ACUITY INC. (DE)
For the period ended Aug 31, 2025. Filed Dec 11, 2025.
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Aug 31, 2025 · Filed Dec 11, 2025
Contents
APPENDIX BB-1
Appendix B: Compensation Performance
Metrics
Reconciliation of U.S. Generally Accepted Accounting Principles (“GAAP”) to
Non-U.S. GAAP Financial Measures and Methodology for Calculating Non-U.S. GAAP
Financial Measures
We use various non-GAAP financial measures to evaluate the performance of our management team, including the
NEOs. For the assessment of the performance of management, the Board believes certain non-GAAP measures better
reflect the operational performance of the business. The Board also believes that in order to drive the desired
management performance, the calculation of operating profit (non-GAAP) and free cash flow (non-GAAP) as management
performance metrics should not include certain adjustments that are included in our reported results, as further described
in the footnotes below.
The following are reconciliations of GAAP measures to non-GAAP measures. Additionally, we have provided definitions
and calculations for certain financial measures that do not have an equivalent GAAP financial measure.
Reconciliation of U.S. GAAP Financial Measures to Non-U.S. GAAP Financial Measures
| Fiscal years ($ millions) | 2025 | 2024 | 2023 |
|---|---|---|---|
| Net sales (GAAP) | $4,345.6 | $3,841.0 | $3,952.2 |
| Operating profit (GAAP) | 563.9 | 553.3 | 473.4 |
| Add-back: Employee severance, impairments and other costs(1) | 29.7 | — | 12.9 |
| Add-back: Acquisition-related items(2) | 95.5 | — | — |
| Adjusted operating profit (non-GAAP)(3) | $689.1 | $553.3 | $486.3 |
| Operating profit margin (GAAP) | 13.0% | 14.4% | 12.0% |
| Adjusted operating profit margin (non-GAAP) | 15.9% | 14.4% | 12.3% |
(1)Charges in fiscal 2025 related to pre-tax special charges, which consisted primarily of impairments of certain assets and severance and employee-related
costs in connection with productivity initiatives. Charges in fiscal 2023 related to pre-tax special charges, which primarily included impairment charges of
certain assets, as well as severance and employee-related costs in connection with the Sunoptics divestiture and other streamlining activities.
(2)Acquisition-related items include amortization, acquired profit in inventory, and professional fees in fiscal 2025 for an acquisition.
(3)Adjusted operating profit used for calculation of management performance measures differs from the same measures used in our reported results.
| Fiscal years ($ millions) | 2025 | 2024 | 2023 |
|---|---|---|---|
| Net cash provided by operating activities (GAAP) | $601.4 | $619.2 | $578.1 |
| Less: Purchase of property, plant and equipment | (68.4) | (64.0) | (66.7) |
| Free cash flow (non-GAAP) | 533.0 | 555.2 | 511.4 |
| Add-back: Employee severance costs(1) | 7.2 | — | — |
| Add-back: Acquisition-related items(2) | 23.8 | — | — |
| Add-back: Tariff payments ahead of collections(3) | 25.0 | — | — |
| Adjusted free cash flow (non-GAAP)(4) | $589.0 | $555.2 | $511.4 |
(1)Charges in fiscal 2025 related to pre-tax severance and employee-related costs in connection with productivity initiatives.
(2)Acquisition-related items include professional fees in fiscal 2025 for an acquisition.
(3)Consisted of payment remitted to governmental authorities for tariffs and duties ahead of collections for related sales.
(4)Adjusted free cash flow used for calculation of management performance measures differs from the same measures used in our reported results.
Acuity Inc. | 2026 Proxy Statement | B-2
APPENDIX B: COMPENSATION PERFORMANCE METRICS
Adjusted Return on Invested Capital (adjusted ROIC) equals Adjusted net operating profit after taxes (NOPAT) divided
by Average capital. Average capital equals Total debt plus Total stockholders’ equity less excess cash (>$100 million)
(average of five quarters).
Weighted Average Cost of Capital (WACC) is calculated utilizing the methodology of the Capital Asset Pricing Model
(average of five quarters).
| Fiscal Years ($ millions) · 2025 · 2024 · 2023 | ||||
|---|---|---|---|---|
| Income before income taxes (GAAP) | $500.2 | $548.6 | $446.7 | |
| Add back: Interest expense (income), net | 22.0 | (4.5) | 18.9 | |
| Add-back: Acquisition or divestiture-related items(1) | 95.5 | — | 11.2 | |
| Add-back: Employee severance, impairments and other costs(2) | 29.7 | — | 12.9 | |
| Add-back: Pension settlement loss | 30.9 | — | — | |
| Adjusted net operating profit before taxes | 678.3 | 544.1 | 489.7 | |
| Less: Taxes | (152.3) | (125.0) | (109.7) | |
| Adjusted net operating profit after taxes (non-GAAP) | (a) | $526.0 | $419.1 | $380.0 |
| Average stockholders’ equity(3) | $2,534.3 | $2,172.5 | $1,949.6 | |
| Plus: Debt(3) | 796.5 | 495.9 | 498.9 | |
| Less: Excess cash(4) | (494.7) | (507.0) | (220.7) | |
| Average capital (non-GAAP) | (b) | $2,836.1 | $2,161.4 | $2,227.8 |
| Adjusted ROIC (non-GAAP) | (a)/(b) | 18.5% | 19.4% | 17.1% |
| WACC (non-GAAP) | (c) | 10.6% | 10.9% | 10.5% |
| Performance metric percentage points (non-GAAP) | (a)/(b)-(c) | 7.9 | 8.5 | 6.6 |
(1)Acquisition or divestiture-related items include amortization, acquired profit in inventory, and professional fees in fiscal 2025 for an acquisition and a loss
on the disposal of a business in fiscal 2023.
(2)Charges in fiscal 2025 relate to intangible asset impairment charges, employee severance and other charges related to productivity efforts. Charges in
fiscal 2023 relate to employee severance costs and impairments of operating lease right of use assets associated with streamlining activities.
(3)For each respective fiscal year end, the amounts represent the rolling five-quarter average of our reported stockholders’ equity (GAAP) and our reported
debt (GAAP).
(4)For each respective fiscal year end, the amounts represent cash balances in excess of $100 million for the rolling five-quarter average.
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