Debt and Lines of Credit |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Aug. 31, 2026 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt and Lines of Credit | Debt and Lines of Credit Our debt is carried at the outstanding balance net of any related unamortized discounts and deferred costs and consistent of the following as of the dates presented (in millions):
Long-term Debt On November 10, 2020, Acuity Brands Lighting, Inc., a wholly-owned operating subsidiary of Acuity Inc., issued $500.0 million aggregate principal amount of 2.150% senior unsecured notes due December 15, 2030 (the “Unsecured Notes”) at a price equal to 99.737% of their face value. Interest on the Unsecured Notes is paid semi-annually in arrears on June 15 and December 15 of each year. At issuance we recorded $4.8 million of deferred issuance costs related to the Unsecured Notes as a direct deduction from the face amount of the Unsecured Notes. These issuance costs are amortized over the 10-year term of the Unsecured Notes. The Unsecured Notes are fully and unconditionally guaranteed on a senior unsecured basis by Acuity Inc. and ABL IP Holding LLC, a wholly-owned subsidiary of Acuity Inc. Lines of Credit On May 8, 2026, we entered into a credit agreement (the “Credit Agreement”) with a syndicate of banks that provides us with an $800.0 million five-year unsecured revolving credit facility. The Credit Agreement will mature on May 8, 2031. Borrowings under the Credit Agreement bear interest at a rate equal to an adjusted base rate, Term Secured Overnight Financing Rate (“SOFR”), Euro Interbank Offered Rate (“EURIBOR”), Daily Simple Sterling Overnight Index Average (“SONIA”), or Term Canadian Overnight Repo Rate Average (“CORRA”), plus, in each case, an applicable margin. The applicable margin is based on, at our option, the Company’s leverage ratio or credit rating level, each as defined in the Credit Agreement, and ranges from 0.75% to 1.25%. Additionally, we pay a quarterly facility fee based on the average daily amount of the revolving credit facility (regardless of usage), which is determined, at the Company’s option, by the Company’s leverage ratio or credit rating level. The Credit Agreement replaced our prior credit agreement dated as of June 30, 2022 and amended on November 25, 2024 that was set to expire June 30, 2027. The prior credit agreement provided us with a $600.0 million five-year unsecured revolving credit facility and a delayed draw term loan facility of up to $600.0 million (the “Term Loan Facility”). In fiscal 2025, we incurred an aggregate $600.0 million in indebtedness on our Term Loan Facility in connection with the acquisition of QSC, and we voluntarily repaid $200.0 million of the obligation. In fiscal 2026, we repaid the remaining $400.0 million using cash on hand and proceeds from borrowings on our Credit Agreement. During the fourth quarter of fiscal 2026, we committed to a plan to repay the remaining outstanding balance under the Credit Agreement in fiscal 2027. This amount is reflected in Current maturities of debt on the Consolidated Balance Sheets as of August 31, 2026. See the Subsequent Event footnote of the Notes to Consolidated Financial Statements for further details. The Credit Agreement contains a leverage ratio covenant (“Maximum Leverage Ratio”) requiring the ratio of (a) the Company’s consolidated debt (subject to certain adjustments), less unrestricted cash and cash equivalents of the Company and its subsidiaries, to (b) the sum of the Company’s consolidated adjusted earnings before interest, tax, depreciation, and amortization (“EBITDA”) as of the last day of any fiscal quarter to be 3.75 to 1.00 or less, subject to the Company’s right to temporarily increase the maximum leverage ratio to up to 4.25 to 1.00 in connection with certain acquisitions. The Credit Agreement contains various customary restrictions, covenants, and events of default. The revolving credit facility under the Credit Agreement is guaranteed by the Company’s material domestic subsidiaries (subject to certain exclusions) and certain other subsidiaries. We were in compliance with all financial covenants under our credit agreements as of the periods presented. At August 31, 2026, we had additional borrowing capacity under the Credit Agreement of $593.3 million under the most restrictive covenant in effect at the time. This represents the full amount of the revolving credit facility under the Credit Agreement less outstanding borrowings of $200.0 million and letters of credit of $6.7 million issued, primarily for securing collateral requirements under our casualty insurance policies. None of our existing debt instruments include provisions that would require an acceleration of repayments based solely on changes in our credit ratings. Borrowings and repayments on our revolving credit facility under the Credit Agreement with terms of three months or less are reported on a net basis on our Consolidated Statements of Cash Flows.
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