, be written in English.
    
Le participant reconnaît que c'est son souhait exprès d'avoir exigé la rédaction en anglais de cette convention, ainsi que de tous documents exécutés, avis donnés et procédures judiciaries intentées, directement ou indirectement, relativement à ou suite à la présente convention.




Exhibit 10(iii)A(71)

Authorization to Release and Transfer Necessary Personal Information for Quebec Employees.
The following provision supplements Section 3(e) of the Agreement:
The Grantee hereby authorizes the Company and the Company’s representatives to discuss with and obtain all relevant information from all personnel, professional or not, involved in the administration and operation of the Plan. The Grantee further authorizes the Company, any Subsidiary or Affiliate to disclose and discuss the Plan with their advisors. The Grantee further authorizes the Company and any Subsidiary or Affiliate to record such information and to keep such information in the Grantee’s employee file.
Foreign Asset/Account Reporting Notice.
Canadian residents may be required to report foreign property on Form T1135 (Foreign Income Verification Statement) if the total cost of the foreign property exceeds C$100,000 at any time in the year. Foreign property includes Shares acquired under the Plan and may include the RSUs, and their cost generally is the adjusted cost base (“ACB”) of the Shares. The ACB ordinarily would equal the fair market value of the Shares at the time of acquisition, but if the Canadian resident owns other Shares, this ACB may have to be leveraged with the ACB of the other Shares. The Form T1135 generally must be filed by April 30 of the following year. Canadian residents should consult with a personal advisor to ensure compliance with the applicable reporting requirements.
Acknowledgement and Direction for Certain Employees in Canada.
The Grantee acknowledges that: (1) Grantee has received this Award under the terms of the Plan; (2) upon the vesting of the Award under the Plan, shares purchased on the open market will be delivered to the Grantee; and (3) a remittance of cash in satisfaction of withholding requirements under the Canadian Income Tax Act will be made so that only a net number of shares, less the amount necessary to cover the tax withholding, will be delivered to the Grantee upon the vesting of the Award. The Grantee directs that (1) the Company engage the services of a broker licensed to transact in its shares (the "Broker") and that it do so as Grantee’s agent and on Grantee’s behalf for the express purpose of acquiring and delivering to the Grantee shares that have vested under the Award pursuant to this authorization; and (2) the Company provide whatever instructions are necessary to the Broker in order to ensure that shares are delivered to Grantee’s account maintained by Merrill Lynch in connection with the operation of the Plan.
FRANCE
Consent to Receive Information in English.
By accepting the grant of the RSUs, the Grantee confirms having read and understood the Plan and the Agreement, which were provided in English language. The Grantee accepts the terms of those documents accordingly.
En acceptant cette attribution gratuite d’actions, le Participant confirme avoir lu et compris le Plan et ce Contrat, incluant tous leurs termes et conditions, qui ont été transmis en langue anglaise. Le Participant accepte les dispositions de ces documents en connaissance de cause.
Foreign Asset/Account Reporting Notice.
French residents may hold Shares outside France, provided that they declare all foreign accounts, whether open, current or closed, on their annual income tax return. Failure to comply could trigger significant penalties.

MEXICO
Terms and Conditions
Labor Law Policy and Acknowledgment . By participating in the Plan, Grantee expressly recognizes that Acuity Brands Inc., with registered offices at 1170 Peachtree Street, NE Suite 2300, Atlanta, GA 30309, U.S., is solely



Exhibit 10(iii)A(71)

responsible for the administration of the Plan and that Grantee’s participation in the Plan and acquisition of Shares does not constitute a relationship as an Employee with the Company since Grantee is participating in the Plan on a wholly commercial basis and the sole Employer is a Subsidiary or Affiliate of the Company (“Acuity-Mexico”). Based on the foregoing, Grantee expressly recognizes that the Plan and the benefits that he may derive from participation in the Plan do not establish any rights between Grantee and the Employer, Acuity-Mexico, and do not form part of the employment conditions and/or benefits provided by Acuity-Mexico and any modification of the Plan or its termination shall not constitute a change or impairment of the terms and conditions of Grantee’s relationship as an Employee.
Grantee further understands that Grantee’s participation in the Plan is as a result of a unilateral and discretionary decision of the Company. Therefore, the Company reserves the absolute right to amend and/or discontinue Grantee’s participation at any time without any liability to Grantee.
Finally, Grantee hereby declares that Grantee does not reserve to himself or herself any action or right to bring any claim against the Company for any compensation or damages regarding any provision of the Plan or the benefits derived under the Plan, and Grantee therefore grants a full and broad release to the Company, the Employer, its Subsidiaries and Affiliates, branches, representation offices, its shareholders, officers, agents or legal representatives with respect to any claim that may arise.
Política de Ley Laboral y Reconocimiento . Participando en el Plan, el Participante reconoce expresamente que Acuity Brands Inc. , con oficinas registradas en 170 Peachtree Street, NE Suite 2300, Atlanta, GA 30309, U.S., es el único responsable de la administración del Plan y que la participación del Participante en el mismo y la compra de acciones bursátiles no constituye de ninguna manera una relación laboral entre Usted y la Compañía dado que su participación en el Plan deriva únicamente de una relación comercial y que su único empleador es una Subsidiaria o Afiliada del la Compañía (“Acuity-Mexico”). Derivado de lo anterior, el Participante expresamente reconoce que el Plan y los beneficios que pudieran derivar del mismo no establecen ningún derecho entre el Participante y el empleador, Acuity-Mexico, y no forman parte de las condiciones laborales y/o prestaciones otorgadas por Acuity-Mexico, y cualquier modificación al Plan o la terminación del mismo no podrá ser interpretada como una modificación o degradación de los términos y condiciones de su trabajo.
Asimismo, el Participante entiende que su participación en el Plan es resultado de la decisión unilateral y discrecional de la Compañía. Por lo tanto, la Compañía se reserva el derecho absoluto para modificar y/o terminar la participación del Participante en cualquier momento, sin ninguna responsabilidad ante el Participante.
Finalmente, el Participante manifiesta que no se reserva ninguna acción o derecho que origine una demanda en contra de la Compañía por cualquier compensación o daño en relación con cualquier disposición del Plan o de los beneficios derivados del mismo, y en consecuencia el Participante otorga un amplio y total finiquito a la Compañía, el Empleador, sus Subsidiarias y Afiliadas, sucursales, oficinas de representación, sus accionistas, directores, agentes y representantes legales con respecto a cualquier demanda que pudiera surgir.

NETHERLANDS

No special provisions.

SPAIN
No Entitlement for Claims or Compensation.
The following provisions supplement Section 3(a) and Section 3(c) of the Agreement:
The Grantee understands and agrees that, as a condition of the grant of the RSUs, the termination of the Grantee’s status as an Employee prior to the Vesting Date will automatically result in the loss of the unvested RSUs that may have been granted to the Grantee, except in the event of the Employee's death or Disability. In particular, the Grantee understands and agrees that any unvested RSUs shall be forfeited without entitlement to the underlying Shares or to any amount as indemnification in the event of a termination of status as an Employee, including, but not limited to:



Exhibit 10(iii)A(71)

resignation, disciplinary dismissal adjudged to be with cause, disciplinary dismissal adjudged or recognized to be without good cause ( i.e ., subject to a “despido improcedente”), individual or collective layoff on objective grounds, whether adjudged to be with cause or adjudged or recognized to be without cause, material modification of the terms of employment under Article 41 of the Workers’ Statute, relocation under Article 40 of the Workers’ Statute, Article 50 of the Workers’ Statute, unilateral withdrawal by the Employer, and under Article 10.3 of Royal Decree 1382/1985.
The Grantee understands that the Company has unilaterally, gratuitously and in its sole discretion decided to grant RSUs under the Plan to individuals who may be Employees or Directors throughout the world. The decision is limited and entered into based upon the express assumption and condition that any RSUs will not economically or otherwise bind the Company or any Subsidiary or Affiliate, including the Employer, on an ongoing basis, other than as expressly set forth in the Agreement. Consequently, the Grantee understands that the RSUs are granted on the assumption and condition that the RSUs shall not become part of any employment contract (whether with the Company or any Subsidiary or Affiliate, including the Employer) and shall not be considered a mandatory benefit, salary for any purpose (including severance compensation) or any other right whatsoever. Furthermore, the Grantee understands and freely accepts that there is no guarantee that any benefit whatsoever shall arise from the grant of RSUs, which is gratuitous and discretionary, since the future value of the RSUs and the underlying Shares is unknown and unpredictable. The Grantee also understands that the grant of RSUs would not be made but for the assumptions and conditions set forth hereinabove; thus, the Grantee understands, acknowledges and freely accepts that, should any or all of the assumptions be mistaken or any of the conditions not be met for any reason, the RSUs and any right to the underlying Shares shall be null and void.
Securities Law Notice.
No “offer of securities to the public,” as defined under Spanish law, has taken place or will take place in the Spanish territory in connection with the grant of RSUs. The Agreement, the Appendix and the Plan have not been registered with the Comisión Nacional del Mercado de Valores (Spanish Securities Exchange Commission) and do not constitute a public offering prospectus.
Exchange Control Notice.
Spanish taxpayers must declare the acquisition, ownership and disposition of Shares in a foreign company (including Shares acquired under the Plan) to the Spanish Dirección General de Comercio e Inversiones (the “DGCI”), which is a department of the Ministry of Economy and Competitiveness. Generally, the declaration must be filed in January for Shares acquired or disposed of during the prior year and/or for Shares owned as of December 31 of the prior year; however, if the value of the Shares acquired under the Plan and/or the amount of the sale proceeds exceeds €1,502,530, the declaration must be filed within one month of the acquisition or disposition, as applicable.
In addition, Spanish taxpayers may be required to declare electronically to the Bank of Spain any foreign accounts (including brokerage accounts held abroad), any foreign instruments (including any Shares acquired under the Plan) and any transactions with non-Spanish residents (including any payments of Shares made by the Company) depending on the value of such accounts and instruments and the amount of the transactions during the relevant year as of December 31 of the relevant year. This reporting requirement will apply if the balances in such accounts together with the value of such instruments as of December 31, or the volume of transactions with non-Spanish residents during the prior or current year, exceed €1,000,000. Once the €1,000,000 threshold has been surpassed in either respect, a report is required on all foreign accounts, foreign instruments and transactions with non-Spanish residents, even if the relevant threshold has not been crossed for an individual item. Generally, the report is required on an annual basis (by January 20 of each year); however, if the balances in Grantee 's foreign accounts together with value of foreign instruments or the volume of transactions with non-Spanish residents exceed €100,000,000, more frequent reporting will be required.



Exhibit 10(iii)A(71)

Foreign Asset/Account Reporting Notice.
Spanish residents are required to report rights or assets deposited or held outside of Spain (including Shares acquired under the Plan or cash proceeds from the sale of such Shares or Dividend Equivalent payments) as of December 31 of each year, if the value of such rights or assets exceeds €50,000 per type of right or asset. After such rights and/or assets are initially reported, the reporting obligation will only apply for subsequent years if the value of any previously-reported rights or assets increases by more than €20,000. If reporting is required, the report must be filed on form 720 by March 31 following the end of the relevant year.

UNITED KINGDOM
Form of Settlement.
RSUs granted to Employee residents in the United Kingdom ("U.K.") shall be paid in Shares only.
Tax Withholding Obligations.
The following supplements Section 3(d) of the Agreement:

The Grantee shall pay to the Company or the Employer any amount of income tax that the Company or the Employer may be required to account to HM Revenue and Customs (" HMRC") with respect to the event giving rise to the income tax (the “Taxable Event”) that cannot be satisfied by the means described in Section 3(d) of the Agreement. If payment or withholding of the income tax due is not made within ninety (90) days of the end of the U.K. tax year (April 6 - April 5) in which the Taxable Event occurs or such other period as required under U.K. law (the “Due Date”), the Grantee agrees that the amount of any uncollected income tax shall constitute a loan owed by the Grantee to the Employer, effective on the Due Date. The Grantee agrees that the loan will bear interest at the then-current HMRC Official Rate, it will be immediately due and repayable, and the Company or the Employer may recover it at any time thereafter by any of the means referred to in Section 3(d) of the Agreement. If the Grantee fails to comply with his or her obligations in connection with the income tax as described in this section, the Company may refuse to deliver the Shares acquired under the Plan.

Notwithstanding the foregoing, if the Grantee is a director or executive officer of the Company (within the meaning of Section 13(k) of the U.S. Securities and Exchange Act of 1934), the Grantee shall not be eligible for a loan from the Company to cover income tax. In the event that the Grantee is a director or executive officer and income tax is not collected from or paid by the Grantee by the Due Date, the amount of any uncollected income tax may constitute a benefit to the Grantee on which additional income tax and National Insurance Contributions ("NICs") may be payable. The Grantee will be responsible for reporting and paying any income tax due on this additional benefit directly to HMRC under the self-assessment regime, and for reimbursing the Company or the Employer (as appropriate) for the value of any employee NICs due on this additional benefit which the Company or the Employer may recover from the Grantee any time thereafter by any of the means referred to in Section 3(d) of the Agreement.



Exhibit 10(iii)A(71)

EXHIBIT B
SHARE OWNERSHIP AND RETENTION REQUIREMENT
It is the Company's belief and expectation that executives should own a reasonable amount of Company stock to further align their interests with those of our shareholders. Accordingly, you are expected to adhere to share ownership and share retention requirements in connection with awards under the Plan.
The share ownership requirement is stated as a multiple of your base salary and mandates that you own a an amount of shares with a value equal to the applicable multiple of your base salary.  The share retention requirement is stated as a percentage of shares acquired under the Plan that must be retained, net of the cost of exercising shares and/or the taxes associated with the shares.  You have until four years from first becoming subject to the requirements to satisfy your share ownership requirement.  However, if you do not currently satisfy the share ownership requirement, you are subject to the share retention requirement. 
Your share ownership and retention requirements are set forth below based on the Grantee Level stated on the first page of this Agreement. 
Grantee Level
Ownership Multiple of
Annual Base Salary
Retention Requirement
Percentage
0
4
50%
1
3
40%
2
2
35%
3
1
30%
4 or 5
0.5
20%
6 or 7
0
0
 
Your ownership multiple is multiplied by your annual base salary and your share retention requirement is the percent of net shares acquired through the Plan (exercise of stock options or receipt of Shares).  Your RSUs count toward satisfying your share ownership requirement beginning at the Grant Date.



Exhibit 10(iii)A(71)

EXHIBIT C
CONFIDENTIALITY, INVENTIONS, NON-SOLICITATION
AND NON-COMPETITION PROVISIONS

1.
Definitions.

(a)
“Confidential Information” “Confidential Information” means the following:
i.
data and information relating to the Company’s Business (as defined herein); which is disclosed to Grantee or of which Grantee became aware of as a consequence of Grantee's relationship with the Company; has value to the Company; is not generally known to the competitors of the Company; and which includes trade secrets, methods of operation, names of customers, price lists, financial information and projections, route books, personnel data, and similar information. For purposes of the Confidentiality, Inventions, Non-Solicitation and Non-Competition Provisions (the "Confidentiality Provisions"), subject to the foregoing, and according to terminology commonly used by the Company, the Company’s Confidential Information shall include, but not be limited to, information pertaining to: (1) business opportunities; (2) data and compilations of data relating to the Company’s Business; (3) compilations of information about, and communications and agreements with, customers and potential customers of the Company; (4) computer software, hardware, network and internet technology utilized, modified or enhanced by the Company or by Grantee in furtherance of Grantee’s duties with the Company; (5) compilations of data concerning Company products, services, customers, and end users including but not limited to compilations concerning projected sales, new project timelines, inventory reports, sales, and cost and expense reports; (6) compilations of information about the Company’s employees and independent contracting consultants; (7) the Company’s financial information, including, without limitation, amounts charged to customers and amounts charged to the Company by its vendors, suppliers, and service providers; (8) proposals submitted to the Company’s customers, potential customers, wholesalers, distributors, vendors, suppliers and service providers; (9) the Company’s marketing strategies and compilations of marketing data; (10) compilations of data or information concerning, and communications and agreements with, vendors, suppliers and licensors to the Company and other sources of technology, products, services or components used in the Company’s Business; (11) any information concerning services requested and services performed on behalf of customers of the Company, including planned products or services; and (12) the Company’s research and development records and data.  Confidential Information also includes any summary, extract or analysis of such information together with information that has been received or disclosed to the Company by any third party as to which the Company has an obligation to treat as confidential.
ii.
Confidential Information shall not include:
(A) Information generally available to the public other than as a result of improper disclosure by Grantee;
(B) Information that becomes available to Grantee from a source other than the Company (provided Grantee has no knowledge that such information was obtained from a source in breach of a duty to the Company);
(C) Information disclosed pursuant to law, regulations or pursuant to a subpoena, court order or legal process; and/or
(D) Information obtained in filings with the Securities and Exchange Commission.
(b)
“Trade Secrets” has the meaning set forth under Georgia law, O.C.G.A. §§ 10-1-760, et seq.

(c)
Customers ” means those entities and/or individuals which, within the two-year period preceding the Date of Termination (as that term is defined in Restricted Stock Unit Agreement): (i) Grantee had material contact on behalf of the Company; (ii) about whom Grantee acquired, directly or indirectly, Confidential Information



Exhibit 10(iii)A(71)

or Trade Secrets as a result of his/her employment with the Company; and/or (iii) Grantee exercised oversight or responsibility of subordinates who engaged in Material Contact on behalf of the Company.  Additionally, "Customers" references only those entities and/or individuals with whom the Company currently has a business relationship, or with whom it expended resources to have or resume the same during the two-year period referenced herein.
(d)
  "Company" means Acuity Brands, Inc., along with its Subsidiaries or other Affiliates.
(e)
“Company’s Business” means the design, manufacture, installation, servicing, and/or sale of one or more of the following and any related products and/or services: lighting fixtures and systems; lighting control components and systems (including but not limited to dimmers, switches, relays, programmable lighting controllers, sensors, timers, and range extenders for lighting and energy management and other purposes); building management and/or control systems; commercial building lighting controls; intelligent building automation and energy management technologies, products, software and solutions with respect to HVAC systems and HVAC controls and sensors; motorized shading and blind controls; building security and access control and monitoring for fire and life safety; emergency lighting fixtures and systems (including but not limited to exit signs, emergency light units, inverters, back-up power battery packs, and combinations thereof); battery powered and/or photovoltaic lighting fixtures; electric lighting track units; hardware for mounting and hanging electrical lighting fixtures; aluminum, steel and fiberglass fixture poles for electric lighting; light fixture lenses; sound and electromagnetic wave receivers and transmitters; flexible and modular wiring systems and components (namely, flexible branch circuits, attachment plugs, receptacles, connectors and fittings); LED drivers and other power supplies; daylighting systems including but not limited to prismatic skylighting and related controls; organic LED products and technology; medical and patient care lighting devices and systems; indoor positioning products and technology; sensor based information networks; and any wired or wireless communications and monitoring hardware or software related to any of the above.  This shall not include any product or service of the Company if the Company is no longer in the business of providing such product or service to its customers at the relevant time of enforcement.
(f)
“Employee Services” shall mean the duties and services of the type conducted, authorized, offered, or provided by Grantee in his/her capacity as an Employee on behalf of the Company within twelve (12) months prior to the Date of Termination. 
(g)
“Territory” means the country in which Grantee is employed by the Company (the "Country"). Grantee acknowledges that the Company is licensed to do business in the Country and in fact does business in all states, territories, provinces and other parts of the Country. Grantee further acknowledges that the services she/he has performed on behalf of the Company are at a senior level and are not limited in their territorial scope to any particular city, state, or region, but instead affect the Company's activity within the Country. Specifically, Grantee provides Employee Services on the Company's behalf throughout the Country, meets with Company agents and distributors, develops products and/or contacts throughout the Country, and otherwise engages in his/her work on behalf of the Company on a national level.  Accordingly, Grantee agrees that these restrictions are reasonable and necessary to protect the Confidential Information, trade secrets, business relationships, and goodwill of the Company.
(h)
“Material Contact” shall have the meaning set forth in O.C.G.A. § 13-8-51(10), which includes contact between an employee and each Customer or potential Customer: with whom or which Grantee dealt on behalf of the Company; whose dealings with the Company were coordinated or supervised by Grantee; about whom Grantee obtained confidential information in the ordinary course of business as a result of such employee's association with the Company; and/or who receives products or services authorized by the Company, the sale or provision of which results or resulted in compensation, commissions, or earnings for Grantee within two years prior to the date of the Date of Termination. 
(i)
“Termination for Cause” or “Terminated for Cause” shall mean the involuntary termination of Grantee by the Company for the following reasons:
i.
If termination shall have been the result of an act or acts by Grantee which constitute an indictable offense, a felony or any crime involving dishonesty, theft, fraud or moral turpitude;

ii.
If termination shall have been the result of an act or acts by Grantee which are determined, in the good faith judgment of the Company, to be in violation of written policies of the Company;




Exhibit 10(iii)A(71)

iii.
If termination shall have been the result of an act or acts of dishonesty by Grantee resulting or intended to result directly or indirectly in gain or personal enrichment to Grantee at the expense of the Company;

iv.
Upon the willful and continued failure by Grantee to substantially perform the duties assigned to Grantee (other than any such failure resulting from incapacity due to mental or physical illness constituting a Disability), after a demand in writing for substantial performance of such duties is delivered by the Company, which demand specifically identifies the manner in which the Company believes that Grantee has not substantially performed his or her duties; or

v.
If termination shall have been the result of the unauthorized disclosure by Grantee of the Company's Confidential Information or violation of any other provision of the Confidentiality Provisions.

(j)
“Inventions” and “Works For Hire.”  The term “Invention” means contributions, discoveries, improvements and ideas and works of authorship, whether or not patentable or copyrightable, and: (i) which relate directly to the business of the Company, or (ii) which result from any work performed by Grantee or by Grantee’s fellow employees for the Company, or (iii) for which equipment, supplies, facilities, Confidential Information or Trade Secrets of the Company are used, or (iv) which is developed on the Company’s time.  The term “Works For Hire” (“Works”) means all documents, programs, software, creative works and other expressions and information in any tangible medium created, in whole or in part, by Grantee during the period of and relating to his/her employment with the Company, whether copyrightable or otherwise protectable, other than Inventions.
2.
 Confidentiality, Inventions, Non-Solicitation and Non-Competition.

(a)
Purpose and Reasonableness of Provisions.  Grantee acknowledges that, during the term of his/her employment with the Company and after the Date of Termination, the Company has furnished and may continue to furnish to Grantee Trade Secrets and Confidential Information, which, if used by Grantee on behalf of, or disclosed to, a competitor of the Company or other person, could cause substantial detriment to the Company.  Moreover, the parties recognize that Grantee, during the term of his/her employment with the Company, has developed important relationships with customers, agents, and others having valuable business relationships with the Company, and that these relationships may continue to develop after the Date of Termination.  In view of the foregoing, Grantee acknowledges and agrees that the restrictive covenants contained in this Section 2 are reasonably necessary to protect the Company's legitimate business interests, Confidential Information, and good will.
(b)
Trade Secrets and Confidential Information.   Grantee agrees that he/she shall protect the Company's Trade Secrets (as defined in Section 1(b) above) and Confidential Information (as defined in Section 1(a) above) and shall not disclose to any person or entity, or otherwise use or disseminate, except in connection with the performance of his/her duties for the Company, any Trade Secrets or Confidential Information. However, Grantee may make disclosures required by a valid order or subpoena issued by a court or administrative agency of competent jurisdiction, in which event Grantee will promptly notify the Company of such order or subpoena to provide it an opportunity to protect its interests.  Grantee’s obligations under this Section 2(b) have applied throughout his/her active employment, shall continue after the Date of Termination, and shall survive any expiration or termination of the Confidentiality Provisions, so long as the information or material remains Confidential Information or a Trade Secret, as applicable.
Grantee further confirms that during his/her employment with the Company, including after the Date of Termination, he/she has not and will not offer, disclose or use on Grantee’s own behalf or on behalf of the Company, any information Grantee received prior to employment by the Company which was supplied to Grantee confidentially or which Grantee should reasonably know to be confidential.
Nothing in this section prohibits Grantee from reporting possible violations of law or regulation to any governmental agency or entity, or making other disclosures that are protected under the whistleblower provisions of law or regulation.  Grantee does not need the prior authorization of the Company to make any



Exhibit 10(iii)A(71)

such reports or disclosures, and Grantee is not required to notify the Company that Grantee has made such reports or disclosures.
(c)
Return of Property.  On or before the Date of Termination, Grantee agrees to deliver promptly to the Company all files, customer lists, management reports, memoranda, research, Company forms, financial data and reports and other documents (including all such data and documents in electronic form) of the Company, supplied to or created by him/her in connection with his/her employment hereunder (including all copies of the foregoing) in his/her possession or control, and all of the Company’s equipment and other materials in his/her possession or control.  Grantee further agrees and covenants not to retain any such property and to permanently delete such information residing in electronic format to the best of his/her ability and not to attempt to retrieve it.  Grantee’s obligations under this Section 2(c) shall survive any expiration or termination of the Confidentiality Provisions.
(d)
Inventions.   Grantee does hereby assign to the Company the entire right, title and interest in any Invention which is or was made or conceived, either solely or jointly with others, during his/her employment with the Company, including after the Date of Termination. Grantee attests that he/she has disclosed (or promptly will disclose, if after the Date of Termination) to the Company all such Inventions. Grantee will, if requested, promptly execute and deliver to the Company a specific assignment of title for any such Invention and will at the expense of the Company, take all reasonably required action by the Company to patent, copyright or otherwise protect the Invention.
(e)
Non-Competition.   In the event that Grantee,
i.
voluntarily resigns from the Company,
ii.
is Terminated for Cause (as defined above), or
iii.
declines to sign a Confidential Severance Agreement and Release offered by the Company in the event of a termination for any reason other than a Termination for Cause (including, for example, as a result of a position elimination).
Grantee acknowledges and agrees that during his/her employment, and for twelve (12) months after the Date of Termination, he/she has not and will not, directly or indirectly, engage in, provide, or perform any Employee Services on behalf of any person or entity (or, if organized into divisions or units, any distinct division or operating unit) in the Territory that derives revenue from providing goods or services substantially similar to those which comprise the Company’s Business.  Notwithstanding the foregoing, if the Company terminates Grantee’s employment for any reason other than a Termination for Cause (including, for example, as a result of a position elimination), and Grantee signs a Confidential Severance Agreement and Release offered by the Company, the period covered by this non-competition covenant will be reduced to either: (i) the time within which severance payments are scheduled to be paid to Grantee under such agreement, or (ii) if severance is paid to Grantee in a lump sum, the number of weeks of Grantee’s then-current regular salary that are used to calculate such lump sum payment; provided, however, that the restrictive period calculated hereunder shall not, in any event, exceed twelve (12) months following the Date of Termination.
(f)
Non-Solicitation of Customers.  Grantee acknowledges and agrees that during his/her employment, and for twenty-four (24) months after the Date of Termination, Grantee has not and will not directly or indirectly solicit Customers (as defined in Paragraph 1(c) above) with whom he/she had Material Contact (as defined in 1(g) above) for the purpose of providing goods and/or services competitive with the Company’s Business.
(g)
Non-Solicitation of Employees and Agents.   Grantee acknowledges and agrees that during his/her employment, and for a period of twenty-four (24) months after the Date of Termination, Grantee has not and will not, directly or indirectly, whether on behalf of the Grantee or others, solicit, lure or attempt to hire away any of the Company's employees or agents.
(h)
Non-Solicitation of Sales Agents .  Grantee acknowledges and agrees that during his/her employment, and for a period of twenty-four (24) months after the Date of Termination, Grantee has not and will not, directly or indirectly, whether on behalf of the Grantee or others, solicit any of the Company's Sales Agents for the purpose of disrupting their relationship with the Company and/or selling and/or facilitating the sale of products competitive with the Company's Business. For purposes of this Section 2, a ‘Sales Agent” is any third-party agency, and/or its representatives, with which or whom the Company has contracted for the purpose of



Exhibit 10(iii)A(71)

facilitating the sale of the Company's products during the last twenty-four (24) months of Grantee’s employment with the Company. 
(i)
Injunctive Relief.   Grantee acknowledges that if he/she breaches or threatens to breach any of the provisions of this Section 2, his/her actions may cause irreparable harm and damage to the Company which could not be compensated in damages.  Accordingly, if Grantee breaches or threatens to breach any of the provisions of this Section 2, the Company shall be entitled to seek injunctive relief, in addition to any other rights or remedies the Company may have.  The existence of any claim or cause of action by Grantee against the Company, whether predicated on the Confidentiality Provisions or otherwise, shall not constitute a defense to the enforcement by the Company of Grantee’s agreements under this Section 2.
3.
Contract Non-Assignable by Grantee.  The parties acknowledge that the Confidentiality Provisions have been entered into due to, among other things, the special skills and knowledge of Grantee, and agree that the Confidentiality Provisions may not be assigned or transferred by Grantee.

4.
Notices.   All notices, requests, demands and other communications required or permitted hereunder shall be in writing and shall be deemed to have been duly given when delivered or seven days after mailing if mailed first class, certified mail, postage prepaid, addressed as follows:

If to the Company:           Acuity Brands, Inc.,                                                      Attention: Corporate Secretary                                                  1170 Peachtree Street, NE Suite 2300                                              Atlanta, Georgia 30309-7676

If to Grantee:          To his or her last known address on file with the Company.

Any party may change the address to which notices, requests, demands and other communications shall be delivered or mailed by giving notice thereof to the other party in the same manner provided herein.
5.
  Provisions Severable.  If any provision or covenant, or any part thereof, contained in the Confidentiality Provisions is held by any court to be invalid, illegal, or unenforceable, either in whole or in part, such invalidity, illegality or unenforceability shall not affect the validity, legality or enforceability of the remaining provisions or covenants, or any part thereof, in the Confidentiality Provisions, all of which shall remain in full force and effect.  Each and every provision, paragraph and subparagraph of Section 2 above is severable from the other provisions, paragraphs and subparagraphs and constitutes a separate and distinct covenant. 

The restrictive covenants set forth in Section 2 of the Confidentiality Provisions represent the entire agreement of the parties with respect to the subject matter thereof and supersede any prior agreement with respect thereto; provided, however, that the restrictive covenants described in this Exhibit C shall not supersede those set forth in either: (a) any Executive Severance Agreement applicable to Grantee, if any, (b) any Confidentiality, Inventions and Non-Solicitation Agreement to which Grantee is a party, if any, or (c) any restrictive covenants to which Grantee is a party under any employment agreement or offer letter, if any.  To the extent that any agreement applicable to Grantee include restrictive covenant provisions that conflict with the provisions contained in these Confidentiality Provisions, the provisions that are more restrictive on Grantee will control. 

6.
Waiver.  Failure of either party to insist, in one or more instances, on performance by the other in strict accordance with the terms and conditions of the Confidentiality Provisions shall not be deemed a waiver or relinquishment of any right granted in the Confidentiality Provisions or the future performance of any such term or condition or of any other term or condition of the Confidentiality Provisions, unless such waiver is contained in a writing signed by the party making the waiver.

7.
Amendments and Modifications .  The Confidentiality Provisions and any Exhibit hereto may be amended or modified only by a writing signed by both parties hereto, which makes specific reference to the Confidentiality Provisions. However, this Section does not affect a court of competent jurisdiction or arbitrator`s ability to modify the Confidentiality Provisions, pursuant to O.C.G.A. §§ 13-8-51(11); 53(d); or 54 in the event that either party



Exhibit 10(iii)A(71)

initiates legal proceedings that relate in any way to this Confidentiality Provisions, including any action brought by either party seeking to enforce any provision set forth herein.

8.
Governing Law and Venue .  The validity and effect of the Confidentiality Provisions shall be governed by and construed and enforced in accordance with the laws of the State of Georgia, United States of America, without regard to its conflict of law provisions. Any and all disputes relating to, concerning or arising from the Confidentiality Provisions, or relating to, concerning or arising from the relationship between the parties evidenced by the Confidentiality Provisions, shall be brought and heard exclusively in the U.S. District Court for the District of Delaware or the Delaware Superior Court, New Castle County. Each of the parties hereby represents and agrees that such party is subject to the personal jurisdiction of said courts; hereby irrevocably consents to the jurisdiction of such courts in any legal or equitable proceedings related to, concerning or arising from such dispute, and waives, to the fullest extent permitted by law, any objection which such party may now or hereafter have that the laying of the venue of any legal or equitable proceedings related to, concerning or arising from such dispute which is brought in such courts is improper or that such proceedings have been brought in an inconvenient forum.
 
9.
Legal Fees .  Each party shall pay its own legal fees and other expenses associated with any dispute under the Confidentiality Provisions or any Exhibit hereto. 

10.
Tender Back Provision .  If, in the context of a lawsuit involving Grantee or any other person or entity arguing on Grantee’s behalf, any court determines that any provisions of Section 2 are void, invalid, illegal, or otherwise unenforceable, Grantee shall be required to immediately return to the Company 70% of all monies paid out under Paragraph 2 of the Restricted Stock Unit Agreement, or to return 70% of any unsold shares the Grantee still owns of such RSUs awarded under Paragraph 2 of the Restricted Stock Unit Agreement.  For purposes of this section, the amount to be paid back shall be determined by ascertaining the value and amount the share(s) sold for at the time that the Grantee actually sold such share(s). You acknowledge and agree that this covenant does not constitute a penalty clause.

11.
Tolling Period .  If Grantee is found by a court to have violated any restriction in Section 2 of the Confidentiality Provisions, he/she agrees that the time period for such restriction shall be extended by one day for each day that he/she is found to have violated the restriction, up to a maximum of 18 months.

12.
Language . The parties acknowledge that they have requested and are satisfied that the Confidentiality Provisions and all related documents be in the English language. 

SPECIAL TERMS AND CONDITIONS EXHIBIT TO THE CONFIDENTIALITY, INVENTIONS, NON-SOLICITATION AND NON COMPETITION PROVISIONS FOR GRANTEES OUTSIDE THE U.S.
This Appendix includes additional country-specific terms and conditions that apply to Grantees in the countries listed below with respect to the Confidentiality, Inventions, Non-Solicitation and Non-Competition Provisions (the "Confidentiality Provisions"). This Appendix is part of the Confidentiality Provisions and contains terms and conditions material to the Grantee's rights and obligations under the Confidentiality Provisions. Unless otherwise provided below, capitalized terms used but not defined herein shall have the same meanings assigned to them in the Plan and the Confidentiality Provisions.
CANADA
The following provision replaces Section 1(b) of the Confidentiality Provisions:
”Trade Secrets" means technical or nontechnical data, a formula, a pattern, a compilation, a program, a device, a method, a technique, a drawing, a process, financial data, financial plans, product plans, or a list of actual or potential customers or suppliers which is not commonly known by or available to the public and which information: (A) derives economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper



Exhibit 10(iii)A(71)

means by, other persons who obtain economic value from its disclosure or use; and (B) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.
The following provision replaces Section 1(h) of the Confidentiality Provisions:
“Material Contact” means contact between an employee and each Customer or potential Customer: with whom or which Grantee dealt on behalf of the Company; whose dealings with the Company were coordinated or supervised by Grantee; about whom Grantee obtained confidential information in the ordinary course of business as a result of such employee's association with the Company; and/or who receives products or services authorized by the Company, the sale or provision of which results or resulted in compensation, commissions, or earnings for Grantee within two years prior to the date of the Date of Termination..
The following provision shall be added to Section 1(i) as sub-section (vi):
"or (vi) Any other act or omission, or a series of acts or omissions, of the Grantee which, pursuant to applicable law, constitutes a serious reason for termination of employment without notice, payment in lieu of notice or any indemnity whatsoever."
The following provision replaces Section 2(d) of the Confidentiality Provisions:
Inventions. Grantee does hereby assign to the Company the entire right, title and interest in any Invention which is or was made or conceived, either solely or jointly with others, and does hereby waive any and all other rights that are non-assignable, including common law rights, but not limited to moral rights in all Inventions or any non-economic rights, during his/her employment with the Company, including after the Date of Termination.  Grantee attests that he/she has disclosed (or promptly will disclose, if after the Date of Termination) to the Company all such Inventions.  Grantee will, if requested, promptly execute and deliver to the Company a specific assignment of title for any such Invention and will at the expense of the Company, take all reasonably required action by the Company to patent, copyright or otherwise protect the Invention.
The following provision replaces Section 7 of the Confidentiality Provisions:
Amendments and Modifications. The Confidentiality Provisions and any Exhibit hereto may be amended or modified only by a writing signed by both parties hereto, which makes specific reference to the Confidentiality Provisions. However, this Section does not affect a court of competent jurisdiction or arbitrator's ability to modify the Confidentiality Provisions, as the case may be, in the event that either party initiates legal proceedings that relate in any way to the Confidentiality Provisions, including any action brought by either party seeking to enforce any provision set forth herein.
The following provision replaces Section 12 of the Confidentiality Provisions:
Language. The parties acknowledge that they have requested and are satisfied that the Confidentiality Provisions and all related documents be drawn up in the English language. Les parties aux présentes reconnaissent avoir requis que la présente entente et les documents qui y sont relatifs soient rédigés en anglais.
***
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

Vernon J Nagel
Chairman, President and CEO

C. Dan Smith
SVP, Treasurer and Secretary

PLEASE RETAIN THIS AGREEMENT AND ALL EXHIBITS FOR YOUR RECORDS.


Exhibit 10(iii)A(72)


ACUITY BRANDS, INC.
2012 Omnibus Stock Incentive Compensation Plan
Nonqualified Stock Option Award Agreement

Optionee : /$ParticipantName$/
Grant Type : /$GrantType$/
Grant ID : /$GrantID$/
Grant Date : /$GrantDate$/
Award Amount : /$AwardsGranted$/
Option Price : /$GrantPrice$/
Vest Schedule : /$VestingDescription$/
Accept By Date : /$AcceptByDate$/

This Nonqualified Stock Option Award Agreement (the “Option Agreement”) is made by and between Acuity Brands, Inc., a Delaware corporation (the “Company”), and Optionee, effective as of the Grant Date.
WHEREAS , the Company maintains the Acuity Brands, Inc. 2012 Omnibus Stock Incentive Compensation Plan (the “Plan”) in order to provide additional incentives to select employees and members of the Board of Directors of the Company (the “Board”) and its Subsidiaries;
WHEREAS , the Optionee performs services for the Company and/or one of its Subsidiaries;
WHEREAS , the Compensation Committee of the Board (the “Committee”) is responsible for administration of the Plan, and has determined to grant the right and option to purchase all or any part of the aggregate of whole Shares equal to the Award Amount set forth above (the “Option”) to the Optionee;
WHEREAS , the Company and Optionee have determined that all awards of Options designated as "performance-based compensation" within the meaning of Section 162(m) of the Internal Revenue Code of 1986, as amended (the "Code"), whether unvested or vested, shall be subject to the Company's Incentive-Based Compensation Recoupment Policy;
WHEREAS , the Company and Optionee have determined that Optionee shall enter into certain confidentiality, inventions, non-solicitation and non-competition provisions (the “Confidentiality Provisions”), which are attached to the Optionee’s Restricted Stock Award Agreement, dated [insert date], as Exhibit B and incorporated herein by reference, in consideration for receipt of the Option pursuant hereto, and other good and valuable consideration, and;
NOW, THEREFORE , the parties hereto agree as follows:
1.
Incorporation by Reference, Etc .
This Option Agreement shall be construed in accordance and consistent with, and subject to, the provisions of the Plan (the provisions of which are incorporated herein by reference) and, except as otherwise expressly set forth herein, the capitalized terms used in this Option Agreement shall have the same definitions as set forth in the Plan.
2.
Grant of Option .
2.1      The Company hereby grants to the Optionee, effective as of the Grant Date, the Option, on the terms and conditions set forth in this Option Agreement and as otherwise provided in the Plan.



Exhibit 10(iii)A(72)

2.2      The Option is not intended to qualify as an Incentive Stock Option within the meaning of Section 422 of the Code.

2.3      The Option is conditioned upon Optionee’s execution of this Option Agreement and the Confidentiality Provisions, which are incorporated herein by reference.  If this Option Agreement and the Restricted Stock Award Agreement, including the Confidentiality Provisions, are not accepted by the Optionee in the manner and within the time period specified by the Company, the Option may be canceled by the Committee.
3.
Option Price .
The price at which the Optionee shall be entitled to purchase Shares upon the exercise of the Option (the “Option Price”) shall be  the Option Price as set forth above.
4.
Duration of Option .
The Option shall be exercisable to the extent and in the manner provided herein for a period of ten (10) years from the Grant Date (the “Exercise Term”); provided, however, that the Option may be earlier terminated as provided in Section 2.3 and Section 7 hereof.
5.
Vesting and Exercisability of Option .
The Option shall vest, and may be exercised, with respect to the Shares as set forth above, subject to earlier termination of the Option as provided in Section 2.3 and Section 7 hereof or in the Plan.  The right to purchase the Shares as the Options become vested shall be cumulative and shall continue during the Exercise Term unless sooner terminated as provided herein.
6.
Manner of Exercise and Payment .
6.1      Subject to the terms and conditions of this Option Agreement and the Plan, the Option may be exercised by either (i) delivery of written or electronic notice to the Company, at its principal executive office or (ii) an online notice given to an online broker with, which the Company has made arrangement for the exercise of Options, which notice satisfies the form and conditions set forth in such arrangement, and which shall be provided to the Optionee from time to time.  Such notice shall state that the Optionee is electing to exercise the Option and the number of Shares in respect of which the Option is being exercised and, if delivered in writing to the Company, shall be signed by the person or persons exercising the Option.  If requested by the Committee, such person or persons shall (i) deliver this Option Agreement to the Secretary of the Company who shall endorse thereon a notation of such exercise and (ii) provide satisfactory proof as to the right of such person or persons to exercise the Option.
6.2      The notice of exercise described in Section 6.1 shall be accompanied by the full Option Price for any Shares purchased pursuant to the exercise of an Option and shall be paid in full upon such exercise, (i) in cash, by check, by transferring Shares to the Company, by attesting to the ownership of Shares, upon such terms and conditions as may be acceptable to the Committee, or by net settlement of the Option in the manner determined by the Committee, or (ii) by such arrangement as is made by the Company with the designated online broker.  Any Shares the Optionee transfers to the Company or attests to owning as payment of the Option Price shall be valued at their Fair Market Value on the day preceding the date of exercise of such Option. 
6.3      Upon receipt of notice of exercise and full payment of the Option Price, the Company shall, subject to Section 21 of the Plan, take such action as may be necessary to affect the transfer to the Optionee of the number of Shares as to which such exercise was effective.
6.4      The Optionee shall not be deemed to be the holder of, or to have any of the rights of a holder with respect to any Shares subject to the Option until (i) the Option shall have been exercised pursuant to the terms of this Option Agreement and the Optionee shall have paid the full Option Price for the number of Shares in respect of which



Exhibit 10(iii)A(72)

the Option was exercised, (ii) the Company shall have issued and delivered the Shares to the Optionee, and (iii) the Optionee’s name shall have been entered as a stockholder of record on the books of the Company, whereupon the Optionee shall have full voting and other ownership rights with respect to such Shares.
7.
Termination of Employment .
7.1 In General .
Except for the reasons set forth in Sections 7.2 and 8.2 below, or except as otherwise provided in a severance agreement with Optionee, if Optionee terminates his or her employment or if the Company, of if different, the Subsidiary employing the Optionee (the “Employer”) terminates Optionee for any reason, the Option shall continue to be exercisable, to the extent the Option was vested and exercisable on the Date of Termination, and shall continue to be exercisable at any time within three (3) months after such Date of Termination, but in no event after the expiration of the Exercise Term. “Date of Termination” means the last day of active employment of the Optionee with the Employer. The Board or the Committee shall have the exclusive discretion to determine when Optionee is no longer actively providing services for purposes of the Option grant (including whether Optionee may still be considered to be providing services while on a leave of absence).
7.2      Termination of Employment Due to Death, Disability, or Retirement .
If the Optionee’s termination of employment is due to death, Disability, or Retirement (termination on or after age 65), or if Optionee terminates employment after age 55, the following shall apply:
(a)      Termination Due To Death . In the event the Optionee dies while actively employed, the Option shall become immediately and fully exercisable, and shall remain exercisable at any time prior to the end of the Exercise Term, or for one (1) year after the date of death, whichever period is shorter, by (A) such person(s) that have acquired Optionee’s rights under the Option by will or by the applicable laws of descent and distribution, or (B) if no such person described in (A) exists, the Optionee’s estate or the representative of Optionee’s estate.

(b)      Termination by Disability . In the event the employment of the Optionee is terminated by reason of Disability, the Option shall become immediately and fully exercisable as of the date the Committee determines the Optionee was terminated for Disability and shall remain exercisable at any time prior to the end of the Exercise Term, or for one (1) year after the Date of Termination, whichever period is shorter.

(c)      Termination After Attaining Age 55 . If the Optionee terminates employment (other than as a result of death or Disability) after attaining age 55, all outstanding unvested Options shall expire, and any Options vested as of Optionee’s Date of Termination shall, unless the Committee determines otherwise at the time of such termination, remain exercisable at any time prior to the end of the Exercise Term, or for five (5) years after the Date of Termination, whichever period is shorter.  In the event of the Optionee’s death after terminating employment after age 55, the Option shall be exercisable in accordance with this subsection (c) and the Option shall be exercisable by the persons described in subsection (a) above.

8.
Effect of Change in Control .
8.1          Notwithstanding anything contained to the contrary in this Option Agreement, in the event of a Change in Control, the Option shall become immediately and fully exercisable, and the Committee, in its discretion, may terminate the Option, provided that at least 30 days prior to the Change in Control, the Committee notifies the Optionee that the Option will be terminated and provides the Optionee, at the election of the Committee, (i) the right to immediately receive a cash payment in an amount equal to the excess, if any, of (A) the greater of (x) the Fair Market Value on the date preceding the date of surrender, of the Shares subject to the Option or portion of the Option surrendered, or (y) the Adjusted Fair Market Value of the Shares subject to the Option or portion thereof surrendered, over (B) the aggregate Option Price for such Shares under the Option; or (ii) the right to exercise all Options (including the Options vested as a result of the Change in Control) immediately prior to the Change in Control.



Exhibit 10(iii)A(72)

8.2          If the Options remain outstanding after the Change in Control and if the employment of the Optionee is terminated within two (2) years following a Change in Control, all vested Options shall continue to be exercisable at any time within five (5) years after the Date of Termination, but in no event after expiration of the Exercise Term.

9.
Transferability .
The Option shall not be transferable other than by will or by the applicable laws of descent and distribution. During the lifetime of the Optionee, the Option shall be exercisable only by the Optionee.

10.
No Right to Continued Employment or Additional Grants .
Nothing in this Option Agreement or the Plan shall be interpreted or construed to confer upon the Optionee any right with respect to continuance of employment by the Company or the Employer, nor shall this Option Agreement or the Plan interfere in any way with the right of the Employer to terminate the Optionee’s employment at any time. The Plan may be terminated at any time and if the Plan is not terminated, Optionee shall not be entitled to any additional awards under the Plan.

11.
Adjustments .
In the event of a Share Change (as defined in Section 4.4(a) of the Plan), the Committee shall make appropriate adjustments to the number and class of Shares or other stock or securities subject to the Option and the Option Price for such Shares or other stock or securities. The Committee’s adjustment shall be made in accordance with the provisions of Section 4 of the Plan and shall be effective and final, binding, and conclusive for all purposes of the Plan and this Option Agreement.

All awards of Options designated as "performance-based compensation" within the meaning of Code Section 162(m), whether unvested or vested, shall be subject to the Company's Incentive-Based Compensation Recoupment Policy (the "Recoupment Policy"), such that any award that was made to an Optionee, who is deemed a "Covered Employee" under the Recoupment Policy, within the three (3) year period preceding the date on which the Company announces that it will prepare an accounting restatement under the Recoupment Policy shall be subject to deduction, clawback or forfeiture, as applicable.

12.
Withholding of Taxes .
12.1      Optionee acknowledges that, regardless of any action taken by the Company or the Employer, the ultimate liability for all income tax, social insurance, payroll tax, fringe benefits tax, payment on account or other tax-related items related to Optionee’s participation in the Plan and legally applicable to Optionee (“Tax-Related Items”), is and remains Optionee’s responsibility and may exceed the amount actually withheld by the Company or the Employer. Optionee further acknowledges that the Company and/or the Employer (1) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the Option, including, but not limited to, the grant, vesting or exercise of the Option, the subsequent sale of Shares acquired pursuant to such exercise and the receipt or payment of any dividends and (2) do not commit to and is under no obligation to structure the terms of the grant or any aspect of the Option to reduce or eliminate Optionee’s liability for Tax-Related Items or achieve any particular tax result. Further, if Optionee is subject to Tax-Related Items in more than one jurisdiction, Optionee acknowledges that the Company and/or the Employer may be required to withhold or account for Tax-Related Items in more than one jurisdiction.

12.2      Prior to any relevant taxable or tax withholding event, as applicable, Optionee agrees to make adequate arrangements satisfactory to the Company to satisfy all Tax-Related Items.

12.3      In this regard, Optionee authorizes the Company, the Employer or their respective agents, at their discretion, to satisfy any applicable withholding obligations with regard to all Tax-Related Items by one or a combination of the following:



Exhibit 10(iii)A(72)


(a) withholding from Optionee's wages or other cash compensation paid to Optionee by the Company or the Employer; or

(b) withholding from proceeds of the sale of Shares acquired upon exercise of the Option either through a voluntary sale or through a mandatory sale arranged by the Company (on Optionee’s behalf pursuant to this authorization); or

(c) Optionee may make a written election (the “Tax Election”) to have withheld a portion of the Shares issuable to him or her upon exercise of the Option, having an aggregate Fair Market Value equal to the amount of the Tax-Related Items, provided that, if Optionee is a Section 16 officer under the Exchange Act, then the Committee shall establish the method of withholding from alternatives (a)-(c) herein, and, if the Committee does not exercise its discretion prior to the Tax-Related Items withholding event, then Optionee shall be entitled to elect the method of withholding from the alternatives above.

12.4      Depending on the withholding method and subject to Section 17.2 of the Plan, the Company may withhold or account for Tax-Related Items by considering applicable minimum statutory withholding rates or other applicable withholding rates, including maximum applicable rates, in which case Optionee will receive a refund of any over-withheld amount in cash and will have no entitlement to the Share equivalent.

12.5      Optionee agrees to pay to the Company or the Employer, including through withholding from Optionee’s wages or other cash compensation paid to Optionee by the Company and/or the Employer any amount of Tax-Related Items that the Company or the Employer may be required to withhold or account for as a result of Optionee’s participation in the Plan that cannot be satisfied by the means previously described. The Company may refuse to issue or deliver the Shares or the proceeds of the sale of Shares, if Optionee fails to comply with Optionee’s obligations in connection with the Tax-Related Items.

13. No Advice Regarding Grant .
The Company is not providing any tax, legal or financial advice, nor is the Company making any recommendations regarding Optionee’s participation in the Plan, or Optionee’s acquisition or sale of the underlying Shares of Common Stock. Optionee should consult with his or her own personal tax, legal and financial advisors regarding his or her participation in the Plan before taking any action related to the Plan.

14.
Governing Law and Venue .
The Option and the provisions of this Option Agreement and the validity, interpretation, construction and performance of same shall be governed by, and subject to, the laws of the State of Delaware, without regard to its conflict of law provisions. Any and all disputes relating to, concerning or arising from this Option Agreement, or relating to, concerning or arising from the relationship between the parties evidenced by the Option or this Option Agreement, shall be brought and heard exclusively in the U.S. District Court for the District of Delaware or the Delaware Superior Court, New Castle County. Each of the parties hereby represents and agrees that such party is subject to the personal jurisdiction of said courts; hereby irrevocably consents to the jurisdiction of such courts in any legal or equitable proceedings related to, concerning or arising from such dispute, and waives, to the fullest extent permitted by law, any objection which such party may now or hereafter have that the laying of the venue of any legal or equitable proceedings related to, concerning or arising from such dispute which is brought in such courts is improper or that such proceedings have been brought in an inconvenient forum.

15.
Imposition of Other Requirements .
The Company reserves the right to impose other requirements on Optionee’s participation in the Plan, on the Option and on any Shares acquired under the Plan, to the extent the Company determines it is necessary or advisable for legal or administrative reasons, and to require Optionee to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing.



Exhibit 10(iii)A(72)


16.
Employee Bound by the Plan .
The Optionee hereby acknowledges receipt of a copy of the Plan and agrees to be bound by all the terms and provisions thereof.

17.
Modification of Agreement .
This Option Agreement may be modified, amended, suspended, or terminated, and any terms or conditions may be waived, but only by mutual agreement of the parties in writing.

18.
Severability .
The provisions of this Option Agreement are severable and if any one or more provisions are determined to be illegal or otherwise unenforceable, in whole or in part, the remaining provisions shall nevertheless be binding and enforceable.

19.
Waiver .
Optionee acknowledges that a waiver by the Company of breach of any provision of this Option Agreement shall not operate or be construed as a waiver of any other provision of this Option Agreement, or of any subsequent breach by Optionee.

20.
Successors in Interest .
This Option Agreement shall inure to the benefit of and be binding upon each successor corporation. This Option Agreement shall inure to the benefit of the Optionee’s legal representatives. All obligations imposed upon the Optionee and all rights granted to the Company under this Option Agreement shall be final, binding, and conclusive upon the Optionee’s heirs, executors, administrators and successors.

21.
Resolution of Disputes .
Any dispute or disagreement which may arise under, or as a result of, or in any way relate to, the interpretation, construction, or application of this Option Agreement shall be determined by the Committee.  Any determination made hereunder shall be final, binding, and conclusive on the Optionee and the Company for all purposes.

22.
Insider Trading/Market Abuse Restrictions .
Optionee may be subject to insider trading restriction and/or market abuse laws, which may affect Optionee's ability to acquire or sell Shares or rights to Shares (e.g., Options) under the Plan during such times as Optionee is considered to have "inside information" regarding the Company. Any restrictions under these laws or regulations are separate from and in addition to any restrictions that may be imposed under any applicable Company insider trading policy. Optionee is responsible for ensuring Optionee's own compliance with any applicable restrictions and is advised to speak with his or her personal legal advisor on this matter.

23.
Electronic Delivery and Acceptance .

The Company may, in its sole discretion, decide to deliver any documents related to current or future participation in the Plan by electronic means. The Optionee hereby consents to receive such documents by electronic delivery and agrees to participate in the Plan through an on-line or electronic system established and maintained by the Company or any third party designated by the Company. By Optionee’s electronic signature and the electronic signature of the Company's representative, Optionee and the Company agree that this Option is granted under and governed by the terms and conditions of the Plan and this Option Agreement.



Exhibit 10(iii)A(72)

***
IN WITNESS WHEREOF, the parties have executed this Option Agreement as of the date first above written.



Vernon J Nagel
Chairman, President and CEO




C. Dan Smith
SVP, Treasurer and Secretary






Exhibit 10(iii)A(73)

ACUITY BRANDS, INC.
2012 Omnibus Stock Incentive Compensation Plan
Nonqualified Stock Option Award Agreement
Optionee : /$ParticipantName$/
Grant Type : /$GrantType$/
Grant ID : /$GrantID$/
Grant Date : /$GrantDate$/
Award Amount : /$AwardsGranted$/
Option Price : /$GrantPrice$/
Vest Schedule : /$VestingDescription$/
Accept By Date : /$AcceptByDate$/

This Nonqualified Stock Option Award Agreement (the “Option Agreement”) is made by and between Acuity Brands, Inc., a Delaware corporation (the “Company”), and Optionee, effective as of the Grant Date.

WHEREAS , the Company maintains the Acuity Brands, Inc. 2012 Omnibus Stock Incentive Compensation Plan (the “Plan”) in order to provide additional incentives to select employees and members of the Board of Directors of the Company (the “Board”) and its Subsidiaries;

WHEREAS , the Optionee performs services for the Company and/or one of its Subsidiaries;

WHEREAS , the Compensation Committee of the Board (the “Committee”) is responsible for administration of the Plan, and has determined to grant the right and option to purchase all or any part of the aggregate of whole Shares equal to the Award Amount set forth above (the “Option”) to the Optionee;

WHEREAS , the Company and Optionee have determined that all awards of Options designated as "performance-based compensation" within the meaning of Section 162(m) of the Internal Revenue Code of 1986, as amended (the "Code"), whether unvested or vested, shall be subject to the Company's Incentive-Based Compensation Recoupment Policy;

WHEREAS , the Company and Optionee have determined that Optionee shall enter into certain confidentiality, inventions, non-solicitation and non-competition provisions (the “Confidentiality Provisions”), which are attached to the Optionee’s Restricted Stock Award Agreement, dated [insert date], as Exhibit B and incorporated herein by reference, in consideration for receipt of the Option pursuant hereto, and other good and valuable consideration, and;

NOW, THEREFORE , the parties hereto agree as follows:

1.
Incorporation by Reference, Etc .

This Option Agreement shall be construed in accordance and consistent with, and subject to, the provisions of the Plan (the provisions of which are incorporated herein by reference) and, except as otherwise expressly set forth herein, the capitalized terms used in this Option Agreement shall have the same definitions as set forth in the Plan.

2.
Grant of Option .

2.1      The Company hereby grants to the Optionee, effective as of the Grant Date, the Option, on the terms and conditions set forth in this Option Agreement and as otherwise provided in the Plan.

2.2      The Option is not intended to qualify as an Incentive Stock Option within the meaning of Section 422 of the Code.



Exhibit 10(iii)A(73)


2.3      The Option is conditioned upon Optionee’s execution of this Option Agreement and the Confidentiality Provisions, which are incorporated herein by reference. If this Option Agreement and the Restricted Stock Award Agreement, including the Confidentiality Provisions, are not accepted by the Optionee in the manner and within the time period specified by the Company, the Option may be canceled by the Committee.

3.
Option Price .

The price at which the Optionee shall be entitled to purchase Shares upon the exercise of the Option (the “Option Price”) shall be the Option Price as set forth above.

4.
Duration of Option.

The Option shall be exercisable to the extent and in the manner provided herein for a period of ten (10) years from the Grant Date (the “Exercise Term”); provided, however, that the Option may be earlier terminated as provided in Section 2.3 and Section 7 hereof.

5.
Vesting and Exercisability of Option.

The Option shall vest, and may be exercised, with respect to the Shares as set forth above, subject to earlier termination of the Option as provided in Section 2.3 and Section 7 hereof or in the Plan. The right to purchase the Shares as the Options become vested shall be cumulative and shall continue during the Exercise Term unless sooner terminated as provided herein.

6.
Manner of Exercise and Payment.

6.1      Subject to the terms and conditions of this Option Agreement and the Plan, the Option may be exercised by either (i) delivery of written or electronic notice to the Company, at its principal executive office or (ii) an online notice given to an online broker with, which the Company has made arrangement for the exercise of Options, which notice satisfies the form and conditions set forth in such arrangement, and which shall be provided to the Optionee from time to time. Such notice shall state that the Optionee is electing to exercise the Option and the number of Shares in respect of which the Option is being exercised and, if delivered in writing to the Company, shall be signed by the person or persons exercising the Option. If requested by the Committee, such person or persons shall (i) deliver this Option Agreement to the Secretary of the Company who shall endorse thereon a notation of such exercise and (ii) provide satisfactory proof as to the right of such person or persons to exercise the Option.

6.2      The notice of exercise described in Section 6.1 shall be accompanied by the full Option Price for any Shares purchased pursuant to the exercise of an Option and shall be paid in full upon such exercise, (i) in cash, by check, by transferring Shares to the Company, by attesting to the ownership of Shares, upon such terms and conditions as may be acceptable to the Committee, or by net settlement of the Option in the manner determined by the Committee, or (ii) by such arrangement as is made by the Company with the designated online broker. Any Shares the Optionee transfers to the Company or attests to owning as payment of the Option Price shall be valued at their Fair Market Value on the day preceding the date of exercise of such Option.

6.3      Upon receipt of notice of exercise and full payment of the Option Price, the Company shall, subject to Section 21 of the Plan, take such action as may be necessary to affect the transfer to the Optionee of the number of Shares as to which such exercise was effective.

6.4      The Optionee shall not be deemed to be the holder of, or to have any of the rights of a holder with respect to any Shares subject to the Option until (i) the Option shall have been exercised pursuant to the terms of this Option Agreement and the Optionee shall have paid the full Option Price for the number of Shares in respect of which the Option was exercised, (ii) the Company shall have issued and delivered the Shares to the Optionee, and (iii) the Optionee’s name shall have been entered as a stockholder of record on the books of the Company, whereupon the Optionee shall have full voting and other ownership rights with respect to such Shares.



Exhibit 10(iii)A(73)


7.
Termination of Employment.

7.1 In General .

Except for the reasons set forth in Sections 7.2 and 8.2 below, or except as otherwise provided in a severance agreement with Optionee, if Optionee terminates his or her employment or if the Company, of if different, the Subsidiary employing the Optionee (the “Employer”) terminates Optionee for any reason, the Option shall continue to be exercisable, to the extent the Option was vested and exercisable on the Date of Termination, and shall continue to be exercisable at any time within three (3) months after such Date of Termination, but in no event after the expiration of the Exercise Term. “Date of Termination” means the last day of active employment of the Optionee with the Employer. The Board or the Committee shall have the exclusive discretion to determine when Optionee is no longer actively providing services for purposes of the Option grant (including whether Optionee may still be considered to be providing services while on a leave of absence).

7.2 Termination of Employment Due to Death, Disability, or Retirement .

If the Optionee’s termination of employment is due to death, Disability, or Retirement (termination on or after age 65), or if Optionee terminates employment after age 55, the following shall apply:

(a)      Termination Due To Death . In the event the Optionee dies while actively employed, the Option shall become immediately and fully exercisable, and shall remain exercisable at any time prior to the end of the Exercise Term, or for one (1) year after the date of death, whichever period is shorter, by (A) a Permitted Transferee (as defined in Section 9 below), if any, or such person(s) that have acquired the Optionee’s rights under such Option by will or by the applicable laws of descent and distribution, or (B) if no such person described in (A) exists, the Optionee’s estate or the representative of Optionee’s estate.

(b)      Termination by Disability . In the event the employment of the Optionee is terminated by reason of Disability, the Option shall become immediately and fully exercisable as of the date the Committee determines the Optionee was terminated for Disability and shall remain exercisable at any time prior to the end of the Exercise Term, or for one (1) year after the Date of Termination, whichever period is shorter.

(c)      Termination After Attaining Age 55 . If the Optionee terminates employment (other than as a result of death or Disability) after attaining age 55, all outstanding unvested Options shall expire, and any Options vested as of Optionee’s Date of Termination shall, unless the Committee determines otherwise at the time of such termination, remain exercisable at any time prior to the end of the Exercise Term, or for five (5) years after the Date of Termination, whichever period is shorter. In the event of the Optionee’s death after terminating employment after age 55, the Option shall be exercisable in accordance with this subsection (c) and the Option shall be exercisable by the persons described in subsection (a) above.

8.
Effect of Change in Control.

8.1 Notwithstanding anything contained to the contrary in this Option Agreement, in the event of a Change in Control, the Option shall become immediately and fully exercisable, and the Committee, in its discretion, may terminate the Option, provided that at least 30 days prior to the Change in Control, the Committee notifies the Optionee that the Option will be terminated and provides the Optionee, at the election of the Committee, (i) the right to immediately receive a cash payment in an amount equal to the excess, if any, of (A) the greater of (x) the Fair Market Value on the date preceding the date of surrender, of the Shares subject to the Option or portion of the Option surrendered, or (y) the Adjusted Fair Market Value of the Shares subject to the Option or portion thereof surrendered, over (B) the aggregate Option Price for such Shares under the Option; or (ii) the right to exercise all Options (including the Options vested as a result of the Change in Control) immediately prior to the Change in Control.




Exhibit 10(iii)A(73)

8.2      If the Options remain outstanding after the Change in Control and if the employment of the Optionee is terminated within two (2) years following a Change in Control, all vested Options shall continue to be exercisable at any time within five (5) years after the Date of Termination, but in no event after expiration of the Exercise Term.

9.
Transferability.

The Option shall not be transferable other than by will or by the applicable laws of descent and distribution. Notwithstanding the foregoing, the Option may be transferred, in whole or in part, without consideration, by written instrument signed by the Optionee, to any members of the immediate family of the Optionee (i.e., spouse, children, and grandchildren), any trusts for the benefit of such family members or any partnerships whose only partners are such family members (the “Permitted Transferees”). Appropriate evidence of any such transfer to the Permitted Transferees shall be delivered to the Company at its principal executive office. If all or part of the Option is transferred to a Permitted Transferee, the Permitted Transferee’s rights hereunder shall be subject to the same restrictions and limitations with respect to the Option as the Optionee. During the lifetime of the Optionee, the Option shall be exercisable only by the Optionee, or if applicable, by the Permitted Transferees.

10.
No Right to Continued Employment or Additional Grants.

Nothing in this Option Agreement or the Plan shall be interpreted or construed to confer upon the Optionee any right with respect to continuance of employment by the Company or the Employer, nor shall this Option Agreement or the Plan interfere in any way with the right of the Employer to terminate the Optionee’s employment at any time. The Plan may be terminated at any time and if the Plan is not terminated, Optionee shall not be entitled to any additional awards under the Plan.

11.
Adjustments.

In the event of a Share Change (as defined in Section 4.4(a) of the Plan), the Committee shall make appropriate adjustments to the number and class of Shares or other stock or securities subject to the Option and the Option Price for such Shares or other stock or securities. The Committee’s adjustment shall be made in accordance with the provisions of Section 4 of the Plan and shall be effective and final, binding, and conclusive for all purposes of the Plan and this Option Agreement.

All awards of Options designated as "performance-based compensation" within the meaning of Code Section 162(m), whether unvested or vested, shall be subject to the Company's Incentive-Based Compensation Recoupment Policy (the "Recoupment Policy"), such that any award that was made to an Optionee, who is deemed a "Covered Employee" under the Recoupment Policy, within the three (3) year period preceding the date on which the Company announces that it will prepare an accounting restatement under the Recoupment Policy shall be subject to deduction, clawback or forfeiture, as applicable.

12.
Withholding of Taxes.

12.1      Optionee acknowledges that, regardless of any action taken by the Company or the Employer, the ultimate liability for all income tax, social insurance, payroll tax, fringe benefits tax, payment on account or other tax-related items related to Optionee’s participation in the Plan and legally applicable to Optionee (“Tax-Related Items”), is and remains Optionee’s responsibility and may exceed the amount actually withheld by the Company or the Employer. Optionee further acknowledges that the Company and/or the Employer (1) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the Option, including, but not limited to, the grant, vesting or exercise of the Option, the subsequent sale of Shares acquired pursuant to such exercise and the receipt or payment of any dividends and (2) do not commit to and is under no obligation to structure the terms of the grant or any aspect of the Option to reduce or eliminate Optionee’s liability for Tax-Related Items or achieve any particular tax result. Further, if Optionee is subject to Tax-Related Items in more than one jurisdiction, Optionee acknowledges that the Company and/or the Employer may be required to withhold or account for Tax-Related Items in more than one jurisdiction.




Exhibit 10(iii)A(73)

12.2      Prior to any relevant taxable or tax withholding event, as applicable, Optionee agrees to make adequate arrangements satisfactory to the Company to satisfy all Tax-Related Items.

12.3      In this regard, Optionee authorizes the Company, the Employer or their respective agents, at their discretion, to satisfy any applicable withholding obligations with regard to all Tax-Related Items by one or a combination of the following:

(a) withholding from Optionee's wages or other cash compensation paid to Optionee by the Company or the Employer; or

(b) withholding from proceeds of the sale of Shares acquired upon exercise of the Option either through a voluntary sale or through a mandatory sale arranged by the Company (on Optionee’s behalf pursuant to this authorization); or

(c) Optionee may make a written election (the “Tax Election”) to have withheld a portion of the Shares issuable to him or her upon exercise of the Option, having an aggregate Fair Market Value equal to the amount of the Tax-Related Items, provided, that if Optionee is a Section 16 officer under the Exchange Act, then the Committee shall establish the method of withholding from alternatives (a)-(c) herein, and, if the Committee does not exercise its discretion prior to the Tax-Related Items withholding event, then Optionee shall be entitled to elect the method of withholding from the alternatives above.

12.4      Depending on the withholding method and subject to Section 17.2 of the Plan, the Company may withhold or account for Tax-Related Items by considering applicable minimum statutory withholding rates or other applicable withholding rates, including maximum applicable rates, in which case Optionee will receive a refund of any over-withheld amount in cash and will have no entitlement to the Share equivalent.

12.5      Optionee agrees to pay to the Company or the Employer, including through withholding from Optionee’s wages or other cash compensation paid to Optionee by the Company and/or the Employer any amount of Tax-Related Items that the Company or the Employer may be required to withhold or account for as a result of Optionee’s participation in the Plan that cannot be satisfied by the means previously described. The Company may refuse to issue or deliver the Shares or the proceeds of the sale of Shares, if Optionee fails to comply with Optionee’s obligations in connection with the Tax-Related Items.

13.
No Advice Regarding Grant.

The Company is not providing any tax, legal or financial advice, nor is the Company making any recommendations regarding Optionee’s participation in the Plan, or Optionee’s acquisition or sale of the underlying Shares of Common Stock. Optionee should consult with his or her own personal tax, legal and financial advisors regarding his or her participation in the Plan before taking any action related to the Plan.

14.
Governing Law and Venue.

The Option and the provisions of this Option Agreement and the validity, interpretation, construction and performance of same shall be governed by, and subject to, the laws of the State of Delaware, without regard to its conflict of law provisions. Any and all disputes relating to, concerning or arising from this Option Agreement, or relating to, concerning or arising from the relationship between the parties evidenced by the Option or this Option Agreement, shall be brought and heard exclusively in the U.S. District Court for the District of Delaware or the Delaware Superior Court, New Castle County. Each of the parties hereby represents and agrees that such party is subject to the personal jurisdiction of said courts; hereby irrevocably consents to the jurisdiction of such courts in any legal or equitable proceedings related to, concerning or arising from such dispute, and waives, to the fullest extent permitted by law, any objection which such party may now or hereafter have that the laying of the venue of any legal or equitable proceedings related to, concerning or arising from such dispute which is brought in such courts is improper or that such proceedings have been brought in an inconvenient forum.




Exhibit 10(iii)A(73)

15.
Imposition of Other Requirements.

The Company reserves the right to impose other requirements on Optionee’s participation in the Plan, on the Option and on any Shares acquired under the Plan, to the extent the Company determines it is necessary or advisable for legal or administrative reasons, and to require Optionee to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing.

16.
Employee Bound by the Plan.

The Optionee hereby acknowledges receipt of a copy of the Plan and agrees to be bound by all the terms and provisions thereof.

17.
Modification of Agreement.

This Option Agreement may be modified, amended, suspended, or terminated, and any terms or conditions may be waived, but only by mutual agreement of the parties in writing.

18.
Severability.

The provisions of this Option Agreement are severable and if any one or more provisions are determined to be illegal or otherwise unenforceable, in whole or in part, the remaining provisions shall nevertheless be binding and enforceable.

19.
Waiver.

Optionee acknowledges that a waiver by the Company of breach of any provision of this Option Agreement shall not operate or be construed as a waiver of any other provision of this Option Agreement, or of any subsequent breach by Optionee.

20.
Successors in Interest.

This Option Agreement shall inure to the benefit of and be binding upon each successor corporation. This Option Agreement shall inure to the benefit of the Optionee’s legal representatives. All obligations imposed upon the Optionee and all rights granted to the Company under this Option Agreement shall be final, binding, and conclusive upon the Optionee’s heirs, executors, Permitted Transferees, administrators, and successors.

21.
Resolution of Disputes.

Any dispute or disagreement which may arise under, or as a result of, or in any way relate to, the interpretation, construction, or application of this Option Agreement shall be determined by the Committee. Any determination made hereunder shall be final, binding, and conclusive on the Optionee and the Company for all purposes.

22.
Insider Trading/Market Abuse Restrictions.

Optionee may be subject to insider trading restriction and/or market abuse laws, which may affect Optionee 's ability to acquire or sell Shares or rights to Shares (e.g., Options) under the Plan during such times as Optionee is considered to have "inside information" regarding the Company. Any restrictions under these laws or regulations are separate from and in addition to any restrictions that may be imposed under any applicable Company insider trading policy. Optionee is responsible for ensuring Optionee 's own compliance with any applicable restrictions and is advised to speak with his or her personal legal advisor on this matter.

23.
Electronic Delivery and Acceptance.

The Company may, in its sole discretion, decide to deliver any documents related to current or future participation in the Plan by electronic means. The Optionee hereby consents to receive such documents by electronic



Exhibit 10(iii)A(73)

delivery and agrees to participate in the Plan through an on-line or electronic system established and maintained by the Company or any third party designated by the Company. By Optionee’s electronic signature and the electronic signature of the Company's representative, Optionee and the Company agree that this Option is granted under and governed by the terms and conditions of the Plan and this Option Agreement.


***

IN WITNESS WHEREOF, the parties have executed this Option Agreement as of the date first above written.




Vernon J Nagel
Chairman, President and CEO





C. Dan Smith
SVP, Treasurer and Secretary






EXHIBIT 21

LIST OF SUBSIDIARIES

ACUITY BRANDS, INC.

As of August 31, 2016

Subsidiary or Affiliate
Principal Location
State or Other Jurisdiction of
Incorporation or Organization
9313-3510 Quebec Inc.
Brossard, Quebec, Canada
Canada
AB BMS C.V.
Cayman Islands
Netherlands
AB Netherlands Holdings, LLC
Atlanta, Georgia
Delaware
AB Netherlands Holdings C.V.
Cayman Islands
Netherlands
ABL IP Holding LLC
Atlanta, Georgia
Georgia
Acuity Aviation, LLC
Atlanta, Georgia
Georgia
Acuity Brands BMS B.V.
Amsterdam, the Netherlands
Netherlands
Acuity Brands BMS, LLC
Atlanta, Georgia
Delaware
Acuity Brands Brasil Participacoes LTDA
Sao Paolo, Brazil
Brazil
Acuity Brands Insurance (Bermuda) Ltd.
Hamilton, Bermuda
Bermuda
Acuity Brands Lighting, Inc.
Atlanta, Georgia
Delaware
Acuity Brands Lighting Canada, Inc.
Markham, Ontario
Canada
Acuity Brands Lighting (Hong Kong) Ltd.
Hong Kong
Hong Kong
Acuity Brands Lighting de Mexico, S. de R.L. de C.V.
Monterrey, Nuevo Leon
Mexico
Acuity Brands Netherlands B.V.
Eindhoven, the Netherlands
Netherlands
Acuity Brands Services, Inc.
Atlanta, Georgia
Delaware
Acuity Brands Technology Services, Inc.
Atlanta, Georgia
Delaware
Acuity Mexico Holdings, LLC
Atlanta, Georgia
Delaware
Acuity Trading (Shanghai) Co. Ltd.
Shanghai, China
Shanghai
C&G Carandini S.A.
Barcelona, Spain
Spain
Castlight de Mexico, S.A. de C.V.
Matamoros, Tamaulipas
Mexico
Distech Controls, Inc.
Brossard, Quebec, Canada
Canada
Distech Controls Facility Solutions, Inc.
Ottawa, Ontario, Canada
Canada
Distech Controls Energy Services (Canada) Inc.
Brossard, Quebec, Canada
Canada
Distech France Holding SAS
Brindas, France
France
Distech Controls SAS France
Brindas, France
France
Distech Controls Solutions SAS France
Brindas, France
France
Distech Controls LLC
Atlanta, Georgia
Delaware
Distech Controls USA Inc.
Atlanta, Georgia
Delaware
Distech Controls Energy Services, Inc.
Atlanta, Georgia
Texas
eldoLAB Holding B.V.
Eindhoven, the Netherlands
Netherlands
eldoLED B.V.
Eindhoven, the Netherlands
Netherlands
Holophane S.A. de C.V.
Tultitlan, Mexico City
Mexico
Holophane Alumbrado Iberica SL
Barcelona, Spain
Spain
Holophane Europe Ltd.
Milton Keynes, England
United Kingdom
Holophane Lichttechnik GmbH
Düsseldorf, Germany
Germany
Holophane Lighting Ltd.
Milton Keynes, England
United Kingdom
HSA Acquisition Company, LLC
Atlanta, Georgia
Ohio
ID Limited
Douglas, Isle of Man
Isle of Man
Luxfab Ltd.
Milton Keynes, England
United Kingdom




Exhibit 23

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in the following Registration Statements:
(1)
 
Registration Statement (Form S-8 No. 333-74242) pertaining to the Acuity Brands, Inc. 401(k) Plan, Acuity Lighting Group, Inc. 401(k) Plan for Hourly Employees, Holophane Division of Acuity Lighting Group 401(k) Plan for Hourly Employees, Holophane Division of Acuity Lighting Group 401(k) Plan for Hourly Employees Covered by a Collective Bargaining Agreement,
(2)
 
Registration Statement (Form S-8 No. 333-74246) pertaining to the Acuity Brands, Inc. Long-Term Incentive Plan, Acuity Brands, Inc. Employee Stock Purchase Plan, Acuity Brands, Inc. 2001 Nonemployee Directors' Stock Option Plan,
(3)
 
Registration Statement (Form S-8 No. 333-123999) pertaining to the Acuity Brands, Inc. 401(k) Plan,
(4)
 
Registration Statement (Form S-8 No. 333-126521) pertaining to the Acuity Brands, Inc. Long-Term Incentive Plan (as amended and restated),
(5)
 
Registration Statement (Form S-8 No. 333-138384) pertaining to the Acuity Brands, Inc. 2005 Supplemental Deferred Savings Plan, Acuity Brands, Inc. Nonemployee Director Deferred Compensation Plan (as amended and restated),
(6)
 
Registration Statement (Form S-8 No. 333-152134) pertaining to the Acuity Brands, Inc. Long-Term Incentive Plan (as amended and restated),
(7)
 
Registration Statement (Form S-8 No. 333-179243) pertaining to the Acuity Brands, Inc. 2011 Nonemployee Director Deferred Compensation Plan, and
(8)
 
Registration Statement (Form S-8 No. 333-185971) pertaining to the Acuity Brands, Inc. 2012 Omnibus Stock Incentive Compensation Plan;
of our reports dated October 27, 2016 , with respect to the consolidated financial statements and schedule of Acuity Brands, Inc. and the effectiveness of internal control over financial reporting of Acuity Brands, Inc. included in this Annual Report (Form 10-K) of Acuity Brands, Inc., for the year ended August 31, 2016 .

/s/ Ernst & Young LLP
Atlanta, Georgia
October 27, 2016






Exhibit 24

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby constitutes and appoints Richard K. Reece and Vernon J. Nagel, and each of them individually, his true and lawful attorneys-in-fact (with full power of substitution and resubstitution) to act for him in his name, place, and stead in his capacity as a director or officer of Acuity Brands, Inc., to file a registrant's annual report on Form 10-K for the fiscal year ended August 31, 2016 , and any and all amendments thereto, with any exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact, and each of them individually, full power and authority to do and perform each and every act and thing requisite and necessary to be done in the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact or either of them, or their substitutes, may lawfully do or cause to be done by virtue hereof.



/s/ W. Patrick Battle                      
W. Patrick Battle

Dated: October 24, 2016





Exhibit 24

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby constitutes and appoints Richard K. Reece and Vernon J. Nagel, and each of them individually, his true and lawful attorneys-in-fact (with full power of substitution and resubstitution) to act for him in his name, place, and stead in his capacity as a director or officer of Acuity Brands, Inc., to file a registrant's annual report on Form 10-K for the fiscal year ended August 31, 2016 , and any and all amendments thereto, with any exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact, and each of them individually, full power and authority to do and perform each and every act and thing requisite and necessary to be done in the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact or either of them, or their substitutes, may lawfully do or cause to be done by virtue hereof.

/s/ Peter C. Browning                      
Peter C. Browning

Dated: October 24, 2016






Exhibit 24

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby constitutes and appoints Richard K. Reece and Vernon J. Nagel, and each of them individually, his true and lawful attorneys-in-fact (with full power of substitution and resubstitution) to act for him in his name, place, and stead in his capacity as a director or officer of Acuity Brands, Inc., to file a registrant's annual report on Form 10-K for the fiscal year ended August 31, 2016 , and any and all amendments thereto, with any exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact, and each of them individually, full power and authority to do and perform each and every act and thing requisite and necessary to be done in the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact or either of them, or their substitutes, may lawfully do or cause to be done by virtue hereof.

/s/ James H. Hance, Jr.                     
James H. Hance, Jr.

Dated: October 24, 2016





Exhibit 24

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby constitutes and appoints Richard K. Reece and Vernon J. Nagel, and each of them individually, his true and lawful attorneys-in-fact (with full power of substitution and resubstitution) to act for him in his name, place, and stead in his capacity as a director or officer of Acuity Brands, Inc., to file a registrant's annual report on Form 10-K for the fiscal year ended August 31, 2016 , and any and all amendments thereto, with any exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact, and each of them individually, full power and authority to do and perform each and every act and thing requisite and necessary to be done in the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact or either of them, or their substitutes, may lawfully do or cause to be done by virtue hereof.

/s/ Gordon D. Harnett                 
Gordon D. Harnett

Dated: October 24, 2016






Exhibit 24

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby constitutes and appoints Richard K. Reece and Vernon J. Nagel, and each of them individually, his true and lawful attorneys-in-fact (with full power of substitution and resubstitution) to act for him in his name, place, and stead in his capacity as a director or officer of Acuity Brands, Inc., to file a registrant's annual report on Form 10-K for the fiscal year ended August 31, 2016 , and any and all amendments thereto, with any exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact, and each of them individually, full power and authority to do and perform each and every act and thing requisite and necessary to be done in the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact or either of them, or their substitutes, may lawfully do or cause to be done by virtue hereof.

/s/ Robert F. McCullough                  
Robert F. McCullough

Dated: October 24, 2016





Exhibit 24

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby constitutes and appoints Richard K. Reece and Vernon J. Nagel, and each of them individually, his true and lawful attorneys-in-fact (with full power of substitution and resubstitution) to act for him in his name, place, and stead in his capacity as a director or officer of Acuity Brands, Inc., to file a registrant's annual report on Form 10-K for the fiscal year ended August 31, 2016 , and any and all amendments thereto, with any exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact, and each of them individually, full power and authority to do and perform each and every act and thing requisite and necessary to be done in the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact or either of them, or their substitutes, may lawfully do or cause to be done by virtue hereof.

/s/ Julia B. North                  
Julia B. North

Dated: October 24, 2016





Exhibit 24

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby constitutes and appoints Richard K. Reece and Vernon J. Nagel, and each of them individually, his true and lawful attorneys-in-fact (with full power of substitution and resubstitution) to act for him in his name, place, and stead in his capacity as a director or officer of Acuity Brands, Inc., to file a registrant's annual report on Form 10-K for the fiscal year ended August 31, 2016 , and any and all amendments thereto, with any exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact, and each of them individually, full power and authority to do and perform each and every act and thing requisite and necessary to be done in the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact or either of them, or their substitutes, may lawfully do or cause to be done by virtue hereof.

/s/ Dominic J. Pileggi                  
Dominic J. Pileggi

Dated: October 24, 2016





Exhibit 24

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby constitutes and appoints Richard K. Reece and Vernon J. Nagel, and each of them individually, his true and lawful attorneys-in-fact (with full power of substitution and resubstitution) to act for him in his name, place, and stead in his capacity as a director or officer of Acuity Brands, Inc., to file a registrant's annual report on Form 10-K for the fiscal year ended August 31, 2016 , and any and all amendments thereto, with any exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact, and each of them individually, full power and authority to do and perform each and every act and thing requisite and necessary to be done in the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact or either of them, or their substitutes, may lawfully do or cause to be done by virtue hereof.

/s/ Ray M. Robinson                  
Ray M. Robinson

Dated: October 24, 2016





Exhibit 24

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby constitutes and appoints Richard K. Reece and Vernon J. Nagel, and each of them individually, his true and lawful attorneys-in-fact (with full power of substitution and resubstitution) to act for him in his name, place, and stead in his capacity as a director or officer of Acuity Brands, Inc., to file a registrant's annual report on Form 10-K for the fiscal year ended August 31, 2016 , and any and all amendments thereto, with any exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact, and each of them individually, full power and authority to do and perform each and every act and thing requisite and necessary to be done in the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact or either of them, or their substitutes, may lawfully do or cause to be done by virtue hereof.

/s/ Norman H. Wesley                  
Norman H. Wesley

Dated: October 24, 2016





EXHIBIT 31(a)
I, Vernon J. Nagel, certify that:
1.
I have reviewed this annual report on Form 10-K of Acuity Brands, Inc.;
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;
(c)
Evaluated the effectiveness of the registrant’s disclosure controls and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s fourth fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
(a)
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: October 27, 2016
/s/ Vernon J. Nagel  
 
 
Vernon J. Nagel 
 
 
Chairman, President, and Chief Executive Officer 
 
 
[A signed original of this written statement required by Section 302 of the Sarbanes-Oxley Act has been provided to Acuity Brands, Inc., and will be retained by Acuity Brands, Inc., and furnished to the Securities and Exchange Commission or its staff upon request.]





EXHIBIT 31(b)
I, Richard K. Reece, certify that:
1.
I have reviewed this annual report on Form 10-K of Acuity Brands, Inc.;
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;
(c)
Evaluated the effectiveness of the registrant’s disclosure controls and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s fourth fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
(a)
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: October 27, 2016
/s/ Richard K. Reece  
 
 
Richard K. Reece 
 
 
Executive Vice President and Chief Financial Officer 
 
 
[A signed original of this written statement required by Section 302 of the Sarbanes-Oxley Act has been provided to Acuity Brands, Inc., and will be retained by Acuity Brands, Inc., and furnished to the Securities and Exchange Commission or its staff upon request.]





Exhibit 32(a)
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906 OF THE
SARBANES-OXLEY ACT OF 2002
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and in connection with the Annual Report on Form 10-K of Acuity Brands, Inc. (the “Corporation”) for the year ended August 31, 2016 , as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, the Chairman, President, and Chief Executive Officer of the Corporation, certifies that:
(1)
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Corporation.
/s/ Vernon J. Nagel  
 
 
Vernon J. Nagel 
 
 
Chairman, President, and Chief Executive Officer
 
 
October 27, 2016
 
 
[A signed original of this written statement required by Section 906 has been provided to Acuity Brands, Inc., and will be retained by Acuity Brands, Inc., and furnished to the Securities and Exchange Commission or its staff upon request.]





Exhibit 32(b)
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906 OF THE
SARBANES-OXLEY ACT OF 2002
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and in connection with the Annual Report on Form 10-K of Acuity Brands, Inc. (the “Corporation”) for the year ended August 31, 2016 , as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, the Executive Vice President and Chief Financial Officer of the Corporation, certifies that:
(1)
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Corporation.
/s/ Richard K. Reece  
 
 
Richard K. Reece 
 
 
Executive Vice President and Chief Financial Officer
 
 
October 27, 2016
 
 
[A signed original of this written statement required by Section 906 has been provided to Acuity Brands, Inc., and will be retained by Acuity Brands, Inc., and furnished to the Securities and Exchange Commission or its staff upon request.]