UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_____________________________________________
FORM 11-K
_____________________________________________
Annual Report Pursuant to Section 15(d) of the Securities Exchange Act of 1934
(Mark One) | ||
þ | ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. | |
For the fiscal year ended: December 31, 2016 | ||
OR | ||
o | TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. | |
For the transition period from to . | ||
Commission file number 001-16583
_____________________________________________
A. | Full title of the plans and the address of the plans, if different from that of the Issuer named below: |
Acuity Brands, Inc. 401(k) Plan | |
Acuity Brands Lighting, Inc. 401(k) Plan for Hourly Employees | |
Holophane Division of Acuity Brands Lighting 401(k) Plan for Hourly Employees Covered by a Collective Bargaining Agreement | |
B. | Name of issuer of the securities held pursuant to the plans and the address of the Principal executive office: |
Acuity Brands, Inc. | |
1170 Peachtree Street, NE | |
Suite 2300 | |
Atlanta, Georgia 30309 | |
Acuity Brands, Inc.
Selected 401(k) and Retirement Plans
Audited Financial Statements and Supplemental Schedule
As of December 31, 2016 and 2015 and for the year ended December 31, 2016
Contents
Audited Financial Statements | |
Supplemental Schedule | |
Report of Independent Registered Public Accounting Firm
To the Plan Administrator
Acuity Brands, Inc. Selected 401(k) and Retirement Plans
Atlanta, GA
We have audited the accompanying statements of net assets available for benefits of Acuity Brands, Inc. 401(k) Plan, Acuity Brands Lighting, Inc. 401(k) Plan for Hourly Employees, and Holophane Division of Acuity Brands Lighting 401(k) Plan for Hourly Employees Covered by a Collective Bargaining Agreement (“Plans”) as of December 31, 2016 and 2015, and the related statements of changes in net assets available for benefits for the year ended December 31, 2016. These financial statements are the responsibility of the Plans' management. Our responsibility is to express an opinion on these financial statements 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. The Plans are not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Plans' internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, 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 net assets available for benefits of the Plans as of December 31, 2016 and 2015, and the changes in net assets available for benefits for the year ended December 31, 2016, in conformity with accounting principles generally accepted in the United States of America.
The accompanying supplemental Schedule H, Line 4i Schedule of Assets (Held at End of Year) and Schedule H, Line 4a - Schedule of Delinquent Participant Contributions as of or for the year ended December 31, 2016 have been subjected to audit procedures performed in conjunction with the audit of the Plans’ financial statements. The supplemental schedules are the responsibility of the Plans’ management. Our audit procedures included determining whether the supplemental schedules reconcile to the financial statements or the underlying accounting and other records, as applicable, and performing procedures to test the completeness and accuracy of the information presented in the supplemental schedules. In forming our opinion on the supplemental schedules, we evaluated whether the supplemental schedules, including its form and content, is presented in conformity with the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. In our opinion, the supplemental schedule is fairly stated, in all material respects, in relation to the financial statements as a whole.
/s/ BDO USA, LLP
Atlanta, Georgia
June 28, 2017
1
Acuity Brands, Inc. Selected 401(k) and Retirement Plans
Statements of Net Assets Available for Benefits
As of December 31, 2016
Acuity Brands, Inc. 401(k) Plan | Acuity Brands Lighting, Inc. 401(k) Plan for Hourly Employees | Holophane Division of Acuity Brands Lighting 401(k) Plan for Hourly Employees Covered by a Collective Bargaining Agreement | ||||||||||
Filing Plan No. | 033 | 067 | 070 | |||||||||
Assets: | ||||||||||||
Plan interest in Acuity DC Trust | $ | 276,844,496 | $ | 14,389,218 | $ | 17,937,818 | ||||||
Receivables: | ||||||||||||
Employer contribution | 245,566 | — | — | |||||||||
Notes receivable from participants | 2,858,544 | 1,010,548 | 462,701 | |||||||||
Total Assets | 279,948,606 | 15,399,766 | 18,400,519 | |||||||||
Liabilities: | ||||||||||||
Accrued expenses | 69,598 | 3,828 | 4,574 | |||||||||
Net assets available for benefits | $ | 279,879,008 | $ | 15,395,938 | $ | 18,395,945 | ||||||
Plan interest percentage in Acuity DC Trust | 89.2 | % | 4.9 | % | 5.9 | % | ||||||
The accompanying notes are an integral part of these financial statements.
2
Acuity Brands, Inc. Selected 401(k) and Retirement Plans
Statements of Net Assets Available for Benefits
As of December 31, 2015
Acuity Brands, Inc. 401(k) Plan | Acuity Brands Lighting, Inc. 401(k) Plan for Hourly Employees | Holophane Division of Acuity Brands Lighting 401(k) Plan for Hourly Employees Covered by a Collective Bargaining Agreement | ||||||||||
Filing Plan No. | 033 | 067 | 070 | |||||||||
Assets: | ||||||||||||
Plan interest in Acuity DC Trust | $ | 254,534,117 | $ | 7,067,058 | $ | 17,395,783 | ||||||
Receivables: | ||||||||||||
Employer contribution | 236,110 | — | — | |||||||||
Notes receivable from participants | 2,151,109 | 196,762 | 593,462 | |||||||||
Total Assets | 256,921,336 | 7,263,820 | 17,989,245 | |||||||||
Liabilities: | ||||||||||||
Accrued expenses | 63,735 | 1,802 | 4,463 | |||||||||
Net assets available for benefits | $ | 256,857,601 | $ | 7,262,018 | $ | 17,984,782 | ||||||
Plan interest percentage in Acuity DC Trust | 91.0 | % | 2.6 | % | 6.4 | % | ||||||
The accompanying notes are an integral part of these financial statements.
3
Acuity Brands, Inc. Selected 401(k) and Retirement Plans
Statements of Changes in Net Assets Available for Benefits
Year Ended December 31, 2016
Acuity Brands, Inc. 401(k) Plan | Acuity Brands Lighting, Inc. 401(k) Plan for Hourly Employees | Holophane Division of Acuity Brands Lighting 401(k) Plan for Hourly Employees Covered by a Collective Bargaining Agreement | ||||||||||
Filing Plan No. | 033 | 067 | 070 | |||||||||
Additions to net assets attributed to: | ||||||||||||
Net investment gain from Acuity DC Trust | $ | 19,842,901 | $ | 364,050 | $ | 1,144,494 | ||||||
Contributions: | ||||||||||||
Employer | 6,936,232 | 122,232 | 261,846 | |||||||||
Participant | 26,359,197 | 598,069 | 409,819 | |||||||||
Total additions | 53,138,330 | 1,084,351 | 1,816,159 | |||||||||
Deductions from net assets attributed to: | ||||||||||||
Benefit payments | 29,762,474 | 730,441 | 1,380,452 | |||||||||
Expenses | 438,413 | 56,858 | 24,547 | |||||||||
Total deductions | 30,200,887 | 787,299 | 1,404,999 | |||||||||
Net increase | 22,937,443 | 297,052 | 411,160 | |||||||||
Conversion from other qualified plans | — | 7,920,835 | — | |||||||||
Plan transfers in (out), net | 83,964 | (83,967 | ) | 3 | ||||||||
Net assets available for benefits: | ||||||||||||
Beginning of year | 256,857,601 | 7,262,018 | 17,984,782 | |||||||||
End of year | $ | 279,879,008 | $ | 15,395,938 | $ | 18,395,945 | ||||||
The accompanying notes are an integral part of these financial statements.
4
Acuity Brands, Inc. Selected 401(k) and Retirement Plans
Notes to Financial Statements
1. | Description of the Plans |
General
The financial positions of Acuity Brands, Inc. 401(k) Plan (the "ABI Plan"), Acuity Brands Lighting, Inc. 401(k) Plan for Hourly Employees (the "ABL Plan"), and Holophane Division of Acuity Brands Lighting 401(k) Plan for Hourly Employees Covered by a Collective Bargaining Agreement (the "Holophane Plan") (collectively, the "Plans") are included in the accompanying financial statements. The investment assets of the Plans are included in the Acuity Brands, Inc. Defined Contribution Plans Master Trust (the "Acuity DC Trust"). The Plans are subject to the provisions of the Employee Retirement Income Security Act of 1974, as amended ("ERISA").
Refer to the respective plan agreement for additional information about the Plans' eligibility, funding, allocation, vesting, and benefit provisions.
Eligibility and Forfeitures
Each of the Plans is a defined contribution plan. The Plans cover substantially all domestic salaried, commissioned, and union and non-union hourly employees of Acuity Brands, Inc. and its subsidiaries ("Acuity Brands" or the "Company"). Employees of certain unions who have elected not to participate in such Plans are not eligible to participate.
Employees have immediate eligibility upon attaining the age requirement of each respective plan. The Plans provide that forfeitures of Company contributions may be used to pay plan administrative expenses or reduce future Company contributions. At December 31, 2016 and 2015, forfeited nonvested accounts totaled $45,488 and $32,140, respectively. Employer contributions were reduced by forfeited nonvested accounts of $400,403 and $608,286 during the years ended December 31, 2016 and 2015, respectively. Plan expenses totaling $3,916 were paid using forfeited nonvested accounts during the year ended December 31, 2016.
In the event of the cessation of operation of a plant or the discontinuance of a component of the Company's business, plan participants identified for separation from the Company shall automatically become fully vested in employer contributions upon termination.
Administration
Administration of the Plans is the responsibility of the Company's Investment Committee, members of which are designated by the Chairman, President, and Chief Executive Officer of Acuity Brands, Inc. Certain administrative expenses of the Plans were paid by either the Company or plan forfeitures during the year ended December 31, 2016. The Investment Committee determines the appropriateness of the Plan's investment offerings and monitors investment performance.
On December 9, 2015, the Company acquired Juno Lighting LLC, which administered the Juno Manufacturing, Inc. 401(k) Plan for Union Employees and the Juno Manufacturing 401(k) Plan for Fishers Union Employees (collectively, the "Juno Plans"). Accordingly, Acuity Brands assumed sponsorship of the Juno Plans effective this date. On October 3, 2016, the Juno Plans were fully merged into the ABL Plan, resulting in the transfer of $7,920,835 of plan assets from the Juno Plans to the ABL Plan.
Notes Receivable from Participants
Participant loans are reflected as notes receivable from participants on the Statements of Net Assets Available for Benefits. Participants may borrow the lesser of 50% of their vested balance or $50,000 (reduced by the participant's highest outstanding loan balance from the twelve months prior to the loan request). Participants agree to loan repayment terms upon endorsement of the borrowed funds. Participants within the ABI and ABL Plans may have up to two outstanding general-purpose loans during a calendar year, and participants within the Holophane Plan may have outstanding one general-purpose loan and one residential loan issued for the purchase of a primary residence during a calendar year. The loan interest rate is set at one percent above the prime rate, as defined.
Loan repayments must be substantially equal in amount over the term of the loan and must be made by payroll deduction on an after-tax basis. General-purpose loans must be repaid within five years, and residential loans must be repaid within ten years.
5
Acuity Brands, Inc. Selected 401(k) and Retirement Plans
Notes to Financial Statements
Loan repayments may be suspended, at the discretion of the Company, for a period of not more than twelve months if a participant is on unpaid leave of absence, disability, or military service. Upon return, the loan will be amortized over the remaining initial loan repayment period.
Plan Termination
Although the Company intends for the Plans to be permanent, the Plan agreements provide the Company the right to discontinue contributions or to terminate the Plans at any time and to terminate the plan subject to the provisions of ERISA.
In the event of a plan termination, each respective participant shall be 100% vested in the balance of his/her account and his/her proportionate share of any future adjustments or forfeitures.
Parties-In-Interest Transactions
As of December 31, 2016 and 2015, the percentage of the Acuity DC Trust's net assets invested in the common stock of Acuity Brands, Inc. was 5.5% and 7.1%, respectively. As described in Note 2 Summary of Accounting Policies, the Plans paid certain expenses related to plan operations and investment activity to various service providers. These transactions are party-in-interest transactions under ERISA.
Vesting
Participants are vested immediately in their contributions and the related earnings. Participants in the ABI Plan and the ABL Plan vest in the Company's contributions to their accounts ratably over a five-year service period. Participants in the Holophane Plan vest in the Company's contributions to their accounts immediately upon the third anniversary of their hire date.
Payments of Benefits
On termination of service due to death, disability, or retirement, a participant may elect to receive either a lump sum amount equal to the value of the participant's vested interest in his or her account, or annual installments over a 10-year period. For termination of service for other reasons, a participant may receive the value of the vested interest in his or her account as a lump sum distribution.
Participant Accounts
Each participant’s account is credited with the participant’s contributions and Company matching contributions, as well as the applicable portion of net earnings/losses generated by the investment fund(s) selected by the participant. Net earnings/losses for each investment fund consist of both realized and unrealized gross earnings/losses, which are adjusted to incorporate fund management expenses specific to each investment fund. Many of the investment funds provide for a revenue sharing arrangement with the Plans that provides for a portion of the fund expenses to be credited to the Plans to pay for certain administrative expenses that are incurred by the Plans. Fees related to the administration of notes receivable from participants are charged directly to the participant's account. The benefit to which a participant is entitled is the benefit that can be provided from the participant’s vested account.
Contributions
The basis for determining participant and Company contributions is as follows:
6
Acuity Brands, Inc. Selected 401(k) and Retirement Plans
Notes to Financial Statements
Plan Name | Participant Contributions | Employer Contributions |
Acuity Brands, Inc. 401(k) Plan | 1% to 50% of compensation | Matching contribution of 60% up to 6% of participant compensation contributed. New hires are automatically enrolled at 3% contribution to the plan. |
Acuity Brands Lighting, Inc. 401(k) Plan for Hourly Employees | 1% to 25% of compensation | Teamsters Local Union 673 - Midwest Regional Warehouse and IBEW Local 481 - Sunoptics employees have a matching contribution of 60% up to 6% of participant compensation contributed. |
CMRJB - Des Plaines facility employees have a matching contribution of 50% up to 5% of participant compensation contributed. | ||
IBEW Local 481 - Fishers facility employees have a matching contribution of 100% up to 3% of participant compensation contributed. | ||
Non-union hourly employees have a matching contribution of 60% up to 6% of participant compensation contributed. All other employees at all other locations participating in the plan do not receive an employer contribution. | ||
Holophane Division of Acuity Brands Lighting 401(k) Plan for Hourly Employees Covered by a Collective Bargaining Agreement | 1% to 25% of compensation | USW Local Nos. 4, 105 and 525 - Participating employees hired prior to August 5, 2002 receive an employer matching contribution of 30% up to 6% of compensation contributed, plus an additional basic contribution of 5% of annual compensation. Participating employees hired on or after August 5, 2002 receive an employer matching contribution of 60% up to 6% of compensation contributed. |
Under all of the Plans, participants direct the investment of their contributions into various investment options offered by the Plans. Additionally, participants who have attained age 50 before the end of the Plan year are eligible to make catch-up contributions. Participants may also contribute amounts representing distributions from other qualified plans. Effective October 2013, an amendment was executed to allow elective Roth contributions in the Plans. Contributions are subject to certain IRS limitations.
2. | Summary of Accounting Policies |
Basis of Accounting
The accompanying financial statements are prepared on the accrual method of accounting.
Investments
The investments in the Acuity DC Trust are subject to certain administrative guidelines and limitations as to the type and amount of securities held. Fund assets are allocated to selected independent investment managers to invest under these guidelines.
Investments of the Acuity DC Trust are stated at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). Refer to Note 3 Acuity DC Trust and Note 5 Fair Value Measurements for further discussion.
Purchases and sales of securities are recorded on a trade-date basis. Interest income is recorded on the accrual basis. Dividends are recorded on the dividend date. Net appreciation includes the Plans' gains and losses on investments bought and sold as well as held during the year.
The Acuity DC Trust holds investments in the Invesco Stable Value Fund, which holds synthetic guaranteed investment contracts ("synthetic GICs" or "wrap contracts") and a diversified portfolio of investments, including units of collective trust funds held in the name of the Acuity DC Trust. The collective trust funds invest in high-quality bonds, including corporate bonds, mortgage-backed securities, asset-backed securities, and government securities. The synthetic GICs or wrap contracts have features that provide for variable interest crediting rates that are credited to the contract value of the contracts' underlying holdings. The investments in synthetic GICs are deemed to be fully benefit-responsive and are recorded at contract value.
Contract value represents contributions made under the contract, plus earnings, less member withdrawals and administrative expenses. Members may ordinarily direct the withdrawal and transfer of all or a portion of their investment at contract value. The crediting interest rate is based on a mutually agreed upon formula that resets on a monthly basis depending on the performance of the underlying investments being managed. The crediting interest rate will not be less than 0%.
Certain events limit the ability of the Plans to transact at contract value with the issuers. These events include, but are not limited to, the following: (1) amendments to the Plan documents that materially and adversely affect the risk borne by the contract issuer, unless otherwise approved by the issuers, (2) bankruptcy of the Plans' sponsor or other events
7
Acuity Brands, Inc. Selected 401(k) and Retirement Plans
Notes to Financial Statements
that would cause a significant withdrawal from the Plans, or (3) the failure of the Acuity DC Trust to qualify for exemption from federal income taxes or any required prohibited transaction exemption under ERISA. Acuity Brands does not believe that the occurrence of any event limiting the Plans' ability to transact at contract value with the issuers has occurred or is probable.
The contract issuers can only terminate the contract under very limited circumstances, such as Acuity Brands or the investment fund managers breaching any of their material obligations under the agreement, or upon completion of specified periods of time following notice periods. Acuity Brands does not believe it is likely that the contracts will be terminated.
Notes Receivable from Participants
The notes receivable from participants represent participant loans, which are carried at principal amounts outstanding plus accrued but unpaid interest. Interest income is recorded on the accrual basis. Related fees are recorded as administrative expense and are expensed when they are incurred. No allowance for credit losses has been recorded as of December 31, 2016 and 2015. If a participant ceases to make loan repayments and the Plan Administrator deems the participant loan to be in default, the participant loan balance is reduced, and a benefit payment is recorded.
Use of Estimates
The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America ("US GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and changes therein and disclosure of contingent assets and liabilities. Actual results could differ from those estimates.
Payments
Benefit payments are recorded when paid.
Expenses
Investment related expenses are included within the net appreciation of fair value of investments. Many of the investment funds provide for a revenue sharing arrangement with the Plans that provides for a portion of the fund expenses to be credited to the Plans to pay for certain administrative expenses that are incurred by the Plans, such as record keeping and investment advisory fees. Certain expenses of maintaining the Plans are paid directly by the Company and are excluded from these financial statements. Fees related to the administration of notes receivable from participants and certain administrative fees are charged directly to the participant's account and are included in administrative expenses.
Accounting Standards Yet to Be Adopted
In February 2017, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update ("ASU") No. 2017-06, Employee Benefit Plan Master Trust Reporting ("ASU 2017-06"). It is effective for fiscal years beginning after December 15, 2018. The amendments require reporting entities to report a plan's interest in a master trust and the change in the value of that interest as separate line items on the statement of net assets available for benefits and the statement of changes in net assets available for benefits, respectively. Additionally, the master trust's investments and other assets and liabilities, as well as the dollar amount of its interest in these balances, must be disclosed. Lastly, investments measured at fair value must be disaggregated by general type of investment. The Company is currently evaluating the impact of the provisions of ASU 2017-06 and intends to implement the standard as required in fiscal 2019.
Accounting Standards Adopted
The FASB issued ASU No. 2015-07, Fair Value Measurement (Topic 820): Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent) ("ASU 2015-07"). It is effective for fiscal years beginning after December 15, 2015, and the Company early adopted the ASU on a retrospective basis for the year ended December 31, 2015. The amendments apply to reporting entities that elect to measure the fair value of an investment using the net asset value per share (or its equivalent) practical expedient. The amendments remove the requirement to categorize within the fair value hierarchy all investments for which fair value is measured using the net asset value per share practical expedient. The amendments also remove the requirement to make certain disclosures for all investments that are eligible to be measured at fair value using the net asset value per share practical expedient.
8
Acuity Brands, Inc. Selected 401(k) and Retirement Plans
Notes to Financial Statements
Rather, those disclosures are limited to investments for which the entity has elected to measure the fair value using that practical expedient. The provisions of ASU 2015-07 did not have a material effect on the Plans' net assets available for benefits or its changes in net assets available for benefits.
The FASB issued ASU No. 2015-12, Plan Accounting: Defined Benefit Pension Plans (Topic 960), Defined Contribution Pension Plans (Topic 962), and Health and Welfare Benefit Plans (Topic 965): (Part I) Fully Benefit-Responsive Investment Contracts; (Part II) Plan Investment Disclosures; and (Part III) Measurement Date Practical Expedient ("ASU 2015-12"). It is effective for fiscal years beginning after December 15, 2015, and the Company early adopted the ASU for the year ended December 31, 2015 on a retrospective basis. Part I eliminates the requirement to measure the fair value of fully benefit-responsive investment contracts and provide certain disclosures. Part II eliminates the requirement to disclose individual investments that represent five percent or more of net assets available for benefits and the net appreciation or depreciation for investments by general type. It also simplifies the level of disaggregation of investments that are measured using fair value and removes the requirement to disaggregate the investments within a self-directed brokerage account. Part III permits plans to measure investments as of a month-end date that is closest to the plan's fiscal year-end when the fiscal period does not coincide with a month-end. The provisions of ASU 2015-12 did not have a material effect on the Plans' net assets available for benefits or its changes in net assets available for benefits; however, certain disclosures were affected as a result of adopting ASU No. 2015-12.
3. Acuity DC Trust
The Acuity DC Trust is a collective investment of the assets of the Company's participating employee benefit plans. Trust assets are allocated among participating plans by assigning to each plan certain transactions (primarily contributions and benefit payments that can be specifically identified and distributed among all plans) in proportion to the fair value of the assets assigned to each plan, and income and expenses resulting from the collective investment of the Trust assets. For the year ended December 31, 2016, total interest income, dividend income, and net appreciation in investments were $1,345,433, $6,418,280, and $13,587,732, respectively. The fair value of net assets of the Acuity DC Trust as of December 31, 2016 and 2015 is presented below:
9
Acuity Brands, Inc. Selected 401(k) and Retirement Plans
Notes to Financial Statements
Plans' Percentage Interest | ||||||||||||
2016 | Plan | Plan | Plan | |||||||||
Value | No. 033 | No. 067 | No. 070 | |||||||||
Mutual Funds | ||||||||||||
Aberdeen Emerging Market | $ | 875,530 | 92.8 | % | 3.9 | % | 3.3 | % | ||||
American Beacon Large Cap Value | 13,826,026 | 90.9 | % | 1.8 | % | 7.3 | % | |||||
Invesco International Growth Fund | 840,965 | 98.6 | % | 1.4 | % | — | % | |||||
JP Morgan Core Bond Fund | 4,516,693 | 99.2 | % | 0.7 | % | 0.1 | % | |||||
Northern Small Cap Value | 10,837,279 | 95.0 | % | 2.5 | % | 2.5 | % | |||||
T. Rowe Price Growth | 14,274,056 | 92.8 | % | 1.3 | % | 5.9 | % | |||||
T. Rowe Price Mid Cap | 23,551,307 | 91.1 | % | 2.4 | % | 6.5 | % | |||||
Templeton Institutional | 7,006,271 | 95.0 | % | 1.7 | % | 3.3 | % | |||||
Vanguard Explorer Admiral | 11,957,582 | 89.1 | % | 2.4 | % | 8.5 | % | |||||
Vanguard Extended Market Index | 2,536,840 | 87.9 | % | 2.6 | % | 9.5 | % | |||||
Vanguard Institutional Index | 38,870,619 | 92.7 | % | 2.6 | % | 4.7 | % | |||||
Vanguard Selected Value | 10,247,934 | 95.9 | % | 2.5 | % | 1.6 | % | |||||
Vanguard Total International Stock | 3,762,936 | 91.5 | % | 3.3 | % | 5.2 | % | |||||
Wells Fargo Target 2010 | 1,118,343 | 70.3 | % | 26.2 | % | 3.5 | % | |||||
Wells Fargo Target 2015 | 2,692,086 | 73.4 | % | 24.8 | % | 1.8 | % | |||||
Wells Fargo Target 2020 | 8,004,028 | 75.9 | % | 17.8 | % | 6.3 | % | |||||
Wells Fargo Target 2025 | 13,793,989 | 75.7 | % | 20.7 | % | 3.6 | % | |||||
Wells Fargo Target 2030 | 14,291,806 | 84.1 | % | 13.3 | % | 2.6 | % | |||||
Wells Fargo Target 2035 | 9,517,676 | 85.7 | % | 13.6 | % | 0.7 | % | |||||
Wells Fargo Target 2040 | 7,592,137 | 92.8 | % | 6.0 | % | 1.2 | % | |||||
Wells Fargo Target 2045 | 5,581,685 | 96.2 | % | 3.8 | % | — | % | |||||
Wells Fargo Target 2050 | 4,421,669 | 98.6 | % | 1.4 | % | — | % | |||||
Wells Fargo Target 2055 | 1,896,324 | 96.6 | % | 2.9 | % | 0.5 | % | |||||
Wells Fargo Target 2060 | 93,653 | 96.8 | % | 3.0 | % | 0.2 | % | |||||
Wells Fargo Target Today | 210,298 | 21.4 | % | 75.8 | % | 2.8 | % | |||||
Total Mutual Funds | 212,317,732 | |||||||||||
Self-Directed Brokerage Accounts | 24,868,448 | 96.8 | % | — | % | 3.2 | % | |||||
Common Stock | ||||||||||||
Acuity Brands Stock Fund | 17,361,835 | 95.4 | % | 1.7 | % | 2.9 | % | |||||
Common/Collective Trust | ||||||||||||
State Street US Bond Fund | 9,061,384 | 93.9 | % | 2.8 | % | 3.3 | % | |||||
Total Investments at fair value | 263,609,399 | |||||||||||
Unallocated Cash | 782,807 | |||||||||||
Accrued Investment Income | 313 | |||||||||||
Adjustment for pending trades | 750 | |||||||||||
Acuity DC Trust at fair value | 264,393,269 | |||||||||||
Invesco Stable Value Fund | 44,778,263 | 80.8 | % | 2.7 | % | 16.5 | % | |||||
Plan Interest in Acuity DC Trust | 309,171,532 | |||||||||||
Accrued expenses | (78,000 | ) | ||||||||||
Net Assets | 309,093,532 | |||||||||||
Employer contributions receivable | 245,566 | |||||||||||
Notes receivable from participants | 4,331,793 | |||||||||||
Net Assets of the Acuity DC Trust | $ | 313,670,891 | ||||||||||
10
Acuity Brands, Inc. Selected 401(k) and Retirement Plans
Notes to Financial Statements
Plans' Percentage Interest | ||||||||||||
2015 | Plan | Plan | Plan | |||||||||
Value | No. 033 | No. 067 | No. 070 | |||||||||
Mutual Funds | ||||||||||||
Aberdeen Emerging Market | $ | 458,640 | 89.7 | % | 4.2 | % | 6.1 | % | ||||
American Beacon Large Cap Value | 14,128,196 | 91.9 | % | 2.1 | % | 6.0 | % | |||||
Invesco International Growth Fund | 438,256 | 99.4 | % | 0.6 | % | — | % | |||||
JP Morgan Core Bond Fund | 2,622,475 | 99.3 | % | 0.7 | % | — | % | |||||
Northern Small Cap Value | 8,076,609 | 95.3 | % | 2.6 | % | 2.1 | % | |||||
T. Rowe Price Growth | 14,612,521 | 92.2 | % | 2.1 | % | 5.7 | % | |||||
T. Rowe Price Mid Cap | 22,902,775 | 90.6 | % | 3.1 | % | 6.3 | % | |||||
Templeton Institutional | 8,051,250 | 94.7 | % | 2.0 | % | 3.3 | % | |||||
Vanguard Explorer Admiral | 10,958,637 | 89.1 | % | 2.3 | % | 8.6 | % | |||||
Vanguard Extended Market Index | 2,018,525 | 87.7 | % | 3.5 | % | 8.8 | % | |||||
Vanguard Institutional Index | 35,153,430 | 92.5 | % | 2.9 | % | 4.6 | % | |||||
Vanguard Selected Value | 9,579,910 | 96.4 | % | 2.3 | % | 1.3 | % | |||||
Vanguard Total International Stock | 2,630,362 | 89.0 | % | 3.5 | % | 7.5 | % | |||||
Wells Fargo Target 2010 | 744,272 | 94.2 | % | 2.3 | % | 3.5 | % | |||||
Wells Fargo Target 2015 | 2,334,953 | 93.7 | % | 3.7 | % | 2.6 | % | |||||
Wells Fargo Target 2020 | 5,209,567 | 85.0 | % | 6.3 | % | 8.7 | % | |||||
Wells Fargo Target 2025 | 9,424,347 | 90.7 | % | 4.7 | % | 4.6 | % | |||||
Wells Fargo Target 2030 | 9,571,805 | 93.8 | % | 2.8 | % | 3.4 | % | |||||
Wells Fargo Target 2035 | 6,733,344 | 92.2 | % | 7.0 | % | 0.8 | % | |||||
Wells Fargo Target 2040 | 5,331,925 | 96.4 | % | 2.0 | % | 1.6 | % | |||||
Wells Fargo Target 2045 | 3,845,011 | 98.5 | % | 1.5 | % | — | % | |||||
Wells Fargo Target 2050 | 3,161,978 | 98.9 | % | 1.1 | % | — | % | |||||
Wells Fargo Target 2055 | 906,493 | 97.1 | % | 2.7 | % | 0.2 | % | |||||
Wells Fargo Target 2060 | 215 | 100.0 | % | — | % | — | % | |||||
Wells Fargo Target Today | 88,407 | 95.3 | % | 0.4 | % | 4.3 | % | |||||
Total Mutual Funds | 178,983,903 | |||||||||||
Self-Directed Brokerage Accounts | 21,893,148 | 97.3 | % | — | % | 2.7 | % | |||||
Common Stock | ||||||||||||
Acuity Brands Stock Fund | 19,900,875 | 96.0 | % | 1.6 | % | 2.4 | % | |||||
Common/Collective Trust | ||||||||||||
State Street US Bond Fund | 9,297,831 | 94.3 | % | 2.7 | % | 3.0 | % | |||||
Total Investments at fair value | 230,075,757 | |||||||||||
Unallocated Cash | 125,211 | |||||||||||
Accrued Investment Income | 316 | |||||||||||
Adjustment for pending trades | 300 | |||||||||||
Acuity DC Trust at fair value | 230,201,584 | |||||||||||
Invesco Stable Value Fund | 48,795,374 | 81.4 | % | 2.4 | % | 16.2 | % | |||||
Plan Interest in Acuity DC Trust | 278,996,958 | |||||||||||
Accrued expenses and other | (70,000 | ) | ||||||||||
Net Assets | 278,926,958 | |||||||||||
Employer contributions receivable | 236,110 | |||||||||||
Notes receivable from participants | 2,941,333 | |||||||||||
Net Assets of the Acuity DC Trust | $ | 282,104,401 | ||||||||||
11
Acuity Brands, Inc. Selected 401(k) and Retirement Plans
Notes to Financial Statements
4. | Stable Value Fund |
The following are the contract values of the synthetic GICs in the Stable Acuity Fund:
Contract Issuer | 2016 Contract Value | Contract Issuer | 2015 Contract Value | |||||||
Synthetic GICs: | Synthetic GICs: | |||||||||
Voya | $ | 7,577,586 | Voya | $ | 12,030,425 | |||||
Life Ins Company SW | 7,895,074 | Life Ins Company SW | — | |||||||
Mass Mutual | 5,819,206 | Mass Mutual | 6,326,102 | |||||||
Transamerica | 7,309,999 | Transamerica | 7,975,316 | |||||||
Prudential Insurance | 7,449,566 | Prudential Insurance | 10,039,683 | |||||||
Pacific Life Insurance | 7,523,646 | Pacific Life Insurance | 11,135,483 | |||||||
Subtotal | 43,575,077 | Subtotal | 47,507,009 | |||||||
Cash: | Cash: | |||||||||
Bank of America Merrill Lynch | 1,203,186 | Bank of America Merrill Lynch | 1,288,365 | |||||||
Total | $ | 44,778,263 | Total | $ | 48,795,374 | |||||
5. Fair Value Measurements
In accordance with Accounting Standards Codification Topic 820, Fair Value Measurements and Disclosures ("ASC 820"), the Plans determine a fair value measurement using an exit price based on the assumptions a market participant would use in pricing an asset or liability. ASC 820 established a three-tiered hierarchy making a distinction between market participant assumptions based on (i) observable inputs such as quoted prices in active markets (Level 1), (ii) inputs other than quoted prices in active markets that are observable either directly or indirectly (Level 2), and (iii) unobservable inputs that reflect the Plans' best estimate of what market participants would use in pricing an asset or liability including consideration of the risk inherent in the valuation technique and the risk inherent in the inputs to the model (Level 3).
Level 1 (Quoted market prices in active markets for identical assets)
Acuity Brands Stock Fund - valued at the last sales price in the market where such securities are primarily traded. If the last sales price is not available, the security is generally valued at the closing bid price obtained from the primary exchange.
Mutual Funds - valued using the net asset value of shares held at year end as reported by the fund. Mutual funds held by the Acuity DC Trust are open-end mutual funds that are registered with the Securities and Exchange Commission.
Self-Directed Brokerage Accounts - valued at the closing price reported by the fund or in the market where such investments are primarily traded.
Common/Collective Trust
The common/collective trust held by the Acuity DC Trust is valued using the net asset value ("NAV") provided by the trustee, which is based on the fair value of the underlying investments held by the fund less its liabilities. The trust's NAV is used as a practical expedient to estimate fair value since it is not probable that the fund will sell the investment for an amount different than the reported NAV.
The following tables present information about the Acuity DC Trust's assets as of December 31, 2016 and 2015:
12
Acuity Brands, Inc. Selected 401(k) and Retirement Plans
Notes to Financial Statements
Fair Value Measurements as of: | ||||||||||||||||
December 31, 2016 | December 31, 2015 | |||||||||||||||
Total Fair Value | Level 1 | Total Fair Value | Level 1 | |||||||||||||
Acuity Brands Stock Fund | $ | 17,361,835 | $ | 17,361,835 | $ | 19,900,875 | $ | 19,900,875 | ||||||||
Mutual Funds | 212,317,732 | 212,317,732 | 178,983,903 | 178,983,903 | ||||||||||||
Self-Directed Brokerage Accounts | 24,868,448 | 24,868,448 | 21,893,148 | 21,893,148 | ||||||||||||
Common/Collective Trust (1) | 9,061,384 | N/A | 9,297,831 | N/A | ||||||||||||
Total Investments at Fair Value | $ | 263,609,399 | $ | 230,075,757 | ||||||||||||
(1) There are currently no redemption restrictions or unfunded commitments on these investments. Generally, redemptions of the fund units for investments in this category may be made each business day, based upon a transaction price per unit that is substantially equivalent to net asset value per share as of the close of the previous business day. | ||||||||||||||||
No transfers between the levels of the fair value hierarchy occurred during the current plan year. In the event of a transfer in or out of a level within the fair value hierarchy, the transfers would be recognized as of the end of the plan year.
6. | Income Tax Status |
The ABI Plan, ABL Plan, and Holophane Plan obtained their latest determination letters on August 12, 2013, July 10, 2013, and May 29, 2014, respectively, in which the IRS stated these plans are qualified under Section 401(a) of the Internal Revenue Code ("IRC"). The Plans have been amended since requesting the latest determination letters, and the plan administrator believes the Plans are currently designed and being operated in compliance with the applicable requirements of the IRC, and the Plans and related trust continue to be tax-exempt. Therefore, no provision for income taxes is included in these financial statements.
US GAAP requires plan management to evaluate uncertain tax positions taken by the Plans. The financial statement impact of a tax position is recognized when the position is more likely than not, based on the technical merits, to be sustained upon examination by the Internal Revenue Service. The plan administrator has analyzed the tax positions taken by the Plans and has concluded that as of December 31, 2016, there are no uncertain positions taken or expected to be taken. The Plans have recognized no interest or penalties related to uncertain tax positions. The Plans are subject to routine audits by taxing jurisdictions; however, there are currently no audits for any tax periods in progress.
7. | Benefits Payable |
The following Plans had benefit payments that were approved for payment prior to December 31 but were not paid until subsequent to December 31:
Plan No. | Plan Name | 2016 | 2015 | |||||||
033 | Acuity Brands, Inc. 401(k) Plan | $ | 782,807 | $ | — | |||||
067 | Acuity Brands Lighting, Inc. 401(k) Plan for Hourly Employees | — | 125,211 | |||||||
These benefit payments represent a reconciling item between the financial statements and Form 5500. The Form 5500 has not yet been finalized. As such, the differences may vary from those noted above. However, these differences are not expected to be material.
8. | Risks and Uncertainties |
The Plans invest in various investment securities. Investment securities are exposed to various risks, such as interest rate, market, and credit risks. Due to the level of risk associated with certain investment securities, it is at least reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect participants' account balances and the amounts reported in the Statements of Net Assets Available for Benefits.
9. | Non-Exempt Transactions |
During 2016, the Company did not remit $18,281 of employee deferrals to the ABI Plan within the appropriate time period. These late deferrals, along with lost earnings, were corrected and remitted to the ABI Plan during August 2016.
13
Acuity Brands, Inc.
Selected 401(k) and Retirement Plans
Schedule H, Line 4a
Schedule of Delinquent Participant Contributions
December 31, 2016
Participant Contributions Transfered Late to Plan | Total that Constitute Nonexempt Prohibited Transactions | |||||||||||||||
Check here if late Participant Loan Repayments are Included: | Contributions Not Corrected | Contributions Corrected Outside VFCP | Contributions Pending Correction in VFCP | Total Fully Corrected Under VFCP and PTE 2002-51 | ||||||||||||
o Acuity Brands, Inc. 401(k) Plan | $ | — | $ | 18,281 | $ | — | $ | — | ||||||||
14
Acuity Brands, Inc.
Selected 401(k) and Retirement Plans
Schedule H, Line 4i
Schedule of Assets (Held at End of Year)
December 31, 2016
Plan Name | Plan No. | EIN # | Identity of Issue * | Description of Investment Varying Maturity Dates and Interest Rates Ranging from: | Cost | Current Value | ||||||||||
Acuity Brands, Inc. 401(k) Plan | 033 | 58-2632672 | Participant Loans | 4.25% to 9.25% (various maturity dates) | $ | — | $ | 2,858,544 | ||||||||
Acuity Brands Lighting, Inc. 401(k) Plan for Hourly Employees | 067 | 58-2632672 | Participant Loans | 4.25% to 4.5% (various maturity dates) | — | 1,010,548 | ||||||||||
Holophane Division of Acuity Brands Lighting 401(k) Plan for Hourly Employees Covered by a Collective Bargaining Agreement | 070 | 58-2632672 | Participant Loans | 4.25% - 9.25% (various maturity dates) | — | 462,701 | ||||||||||
___________________________________________
* Represents a party-in-interest
15
EXHIBIT INDEX
Exhibit Number | Description | ||
23.1 | Consent of BDO USA, LLP | ||
16
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who administer the employee benefit plans) have duly caused this annual report to be signed on its behalf by the undersigned thereunto duly authorized.
Date: June 28, 2017
Acuity Brands, Inc. 401(k) Plan | ||
Acuity Brands Lighting, Inc. 401(k) Plan for Hourly Employees | ||
Holophane Division of Acuity Brands Lighting 401(k) Plan for Hourly Employees Covered by a Collective Bargaining Agreement | ||
By: | Acuity Brands, Inc. | |
Plan Administrator | ||
By: | /s/ Vernon J. Nagel | |
Name: | Vernon J. Nagel | |
Title: | Chairman, President and Chief Executive Officer | |
17
Exhibit 23.1
Consent of Independent Registered Public Accounting Firm
Acuity Brands, Inc. Selected 401(k) and Retirement Plans
Atlanta, Georgia
We hereby consent to the incorporation by reference in the Registration Statement on Form S-8 (File no. 333-74242 and 333-123999) of Acuity Brands, Inc. of our report dated June 28, 2017, relating to the financial statements and supplemental schedules of Acuity Brands, Inc. 401(k) Plan, Acuity Brands Lighting, Inc. 401(k) Plan for Hourly Employees, and Holophane Division of Acuity Brands Lighting 401(k) Plan for Hourly Employees Covered by a Collective Bargaining Agreement which appear in this Form 11-K for the year ended December 31, 2016.
/s/ BDO USA, LLP
Atlanta, GA
June 28, 2017