Supplemental Guarantor Condensed Consolidating Financial Statements

3 Months Ended

Nov. 30, 2018

Condensed Financial Information Disclosure [Abstract]

Supplemental Guarantor Condensed Consolidating Financial Statements

Supplemental Guarantor Condensed Consolidating Financial Statements

In December 2009, ABL, the 100% owned and principal operating subsidiary of Acuity Brands, refinanced the then current outstanding debt through the issuance of the Unsecured 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 Unsecured Notes and the initial purchasers of the Unsecured Notes, ABL and the guarantors to the Notes filed a registration statement with the SEC for an offer to exchange the Unsecured Notes for an issue of SEC-registered notes with identical terms. Due to the filing of the registration statement and offer to exchange, we 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, we have included the accompanying Condensed Consolidating Financial Statements in accordance with Rule 3-10(d) of SEC Regulation S-X since the Unsecured 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. Consolidating adjustments 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 the Company's financial condition, results of operations, or cash flows for any purpose other than to comply with the specific requirements for parent-subsidiary guarantor reporting.

CONDENSED CONSOLIDATING BALANCE SHEETS

(In millions)

	November 30, 2018
	Parent		Subsidiary Issuer		Subsidiary Guarantor		Non- Guarantors		Consolidating Adjustments			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	158.0	$	—	$	—	$	56.8	$	—		$	214.8
Accounts receivable, net	—		486.9		—		69.8		—			556.7
Inventories	—		392.6		—		27.6		—			420.2
Other current assets	11.5		32.5		—		16.1		—			60.1
Total current assets	169.5		912.0		—		170.3		—			1,251.8
Property, plant, and equipment, net	0.2		225.3		—		57.5		—			283.0
Goodwill	—		746.0		2.7		218.2		—			966.9
Intangible assets, net	—		282.7		105.8		101.0		—			489.5
Deferred income taxes	36.0		—		—		6.3		(39.4		)	2.9
Other long-term assets	0.2		19.2		—		1.8		—			21.2
Investments in and amounts due from affiliates	1,679.2		513.8		290.3		—		(2,483.3		)	—
Total assets	$	1,885.1	$	2,699.0	$	398.8	$	555.1	$	(2,522.7	)	$	3,015.3
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	0.5	$	363.9	$	—	$	25.3	$	—		$	389.7
Current maturities of long-term debt	—		—		—		0.4		—			0.4
Other accrued liabilities	33.9		191.6		—		36.4		—			261.9
Total current liabilities	34.4		555.5		—		62.1		—			652.0
Long-term debt	—		353.6		—		2.7		—			356.3
Deferred income taxes	—		102.3		—		25.8		(39.4		)	88.7
Other long-term liabilities	99.8		53.3		—		14.3		—			167.4
Amounts due to affiliates	—		—		—		139.9		(139.9		)	—
Total stockholders’ equity	1,750.9		1,634.3		398.8		310.3		(2,343.4		)	1,750.9
Total liabilities and stockholders’ equity	$	1,885.1	$	2,699.0	$	398.8	$	555.1	$	(2,522.7	)	$	3,015.3

CONDENSED CONSOLIDATING BALANCE SHEETS

(In millions)

	August 31, 2018
	Parent		Subsidiary Issuer		Subsidiary Guarantor		Non- Guarantors		Consolidating Adjustments			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	80.5	$	—	$	—	$	48.6	$	—		$	129.1
Accounts receivable, net	—		560.7		—		77.2		—			637.9
Inventories	—		386.6		—		25.2		—			411.8
Other current assets	2.3		18.6		—		11.4		—			32.3
Total current assets	82.8		965.9		—		162.4		—			1,211.1
Property, plant, and equipment, net	0.2		226.8		—		59.7		—			286.7
Goodwill	—		746.5		2.7		221.4		—			970.6
Intangible assets, net	—		286.6		106.5		105.6		—			498.7
Deferred income taxes	36.4		—		—		6.2		(39.7		)	2.9
Other long-term assets	1.2		15.6		—		2.0		—			18.8
Investments in and amounts due from affiliates	1,707.0		370.6		279.5		—		(2,357.1		)	—
Total assets	$	1,827.6	$	2,612.0	$	388.7	$	557.3	$	(2,396.8	)	$	2,988.8
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	0.3	$	420.7	$	—	$	30.1	$	—		$	451.1
Current maturities of long-term debt	—		—		—		0.4		—			0.4
Other accrued liabilities	18.8		170.1		—		42.3		—			231.2
Total current liabilities	19.1		590.8		—		72.8		—			682.7
Long-term debt	—		353.5		—		2.9		—			356.4
Deferred income taxes	—		106.5		—		25.7		(39.7		)	92.5
Other long-term liabilities	91.7		34.0		—		14.7		—			140.4
Amounts due to affiliates	—		—		—		138.8		(138.8		)	—
Total stockholders’ equity	1,716.8		1,527.2		388.7		302.4		(2,218.3		)	1,716.8
Total liabilities and stockholders’ equity	$	1,827.6	$	2,612.0	$	388.7	$	557.3	$	(2,396.8	)	$	2,988.8

CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME

(In millions)

	Three Months Ended November 30, 2018
	Parent			Subsidiary Issuer			Subsidiary Guarantor		Non- Guarantors			Consolidating Adjustments			Consolidated
Net sales:
External sales	$	—		$	828.9		$	—	$	103.7		$	—		$	932.6
Intercompany sales	—			—			13.7		53.0			(66.7		)	—
Total sales	—			828.9			13.7		156.7			(66.7		)	932.6
Cost of products sold	—			500.5			—		116.3			(51.7		)	565.1
Gross profit	—			328.4			13.7		40.4			(15.0		)	367.5
Selling, distribution, and administrative expenses	8.9			217.7			0.7		37.8			(15.0		)	250.1
Intercompany charges	(1.3		)	—			—		1.3			—			—
Special charge	—			1.0			—		—			—			1.0
Operating (loss) profit	(7.6		)	109.7			13.0		1.3			—			116.4
Interest expense, net	3.1			4.4			—		1.2			—			8.7
Equity earnings in subsidiaries	(89.2		)	(3.3		)	—		0.1			92.4			—
Miscellaneous expense (income), net	1.9			(0.6		)	—		—			—			1.3
Income before income taxes	76.6			109.2			13.0		—			(92.4		)	106.4
Income tax (benefit) expense	(3.0		)	26.6			2.7		0.5			—			26.8
Net income (loss)	79.6			82.6			10.3		(0.5		)	(92.4		)	79.6
Other comprehensive income (loss) items:
Foreign currency translation adjustments	(8.8		)	(8.8		)	—		—			8.8			(8.8		)
Defined benefit pension plans, net	2.6			1.2			—		0.3			(1.5		)	2.6
Other comprehensive (loss) income items, net of tax	(6.2		)	(7.6		)	—		0.3			7.3			(6.2		)
Comprehensive income (loss)	$	73.4		$	75.0		$	10.3	$	(0.2	)	$	(85.1	)	$	73.4

CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME

(In millions)

	Three Months Ended November 30, 2017
	Parent			Subsidiary Issuer			Subsidiary Guarantor		Non- Guarantors			Consolidating Adjustments			Consolidated
Net sales:
External sales	$	—		$	744.2		$	—	$	98.6		$	—		$	842.8
Intercompany sales	—			—			12.0		43.5			(55.5		)	—
Total sales	—			744.2			12.0		142.1			(55.5		)	842.8
Cost of products sold	—			430.1			—		104.9			(42.1		)	492.9
Gross profit	—			314.1			12.0		37.2			(13.4		)	349.9
Selling, distribution, and administrative expenses	11.1			194.7			0.8		36.3			(13.4		)	229.5
Intercompany charges	(1.0		)	(0.5		)	—		1.5			—			—
Special charge	—			0.2			—		—			—			0.2
Operating (loss) profit	(10.1		)	119.7			11.2		(0.6		)	—			120.2
Interest expense, net	2.7			4.0			—		1.4			—			8.1
Equity earnings in subsidiaries	(80.9		)	(1.1		)	—		—			82.0			—
Miscellaneous expense (income), net	1.6			0.5			—		(0.9		)	—			1.2
Income (loss) before income taxes	66.5			116.3			11.2		(1.1		)	(82.0		)	110.9
Income tax (benefit) expense	(5.0		)	42.2			2.2		—			—			39.4
Net income (loss)	71.5			74.1			9.0		(1.1		)	(82.0		)	71.5
Other comprehensive income (loss) items:
Foreign currency translation adjustments	(10.5		)	(10.5		)	—		—			10.5			(10.5		)
Defined benefit pension plans, net	1.6			1.2			—		0.4			(1.6		)	1.6
Other comprehensive (loss) income items, net of tax	(8.9		)	(9.3		)	—		0.4			8.9			(8.9		)
Comprehensive income (loss)	$	62.6		$	64.8		$	9.0	$	(0.7	)	$	(73.1	)	$	62.6

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

(In millions)

	Three Months Ended November 30, 2018
	Parent			Subsidiary Issuer			Subsidiary Guarantor		Non- Guarantors			Consolidating Adjustments		Consolidated
Net cash provided by operating activities	$	110.9		$	8.7		$	—	$	12.2		$	—	$	131.8
Cash flows from investing activities:
Purchases of property, plant, and equipment	—			(11.5		)	—		(2.5		)	—		(14.0		)
Other investing activities	0.6			2.1			—		—			—		2.7
Net cash provided by (used for) investing activities	0.6			(9.4		)	—		(2.5		)	—		(11.3		)
Cash flows from financing activities:
Borrowings on credit facility	—			55.4			—		—			—		55.4
Repayments of borrowings on credit facility	—			(55.4		)	—		—			—		(55.4		)
Repayments of long-term debt	—			—			—		(0.1		)	—		(0.1		)
Proceeds from stock option exercises and other	0.1			—			—		—			—		0.1
Repurchases of common stock	(25.0		)	—			—		—			—		(25.0		)
Withholding taxes on net settlement of equity awards	(3.9		)	—			—		—			—		(3.9		)
Dividends paid	(5.2		)	—			—		—			—		(5.2		)
Net cash used for financing activities	(34.0		)	—			—		(0.1		)	—		(34.1		)
Effect of exchange rates changes on cash	—			0.7			—		(1.4		)	—		(0.7		)
Net change in cash and cash equivalents	77.5			—			—		8.2			—		85.7
Cash and cash equivalents at beginning of period	80.5			—			—		48.6			—		129.1
Cash and cash equivalents at end of period	$	158.0		$	—		$	—	$	56.8		$	—	$	214.8

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

(In millions)

	Three Months Ended November 30, 2017
	Parent			Subsidiary Issuer			Subsidiary Guarantor		Non- Guarantors			Consolidating Adjustments		Consolidated
Net cash provided by (used for) operating activities	$	137.8		$	5.8		$	—	$	(3.8	)	$	—	$	139.8
Cash flows from investing activities:
Purchases of property, plant, and equipment	—			(7.2		)	—		(3.1		)	—		(10.3		)
Net cash used for investing activities	—			(7.2		)	—		(3.1		)	—		(10.3		)
Cash flows from financing activities:
Repayments of long-term debt	—			—			—		(0.1		)	—		(0.1		)
Proceeds from stock option exercises and other	0.8			—			—		—			—		0.8
Withholding taxes on net settlement of equity awards	(6.0		)	—			—		—			—		(6.0		)
Dividends paid	(5.5		)	—			—		—			—		(5.5		)
Net cash used for financing activities	(10.7		)	—			—		(0.1		)	—		(10.8		)
Effect of exchange rate changes on cash	—			1.4			—		(2.6		)	—		(1.2		)
Net change in cash and cash equivalents	127.1			—			—		(9.6		)	—		117.5
Cash and cash equivalents at beginning of period	237.7			—			—		73.4			—		311.1
Cash and cash equivalents at end of period	$	364.8		$	—		$	—	$	63.8		$	—	$	428.6