Form 11-k
Table of Contents

FORM 11-K

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

Annual Report Pursuant to Section 15(d) of the Securities Exchange Act of 1934

 

(Mark One)

 

x   ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

 

  For the fiscal year ended: December 31, 2002

 

OR

 

¨   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:
     Selig Chemical Industries Retirement Plan
     Acuity Specialty Products 401(k) Plan
     Acuity Lighting Group, Inc. Profit Sharing and Retirement Plan for Salaried Employees
     Acuity Brands, Inc. 401(k) Plan for Corporate 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
     Acuity Lighting Group, Inc. 401(k) Plan for Hourly Employees
     Enforcer Products 401(k) Plan

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 2400

Atlanta, Georgia 30309

 

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REQUIRED INFORMATION

 

The following documents are filed as part of this report:

 

1.   Financial Statements

 

Plan financial statements prepared in accordance with the financial reporting requirements of ERISA including the following:

 

Report of Independent Auditors

 

Statements of Net Assets Available for Benefits as of December 31, 2002 and 2001

 

Statement of Changes in Net Assets Available for Benefits for the Year Ended December 31, 2002

 

Notes to Financial Statements

 

2.   Exhibits

 

The following exhibit is filed with this report:

 

Consent of Ernst & Young LLP

 

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who administer the employee benefit plan) have duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Date: June 27, 2003

       By:  

Acuity Brands, Inc.

               

Plan Administrator

 

            By:  

/s/ James S. Balloun

               

Name: James S. Balloun

               

Title: Chairman and Chief Executive Officer

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AUDITED FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES

Selected 401(k) and Retirement Plans

At December 31, 2002 and 2001 and

for the year ended December 31, 2002

Table of Contents

Selected 401(k) and Retirement Plans

 

Audited Financial Statements and Supplemental Schedules

 

At December 31, 2002 and 2001 and for the year ended December 31, 2002

 

Contents

 

Report of Independent Auditors

    1

Audited Financial Statements

     

Statements of Net Assets Available for Benefits

    2

Statements of Changes in Net Assets Available for Benefits

    4

Notes to Financial Statements

    5

Supplemental Schedules

     

Schedule G, Part III—Schedule of Nonexempt Transactions, Acuity Lighting Group, Inc. Profit Sharing and Retirement Plan for Salaried Employees

    15

Schedule G, Part III—Schedule of Nonexempt Transactions, Acuity Lighting Group, Inc. 401(k) Plan for Hourly Employees

    16

Schedule G, Part III—Schedule of Nonexempt Transactions, Holophane Division of Acuity Lighting Group 401(k) Plan for Hourly Employees

    17

Schedule G, Part III—Schedule of Nonexempt Transactions, Holophane Division of Acuity Lighting Group 401(k) Plan for Hourly Employees Covered by a Collective Bargaining Agreement

    18

Schedule of Assets (Held at End of Year)

    19

Exhibit Index

    20

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Report of Independent Auditors

 

Plan Administrator

Acuity Brands, Inc. Selected 401(k) and Retirement Plans

 

We have audited the accompanying statements of net assets available for benefits of Acuity Brands, Inc. 401(k) Plan for Corporate Employees, Acuity Specialty Products 401(k) Plan, Enforcer Products 401(k) Plan, Selig Chemical Industries Retirement Plan, Acuity Lighting Group, Inc. Profit Sharing and Retirement Plan for Salaried Employees, Acuity Lighting Group, Inc. 401(k) Plan for Hourly Employees, Holophane Division of Acuity Lighting Group 401(k) Plan for Hourly Employees Covered by a Collective Bargaining Agreement, and Holophane Division of Acuity Lighting Group 401(k) Plan For Hourly Employees, (collectively, the “Plans”) as of December 31, 2002 and 2001, and the related statements of changes in net assets available for benefits for the year ended December 31, 2002. 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 auditing standards generally accepted in the 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 net assets available for benefits of the Plans at December 31, 2002 and 2001, and the changes in the net assets available for benefits of the Plans for the year ended December 31, 2002 in conformity with accounting principles generally accepted in the United States.

 

Our audits were performed for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying supplemental schedules of nonexempt transactions for the year ended December 31, 2002 and the Schedule of Assets (Held at End of Year) as of December 31, 2002 are presented for purposes of additional analysis and are not a required part of the financial statements but are supplementary information required by the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. These supplemental schedules are the responsibility of the Plan’s management. The supplemental schedules have been subjected to the auditing procedures applied in our audits of the financial statements and, in our opinion, are fairly stated in all material respects in relation to the financial statements taken as a whole.

 

/s/ Ernst & Young LLP

 

June 5, 2003

 

1

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Acuity Brands, Inc. Selected 401(k) and Retirement Plans

 

Statements of Net Assets Available for Benefits

 

December 31, 2002

 

Plan
No.

   

Plan Name

    Employer
Contributions
Receivable
    Participant
Contributions
Receivable
    Plan Interest in
Acuity DC Trust
(Notes 1, 2 & 3)
    Participant
Loans
    Net Assets
Available for
Benefits
    Plan Interest
Percentage
in Acuity
DC Trust
(Notes 1, 2 & 3)
  

006

   

Selig Chemical Industries Retirement Plan

    $ —      $ —      $ —      $ —      $ —      0.00 %

007

   

Acuity Specialty Products 401(k) Plan

      231,552      28,837      124,436,444      3,924,202      128,621,035    46.12 %

033

   

Acuity Lighting Group, Inc. Profit Sharing and Retirement Plan for Salaried Employees

      149,112      365,394      119,953,662      2,965,504      123,433,672    44.26 %

060

   

Acuity Brands, Inc. 401(k) Plan for Corporate Employees

      —        —        —        —        —      0.00 %

067

   

Acuity Lighting Group, Inc. 401(k) Plan for Hourly Employees

      2,429      15,152      1,264,440      33,004      1,315,025    0.47 %

068

   

Enforcer Products 401(k) Plan

      —        —        3,493,049      168,051      3,661,100    1.31 %

069

   

Holophane Division of Acuity Lighting Group 401(k) Plan for Hourly Employees

      664      1,431      7,415,339      832,434      8,249,868    2.96 %

070

   

Holophane Division of Acuity Lighting Group 401(k) Plan for Hourly Employees Covered by a Collective Bargaining Agreement

      —        —        12,880,561      714,106      13,594,667    4.88 %
         
  
  
  
  
  
    

Total

    $ 383,757    $ 410,814    $ 269,443,495    $ 8,637,301    $ 278,875,367    100.00 %
         
  
  
  
  
  

 

See accompanying notes.

 

2

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Acuity Brands, Inc. Selected 401(k) and Retirement Plans

 

Statements of Net Assets Available for Benefits

 

December 31, 2001

 

Plan
No.

   

Plan Name

    Employer
Contributions
Receivable
    Participant
Contributions
Receivable
    Plan Interest in
Acuity DC
Trust (Notes 1,
2 & 3)
    Participant
Loans
    Net Assets
Available for
Benefits
    Plan Interest
Percentage
in Acuity
DC Trust
(Notes 1, 2 & 3)
  

006

   

Selig Chemical Industries Retirement Plan

    $ 444    $ 1,069    $ 11,315,031    $ 382,910    $ 11,699,454    3.88 %

007

   

Acuity Specialty Products 401(k) Plan

      177,666      452      126,422,731      3,647,819      130,248,668    43.20 %

033

   

Acuity Lighting Group, Inc. Profit Sharing and Retirement Plan for Salaried Employees

      5,029      17,603      127,044,083      3,012,509      130,079,224    43.14 %

060

   

Acuity Brands, Inc. 401(k) Plan for Corporate Employees

      5,526      11,537      2,060,719      23,910      2,101,692    0.70 %

067

   

Acuity Lighting Group, Inc. 401(k) Plan for Hourly Employees

      3,566      14,836      877,142      21,487      917,031    0.30 %

068

   

Enforcer Products 401(k) Plan

      5,660      34,786      3,297,288      229,742      3,567,476    1.18 %

069

   

Holophane Division of Acuity Lighting Group 401(k) Plan for Hourly Employees

      —        —        7,800,022      683,943      8,483,965    2.81 %

070

   

Holophane Division of Acuity Lighting Group 401(k) Plan for Hourly Employees Covered by a Collective Bargaining Agreement

      —        —        13,758,525      660,449      14,418,974    4.79 %
         
  
  
  
  
  
    

Total

    $ 197,891    $ 80,283    $ 292,575,541    $ 8,662,769    $ 301,516,484    100.00 %
         
  
  
  
  
  

 

See accompanying notes.

 

3

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Acuity Brands, Inc. Selected 401(k) and Retirement Plans

 

Statements of Changes in Net Assets Available for Benefits

 

Year ended December 31, 2002

 

Plan
No.

   

Plan Name

    Net Assets
Available
for Benefits
at December
31, 2001
    Employer
Contributions
     Participant
Contributions
     Benefit
Payments
     Net Investment
Gain (Loss) from
Acuity DC Trust
(Notes 1, 2 & 3)
     Plan Transfers,
net
      Net Assets
Available for
Benefits at
December 31, 2002

006

    Selig Chemical Industries Retirement Plan    $ 11,699,454    $ (444 )   $ (1,069 )   $ —       $ 67,308     $ (11,765,249 )    $ —  

007

    Acuity Specialty Products 401(k) Plan      130,248,668      2,074,950       5,799,117       (7,867,194 )     (13,386,852 )     11,752,346        128,621,035

033

    Acuity Lighting Group, Inc. Profit Sharing and Retirement Plan for Salaried Employees      130,079,224      2,596,159       8,912,267       (6,919,228 )     (13,267,053 )     2,032,303        123,433,672

060

    Acuity Brands, Inc. 401(k) Plan for Corporate Employees      2,101,692      116,907       358,779       (348,363 )     (209,615 )     (2,019,400 )      —  

067

    Acuity Lighting Group, Inc. 401(k) Plan for Hourly Employees      917,031      58,457       504,488       (65,053 )     (99,898 )     —          1,315,025

068

    Enforcer Products 401(k) Plan      3,567,476      88,745       557,547       (187,994 )     (364,674 )     —          3,661,100

069

    Holophane Division of Acuity Lighting Group 401(k) Plan for Hourly Employees      8,483,965      395,209       377,924       (514,912 )     (492,318 )     —          8,249,868

070

    Holophane Division of Acuity Lighting Group 401(k) Plan for Hourly Employees Covered by a Collective Bargaining Agreement      14,418,974      540,431       695,432       (1,714,047 )     (346,123 )     —          13,594,667
         
  
 
 
 
 
  
    

Total

    $ 301,516,484    $ 5,870,414     $ 17,204,485     $ (17,616,791 )   $ (28,099,225 )   $ —        $ 278,875,367
         
  
 
 
 
 
  

 

See accompanying notes.

 

4

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Acuity Brands, Inc. Selected 401(k) and Retirement Plans

 

Notes to Financial Statements

 

December 31, 2002

 

1. Description of the Plans

 

General

 

The accompanying financial statements of the Acuity Brands, Inc. (the “Company” or “Acuity”) 401(k) and Retirement Plans (the “Plans”) listed in the accompanying financial statements are commingled 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”).

 

On November 7, 2001, the board of directors of National Service Industries, Inc. (“NSI”) approved the spin-off of its lighting equipment and chemicals businesses into a separate publicly-traded company with its own management and board of directors. The spin-off was effected on November 30, 2001 through a tax-free distribution (“Distribution” or “Spin-off”) of 100% of the outstanding shares of common stock of Acuity, at that time a wholly-owned subsidiary of NSI owning and operating its lighting equipment and chemicals businesses. Prior to the Spin-off, the Plans were commingled in the National Service Industries, Inc. Defined Contribution Plans Master Trust (the “NSI DC Trust”) with certain other plans sponsored by NSI. Upon completion of the Spin-off, the Plans’ assets were transferred to the Acuity DC Trust (see note 3) from the NSI DC Trust effective November 30, 2001. NSI retained its textile rental and envelope businesses and sponsorship for their related plans.

 

The Holophane Division of Lithonia Lighting Group Retirement and 401(k) Plan for Hourly Employees (the “Holophane Hourly Plan”) and Holophane Division of Lithonia Lighting Group Retirement and 401(k) Plan for Hourly Employees Covered by a Collective Bargaining Agreement (the “Holophane Hourly Union Plan”) were established effective January 1, 2001 for the benefit of eligible bargained and non-bargained hourly employees of the Holophane Division of the Lithonia Lighting Group of NSI. The Holophane Hourly Plan and Holophane Hourly Union Plan assets were also commingled in the NSI DC Trust at their inception and such assets were transferred to the Acuity DC Trust upon completion of the Spin-off.

 

5

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Acuity Brands, Inc. Selected 401(k) and Retirement Plans

 

Notes to Financial Statements (continued)

 

1. Description of the Plans (continued)

 

General (continued)

 

NSI sponsored other employee benefit plans that were not commingled in the NSI DC Trust. During 2001, the board of directors of NSI elected to merge certain of these plans into several of the Plans reported on herein as follows: the net assets of the Holophane Division Thrift and Retirement Plan (the “Holophane Thrift Plan”), Metal Optics Division 401(k) Profit Sharing Plan (the “Metal Optics Plan”), and Hydrel/Lithonia Operations 401(k) Retirement Plan (the “Hydrel Plan”) were split between salaried and hourly employees. The fair value of net assets related to the salaried employees of each respective plan were merged into the Acuity Lighting Group, Inc. Profit Sharing and Retirement Plan for Salaried Employees (formerly Lithonia Lighting Profit Sharing and Retirement Plan for Salaried Employees). The fair value of net assets related to hourly employees of the Holophane Thrift Plan and Metal Optics Plan were merged into the Holophane Division of Lithonia Lighting Group Retirement and 401(k) Plan for Hourly Employees. The fair value of net assets related to the hourly employees of the Hydrel Plan were merged into the Acuity Lighting Group, Inc. 401(k) Plan for Hourly Employees (formerly Lithonia Lighting 401(k) Plan for Hourly Employees). The net assets of the Holophane Division Retirement Plan for AFGWU Union Employees, Holophane Division Retirement Plan for IBEW Union Employees, and Holophane Division Retirement Plan for UAW Union Employees (collectively the “Holophane Union Plans”) were merged into the Holophane Division of Lithonia Lighting Group Retirement and 401(k) Plan for Hourly Employees Covered by a Collective Bargaining Agreement. Such contributed funds from merged plans totaled approximately $63,079,000 for the year ended December 31, 2001.

 

During 2002, two Plan mergers occurred. Effective January 1, 2002, the Selig Chemical Industries Retirement Plan merged into the Acuity Specialty Products 401(k) Plan. Employees of Selig Chemical Industries became eligible to participate in the Acuity Specialty Products 401(k) Plan, in accordance with its terms. Effective December 31, 2002, the Acuity Brands, Inc. 401(k) Plan for Corporate Employees merged into the Acuity Lighting Group, Inc. Profit Sharing and Retirement Plan for Salaried Employees. Participants of the Acuity Brands, Inc. 401(k) Plan for Corporate Employees became eligible to participate in the Acuity Lighting Group, Inc. Profit Sharing and Retirement Plan for Salaried Employees, in accordance with its terms.

 

6

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Acuity Brands, Inc. Selected 401(k) and Retirement Plans

 

Notes to Financial Statements (continued)

 

1. Description of the Plans (continued)

 

General (continued)

 

The name of the Lithonia Lighting 401(k) Plan for Hourly Employees was changed to Acuity Lighting Group, Inc. 401(k) Plan for Hourly Employees on January 1, 2002. The plan was also changed to provide for a matching contribution for employees of American Electric Lighting. The name of the Holophane Division of Lithonia Lighting Group Retirement and 401(k) Plan for Hourly Employees Covered by a Collective Bargaining Agreement and the name of the Holophane Division of Lithonia Lighting Group Retirement and 401(k) Plan for Hourly Employees were changed to Holophane Division of Acuity Lighting Group 401(k) Plan for Hourly Employees Covered by a Collective Bargaining Agreement and Holophane Division of Acuity Lighting Group 401(k) Plan for Hourly Employees, respectively.

 

Effective February 11, 2002, participants in all of the Plans were permitted to direct the investments of all funds in their respective plan, thereby eliminating the non-participant-directed funds. Employer matching amounts are allocated in accordance with the participant’s current investment elections for elective deferrals.

 

Additional amendments that were made and entered into during 2002 were adopted to reflect certain provisions of the Economic Growth and Tax Relief Reconciliation Act of 2001 as they were applicable to the plans.

 

Refer to the respective summary plan description or plan agreement for additional information about the Plans’ eligibility, funding, allocation, vesting, and benefit provisions.

 

Eligibility

 

Each of the Plans is a defined contribution plan. The Plans cover substantially all salaried, commissioned, union and non-union hourly employees of the Company. Employees have immediate eligibility upon attaining the age requirement, with the exception of Plan 007, which has a six-month waiting period.

 

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Acuity Brands, Inc. Selected 401(k) and Retirement Plans

 

Notes to Financial Statements (continued)

 

1. Description of the Plans (continued)

 

Administration

 

Administration of the Plans is the responsibility of the Company’s investment committee, which is appointed by its board of directors. All administrative expenses of the Plans were paid by the Company during the year ended December 31, 2002.

 

Plan Termination

 

Although the Company intends for the Plans to be permanent, the Plans provide that the Company has the right to discontinue contributions or to terminate the Plans at any time. 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.

 

Investment in Related Party Common Stock

 

As of December 31, 2001, approximately 0.3% and 1.7% of the Acuity DC Trust’s net assets were invested in the common stock of NSI and Acuity, respectively. As of December 31, 2002, approximately 0.2% and 2.6% of the Acuity DC Trust’s net assets were invested in the common stock of NSI and Acuity, respectively.

 

8

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Acuity Brands, Inc. Selected 401(k) and Retirement Plans

 

Notes to Financial Statements (continued)

 

1. Description of the Plans (continued)

 

Funding Policy

 

The basis for determining participant (pre-tax) and employer contributions is as follows:

 

Plan Name

   

Participant
Contributions*

   

Employer Contributions*

Selig Chemical Industries

    Retirement Plan

    2% to 15% of compensation    50% of participant contribution up to 6% of compensation.

Acuity Specialty Products

    401(k) Plan

    1% to 15% of compensation    For non-union employees—50% of participant contribution up to 6% of compensation. For union employees only—5% of net profits plus an amount which represents the same percentage of total annual compensation of all hourly paid Plan participants as the 5% of net profits bears to total annual compensation of salaried and commissioned Plan participants. This amount is multiplied by a fraction representing the relationship between annual compensation of all salaried, commissioned, and nonunion hourly or union qualifying participants to the annual compensation of all qualifying participants. Contributions apply to up to $40,000 of qualifying participant compensation. Additional discretionary contributions are permitted.

Acuity Lighting Group, Inc.

    Profit Sharing and

    Retirement Plan for

    Salaried Employees

    1% to 15% of compensation    50% of participant contribution up to 6% of compensation. Additional profit sharing provision included within plan.
*   Effective January 1, 2002, all plans were amended to permit employees to defer up to 25% of compensation. In addition, all plans were amended to permit employees age 50 or older (or who turned age 50 during 2002) to contribute up to an additional $1,000 as a “catch-up” contribution. This contribution provision was effective July 1, 2002 for the Acuity Lighting Group, Inc. Profit Sharing and Retirement Plan for Salaried Employees and was effective October 1, 2002 for the Acuity Specialty Products 401(k) Plan.

 

9

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Acuity Brands, Inc. Selected 401(k) and Retirement Plans

 

Notes to Financial Statements (continued)

 

1. Description of the Plans (continued)

 

Plan Name

   

Participant
Contributions*

   

Employer Contributions*

Acuity Brands, Inc. 401(k)

    Plan for Corporate

    Employees

    1% to 15% of compensation; 3% for automatic enrollment    50% of participant contribution up to 6% of compensation. Additional discretionary profit sharing permitted.

Acuity Lighting Group, Inc.

    401(k) Plan for Hourly

    Employees

    1% to 15% of compensation    At the Hydrel location only, employees receive a matching contribution equal to 25% for the first 6% of employee deferrals. At the American Electric location, employees receive a matching contribution equal to 50% of the first 6% of employee deferrals. Employees at all other locations participating in the plan do not receive an employer contribution.

Enforcer Products 401(k)

    Plan

    1% to 15% of compensation    Discretionary match and profit sharing contribution.

Holophane Division of

    Acuity Lighting Group

    401(k) Plan for Hourly

    Employees

    1% to 15% of compensation   

Employees of Holophane at Pataskala and Utica, Ohio hired on or after December 1, 2001—50% of participant contribution up to 6% of compensation.

All other employees of Holophane—33% of participant contribution up to 6% of compensation, plus a discretionary basic contribution of 5% of annual compensation.

Employees of Metal Optics—50% of participant contribution up to 6% of compensation.

Holophane Division of

    Acuity Lighting Group

    401(k) Plan for Hourly

    Employees Covered by a

    Collective Bargaining

    Agreement

    1% to 15% of compensation   

IBEW Local 1853—Prior to April 1, 2001, 30% of the first 4% of employee deferrals. Effective April 1, 2001, 30% of the first 5% of compensation.

Additional basic contribution of 4.5% of annual compensation. Employees hired on or after December 16, 2001 will receive a matching contribution of 50% of the first 6% of employee deferrals.

AFGWU Local Nos. 4, 105 and 525—25% of the first 6% of compensation. Additional basic contribution of 5% of annual compensation. Employees hired on or after August 5, 2002 will receive a matching contribution of 50% of the first 6% of employee deferrals. UAW Local 1876—25% of the first 6% of compensation. Additional basic contribution of 4.5% of annual compensation.

*   Effective January 1, 2002, all plans were amended to permit employees to defer up to 25% of compensation. In addition, all plans were amended to permit employees age 50 or older (or who turned age 50 during 2002) to contribute up to an additional $1,000 as a “catch-up” contribution. This contribution provision was effective July 1, 2002 for the Acuity Lighting Group, Inc. 401(k) Plan for Hourly Employees, Enforcer Products 401(k) Plan, 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, and effective October 1, 2002, for the Acuity Brands, Inc. 401(k) Plan for Corporate Employees.

 

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Acuity Brands, Inc. Selected 401(k) and Retirement Plans

 

Notes to Financial Statements (continued)

 

2. Significant Accounting Policies

 

Basis of Accounting

 

The accounts of the Plans are maintained by the trustee, AMVESCAP National Trust Company, on the cash basis of accounting. The accompanying financial statements have been prepared using the accrual method of accounting by application of memorandum entries.

 

Investments

 

The investments in the Acuity DC Trust (the “Trust”) are subject to certain administrative guidelines and limitations as to the type and amount of securities held. Certain fund assets are allocated to selected independent investment managers to invest under these guidelines. Investments of the Trust, except for the guaranteed investment contracts (“GICs”), are stated at fair value, as determined by the trustee from quoted market prices. Securities traded on a national exchange are valued at the last reported sales price on the last business day of the plan year; investments traded in the over-the-counter market and listed securities for which no sale was reported on the last day of the plan year are valued at the last reported bid price.

 

GICs are subject to credit risk based on the ability of the issuers to meet interest or principal payments, or both, as they become due. Certain GICs included in the Trust are synthetic; that is, the Trust own/owned certain fixed income securities and the contract issuer provides/provided a “wrapper” that guarantees a fixed rate of return and provides benefit responsiveness. At December 31, 2002 and 2001, the fair values of the underlying assets of the synthetic GICs (as determined from quoted market prices) were $93,501,000 and $74,946,000 respectively, and the values of the related wrapper contracts were $(4,336,487) and $(2,080,973) included in the Acuity DC Trust, respectively.

 

GICs included in the Trust are fully benefit-responsive and are therefore carried at contract value (cost plus accrued interest) by the Trust in accordance with SOP 94-4, “Reporting of Investment Contracts held by Health and Welfare Benefit Plans and Defined-Contribution Pension Plans.” At December 31, 2002 and 2001, contract value approximated fair value. At December 31, 2002 and 2001, the weighted average crediting interest rates, which are reset periodically during the year, were 3.37% and 5.71%, respectively. For the years ended December 31, 2002 and 2001, the annual yields on the GICs held by the Trust were 4.88% and 5.62%, respectively. For certain of the GICs held by the Trust, crediting interest rates may be changed if certain events occur, such as early retirements and plant closings, but in no case are adjusted to a rate less than 0%.

 

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Acuity Brands, Inc. Selected 401(k) and Retirement Plans

 

Notes to Financial Statements (continued)

 

2. Significant Accounting Policies (continued)

 

Use of Estimates

 

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates and the differences could be significant.

 

3. Acuity DC Trust

 

In conjunction with the Spin-off of the Company from NSI (see Note 1), the assets of the Plans were transferred to the Acuity DC Trust which is a collective investment of the assets of participating employee benefit plans of the Company. Trust assets are allocated among participating plans by assigning to each plan those transactions (primarily contributions and benefit payments) which can be specifically identified and allocating among all plans, in proportion to the fair value of the assets assigned to each plan, income and expenses resulting from the collective investment of the assets of the trust.

 

The assets transferred to the Acuity DC Trust were only those of the Plans relating to the lighting equipment and chemicals segments. Those assets relating to the plans of the textile rental and envelope segments remained in the NSI DC Trust.

 

The fair value or contract value, which approximates fair value, of net assets of the Acuity DC Trust is presented below as of December 31, 2002 and 2001.

 

     2002
     2001
  

Mutual funds

    $ 106,947,137     $ 136,333,702  

Common/collective trusts

      51,872,086       52,185,173  

Guaranteed investment contracts

      11,412,151       17,118,851  

Common stock

      7,737,085       7,733,857  

Cash equivalents

      2,579,606       6,333,378  

Accrued investment income

      2,410       10,601  

Adjustments for pending trades

      105,572       324,120  

Accrued expenses and other

      (45,780 )     (111,743 )

Corporate debt instruments

      12,855,708       15,354,709  

U.S. Government securities

      8,958,246       17,519,518  

103-12 investment entities

      71,355,761       41,854,348  

Synthetic guaranteed investment contract wrappers

      (4,336,487 )     (2,080,973 )
    
 

Net assets

    $ 269,443,495     $ 292,575,541  
    
 

 

 

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Acuity Brands, Inc. Selected 401(k) and Retirement Plans

 

Notes to Financial Statements (continued)

 

3. Acuity DC Trust (continued)

 

Investment results of the Acuity DC Trust for the year ended December 31, 2002 are as follows:

 

Interest income

    $ 5,610,714  

Net appreciation in fair value of common stock

      743,986  

Net loss from common/collective trust funds

      (2,352,841 )

Net loss from mutual funds

      (32,101,084 )
    

Investment results

    $ (28,099,225 )
    

 

4. Income Tax Status

 

The Plans have received determination letters from the Internal Revenue Service stating that the Plans, as restated and amended, are qualified under Section 401(a) of the Internal Revenue Code (the “Code”). The Plan sponsor has indicated that it will take the necessary steps, if any, to maintain the Plans’ qualified status.

 

5. Nonparticipant-Directed Fund Information

 

Prior to February 11, 2002, certain Plans provided for nonparticipant-directed funds. Such funds were invested in NSI common stock prior to the Spin-off and Acuity common stock subsequent thereto. The following represents the net assets available for benefits of the nonparticipant-directed portion of the Plans as of December 31, 2002 and 2001, and the changes in net assets available for benefits for the year ended December 31, 2002, respectively.

 

 

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Acuity Brands, Inc. Selected 401(k) and Retirement Plans

 

Notes to Financial Statements (continued)

 

5. Nonparticipant-Directed Fund Information (continued)

 

     Acuity Common Stock held by Plan No.
  
     006
     007
     060
     068
  

Net Assets, December 31, 2001

    $ 191,650     $ 2,075,755     $ 214,316     $ 84,797  

Employer contributions, net of forfeitures

      —         415,012       23,447       8,641  

Net investment income

      28,485       219,300       38,169       13,994  

Plan Transfers

      (220,135 )     20,589       (262,518 )     (5,501 )

Transfers to Participant-Directed Funds*

      —         (2,620,099 )     —         (97,179 )

Benefits paid to participants

      —         (110,557 )     (13,414 )     (4,752 )
    
 
 
 

Net (decrease) increase

      (191,650 )     (2,075,755 )     (214,316 )     (84,797 )
    
 
 
 

Net Assets, December 31, 2002

    $ —       $ —       $ —       $ —    
    
 
 
 

* Effective February 11, 2002, participants in all of the Plans were permitted to direct the investments of all funds in their respective plan, thereby eliminating the non-participant-directed funds. Employer matching amounts are allocated in accordance with the participant’s current investment elections for elective deferrals.

 

6. Benefits Payable

 

The following Plans had benefit payments that were approved for payment, but were not paid until subsequent December 31:

 

Plan No.

   

Plan Name

    2002
    2001

006

   

Selig Chemical Industries Retirement Plan

    $ —      $ 5,297

007

   

Acuity Specialty Products 401(k) Plan

      —        243

033

   

Acuity Lighting Group, Inc. Profit Sharing and Retirement Plan for Salaried Employees

      633      71,737

067

   

Acuity Lighting Group, Inc. 401(k) Plan for Hourly Employees

      —        3,916

068

   

Enforcer Products 401(k) Plan

      —        2,443

069

   

Holophane Division of Acuity Lighting Group 401(k) Plan for Hourly Employees

      —        24,355

 

7. Subsequent Events

 

Effective January 1, 2003, the Acuity Lighting Group, Inc. Profit Sharing and Retirement Plan for Salaried Employees employer contribution increased from 50% of participant contribution up to 6% of compensation, to 60% of participant contribution up to 6% of compensation. Also, effective January 1, 2003, the profit sharing contribution provision of this plan was eliminated.

 

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Acuity Lighting Group, Inc. Profit Sharing and Retirement Plan

for Salaried Employees

 

EIN: 58-2632672 Plan No.: 033

 

Schedule G, Part III—Schedule of Nonexempt Transactions

 

Year ended December 31, 2002

 

(a)    (b)    (c)

Identity of Party Involved

   

Relationship to Plan,
Employer, or Other Party-
in-Interest

   

Description of Transactions,
including Maturity Date,
Rate of Interest, Collateral,
Par, or Maturity Value

Acuity Brands, Inc.    Employer/Plan Sponsor   

Contributions of $51,090 for

    the November 26, 2002

    payroll period were remitted

    January 3, 2003.

 

Note: The information to be presented in columns (d), (e), (f), (g), (h), (i), or (j) is not applicable.

 

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Acuity Lighting Group, Inc. 401(k) Plan for Hourly Employees

 

EIN: 58-2632672 Plan No.: 067

 

Schedule G, Part III—Schedule of Nonexempt Transactions

 

Year ended December 31, 2002

 

(a)    (b)    (c)

Identity of Party Involved

   

Relationship to Plan,
Employer, or Other Party-
in-Interest

   

Description of Transactions,
including Maturity Date,
Rate of Interest, Collateral,
Par, or Maturity Value

Acuity Brands, Inc.    Employer/Plan Sponsor   

Contributions of $9,576 for

    the November 26, 2002

    payroll period were remitted

    January 3, 2003.

 

Note: The information to be presented in columns (d), (e), (f), (g), (h), (i), or (j) is not applicable.

 

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Holophane Division of Acuity Lighting Group

401(k) Plan for Hourly Employees

 

EIN: 58-2632672 Plan No.: 069

 

Schedule G, Part III—Schedule of Nonexempt Transactions

 

Year ended December 31, 2002

 

(a)    (b)    (c)

Identity of Party Involved

   

Relationship to Plan,
Employer, or Other Party-
in-Interest

   

Description of Transactions,
including Maturity Date,
Rate of Interest, Collateral,
Par, or Maturity Value

Acuity Brands, Inc.    Employer/Plan Sponsor   

Contributions of $1,232 for

    the November 26, 2002

    payroll period were remitted on

    January 3, 2003.

 

Note: The information to be presented in columns (d), (e), (f), (g), (h), (i), or (j) is not applicable.

 

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Table of Contents

Holophane Division of Acuity Lighting Group

401(k) Plan for Hourly Employees Covered

by a Collective Bargaining Agreement

 

EIN: 58-2632672 Plan No.: 070

 

Schedule G, Part III—Schedule of Nonexempt Transactions

 

Year ended December 31, 2002

 

(a)    (b)    (c)

Identity of Party Involved

   

Relationship to Plan,
Employer, or Other Party-
in-Interest

   

Description of Transactions,
including Maturity Date,
Rate of Interest, Collateral,
Par, or Maturity Value

Acuity Brands, Inc.    Employer/Plan Sponsor   

Contributions of $26,706 for

    the December 1, 2002

    payroll period were remitted

    on May 6, 2003.

 

Note: The information to be presented in columns (d), (e), (f), (g), (h), (i), or (j) is not applicable.

 

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Selected 401(k) and Retirement Plans

 

Schedule H, Line 4i

 

Schedule of Assets (Held at End of Year)

 

December 31, 2002

 

      (a)        

   

(b)

Identity of Issue, Borrower,
Lessor, or Similar Party

   

Plan

No.

    EIN #
   

(c)

Description of Investment,
Including Maturity Date, Rate
of Interest, Collateral, Par or
Maturity Value

   Cost 
    Current
Value

*

    Selig Chemical Industries Retirement Plan    006    58-2632672    Participant Loans    $ —      $ —  

*

    Acuity Specialty Products 401(k) Plan    007    58-2632672    Participant Loans      —        3,924,202

*

    Acuity Lighting Group, Inc. Profit Sharing and Retirement Plan for Salaried Employees    033    58-2632672    Participant Loans      —        2,965,504

*

    Acuity Brands, Inc. 401(k) Plan for Corporate Employees    060    58-2632672    Participant Loans      —        —  

*

    Acuity Lighting Group, Inc. 401(k) Plan for Hourly Employees    067    58-2632672    Participant Loans      —        33,004

*

    Enforcer Products 401(k) Plan    068    58-2632672    Participant Loans      —        168,051

*

    Holophane Division of Acuity Lighting Group 401(k) Plan for Hourly Employees    069    58-2632672    Participant Loans      —        832,434

*

    Holophane Division of Acuity Lighting Group 401(k) Plan for Hourly Employees Covered by a Collective Bargaining Agreement    070    58-2632672    Participant Loans      —        714,106
                        
  
     Total                   $  —      $ 8,637,301
                        
  
*   Represents a party in interest.

 

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EXHIBIT INDEX

 

Exhibit
Number
   

Description

23.1

    Consent of Ernst & Young LLP, Independent Auditors.

 

20