Good morning and welcome to the Acuity Brands 2008 fourth quarter financial conference call. (Operator Instructions) I would now like to introduce Dan Smith, Vice President, Treasurer and Secretary of Acuity Brands; sir you may begin.

Good morning. With me today to discuss our fourth quarter and full year results are Vernon Nagel, our Chairman, President and Chief Executive Officer; and Richard Reece, our Executive Vice President and Chief Financial Officer. We are webcasting today’s conference call at www.acuitybrands.com. During today’s call we may refer to certain non-GAAP measures. Please refer to today’s press release which contains a reconciliation table of these non-GAAP measures to the appropriate GAAP measures. I would like to remind everyone that during this call, we may make projections or forward-looking statements regarding future events or future financial performance of the company. Such statements involve risk and uncertainties, such that actual results may differ materially. Please refer to our most recent 10-K and 10-Q SEC filings and today’s press release, which identify important factors that could cause actual results to differ materially from those contained in our projections or forward-looking statements. Now, let me turn the call over to Vernon Nagel.

Thank you Dan, good morning everyone. Richard and I would like to make a few comments and then we will answer your questions. First on behalf of our associates worldwide I am again pleased to announce record earnings for both our fourth quarter and full year 2008. The year 2008 was another outstanding year for Acuity Brands; in fact we again exceeded all of our longer term financial targets. In addition to our record results we achieved great success in a number of strategic priorities including accelerating programs to introduce new, more energy efficient products and services, enhanced customer service, and expanded to new markets and improved productivity as well as the spin-off of our chemical business. These accomplishments will better position the company strategically to produce upper quartile results more consistently. Also this is our 14th quarter in a row of record operating profit, operating profit margin and diluted earnings per share from continuing operations; a great accomplishment considering the number of significant challenges we faced this quarter. I know many of you have already received our results and Richard will provide more detail later in this call, but I would like to make a few comments on key highlights. First for the fourth quarter, net sales for the quarter were $523 million, down 3% compared with the year ago period. Operating profit was $73.7 million, up 6% while margins were 14.1%, up 120 basis points to an all-time high. Diluted earnings per share from continuing operations was $1.02, up more than 5% from the year ago period. For the full year in 2008 net sales at Acuity Brands Lighting exceeded $2 billion for the first time, up more than 3% from 2007. Consolidated operating profit margins excluding the special charge in the first quarter following the spin-off of…

Thank you Vernon and good morning everyone. Vernon previously discussed key highlights of our results so I’ll not repeat that information however I will touch on a few additional items regarding our fourth quarter results. Gross profit for the fourth quarter was $212.4 million, or 40.6% of sales. This gross profit margin reflects an increase of 170 basis points compared with the year ago period. This improvement in gross profit is after overcoming the challenges of unprecedented increases in raw material and freight costs. This margin improvement reflects the benefits we are realizing from our pricing discipline, richer mix of products sold and productivity gains. Selling, distribution and administrative costs were $138.7 million in the quarter ended August 31, 2008, a reduction of $2 million compared with $140.6 million in the prior year period. This reduced cost reflects the benefits from simplification of our administrative structure as a result of the spin-off of Zep and tight management of discretionary expenses partially offset by increased commission expense due to higher commission rates paid on the richer mix of products as well as the investments we are making in our business to drive profitable growth which Vernon previously discussed. As a percent of sales, operating expense for the quarter was 26.5% compared to 26% in the prior year. This 50 basis point increase reflects the impact of the higher commission rates and the strategic investments. I’ll next spend a minute discussing items in the fourth quarter below the operating earnings line, first net interest expense in the fourth quarter increased $400,000 to $7.1 million from the year ago period, primarily due to lower interest income as a result of lower short-term interest rates. Second, other expenses related to the impact of exchange rates on foreign currency transactions, and gain and losses on…

Thank you Richard, as we look forward we continue to see challenges but more importantly opportunities. Clearly economies worldwide are in a state of flux. With uncertainty comes great volatility. Some economists suggest we are in a recession. Of course time will tell. What we do know is key indicators for our traditional markets, both residential and non-residential construction are signaling a decline in available market in 2009. All the data we see shows the economy in the United States and in many other parts of the world experiencing a slowdown due to political uncertainties, the disruption in the housing and financial markets, and higher commodity prices. Clearly it is impossible to know the precise effect these items could have on the future growth rate of the construction markets or for how long into the future these conditions may prevail. But it is clear those factors which influence the future growth rate of new construction including the future vitality of the economy, job creation, consumer sentiment, occupancy rates, and the availability of capital, are all in a current state of flux and signaling slower growth ahead or in some markets, continuing declines in demand. This information is all widely known. All this seems to support the forecast by independent third parties that unit volume for construction put in place in the non-residential construction market, could be down mid to upper single-digit percentages in 2009 compared with 2008. Additionally housing starts which were down 30% in our fiscal 2008 are expected to decline again in 2009 albeit at a slower pace. So, the two key questions many shareholders may have are how will Acuity Brands perform in this environment, and most importantly, what are our strategies to drive profitable growth? Given these uncertain and volatile economic and market conditions we would…

(Operator Instructions) Your first question comes from the line of Matt McCall - BB&T Markets Matt McCall - BB&T Markets: If we look at the gross margin performance I think last quarter you had talked about expectations of sequential pressure of up to 100 basis points and it sounded like the steel environment didn’t get any better, help me understand, I think you were flat sequentially versus Q3, help me understand how that got close so quickly.

The fact of the matter is we continue to drive sales of our new products and these new products obviously have features and benefits, as well as price points that are interesting to the marketplace and so our mix of products sold continued to really be beneficial. As you know we put a price increase in place in May and that had a positive impact on our results for the fourth quarter of this year and I believe that as we look at our productivity and other areas of our business, our spend productivity as well as just being more efficient in our facilities, all of those served us well in the fourth quarter to help drive the kind of margin performance that you saw. Matt McCall - BB&T Markets: The SG&A line, I think last quarter we talked about I believe you referenced expectations for 2009 dollars to be up about 3% to 4% and as you continue to invest in some of these initiatives and it sounds like the new products are going to continue to push your spending higher, is that 3% to 4% spending number still a good number for 2009?

I don’t know that we in fact gave that kind of indication, I would say that from a salary perspective as you obviously know, we have taken a number of actions with our streamlining program to really get at our spending and to better understand how we do some of these things and really to drive investment in new products and in expansion of newer markets. So from our perspective I think its best that you focus on our overall margin in some of the areas that we’re suggesting to get a better insight as to what that’s going to look like. Matt McCall - BB&T Markets: On the consolidation side, it sounds like you’re talking only about manufacturing facilities, opportunities beyond that, the distribution structure we’ve referenced in the past, any further opportunities that could show up in 2009?

Our entire team continues to do, in my view, just an outstanding job of driving productivity and efficiencies into the organization. We continue to look throughout the company for ways that we can improve and enhance those capabilities. We are very aggressively investing in new product development, market expansion and so I would be reluctant to say at this point in time that tackling more than what we have on our plate right now is going to happen. But I think that we have proven over the last three years that we are committed to continuous improvement. The programs and plans and education that we have in place for our employees are paying off. They’re paying off not just in terms of greater productivity but greater opportunities for our customers. Again I can’t say enough how our customer service and the quality of our products has improved allowing us to win more frequently in the marketplace and to drive better pricing. So we’re going to tackle these streamlining actions now and we’ll continue to see what that affords us in the future. Matt McCall - BB&T Markets: You talked about expectations of outperforming the market in 2009 and I just wanted to clarify in the release you say if one were to assume flat unit volume with the apples apples unit volume here, you’re talking about non-res construction down mid to high single-digits, residential construction still down but maybe not as bad as last year, but is that meant to be kind of a guidance range if we assume flat unit volume? Is that your expectation for next year?

No let’s be clear, what we were attempting to do was give shareholders and you a sense of what our expectation of raw material costs could do and how it would impact potentially our financial performance. So what we were trying to do is say that if one were to assume flat unit volume growth and you were to look at our cost increases for steel and fuel and other certain components, we were estimating a mid single-digit increase on that. When you imagine that we believe we will, through our pricing actions, be able to fully recapture those cost increases but not more then that. We think that the marketplace will be competitive and not allow capturing more then our cost increases. We wanted you to be able to understand and do your own math on what that impact would have on our operating profit margins. Because you’re increasing the top line through price increase but you’re getting virtually no bottom line improvement so your margins will decline by some amount. We just wanted to be very clear on that. When it comes to the top line, the actual top line, as I said, we are focused, we’re assuming that these forecasters have it right but we don’t know, so we’re anticipating that unit volume will be down in 2009 on the base business, but its our expectation through these other initiatives that we’re going to work and focus on how do we offset that? Now whether we’re able to offset it all or not, we don’t know. But we think that the programs that we have in place are well targeted to helping us grow our revenue base in those areas at an accelerated pace. So what does all that look like at the end of the year? It really depends on your assumption of where you think the base business is going to go in 2009.

Your next question comes from the line of Chris Glynn - Oppenheimer Chris Glynn – Oppenheimer: Just to be clear in the press release and in your comments, you referenced the longer terms goals including the 15% EPS growth, does 2009 fall into the bucket or is it strictly restating the longer terms goals with no explicit relevance to 2009?

It is stating our longer term goals. Our expectation is is that the efforts and the focus that we have internally, that we expect to outperform the market, don’t quite know what that market is going to look like but as you know we have been very focused on internal improvements, redirecting those resources into new product development, very excited about our plans for 2009 in that regard. We are making strong inroads into new markets such as New York City. The relight market we’ve disclosed for the first time what our revenues look like in that space. It’s difficult because we’re just now establishing a baseline but difficult to compare it to what it was like in 2006. We believe that we’ve had very significant growth in that space and we expect to have very significant growth in 2009 there. But what is that precisely going to look like? We still are trying to understand the sales cycle, still trying to understand how aggressively we can penetrate this market. We are making considerable investment in people as well as training to go after this market. And so how fast can we grow that to help offset some of these other areas? Time will tell in that frankly. Chris Glynn – Oppenheimer: On some of the movements around the operating margin, you have the 70 basis points longer term goal, I think 110 from the new streamlining charge, and then some remainder, maybe $6 or $7 million from the streamlining you did in the first quarter as well as the drag from [raws] are those all additive? What’s the subset? I guess the 110 that’s inclusive of the 70? Not additional?

Correct, that is correct. You’re thinking about it exactly correct. What we tried to do was give through our press release and our comments insight as to what our focus is. I think that the wildcard for any investor is to have their own assumption about where these markets are going to go. But we are very committed to targeting growth in areas and we are very committed to driving productivity that we can deploy back into the business in the form of new products for customers, better service and better capability. Chris Glynn – Oppenheimer: So the pieces that you’re looking at for the margin build are the 110 plus the full realization of the first quarter 2008 streamlining less the raws impact.

Yes. Chris Glynn – Oppenheimer: You cite renovation a lot, historically we’ve talked about relighting as a new market opportunity and renovation, haven’t really called that out before, I think its been thought as more of a traditional market, what brings that out to the forefront today?

Well renovation has always occurred and usually it’s occurred when you have a typical change-out of a lessee and so when someone new moves into a commercial space typically the lessor will provide them with some type of build out allowance. We believe that the relight market represents and opportunity where existing owners and occupiers of this space now represent an opportunity to go in and say, let’s proactively change out your lighting to provide you with better lighting, more energy efficient products, saving you energy and helping you meet your goals in terms of your own sustainability objectives. So we believe that proactively targeting companies that fit this bill is just a huge untapped market. So what you’re doing is you’re going in and knocking on their door and you’re saying here is why you ought to consider relighting your space and for us what we wanted to do was give insight for the first time as to what we think our revenues into that renovation and relight market look like. It’s a base line and we’ll see just how fast we can penetrate that market and develop that market. We have ramped up our capabilities through our SAERIS business unit in terms of people and capability to provide turnkey solutions into that market so customers who believe that its appropriate for them to relight their space, we have the ability to provide them full turnkey solutions with our distribution partners, with our agents, with our many folks that are helping us target this market. Chris Glynn – Oppenheimer: How are you thinking about any risks associated to customer service through the streamlining efforts?

I believe that our organization is extremely focused on not only maintaining but improving our customer service capabilities. Much of what we are doing here vis-à-vis these streamlining actions really are not involving customer facing or direct customer facing activities. Obviously the plant consolidations are an issue and making sure that we do those effectively is critical to us continuing to maintain a very high level of customer service. We believe that the plans that we have in place will allow us to do this in a seamless fashion.

Some of the opportunity that we’re seeing and taking advantage of in the streamlining is the automation that we’ve continued to put throughout the business. Many of you are aware we’ve been putting Oracle in. We now pretty much have Oracle in all of the facilities and that’s enabling us to take advantage of streamlining some of the transactional processes that are less cumbersome now then they were when we were operating multiple systems. We also have put a fair amount of technology in place with our supply chain as well as with our channel partners that are enabling us to be a lot more efficient in managing those people intensive transactions. So we’re certainly leveraging some of the investments we’ve made and are continuing to make in technology that are enabling us to take advantage of some of the efficiencies that brings.

Your next question comes from the line of Glen Wortman – Sidoti and Company Glen Wortman – Sidoti and Company: Can you just comment, get more specific on your intentions with the large cash position?

Our initial thoughts continue to be to use that cash when the $160 million of public debt becomes due early next calendar year; comes due on February 1, 2009. So we are looking to go ahead and pay that off. We are seeing opportunities to invest in the business both in organic growth through product development as well as some of the service and capabilities but also seeing opportunities through acquisitions to utilize the cash in that area as well. And then lastly we have been using the cash for dividends and stock buybacks and that will certainly be something we will consider as well as the right opportunities present themselves. So, deleveraging, growing the business both organically as well as acquisitions and then returning to shareholders in dividends and stock buybacks.

I would also add that we are in a very strong position from a financial perspective to execute over our strategies. While no one enjoys this type of market, we think it’s an opportunity for great companies to take advantage of markets like this to extend and expand their market share to better serve their customers. We intend to use not only our capabilities as an organization but our financial capabilities in this time period to really again, extend out our franchise and we’re fortunate to be in that situation. Glen Wortman – Sidoti and Company: With respect to the August price increase, so the early indications are that, the announcement was about 5% to 10% so you’re expecting to realize maybe about 5% of that?

It really depends on the products and what type of products. Obviously that price increase was driven significantly or primarily around the steel costs and fuel cost increases. Steel during our fourth quarter of 2008 increased literally 100% over the fourth quarter of 2007. And so if you imagine that we’re using north of 50 million pounds of steel a quarter, that just has a huge impact on us. So for us the price increase and we wanted to be very clear about it, the price increase we believe will offset our cost increases in these and other areas but that’s probably about it given where the market is but we think that’s a pretty significant event in and of itself.

Your next question comes from the line of Peter Lisnic - Robert W. Baird

I was wondering if you could talk about free cash flow a bit more in terms of 2009, should we expect to see the same sort of conversion rates if you will.

Well our objective continues to be, it’s a long-term goal, that our cash flow, so that’s cash flow from operations minus capital expenditures will exceed our net income. We’ve done that for six out of the last seven years and we are very focused on continuing to drive our cash flow. It’s highlighted even more particularly given this environment where again we see opportunities to use our financial strength to enhance our franchise.

On the materials cost side, with the pressure that you saw in the fourth quarter it looks like at least in some cases steel costs have come down. Have you build any of the declines into your forecast or expectations for next year?

Unfortunately I too have read the newspapers but I see what the invoices look like from our vendors and they don’t reflect a decline so at this stage, we are still seeing our costs at a very high level. Diesel fuel for us went up, just between quarters, third quarter to this quarter, diesel fuel was up 11%. That increase from the third quarter to the fourth quarter cost us $0.50 million. So we’re not at this point in time anticipating prices coming down. If it happens then of course we will respond to that.

In terms of the $70 million that you’re so far realizing from the retrofit market if you will, can you give us a sense as to where the early penetration has been and where the biggest opportunities are and what you’re doing to address those opportunities?

To be clear, we are not a strong player in the retrofit market; we are a player in the renovation and relight market. Retrofit is someone that would come in and change out a ballast and a lamp or at least that’s how we define it. We are far more focused on how do we provide [escos] and our capabilities with lighting products that will allow them to relight the space to renovate the space. Our focus has been, at least internally, providing these capabilities to a lot of the retail space where folks there have great cash flows but same store sales are declining so they’re looking how do they improve their profitability. We think that relight really provides them with an opportunity to again, not only have better lighting which is really a key, but also to enjoy the energy savings while really driving their own sustainability goals. We have just a plethora of product that we are providing to folks, [escos] in the marketplace, capabilities that allow them to very effectively create a value proposition around relight projects. So we’re seeing it in a number of areas. The good news is is that our agents in the commercial and industrial space are ramping up their investments separately identifying these opportunities and separately identifying resources against them. We have a number of distribution channel partners that are aggressively investing in the relight market along with us. So just how aggressively can we grow this will depend, but I will tell you that there’s considerable focus on this space by people who really know how to do it.

And it sounds like its mostly businesses that are relatively cash rich that the current credit crisis or issues that we’re going through, that the margin probably doesn’t have that big of an impact, is that safe to say this early in the cycle?

I would say that the clients that we are dealing with are large, major organizations. As we look at [REITS] and things of that nature people who own office spaces, a lot of these things are of benefit to them and usually the price points that these projects happen to be at are I think very well within peoples’ operating budgets and are not really going to put huge strains on them. And also when you imagine when you have someone that has a very large national footprint, what they’re going to do as they relight their spaces, is they’re going to target those areas where energy costs are particularly high. And as energy cost in areas that are now artificially low as those caps come off, you’ll do it in stages. So the paybacks are quite attractive in some of these areas where energy costs are high and that’s where you’re seeing the renovation and relight opportunities flourish.

We can obviously build our models and kind of read the papers, but I’m sort of wondering you mentioned the Dodge forecast and the industry forecast, but what is your gut telling you about the next, call it 12 to 18 months in terms of what you’re seeing from your customers and how do you feel about the business going forward?

Obviously we have over 14 different channels and access points to market in North America, another couple in Europe and our people are in front of these customers every day. What we are hearing and what we’re seeing is that its very market channel sector geographies specific, if you look in the Mid West where you take places like Detroit and Milwaukee, we’re down in the 20% to 30% range because the markets are just down. But if you take other markets like a Dallas, Phoenix and Vegas and some of these other places where we continue to see very solid growth because of the value propositions that we have, so I think it really is very dependent upon which markets are you talking about and how fast can one fall while the other one gains. I think the wildcard also continues to be new product development. We continue to see very significant benefits from the products that we introduce and the acceptance of these products. We are very excited about what 2009 represents in terms of not only products incorporating newer technologies such as LED, but even products that have improved features and benefits using traditional core lamp ballast technology; all very exciting. So to me how quickly can we accelerate the introduction of these products, the market acceptance of them will be a key in really determining how much we are able to offset a projected decline in the overall market.

Your next question comes from the line of Mike Meek – Atlantic Investments Mike Meek – Atlantic Investments: Obviously there’s been a ton of headlines over the last couple of weeks about the commercial paper market seizing up, have you seen any impact from that in your business in terms of people cancelling orders or maybe the offhand distributor in financial stress or anything of that sort?

From the distributor perspective virtually all of the distributors that we deal with are very strong financially; the who’s who list of distributors in North America so I feel pretty good about their position. Obviously we monitor that very, very carefully. When it comes to cancellations, then I’ll refer if you will to our agency force and what we’re hearing is again its very market dependent. We are hearing some situations where folks have taken delay as they secure financing or look at the economics of that but we really haven’t seen if you will any significant cancellation of business. I think the good news is that we’re pretty diversified in that arena. When I look at our job business we actually had very nice growth in the fourth quarter and one could say that they’re finishing out these projects, but again, it’s very balanced between large, medium and small flow type projects.

Your next question comes from the line of Steve Searle – Unspecified Company Steve Searle – Unspecified Company: With your current plans to pay off your debt out of cash in February, 2009 you’ll be arguably pretty underleveraged, would you expect to add debt to that peer capital structure longer term through acquisitions or share repurchases or other activities?

You’re accurate that after that payoff with the cash that we’re likely to have we could be in a net positive cash situation. The $200 million that becomes due in August, 2010 we probably would be looking, although that’s a ways out and we’ll have to see what the environment and all is like, but we probably would be looking at refinancing that and using that cash as well as our cash flow to reinvest in our profitable growth strategies and our share repurchases because at some point the capital structure would be more efficient with some leverage. We target 30% to 40% total debt to cap kind of a ratio. We want to maintain our investment grade rating so we’re sensitive to that such that the markets will be available to us when opportunities present themselves since the investment grade markets tend to be a lot more stable then the non-investment grade so we would look to increase leverage when the opportunities present themselves to create value for the shareholders by investing that money.

Your final question comes from the line of Analyst – KSA Capital Partners

Just wanted to clarify this $2.1 million pre-tax change that you referred to how much of that was in the fourth quarter?

That is the fourth quarter swing on those items fourth quarter this year versus last year in these non-operating items primarily transaction, foreign currency transaction where we had a gain last year and a loss this year and then similarly on sale of fixed assets we went from a gain last year to a loss this year in the quarter. So that’s a quarter swing.

There are no additional questions at this time; I would like to turn it back over to management for any additional or closing comments.

Thank you for your time this morning. We understand the current environment is unsettling however we strongly believe we are focusing on the right objectives, deploying the proper strategies and driving the organization to succeed in critical areas that will over the longer term deliver on the expectations of our key stakeholders. Our future is bright. Thank you for your support.