Ireland
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001-35971
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98-1108930
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(State or other jurisdiction
of incorporation)
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(Commission
File Number)
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(I.R.S. Employer
Identification No.)
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Item 5.03
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Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.
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Item 8.01
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Other Events.
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Item 9.01
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Financial Statements and Exhibits.
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Exhibit
No.
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Description
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3.1
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Amended and Restated Memorandum and Articles of Association of Allegion plc (incorporated by reference to Exhibit 3.1 to Allegion plc’s Registration Statement on Form 10 filed with the Securities and Exchange Commission on June 17, 2013, as amended (file number 001-35971)).
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3.2
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Certificate of Incorporation of Allegion plc (incorporated by reference to Exhibit 3.2 to Allegion plc’s Registration Statement on Form 10 filed with the Securities and Exchange Commission on June 17, 2013, as amended (file number 001-35971)).
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99.1
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Information Statement of Allegion plc, dated November 14, 2013.
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ALLEGION PLC
(Registrant)
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Date:
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November 15, 2013
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/s/ Barbara A. Santoro
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Barbara A. Santoro
Senior Vice President, General Counsel and Secretary
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Exhibit
No.
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Description
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3.1
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Amended and Restated Memorandum and Articles of Association of Allegion plc (incorporated by reference to Exhibit 3.1 to Allegion plc’s Registration Statement on Form 10 filed with the Securities and Exchange Commission on June 17, 2013, as amended (file number 001-35971)).
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3.2
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Certificate of Incorporation of Allegion plc (incorporated by reference to Exhibit 3.2 to Allegion plc’s Registration Statement on Form 10 filed with the Securities and Exchange Commission on June 17, 2013, as amended (file number 001-35971)).
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99.1
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Information Statement of Allegion plc, dated November 14, 2013.
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Page
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SUMMARY
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RISK FACTORS
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CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS
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THE SPIN-OFF
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DIVIDENDS
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CAPITALIZATION
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SELECTED HISTORICAL COMBINED FINANCIAL DATA
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UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
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BUSINESS
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
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MANAGEMENT
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COMPENSATION DISCUSSION AND ANALYSIS
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EXECUTIVE COMPENSATION
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
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DESCRIPTION OF MATERIAL INDEBTEDNESS
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CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
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DESCRIPTION OF OUR SHARE CAPITAL
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WHERE YOU CAN FIND MORE INFORMATION
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INDEX TO FINANCIAL STATEMENTS
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RELEVANT TERRITORIES
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“Allegion,” “we,” “our” and “us” refer to Allegion plc and its consolidated subsidiaries, after giving effect to the internal reorganization and the distribution;
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“Allegion plc” refers to Allegion plc on an unconsolidated basis; and
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“Ingersoll Rand” refers to Ingersoll-Rand plc and, unless the context otherwise requires, its consolidated subsidiaries, other than, for all periods following the spin-off, Allegion.
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the series of internal transactions described under “The Spin-Off - Manner of Effecting the Spin-Off - Internal Reorganization” that will result in the allocation and transfer or assignment of certain assets and liabilities to Allegion as the “internal reorganization”;
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the distribution of Allegion ordinary shares to Ingersoll Rand shareholders as the “distribution”; and
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the internal reorganization and the distribution collectively as the “spin-off.”
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Expertise required to design custom-configured solutions for our end-users.
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Diversified portfolio of market-leading brands.
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Long history of delivering innovative and high-quality products and solutions.
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Operational excellence capabilities that enable a highly variable product mix while meeting exacting customer-delivery timetables.
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Robust network of value-added channel and distribution relationships.
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Deep and action-oriented consumer insight.
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Strong financial performance and cash-generation capabilities.
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Invest in attractive developing markets.
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Invest in emerging technology product categories.
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Leverage our expertise to deliver differentiated products and solutions in key market segments.
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Build upon our operational excellence program to be a world-class supplier of security products and solutions.
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Selectively pursue acquisitions to accelerate expansion into attractive markets and products.
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Q:
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What is the spin-off?
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A:
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The spin-off is the series of transactions by which Ingersoll Rand will transfer its commercial and residential security businesses to us in return for which we will issue our ordinary shares to Ingersoll Rand shareholders pro rata to their respective holdings. For the purposes of Irish law, this will be treated as Ingersoll Rand having made a dividend in specie, or a non-cash dividend, to its shareholders. Following the spin-off, we will be an independent, publicly-traded company.
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Q:
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What is Allegion?
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A:
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Allegion is an Irish public limited company incorporated on May 9, 2013 for the purpose of holding Ingersoll Rand’s commercial and residential security businesses following the spin-off. Prior to the transfer by Ingersoll Rand to us of its commercial and residential security businesses, which will occur in connection with the spin-off, we will have no operations other than those incidental to our formation and in preparation for the spin-off.
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Q:
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Why is the separation of Allegion structured as a spin-off?
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A:
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The Board of Directors of Ingersoll Rand has approved a plan to spin off Ingersoll Rand’s commercial and residential security businesses into a new publicly-traded company. Ingersoll Rand currently believes a spin-off is the most efficient way to accomplish a separation of our businesses from Ingersoll Rand for various reasons, including: (i) a spin-off provides a high degree of assurance that decisions regarding our capital structure will support future financial stability; (ii) a spin-off offers a high degree of certainty of completion in a timely manner, lessening disruption to current business operations; and (iii) a spin-off would be a tax-free distribution of Allegion ordinary shares to Ingersoll Rand shareholders. After consideration of strategic opportunities, Ingersoll Rand believes that a tax-free spin-off will enhance the long-term value of both Ingersoll Rand and us. See “The Spin-Off - Reasons for the Spin-Off.”
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Q
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Can Ingersoll Rand decide to cancel the spin-off even if all the conditions have been met?
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Yes. The spin-off is subject to the satisfaction or waiver by Ingersoll Rand of certain conditions. See “The Spin-Off - Conditions to the Spin-Off.” Even if all such conditions are met, Ingersoll Rand has the right not to complete the spin-off if, at any time prior to the distribution, the Board of Directors of Ingersoll Rand determines, in its sole discretion, that the spin-off is not in the best interests of Ingersoll Rand or its shareholders, that a sale or other alternative is in the best interests of Ingersoll Rand or its shareholders, or that market conditions or other circumstances are such that it is not advisable at that time to separate the commercial and residential security businesses from Ingersoll Rand.
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Q:
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What will I receive in the spin-off?
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A:
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As a holder of Ingersoll Rand ordinary shares, you will retain your Ingersoll Rand ordinary shares and will receive one Allegion ordinary share for every three Ingersoll Rand ordinary shares you own as of the record date. The number of shares of Ingersoll Rand you own and your proportionate interest in Ingersoll Rand will not change as a result of the spin-off. See “The Spin-Off.”
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Q:
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When is the record date for the distribution?
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The record date is November 22, 2013.
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Q:
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When will the distribution occur?
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The distribution date of the spin-off is December 1, 2013. The distribution agent, acting on behalf of Ingersoll Rand, will distribute the Allegion ordinary shares to Ingersoll Rand shareholders as soon as practicable after the distribution date. The ability to trade Allegion shares will not be affected during that time.
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Q:
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What do I have to do to participate in the spin-off?
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A:
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Nothing. You are not required to take any action to receive your Allegion ordinary shares, although you are urged to read this entire document carefully. No shareholder approval of the distribution is required or sought. You are not being asked for a proxy. You will neither be required to pay anything for the new shares nor be required to surrender any Ingersoll Rand ordinary shares to participate in the spin-off.
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Q:
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What are Ingersoll Rand’s reasons for the spin-off?
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A:
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Ingersoll Rand is a multi-industry conglomerate which generates value, in part, from synergies among its various businesses. However, as industries evolve and change, the added value from synergies for some business units may become outweighed by the benefits to be gained from the focus that comes from being a stand-alone company. Such is now the case with Ingersoll Rand’s commercial and residential security businesses. Ingersoll Rand’s Board of Directors has determined that the spin-off is in the best interests of Ingersoll Rand and its shareholders because the spin-off will provide the following key benefits:
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Strategic Focus.
Position each company to pursue a more focused strategy based on the needs of their respective businesses and the dynamics of their respective industries.
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Board and Management Focus.
Allow the Board of Directors and management of each company to focus exclusively on the growth and expansion of their respective businesses, with greater ability to anticipate and respond faster to changing markets and new opportunities, including potential strategic acquisitions, as well as increase our management’s ability to attract and retain industry-specific skilled employees and management.
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Access to Capital, Capital Structure and Preservation of Synergies.
Eliminate competition for capital while still allowing each company to preserve existing synergies. Both companies will have direct access to the debt and equity capital markets to fund their respective growth strategies and to establish a capital structure and dividend policy appropriate to their business needs.
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Investor Choice.
Provide investors with a more targeted investment opportunity in each company that offers different investment and business characteristics, including different opportunities for growth, capital structure, and financial returns. This will allow investors to evaluate the separate and distinct merits, performance and future prospects of each company.
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Q:
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If I sell, on or before the distribution date, Ingersoll Rand ordinary shares
that I held on the record date, am I still entitled to receive Allegion ordinary shares
distributable with respect to the Ingersoll Rand ordinary shares I sold?
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A:
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Beginning on or shortly before the record date and continuing through the distribution date for the spin-off, Ingersoll Rand’s ordinary shares will begin to trade in two markets on the New York Stock Exchange (“NYSE”): a “regular-way” market and an “ex-distribution” market. If you hold Ingersoll Rand ordinary shares as of the record date for the distribution and choose to sell those shares in the “regular-way” market after the record date for the distribution and on or before the distribution date, you also will be selling the right to receive the Allegion ordinary shares in connection with the spin-off. However, if you hold Ingersoll Rand ordinary shares as of the record date for the distribution and choose to sell those shares in the “ex-distribution” market after the record date for the distribution and on or before the distribution date, you will still receive the Allegion ordinary shares in the spin-off.
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Q:
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Will the spin-off affect the trading price of my Ingersoll Rand ordinary shares?
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A
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Yes, the trading price of Ingersoll Rand ordinary shares immediately following the distribution is expected to be lower than immediately prior to the distribution because its trading price will no longer reflect the value of the our businesses. However, we cannot provide you with any guarantees as to the price at which the Ingersoll Rand shares will trade following the spin-off.
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Q:
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What indebtedness will Allegion have following the spin-off?
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A:
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At the time of the spin-off, we expect to have approximately $1.3 billion of indebtedness and a senior secured revolving credit facility permitting borrowings of up to $500 million. Specifically, we have issued $300 million of 5.75% senior notes due 2021 (the “senior notes”), and prior to the spin-off we expect to enter into a credit agreement providing for (i) $1.0 billion of senior secured term loan facilities, consisting of a $500 million “tranche A” term loan facility due in 2018 (the “Term Loan A Facility”) and a $500 million “tranche B” term loan facility due in 2020 (the “Term Loan B Facility,” and together with the Term Loan A Facility, the “Term Facilities”), and (ii) a $500 million senior secured revolving credit facility maturing in 2018. We refer to these credit facilities as our “senior secured credit facilities.” We expect our senior secured revolving credit facility to be undrawn upon the completion of the spin-off. The net proceeds of this indebtedness will be distributed to Ingersoll Rand. See “Description of Material Indebtedness.”
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Q:
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What are the risks associated with the spin-off?
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A:
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There are a number of risks associated with the spin-off and ownership of Allegion ordinary shares. These risks are discussed under “Risk Factors.”
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Q:
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Where can I get more information?
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A.
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If you have any questions relating to the mechanics of the distribution, you should contact the distribution agent at:
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Distributed Company . . . . . . . . . . . . . . .
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Allegion plc, an Irish public limited company formed to hold the commercial and residential security businesses of Ingersoll Rand. After the spin-off, Allegion will be an independent, publicly-traded company.
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Distributed Securities. . . . . . . . . . . . . . .
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All of the ordinary shares of Allegion issued and outstanding at the time of the distribution.
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Record Date. . . . . . . . . . . . . . . . . . . . . .
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The record date for the distribution is November 22, 2013.
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Distribution Date. . . . . . . . . . . . . . . . . .
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The distribution date is December 1, 2013.
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Internal Reorganization. . . . . . . . . . . . .
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As part of the spin-off, Ingersoll Rand will undergo an internal reorganization that will, among other things and subject to limited exceptions, result in the allocation and transfer or assignment to us of the assets and liabilities in respect of the activities of the commercial and residential security businesses and certain other current and former businesses and activities of Ingersoll Rand.
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we will own and operate the commercial and residential security businesses currently owned and operated by Ingersoll Rand; and
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Ingersoll Rand will continue to own and operate its Climate Solutions, Residential Solutions (excluding the residential security business) and Industrial Technologies businesses.
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Distribution Ratio. . . . . . . . . . . . . . . . .
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Each holder of Ingersoll Rand ordinary shares will receive one Allegion ordinary share for every three ordinary shares of Ingersoll Rand held on November 22, 2013.
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The Distribution. . . . . . . . . . . . . . . . . . .
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On the distribution date, the distribution agent will distribute to Ingersoll Rand shareholders all of Allegion’s ordinary shares. The distribution of shares will be made by direct registration or in book-entry form, which means that no physical share certificates will be issued. The distribution agent will issue shares of Allegion as soon as practicable to registered holders of Ingersoll Rand by way of direct registration or to beneficial holders’ banks or brokerage firms electronically in book-entry form. Trading of our shares will not be affected during that time. Following the spin-off, shareholders whose shares are held by direct registration may request that their shares of Allegion be transferred to a brokerage or other account at any time. You will not be required to make any payment on, surrender or exchange your Ingersoll Rand shares or take any other action to receive your Allegion shares.
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Fractional Shares. . . . . . . . . . . . . . . . . .
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The distribution agent will not distribute any fractional shares of Allegion to Ingersoll Rand shareholders. Fractional shares of Allegion to which Ingersoll Rand shareholders would otherwise be entitled will be aggregated and sold in the public market by the distribution agent. The aggregate net cash proceeds of the sales will be distributed ratably to those shareholders who would otherwise have received fractional shares of Allegion. Receipt of the proceeds from these sales will generally result in a taxable gain or loss to those shareholders. Each shareholder entitled to receive cash proceeds from these shares should consult his, her or its own tax adviser as to such shareholder’s particular circumstances. The tax consequences of the distribution are described in more detail under “The Spin-Off - U.S. Federal Income Tax Consequences of the Spin-Off” and “The Spin-Off - Irish Income Tax Consequences of the Spin-Off.”
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Tax Consequences. . . . . . . . . . . . . . . . .
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Ingersoll Rand, has received a ruling from the U.S. Internal Revenue Service (the “IRS”) substantially to the effect that, among other things, the distribution of our ordinary shares, together with certain related transactions, will qualify under Sections 355 and 368(a) of the Internal Revenue Code of 1986, as amended (the “Code”), with the result that Ingersoll Rand and Ingersoll Rand’s shareholders will not recognize any taxable income, gain or loss for U.S. federal income tax purposes as a result of the
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Trading Market and Symbol. . . . . . . . . .
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We intend to file an application to list Allegion ordinary shares on the NYSE under the ticker symbol “ALLE.” We anticipate that, at least two trading days prior to the record date, trading of Allegion ordinary shares will begin on a “when-issued” basis and will continue up to and including the distribution date, and we expect “regular-way” trading of Allegion ordinary shares will begin the first trading day after the distribution date. We also anticipate that, at least two trading days prior to the record date, there will be two markets in Ingersoll Rand ordinary shares: a “regular-way” market on which Ingersoll Rand shares will trade with an entitlement for the purchaser to receive Allegion ordinary shares to be distributed pursuant to the distribution, and an “ex-distribution” market on which Ingersoll Rand shares will trade without an entitlement for the purchaser to receive Allegion ordinary shares. For more information, see “The Spin-Off - Trading Market.”
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Conditions to the Spin-Off. . . . . . . . . . .
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Completion of the spin-off is subject to the satisfaction or waiver by Ingersoll Rand of the following conditions:
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our Registration Statement on Form 10, of which this Information Statement forms a part, shall have been declared effective by the Securities and Exchange Commission (the “SEC”), no stop order suspending the effectiveness thereof shall be in effect, no proceedings for such purpose shall be pending before or threatened by the SEC, and this Information Statement, or a Notice of Internet Availability of Information Statement Materials, shall have been mailed to the Ingersoll Rand shareholders;
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Allegion ordinary shares shall have been approved for listing on the NYSE, subject to official notice of distribution;
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the IRS Ruling, to the effect, among other things, that the distribution, together with certain related transactions, will qualify as tax-free under Sections 355 and 368(a) of the Code, shall remain in effect as of the distribution date;
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Ingersoll Rand shall also have obtained opinions from its tax adviser, Simpson Thacher & Bartlett LLP, in form and substance satisfactory to Ingersoll Rand, as to the satisfaction of certain critical requirements, that the IRS will not rule on, necessary for the distribution, together with certain related transactions, to qualify as tax-free under Section 355 of the Code;
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prior to the distribution date, Ingersoll Rand’s Board of Directors shall have obtained opinions from a nationally recognized valuation firm, in form and substance satisfactory to Ingersoll Rand, with respect to the capital adequacy and solvency of Ingersoll Rand and us;
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all regulatory approvals and other consents necessary to consummate the distribution shall have been received;
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no order, injunction or decree issued by any governmental entity of competent jurisdiction or other legal restraint or prohibition preventing the consummation of all or any portion of the distribution shall be pending, threatened, issued or in effect, and no other event outside the control of Ingersoll Rand shall have occurred or failed to occur that prevents the consummation of all or any portion of the distribution;
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no other events or developments shall have occurred or failed to occur that, in the judgment of the Board of Directors of Ingersoll Rand, would result in the distribution having a material adverse effect on Ingersoll Rand or its shareholders;
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the financing transactions described in “Description of Material Indebtedness” and elsewhere in this Information Statement as having occurred prior to the distribution shall have been consummated on or prior to the distribution;
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the internal reorganization shall have been completed, except for such steps as Ingersoll Rand in its sole discretion shall have determined may be completed after the distribution date or, alternatively, such steps as cannot be completed until after the distribution date for local regulatory reasons;
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Ingersoll Rand shall have taken all necessary action, in the judgment of the Board of Directors of Ingersoll Rand, to cause our Board of Directors to consist of the individuals identified in this Information Statement as our directors;
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all necessary actions shall have been taken to adopt the form of Amended and Restated Memorandum and Articles of Association we file with the SEC as exhibits to the Registration Statement on Form 10, of which this Information Statement forms a part;
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the Board of Directors of Ingersoll Rand shall have approved the spin-off, which approval may be given or withheld at its absolute and sole discretion; and
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each of the Separation and Distribution Agreement, the Tax Matters Agreement, the Employee Matters Agreement, the Transition Services Agreement, the Intellectual Property License Agreement and the other ancillary agreements shall have been executed by each party.
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after the Spin-Off. . . . . . . . . . . . . . . . . .
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We will enter into a Separation and Distribution Agreement and other agreements with Ingersoll Rand related to the spin-off. These agreements will govern the relationship between us and Ingersoll Rand after completion of the spin-off and provide for the allocation between us and Ingersoll Rand of various assets, liabilities, rights and obligations (including employee benefits, insurance and tax-related assets and liabilities). We intend to enter into a Transition Services Agreement with Ingersoll Rand pursuant to which certain services will be provided on an interim basis following the distribution. We also intend to enter into an Employee Matters Agreement that will set forth the agreements between us and Ingersoll Rand concerning certain employee compensation and benefit matters. We also intend to enter into an Intellectual Property License Agreement under which Ingersoll Rand will license to us the right to use certain intellectual property. Further, we intend to enter into a Tax Matters Agreement with Ingersoll Rand regarding the sharing of taxes incurred before and after completion of the spin-off, certain indemnification rights with respect to tax matters and certain restrictions to preserve the tax-free status of the spin-off. In addition, we intend to enter into one or more real estate agreements that will provide for the use of shared office space and other real estate on a temporary basis. We describe these arrangements in greater detail under “Certain Relationships and Related Party Transactions - Agreements with Ingersoll Rand Related to the Spin-Off,” and describe some of the risks of these arrangements under “Risk Factors - Risks Relating to the Spin-Off.”
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Dividend Policy. . . . . . . . . . . . . . . . . . .
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Following the distribution, we expect to pay regular dividends. The recommendation, declaration, amount and payment of any dividend in the future by us will be subject to the sole discretion of our Board of Directors and will depend upon many factors. See “Dividends.”
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Transfer Agent. . . . . . . . . . . . . . . . . . . .
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Computershare Trust Company, N.A. (“Computershare”).
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Risk Factors. . . . . . . . . . . . . . . . . . . . . .
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We face both general and specific risks and uncertainties relating to our business, our relationship with Ingersoll Rand and our being an independent, publicly-traded company. We are also subject to risks relating to the spin-off. You should carefully read the risk factors set forth in the section entitled “Risk Factors” in this Information Statement.
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changes in laws and regulations or imposition of currency restrictions and other restraints in various jurisdictions;
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limitation of ownership rights, including expropriation of assets by a local government, and limitation on the ability to repatriate earnings;
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sovereign debt crisis and currency instability in developed and developing countries;
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imposition of burdensome tariffs and quotas;
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difficulty in staffing and managing global operations;
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difficulty of enforcing agreements, collecting receivables and protecting assets through non-U.S. legal systems;
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national and international conflict, including war, civil disturbances and terrorist acts; and
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economic downturns and social and political instability.
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diversion of management time and attention from daily operations;
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difficulties integrating acquired businesses, technologies and personnel into our business;
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difficulties in obtaining and verifying the financial statements and other business information of acquired businesses;
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inability to obtain required regulatory approvals and/or required financing on favorable terms;
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potential loss of key employees, key contractual relationships or key customers of acquired companies or of us;
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assumption of the liabilities and exposure to unforeseen liabilities of acquired companies; and
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dilution of interests of holders of shares of our ordinary shares through the issuance of equity securities or equity-linked securities.
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limited in how we conduct our business;
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limited in our ability to pay dividends or make other distributions to our shareholders;
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unable to raise additional debt or equity financing to operate during general economic or business downturns; or
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unable to compete effectively or to take advantage of new business opportunities.
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Prior to our spin-off, our business was operated by Ingersoll Rand as part of its broader corporate organization, rather than as an independent, publicly-traded company. In addition, prior to our spin-off, Ingersoll Rand, or one of its affiliates, performed significant corporate functions for us, including tax and treasury administration and certain governance functions, including internal audit and external reporting. Our historical and pro forma financial statements reflect allocations of corporate expenses from Ingersoll Rand for these and similar functions and may not reflect the costs we will incur for similar services in the future as an independent company. Furthermore, following the spin-off, we will also be responsible for the additional costs associated with being an independent, publicly-traded company, including costs related to corporate governance and external reporting.
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Our working capital requirements and capital for our general corporate purposes, including acquisitions and capital expenditures, historically have been satisfied as part of the company-wide cash management practices of Ingersoll Rand. While our businesses have historically generated sufficient cash to finance our working capital and other cash requirements, following the spin-off, we will no longer have access to Ingersoll Rand’s cash pool. Without the opportunity to obtain financing from Ingersoll Rand, we may need to obtain additional financing from banks, through public offerings or private placements of debt or equity securities or other arrangements.
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Other significant changes may occur in our cost structure, management, financing and business operations as a result of our operating as a company separate from Ingersoll Rand.
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approving or allowing any transaction that results in a change in ownership of more than 50% of our ordinary shares when combined with any other changes in ownership of our shares,
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redeeming or repurchasing equity securities,
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selling or otherwise disposing of substantially all of our assets, or
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engaging in certain internal transactions.
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our business profile and market capitalization may not fit the investment objectives of some Ingersoll Rand shareholders and, as a result, these Ingersoll Rand shareholders may sell our shares after the distribution;
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actual or anticipated fluctuations in our operating results due to factors related to our business;
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success or failure of our business strategy;
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our quarterly or annual earnings, or those of other companies in our industry;
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our ability to obtain third-party financing as needed;
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announcements by us or our competitors of significant acquisitions or dispositions;
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changes in accounting standards, policies, guidance, interpretations or principles;
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the failure of securities analysts to cover our ordinary shares after the spin-off;
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changes in earnings estimates by securities analysts or our ability to meet those estimates;
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the operating and share price performance of other comparable companies;
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investor perception of our company;
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natural or other disasters that investors believe may affect us;
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overall market fluctuations;
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results from any material litigation or government investigations;
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changes in laws and regulations affecting our business; and
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general economic conditions and other external factors.
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a provision of our Articles of Association which generally prohibits us from engaging in a business combination with an interested shareholder (being (i) the beneficial owner of the relevant percentage of our voting shares or (ii) an affiliate or associate of us that has at any time within the previous five years been the beneficial owner of the relevant percentage of our voting shares), subject to certain exceptions;
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rules regarding how shareholders may present proposals or nominate directors for election at shareholder meetings;
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the right of our Board of Directors to issue preferred shares without shareholder approval in certain circumstances, subject to applicable law; and
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the ability of our Board of Directors to fill vacancies on our Board of Directors in certain circumstances.
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we will be an independent, publicly-traded company (NYSE: ALLE), focused on security
products and solutions markets globally
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•
|
Ingersoll Rand will continue to be an independent, publicly-traded company (NYSE: IR) and continue to own and operate its Climate Solutions, Residential Solutions (excluding the residential security business) and Industrial Technologies businesses.
|
•
|
Strategic Focus.
Position each company to pursue a more focused strategy based on the needs of their respective businesses and the dynamics of their respective industries.
|
•
|
Board and Management Focus
. Allow the Board of Directors and management of each company to focus exclusively on the growth and expansion of their respective businesses, with greater ability to anticipate and respond faster to changing markets and new opportunities, including potential strategic acquisitions, as well as increase our management’s ability to attract and retain industry-specific skilled employees and management.
|
•
|
Access to Capital, Capital Structure and Preservation of Synergies
. Eliminate competition for capital while still allowing each company to preserve existing synergies. Both companies will have direct access to the debt and equity capital markets to fund their respective growth strategies and to establish a capital structure and dividend policy appropriate to their business needs.
|
•
|
Investor Choice
. Provide investors with a more targeted investment opportunity in each company that offers different investment and business characteristics, including different opportunities for growth, capital structure, and financial returns. This will allow investors to evaluate the separate and distinct merits, performance and future prospects of each company.
|
•
|
Outstanding stock options and stock appreciation rights (“SARs”) that are vested and exercisable at the time of the spin-off will be treated in a manner similar to Ingersoll Rand shareholders and their awards will be deemed bifurcated into corresponding awards of the same type with respect to both Ingersoll Rand ordinary shares and Allegion ordinary shares. These bifurcated awards will be subject to the same terms and conditions after the effective time of the spin-off as the terms and conditions applicable to such awards prior to the spin-off, except:
|
▪
|
With respect to each bifurcated award covering Ingersoll Rand ordinary shares, the per-share exercise price will be adjusted so that the two bifurcated awards will retain, in the aggregate, the same intrinsic value as the
|
▪
|
With respect to each bifurcated award covering Allegion ordinary shares, the number of underlying shares will be determined based on application of the distribution ratio to the number of Ingersoll Rand ordinary shares subject to the award prior to bifurcation, and the per-share exercise price will be adjusted so that the two bifurcated awards will retain, in the aggregate, the same intrinsic value as the corresponding award immediately prior to the distribution (subject to rounding).
|
•
|
Outstanding stock options and SARs that are not vested and exercisable at the time of the spin-off will not be converted into awards of both Ingersoll Rand and Allegion ordinary shares, but instead will be converted, in their entirety, into corresponding awards of the same type with respect to Allegion ordinary shares, with adjustments to exercise prices and the number of underlying shares as appropriate to preserve the intrinsic value of such awards immediately prior to the distribution (subject to rounding);
|
•
|
Performance share units (“PSUs”) will be adjusted by dividing the PSUs by a fraction, the numerator of which is the opening trading price of the ordinary shares of Ingersoll Rand immediately following the distribution and the denominator of which is the closing price of the ordinary shares of Ingersoll Rand immediately prior to the distribution and then prorating the resulting PSUs based on the number of days elapsed during the applicable performance period through the consummation of the distribution (subject to rounding), and finally by adjusting the calculation of “earnings per share” and “total shareholder return” to appropriately reflect the spin-off; and
|
•
|
All other stock-based awards, including any outstanding restricted stock units (“RSUs”) and notional shares will be converted into corresponding awards of the same type with respect to Allegion ordinary shares, with adjustments to the number of underlying shares as appropriate to preserve the intrinsic value of such awards immediately prior to the distribution (subject to rounding).
|
•
|
no gain or loss will be recognized by, and no amount will be included in the income of, holders of Ingersoll Rand ordinary shares upon their receipt of our ordinary shares in the distribution;
|
•
|
the basis of Ingersoll Rand ordinary shares immediately before the distribution will be allocated between the Ingersoll Rand ordinary shares and our ordinary shares received in the distribution, in proportion to their relative fair market values at the time of the distribution;
|
•
|
the holding period of our ordinary shares received by each Ingersoll Rand shareholder will include the period during which the shareholder held the Ingersoll Rand ordinary shares on which the distribution is made, provided that the Ingersoll Rand ordinary shares are held as a capital asset on the distribution date;
|
•
|
any cash received in lieu of fractional share interests in our ordinary shares will give rise to a taxable gain or loss equal to the difference between the amount of cash received and the tax basis allocable to the fractional share interests, determined as described above, and such gain will be a capital gain or loss if the Ingersoll Rand ordinary shares on which the distribution is made are held as a capital asset on the distribution date; and
|
•
|
no gain or loss will be recognized by Ingersoll Rand upon the distribution of our ordinary shares.
|
•
|
a taxable dividend to the extent of the shareholder’s pro rata share of Ingersoll Rand’s current and accumulated earnings and profits;
|
•
|
a reduction in the shareholder’s basis in Ingersoll Rand ordinary shares to the extent the amount received exceeds such shareholder’s share of earnings and profits;
|
•
|
taxable gain from the exchange of Ingersoll Rand ordinary shares to the extent the amount received exceeds both the shareholder’s share of earnings and profits and the shareholder’s basis in Ingersoll Rand ordinary shares; and
|
•
|
basis in our stock equal to its fair market value on the distribution date.
|
•
|
the distribution does not qualify as tax-free under Section 355 of the Code; and
|
•
|
there are one or more acquisitions (including issuances) of either our stock or the stock of Ingersoll Rand, representing 50% or more, measured by vote or value, of the then-outstanding stock of that corporation, and the acquisition or acquisitions are deemed to be part of a plan or series of related transactions that include the distribution. Any such acquisition of our stock or the stock of Ingersoll Rand within two years before or after the distribution (with exceptions, including public trading by less-than-5% shareholders and certain compensatory stock issuances) generally will be presumed to be part of such a plan unless that presumption is rebutted.
|
•
|
there is no change in the beneficial ownership of such shares; and
|
•
|
at the time of the transfer into DTC there is no agreement in place for the sale of the shares by the beneficial owner to a third party.
|
•
|
an individual resident for tax purposes in a “relevant territory” (including the U.S.) and is neither resident nor ordinarily resident in Ireland (for a list of “relevant territories” for DWT purposes, please see Annex A to this Information Statement);
|
•
|
a company resident for tax purposes in a “relevant territory,” provided such company is not under the control, whether directly or indirectly, of a person or persons who is or are resident in Ireland;
|
•
|
a company, wherever resident, that is controlled, directly or indirectly, by persons resident in a “relevant territory” and who is or are (as the case may be) not controlled by, directly or indirectly, persons who are not resident in a “relevant territory”;
|
•
|
a company, wherever resident, whose principal class of shares (or those of its 75% direct or indirect parent) is substantially and regularly traded on a recognized stock exchange either in a “relevant territory” or on such other stock exchange approved by the Irish Minister for Finance; or
|
•
|
a company, wherever resident, that is wholly owned, directly or indirectly, by two or more companies where the principal class of shares of each of such companies is substantially and regularly traded on a recognized stock exchange in a “relevant territory” or on such other stock exchange approved by the Irish Minister for Finance;
|
•
|
its broker (and the relevant information is further transmitted to us or any qualifying intermediary appointed by us) before the record date for the dividend if its shares are held through DTC, or
|
•
|
our transfer agent at least seven business days before such record date if its shares are held outside of DTC.
|
•
|
our Registration Statement on Form 10, of which this Information Statement forms a part, shall have been declared effective by the SEC, no stop order suspending the effectiveness thereof shall be in effect, no proceedings for such purpose shall be pending before or threatened by the SEC, and this Information Statement, or a Notice of Internet Availability of Information Statement Materials, shall have been mailed to the Ingersoll Rand shareholders;
|
•
|
Allegion ordinary shares shall have been approved for listing on the NYSE, subject to official notice of distribution;
|
•
|
the IRS Ruling, to the effect, among other things, that the distribution, together with certain related transactions, will qualify as tax-free under Sections 355 and 368(a) of the Code, shall remain in effect as of the distribution date;
|
•
|
Ingersoll Rand shall have obtained opinions from its tax adviser, Simpson Thacher & Bartlett LLP, in form and substance satisfactory to Ingersoll Rand, as to the satisfaction of certain requirements necessary for the distribution, together with certain related transactions, to qualify as tax-free under Section 355 of the Code upon which the IRS will not rule;
|
•
|
prior to the distribution date, Ingersoll Rand’s Board of Directors shall have obtained opinions from a nationally recognized valuation firm, in form and substance satisfactory to Ingersoll Rand, with respect to the capital adequacy and solvency of Ingersoll Rand and us;
|
•
|
all regulatory approvals and other consents necessary to consummate the distribution shall have been received;
|
•
|
no order, injunction or decree issued by any governmental entity of competent jurisdiction or other legal restraint or prohibition preventing the consummation of all or any portion of the distribution shall be pending, threatened, issued or in effect, and no other event outside the control of Ingersoll Rand shall have occurred or failed to occur that prevents the consummation of all or any portion of the distribution;
|
•
|
no other events or developments shall have occurred or failed to occur that, in the judgment of the Board of Directors of Ingersoll Rand, would result in the distribution having a material adverse effect on Ingersoll Rand or its shareholders;
|
•
|
the financing transactions described in “Description of Material Indebtedness” and elsewhere in this Information Statement as having occurred prior to the distribution shall have been consummated on or prior to the distribution;
|
•
|
the internal reorganization shall have been completed, except for such steps as Ingersoll Rand in its sole discretion shall have determined may be completed after the distribution date or, alternatively, such steps as cannot be completed until after the distribution date for local regulatory reasons;
|
•
|
Ingersoll Rand shall have taken all necessary action, in the judgment of the Board of Directors of Ingersoll Rand, to cause our Board of Directors to consist of the individuals identified in this Information Statement as our directors;
|
•
|
all necessary actions shall have been taken to adopt the form of amended and restated Memorandum and Articles of Association we file with the SEC as exhibits to the Registration Statement on Form 10, of which this Information Statement forms a part;
|
•
|
the Board of Directors of Ingersoll Rand shall have approved the distribution, which approval may be given or withheld at its absolute and sole discretion; and
|
•
|
each of the Separation and Distribution Agreement, the Tax Matters Agreement, the Employee Matters Agreement, the Transition Services Agreement, the Intellectual Property License Agreement and the other ancillary agreements shall have been executed by each party.
|
|
|
As of September 30, 2013
|
||||||
In millions
|
|
Historical
(Unaudited)
|
|
Pro Forma, as adjusted
(Unaudited)
|
||||
Cash and cash equivalents
|
|
$
|
368.5
|
|
|
$
|
127.0
|
|
|
|
|
|
|
||||
Indebtedness:
|
|
|
|
|
||||
Short-term borrowings and current maturities of long-term debt
|
|
$
|
2.1
|
|
|
$
|
22.8
|
|
Revolving credit facility
(1)
|
|
—
|
|
|
—
|
|
||
Term Loan A
(2)
|
|
—
|
|
|
479.0
|
|
||
Term Loan B
(2)
|
|
—
|
|
|
495.0
|
|
||
Senior notes
(3)
|
|
—
|
|
|
300.0
|
|
||
Other long-term debt, including capital leases
|
|
2.7
|
|
|
2.7
|
|
||
Long-term debt
|
|
2.7
|
|
|
1,276.7
|
|
||
Total indebtedness
|
|
$
|
4.8
|
|
|
$
|
1,299.5
|
|
Equity:
|
|
|
|
|
||||
Ordinary shares, $0.01 par value
|
|
—
|
|
|
1.0
|
|
||
Capital in excess of par value
|
|
—
|
|
|
—
|
|
||
Parent company investment
|
|
1,324.8
|
|
|
(160.8
|
)
|
||
Accumulated other comprehensive earnings (losses)
|
|
(56.4
|
)
|
|
(97.3
|
)
|
||
Noncontrolling interest
|
|
32.6
|
|
|
32.6
|
|
||
Total equity
|
|
$
|
1,301.0
|
|
|
$
|
(224.5
|
)
|
|
|
|
|
|
||||
Total capitalization
|
|
$
|
1,305.8
|
|
|
$
|
1,075.0
|
|
|
|
As of and for the Nine Months Ended September 30
|
|
As of and for the Years Ended December 31
|
|
||||||||||||||||||||||||
In millions
|
|
2013
|
|
2012
|
|
2012
|
|
2011
|
|
2010
|
|
2009
|
|
2008
|
|
||||||||||||||
Net revenues
|
|
$
|
1,542.9
|
|
|
$
|
1,500.4
|
|
|
$
|
2,046.6
|
|
|
$
|
2,021.2
|
|
|
$
|
1,967.7
|
|
|
$
|
2,038.8
|
|
|
$
|
2,413.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net earnings (loss) attributable to Allegion:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Continuing operations
(a)
|
|
21.9
|
|
(b)
|
162.4
|
|
|
222.3
|
|
|
225.4
|
|
|
194.3
|
|
|
180.4
|
|
|
(77.0
|
)
|
(c)
|
|||||||
Discontinued operations
|
|
(0.3
|
)
|
|
(1.5
|
)
|
|
(2.7
|
)
|
|
(7.3
|
)
|
|
(2.5
|
)
|
|
(3.0
|
)
|
|
0.6
|
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Total assets
|
|
1,925.1
|
|
|
|
|
1,983.8
|
|
|
2,036.2
|
|
|
2,052.5
|
|
|
2,016.2
|
|
|
1,979.2
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Total debt, including capital leases
|
|
4.8
|
|
|
|
|
5.0
|
|
|
4.9
|
|
|
6.2
|
|
|
7.9
|
|
|
10.5
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Total Parent Company equity
|
|
1,268.4
|
|
|
|
|
1,343.2
|
|
|
1,413.8
|
|
|
1,457.4
|
|
|
1,378.8
|
|
|
1,367.6
|
|
|
•
|
the inclusion of $1.3 billion of debt;
|
•
|
the cash distribution of the net debt proceeds to Ingersoll Rand;
|
•
|
the issuance of approximately 96.2 million of our $0.01 par value ordinary shares; and
|
•
|
assets, liabilities and related expenses assumed from, or transferred to, Ingersoll Rand that were excluded/included in our historical combined financial statements; including those related to the Tax Matters Agreement described under "Certain Relationships and Related Party Transactions."
|
In millions
|
|
For the Nine Months Ended September 30, 2013
|
|
For the Year Ended December 31, 2012
|
||||
Centrally managed service costs
|
|
$
|
72.6
|
|
|
$
|
94.8
|
|
Historical Ingersoll Rand corporate overhead allocations
|
|
35.1
|
|
|
53.5
|
|
||
Incremental corporate costs not previously allocated to businesses
|
|
24.8
|
|
|
28.4
|
|
||
Total
|
|
$
|
132.5
|
|
|
$
|
176.7
|
|
|
||||||||||||
In millions, except per share data
|
|
Allegion
|
|
Pro Forma Adjustments
|
|
Pro Forma
|
||||||
Net revenues
|
|
$
|
2,046.6
|
|
|
$
|
—
|
|
|
$
|
2,046.6
|
|
Cost of goods sold
|
|
(1,220.6
|
)
|
|
(0.5
|
)
|
(a)
|
(1,221.1
|
)
|
|||
Selling and administrative expenses
|
|
(457.4
|
)
|
|
(0.2
|
)
|
(a)
|
(457.6
|
)
|
|||
Operating income
|
|
368.6
|
|
|
(0.7
|
)
|
|
367.9
|
|
|||
Interest expense
|
|
(1.5
|
)
|
|
(49.7
|
)
|
(a)(b)
|
(51.2
|
)
|
|||
Other, net
|
|
(3.2
|
)
|
|
2.0
|
|
(a)
|
(1.2
|
)
|
|||
Earnings before income taxes
|
|
363.9
|
|
|
(48.4
|
)
|
|
315.5
|
|
|||
Provision for income taxes
|
|
(135.9
|
)
|
|
15.6
|
|
(a)(c)
|
(120.3
|
)
|
|||
Earnings from continuing operations
|
|
228.0
|
|
|
(32.8
|
)
|
|
195.2
|
|
|||
Less: Net earnings from continuing operations attributable to noncontrolling interests
|
|
(5.7
|
)
|
|
—
|
|
|
(5.7
|
)
|
|||
Earnings from continuing operations attributable to Allegion
|
|
$
|
222.3
|
|
|
$
|
(32.8
|
)
|
|
$
|
189.5
|
|
Pro forma earnings per share from continuing operations attributable to Allegion:
|
|
|
|
|
|
|
||||||
Basic (d)
|
|
|
|
|
|
$
|
1.87
|
|
||||
Diluted (e)
|
|
|
|
|
|
$
|
1.87
|
|
||||
Pro forma weighted-average shares outstanding:
|
|
|
|
|
|
|
||||||
Basic (d)
|
|
|
|
|
|
101.3
|
|
|||||
Diluted (e)
|
|
|
|
|
|
101.4
|
|
|
||||||||||||
In millions, except per share data
|
|
Allegion
|
|
Pro Forma Adjustments
|
|
Pro Forma
|
||||||
Net revenues
|
|
$
|
1,542.9
|
|
|
$
|
—
|
|
|
$
|
1,542.9
|
|
Cost of goods sold
|
|
(899.8
|
)
|
|
(0.5
|
)
|
(a)
|
(900.3
|
)
|
|||
Selling and administrative expenses
|
|
(359.5
|
)
|
|
(0.1
|
)
|
(a)
|
(359.6
|
)
|
|||
Asset impairment
|
|
(137.6
|
)
|
|
—
|
|
|
(137.6
|
)
|
|||
Operating income
|
|
146.0
|
|
|
(0.6
|
)
|
|
145.4
|
|
|||
Interest expense
|
|
(1.4
|
)
|
|
(36.4
|
)
|
(a)(b)
|
(37.8
|
)
|
|||
Other, net
|
|
(6.9
|
)
|
|
(0.2
|
)
|
(a)
|
(7.1
|
)
|
|||
Earnings before income taxes
|
|
137.7
|
|
|
(37.2
|
)
|
|
100.5
|
|
|||
Provision for income taxes
|
|
(101.9
|
)
|
|
14.7
|
|
(a)(c)
|
(87.2
|
)
|
|||
Earnings from continuing operations
|
|
35.8
|
|
|
(22.5
|
)
|
|
13.3
|
|
|||
Less: Earnings from continuing operations attributable to noncontrolling interests
|
|
(13.9
|
)
|
|
—
|
|
|
(13.9
|
)
|
|||
Earnings from continuing operations attributable to Allegion
|
|
$
|
21.9
|
|
|
$
|
(22.5
|
)
|
|
$
|
(0.6
|
)
|
Pro forma earnings per share from continuing operations attributable to Allegion:
|
|
|
|
|
|
|
||||||
Basic (d)
|
|
|
|
|
|
$
|
(0.01
|
)
|
||||
Diluted (e)
|
|
|
|
|
|
$
|
(0.01
|
)
|
||||
Pro forma weighted-average shares outstanding:
|
|
|
|
|
|
|
||||||
Basic (d)
|
|
|
|
|
|
98.6
|
|
|||||
Diluted (e)
|
|
|
|
|
|
98.7
|
|
In millions, except share and per share data
|
|
Allegion
|
|
Pro Forma Adjustments
|
|
Pro Forma
|
||||||
ASSETS
|
|
|
|
|
|
|
||||||
Current assets:
|
|
|
|
|
|
|
||||||
Cash and cash equivalents
|
|
$
|
368.5
|
|
|
$
|
(241.5
|
)
|
(f)(g)
|
$
|
127.0
|
|
Accounts receivable from third parties, net
|
|
306.4
|
|
|
—
|
|
|
306.4
|
|
|||
Costs in excess of billings on uncompleted contracts
|
|
118.7
|
|
|
—
|
|
|
118.7
|
|
|||
Inventories
|
|
163.2
|
|
|
—
|
|
|
163.2
|
|
|||
Other current assets
|
|
46.3
|
|
|
—
|
|
|
46.3
|
|
|||
Total current assets
|
|
1,003.1
|
|
|
(241.5
|
)
|
|
761.6
|
|
|||
Property, plant and equipment, net
|
|
206.6
|
|
|
—
|
|
|
206.6
|
|
|||
Goodwill
|
|
505.4
|
|
|
—
|
|
|
505.4
|
|
|||
Intangible assets, net
|
|
145.4
|
|
|
—
|
|
|
145.4
|
|
|||
Other noncurrent assets
|
|
64.6
|
|
|
110.1
|
|
(a)(g)
|
174.7
|
|
|||
Total assets
|
|
$
|
1,925.1
|
|
|
$
|
(131.4
|
)
|
|
$
|
1,793.7
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
||||||
Current liabilities:
|
|
|
|
|
|
|
||||||
Accounts payable
|
|
$
|
209.6
|
|
|
$
|
—
|
|
|
$
|
209.6
|
|
Accrued compensation and benefits
|
|
61.5
|
|
|
—
|
|
|
61.5
|
|
|||
Accrued expenses and other current liabilities
|
|
98.4
|
|
|
—
|
|
|
98.4
|
|
|||
Short-term borrowings and current maturities of long-term debt
|
|
2.1
|
|
|
20.7
|
|
(a)(g)
|
22.8
|
|
|||
Total current liabilities
|
|
371.6
|
|
|
20.7
|
|
|
392.3
|
|
|||
Long-term debt
|
|
2.7
|
|
|
1,274.0
|
|
(g)
|
1,276.7
|
|
|||
Postemployment and other benefit liabilities
|
|
139.9
|
|
|
16.4
|
|
(a)
|
156.3
|
|
|||
Deferred and noncurrent income taxes
|
|
95.0
|
|
|
13.0
|
|
(a)(c)
|
108.0
|
|
|||
Other noncurrent liabilities
|
|
14.9
|
|
|
70.0
|
|
(a)
|
84.9
|
|
|||
Total liabilities
|
|
624.1
|
|
|
1,394.1
|
|
|
2,018.2
|
|
|||
Equity:
|
|
|
|
|
|
|
||||||
Allegion shareholders’ equity
|
|
|
|
|
|
|
||||||
Preferred shares $0.001 par value; 10,000,000 authorized 0 issued and outstanding on a pro forma basis
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Ordinary shares $0.01 par value; 400,000,000 authorized 96,200,000 issued and outstanding on a pro forma basis
|
|
—
|
|
|
1.0
|
|
(h)
|
1.0
|
|
|||
Capital in excess of par value
|
|
—
|
|
|
—
|
|
(i)
|
—
|
|
|||
Parent company investment (deficit)
|
|
1,324.8
|
|
|
(1,485.6
|
)
|
(i)
|
(160.8
|
)
|
|||
Accumulated other comprehensive income (loss)
|
|
(56.4
|
)
|
|
(40.9
|
)
|
(a)
|
(97.3
|
)
|
|||
Total parent company investment (deficit) / Allegion shareholders’ equity
|
|
1,268.4
|
|
|
(1,525.5
|
)
|
|
(257.1
|
)
|
|||
Noncontrolling interest
|
|
32.6
|
|
|
—
|
|
|
32.6
|
|
|||
Total equity
|
|
1,301.0
|
|
|
(1,525.5
|
)
|
|
(224.5
|
)
|
|||
Total liabilities and equity
|
|
$
|
1,925.1
|
|
|
$
|
(131.4
|
)
|
|
$
|
1,793.7
|
|
(a)
|
While our historical combined financial statements reflect the allocation to us of certain assets and liabilities from Ingersoll Rand, as of the spin-off date, we anticipate assuming from, and transferring to, Ingersoll Rand certain assets, liabilities and related expenses that were excluded/included in our historical combined financial statements. We anticipate assuming from Ingersoll Rand approximately $16.4 million of net liabilities, $3.8 million of deferred tax assets and $40.9 million of accumulated other comprehensive loss related to defined benefit pension plans and transferring to Ingersoll Rand approximately $1.8 million of liabilities and $0.1 million of interest expense related to short-term borrowings. Additionally, we have reflected an increase of approximately $80.6 million to other noncurrent assets, $13.0 million to deferred and noncurrent income taxes and $70.0 million to other noncurrent liabilities related to the transfer of certain tax assets and liabilities and establishment of indemnifications to/from Ingersoll Rand, as defined by the Tax Matters Agreement to be entered into with Ingersoll Rand. These adjustments result in a net increase in Parent company investment of $27.7 million from Ingersoll Rand. We have also reflected approximately $0.7 million of net benefit and $1.2 million of net expense for the nine months ended September 30, 2013 and the year ended December 31, 2012, respectively, related to this agreement. The actual indemnification amounts due to/from Ingersoll Rand under this agreement could vary depending upon the outcome of unresolved tax matters, which may not be resolved for several years. There may be additional assets, liabilities or related expenses transferred to or from us in the spin-off for which the transfer has not been finalized.
|
(b)
|
Represents interest expense, amortization of debt issuance costs and amortization of original issue discounts related to the $1.3 billion of debt and $500 million senior secured revolving credit facility described in (g). We have reflected a weighted-average interest rate on the debt of approximately 3.5%, resulting in pro forma interest expense related to this debt, excluding amortization of debt issuance costs and amortization of original issues discounts, of approximately $45.0 million for the year ended December 31, 2012 and $31.8 million for the nine months ended September 30, 2013.
|
(c)
|
Reflects the tax effects of the pro forma adjustments at the applicable statutory income tax rate. The effective tax rate of Allegion could be different (either higher or lower) depending on activities subsequent to the spin-off. The impacts of pro forma adjustments on long-term deferred tax assets and liabilities were offset against existing long-term deferred tax assets and liabilities reflected in our historical combined balance sheet based on jurisdiction.
|
(d)
|
Pro forma basic earnings per share from continuing operations and pro forma weighted-average basic shares outstanding are based on the number of Ingersoll Rand weighted-average basic shares outstanding for the year ended December 31, 2012 and for the
nine
months ended
September 30, 2013
as adjusted for an expected distribution ratio of one ordinary share of Allegion for every three ordinary shares of Ingersoll Rand.
|
(e)
|
Pro forma diluted earnings per share from continuing operations and pro forma weighted-average diluted shares outstanding, after giving effect to the distribution described in (d), reflect potential dilution from the issuance of Ingersoll Rand’s equity plans awarded to Allegion employees.
|
(f)
|
Reflects cash distributions to Ingersoll Rand prior to the spin-off, based on $1,275 million of net proceeds from the debt described in (g) and approximately $237 million of cash on hand, to achieve the estimated day one targeted cash balance. Approximately $27 million of the $127 million pro forma cash balance at September 30, 2013 represents cash attributable to joint venture partners.
|
(g)
|
Reflects $1.3 billion of debt, net of debt issuance costs and original issue discounts of $25.7 million and $3.5 million, respectively. The debt is comprised of: $500 million of Term Loan A Facility due in 2018, $500 million of Term Loan B Facility due in 2020, and $300 million of senior unsecured notes due 2021. Included in the debt issuance costs are $6.8 million of costs related to our $500 million senior secured revolving credit facility due in 2018, which is assumed undrawn upon completion of the spin-off.
|
(h)
|
Reflects the pro forma recapitalization of our equity based on the number of Ingersoll Rand ordinary shares outstanding on October 1, 2013. As of the distribution date, Ingersoll Rand’s net investment in our business will be exchanged to reflect the distribution of our ordinary shares to Ingersoll Rand’s shareholders. Ingersoll Rand’s shareholders will receive shares based on an expected distribution ratio of one ordinary share of Allegion for every three ordinary shares of Ingersoll Rand.
|
(i)
|
Represents adjustments to net parent company investment (deficit), capital in excess of par and ordinary shares to reflect the following:
|
In millions
|
|
|
||
Cash distribution of net proceeds described in (f)
|
|
$
|
(1,275.0
|
)
|
Adjust cash on hand to day one target cash balance as described in (f)
|
|
(237.3
|
)
|
|
Assumption of net liabilities described in (a)
|
|
27.7
|
|
|
Allegion ordinary shares described in (h)
|
|
(1.0
|
)
|
|
Parent company investment (deficit)
|
|
$
|
(1,485.6
|
)
|
Allegion Principal Products
|
||
Door closers and controls
|
|
Door and door frames (steel)
|
Electronic security products
|
|
Electronic and biometric access-control systems
|
Exit devices
|
|
Locks, locksets and key systems
|
Time, attendance, and workforce productivity systems
|
|
Video analytics systems
|
Other accessories
|
|
|
•
|
Our extensive and versatile product portfolio, combined with our deep expertise, which enables us to deliver the right products and solutions to meet diverse security and functional specifications;
|
•
|
Our consultative approach and experience, which enables us to develop the most efficient and appropriate building security and access-control specifications to fulfill the unique needs of our end-users and their partners, including architects, contractors, home-builders and engineers; and
|
•
|
Our operational excellence capabilities, including our global manufacturing operations and agile supply chain, which facilitates our ability to deliver specific product and system configurations to end-users worldwide, quickly and efficiently.
|
Allegion Brands
(listed alphabetically for each region) |
||||||
Product Category
|
|
Americas
|
|
EMEIA
|
|
Asia Pacific
|
Locks / Locksets / Key Systems
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Door Closers and Controls / Exit Devices
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Electronic Products and Access Control Systems, including Time, Attendance and Workforce Productivity and Video Analytics Systems
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Doors and Door Frames
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Accessories
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue By Geographic Destination
|
|
Revenue By Product Category
|
|
|
|
•
|
Von Duprin, established in 1908, was awarded the first exit device patent in 1909;
|
•
|
Schlage, established in 1920, was awarded the first patents granted for the cylindrical lock and the push button lock;
|
•
|
LCN, established in 1926, created the door closer;
|
•
|
CISA, established in 1926, devised the first electrically controlled lock; and
|
•
|
Steelcraft Doors, established in 1927, developed the first mass-produced hollow metal door in 1942.
|
•
|
We combine product breadth and depth with aesthetics and functionality.
We offer an extensive and versatile portfolio of mechanical and electronic products to meet the needs of our end-users, including products in a broad range of styles and colors with a variety of specific functionalities. For example, we can deliver more than 70 million unique configurations of our Von Duprin exit devices for our end-users, and we generally ship any sized order within one week from receipt of the order.
|
•
|
We have deep building code expertise.
Most of the markets we serve have complex national, regional and local building codes and standard-making bodies that require end-users to adhere to specific safety requirements. Our long history provides us with a depth of experience that allows us to identify and deliver the right security solutions that meet these requirements and the end-user’s particular needs. We employ global teams of specification writers who work with end-users, architects, contractors and distribution partners to design solutions tailored to their unique needs while meeting the applicable building codes and standards.
|
•
|
We have a versatile, advanced electronic products offering.
Our portfolio of products and solutions positions us favorably as the security products industry becomes increasingly electronic. We offer wireless access and biometric access control solutions, electro-magnetic locks, electric latches, and automatic door operators, in addition to numerous other supporting components. Our electronics strategy includes designing products that employ interoperable, non-proprietary technologies, which we believe provides end-users with a level of flexibility that they prefer. For instance, Schlage’s AD-Series electronic lock employs open architecture that is compatible with and works with nearly any existing access-control software system.
|
•
|
in 2013, a Schlage Touchscreen Deadbolt lock, designed for the home that combines stylish design with high-quality functionality, including alarm and motion detection capabilities;
|
•
|
in 2013, our CISA eSigno hospitality platform that allows hotel owners to choose easily between different product types compatible with a single modular platform;
|
•
|
in 2012, our Interflex eVayo platform, an award-winning platform of access control and time and attendance reader terminals;
|
•
|
in 2012, our innovative Von Duprin concealed vertical cable platform that enables shorter installation time and simplifies maintenance;
|
•
|
in 2012, our aptiQ credential and reader platform that allows end-users around the world to use a single product family globally while also enabling the utilization of magnetic stripe, proximity and smart card credentials; and
|
•
|
in 2010, our Schlage AD/CO electronics line of products that create flexibility and modularity and extend the life of end-users’ electronic lock investments through low-cost module replacement.
|
•
|
Locks, locksets and key systems
: A broad array of tubular and mortise door locksets, security levers, and master key systems that are used to protect and control access. We also offer a range of portable security products, including bicycle, small vehicle and travel locks.
|
•
|
Door closers and exit devices
: An extensive portfolio of life-safety products generally installed on fire doors and facility entrances and exits. Door closers are devices that automatically close doors after they are opened. Exit devices are generally horizontal attachments to doors and enable rapid exit from the premises.
|
•
|
Electronic Security Products and Access Control Systems
: A broad range of electrified locks, door closers, exit devices, access control systems, biometric hand reader systems, key card and reader systems, accessories, and automatic doors.
|
•
|
Time, Attendance and Workforce Productivity Systems
: Products and services designed to help business customers manage and monitor workforce access control parameters, attendance and employee scheduling. We offer ongoing aftermarket services in addition to design and installation offerings.
|
•
|
Video Analytics
: Electronic video analytics systems and services, primarily for business and government customers in Asia Pacific. We offer ongoing aftermarket services in addition to design and installation offerings.
|
•
|
Doors and Door Frames
: A portfolio of hollow metal doors and door frames. In select geographies, we also provide installation and service maintenance services.
|
•
|
Other Accessories
: A variety of additional security and product components, including hinges, door levers, door stops and other accessories, as well as certain bathroom fittings products.
|
Production Facilities
|
||||
Americas
|
|
EMEIA
|
|
Asia Pacific
|
Blue Ash, Ohio
|
|
Durchhausen, Germany
|
|
Auckland, New Zealand
|
Caracas, Venezuela
|
|
Duzce, Turkey
|
|
Shanghai, China
|
Chino, California
|
|
Faenza, Italy
|
|
|
Ensenada, Mexico
|
|
Feuquieres, France
|
|
|
Indianapolis, Indiana
|
|
Renchen, Germany
|
|
|
Princeton, Illinois
|
|
Monsampolo, Italy
|
|
|
Security, Colorado
|
|
Sittingbourne, England
|
|
|
Tecate, Mexico
|
|
|
|
|
Tijuana, Mexico
|
|
|
|
|
In millions
|
2013
|
|
% of
revenues |
|
2012
|
|
% of
revenues |
||||
Net revenues
|
$
|
1,542.9
|
|
|
|
|
$
|
1,500.4
|
|
|
|
Cost of goods sold
|
(899.8
|
)
|
|
58.3%
|
|
(894.2
|
)
|
|
59.6%
|
||
Selling and administrative expenses
|
(359.5
|
)
|
|
23.3%
|
|
(337.0
|
)
|
|
22.5%
|
||
Asset impairment
|
(137.6
|
)
|
|
8.9%
|
|
—
|
|
|
—%
|
||
Operating income
|
146.0
|
|
|
9.5%
|
|
269.2
|
|
|
17.9%
|
||
Interest expense
|
(1.4
|
)
|
|
|
|
(1.1
|
)
|
|
|
||
Other, net
|
(6.9
|
)
|
|
|
|
(2.6
|
)
|
|
|
||
Earnings before income taxes
|
137.7
|
|
|
|
|
265.5
|
|
|
|
||
Provision for income taxes
|
(101.9
|
)
|
|
|
|
(99.2
|
)
|
|
|
||
Earnings from continuing operations
|
35.8
|
|
|
|
|
166.3
|
|
|
|
||
Discontinued operations, net of tax
|
(0.3
|
)
|
|
|
|
(1.5
|
)
|
|
|
||
Net earnings
|
35.5
|
|
|
|
|
164.8
|
|
|
|
||
Less: Net earnings attributable to noncontrolling interests
|
(13.9
|
)
|
|
|
|
(3.9
|
)
|
|
|
||
Net earnings attributable to Allegion
|
$
|
21.6
|
|
|
|
|
$
|
160.9
|
|
|
|
Volume/product mix
|
2.4
|
%
|
Pricing
|
1.5
|
%
|
Currency exchange rates
|
(0.3
|
)%
|
Acquisitions/Divestitures
|
(0.8
|
)%
|
Total
|
2.8
|
%
|
In millions
|
|
2013
|
|
2012
|
||||
Interest income
|
|
$
|
0.1
|
|
|
$
|
(0.1
|
)
|
Exchange gain (loss)
|
|
(6.9
|
)
|
|
(2.4
|
)
|
||
Other
|
|
(0.1
|
)
|
|
(0.1
|
)
|
||
Other, net
|
|
$
|
(6.9
|
)
|
|
$
|
(2.6
|
)
|
In millions
|
|
2012
|
|
% of Revenues
|
|
2011
|
|
% of Revenues
|
|
2010
|
|
% of Revenues
|
||||||
Net revenues
|
|
$
|
2,046.6
|
|
|
|
|
$
|
2,021.2
|
|
|
|
|
$
|
1,967.7
|
|
|
|
Cost of goods sold
|
|
(1,220.6
|
)
|
|
59.7%
|
|
(1,211.4
|
)
|
|
59.9%
|
|
(1,201.7
|
)
|
|
61.1%
|
|||
Selling and administrative expenses
|
|
(457.4
|
)
|
|
22.3%
|
|
(450.8
|
)
|
|
22.3%
|
|
(441.0
|
)
|
|
22.4%
|
|||
Operating income
|
|
368.6
|
|
|
18.0%
|
|
359.0
|
|
|
17.8%
|
|
325.0
|
|
|
16.5%
|
|||
Interest expense
|
|
(1.5
|
)
|
|
|
|
(1.4
|
)
|
|
|
|
(1.8
|
)
|
|
|
|||
Other, net
|
|
(3.2
|
)
|
|
|
|
4.6
|
|
|
|
|
3.5
|
|
|
|
|||
Earnings before income taxes
|
|
363.9
|
|
|
|
|
362.2
|
|
|
|
|
326.7
|
|
|
|
|||
Provision for income taxes
|
|
(135.9
|
)
|
|
|
|
(130.5
|
)
|
|
|
|
(125.7
|
)
|
|
|
|||
Earnings from continuing operations
|
|
228.0
|
|
|
|
|
231.7
|
|
|
|
|
201.0
|
|
|
|
|||
Discontinued operations, net of tax
|
|
(2.7
|
)
|
|
|
|
(7.3
|
)
|
|
|
|
(2.5
|
)
|
|
|
|||
Net earnings
|
|
225.3
|
|
|
|
|
224.4
|
|
|
|
|
198.5
|
|
|
|
|||
Less: Net earnings attributable to noncontrolling interests
|
|
(5.7
|
)
|
|
|
|
(6.3
|
)
|
|
|
|
(6.7
|
)
|
|
|
|||
Net earnings attributable to Allegion
|
|
$
|
219.6
|
|
|
|
|
$
|
218.1
|
|
|
|
|
$
|
191.8
|
|
|
|
Pricing
|
2.3
|
%
|
Volume/product mix
|
0.3
|
%
|
Currency exchange rates
|
(1.3
|
)%
|
Total
|
1.3
|
%
|
Pricing
|
2.3
|
%
|
Volume/product mix
|
(1.3
|
)%
|
Currency exchange rates
|
1.7
|
%
|
Total
|
2.7
|
%
|
In millions
|
|
2012
|
|
2011
|
|
2010
|
||||||
Interest income
|
|
$
|
0.1
|
|
|
$
|
0.4
|
|
|
$
|
0.5
|
|
Exchange gain (loss)
|
|
(3.3
|
)
|
|
4.1
|
|
|
3.1
|
|
|||
Other
|
|
—
|
|
|
0.1
|
|
|
(0.1
|
)
|
|||
Other, net
|
|
$
|
(3.2
|
)
|
|
$
|
4.6
|
|
|
$
|
3.5
|
|
Dollar amounts in millions
|
|
2013
|
|
% change
|
|
2012
|
|||
Net revenues
|
|
1,154.2
|
|
|
4.2
|
%
|
|
1,107.2
|
|
Segment operating income
|
|
302.8
|
|
|
|
|
|
282.7
|
|
Segment operating margin
|
|
26.2
|
%
|
|
|
|
25.5
|
%
|
Dollar amounts in millions
|
|
2012
|
|
% change
|
|
2011
|
|
% change
|
|
2010
|
||||||
Net revenues
|
|
$
|
1,471.9
|
|
|
5.0%
|
|
$
|
1,402.2
|
|
|
1.7%
|
|
$
|
1,379.2
|
|
Segment operating income
|
|
377.2
|
|
|
|
|
347.8
|
|
|
|
|
322.3
|
|
|||
Segment operating margin
|
|
25.6
|
%
|
|
|
|
24.8
|
%
|
|
|
|
23.4
|
%
|
Pricing
|
2.9
|
%
|
Volume/product mix
|
2.3
|
%
|
Currency exchange rates
|
(0.2
|
)%
|
Total
|
5.0
|
%
|
Pricing
|
2.8
|
%
|
Volume/product mix
|
(1.7
|
)%
|
Currency exchange rates
|
0.6
|
%
|
Total
|
1.7
|
%
|
Dollar amounts in millions
|
|
2013
|
|
% change
|
|
2012
|
|||||
Net revenues
|
|
$
|
303.0
|
|
|
(2.8
|
)%
|
|
$
|
311.8
|
|
Segment operating income
|
|
(13.2
|
)
|
|
|
|
|
—
|
|
||
Segment operating margin
|
|
(4.4
|
)%
|
|
|
|
—
|
%
|
Dollar amounts in millions
|
|
2012
|
|
% change
|
|
2011
|
|
% change
|
|
2010
|
||||||
Net revenues
|
|
$
|
428.3
|
|
|
(10.0)%
|
|
$
|
476.0
|
|
|
1.2%
|
|
$
|
470.5
|
|
Segment operating income
|
|
8.2
|
|
|
|
|
19.4
|
|
|
|
|
17.2
|
|
|||
Segment operating margin
|
|
1.9
|
%
|
|
|
|
4.1
|
%
|
|
|
|
3.7
|
%
|
Pricing
|
1.3
|
%
|
Volume/product mix
|
(5.0
|
)%
|
Currency exchange rates
|
(6.3
|
)%
|
Total
|
(10.0
|
)%
|
Pricing
|
1.4
|
%
|
Volume/product mix
|
(4.3
|
)%
|
Currency exchange rates
|
4.1
|
%
|
Total
|
1.2
|
%
|
Dollar amounts in millions
|
|
2013
|
|
% change
|
|
2012
|
|||||
Net revenues
|
|
$
|
85.7
|
|
|
5.3
|
%
|
|
$
|
81.4
|
|
Segment operating income
|
|
18.7
|
|
|
|
|
|
2.5
|
|
||
Segment operating margin
|
|
21.8
|
%
|
|
|
|
3.1
|
%
|
Dollar amounts in millions
|
|
2012
|
|
% change
|
|
2011
|
|
% change
|
|
2010
|
||||||
Net revenues
|
|
$
|
146.4
|
|
|
2.4%
|
|
$
|
143.0
|
|
|
21.2%
|
|
$
|
118.0
|
|
Segment operating income
|
|
11.4
|
|
|
|
|
11.9
|
|
|
|
|
11.0
|
|
|||
Segment operating margin
|
|
7.8
|
%
|
|
|
|
8.3
|
%
|
|
|
|
9.3
|
%
|
Pricing
|
0.8
|
%
|
Volume/product mix
|
(0.2
|
)%
|
Currency exchange rates
|
1.8
|
%
|
Total
|
2.4
|
%
|
Pricing
|
1.1
|
%
|
Volume/product mix
|
14.0
|
%
|
Currency exchange rates
|
6.1
|
%
|
Total
|
21.2
|
%
|
In millions
|
|
2012
|
|
2011
|
|
2010
|
||||||
Net revenues
|
|
$
|
—
|
|
|
$
|
72.2
|
|
|
$
|
78.0
|
|
Pre-tax earnings (loss) from operations
|
|
(2.8
|
)
|
|
(2.9
|
)
|
|
(4.1
|
)
|
|||
Pre-tax gain (loss) on sale
|
|
(1.5
|
)
|
|
(6.7
|
)
|
|
—
|
|
|||
Tax benefit (expense)
|
|
1.6
|
|
|
2.3
|
|
|
1.6
|
|
|||
Discontinued operations, net of tax
|
|
$
|
(2.7
|
)
|
|
$
|
(7.3
|
)
|
|
$
|
(2.5
|
)
|
In millions
|
2012
|
|
2011
|
|
2010
|
||||||
Net revenues
|
$
|
—
|
|
|
$
|
72.2
|
|
|
$
|
78.0
|
|
After-tax earnings (loss) from operations
|
$
|
(0.5
|
)
|
|
$
|
(1.3
|
)
|
|
$
|
(2.5
|
)
|
Gain (loss) on sale, net of tax
|
(1.5
|
)
|
|
(5.2
|
)
|
|
—
|
|
|||
Discontinued operations, net of tax
|
$
|
(2.0
|
)
|
|
$
|
(6.5
|
)
|
|
$
|
(2.5
|
)
|
|
|
September 30,
|
|
December 31,
|
||||||||||||
In millions
|
|
2013
|
|
2012
|
|
2011
|
|
2010
|
||||||||
Cash and cash equivalents
|
|
$
|
368.5
|
|
|
$
|
317.5
|
|
|
$
|
376.8
|
|
|
$
|
378.3
|
|
Short-term borrowings and current maturities of long-term debt
|
|
2.1
|
|
|
2.2
|
|
|
1.4
|
|
|
1.0
|
|
||||
Long-term debt, including capital leases
|
|
2.7
|
|
|
2.8
|
|
|
3.5
|
|
|
5.2
|
|
||||
Total debt
|
|
4.8
|
|
|
5.0
|
|
|
4.9
|
|
|
6.2
|
|
||||
Total Parent Company equity
|
|
1,268.4
|
|
|
1,343.2
|
|
|
1,413.8
|
|
|
1,457.4
|
|
||||
Total equity
|
|
1,301.0
|
|
|
1,366.2
|
|
|
1,435.8
|
|
|
1,481.6
|
|
||||
Debt-to-total capital ratio
|
|
0.4
|
%
|
|
0.4
|
%
|
|
0.3
|
%
|
|
0.4
|
%
|
|
|
September 30,
|
|
December 31,
|
||||||||
In millions
|
|
2013
|
|
2012
|
|
2011
|
||||||
Current maturities of long-term debt
|
|
$
|
0.3
|
|
|
$
|
0.9
|
|
|
$
|
1.4
|
|
Short-term borrowings
|
|
1.8
|
|
|
1.3
|
|
|
—
|
|
|||
Total
|
|
$
|
2.1
|
|
|
$
|
2.2
|
|
|
$
|
1.4
|
|
|
|
September 30,
|
|
December 31,
|
||||||||||||||||
In millions
|
|
2013
|
|
2012
|
|
2012
|
|
2011
|
|
2010
|
||||||||||
Operating cash flow provided by (used in) continuing operations
|
|
$
|
157.9
|
|
|
$
|
198.9
|
|
|
$
|
271.9
|
|
|
$
|
272.8
|
|
|
$
|
208.0
|
|
Investing cash flow provided by (used in) continuing operations
|
|
12.4
|
|
|
(12.0
|
)
|
|
(17.5
|
)
|
|
(3.5
|
)
|
|
(20.1
|
)
|
|||||
Financing cash flow provided by (used in) continuing operations
|
|
(123.9
|
)
|
|
(242.1
|
)
|
|
(317.9
|
)
|
|
(253.6
|
)
|
|
(106.3
|
)
|
In millions
|
|
Less than
1 year
|
|
1 - 3
years
|
|
3 - 5
years
|
|
More than
5 years
|
|
Total
|
||||||||||
Short-term debt and interest
|
|
$
|
1.3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1.3
|
|
Long-term debt and interest, including capital leases
|
|
0.9
|
|
|
1.8
|
|
|
1.1
|
|
|
—
|
|
|
3.8
|
|
|||||
Purchase obligations
|
|
104.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
104.4
|
|
|||||
Operating leases
|
|
19.3
|
|
|
22.5
|
|
|
12.9
|
|
|
2.3
|
|
|
57.0
|
|
|||||
Total contractual cash obligations
|
|
$
|
125.9
|
|
|
$
|
24.3
|
|
|
$
|
14.0
|
|
|
$
|
2.3
|
|
|
$
|
166.5
|
|
•
|
Allowance for doubtful accounts – We maintain an allowance for doubtful accounts receivable which represents our best estimate of probable loss inherent in our accounts receivable portfolio. This estimate is based upon our two step policy that results in the total recorded allowance for doubtful accounts. The first step is to create a specific reserve for significant accounts as to which the customer’s ability to satisfy their financial obligation to the Company is in doubt due to circumstances such as bankruptcy, deteriorating operating results or financial position. In these circumstances,
|
•
|
Goodwill and indefinite-lived intangible assets – We have significant goodwill and indefinite-lived intangible assets on our balance sheet related to acquisitions. Our goodwill and other indefinite-lived intangible assets are tested and reviewed annually during the fourth quarter for impairment or when there is a significant change in events or circumstances that indicate that the fair value of an asset is more likely than not less than the carrying amount of the asset.
|
•
|
Decreases in estimated market sizes or market growth rates due to greater-than-expected declines in volumes, pricing pressures or disruptive technology;
|
•
|
Declines in our market share and penetration assumptions due to increased competition or an inability to develop or launch new products;
|
•
|
The impacts of the European sovereign debt crisis, including greater-than-expected declines in pricing, reductions in volumes, or fluctuations in foreign exchange rates;
|
•
|
The level of success of on-going and future research and development efforts, including those related to recent acquisitions, and increases in the research and development costs necessary to obtain regulatory approvals and launch new products;
|
•
|
Increase in the price or decrease in the availability of key commodities and the impact of higher energy prices;
|
•
|
Increases in our market-participant risk-adjusted weighted-average cost of capital; and
|
•
|
Changes in the structure of our business as a result of future reorganizations or divestitures of assets or businesses.
|
•
|
Long-lived assets and finite-lived intangibles – Long-lived assets and finite-lived intangibles are reviewed for impairment whenever events or changes in business circumstances indicate that the carrying amount of an asset may not be fully recoverable. Assets are grouped with other assets and liabilities at the lowest level for which identifiable cash flows can be generated. Impairment in the carrying value of an asset would be recognized whenever anticipated future undiscounted cash flows from an asset are less than its carrying value. The impairment is measured as the amount by which the carrying value exceeds the fair value of the asset as determined by an estimate of discounted cash flows. We believe that our use of estimates and assumptions are reasonable and comply with U.S. generally accepted accounting principles. Changes in business conditions could potentially require future adjustments to these valuations.
|
•
|
Loss contingencies – Liabilities are recorded for various contingencies arising in the normal course of business, including litigation and administrative proceedings, product warranty, worker’s compensation and other claims. We have recorded reserves in the financial statements related to these matters, which are developed using input derived from actuarial estimates and historical and anticipated experience data depending on the nature of the reserve, and in certain instances with consultation of legal counsel, internal and external consultants and engineers. Subject to the uncertainties inherent in estimating future costs for these types of liabilities, we believe our estimated reserves are reasonable and do not believe the final determination of the liabilities with respect to these matters would have a material effect on our financial condition, results of operations, liquidity or cash flows for any year.
|
•
|
Revenue recognition – Revenue is recognized and earned when all of the following criteria are satisfied: (a) persuasive evidence of a sales arrangement exists; (b) the price is fixed or determinable; (c) collectability is reasonably assured; and (d) delivery has occurred or service has been rendered. Delivery generally occurs when the title and the risks and rewards of ownership have substantially transferred to the customer. Both the persuasive evidence of a sales arrangement and fixed or determinable price criteria are deemed to be satisfied upon receipt of an executed and legally binding sales agreement or contract that clearly defines the terms and conditions of the transaction including the respective obligations of the parties. If the defined terms and conditions allow variability in all or a component of the price, revenue is not recognized until such time that the price becomes fixed or determinable. At the point of sale, we validate that existence of an enforceable claim that requires payment within a reasonable amount of time and assesses the collectability of that claim. If collectability is not deemed to be reasonably assured, then revenue recognition is deferred until such time that collectability becomes probable or cash is received. Delivery is not considered to have occurred until the customer has taken title and assumed the risks and rewards of ownership. Service and installation revenue are recognized when earned. In some instances, customer acceptance provisions are included in sales arrangements to give the buyer the ability to ensure the delivered product or service meets the criteria established in the order. In these instances, revenue recognition is deferred until the acceptance terms specified in the arrangement are fulfilled through customer acceptance or a
|
•
|
Product Warranties – Standard product warranty accruals are recorded at the time of sale and are estimated based upon product warranty terms and historical experience. We assess the adequacy of our liabilities and will make adjustments as necessary based on known or anticipated warranty claims, or as new information becomes available.
|
•
|
Income taxes – Deferred tax assets and liabilities are determined based on temporary differences between financial reporting and tax bases of assets and liabilities, applying enacted tax rates expected to be in effect for the year in which the differences are expected to reverse. We recognize future tax benefits, such as net operating losses and non-U.S. tax credits, to the extent that realizing these benefits is considered in our judgment to be more likely than not. We regularly review the recoverability of our deferred tax assets considering our historic profitability, projected future taxable income, timing of the reversals of existing temporary differences and the feasibility of our tax planning strategies. Where appropriate, we record a valuation allowance with respect to a future tax benefit.
|
•
|
Employee benefit plans – Ingersoll Rand provides a range of benefits to eligible employees and retirees, including pensions, postretirement and postemployment benefits. Determining the cost associated with such benefits is dependent on various actuarial assumptions including discount rates, expected return on plan assets, compensation increases, employee mortality, turnover rates and healthcare cost trend rates. Actuarial valuations are performed to determine expense in accordance with GAAP. Actual results may differ from the actuarial assumptions and are generally accumulated and amortized into earnings over future periods. Actuarial assumptions are reviewed at each measurement date and modifications are made to the assumptions based on current rates and trends, if appropriate. The discount rate, the rate of compensation increase and the expected long-term rates of return on plan assets are determined as of each measurement date. A discount rate reflects a rate at which pension benefits could be effectively settled. Discount rates for all plans are established using hypothetical yield curves based on the yields of corporate bonds rated AA quality. Spot rates are developed from the yield curve and used to discount future benefit payments. The rate of compensation increase is dependent on expected future compensation levels. The expected long-term rate of return on plan assets reflects the average rate of returns expected on the funds invested or to be invested to provide for the benefits included in the projected benefit obligation. The expected long-term rate of return on plan assets is based on what is achievable given the plan’s investment policy, the types of assets held and the target asset allocation. The expected long-term rate of return is determined as of each measurement date. The assumptions utilized in recording our obligations under the plans are reasonable based on input from our actuaries, outside investment advisers and information as to assumptions used by plan sponsors.
|
•
|
Former Chairman and Chief Executive Officer of Great Plains Energy Incorporated (an electric utilities holding company) from 2003 to 2013
|
•
|
Current Directorships:
|
▪
|
Polypore International Inc.
|
•
|
Former Directorships:
|
▪
|
Great Plains Energy Inc.
|
▪
|
Itron Inc.
|
▪
|
UMB Financial Corp.
|
•
|
Other activities:
|
▪
|
Trustee, Midwest Research Institute
|
▪
|
Trustee, Committee for Economic Development
|
▪
|
Chairman, Partnership for Children
|
•
|
Former Chief Executive Officer of Rivoli S.p.A. (prefabricated infrastructure company) from 2009 to 2011
|
•
|
Former Chief Executive Officer of Ambrosetti Consulting (a consulting company) from 2008 to 2009
|
•
|
Current Directorships:
|
▪
|
Alcatel-Lucent
|
•
|
Former Chairman, President and Chief Executive Officer of Cooper Industries plc. (global manufacturer of electrical components for the industrial, utility and construction markets) from 2006 to 2012
|
•
|
Current Directorships:
|
▪
|
Paccar Inc.
|
•
|
Former Directorships:
|
▪
|
Cooper Industries plc
|
▪
|
Trane Inc. (formerly, American Standard Inc.)
|
•
|
President and Chief Executive Officer of Allegion plc
|
•
|
Chairman, President and Chief Executive Officer of Quanex Building Products Corporation (a manufacturer of engineered material and components for the building products markets) from 2008 to July 2013
|
•
|
President and Chief Executive Officer of the North American Operating Division of Schneider Electric (a global electrical and automation manufacturer) from 2004 to 2008
|
•
|
Current Directorships: None
|
•
|
Former Directorships:
|
▪
|
Gardner Denver, Inc.
|
▪
|
Quanex Building Products Corporation
|
•
|
Former Executive Vice President and Chief Financial Officer of Visteon Corporation (a global automotive parts supplier) from 2011 to 2012
|
•
|
Former Executive Vice President and Chief Financial Officer of United Rentals, Inc. (an equipment rental company) from 2005 to 2009
|
•
|
Former Business Advisor to York Management Services (a private equity firm) from 2002 to 2008
|
•
|
Current Directorships:
|
▪
|
Global Brass and Copper Holdings, Inc.
|
•
|
Former Directorships:
|
▪
|
Delphi Corporation
|
•
|
Other Activities:
|
▪
|
Trustee, University of Detroit Mercy
|
•
|
Reviewing annual audited and quarterly financial statements, as well as our disclosures under “Management’s Discussion and Analysis of Financial Conditions and Results of Operations,” with management and the independent auditors.
|
•
|
Obtaining and reviewing periodic reports, at least annually, from management assessing the effectiveness of our internal controls and procedures for financial reporting.
|
•
|
Reviewing our processes to assure compliance with all applicable laws, regulations and corporate policy.
|
•
|
Recommending the public accounting firm to be proposed for appointment by the shareholders as our independent auditors and review the performance of the independent auditors.
|
•
|
Reviewing the scope of the audit and the findings and approve the fees of the independent auditors.
|
•
|
Approving in advance permitted audit and non-audit services to be performed by the independent auditors.
|
•
|
Satisfying itself as to the independence of the independent auditors and ensuring receipt of their annual independence statement.
|
•
|
Reviewing proposed borrowings and issuances of securities.
|
•
|
Recommending to the Board of Directors the dividends to be paid on our ordinary shares.
|
•
|
Reviewing cash management policies.
|
•
|
Reviewing periodic reports of the investment performance of our employee benefit plans.
|
•
|
Establishing executive compensation policies.
|
•
|
Reviewing and approving the goals and objectives relevant to the compensation of the Chief Executive Officer, evaluating the Chief Executive Officer’s performance against those goals and objectives and setting the Chief Executive Officer’s compensation level based on this evaluation.
|
•
|
Approving compensation of other officers and key employees.
|
•
|
Reviewing and approving executive compensation and benefit programs.
|
•
|
Administering our equity compensation plans.
|
•
|
Reviewing and recommending significant changes in principal employee benefit programs.
|
•
|
Approving and overseeing Compensation Committee consultants.
|
•
|
Identifying individuals qualified to become directors and recommend the candidates for all directorships.
|
•
|
Recommending individuals for election as officers.
|
•
|
Reviewing our Corporate Governance Guidelines and making recommendations for changes.
|
•
|
Considering questions of independence and possible conflicts of interest of directors and executive officers.
|
•
|
Taking a leadership role in shaping our corporate governance.
|
(i)
|
David D. Petratis, is our Chairman, President and Chief Executive Officer (“CEO”);
|
(ii)
|
Patrick S. Shannon, is our Senior Vice President and Chief Financial Officer (“CFO”);
|
(iii)
|
Timothy P. Eckersley, is our Senior Vice President - Americas;
|
(iv)
|
Barbara A. Santoro, is our Senior Vice President, General Counsel and Secretary; and
|
(v)
|
Feng (William) Yu, is our Senior Vice President - Asia Pacific.
|
I.
|
Compensation Philosophy and Design Principles
|
II.
|
Factors Considered in the Determination of Target Total Direct Compensation
|
III.
|
Role of the Compensation Committee and its Independent Adviser
|
IV.
|
Compensation Program Descriptions and Compensation Decisions
|
V.
|
Other Compensation and Tax Matters
|
Total Direct Compensation
|
|
|||
|
Element
|
|
Description of Element
|
|
|
Base Salary
|
|
Fixed cash compensation.
|
|
|
Annual Incentive
(the Annual Incentive Matrix or “AIM”)
|
|
Cash incentive compensation where any award is based on performance against pre-defined annual Operating Income (“OI”) margin percent, revenue (“Revenue”) and cash flow (“Cash Flow”) objectives as well as individual performance.
|
|
|
Long-Term Incentives
|
|
Performance-based long-term incentive compensation that is aligned with Ingersoll Rand’s stock price and is awarded in the form of stock options, RSUs and PSUs. PSUs are only payable if Ingersoll Rand’s earnings per share (“EPS”) and total shareholder return (“TSR”) relative to companies in the S&P 500 Industrials Index exceed threshold performance against pre-defined objectives.
|
|
3M
|
Eaton Corp
|
Johnson Controls Inc.
|
Pentair
|
Cummins, Inc.
|
Emerson Electric
|
Paccar Inc.
|
Stanley Black & Decker
|
Danaher Corp
|
Honeywell International
|
Parker Hannifin Corp
|
Textron
|
Dover
|
Illinois Tool Works
|
PPG Industries
|
Tyco International
|
ADT Corporation
|
Checkpoint Systems
|
Flir Systems
|
ScanSource
|
Brady Corp.
|
Diebold
|
Fortune Brands Home Security
|
Steelcase
|
Brinks
|
Enersys
|
Griffon Corp.
|
|
CACI International
|
Enpro Industries
|
Quanex Building Products
|
|
Element
|
|
Objective of Element Including Risk Mitigation Factors
|
|
Key Features
|
Base Salary
|
|
To provide a sufficient and stable source of cash compensation.
To avoid encouraging excessive risk-taking, it is important that an appropriate level of cash compensation is not variable.
|
|
Targeted, on average, at the 50th percentile of the peer group.
Future adjustments are determined based on an evaluation of the executives’ proficiency in fulfilling his or her responsibilities.
|
Annual Incentive Matrix Program
|
|
To serve as an annual cash award based on the achievement of pre-established performance objectives.
Structured to take into consideration the unique needs of the various businesses.
Amount of compensation earned cannot exceed a maximum payout of 200% of individual target levels and is also subject to a claw-back in the event of a financial restatement.
|
|
Officers have an AIM target expressed as a percentage of base salary. Targets are set based on the compensation levels of similar jobs in comparable companies, as well as on the officer’s experience and proficiency level in performing the duties of the role.
Actual AIM payouts are dependent on business and/or enterprise financial performance and individual performance. The financial metrics used to determine the awards for 2012 were Revenue and OI margin percent, modified up or down based on Cash Flow performance.
|
Element
|
|
Objective of Element Including Risk Mitigation Factors
|
|
Key Features
|
Performance Share Program
|
|
To serve as a long-term incentive based on the achievement of pre-established performance objectives relative to companies in the S&P 500 Industrials Index.
To promote long-term strategic planning and discourage an overemphasis on attaining short-term goals.
Amount earned cannot exceed a maximum payout of 200% of individual target levels and is also subject to a claw-back in the event of a financial restatement.
|
|
Earned over a three-year performance period.
Equity earned is based on our EPS growth (from continuing operations) relative to the companies in the S&P 500 Industrials Index for awards granted through 2011.
Beginning in 2012, equity earned is based on relative TSR and relative EPS growth compared to companies within the S&P 500 Industrials Index (with equal weight given to each metric).
Actual value of the PSP shares earned depends on our share price at the time of payment.
|
Stock Options / Restricted Stock Units
|
|
Aligns the interests of the officers and shareholders.
Awards provide a balanced approach between risk and retention.
Awards are subject to a claw-back in the event of a financial restatement.
|
|
Stock options and RSUs are granted annually, with stock options having an exercise price equal to the fair market value of ordinary shares on the date of grant.
Both stock options and RSUs typically vest ratably over three years, one third per year.
Stock options expire on the 10th anniversary (less one day) of the grant date (unless employment terminates sooner).
|
Name
|
|
2011
|
|
2012
|
|
% Increase (1)
|
|||||||||
P. S. Shannon (2)
|
|
$
|
340,000
|
|
|
|
|
$
|
370,000
|
|
|
|
|
8.8
|
%
|
T. P. Eckersley
|
|
$
|
387,219
|
|
|
|
|
$
|
396,900
|
|
|
|
|
2.5
|
%
|
B. A. Santoro
|
|
$
|
300,000
|
|
|
|
|
$
|
309,000
|
|
|
|
|
3.0
|
%
|
F. W. Yu (3)
|
|
$
|
269,152
|
|
|
|
|
$
|
296,067
|
|
|
|
|
10.0
|
%
|
(1)
|
Represents merit increases other than for Mr. Shannon and Mr. Yu.
|
(2)
|
Mr. Shannon received two increases in 2012: a merit increase of 3% effective April 1, 2012 and a market adjustment of 5.7% in connection with his change in role from Vice President of Audit to Vice President and Treasurer in August 2012.
|
(3)
|
Mr. Yu received an increase in order for his base salary to remain competitive in China.
|
•
|
Patrick S. Shannon: Strengthen capital structure through cash flow and debt reduction; continue to build enterprise awareness, accountability and effectiveness of compliance issues and best practices; provide the Audit Committee with regular and timely risk assurance reports; implement operational efficiency plans for Treasury; and leadership development.
|
•
|
Timothy P. Eckersley: Deliver operational performance through continued focus on productivity and cash flow; execute growth strategy for Electronics platforms through focused penetration in the Original Equipment Manufacturing, Integrator, and Locksmith channels; leverage IT investments to drive increased efficiency; and leadership development.
|
•
|
Barbara A. Santoro: Manage transition to new transfer agent; provide legal and corporate governance support to management and the Board of Directors in connection with Ingersoll Rand’s consideration of strategic opportunities; and implement Disclosure Committee process enhancements.
|
•
|
Feng W. Yu: Implement improved inventory management plan in Asia Pacific; develop and deploy a customer-wide satisfaction survey in China to drive improvements; upgrade product offerings through innovation; expand market coverage through geographical/channel expansion, and improve brand awareness.
|
|
Weight
|
|
Target Revenue
|
|
Adjusted Revenue
|
|
Target OI Margin
|
|
Adjusted OI Margin
|
|
Adjusted Cash Flow
|
|
Overall Financial Score
|
|
Individual Performance Score
|
|
AIM Payout %
|
||||||||||
P. S. Shannon
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Enterprise
|
100
|
%
|
|
$
|
14.226
|
B
|
|
$
|
14.035
|
B
|
|
11.1
|
%
|
|
10.8
|
%
|
|
111.5
|
%
|
|
77.94
|
%
|
|
100%
|
|
77.94
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
T. P. Eckersley
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Enterprise
|
35
|
%
|
|
$
|
14.226
|
B
|
|
$
|
14.035
|
B
|
|
11.1
|
%
|
|
10.8
|
%
|
|
111.5
|
%
|
|
111.47
|
%
|
|
100%
|
|
111.47
|
%
|
Security Technologies (1)
|
65
|
%
|
|
$
|
1.632
|
B
|
|
$
|
1.626
|
B
|
|
20.3
|
%
|
|
20.3
|
%
|
|
106.1
|
%
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
B. A. Santoro
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Enterprise
|
100
|
%
|
|
$
|
14.226
|
B
|
|
$
|
14.035
|
B
|
|
11.1
|
%
|
|
10.8
|
%
|
|
111.5
|
%
|
|
77.94
|
%
|
|
100%
|
|
77.94
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
F. W. Yu
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Enterprise
|
35
|
%
|
|
$
|
14.226
|
B
|
|
$
|
14.035
|
B
|
|
11.1
|
%
|
|
10.8
|
%
|
|
111.5
|
%
|
|
97.63
|
%
|
|
100%
|
|
97.63
|
%
|
Security Technologies (2)
|
65
|
%
|
|
$
|
1.632
|
B
|
|
$
|
1.626
|
B
|
|
20.3
|
%
|
|
20.3
|
%
|
|
106.1
|
%
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Calculated payout includes 35% weighting for Security Technologies with an AIM payout of 96.81% and 30% weighting for Security Technologies - Americas region with an AIM payout of 167.70%.
|
(2)
|
Calculated payout includes 35% weighting for Security Technologies with an AIM payout of 96.81% and 30% weighting for Security Technologies - Asia Pacific region with an AIM payout of 121.56%.
|
Name
|
|
Individual AIM Target
|
|
AIM Payout Percent for 2012
|
|
AIM Award for 2012
|
|||||
P. S. Shannon (1)
|
|
60% of $358,369
|
|
77.94
|
%
|
|
|
$
|
167,588
|
|
|
T. P. Eckersley
|
|
60% of $396,900
|
|
111.47
|
%
|
|
|
$
|
265,455
|
|
|
B. A. Santoro
|
|
55% of $309,000
|
|
77.94
|
%
|
|
|
$
|
132,459
|
|
|
F. W. Yu
|
|
50% of $296,067
|
|
97.63
|
%
|
|
|
$
|
144,525
|
|
|
(1)
|
In 2012, Mr. Shannon served in the role of VP, Audit Services from January 1, 2012 through August 2, 2012 and in the role of VP, Treasurer from August 3, 2012 through December 31, 2012. His 2012 AIM target was pro-rated to reflect time served and base salary in each role.
|
Name
|
Stock
Option
Award
|
|
RSU
Award
|
|
Target 2012-14
PSU award
|
|||||||||
P. S. Shannon
|
|
$
|
120,000
|
|
|
|
|
$
|
120,000
|
|
|
$
|
160,000
|
|
T. P. Eckersley
|
|
$
|
125,400
|
|
|
|
|
$
|
125,400
|
|
|
$
|
152,000
|
|
B. A. Santoro
|
|
$
|
71,500
|
|
|
|
|
$
|
71,500
|
|
|
$
|
108,000
|
|
F. W. Yu
|
|
$
|
33,000
|
|
|
|
|
$
|
33,000
|
|
|
$
|
40,000
|
|
Ingersoll Rand Position
|
|
Individual Ownership
Requirement (Shares
and Equivalents)
|
|
Percent of Salary
(Based on Stock Price as of December 31, 2012)
|
|||
Chief Executive Officer
|
|
150,000
|
|
|
|
|
Approximately 7x multiple of salary
|
Senior Vice Presidents
|
|
40,000
|
|
|
|
|
Approximately 5x multiple of salary
|
Corporate Vice Presidents (Shannon and Santoro)
|
|
15,000
|
|
|
|
|
Approximately 2x multiple of salary
|
Other Vice Presidents (Eckersley and Yu)
|
|
6,000
|
|
|
|
|
Approximately 0.75x multiple of salary
|
Name and Position
|
|
Compensation
|
|
% of Total Compensation
|
|||
D. D. Petratis, CEO
|
|
|
|
|
|
||
Base Salary
|
|
$
|
900,000
|
|
|
18.4
|
%
|
Target AIM
|
|
$
|
990,000
|
|
|
20.2
|
%
|
Target Long-Term Incentives
|
|
$
|
3,000,000
|
|
|
61.3
|
%
|
P. S. Shannon, SVP and CFO:
|
|
|
|
|
|
||
Base Salary
|
|
$
|
425,000
|
|
|
31.0
|
%
|
Target AIM
|
|
$
|
297,500
|
|
|
21.7
|
%
|
Target Long-Term Incentives
|
|
$
|
650,000
|
|
|
47.4
|
%
|
T. P. Eckersley, SVP - Americas:
|
|
|
|
|
|
||
Base Salary
|
|
$
|
408,807
|
|
|
39.5
|
%
|
Target AIM
|
|
$
|
245,284
|
|
|
23.7
|
%
|
Target Long-Term Incentives
|
|
$
|
380,000
|
|
|
36.7
|
%
|
B. A. Santoro, SVP, GC and Secretary:
|
|
|
|
|
|
||
Base Salary
|
|
$
|
350,000
|
|
|
36.7
|
%
|
Target AIM
|
|
$
|
227,500
|
|
|
23.9
|
%
|
Target Long-Term Incentives
|
|
$
|
375,000
|
|
|
39.4
|
%
|
F. W. Yu, SVP - Asia Pacific:
|
|
|
|
|
|
||
Base Salary
|
|
$
|
344,480
|
|
|
55.9
|
%
|
Target AIM
|
|
$
|
172,240
|
|
|
27.9
|
%
|
Target Long-Term Incentives
|
|
$
|
100,000
|
|
|
16.2
|
%
|
Name
|
|
Transition Bonus
|
||
P. S. Shannon
|
|
$
|
150,000
|
|
T. P. Eckersley
|
|
$
|
400,000
|
|
B. A. Santoro
|
|
$
|
150,000
|
|
F. W. Yu
|
|
$
|
300,000
|
|
Name and
Principal Position
|
|
Year
|
|
Salary
($)(a)
|
|
Stock
Awards
($)(b)
|
|
Option
Awards
($)(c)
|
|
Non-
Equity
Incentive
Plan
Compensation
($)(d)
|
|
Change in
Pension
Value and
Nonqualified
Deferred
Compensation
Earnings
($)(e)
|
|
All
Other
Compensation
($)(f)
|
|
Total
($) |
|||||||
D. D. Petratis (g)
|
|
2012
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Chairman, President and Chief Executive Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
P. S. Shannon
|
|
2012
|
|
355,757
|
|
|
319,554
|
|
|
113,147
|
|
|
167,588
|
|
|
395,851
|
|
|
56,593
|
|
|
1,408,490
|
|
Senior Vice President and Chief Financial Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
T. P. Eckersley
|
|
2012
|
|
394,666
|
|
|
314,970
|
|
|
118,236
|
|
|
265,455
|
|
|
187,116
|
|
|
45,868
|
|
|
1,326,311
|
|
Senior Vice President - Americas
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
B. A. Santoro
|
|
2012
|
|
306,750
|
|
|
206,187
|
|
|
67,415
|
|
|
132,459
|
|
|
423,923
|
|
|
58,469
|
|
|
1,195,203
|
|
Senior Vice President, General Counsel and Secretary
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
F. W. Yu (h)
|
|
2012
|
|
289,221
|
|
|
82,890
|
|
|
31,122
|
|
|
144,525
|
|
|
—
|
|
|
56,559
|
|
|
604,317
|
|
Senior Vice President - Asia Pacific
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
A portion of a participant’s annual salary may be deferred into a number of investment options under Ingersoll Rand’s deferred compensation plans. In 2012, no NEO deferred any salary.
|
(b)
|
The amounts shown in this column reflect the aggregate grant date fair value of PSU awards and any RSU awards granted for the year under Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 718 and do not reflect amounts paid to or realized by the NEOs. In determining the aggregate grant date fair value of the PSU awards, the awards were valued assuming target level performance achievement. If the maximum level performance achievement is assumed, the aggregate grant date fair value of the PSU awards would be as follows:
|
Name
|
|
Maximum Grant Date Value
Of
2012-14 PSU Awards
($) |
|
P. S. Shannon
|
|
399,059
|
|
T. P. Eckersley
|
|
379,065
|
|
B. A. Santoro
|
|
269,354
|
|
F. W. Yu
|
|
99,765
|
|
(c)
|
The amounts in this column reflect the aggregate grant date fair value of stock option grants for financial reporting purposes for the year under ASC 718 and do not reflect amounts paid to or realized by the NEOs. For a discussion of the assumptions made in determining the ASC 718 values, see Note 14, “Share-Based Compensation,” to the annual combined financial statements included elsewhere in this Information Statement.
|
(d)
|
This column reflects the amounts earned as annual awards under the AIM program. Unless deferred into Ingersoll Rand’s deferred compensation plans, AIM program payments are made in cash. In 2012, Mr. Eckersley deferred 50% of his AIM payment. Amounts shown in this column are not reduced to reflect deferrals of AIM awards into Ingersoll Rand’s deferred compensation plans.
|
(e)
|
Amounts reported in this column reflect the aggregate increase in the actuarial present value of the benefits under the qualified Ingersoll Rand Pension Plan Number One (the “Pension Plan”), Supplemental Pension Plan I, Supplemental Pension Plan II (together with Supplemental Pension Plan I, the “Supplemental Pension Plans”), KMP and EOSP, as applicable. Amounts are higher for those NEOs who are older and closer to retirement than for those who are younger and further from retirement since the period over which the benefit is discounted to determine its present value is shorter and the impact of discounting is therefore reduced. The plans do not permit above-market or preferential earnings on any nonqualified deferred compensation. Mr. Yu does not participate in any company-sponsored pension plan.
|
(f)
|
The following table summarizes the components of this column for fiscal year 2012:
|
Name
|
|
Matching Contributions
($)(1)
|
|
Company
Cost for
Life
Insurance
($)
|
|
Retiree
Medical
Plan
($)(2)
|
|
Other
Benefits
($)(3)
|
|
Total
($)
|
|||||
P. S. Shannon
|
|
32,643
|
|
|
800
|
|
|
—
|
|
|
23,150
|
|
|
56,593
|
|
T. P. Eckersley
|
|
32,791
|
|
|
930
|
|
|
—
|
|
|
12,147
|
|
|
45,868
|
|
B. A. Santoro
|
|
27,543
|
|
|
1,290
|
|
|
1,100
|
|
|
28,536
|
|
|
58,469
|
|
W. Yu
|
|
5,824
|
|
|
—
|
|
|
—
|
|
|
50,735
|
|
|
56,559
|
|
(1)
|
Represents matching contributions under Ingersoll Rand’s ESP and Supplemental ESP plans for Messrs. Shannon and Eckersley and Ms. Santoro and under the Huabao Service Retention Bonus Plan (the “Huabao Plan”) for Mr. Yu.
|
(2)
|
Represents the estimated year-over-year increase in the value of the retiree medical plan, calculated based on the methods used for financial statement reporting purposes.
|
(3)
|
The other benefits the NEOs received in 2012 are:
|
Name
|
|
Car Usage
($)(a)
|
|
Financial Counseling
($)
|
|
|
Executive Health Program
($)
|
|
|
Total
($)
|
||||
P. Shannon
|
|
13,524
|
|
|
9,251
|
|
|
|
375
|
|
|
|
23,150
|
|
T. Eckersley
|
|
10,565
|
|
|
—
|
|
|
|
1,582
|
|
|
|
12,147
|
|
B. A. Santoro
|
|
17,982
|
|
|
8,490
|
|
|
|
2,064
|
|
|
|
28,536
|
|
F. W. Yu
|
|
50,680
|
|
|
—
|
|
|
|
55
|
|
|
|
50,735
|
|
(a)
|
Represents the incremental cost of the leased cars, calculated based on the lease, insurance, fuel and maintenance costs to Ingersoll Rand for all NEOs other than Mr. Yu. For Mr. Yu, the amount represents the value of the car and driver provided under the Chinese car policy.
|
(g)
|
Mr. Petratis was not employed by Ingersoll Rand in 2012 and therefore no historical information is available for him.
|
(h)
|
Cash amounts for Mr. Yu were paid in Chinese Yuan. For reporting purposes, these amounts have been converted from Chinese Yuan to United States dollars in this table and throughout this Proxy Statement. Where amounts are reported as of a point in time, Chinese Yuan were converted to United States dollars using the closing currency exchange rate as of December 31, 2012. Where payments were made throughout the year, Chinese Yuan were converted to United States dollars using the closing currency exchange rate as of the last day of the month in which the cash compensation was received or deemed to have been received.
|
Name
|
|
Grant Date
|
|
Estimated Future Payouts
Under Non-Equity
Incentive Plan Awards
|
|
Estimated Future Payouts
Under Equity
Incentive Plan Awards
|
|
All Other Stock Awards: Number of Shares of Stock or Units
(#)(c)
|
|
All Other Option Awards: Number of Securities Underlying Options
(#)(c)
|
|
Exercise
or Base
Price of
Option
Awards
($/Sh)
(d)
|
|
Grant
Date
Fair
Value of
Stock
and
Option
Awards
($)(e)
|
|||||||||||||||||||
Threshold
($)(a)
|
|
Target
($)(a)
|
|
Maximum
($)(a)
|
|
Threshold
(#)(b)
|
|
Target
(#)(b)
|
|
Maximum
(#)(b)
|
|
||||||||||||||||||||||
D. D. Petratis (f)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
P. S. Shannon
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
AIM
|
|
2/24/2012
|
|
64,506
|
|
|
215,021
|
|
|
430,043
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
PSUs (2012-14)
|
|
2/24/2012
|
|
—
|
|
|
—
|
|
|
—
|
|
|
983
|
|
|
3,932
|
|
|
7,864
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
199,529
|
|
|
Options
|
|
2/24/2012
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,271
|
|
|
40.70
|
|
|
113,147
|
|
|
RSUs
|
|
2/24/2012
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,949
|
|
|
—
|
|
|
—
|
|
|
120,024
|
|
|
T. P. Eckersley
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
AIM
|
|
2/24/2012
|
|
71,442
|
|
|
238,140
|
|
|
476,280
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
PSUs (2012-14)
|
|
2/24/2012
|
|
—
|
|
|
—
|
|
|
—
|
|
|
934
|
|
|
3,735
|
|
|
7,470
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
189,533
|
|
|
Options
|
|
2/24/2012
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,643
|
|
|
40.70
|
|
|
118,236
|
|
|
RSUs
|
|
2/24/2012
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,082
|
|
|
—
|
|
|
—
|
|
|
125,437
|
|
|
B. A. Santoro
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
AIM
|
|
2/24/2012
|
|
50,985
|
|
|
169,950
|
|
|
339,900
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
PSUs (2012-14)
|
|
2/24/2012
|
|
—
|
|
|
—
|
|
|
—
|
|
|
664
|
|
|
2,654
|
|
|
5,308
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
134,677
|
|
|
Options
|
|
2/24/2012
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,928
|
|
|
40.70
|
|
|
67,415
|
|
|
RSUs
|
|
2/24/2012
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,757
|
|
|
—
|
|
|
—
|
|
|
71,510
|
|
|
F. W. Yu
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
AIM
|
|
2/24/2012
|
|
44,410
|
|
|
148,034
|
|
|
296,034
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
PSUs (2012-14)
|
|
2/24/2012
|
|
—
|
|
|
—
|
|
|
—
|
|
|
246
|
|
|
983
|
|
|
1,966
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
49,882
|
|
|
Options
|
|
2/24/2012
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,275
|
|
|
40.70
|
|
|
31,122
|
|
|
RSUs
|
|
2/24/2012
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
811
|
|
|
—
|
|
|
—
|
|
|
33,008
|
|
(a)
|
The target award levels established for the AIM program are established annually in February and are expressed as a percentage of the NEO’s base salary. Refer to Compensation Discussion and Analysis under the heading “Annual Incentive Matrix Program” for a description of the Ingersoll Rand Compensation Committee’s process for establishing AIM program target award levels. The amounts reflected in the “Estimated Future Payouts Under Non-Equity Incentive Plan Awards” columns represent the threshold, target and maximum amounts for awards under the AIM program that were paid in February 2013, based on performance in 2012. Thus, the amounts shown in the threshold, target and maximum columns reflect the range of potential payouts when the target award levels were established in February 2012. The AIM program pays $0 for performance below threshold. The actual amounts paid pursuant to those awards are reflected in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table.
|
(b)
|
The amounts reflected in the “Estimated Future Payouts Under Equity Incentive Plan Awards” columns represent the threshold, target and maximum amounts for PSU awards for the 2012-2014 performance period. The PSP pays $0 for
|
(c)
|
The amounts in these columns reflect the stock option and RSU awards granted in February 2012. For a description of the Ingersoll Rand Compensation Committee’s process for determining stock option and RSU awards and the terms of such awards, see Compensation Discussion and Analysis under the heading “Long-Term Incentive Program” and the “Post-Employment Benefits” sections.
|
(d)
|
Stock options were granted under the Ingersoll Rand Incentive Stock Plan of 2007 (the “2007 Plan”), which requires options to be granted at an exercise price equal to the fair market value of Ingersoll Rand’s ordinary shares on the date of grant. The fair market value is defined in the 2007 Plan as the average of the high and low composite price of Ingersoll Rand’s ordinary shares listed on the NYSE on the grant date. The closing price on the NYSE of Ingersoll Rand’s ordinary shares was $40.48 on the grant date.
|
(e)
|
The grant date fair value of the equity awards granted in February 2012 was calculated in accordance with ASC 718. The actual amount ultimately realized by each NEO from the stock option awards will likely vary based on a number of factors, including stock price fluctuations, differences from the valuation assumptions used and timing of exercise or applicable vesting. For a description of the assumptions made in valuing the equity awards, see Note 14, “Share-Based Compensation” to the annual combined financial statements included elsewhere in this Information Statement. For PSUs, the grant date fair value has been determined based on achievement of target level performance, which is the performance threshold Ingersoll Rand believes is the most likely to be achieved under the grants.
|
(f)
|
Mr. Petratis was not employed by Ingersoll Rand in 2012 and therefore no historical information is available for him.
|
Name
|
|
|
|
|
Option Awards
|
|
Stock Awards
|
|||||||||||||||||||||
|
Grant Date
|
|
|
Number of
Securities
Underlying
Unexercised
Options
(#)
Exercisable
(a)
|
|
Number of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable
(a)
|
|
Option
Exercise
Price
($)
|
|
Option
Expiration
Date
(b)
|
|
Number of Shares or Units of Stock that have Not Vested
(#)
(c)
|
|
Market Value of Shares or Units of Stock that have Not Vested ($)
(d)
|
|
Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights that have Not Vested
(#)
(e)
|
|
Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights that have Not Vested
($)
(d)
|
||||||||||
D. D. Petratis (f)
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
P. S. Shannon
|
|
2/2/2005
|
|
|
|
23,040
|
|
|
—
|
|
|
38.6850
|
|
|
2/1/2015
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
2/1/2006
|
|
|
|
17,580
|
|
|
—
|
|
|
39.4250
|
|
|
1/31/2016
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
2/7/2007
|
|
|
|
17,230
|
|
|
—
|
|
|
43.1250
|
|
|
2/6/2017
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
2/15/2008
|
|
|
|
22,643
|
|
|
—
|
|
|
39.0000
|
|
|
2/14/2018
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
2/12/2009
|
|
|
|
26,400
|
|
|
—
|
|
|
16.8450
|
|
|
2/11/2019
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
2/16/2010
|
|
|
|
5,670
|
|
|
2,835
|
|
|
31.5916
|
|
|
2/15/2020
|
|
|
1,003
|
|
|
48,104
|
|
|
6,331
|
|
|
303,635
|
|
|
|
2/14/2011
|
|
|
|
2,339
|
|
|
4,679
|
|
|
47.3350
|
|
|
2/13/2021
|
|
|
1,409
|
|
|
67,576
|
|
|
4,226
|
|
|
202,679
|
|
|
|
2/24/2012
|
|
|
|
—
|
|
|
8,271
|
|
|
40.7000
|
|
|
2/23/2022
|
|
|
2,949
|
|
|
141,434
|
|
|
3,932
|
|
|
188,579
|
|
T. P. Eckersley
|
|
12/5/2007
|
|
|
|
20,000
|
|
|
—
|
|
|
51.5000
|
|
|
12/4/2017
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
2/16/2010
|
|
|
|
6,520
|
|
|
3,261
|
|
|
31.5916
|
|
|
2/15/2020
|
|
|
1,153
|
|
|
55,298
|
|
|
6,014
|
|
|
288,431
|
|
|
|
2/14/2011
|
|
|
|
2,444
|
|
|
4,890
|
|
|
47.3350
|
|
|
2/13/2021
|
|
|
1,472
|
|
|
70,597
|
|
|
4,014
|
|
|
192,511
|
|
|
|
11/1/2011
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,000
|
|
|
479,600
|
|
|
—
|
|
|
—
|
|
|
|
2/24/2012
|
|
|
|
—
|
|
|
8,643
|
|
|
40.7000
|
|
|
2/23/2022
|
|
|
3,082
|
|
|
147,813
|
|
|
3,735
|
|
|
179,131
|
|
B. A. Santoro
|
|
2/2/2005
|
|
|
|
18,320
|
|
|
—
|
|
|
38.6850
|
|
|
2/1/2015
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
2/1/2006
|
|
|
|
17,580
|
|
|
—
|
|
|
39.4250
|
|
|
1/31/2016
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
2/7/2007
|
|
|
|
17,090
|
|
|
—
|
|
|
43.1250
|
|
|
2/6/2017
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
2/15/2008
|
|
|
|
18,334
|
|
|
—
|
|
|
39.0000
|
|
|
2/14/2018
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
2/12/2009
|
|
|
|
15,000
|
|
|
—
|
|
|
16.8450
|
|
|
2/11/2019
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
2/16/2010
|
|
|
|
5,953
|
|
|
2,977
|
|
|
31.5916
|
|
|
2/15/2020
|
|
|
1,053
|
|
|
50,502
|
|
|
2,532
|
|
|
121,435
|
|
|
|
8/5/2010
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,000
|
|
|
239,800
|
|
|
—
|
|
|
—
|
|
|
|
2/14/2011
|
|
|
|
2,222
|
|
|
4,445
|
|
|
47.3350
|
|
|
2/13/2021
|
|
|
1,338
|
|
|
64,170
|
|
|
1,691
|
|
|
81,100
|
|
|
|
2/24/2012
|
|
|
|
—
|
|
|
4,928
|
|
|
40.7000
|
|
|
2/23/2022
|
|
|
1,757
|
|
|
84,266
|
|
|
2,654
|
|
|
127,286
|
|
F. W. Yu
|
|
2/2/2005
|
|
|
|
2,000
|
|
|
—
|
|
|
38.6850
|
|
|
2/1/2015
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
2/1/2006
|
|
|
|
1,420
|
|
|
—
|
|
|
39.4250
|
|
|
1/31/2016
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
2/7/2007
|
|
|
|
1,300
|
|
|
—
|
|
|
43.1250
|
|
|
2/6/2017
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
2/15/2008
|
|
|
|
2,548
|
|
|
—
|
|
|
39.0000
|
|
|
2/14/2018
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
2/16/2010
|
|
|
|
1,790
|
|
|
895
|
|
|
31.5916
|
|
|
2/15/2020
|
|
|
317
|
|
|
15,203
|
|
|
—
|
|
|
—
|
|
|
|
2/14/2011
|
|
|
|
701
|
|
|
1,403
|
|
|
47.3350
|
|
|
2/13/2021
|
|
|
423
|
|
|
20,287
|
|
|
—
|
|
|
—
|
|
|
|
11/1/2011
|
|
|
|
—
|
|
|
13,237
|
|
|
30.4175
|
|
|
10/31/2021
|
|
|
4,000
|
|
|
191,840
|
|
|
—
|
|
|
—
|
|
|
|
2/24/2012
|
|
|
|
—
|
|
|
2,275
|
|
|
40.7000
|
|
|
2/23/2022
|
|
|
811
|
|
|
38,896
|
|
|
983
|
|
|
47,145
|
|
(a)
|
These columns represent stock option and Stock Appreciation Right (“SAR”) awards. Except as described in the following sentence, these awards become exercisable in three equal installments beginning on the first anniversary after the date of grant, subject to continued employment through the vesting period or retirement. Mr. Yu’s grant dated November 1, 2011 vests 100% on the third anniversary of the grant date.
|
(b)
|
All of the stock options and SARs granted to the NEOs expire on the tenth anniversary (less one day) of the grant date.
|
(c)
|
This column represents unvested RSUs. Except as described in the following sentence, RSUs become exercisable in three equal installments beginning on the first anniversary after the date of grant, subject to continued employment through the vesting period or retirement. Mr. Eckersley’s and Mr. Yu’s grants dated November 1, 2011 and Ms. Santoro’s grant dated August 5, 2010 vest 100% on the third anniversary of the grant date.
|
(d)
|
The market value was computed based on $47.96, the closing market price of Ingersoll Rand’s ordinary shares on the NYSE at December 31, 2012.
|
(e)
|
This column represents unvested and unearned PSUs. PSUs vest upon the completion of a three-year performance period. The actual number of shares an NEO will receive, if any, is subject to achievement of the performance goals as certified by the Ingersoll Rand Compensation Committee, and continued employment through the performance certification date or retirement.
|
(f)
|
Mr. Petratis was not employed by Ingersoll Rand in 2012 and therefore no historical information is available for him.
|
Name
|
|
Option Awards
|
|
Stock Awards
|
||||||||||
Number of
Shares
Acquired on
Exercise
(#)
|
|
Value
Realized on
Exercise
($)
(a)
|
|
Number of Shares
Acquired on Vesting
(#)
|
|
Value
Realized on
Vesting
($)
(b) |
||||||||
D. D. Petratis (c)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
P. S. Shannon
|
|
29,900
|
|
|
473,268
|
|
|
3,467
|
|
|
133,594
|
|
||
T. P. Eckersley
|
|
8,943
|
|
|
278,619
|
|
|
3,678
|
|
|
141,930
|
|
||
B. A. Santoro
|
|
7,000
|
|
|
171,091
|
|
|
3,189
|
|
|
123,220
|
|
||
F. W. Yu
|
|
2,936
|
|
|
84,983
|
|
|
822
|
|
|
31,910
|
|
(a)
|
This column reflects the aggregate dollar amount realized by the NEO upon the exercise of the stock options by determining the difference between the market price of Ingersoll Rand’s ordinary shares at exercise and the exercise price of the stock options.
|
(b)
|
Reflects the value of the RSUs that vested on February 12, 2012, February 14, 2012 and February 16, 2012, based on the average of the high and low stock price of Ingersoll Rand’s ordinary shares on the vesting date.
|
(c)
|
Mr. Petratis was not employed by Ingersoll Rand in 2012 and therefore no historical information is available for him.
|
•
|
the Pension Plan;
|
•
|
the Supplemental Pension Plans; and
|
•
|
the EOSP or the KMP.
|
Name
|
|
Plan
Name
|
|
Number
of Years
Credited
Service
(#)
(a)
|
|
Present
Value of
Accumulated
Benefit
($)
(b)
|
|
Payments
During
Last Fiscal
Year
($)
|
||||||
D. D. Petratis (c)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
P. S. Shannon
|
|
Pension Plan
|
|
10.67
|
|
|
110,652
|
|
|
—
|
|
|||
|
|
Supplemental Pension Plan II
|
|
10.67
|
|
|
117,503
|
|
|
—
|
|
|||
|
|
EOSP
|
|
11.00
|
|
|
1,222,743
|
|
|
—
|
|
|||
T. P. Eckersley
|
|
Pension Plan
|
|
5.17
|
|
|
50,918
|
|
|
—
|
|
|||
|
|
Supplemental Pension Plan II
|
|
5.17
|
|
|
65,632
|
|
|
—
|
|
|||
|
|
KMP
|
|
5.17
|
|
|
391,777
|
|
|
—
|
|
|||
B. A. Santoro
|
|
Pension Plan
|
|
16.58
|
|
|
233,355
|
|
|
—
|
|
|||
|
|
Supplemental Pension Plan I
|
|
8.58
|
|
|
5,581
|
|
|
—
|
|
|||
|
|
Supplemental Pension Plan II
|
|
16.58
|
|
|
98,140
|
|
|
—
|
|
|||
|
|
EOSP
|
|
17.00
|
|
|
1,700,974
|
|
|
—
|
|
|||
F. W. Yu (c)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
(a)
|
Under the EOSP or the KMP, for officers covered prior to May 19, 2009, a full year of service is credited for any year in which they work at least one day. In the Pension Plan, the Supplemental Pension Plans, the EOSP and the KMP for officers first covered on or after May 19, 2009, the number of years of credited service is based on elapsed time (
i.e.
, credit is given for each month in which a participant works at least one day). The Supplemental Pension Plan II was established as a mirror plan, effective January 1, 2005. The years of credited service used for calculating benefits under (i) the Supplemental Pension Plan I are the years of credited service through December 31, 2004, and (ii) the Pension Plan, EOSP, KMP and Supplemental Pension Plan II are the years of credited service through December 31, 2012. The benefits earned under the Supplemental Pension Plan I serve as offsets to the benefits earned under the Supplemental Pension Plan II.
|
(b)
|
The amounts in this column reflect the estimated present value of each NEO’s accumulated benefit under the plans indicated. The calculations reflect the value of the benefits assuming that each NEO was fully vested under each plan. The benefits were computed as of December 31, 2012, consistent with the assumptions described in Note 11, “Pensions and Postretirement Benefits Other than Pensions,” to the annual combined financial statements included elsewhere in this Information Statement.
|
(c)
|
Mr. Petratis was not employed by Ingersoll Rand in 2012 and therefore no historical information is available for him. Mr. Yu does not participate in any company defined benefit plan.
|
Name
|
|
Executive
Contributions
in Last Fiscal
Year ($)
(a)
|
|
Registrant
Contributions
in Last Fiscal
Year
($)
(b)
|
|
Aggregate
Earnings in
Last Fiscal
Year ($)
(c)
|
|
Aggregate
Withdrawals/
Distributions
($)
|
|
Aggregate
Balance at
Last Fiscal
Year End
($)
|
|||||
D. D. Petratis (d)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
P. S. Shannon
|
|
|
|
|
|
|
|
|
|
|
|||||
EDCP II
|
|
—
|
|
|
—
|
|
|
282,530
|
|
|
—
|
|
|
1,067,830
|
|
Supplemental ESP
|
|
—
|
|
|
17,643
|
|
|
78,084
|
|
|
—
|
|
|
234,486
|
|
T. P. Eckersley
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
EDCP II
|
|
75,924
|
|
|
—
|
|
|
107,827
|
|
|
—
|
|
|
556,465
|
|
Supplemental ESP
|
|
—
|
|
|
17,791
|
|
|
47,125
|
|
|
—
|
|
|
146,990
|
|
B. A. Santoro
|
|
|
|
|
|
|
|
|
|
|
|||||
EDCP I
|
|
—
|
|
|
—
|
|
|
935
|
|
|
—
|
|
|
7,995
|
|
Supplemental ESP
|
|
—
|
|
|
12,543
|
|
|
41,238
|
|
|
—
|
|
|
127,322
|
|
W. Yu
|
|
|
|
|
|
|
|
|
|
|
|||||
Huabao Plan
|
|
—
|
|
|
5,824
|
|
|
188
|
|
|
—
|
|
|
6,012
|
|
Generali Savings Plan
|
|
—
|
|
|
—
|
|
|
4,111
|
|
|
—
|
|
|
103,797
|
|
(a)
|
The annual deferrals (salary, AIM & PSP) are all reflected in the Salary column, the Non-Equity Incentive Plan column and the Stock Awards column, respectively of the Summary Compensation Table.
|
(b)
|
All of the amounts reflected in this column are included in the All Other Compensation column of the Summary Compensation Table and the Matching Contribution column of footnote (f) of the Summary Compensation Table.
|
(c)
|
Amounts in this column include gains and losses on investments, as well as dividends on ordinary shares or ordinary share equivalents. None of the earnings or losses reported in this column are included in the Summary Compensation Table.
|
(d)
|
Mr. Petratis was not employed by Ingersoll Rand in 2012 and therefore no historical information is available for him.
|
•
|
death, disability or retirement, RSUs, stock options and SARs continue to vest on the same basis as active employees and the stock options and SARs remain exercisable for a period of three years (or five years in the case of retirement for awards granted in 2007 and after) following termination;
|
•
|
group termination, RSUs, stock options and SARs immediately vest in the portion of the awards that would have vested within twelve months of termination and all vested stock options and SARs remain exercisable for a period of three years following termination;
|
•
|
death or disability, PSUs vest pro-rata based on the time worked during the performance period and the achievement of performance goals from the beginning of the performance period through the end of the calendar quarter in which employment terminated; and
|
•
|
retirement, group termination or job elimination, PSUs vest pro-rata based on the time worked during the performance period and the achievement of performance goals through the end of the performance period.
|
•
|
any base salary and annual bonus for a completed fiscal year that had not been paid;
|
•
|
an amount equal to the executive’s annual bonus for the last completed fiscal year pro-rated for the number of full months employed in the current fiscal year;
|
•
|
an amount equal to the executive’s base salary pro-rated for any unused vacation days;
|
•
|
a lump sum severance payment from Ingersoll Rand equal to two times the sum of:
|
▪
|
the executive’s annual salary in effect on the termination date, or, if higher, the annual salary in effect immediately prior to the reduction of the executive’s annual salary after the change in control; and
|
▪
|
the executive’s target AIM award for the year of termination or, if higher, the average of the AIM award amounts beginning three years immediately preceding the change in control and ending on the termination date; and
|
•
|
a lump sum payment equal to two times of: (a) the cash value of the target amount of the most recent PSU award; or (b) if higher, the average amounts of the last three PSU awards granted and paid to the NEO immediately preceding termination. This payment is in lieu of any rights the individual might have with respect to unvested PSU awards.
|
|
|
Retirement
($)
|
|
Involuntary
without
Cause
($)
|
|
Involuntary
with Cause
($)
|
|
Change in
Control
($)
|
|
Disability
($)
|
|
Death
($)
|
||||||
D. D. Petratis
(a)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
P. S. Shannon
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Severance (b)
|
|
—
|
|
|
355,770
|
|
|
—
|
|
|
1,184,000
|
|
|
—
|
|
|
—
|
|
2012 Earned but Unpaid AIM Award(s) (c)
|
|
—
|
|
|
167,588
|
|
|
—
|
|
|
167,588
|
|
|
—
|
|
|
—
|
|
PSP Award Payout (d)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
320,000
|
|
|
501,853
|
|
|
501,853
|
|
Value of Unvested Equity Awards (e)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
420,869
|
|
|
366,490
|
|
|
366,490
|
|
Enhanced Retirement Benefits (f)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
703,424
|
|
|
—
|
|
|
—
|
|
Outplacement (g)
|
|
—
|
|
|
14,100
|
|
|
—
|
|
|
100,000
|
|
|
—
|
|
|
—
|
|
Tax Assistance (h)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,516,411
|
|
|
—
|
|
|
—
|
|
Health Benefits (i)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
20,901
|
|
|
—
|
|
|
—
|
|
Total
|
|
—
|
|
|
537,458
|
|
|
—
|
|
|
4,433,193
|
|
|
868,343
|
|
|
868,343
|
|
T. P. Eckersley
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Severance (b)
|
|
—
|
|
|
244,246
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
2012 Earned but Unpaid AIM Award(s) (c)
|
|
—
|
|
|
238,140
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
PSP Award Payout (d)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
476,483
|
|
|
476,722
|
|
|
476,722
|
|
Value of Unvested Equity Awards (e)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
872,490
|
|
|
872,490
|
|
|
872,490
|
|
Enhanced Retirement Benefits (f)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Outplacement (g)
|
|
—
|
|
|
14,100
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Tax Assistance (h)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Health Benefits (i)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Total
|
|
—
|
|
|
496,486
|
|
|
—
|
|
|
1,348,973
|
|
|
1,349,212
|
|
|
1,349,212
|
|
B. A. Santoro
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Severance (b)
|
|
—
|
|
|
309,000
|
|
|
—
|
|
|
957,900
|
|
|
—
|
|
|
—
|
|
2012 Earned but Unpaid AIM Award(s) (c)
|
|
132,459
|
|
|
132,459
|
|
|
—
|
|
|
132,459
|
|
|
—
|
|
|
—
|
|
PSP Award Payout (d)
|
|
218,074
|
|
|
218,074
|
|
|
—
|
|
|
216,000
|
|
|
218,074
|
|
|
218,074
|
|
Value of Unvested Equity Awards (e)
|
|
526,022
|
|
|
526,022
|
|
|
—
|
|
|
575,833
|
|
|
526,022
|
|
|
526,022
|
|
Enhanced Retirement Benefits (f)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
986,855
|
|
|
—
|
|
|
—
|
|
Outplacement (g)
|
|
—
|
|
|
14,100
|
|
|
—
|
|
|
100,000
|
|
|
—
|
|
|
—
|
|
Tax Assistance (h)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,044,420
|
|
|
—
|
|
|
—
|
|
Health Benefits (i)
|
|
112,000
|
|
|
112,000
|
|
|
112,000
|
|
|
79,901
|
|
|
112,000
|
|
|
—
|
|
Total
|
|
988,555
|
|
|
1,311,655
|
|
|
—
|
|
|
4,093,368
|
|
|
856,096
|
|
|
744,096
|
|
|
|
Retirement
($)
|
|
Involuntary
without
Cause
($)
|
|
Involuntary
with Cause
($)
|
|
Change in
Control
($)
|
|
Disability
($)
|
|
Death
($)
|
||||||
F. W. Yu
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Severance (b)
|
|
—
|
|
|
456,604
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
2012 Earned but Unpaid AIM Award(s) (c)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
PSP Award Payout (d)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
15,731
|
|
|
15,779
|
|
|
15,779
|
|
Value of Unvested Equity Awards (e)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
534,916
|
|
|
530,479
|
|
|
530,479
|
|
Enhanced Retirement Benefits (f)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Outplacement (g)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Tax Assistance (h)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Health Benefits (i)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Total
|
|
—
|
|
|
456,604
|
|
|
—
|
|
|
550,647
|
|
|
546,258
|
|
|
546,258
|
|
(a)
|
Mr. Petratis was not employed by Ingersoll Rand in 2012 and therefore no historical information is available for him.
|
(b)
|
For the “Involuntary without Cause” column, the current severance guidelines permit payment of nine months of base salary plus an additional week for each year of service (rounded up) for Mr. Shannon and Ms. Santoro (capped at one year) and 6 months of base salary plus an additional week for each year of service (rounded up) for the other NEOs (capped at one year). The amount for Mr. Yu is based on Chinese law. Under the “Change in Control” column, for Mr. Shannon and Ms. Santoro, please see the section above, entitled Post-Employment Benefits, for a description of how severance is calculated.
|
(c)
|
For the “Involuntary without Cause” column, these amounts represent the prorated AIM award (up to target) that may be paid to the NEOs depending on the circumstances and timing of the termination. For the amounts under “Change in Control”, these amounts represent the actual award earned for the 2012 performance period, which may be more or less than the target award.
|
(d)
|
For the “Involuntary without Cause” column, this amount represents the cash value of the prorated PSU award payout to Ms. Santoro because she is retirement eligible. For the “Change in Control” column for Mr. Shannon and Ms. Santoro, these amounts represent the cash value of the PSU award payout, based on the appropriate multiple. For Messrs. Eckersley and Yu, these values represent what would be provided under the terms of the 2007 Plan, which provides a pro-rated payment for all outstanding awards. For the “Retirement”, “Disability” and “Death” columns, amounts represent the cash value of the prorated portion of the PSUs that vest upon such events. Amounts for each column are based on the closing stock price of the ordinary shares on December 31, 2012 ($47.96).
|
(e)
|
The amounts shown for “Retirement”, “Involuntary without Cause”, “Change in Control”, “Disability” and “Death” represent (i) the value of the unvested RSUs, which is calculated based on the number of unvested RSUs multiplied by the closing stock price of the ordinary shares on December 31, 2012 ($47.96), and (ii) the intrinsic value of the unvested stock options, which is calculated based on the difference between the closing stock price of the ordinary shares on December 31, 2012 ($47.96) and the relevant exercise price. However, only in the event of termination following a “Change in Control” is there accelerated vesting of unvested awards. In addition, in the event of a “Change in Control,” holders of outstanding stock options under the Stock Incentive Plan of 1998 may elect to receive a cash payment based on the difference between the highest fair market value of the shares during the 60 days prior to the event ($48.90) and the exercise price. For “Retirement”, “Involuntary without Cause”, “Disability” and “Death”, the awards do not accelerate but continue to vest on the same basis as active employees. Because Ms. Santoro is retirement eligible, she would continue to vest in stock options and RSUs after termination of employment for any reason other than cause.
|
(f)
|
In the event of a change in control of Ingersoll Rand and a termination of the NEOs who have change in control agreements, the present value of the pension benefits under the EOSP and Supplemental Pension Plans would be paid out as lump sums and benefits under the KMP would be paid out in accordance with the terms of the plan. While there is no additional benefit to the NEOs as a result of either voluntary retirement/resignation and/or involuntary resignation without cause, there are differences (based on the methodology mandated by the SEC) between the numbers that are shown in the Pension Benefits Table and those that would actually be payable to the NEO under these termination scenarios.
|
(g)
|
For the “Involuntary without Cause” column, each NEO, other than Mr. Yu, is eligible for outplacement services for a twelve month period, not to exceed $14,100. For the “Change in Control” column, the amount represents the maximum expenses Ingersoll Rand would reimburse Mr. Shannon and Ms. Santoro for professional outplacement services.
|
(h)
|
Pursuant to the change-in-control agreements for Mr. Shannon and Ms. Santoro, if any payment or distribution by Ingersoll to these NEOs creates certain incremental taxes, they would be entitled to receive from Ingersoll a payment in an amount sufficient to place them in the same after-tax financial position as if such taxes had not been imposed.
|
(i)
|
Represents Ingersoll Rand’s cost of health and welfare coverage. The cost for “Change in Control” is a combination of continued active coverage for two years followed by retiree coverage, while the cost shown under the other scenarios is retiree coverage only.
|
•
|
each of our shareholders who we believe (based on the assumptions described below) will beneficially own more than 5% of our outstanding ordinary shares;
|
•
|
each of our directors following the spin-off;
|
•
|
each NEO following the spin-off; and
|
•
|
all of our directors and executive officers following the spin-off as a group.
|
Name
|
|
Ordinary Shares(a)(b)
|
|
Options
Exercisable
Within 60
Days
(c)
|
||
Michael J. Chesser
|
|
—
|
|
|
—
|
|
Carla Cico
|
|
—
|
|
|
—
|
|
Kirk S. Hachigian
|
|
—
|
|
|
—
|
|
Marty E. Welch III
|
|
—
|
|
|
—
|
|
David D. Petratis
|
|
—
|
|
|
—
|
|
Patrick S. Shannon
|
|
1,210
|
|
|
5,313
|
|
Timothy P. Eckersley
|
|
9,215
|
|
|
3,290
|
|
Barbara A. Santoro
|
|
792
|
|
|
10,702
|
|
Feng (William) Yu
|
|
802
|
|
|
1,607
|
|
All directors and executive officers as a group (12 persons)(e)
|
|
13,356
|
|
|
25,235
|
|
(a)
|
Represents (i) ordinary shares held directly; (ii) unvested shares, including any RSUs or PSUs that vest within 60 days of October 1, 2013; and (iii) ordinary shares held by the trustee under the ESP for the benefit of executive officers. No director or executive officer will beneficially own 1% or more of Allegion’s ordinary shares.
|
(b)
|
Messrs. Shannon and Eckersley also notionally hold ordinary shares and ordinary share equivalents under deferred compensation plans that are not distributable within 60 days of October 1, 2013.
|
(c)
|
Represents ordinary shares as to which directors and executive officers had stock options exercisable within 60 days of October 1, 2013, under Ingersoll Rand’s Incentive Stock Plans.
|
Name and Address of Beneficial Owner
|
|
Number of Ingersoll Rand
Ordinary Shares
|
|
Number of Allegion
Ordinary Shares |
|
Percentage
of Class
|
||
BlackRock, Inc.
40 East 52nd Street
New York, New York 10022
|
|
21,628,469 (a)
|
|
7,209,489
|
|
|
7.49
|
%
|
Trian Fund Management, L.P.
280 Park Avenue, 41st Floor
New York, New York 10017
|
|
21,072,305 (b)
|
|
7,024,101
|
|
|
7.30
|
%
|
Fidelity Management and Research (FMR) LLC
82 Devonshire Street
Boston, Massachusetts 02109
|
|
16,984,883 (c)
|
|
6,661,627
|
|
|
6.92
|
%
|
(a)
|
Information regarding BlackRock, Inc. and its stockholdings was obtained from a Schedule 13G filed with the SEC on January 30, 2013. The filing indicated that, as of December 31, 2012, BlackRock, Inc. had sole voting power and sole dispositive power as to all of such shares.
|
(b)
|
Information regarding Trian and its stockholdings was obtained from the Schedule 13D (Amendment No. 3) filed with the SEC on August 13, 2012. According to the Schedule 13D (Amendment No. 3), Trian Fund Management, L.P. shares voting and dispositive power over all or some of the shares with Trian Partners, L.P., Trian Partners Master Fund, L.P., Trian Partners Parallel Fund I, L.P., Trian Partners Strategic Investment Fund, L.P., Trian Partners Strategic Investment Fund-A, L.P., Trian Partners Strategic Co-Investment Fund-A, L.P., Trian Partners Master Fund (ERISA), L.P., Trian Fund Management GP, LLC, Trian SPV (SUB) VI, L.P., Trian SPV (SUB) VI-A, L.P., Trian IR Holdco Ltd., Nelson Peltz, Peter W. May and Edward P. Garden.
|
(c)
|
Information regarding the FMR LLC and its stockholdings was obtained from a Schedule 13G (Amendment No. 4) filed with the SEC on February 14, 2013. The filing indicated that, as of December 31, 2012, FMR LLC had sole voting power as to 2,931,576 of such shares and sole dispositive power as to 16,984,883 of such shares.
|
•
|
incur additional debt;
|
•
|
provide guarantees;
|
•
|
pay dividends on or make distributions in respect of capital stock or make certain other restricted payments or investments;
|
•
|
enter into agreements that restrict distributions from restricted subsidiaries;
|
•
|
sell or otherwise dispose of assets, including capital stock of restricted subsidiaries;
|
•
|
enter into transactions with affiliates;
|
•
|
create or incur liens; and
|
•
|
merge, consolidate or sell substantially all of our assets.
|
•
|
100% of the net cash proceeds from the incurrence of indebtedness by us and our restricted subsidiaries (other than permitted debt);
|
•
|
100% of the net cash proceeds of all non-ordinary course asset sales or other dispositions of property by us and our restricted subsidiaries (including casualty insurance and condemnation proceeds, but with exceptions for sales of inventory and other ordinary course dispositions, obsolete or worn-out property, property no longer useful in the business and other exceptions);
|
•
|
50% of excess cash flow with stepdowns to 25% and 0% based on certain leverage targets.
|
•
|
create liens and encumbrances;
|
•
|
incur additional indebtedness;
|
•
|
merge, dissolve, liquidate or consolidate;
|
•
|
make acquisitions, investments, advances or loans;
|
•
|
dispose of or transfer assets;
|
•
|
pay dividends or make other payments in respect of their capital stock;
|
•
|
amend certain material governance or debt documents;
|
•
|
redeem or repurchase capital stock or prepay, redeem or repurchase certain debt;
|
•
|
engage in certain transactions with affiliates;
|
•
|
enter into certain speculative hedging arrangements; and
|
•
|
enter into certain restrictive agreements.
|
•
|
All of the assets and liabilities (including whether accrued, contingent or otherwise, and subject to certain exceptions) relating primarily to our business will be retained by or transferred to us or one of our subsidiaries, except as set forth in one of the other agreements described below.
|
•
|
All other assets and liabilities (including whether accrued, contingent or otherwise, and subject to certain exceptions) of Ingersoll Rand will be retained by or transferred to Ingersoll Rand or one of its subsidiaries (other than us or one of our subsidiaries), except as set forth in one of the other agreements described below and except for other limited exceptions that are not material that will result in us retaining or assuming other liabilities.
|
•
|
Except as expressly set forth in the Separation and Distribution Agreement or any ancillary agreements, each party shall be responsible for its own internal fees, costs and expenses incurred following the distribution date, including any costs and expenses relating to such party’s disclosure documents filed following the distribution date.
|
•
|
the liabilities or alleged liabilities each party assumed or retained pursuant to the Separation and Distribution Agreement; and
|
•
|
any breach by us or Ingersoll Rand of any provision of the Separation and Distribution Agreement or any ancillary agreement unless such ancillary agreement expressly provides for separate indemnification therein.
|
•
|
amending our objects (
i.e.
, main purposes);
|
•
|
amending our Memorandum of Association and Articles of Association;
|
•
|
approving the change of our name;
|
•
|
authorizing the entering into of a guarantee or provision of security in connection with a loan, quasi-loan or credit transaction to a director or a person who is deemed to be “connected” to a director for the purposes of the Irish Companies Acts;
|
•
|
opting out of pre-emption rights on the issuance of new shares;
|
•
|
re-registration of us from a public limited company to a private company;
|
•
|
variation of class rights attaching to classes of shares;
|
•
|
purchasing our shares off-market;
|
•
|
the reduction of share capital;
|
•
|
resolving that we be wound up by the Irish courts;
|
•
|
resolving in favor of a shareholders’ voluntary winding-up;
|
•
|
re-designation of shares into different share classes; and
|
•
|
setting the re-issue price of treasury shares.
|
(a)
|
a court-approved scheme of arrangement under the Irish Companies Acts. A scheme of arrangement with shareholders requires a court order from the High Court of Ireland and the approval of: (1) 75% of the voting shareholders by value; and (2) 50% in number of the voting shareholders, at a meeting called to approve the scheme;
|
(b)
|
through a tender offer by a third party for all of our shares. Where the holders of 80% or more of our shares have accepted an offer by a bidder for their shares, the remaining shareholders may be statutorily required to also transfer their shares to such bidder. If the bidder does not exercise its “squeeze out” right, then the non-accepting shareholders also have a statutory right to require the bidder to acquire their shares on the same terms. If our shares were listed on the official list of the Irish Stock Exchange or another regulated stock exchange in the European Economic Area (EEA), this threshold would be increased to 90%; and
|
(c)
|
it is also possible for us to be acquired by way of a merger with an EEA incorporated company under the E.U. Cross Border Merger Directive 2005/56. Such a merger must be approved by a special resolution.
|
(a)
|
any transfer of those shares, or in the case of unissued shares any transfer of the right to be issued with shares and any issue of shares, is void;
|
(b)
|
no voting rights are exercisable in respect of those shares;
|
(c)
|
no further shares may be issued in right of those shares or in pursuance of any offer made to the holder of those shares; and
|
(d)
|
no payment may be made of any sums due from us on those shares, whether in respect of capital or otherwise.
|
•
|
any business combination with an interested shareholder that has been approved by the Board of Directors; or
|
•
|
any agreement for the amalgamation, merger or consolidation of any of our subsidiaries with Allegion plc or with another of our subsidiaries if (1) the relevant provisions of our Articles of Association will not be changed or otherwise affected by or by virtue of the amalgamation, merger or consolidation and (2) the holders of greater than 50% of the voting power of Allegion plc or the subsidiary, as appropriate, immediately prior to the amalgamation, merger or consolidation continue to hold greater than 50% of the voting power of the amalgamated company immediately following the amalgamation, merger or consolidation.
|
•
|
any amalgamation, merger or consolidation of Allegion plc or one of our subsidiaries with an interested shareholder or with any person that is, or would be after such amalgamation, merger or consolidation, an affiliate or associate of an interested shareholder;
|
•
|
any transfer or other disposition to or with an interested shareholder or any affiliate or associate of an interested shareholder of all or any material part of our assets or one of our subsidiaries; and
|
•
|
any issuance or transfer of our shares upon conversion of or in exchange for the securities or assets of any interested shareholder, or with any company that is, or would be after such merger or consolidation, an affiliate or associate of an interested shareholder.
|
•
|
in the event of an offer, all classes of shareholders of the target company should be afforded equivalent treatment and, if a person acquires control of a company, the other holders of securities must be protected;
|
•
|
the holders of securities in the target company must have sufficient time and information to allow them to make an informed decision regarding the offer;
|
•
|
the board of directors of a company must act in the interests of the company as a whole and must not deny shareholders the opportunity to decide on the merits of an offer. If the board of directors of the target company advises the holders of securities as regards the offer, it must advise on the effects of the implementation of the offer on employment, employment conditions and the locations of the target company’s place of business;
|
•
|
false markets (
i.e.
, a market based on erroneous, imperfect or unequally disclosed information) in the securities of the target company or any other company concerned by the offer must not be created;
|
•
|
a bidder can only announce an offer after ensuring that he or she can pay in full the consideration offered;
|
•
|
a target company may not be hindered longer than is reasonable by an offer for its securities. This is a recognition that an offer will disrupt the day-to-day running of a target company particularly if the offer is hostile and the board of directors of the target company must divert its attention to resist the offer; and
|
•
|
acquisitions of securities (whether such acquisition is to be effected by one transaction or a series of transactions) will only be allowed to take place at an acceptable speed and subject to adequate and timely disclosure. Specifically, the acquisition of 10% or more of the issued voting shares within a seven day period that would take a shareholders’ holding to or above 15% of the issued voting shares (but less than 30%) is prohibited, subject to certain exemptions.
|
(a)
|
where the action is approved by the offeree at a general meeting; or
|
(b)
|
with the consent of the Irish Takeover Panel where:
|
(i)
|
the Irish Takeover Panel is satisfied the action would not constitute a frustrating action;
|
(ii)
|
the holders of 50% of the voting rights state in writing that they approve the proposed action and would vote in favor of it at a general meeting;
|
(iii)
|
such action is in accordance with a contract entered into prior to the announcement of the offer; or
|
(iv)
|
the decision to take such action was made before the announcement of the offer and either has been at least partially implemented or is in the ordinary course of business.
|
|
|
|
|
|
|
|
|
|
|
|
|
Allegion
Combined Statements of Comprehensive Income
In millions
|
||||||||||||
For the years ended December 31,
|
|
2012
|
|
2011
|
|
2010
|
||||||
Net revenues
|
|
$
|
2,046.6
|
|
|
$
|
2,021.2
|
|
|
$
|
1,967.7
|
|
Cost of goods sold
|
|
(1,220.6
|
)
|
|
(1,211.4
|
)
|
|
(1,201.7
|
)
|
|||
Selling and administrative expenses
|
|
(457.4
|
)
|
|
(450.8
|
)
|
|
(441.0
|
)
|
|||
Operating income
|
|
368.6
|
|
|
359.0
|
|
|
325.0
|
|
|||
Interest expense
|
|
(1.5
|
)
|
|
(1.4
|
)
|
|
(1.8
|
)
|
|||
Other, net
|
|
(3.2
|
)
|
|
4.6
|
|
|
3.5
|
|
|||
Earnings before income taxes
|
|
363.9
|
|
|
362.2
|
|
|
326.7
|
|
|||
Provision for income taxes
|
|
(135.9
|
)
|
|
(130.5
|
)
|
|
(125.7
|
)
|
|||
Earnings from continuing operations
|
|
228.0
|
|
|
231.7
|
|
|
201.0
|
|
|||
Discontinued operations, net of tax
|
|
(2.7
|
)
|
|
(7.3
|
)
|
|
(2.5
|
)
|
|||
Net earnings
|
|
225.3
|
|
|
224.4
|
|
|
198.5
|
|
|||
Less: Net earnings attributable to noncontrolling interests
|
|
(5.7
|
)
|
|
(6.3
|
)
|
|
(6.7
|
)
|
|||
Net earnings attributable to Allegion
|
|
$
|
219.6
|
|
|
$
|
218.1
|
|
|
$
|
191.8
|
|
Amounts attributable to Allegion:
|
|
|
|
|
|
|
||||||
Continuing operations
|
|
$
|
222.3
|
|
|
$
|
225.4
|
|
|
$
|
194.3
|
|
Discontinued operations
|
|
(2.7
|
)
|
|
(7.3
|
)
|
|
(2.5
|
)
|
|||
Net earnings
|
|
$
|
219.6
|
|
|
$
|
218.1
|
|
|
$
|
191.8
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
Allegion
Combined Statements of Comprehensive Income (continued)
In millions
|
||||||||||||
For the years ended December 31,
|
|
2012
|
|
2011
|
|
2010
|
||||||
Net earnings
|
|
$
|
225.3
|
|
|
$
|
224.4
|
|
|
$
|
198.5
|
|
Other comprehensive income (loss)
|
|
|
|
|
|
|
||||||
Currency translation
|
|
21.4
|
|
|
(17.9
|
)
|
|
(27.3
|
)
|
|||
Cash flow hedges and marketable securities
|
|
|
|
|
|
|
||||||
Unrealized net gains (losses) arising during period
|
|
5.3
|
|
|
(3.5
|
)
|
|
1.6
|
|
|||
Net (gains) losses reclassified into earnings
|
|
0.2
|
|
|
1.3
|
|
|
2.3
|
|
|||
Tax (expense) benefit
|
|
0.2
|
|
|
(0.4
|
)
|
|
(0.3
|
)
|
|||
Total cash flow hedges and marketable securities, net of tax
|
|
5.7
|
|
|
(2.6
|
)
|
|
3.6
|
|
|||
Pension and OPEB adjustments:
|
|
|
|
|
|
|
||||||
Prior service gains (costs) for the period
|
|
13.8
|
|
|
—
|
|
|
(0.2
|
)
|
|||
Net actuarial gains (losses) for the period
|
|
(23.0
|
)
|
|
(5.5
|
)
|
|
20.3
|
|
|||
Amortization reclassified into earnings
|
|
5.0
|
|
|
5.7
|
|
|
7.7
|
|
|||
Settlements/curtailments reclassified to earnings
|
|
2.7
|
|
|
—
|
|
|
—
|
|
|||
Currency translation and other
|
|
(1.2
|
)
|
|
(0.8
|
)
|
|
2.9
|
|
|||
Tax (expense) benefit
|
|
(2.5
|
)
|
|
1.9
|
|
|
(8.8
|
)
|
|||
Total pension and OPEB adjustments, net of tax
|
|
(5.2
|
)
|
|
1.3
|
|
|
21.9
|
|
|||
Other comprehensive income (loss), net of tax
|
|
21.9
|
|
|
(19.2
|
)
|
|
(1.8
|
)
|
|||
Total comprehensive income (loss), net of tax
|
|
$
|
247.2
|
|
|
$
|
205.2
|
|
|
$
|
196.7
|
|
Less: Total comprehensive (income) loss attributable to noncontrolling interests
|
|
(6.2
|
)
|
|
(8.2
|
)
|
|
(14.2
|
)
|
|||
Total comprehensive income (loss) attributable to Allegion
|
|
$
|
241.0
|
|
|
$
|
197.0
|
|
|
$
|
182.5
|
|
December 31,
|
|
2012
|
|
2011
|
||||
ASSETS
|
|
|
|
|
||||
Current assets:
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
317.5
|
|
|
$
|
376.8
|
|
Accounts receivable from third parties
|
|
288.2
|
|
|
287.4
|
|
||
Costs in excess of billings on uncompleted contracts
|
|
93.7
|
|
|
90.7
|
|
||
Inventories
|
|
166.4
|
|
|
163.8
|
|
||
Deferred taxes and current tax receivable
|
|
37.2
|
|
|
34.9
|
|
||
Other current assets
|
|
6.9
|
|
|
8.1
|
|
||
Total current assets
|
|
909.9
|
|
|
961.7
|
|
||
Property, plant and equipment, net
|
|
232.0
|
|
|
244.6
|
|
||
Goodwill
|
|
637.9
|
|
|
630.9
|
|
||
Intangible assets, net
|
|
150.5
|
|
|
157.5
|
|
||
Other noncurrent assets
|
|
53.5
|
|
|
41.5
|
|
||
Total assets
|
|
$
|
1,983.8
|
|
|
$
|
2,036.2
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
||||
Current liabilities:
|
|
|
|
|
||||
Accounts payable
|
|
$
|
227.2
|
|
|
$
|
218.3
|
|
Accrued compensation and benefits
|
|
60.5
|
|
|
63.1
|
|
||
Accrued expenses and other current liabilities
|
|
92.8
|
|
|
91.7
|
|
||
Short-term borrowings and current maturities of long-term debt
|
|
2.2
|
|
|
1.4
|
|
||
Total current liabilities
|
|
382.7
|
|
|
374.5
|
|
||
Long-term debt
|
|
2.8
|
|
|
3.5
|
|
||
Postemployment and other benefit liabilities
|
|
121.5
|
|
|
112.2
|
|
||
Deferred and noncurrent income taxes
|
|
92.0
|
|
|
92.4
|
|
||
Other noncurrent liabilities
|
|
18.6
|
|
|
17.8
|
|
||
Total liabilities
|
|
617.6
|
|
|
600.4
|
|
||
Equity:
|
|
|
|
|
||||
Parent company investment
|
|
1,350.9
|
|
|
1,442.9
|
|
||
Accumulated other comprehensive income (loss)
|
|
(7.7
|
)
|
|
(29.1
|
)
|
||
Total Parent Company equity
|
|
1,343.2
|
|
|
1,413.8
|
|
||
Noncontrolling interests
|
|
23.0
|
|
|
22.0
|
|
||
Total equity
|
|
1,366.2
|
|
|
1,435.8
|
|
||
Total liabilities and equity
|
|
$
|
1,983.8
|
|
|
$
|
2,036.2
|
|
Allegion
Combined Statements of Equity
In millions
|
||||||||||||||||
|
|
|
|
Parent Company Equity
|
|
|
||||||||||
|
|
Total equity
|
|
Parent company’s net investment
|
|
Accumulated other
comprehensive
income
(loss)
|
|
Noncontrolling
Interest
|
||||||||
|
|
|
||||||||||||||
Balance at December 31, 2009
|
|
$
|
1,399.1
|
|
|
$
|
1,377.5
|
|
|
$
|
1.3
|
|
|
$
|
20.3
|
|
Net earnings
|
|
198.5
|
|
|
191.8
|
|
|
—
|
|
|
6.7
|
|
||||
Other comprehensive income (loss)
|
|
(1.8
|
)
|
|
—
|
|
|
(9.3
|
)
|
|
7.5
|
|
||||
Acquisition/divestiture of noncontrolling interests
|
|
(3.0
|
)
|
|
—
|
|
|
—
|
|
|
(3.0
|
)
|
||||
Dividends declared to noncontrolling interest
|
|
(6.4
|
)
|
|
—
|
|
|
—
|
|
|
(6.4
|
)
|
||||
Distribution/contribution to/from Parent Company
|
|
(103.9
|
)
|
|
(103.9
|
)
|
|
—
|
|
|
—
|
|
||||
Other
|
|
(0.9
|
)
|
|
—
|
|
|
—
|
|
|
(0.9
|
)
|
||||
Balance at December 31, 2010
|
|
$
|
1,481.6
|
|
|
$
|
1,465.4
|
|
|
$
|
(8.0
|
)
|
|
$
|
24.2
|
|
Net earnings
|
|
224.4
|
|
|
218.1
|
|
|
—
|
|
|
6.3
|
|
||||
Other comprehensive income (loss)
|
|
(19.2
|
)
|
|
—
|
|
|
(21.1
|
)
|
|
1.9
|
|
||||
Dividends declared to noncontrolling interests
|
|
(9.3
|
)
|
|
—
|
|
|
—
|
|
|
(9.3
|
)
|
||||
Distribution/contribution to/from Parent Company
|
|
(240.6
|
)
|
|
(240.6
|
)
|
|
—
|
|
|
—
|
|
||||
Other
|
|
(1.1
|
)
|
|
—
|
|
|
—
|
|
|
(1.1
|
)
|
||||
Balance at December 31, 2011
|
|
$
|
1,435.8
|
|
|
$
|
1,442.9
|
|
|
$
|
(29.1
|
)
|
|
$
|
22.0
|
|
Net earnings
|
|
225.3
|
|
|
219.6
|
|
|
—
|
|
|
5.7
|
|
||||
Other comprehensive income (loss)
|
|
21.9
|
|
|
—
|
|
|
21.4
|
|
|
0.5
|
|
||||
Dividends declared to noncontrolling interests
|
|
(5.2
|
)
|
|
—
|
|
|
—
|
|
|
(5.2
|
)
|
||||
Distribution/contribution to/from Parent Company
|
|
(311.6
|
)
|
|
(311.6
|
)
|
|
—
|
|
|
—
|
|
||||
Other
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Balance at December 31, 2012
|
|
$
|
1,366.2
|
|
|
$
|
1,350.9
|
|
|
$
|
(7.7
|
)
|
|
$
|
23.0
|
|
Allegion
Combined Statements of Cash Flows
In millions
|
||||||||||||
For the years ended December 31,
|
|
2012
|
|
2011
|
|
2010
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
||||||
Net earnings
|
|
$
|
225.3
|
|
|
$
|
224.4
|
|
|
$
|
198.5
|
|
(Income) loss from discontinued operations, net of tax
|
|
2.7
|
|
|
7.3
|
|
|
2.5
|
|
|||
Adjustments to arrive at net cash provided by (used in) operating activities:
|
|
|
|
|
|
|
||||||
Depreciation and amortization
|
|
43.8
|
|
|
46.0
|
|
|
47.3
|
|
|||
(Gain) loss on sale of property, plant and equipment
|
|
0.1
|
|
|
2.0
|
|
|
0.4
|
|
|||
Deferred income taxes
|
|
(3.9
|
)
|
|
0.8
|
|
|
14.1
|
|
|||
Other items
|
|
12.8
|
|
|
9.5
|
|
|
(27.5
|
)
|
|||
Changes in other assets and liabilities
|
|
|
|
|
|
|
||||||
(Increase) decrease in:
|
|
|
|
|
|
|
||||||
Accounts and notes receivable
|
|
1.9
|
|
|
(12.0
|
)
|
|
(23.7
|
)
|
|||
Inventories
|
|
(0.6
|
)
|
|
(12.9
|
)
|
|
7.2
|
|
|||
Other current and noncurrent assets
|
|
(14.6
|
)
|
|
(22.3
|
)
|
|
(1.7
|
)
|
|||
Increase (decrease) in:
|
|
|
|
|
|
|
||||||
Accounts payable
|
|
8.0
|
|
|
25.5
|
|
|
3.0
|
|
|||
Other current and noncurrent liabilities
|
|
(3.6
|
)
|
|
4.5
|
|
|
(12.1
|
)
|
|||
Net cash (used in) provided by continuing operating activities
|
|
271.9
|
|
|
272.8
|
|
|
208.0
|
|
|||
Net cash (used in) provided by discontinued operating activities
|
|
(2.7
|
)
|
|
(7.3
|
)
|
|
(0.2
|
)
|
|||
Net cash provided by (used in) operating activities
|
|
269.2
|
|
|
265.5
|
|
|
207.8
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
|
||||||
Capital expenditures
|
|
(19.6
|
)
|
|
(25.5
|
)
|
|
(21.8
|
)
|
|||
Proceeds from sale of property, plant and equipment
|
|
2.1
|
|
|
2.8
|
|
|
1.7
|
|
|||
Proceeds from business dispositions, net of cash sold
|
|
—
|
|
|
19.2
|
|
|
—
|
|
|||
Net cash (used in) provided by continuing investing activities
|
|
(17.5
|
)
|
|
(3.5
|
)
|
|
(20.1
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
|
||||||
Other short-term borrowings, net
|
|
(1.0
|
)
|
|
(2.5
|
)
|
|
7.2
|
|
|||
Payments of long-term debt
|
|
(0.1
|
)
|
|
(0.1
|
)
|
|
(0.2
|
)
|
|||
Net proceeds (repayments) in debt
|
|
(1.1
|
)
|
|
(2.6
|
)
|
|
7.0
|
|
|||
Dividends paid to noncontrolling interests
|
|
(5.2
|
)
|
|
(9.3
|
)
|
|
(6.4
|
)
|
|||
Acquisition/divestiture of noncontrolling interest
|
|
—
|
|
|
—
|
|
|
(3.0
|
)
|
|||
Net transfers from (to) Parent and affiliates
|
|
(311.6
|
)
|
|
(240.6
|
)
|
|
(103.9
|
)
|
|||
Other, net
|
|
—
|
|
|
(1.1
|
)
|
|
—
|
|
|||
Net cash (used in) provided by continuing financing activities
|
|
(317.9
|
)
|
|
(253.6
|
)
|
|
(106.3
|
)
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
|
6.9
|
|
|
(9.9
|
)
|
|
1.8
|
|
|||
Net increase (decrease) in cash and cash equivalents
|
|
(59.3
|
)
|
|
(1.5
|
)
|
|
83.2
|
|
|||
Cash and cash equivalents – beginning of period
|
|
376.8
|
|
|
378.3
|
|
|
295.1
|
|
|||
Cash and cash equivalents – end of period
|
|
$
|
317.5
|
|
|
$
|
376.8
|
|
|
$
|
378.3
|
|
Cash paid during the year for:
|
|
|
|
|
|
|
||||||
Interest, net of amounts capitalized
|
|
$
|
1.2
|
|
|
$
|
1.2
|
|
|
$
|
1.1
|
|
Buildings
|
10
|
to
|
50
|
years
|
Machinery and equipment
|
2
|
to
|
12
|
years
|
Software
|
2
|
to
|
7
|
years
|
Customer relationships
|
25
|
years
|
Trademarks
|
25
|
years
|
Completed technology/patents
|
10
|
years
|
Other
|
25
|
years
|
In millions
|
|
2012
|
|
2011
|
|
2010
|
||||||
Centrally managed service costs
|
|
$
|
94.8
|
|
|
$
|
86.7
|
|
|
$
|
84.8
|
|
Historical Ingersoll Rand corporate overhead allocations
|
|
53.5
|
|
|
52.0
|
|
|
48.8
|
|
|||
Incremental corporate costs not previously allocated to businesses
|
|
28.4
|
|
|
21.8
|
|
|
24.2
|
|
|||
Total
|
|
$
|
176.7
|
|
|
$
|
160.5
|
|
|
$
|
157.8
|
|
|
|
2012
|
|
2011
|
||||||||||||||||||||
In millions
|
|
Amortized cost or cost
|
|
Unrealized
gains
|
|
Fair
value
|
|
Amortized cost or cost
|
|
Unrealized
gains
|
|
Fair
value
|
||||||||||||
Equity securities
|
|
$
|
5.5
|
|
|
$
|
11.2
|
|
|
$
|
16.7
|
|
|
$
|
5.7
|
|
|
$
|
4.7
|
|
|
$
|
10.4
|
|
In millions
|
|
2012
|
|
2011
|
||||
Raw materials
|
|
$
|
80.4
|
|
|
$
|
79.0
|
|
Work-in-process
|
|
22.2
|
|
|
17.1
|
|
||
Finished goods
|
|
95.5
|
|
|
98.6
|
|
||
|
|
198.1
|
|
|
194.7
|
|
||
LIFO reserve
|
|
(31.7
|
)
|
|
(30.9
|
)
|
||
Total
|
|
$
|
166.4
|
|
|
$
|
163.8
|
|
In millions
|
|
2012
|
|
2011
|
||||
Land
|
|
$
|
16.5
|
|
|
$
|
16.2
|
|
Buildings
|
|
132.7
|
|
|
129.0
|
|
||
Machinery and equipment
|
|
356.3
|
|
|
343.1
|
|
||
Software
|
|
81.3
|
|
|
69.7
|
|
||
|
|
586.8
|
|
|
558.0
|
|
||
Accumulated depreciation
|
|
(354.8
|
)
|
|
(313.4
|
)
|
||
Total
|
|
$
|
232.0
|
|
|
$
|
244.6
|
|
In millions
|
|
Americas
|
|
EMEIA
|
|
Asia Pacific
|
|
Total
|
||||||||
December 31, 2010 (gross)
|
|
$
|
336.4
|
|
|
$
|
536.3
|
|
|
$
|
105.1
|
|
|
$
|
977.8
|
|
Acquisitions and adjustments
|
|
2.6
|
|
|
0.3
|
|
|
—
|
|
|
2.9
|
|
||||
Currency translation
|
|
—
|
|
|
(4.3
|
)
|
|
2.4
|
|
|
(1.9
|
)
|
||||
December 31, 2011 (gross)
|
|
339.0
|
|
|
532.3
|
|
|
107.5
|
|
|
978.8
|
|
||||
Acquisitions and adjustments
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Currency translation
|
|
—
|
|
|
4.4
|
|
|
2.6
|
|
|
7.0
|
|
||||
December 31, 2012 (gross)
|
|
339.0
|
|
|
536.7
|
|
|
110.1
|
|
|
985.8
|
|
||||
Accumulated impairment *
|
|
—
|
|
|
(341.0
|
)
|
|
(6.9
|
)
|
|
(347.9
|
)
|
||||
Goodwill (net)
|
|
$
|
339.0
|
|
|
$
|
195.7
|
|
|
$
|
103.2
|
|
|
$
|
637.9
|
|
|
|
2012
|
|
2011
|
||||||||||||||||||||
In millions
|
|
Gross carrying amount
|
|
Accumulated amortization
|
|
Net carrying amount
|
|
Gross carrying amount
|
|
Accumulated amortization
|
|
Net carrying amount
|
||||||||||||
Completed technologies/patents
|
|
$
|
24.1
|
|
|
$
|
(21.7
|
)
|
|
$
|
2.4
|
|
|
$
|
23.4
|
|
|
$
|
(20.2
|
)
|
|
$
|
3.2
|
|
Customer relationships
|
|
103.7
|
|
|
(32.9
|
)
|
|
70.8
|
|
|
104.5
|
|
|
(31.1
|
)
|
|
73.4
|
|
||||||
Trademarks (finite-lived)
|
|
97.4
|
|
|
(31.5
|
)
|
|
65.9
|
|
|
95.4
|
|
|
(27.0
|
)
|
|
68.4
|
|
||||||
Other
|
|
15.8
|
|
|
(13.4
|
)
|
|
2.4
|
|
|
16.2
|
|
|
(12.7
|
)
|
|
3.5
|
|
||||||
Total finite-lived intangible assets
|
|
241.0
|
|
|
$
|
(99.5
|
)
|
|
141.5
|
|
|
239.5
|
|
|
$
|
(91.0
|
)
|
|
148.5
|
|
||||
Trademarks (indefinite-lived)
|
|
9.0
|
|
|
|
|
9.0
|
|
|
9.0
|
|
|
|
|
9.0
|
|
||||||||
Total
|
|
$
|
250.0
|
|
|
|
|
$
|
150.5
|
|
|
$
|
248.5
|
|
|
|
|
$
|
157.5
|
|
In millions
|
|
2012
|
|
2011
|
||||
Current maturities of long-term debt, including capital leases
|
|
$
|
0.9
|
|
|
$
|
1.4
|
|
Short-term borrowings
|
|
1.3
|
|
|
—
|
|
||
Total
|
|
$
|
2.2
|
|
|
$
|
1.4
|
|
In millions
|
|
2012
|
|
2011
|
||||
Long-term debt, including capital leases, at end-of-year average interest rates of 1.7% in 2012 and 2.3% in 2011, maturing in various amounts to 2016
|
|
$
|
2.8
|
|
|
$
|
3.5
|
|
In millions
|
|
||
2013
|
$
|
0.9
|
|
2014
|
0.8
|
|
|
2015
|
0.9
|
|
|
2016
|
1.1
|
|
|
Thereafter
|
—
|
|
|
Total
|
$
|
3.7
|
|
|
|
Asset derivatives
|
|
Liability derivatives
|
||||||||||||
In millions
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||
Currency derivatives designated as hedges
|
|
$
|
0.1
|
|
|
$
|
0.8
|
|
|
$
|
0.3
|
|
|
$
|
0.1
|
|
|
|
NON-U.S.
|
||||||||||
In millions
|
|
Prior service cost
|
|
Net actuarial losses
|
|
Total
|
||||||
December 31, 2011
|
|
$
|
(0.5
|
)
|
|
$
|
(44.1
|
)
|
|
$
|
(44.6
|
)
|
Current year changes recorded to Accumulated other comprehensive income (loss)
|
|
—
|
|
|
(24.3
|
)
|
|
(24.3
|
)
|
|||
Amortization reclassified to earnings
|
|
—
|
|
|
1.7
|
|
|
1.7
|
|
|||
Settlements/curtailments reclassified to earnings
|
|
—
|
|
|
0.3
|
|
|
0.3
|
|
|||
Currency translation and other
|
|
—
|
|
|
(2.6
|
)
|
|
(2.6
|
)
|
|||
December 31, 2012
|
|
$
|
(0.5
|
)
|
|
$
|
(69.0
|
)
|
|
$
|
(69.5
|
)
|
Benefit obligations at December 31,
|
|
2012
|
|
2011
|
||
Discount rate:
|
|
|
|
|
||
U.S. plans
|
|
3.75
|
%
|
|
4.25
|
%
|
Non-U.S. plans
|
|
4.50
|
%
|
|
5.25
|
%
|
Rate of compensation increase:
|
|
|
|
|
||
U.S. plans
|
|
4.00
|
%
|
|
4.00
|
%
|
Non-U.S. plans
|
|
4.25
|
%
|
|
4.25
|
%
|
In millions
|
U.S.
|
|
NON-U.S.
|
||||
2013
|
$
|
13.3
|
|
|
$
|
9.6
|
|
2014
|
13.5
|
|
|
10.9
|
|
||
2015
|
13.5
|
|
|
10.7
|
|
||
2016
|
15.4
|
|
|
10.9
|
|
||
2017
|
14.9
|
|
|
11.1
|
|
||
2018 - 2022
|
88.7
|
|
|
63.5
|
|
|
|
NON-U.S.
|
||||||||||
In millions
|
|
2012
|
|
2011
|
|
2010
|
||||||
Service cost
|
|
$
|
3.1
|
|
|
$
|
2.9
|
|
|
$
|
2.3
|
|
Interest cost
|
|
10.3
|
|
|
11.1
|
|
|
11.4
|
|
|||
Expected return on plan assets
|
|
(9.7
|
)
|
|
(10.7
|
)
|
|
(10.0
|
)
|
|||
Net amortization of:
|
|
|
|
|
|
|
||||||
Prior service costs
|
|
—
|
|
|
0.1
|
|
|
0.1
|
|
|||
Transition amount
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Plan net actuarial losses
|
|
1.7
|
|
|
2.0
|
|
|
4.0
|
|
|||
Net periodic pension benefit cost
|
|
5.4
|
|
|
5.4
|
|
|
7.8
|
|
|||
Net curtailment and settlement (gains) losses
|
|
0.3
|
|
|
—
|
|
|
—
|
|
|||
Net periodic pension benefit cost after net curtailment and settlement (gains) losses
|
|
$
|
5.7
|
|
|
$
|
5.4
|
|
|
$
|
7.8
|
|
Amounts recorded in continuing operations
|
|
$
|
5.7
|
|
|
$
|
5.4
|
|
|
$
|
7.8
|
|
Net periodic pension cost for the year ended December 31,
|
|
2012
|
|
2011
|
|
2010
|
|||
Discount rate:
|
|
|
|
|
|
|
|||
U.S. plans
|
|
|
|
|
|
|
|||
For the period January 1 to June 7
|
|
4.25
|
%
|
|
5.00
|
%
|
|
5.75
|
%
|
For the period June 8 to December 31
|
|
4.00
|
%
|
|
5.00
|
%
|
|
5.75
|
%
|
Non-U.S. plans
|
|
5.25
|
%
|
|
5.50
|
%
|
|
5.50
|
%
|
Rate of compensation increase:
|
|
|
|
|
|
|
|||
U.S. plans
|
|
4.00
|
%
|
|
4.00
|
%
|
|
4.00
|
%
|
Non-U.S. plans
|
|
4.25
|
%
|
|
4.75
|
%
|
|
4.75
|
%
|
Expected return on plan assets:
|
|
|
|
|
|
|
|||
U.S. plans
|
|
5.25
|
%
|
|
7.25
|
%
|
|
7.75
|
%
|
Non-U.S. plans
|
|
5.75
|
%
|
|
6.50
|
%
|
|
7.25
|
%
|
|
|
December 31, 2012
|
|
|
||||||||||||
|
|
Fair value measurements
|
|
Total
fair value
|
||||||||||||
In millions
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
|||||||||
Cash and cash equivalents
|
|
$
|
—
|
|
|
$
|
2.4
|
|
|
$
|
—
|
|
|
$
|
2.4
|
|
Commingled funds – equity specialty
(a)
|
|
—
|
|
|
43.4
|
|
|
—
|
|
|
43.4
|
|
||||
Fixed income investments:
|
|
|
|
|
|
|
|
|
||||||||
U.S. government and agency obligations
|
|
—
|
|
|
83.9
|
|
|
—
|
|
|
83.9
|
|
||||
Corporate and non-U.S. bonds
(b)
|
|
—
|
|
|
92.3
|
|
|
—
|
|
|
92.3
|
|
||||
Asset-backed and mortgage-backed securities
|
|
—
|
|
|
4.5
|
|
|
—
|
|
|
4.5
|
|
||||
Other fixed income
(c)
|
|
—
|
|
|
—
|
|
|
0.3
|
|
|
0.3
|
|
||||
|
|
—
|
|
|
180.7
|
|
|
0.3
|
|
|
181.0
|
|
||||
Real estate
(d)
|
|
—
|
|
|
—
|
|
|
2.7
|
|
|
2.7
|
|
||||
Total assets at fair value
|
|
$
|
—
|
|
|
$
|
226.5
|
|
|
$
|
3.0
|
|
|
$
|
229.5
|
|
Receivables and payables, net
|
|
|
|
|
|
|
|
1.4
|
|
|||||||
Net assets available for benefits
|
|
|
|
|
|
|
|
$
|
230.9
|
|
|
|
December 31, 2011
|
|
|
||||||||||||
|
|
Fair value measurements
|
|
Total
fair value
|
||||||||||||
In millions
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
|||||||||
Cash and cash equivalents
|
|
$
|
—
|
|
|
$
|
3.7
|
|
|
$
|
—
|
|
|
$
|
3.7
|
|
Commingled funds – equity specialty
(a)
|
|
—
|
|
|
43.4
|
|
|
—
|
|
|
43.4
|
|
||||
Fixed income investments:
|
|
|
|
|
|
|
|
|
||||||||
U.S. government and agency obligations
|
|
—
|
|
|
95.1
|
|
|
—
|
|
|
95.1
|
|
||||
Corporate and non-U.S. bonds
(b)
|
|
—
|
|
|
76.8
|
|
|
—
|
|
|
76.8
|
|
||||
Asset-backed and mortgage-backed securities
|
|
—
|
|
|
4.5
|
|
|
—
|
|
|
4.5
|
|
||||
Other fixed income
(c)
|
|
—
|
|
|
—
|
|
|
0.3
|
|
|
0.3
|
|
||||
|
|
—
|
|
|
176.4
|
|
|
0.3
|
|
|
176.7
|
|
||||
Real estate
(d)
|
|
—
|
|
|
—
|
|
|
2.7
|
|
|
2.7
|
|
||||
Total assets at fair value
|
|
$
|
—
|
|
|
$
|
223.5
|
|
|
$
|
3.0
|
|
|
$
|
226.5
|
|
Receivables and payables, net
|
|
|
|
|
|
|
|
(0.4
|
)
|
|||||||
Net assets available for benefits
|
|
|
|
|
|
|
|
$
|
226.1
|
|
(a)
|
This class includes commingled and registered mutual funds that focus on equity investments. It includes both indexed and actively managed funds.
|
(b)
|
This class includes state and municipal bonds.
|
(c)
|
This class includes group annuity and guaranteed interest contracts as well as other miscellaneous fixed income securities.
|
(d)
|
This class includes several private equity funds that invest in real estate. It includes both direct investment funds and funds-of-funds.
|
|
|
December 31, 2012
|
|
|
||||||||||||
|
|
Fair value measurements
|
|
Total
fair value
|
||||||||||||
In millions
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
|||||||||
Cash and cash equivalents
|
|
$
|
1.5
|
|
|
$
|
0.8
|
|
|
$
|
—
|
|
|
$
|
2.3
|
|
Commingled funds – equity specialty
(a)
|
|
—
|
|
|
68.4
|
|
|
—
|
|
|
68.4
|
|
||||
Commingled funds – fixed income specialty
(b)
|
|
—
|
|
|
113.2
|
|
|
—
|
|
|
113.2
|
|
||||
Real estate
(c)
|
|
—
|
|
|
—
|
|
|
1.6
|
|
|
1.6
|
|
||||
Total assets at fair value
|
|
$
|
1.5
|
|
|
$
|
182.4
|
|
|
$
|
1.6
|
|
|
$
|
185.5
|
|
Receivables and payables, net
|
|
|
|
|
|
|
|
(2.1
|
)
|
|||||||
Net assets available for benefits
|
|
|
|
|
|
|
|
$
|
183.4
|
|
|
|
December 31, 2011
|
|
|
||||||||||||
|
|
Fair value measurements
|
|
Total
fair value
|
||||||||||||
In millions
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
|||||||||
Cash and cash equivalents
|
|
$
|
0.3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.3
|
|
Commingled funds – equity specialty
(a)
|
|
—
|
|
|
59.2
|
|
|
—
|
|
|
59.2
|
|
||||
Commingled funds – fixed income specialty
(b)
|
|
—
|
|
|
105.1
|
|
|
—
|
|
|
105.1
|
|
||||
Real estate
(c)
|
|
—
|
|
|
—
|
|
|
1.5
|
|
|
1.5
|
|
||||
Other
(d)
|
|
—
|
|
|
—
|
|
|
0.5
|
|
|
0.5
|
|
||||
Total assets at fair value
|
|
$
|
0.3
|
|
|
$
|
164.3
|
|
|
$
|
2.0
|
|
|
$
|
166.6
|
|
Receivables and payables, net
|
|
|
|
|
|
|
|
0.3
|
|
|||||||
Net assets available for benefits
|
|
|
|
|
|
|
|
$
|
166.9
|
|
(a)
|
This class includes commingled and registered mutual funds that focus on equity investments. It includes both indexed and actively managed funds.
|
(b)
|
This class comprises commingled and registered mutual funds that focus on fixed income securities.
|
(c)
|
This class includes several private equity funds that invest in real estate. It includes both direct investment funds and funds-of-funds.
|
(d)
|
This investment comprises the Company’s non-significant pension plan assets. It mostly includes insurance contracts.
|
In millions
|
|
2012
|
|
2011
|
||||
Change in benefit obligations:
|
|
|
|
|
||||
Benefit obligation at beginning of year
|
|
$
|
28.9
|
|
|
$
|
34.3
|
|
Service cost
|
|
0.3
|
|
|
0.8
|
|
||
Interest cost
|
|
0.7
|
|
|
1.3
|
|
||
Plan participants’ contributions
|
|
0.3
|
|
|
0.3
|
|
||
Actuarial (gains) losses
|
|
3.1
|
|
|
(6.5
|
)
|
||
Benefits paid, net of Medicare Part D subsidy *
|
|
(1.3
|
)
|
|
(1.3
|
)
|
||
Amendments
|
|
(14.0
|
)
|
|
—
|
|
||
Benefit obligations at end of year
|
|
$
|
18.0
|
|
|
$
|
28.9
|
|
In millions
|
|
Prior service gains
|
|
Net actuarial losses
|
|
Total
|
||||||
Balance at December 31, 2011
|
|
$
|
0.1
|
|
|
$
|
(3.7
|
)
|
|
$
|
(3.6
|
)
|
Current year changes recorded to Accumulated other comprehensive income (loss)
|
|
14.0
|
|
|
(3.1
|
)
|
|
10.9
|
|
|||
Amortization reclassified to earnings
|
|
(2.0
|
)
|
|
0.2
|
|
|
(1.8
|
)
|
|||
Balance at December 31, 2012
|
|
$
|
12.1
|
|
|
$
|
(6.6
|
)
|
|
$
|
5.5
|
|
In millions
|
|
2012
|
|
2011
|
|
2010
|
||||||
Service cost
|
|
$
|
0.3
|
|
|
$
|
0.8
|
|
|
$
|
1.0
|
|
Interest cost
|
|
0.7
|
|
|
1.3
|
|
|
1.8
|
|
|||
Net amortization of:
|
|
|
|
|
|
|
||||||
Prior service gains
|
|
(2.0
|
)
|
|
(0.4
|
)
|
|
(0.5
|
)
|
|||
Net actuarial losses
|
|
0.2
|
|
|
—
|
|
|
0.6
|
|
|||
Net periodic postretirement benefit cost
|
|
(0.8
|
)
|
|
1.7
|
|
|
2.9
|
|
|||
Net curtailment and settlement (gains) losses
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Net periodic postretirement benefit (income) cost after net curtailment and settlement (gains) losses
|
|
$
|
(0.8
|
)
|
|
$
|
1.7
|
|
|
$
|
2.9
|
|
Amounts recorded in continuing operations
|
|
$
|
(0.8
|
)
|
|
$
|
1.7
|
|
|
$
|
2.9
|
|
Assumptions:
|
|
2012
|
|
2011
|
|
2010
|
|||
Weighted-average discount rate assumption to determine:
|
|
|
|
|
|
|
|||
Benefit obligations at December 31
|
|
3.25
|
%
|
|
4.00
|
%
|
|
5.00
|
%
|
Net periodic benefit cost
|
|
|
|
|
|
|
|||
For the period January 1 to January 31
|
|
4.00
|
%
|
|
5.00
|
%
|
|
5.50
|
%
|
For the period February 1 to December 31
|
|
3.75
|
%
|
|
5.00
|
%
|
|
5.50
|
%
|
Assumed health-care cost trend rates at December 31:
|
|
|
|
|
|
|
|||
Current year medical inflation
|
|
8.05
|
%
|
|
8.45
|
%
|
|
8.85
|
%
|
Ultimate inflation rate
|
|
5.00
|
%
|
|
5.00
|
%
|
|
5.00
|
%
|
Year that the rate reaches the ultimate trend rate
|
|
2021
|
|
|
2021
|
|
|
2021
|
|
In millions
|
|
1%
Increase
|
|
1%
Decrease
|
||
Effect on postretirement benefit obligation
|
|
0.2
|
|
|
(0.2
|
)
|
In millions
|
|
||
2013
|
$
|
1.0
|
|
2014
|
1.2
|
|
|
2015
|
1.3
|
|
|
2016
|
1.4
|
|
|
2017
|
1.4
|
|
|
2018 - 2022
|
7.7
|
|
•
|
Level 1 – Inputs based on quoted prices in active markets for identical assets or liabilities.
|
•
|
Level 2 – Inputs other than Level 1 quoted prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the asset or liability.
|
•
|
Level 3 – Unobservable inputs based on little or no market activity and that are significant to the fair value of the assets and liabilities.
|
|
|||||||||||||||
|
Fair value measurements
|
|
Total
fair value |
||||||||||||
In millions
|
Quoted Prices in Active Markets for Identical Assets (Level 1)
|
|
Significant Other Observable Inputs (Level 2)
|
|
Significant Unobservable Inputs (Level 3)
|
|
|||||||||
Recurring fair value measurements
|
|
|
|
|
|
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Marketable securities
|
$
|
16.7
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
16.7
|
|
Derivative instruments
|
—
|
|
|
0.1
|
|
|
—
|
|
|
0.1
|
|
||||
Total asset recurring fair value measurements
|
$
|
16.7
|
|
|
$
|
0.1
|
|
|
$
|
—
|
|
|
$
|
16.8
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Derivative instruments
|
$
|
—
|
|
|
$
|
0.3
|
|
|
$
|
—
|
|
|
$
|
0.3
|
|
Total liability recurring fair value measurements
|
$
|
—
|
|
|
$
|
0.3
|
|
|
$
|
—
|
|
|
$
|
0.3
|
|
|
|||||||||||||||
|
Fair value measurements
|
|
Total
fair value |
||||||||||||
In millions
|
Quoted Prices in Active Markets for Identical Assets (Level 1)
|
|
Significant Other Observable Inputs (Level 2)
|
|
Significant Unobservable Inputs (Level 3)
|
|
|||||||||
Recurring fair value measurements
|
|
|
|
|
|
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Marketable securities
|
$
|
10.4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
10.4
|
|
Derivative instruments
|
—
|
|
|
0.8
|
|
|
—
|
|
|
0.8
|
|
||||
Total asset recurring fair value measurements
|
$
|
10.4
|
|
|
$
|
0.8
|
|
|
$
|
—
|
|
|
$
|
11.2
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Derivative instruments
|
$
|
—
|
|
|
$
|
0.1
|
|
|
$
|
—
|
|
|
$
|
0.1
|
|
Total liability recurring fair value measurements
|
$
|
—
|
|
|
$
|
0.1
|
|
|
$
|
—
|
|
|
$
|
0.1
|
|
•
|
Marketable securities
– These securities include investments in publicly-traded stock of non-U.S. companies held by non-U.S. subsidiaries of the Company. The fair value is obtained for the securities based on observable market prices quoted on public stock exchanges.
|
•
|
Derivative instruments
– These instruments include forward foreign currency contracts. The fair value of the derivative instruments are determined based on a pricing model that uses spot rates and forward prices from actively quoted currency markets that are readily accessible and observable.
|
In millions
|
|
Cash flow hedges and marketable securities
|
|
Pension and OPEB Items
|
|
Foreign Currency Items
|
|
Total
|
||||||||
December 31, 2010
|
|
$
|
7.8
|
|
|
$
|
(91.8
|
)
|
|
$
|
76.0
|
|
|
$
|
(8.0
|
)
|
Other comprehensive income (loss), net of tax
|
|
(2.6
|
)
|
|
1.3
|
|
|
(19.8
|
)
|
|
(21.1
|
)
|
||||
December 31, 2011
|
|
$
|
5.2
|
|
|
$
|
(90.5
|
)
|
|
$
|
56.2
|
|
|
$
|
(29.1
|
)
|
Other comprehensive income (loss), net of tax
|
|
5.7
|
|
|
(5.2
|
)
|
|
20.9
|
|
|
21.4
|
|
||||
December 31, 2012
|
|
$
|
10.9
|
|
|
$
|
(95.7
|
)
|
|
$
|
77.1
|
|
|
$
|
(7.7
|
)
|
In millions
|
|
2012
|
|
2011
|
|
2010
|
||||||
Foreign currency items
|
|
$
|
0.5
|
|
|
$
|
1.9
|
|
|
$
|
7.5
|
|
Total other comprehensive income (loss) attributable to noncontrolling interests
|
|
$
|
0.5
|
|
|
$
|
1.9
|
|
|
$
|
7.5
|
|
In millions
|
|
2012
|
|
2011
|
|
2010
|
||||||
Stock options
|
|
$
|
1.7
|
|
|
$
|
2.1
|
|
|
$
|
3.1
|
|
RSUs
|
|
2.6
|
|
|
2.4
|
|
|
2.0
|
|
|||
PSUs
|
|
1.5
|
|
|
(0.1
|
)
|
|
3.1
|
|
|||
Deferred compensation
|
|
0.5
|
|
|
(0.1
|
)
|
|
0.6
|
|
|||
Pre-tax expense
|
|
6.3
|
|
|
4.3
|
|
|
8.8
|
|
|||
Tax benefit
|
|
(2.4
|
)
|
|
(1.6
|
)
|
|
(3.4
|
)
|
|||
Total
|
|
$
|
3.9
|
|
|
$
|
2.7
|
|
|
$
|
5.4
|
|
|
|
2012
|
|
2011
|
||
Dividend yield
|
|
1.33
|
%
|
|
1.33
|
%
|
Volatility
|
|
43.62
|
%
|
|
34.81
|
%
|
Risk-free rate of return
|
|
0.92
|
%
|
|
2.45
|
%
|
Expected life
|
|
5.1 years
|
|
|
5.3 years
|
|
|
|
Shares
subject
to option
|
|
Weighted-
average
exercise price
|
|
Aggregate
intrinsic
value (millions)
|
|
Weighted-
average
remaining life
|
|||||
December 31, 2009
|
|
2,239,577
|
|
|
$
|
33.37
|
|
|
|
|
|
||
Granted
|
|
235,954
|
|
|
31.71
|
|
|
|
|
|
|||
Exercised
|
|
(318,176
|
)
|
|
30.88
|
|
|
|
|
|
|||
Cancelled
|
|
(87,816
|
)
|
|
33.15
|
|
|
|
|
|
|||
Transfers, net
|
|
(122,359
|
)
|
|
34.12
|
|
|
|
|
|
|||
December 31, 2010
|
|
1,947,180
|
|
|
33.54
|
|
|
|
|
|
|||
Granted
|
|
207,962
|
|
|
44.95
|
|
|
|
|
|
|||
Exercised
|
|
(526,327
|
)
|
|
32.54
|
|
|
|
|
|
|||
Cancelled
|
|
(145,565
|
)
|
|
33.91
|
|
|
|
|
|
|||
Transfers, net
|
|
(203,693
|
)
|
|
35.22
|
|
|
|
|
|
|||
December 31, 2011
|
|
1,279,557
|
|
|
35.49
|
|
|
|
|
|
|||
Granted
|
|
144,051
|
|
|
40.63
|
|
|
|
|
|
|||
Exercised
|
|
(194,860
|
)
|
|
26.18
|
|
|
|
|
|
|||
Cancelled
|
|
(13,159
|
)
|
|
42.65
|
|
|
|
|
|
|||
Transfers, net
|
|
(113,460
|
)
|
|
35.00
|
|
|
|
|
|
|||
Outstanding December 31, 2012
|
|
1,102,129
|
|
|
$
|
37.77
|
|
|
$
|
11.3
|
|
|
5.6
|
Exercisable December 31, 2012
|
|
786,186
|
|
|
$
|
36.55
|
|
|
$
|
9.0
|
|
|
4.5
|
|
|
|
|
|
|
Options outstanding
|
|
Options exercisable
|
||||||||||||||||||
Range of
exercise price
|
|
Number
outstanding at
December 31,
2012
|
|
Weighted-
average
remaining
life
|
|
Weighted-
average
exercise
price
|
|
Number
outstanding at
December 31,
2012
|
|
Weighted-
average
remaining
life
|
|
Weighted-
average
exercise
price
|
||||||||||||||
$
|
10.01
|
|
|
—
|
|
$
|
20.00
|
|
|
116,076
|
|
|
5.5
|
|
$
|
16.78
|
|
|
116,076
|
|
|
5.5
|
|
$
|
16.78
|
|
20.01
|
|
|
—
|
|
30.00
|
|
|
1,440
|
|
|
2.1
|
|
27.35
|
|
|
1,440
|
|
|
2.1
|
|
27.35
|
|
||||
30.01
|
|
|
—
|
|
40.00
|
|
|
474,765
|
|
|
4.4
|
|
36.29
|
|
|
405,678
|
|
|
3.9
|
|
37.02
|
|
||||
40.01
|
|
|
—
|
|
50.00
|
|
|
484,950
|
|
|
6.7
|
|
43.58
|
|
|
240,027
|
|
|
5.1
|
|
43.97
|
|
||||
50.01
|
|
|
—
|
|
60.00
|
|
|
24,898
|
|
|
5.2
|
|
51.30
|
|
|
22,965
|
|
|
5.0
|
|
51.38
|
|
||||
|
|
|
|
|
|
|
|
1,102,129
|
|
|
5.6
|
|
$
|
37.77
|
|
|
786,186
|
|
|
4.5
|
|
$
|
36.55
|
|
|
|
RSUs
|
|
Weighted-
average grant
date fair value
|
|||
Outstanding and unvested at December 31, 2009
|
|
142,047
|
|
|
$
|
16.85
|
|
Granted
|
|
116,320
|
|
|
31.68
|
|
|
Vested
|
|
(44,665
|
)
|
|
16.85
|
|
|
Cancelled
|
|
(9,859
|
)
|
|
22.20
|
|
|
Transfers, net
|
|
(7,943
|
)
|
|
16.85
|
|
|
Outstanding and unvested at December 31, 2010
|
|
195,900
|
|
|
$
|
25.35
|
|
Granted
|
|
93,464
|
|
|
44.86
|
|
|
Vested
|
|
(71,438
|
)
|
|
23.88
|
|
|
Cancelled
|
|
(37,324
|
)
|
|
33.90
|
|
|
Transfers, net
|
|
(14,533
|
)
|
|
24.44
|
|
|
Outstanding and unvested at December 31, 2011
|
|
166,069
|
|
|
$
|
35.11
|
|
Granted
|
|
68,429
|
|
|
40.70
|
|
|
Vested
|
|
(72,300
|
)
|
|
29.99
|
|
|
Cancelled
|
|
(7,931
|
)
|
|
41.47
|
|
|
Transfers, net
|
|
(10,214
|
)
|
|
34.73
|
|
|
Outstanding and unvested at December 31, 2012
|
|
144,053
|
|
|
$
|
40.02
|
|
|
|
PSUs
|
|
Weighted-average grant date fair value
|
|||
Outstanding and unvested at December 31, 2009
|
|
338,708
|
|
|
$
|
18.81
|
|
Granted
|
|
92,428
|
|
|
32.23
|
|
|
Vested
|
|
(30,000
|
)
|
|
39.00
|
|
|
Transfers, net
|
|
(3,720
|
)
|
|
16.85
|
|
|
Outstanding and unvested at December 31, 2010
|
|
397,416
|
|
|
$
|
20.42
|
|
Granted
|
|
71,900
|
|
|
46.73
|
|
|
Vested
|
|
(112,496
|
)
|
|
16.95
|
|
|
Forfeited
|
|
(72,620
|
)
|
|
28.75
|
|
|
Transfers, net
|
|
(30,078
|
)
|
|
27.10
|
|
|
Outstanding and unvested at December 31, 2011
|
|
254,122
|
|
|
$
|
27.10
|
|
Granted
|
|
37,746
|
|
|
50.75
|
|
|
Forfeited
|
|
(126,982
|
)
|
|
17.80
|
|
|
Transfers, net
|
|
(22,430
|
)
|
|
39.13
|
|
|
Outstanding and unvested at December 31, 2012
|
|
142,456
|
|
|
$
|
39.13
|
|
In millions
|
|
2012
|
|
2011
|
|
2010
|
||||||
Americas
|
|
$
|
1.7
|
|
|
$
|
(0.8
|
)
|
|
$
|
1.7
|
|
EMEIA
|
|
5.8
|
|
|
1.1
|
|
|
0.7
|
|
|||
Asia Pacific
|
|
—
|
|
|
—
|
|
|
0.6
|
|
|||
Total
|
|
$
|
7.5
|
|
|
$
|
0.3
|
|
|
$
|
3.0
|
|
Cost of goods sold
|
|
$
|
3.0
|
|
|
$
|
0.1
|
|
|
$
|
1.0
|
|
Selling and administrative expenses
|
|
4.5
|
|
|
0.2
|
|
|
2.0
|
|
|||
Total
|
|
$
|
7.5
|
|
|
$
|
0.3
|
|
|
$
|
3.0
|
|
In millions
|
|
Americas
|
|
EMEIA
|
|
Asia Pacific
|
|
Total
|
||||||||
December 31, 2010
|
|
$
|
4.8
|
|
|
$
|
3.4
|
|
|
$
|
0.7
|
|
|
$
|
8.9
|
|
Additions, net of reversals
|
|
(0.8
|
)
|
*
|
1.1
|
|
|
—
|
|
|
0.3
|
|
||||
Cash and non-cash uses
|
|
(2.3
|
)
|
|
(4.1
|
)
|
|
(0.7
|
)
|
|
(7.1
|
)
|
||||
Currency translation
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
December 31, 2011
|
|
1.7
|
|
|
0.4
|
|
|
—
|
|
|
2.1
|
|
||||
Additions, net of reversals
|
|
1.7
|
|
|
5.8
|
|
|
—
|
|
|
7.5
|
|
||||
Cash and non-cash uses
|
|
(3.4
|
)
|
|
(3.2
|
)
|
|
—
|
|
|
(6.6
|
)
|
||||
Currency translation
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
December 31, 2012
|
|
$
|
—
|
|
|
$
|
3.0
|
|
|
$
|
—
|
|
|
$
|
3.0
|
|
In millions
|
|
2012
|
|
2011
|
|
2010
|
||||||
Interest income
|
|
$
|
0.1
|
|
|
$
|
0.4
|
|
|
$
|
0.5
|
|
Exchange gain (loss)
|
|
(3.3
|
)
|
|
4.1
|
|
|
3.1
|
|
|||
Other
|
|
—
|
|
|
0.1
|
|
|
(0.1
|
)
|
|||
Other, net
|
|
$
|
(3.2
|
)
|
|
$
|
4.6
|
|
|
$
|
3.5
|
|
In millions
|
|
2012
|
|
2011
|
|
2010
|
||||||
United States
|
|
$
|
317.0
|
|
|
$
|
291.1
|
|
|
$
|
266.4
|
|
Non-U.S.
|
|
46.9
|
|
|
71.1
|
|
|
60.3
|
|
|||
Total
|
|
$
|
363.9
|
|
|
$
|
362.2
|
|
|
$
|
326.7
|
|
In millions
|
|
2012
|
|
2011
|
|
2010
|
||||||
Current tax expense (benefit):
|
|
|
|
|
|
|
||||||
United States
|
|
$
|
121.3
|
|
|
$
|
102.4
|
|
|
$
|
86.0
|
|
Non-U.S.
|
|
18.6
|
|
|
27.3
|
|
|
25.6
|
|
|||
Total:
|
|
139.9
|
|
|
129.7
|
|
|
111.6
|
|
|||
Deferred tax expense (benefit):
|
|
|
|
|
|
|
||||||
United States
|
|
(4.0
|
)
|
|
(0.4
|
)
|
|
15.0
|
|
|||
Non-U.S.
|
|
—
|
|
|
1.2
|
|
|
(0.9
|
)
|
|||
Total:
|
|
(4.0
|
)
|
|
0.8
|
|
|
14.1
|
|
|||
Total tax expense (benefit):
|
|
|
|
|
|
|
||||||
United States
|
|
117.3
|
|
|
102.0
|
|
|
101.0
|
|
|||
Non-U.S.
|
|
18.6
|
|
|
28.5
|
|
|
24.7
|
|
|||
Total
|
|
$
|
135.9
|
|
|
$
|
130.5
|
|
|
$
|
125.7
|
|
|
|
Percent of pretax income
|
|||||||
|
|
2012
|
|
2011
|
|
2010
|
|||
Statutory U.S. rate
|
|
35.0
|
%
|
|
35.0
|
%
|
|
35.0
|
%
|
Increase (decrease) in rates resulting from:
|
|
|
|
|
|
|
|||
Non-U.S. tax rate differential
|
|
(0.5
|
)
|
|
(1.1
|
)
|
|
(0.5
|
)
|
State and local income taxes (1)
|
|
2.8
|
|
|
2.3
|
|
|
2.1
|
|
Reserves for uncertain tax positions
|
|
0.6
|
|
|
1.7
|
|
|
2.3
|
|
Other adjustments
|
|
(0.6
|
)
|
|
(1.9
|
)
|
|
(0.4
|
)
|
Effective tax rate
|
|
37.3
|
%
|
|
36.0
|
%
|
|
38.5
|
%
|
(1)
|
Net of changes in valuation allowances
|
In millions
|
|
2012
|
|
2011
|
||||
Deferred tax assets:
|
|
|
|
|
||||
Inventory and accounts receivable
|
|
$
|
7.2
|
|
|
$
|
7.1
|
|
Fixed assets and intangibles
|
|
15.2
|
|
|
15.8
|
|
||
Postemployment and other benefit liabilities
|
|
12.9
|
|
|
9.1
|
|
||
Other reserves and accruals
|
|
13.8
|
|
|
15.1
|
|
||
Net operating losses and credit carryforwards
|
|
21.5
|
|
|
26.6
|
|
||
Investment and other asset basis differences
|
|
7.3
|
|
|
10.6
|
|
||
Other
|
|
1.1
|
|
|
1.0
|
|
||
Gross deferred tax assets
|
|
79.0
|
|
|
85.3
|
|
||
Less: deferred tax valuation allowances
|
|
(5.8
|
)
|
|
(9.7
|
)
|
||
Deferred tax assets net of valuation allowances
|
|
$
|
73.2
|
|
|
$
|
75.6
|
|
Deferred tax liabilities:
|
|
|
|
|
||||
Fixed assets and intangibles
|
|
(60.0
|
)
|
|
(61.5
|
)
|
||
Other reserves and accruals
|
|
(1.4
|
)
|
|
(5.3
|
)
|
||
Other
|
|
(1.1
|
)
|
|
(2.1
|
)
|
||
Gross deferred tax liabilities
|
|
(62.5
|
)
|
|
(68.9
|
)
|
||
Net deferred tax assets (liabilities)
|
|
$
|
10.7
|
|
|
$
|
6.7
|
|
In millions
|
|
Amount
|
|
Expiration
Period
|
||
U.S. Federal net operating loss carryforwards
|
|
$
|
15.0
|
|
|
2013-2032
|
U.S. Federal credit carryforwards
|
|
0.3
|
|
|
2014-Unlimited
|
|
U.S. State net operating loss carryforwards
|
|
14.4
|
|
|
2013-2032
|
|
Non-U.S. net operating loss carryforwards
|
|
42.6
|
|
|
2013-Unlimited
|
|
Non-U.S. credit carryforwards
|
|
$
|
9.4
|
|
|
Unlimited
|
In millions
|
|
2012
|
|
2011
|
|
2010
|
||||||
Beginning balance
|
|
$
|
9.7
|
|
|
$
|
9.8
|
|
|
$
|
9.4
|
|
Increase to valuation allowance
|
|
1.8
|
|
|
2.0
|
|
|
1.4
|
|
|||
Decrease to valuation allowance
|
|
(0.1
|
)
|
|
—
|
|
|
(0.8
|
)
|
|||
Net equity with parent
|
|
(5.9
|
)
|
|
(1.6
|
)
|
|
(0.1
|
)
|
|||
Accumulated other comprehensive income (loss)
|
|
0.3
|
|
|
(0.5
|
)
|
|
(0.1
|
)
|
|||
Ending balance
|
|
$
|
5.8
|
|
|
$
|
9.7
|
|
|
$
|
9.8
|
|
In millions
|
|
2012
|
|
2011
|
|
2010
|
||||||
Beginning balance
|
|
$
|
63.0
|
|
|
$
|
53.3
|
|
|
$
|
51.4
|
|
Additions based on tax positions related to the current year
|
|
1.7
|
|
|
1.6
|
|
|
1.8
|
|
|||
Additions based on tax positions related to prior years
|
|
4.3
|
|
|
17.6
|
|
|
5.7
|
|
|||
Reductions based on tax positions related to prior years
|
|
(3.7
|
)
|
|
(8.7
|
)
|
|
(1.9
|
)
|
|||
Reductions related to settlements with tax authorities
|
|
(1.6
|
)
|
|
—
|
|
|
(0.5
|
)
|
|||
Reductions related to lapses of statute of limitations
|
|
—
|
|
|
(0.1
|
)
|
|
(2.5
|
)
|
|||
Translation (gain)/loss
|
|
(0.1
|
)
|
|
(0.7
|
)
|
|
(0.7
|
)
|
|||
Ending balance
|
|
$
|
63.6
|
|
|
$
|
63.0
|
|
|
$
|
53.3
|
|
In millions
|
|
2012
|
|
2011
|
|
2010
|
||||||
Net revenues
|
|
$
|
—
|
|
|
$
|
72.2
|
|
|
$
|
78.0
|
|
Pre-tax earnings (loss) from operations
|
|
(2.8
|
)
|
|
(2.9
|
)
|
|
(4.1
|
)
|
|||
Pre-tax gain (loss) on sale
|
|
(1.5
|
)
|
|
(6.7
|
)
|
|
—
|
|
|||
Tax benefit (expense)
|
|
1.6
|
|
|
2.3
|
|
|
1.6
|
|
|||
Discontinued operations, net of tax
|
|
$
|
(2.7
|
)
|
|
$
|
(7.3
|
)
|
|
$
|
(2.5
|
)
|
In millions
|
2012
|
|
2011
|
|
2010
|
||||||
Net revenues
|
$
|
—
|
|
|
$
|
72.2
|
|
|
$
|
78.0
|
|
After-tax earnings (loss) from operations
|
$
|
(0.5
|
)
|
|
$
|
(1.3
|
)
|
|
$
|
(2.5
|
)
|
Gain (loss) on sale, net of tax
|
(1.5
|
)
|
|
(5.2
|
)
|
|
—
|
|
|||
Discontinued operations, net of tax
|
$
|
(2.0
|
)
|
|
$
|
(6.5
|
)
|
|
$
|
(2.5
|
)
|
In millions
|
2012
|
|
2011
|
||||
Balance at beginning of period
|
$
|
9.1
|
|
|
$
|
8.6
|
|
Reductions for payments
|
(4.9
|
)
|
|
(4.5
|
)
|
||
Accruals for warranties issued during the current period
|
4.9
|
|
|
5.2
|
|
||
Changes to accruals related to preexisting warranties
|
0.4
|
|
|
(0.2
|
)
|
||
Translation
|
0.1
|
|
|
—
|
|
||
Balance at end of period
|
$
|
9.6
|
|
|
$
|
9.1
|
|
Dollar amounts in millions
|
|
2012
|
|
2011
|
|
2010
|
||||||
Americas
|
|
|
|
|
|
|
||||||
Net revenues
|
|
$
|
1,471.9
|
|
|
$
|
1,402.2
|
|
|
$
|
1,379.2
|
|
Segment operating income
|
|
377.2
|
|
|
347.8
|
|
|
322.3
|
|
|||
Segment operating margin
|
|
25.6
|
%
|
|
24.8
|
%
|
|
23.4
|
%
|
|||
Depreciation and amortization
|
|
23.3
|
|
|
22.8
|
|
|
24.2
|
|
|||
Capital expenditures
|
|
16.9
|
|
|
18.9
|
|
|
14.3
|
|
|||
Total segment assets
|
|
883.3
|
|
|
883.4
|
|
|
903.1
|
|
|||
|
|
|
|
|
|
|
||||||
EMEIA
|
|
|
|
|
|
|
||||||
Net revenues
|
|
428.3
|
|
|
476.0
|
|
|
470.5
|
|
|||
Segment operating income
|
|
8.2
|
|
|
19.4
|
|
|
17.2
|
|
|||
Segment operating margin
|
|
1.9
|
%
|
|
4.1
|
%
|
|
3.7
|
%
|
|||
Depreciation and amortization
|
|
18.3
|
|
|
20.9
|
|
|
20.7
|
|
|||
Capital expenditures
|
|
1.7
|
|
|
5.5
|
|
|
6.6
|
|
|||
Total segment assets
|
|
724.4
|
|
|
798.5
|
|
|
823.5
|
|
|||
|
|
|
|
|
|
|
||||||
Asia Pacific
|
|
|
|
|
|
|
||||||
Net revenues
|
|
146.4
|
|
|
143.0
|
|
|
118.0
|
|
|||
Segment operating income
|
|
11.4
|
|
|
11.9
|
|
|
11.0
|
|
|||
Segment operating margin
|
|
7.8
|
%
|
|
8.3
|
%
|
|
9.3
|
%
|
|||
Depreciation and amortization
|
|
2.2
|
|
|
2.3
|
|
|
2.4
|
|
|||
Capital expenditures
|
|
1.0
|
|
|
1.1
|
|
|
0.9
|
|
|||
Total segment assets
|
|
310.9
|
|
|
294.8
|
|
|
256.7
|
|
|||
|
|
|
|
|
|
|
||||||
Total net revenues
|
|
$
|
2,046.6
|
|
|
$
|
2,021.2
|
|
|
$
|
1,967.7
|
|
|
|
|
|
|
|
|
||||||
Reconciliation to Operating Income
|
|
|
|
|
|
|
||||||
Segment operating income from reportable segments
|
|
$
|
396.8
|
|
|
$
|
379.1
|
|
|
$
|
350.5
|
|
Unallocated corporate expense
|
|
(28.2
|
)
|
|
(20.1
|
)
|
|
(25.5
|
)
|
|||
Total operating income
|
|
368.6
|
|
|
359.0
|
|
|
325.0
|
|
|||
Total operating income as a percentage of revenues
|
|
18.0
|
%
|
|
17.8
|
%
|
|
16.5
|
%
|
|||
|
|
|
|
|
|
|
||||||
Depreciation and amortization from reportable segments
|
|
43.8
|
|
|
46.0
|
|
|
47.3
|
|
|||
|
|
|
|
|
|
|
||||||
Capital expenditures from reportable segments
|
|
19.6
|
|
|
25.5
|
|
|
21.8
|
|
|||
|
|
|
|
|
|
|
||||||
Assets from reportable segments
|
|
1,918.6
|
|
|
1,976.7
|
|
|
1,983.3
|
|
|||
Unallocated assets
(1)
|
|
65.2
|
|
|
59.5
|
|
|
69.2
|
|
|||
Total assets
|
|
$
|
1,983.8
|
|
|
$
|
2,036.2
|
|
|
$
|
2,052.5
|
|
In millions
|
|
2012
|
|
2011
|
|
2010
|
||||||
Revenues
|
|
|
|
|
|
|
||||||
United States
|
|
$
|
1,299.3
|
|
|
$
|
1,241.3
|
|
|
$
|
1,228.3
|
|
Non-U.S.
|
|
747.3
|
|
|
779.9
|
|
|
739.4
|
|
|||
Total
|
|
$
|
2,046.6
|
|
|
$
|
2,021.2
|
|
|
$
|
1,967.7
|
|
In millions
|
|
2012
|
|
2011
|
|
2010
|
||||||
Revenues
|
|
|
|
|
|
|
||||||
Mechanical
|
|
$
|
1,635.8
|
|
|
$
|
1,601.8
|
|
|
$
|
1,578.3
|
|
Electronic
|
|
410.8
|
|
|
419.4
|
|
|
389.4
|
|
|||
Total
|
|
$
|
2,046.6
|
|
|
$
|
2,021.2
|
|
|
$
|
1,967.7
|
|
In millions
|
|
2012
|
|
2011
|
||||
Long-lived assets
|
|
|
|
|
||||
United States
|
|
$
|
148.1
|
|
|
$
|
153.3
|
|
Non-U.S.
|
|
225.4
|
|
|
239.8
|
|
||
Total
|
|
$
|
373.5
|
|
|
$
|
393.1
|
|
Allowances for Doubtful Accounts:
|
|
||
|
|
||
Balance December 31, 2009
|
$
|
5.1
|
|
Additions charged to costs and expenses
|
2.1
|
|
|
Deductions*
|
(2.5
|
)
|
|
Currency translation
|
(0.1
|
)
|
|
Other
|
(0.3
|
)
|
|
|
|
||
Balance December 31, 2010
|
4.3
|
|
|
Additions charged to costs and expenses
|
0.9
|
|
|
Deductions*
|
(2.0
|
)
|
|
Business acquisitions and divestitures, net
|
0.2
|
|
|
|
|
||
Balance December 31, 2011
|
3.4
|
|
|
Additions charged to costs and expenses
|
2.4
|
|
|
Deductions*
|
(1.5
|
)
|
|
Currency translation
|
0.1
|
|
|
|
|
||
Balance December 31, 2012
|
$
|
4.4
|
|
(*)
|
“Deductions” include accounts and advances written off, less recoveries.
|
|
|
Nine months ended
|
||||||
|
|
September 30,
|
||||||
In millions
|
|
2013
|
|
2012
|
||||
Net revenues
|
|
$
|
1,542.9
|
|
|
$
|
1,500.4
|
|
Cost of goods sold
|
|
(899.8
|
)
|
|
(894.2
|
)
|
||
Selling and administrative expenses
|
|
(359.5
|
)
|
|
(337.0
|
)
|
||
Asset impairment
|
|
(137.6
|
)
|
|
—
|
|
||
Operating income
|
|
146.0
|
|
|
269.2
|
|
||
Interest expense
|
|
(1.4
|
)
|
|
(1.1
|
)
|
||
Other, net
|
|
(6.9
|
)
|
|
(2.6
|
)
|
||
Earnings before income taxes
|
|
137.7
|
|
|
265.5
|
|
||
Provision for income taxes
|
|
(101.9
|
)
|
|
(99.2
|
)
|
||
Earnings from continuing operations
|
|
35.8
|
|
|
166.3
|
|
||
Discontinued operations, net of tax
|
|
(0.3
|
)
|
|
(1.5
|
)
|
||
Net earnings
|
|
35.5
|
|
|
164.8
|
|
||
Less: Net earnings attributable to noncontrolling interests
|
|
(13.9
|
)
|
|
(3.9
|
)
|
||
Net earnings attributable to Allegion
|
|
$
|
21.6
|
|
|
$
|
160.9
|
|
Amounts attributable to Allegion:
|
|
|
|
|
||||
Continuing operations
|
|
$
|
21.9
|
|
|
$
|
162.4
|
|
Discontinued operations
|
|
(0.3
|
)
|
|
(1.5
|
)
|
||
Net earnings
|
|
$
|
21.6
|
|
|
$
|
160.9
|
|
|
|
|
|
|
||||
Total comprehensive income (loss)
|
|
$
|
(12.3
|
)
|
|
$
|
203.6
|
|
Less: Total comprehensive (income) loss attributable to noncontrolling interests
|
|
(14.8
|
)
|
|
(4.1
|
)
|
||
Total comprehensive income (loss) attributable to Allegion
|
|
$
|
(27.1
|
)
|
|
$
|
199.5
|
|
In millions
|
September 30,
2013 |
|
December 31,
2012 |
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
368.5
|
|
|
$
|
317.5
|
|
Accounts receivable from third parties
|
306.4
|
|
|
288.2
|
|
||
Costs in excess of billings on uncompleted contracts
|
118.7
|
|
|
93.7
|
|
||
Inventories
|
163.2
|
|
|
166.4
|
|
||
Other current assets
|
46.3
|
|
|
44.1
|
|
||
Total current assets
|
1,003.1
|
|
|
909.9
|
|
||
Property, plant and equipment, net
|
206.6
|
|
|
232.0
|
|
||
Goodwill
|
505.4
|
|
|
637.9
|
|
||
Intangible assets, net
|
145.4
|
|
|
150.5
|
|
||
Other noncurrent assets
|
64.6
|
|
|
53.5
|
|
||
Total assets
|
$
|
1,925.1
|
|
|
$
|
1,983.8
|
|
LIABILITIES AND EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
209.6
|
|
|
$
|
227.2
|
|
Accrued compensation and benefits
|
61.5
|
|
|
60.5
|
|
||
Accrued expenses and other current liabilities
|
98.4
|
|
|
92.8
|
|
||
Short-term borrowings and current maturities of long-term debt
|
2.1
|
|
|
2.2
|
|
||
Total current liabilities
|
371.6
|
|
|
382.7
|
|
||
Long-term debt
|
2.7
|
|
|
2.8
|
|
||
Postemployment and other benefit liabilities
|
139.9
|
|
|
121.5
|
|
||
Deferred and noncurrent income taxes
|
95.0
|
|
|
92.0
|
|
||
Other noncurrent liabilities
|
14.9
|
|
|
18.6
|
|
||
Total liabilities
|
624.1
|
|
|
617.6
|
|
||
Equity:
|
|
|
|
||||
Parent company investment
|
1,324.8
|
|
|
1,350.9
|
|
||
Accumulated other comprehensive income (loss)
|
(56.4
|
)
|
|
(7.7
|
)
|
||
Total Parent Company equity
|
1,268.4
|
|
|
1,343.2
|
|
||
Noncontrolling interest
|
32.6
|
|
|
23.0
|
|
||
Total equity
|
1,301.0
|
|
|
1,366.2
|
|
||
Total liabilities and equity
|
$
|
1,925.1
|
|
|
$
|
1,983.8
|
|
|
Nine months ended
|
||||||
|
September 30,
|
||||||
In millions
|
2013
|
|
2012
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net earnings
|
$
|
35.5
|
|
|
$
|
164.8
|
|
(Income) loss from discontinued operations, net of tax
|
0.3
|
|
|
1.5
|
|
||
Adjustments to arrive at net cash provided by (used in) operating activities:
|
|
|
|
||||
Asset impairment
|
137.6
|
|
|
—
|
|
||
Depreciation and amortization
|
34.2
|
|
|
32.6
|
|
||
(Gain) loss on sale of property, plant and equipment
|
(21.3
|
)
|
|
0.1
|
|
||
Changes in other assets and liabilities, net
|
(47.4
|
)
|
|
(17.7
|
)
|
||
Other, net
|
19.0
|
|
|
17.6
|
|
||
Net cash provided by (used in) continuing operating activities
|
157.9
|
|
|
198.9
|
|
||
Net cash provided by (used in) discontinued operating activities
|
(0.3
|
)
|
|
(1.5
|
)
|
||
Net cash provided by (used in) operating activities
|
157.6
|
|
|
197.4
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Capital expenditures
|
(12.0
|
)
|
|
(14.1
|
)
|
||
Proceeds from sale of property, plant and equipment
|
24.4
|
|
|
2.1
|
|
||
Net cash provided by (used in) continuing investing activities
|
12.4
|
|
|
(12.0
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Short-term borrowings, net
|
(0.1
|
)
|
|
(0.3
|
)
|
||
Payments of long-term debt
|
(0.1
|
)
|
|
(0.1
|
)
|
||
Net proceeds (repayments) in debt
|
(0.2
|
)
|
|
(0.4
|
)
|
||
Dividends paid to noncontrolling interests
|
(5.2
|
)
|
|
(2.9
|
)
|
||
Net transfers from (to) Parent and affiliates
|
(118.5
|
)
|
|
(238.8
|
)
|
||
Net cash provided by (used in) continuing financing activities
|
(123.9
|
)
|
|
(242.1
|
)
|
||
Effect of exchange rate changes on cash and cash equivalents
|
4.9
|
|
|
14.5
|
|
||
Net increase (decrease) in cash and cash equivalents
|
51.0
|
|
|
(42.2
|
)
|
||
Cash and cash equivalents - beginning of period
|
317.5
|
|
|
376.8
|
|
||
Cash and cash equivalents - end of period
|
$
|
368.5
|
|
|
$
|
334.6
|
|
In millions
|
|
2013
|
|
2012
|
||||
Centrally managed service costs
|
|
$
|
72.6
|
|
|
$
|
55.3
|
|
Historical Ingersoll Rand corporate overhead allocations
|
|
35.1
|
|
|
31.2
|
|
||
Incremental corporate costs not previously allocated to businesses
|
|
24.8
|
|
|
16.6
|
|
||
Total
|
|
$
|
132.5
|
|
|
$
|
103.1
|
|
In millions
|
September 30,
2013 |
|
December 31,
2012 |
||||
Raw materials
|
$
|
76.4
|
|
|
$
|
80.4
|
|
Work-in-process
|
32.5
|
|
|
22.2
|
|
||
Finished goods
|
87.1
|
|
|
95.5
|
|
||
|
196.0
|
|
|
198.1
|
|
||
LIFO reserve
|
(32.8
|
)
|
|
(31.7
|
)
|
||
Total
|
$
|
163.2
|
|
|
$
|
166.4
|
|
In millions
|
Americas
|
|
EMEIA
|
|
Asia Pacific
|
|
Total
|
||||||||
Balance as of December 31, 2012
|
|
|
|
|
|
|
|
|
|||||||
Goodwill (gross)
|
$
|
339.0
|
|
|
$
|
536.7
|
|
|
$
|
110.1
|
|
|
$
|
985.8
|
|
Accumulated impairment
|
—
|
|
|
(341.0
|
)
|
|
(6.9
|
)
|
|
(347.9
|
)
|
||||
|
339.0
|
|
|
195.7
|
|
|
103.2
|
|
|
637.9
|
|
||||
Acquisitions and adjustments *
|
23.8
|
|
|
—
|
|
|
(23.8
|
)
|
|
—
|
|
||||
Impairment losses **
|
—
|
|
|
(137.6
|
)
|
|
—
|
|
|
(137.6
|
)
|
||||
Currency translation
|
—
|
|
|
4.0
|
|
|
1.1
|
|
|
5.1
|
|
||||
Balance as of September 30, 2013
|
|
|
|
|
|
|
|
||||||||
Goodwill (gross)
|
362.8
|
|
|
540.7
|
|
|
87.4
|
|
|
990.9
|
|
||||
Accumulated impairment
|
—
|
|
|
(478.6
|
)
|
|
(6.9
|
)
|
|
(485.5
|
)
|
||||
|
$
|
362.8
|
|
|
$
|
62.1
|
|
|
$
|
80.5
|
|
|
$
|
505.4
|
|
|
|
September 30, 2013
|
|
December 31, 2012
|
||||||||||||||||||||
In millions
|
|
Gross carrying amount
|
|
Accumulated amortization
|
|
Net carrying amount
|
|
Gross carrying amount
|
|
Accumulated amortization
|
|
Net carrying amount
|
||||||||||||
Completed technologies/patents
|
|
$
|
25.6
|
|
|
$
|
(23.0
|
)
|
|
$
|
2.6
|
|
|
$
|
24.1
|
|
|
$
|
(21.7
|
)
|
|
$
|
2.4
|
|
Customer relationships
|
|
106.1
|
|
|
(36.8
|
)
|
|
69.3
|
|
|
103.7
|
|
|
(32.9
|
)
|
|
70.8
|
|
||||||
Trademarks (finite-lived)
|
|
99.5
|
|
|
(35.1
|
)
|
|
64.4
|
|
|
97.4
|
|
|
(31.5
|
)
|
|
65.9
|
|
||||||
Other
|
|
13.3
|
|
|
(13.2
|
)
|
|
0.1
|
|
|
15.8
|
|
|
(13.4
|
)
|
|
2.4
|
|
||||||
Total finite-lived intangible assets
|
|
244.5
|
|
|
$
|
(108.1
|
)
|
|
136.4
|
|
|
241.0
|
|
|
$
|
(99.5
|
)
|
|
141.5
|
|
||||
Trademarks (indefinite-lived)
|
|
9.0
|
|
|
|
|
9.0
|
|
|
9.0
|
|
|
|
|
9.0
|
|
||||||||
Total
|
|
$
|
253.5
|
|
|
|
|
$
|
145.4
|
|
|
$
|
250.0
|
|
|
|
|
$
|
150.5
|
|
In millions
|
|
September 30,
2013 |
|
December 31,
2012 |
||||
Current maturities of long-term debt, including capital leases
|
|
$
|
0.3
|
|
|
$
|
0.9
|
|
Short-term borrowings
|
|
1.8
|
|
|
1.3
|
|
||
Total
|
|
$
|
2.1
|
|
|
$
|
2.2
|
|
In millions
|
|
September 30,
2013 |
|
December 31,
2012 |
||||
Long-term debt, including capital leases, maturing in various amounts to 2016
|
|
$
|
2.7
|
|
|
$
|
2.8
|
|
|
Asset derivatives
|
|
Liability derivatives
|
||||||||||||
In millions
|
September 30,
2013 |
|
December 31,
2012 |
|
September 30,
2013 |
|
December 31,
2012 |
||||||||
Currency derivatives designated as hedges
|
$
|
0.3
|
|
|
$
|
0.1
|
|
|
$
|
0.3
|
|
|
$
|
0.3
|
|
|
U.S.
|
|
Non-U.S.
|
||||||||||||
In millions
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
Service cost
|
$
|
6.7
|
|
|
$
|
7.2
|
|
|
$
|
2.8
|
|
|
$
|
2.4
|
|
Interest cost
|
7.6
|
|
|
8.3
|
|
|
7.8
|
|
|
7.7
|
|
||||
Expected return on plan assets
|
(8.0
|
)
|
|
(8.7
|
)
|
|
(7.2
|
)
|
|
(7.2
|
)
|
||||
Net amortization of:
|
|
|
|
|
|
|
|
||||||||
Prior service costs
|
0.4
|
|
|
0.7
|
|
|
—
|
|
|
—
|
|
||||
Plan net actuarial losses
|
2.9
|
|
|
3.1
|
|
|
1.3
|
|
|
1.3
|
|
||||
Net periodic pension benefit cost
|
9.6
|
|
|
10.6
|
|
|
4.7
|
|
|
4.2
|
|
||||
Net curtailment and settlement losses
|
—
|
|
|
2.4
|
|
|
—
|
|
|
—
|
|
||||
Net periodic pension benefit cost after net curtailment and settlement losses
|
$
|
9.6
|
|
|
$
|
13.0
|
|
|
$
|
4.7
|
|
|
$
|
4.2
|
|
Amounts recorded in continuing operations
|
$
|
9.6
|
|
|
$
|
13.0
|
|
|
$
|
4.7
|
|
|
$
|
4.2
|
|
In millions
|
2013
|
|
2012
|
||||
Service cost
|
$
|
0.2
|
|
|
$
|
0.3
|
|
Interest cost
|
0.4
|
|
|
0.5
|
|
||
Net amortization of:
|
|
|
|
||||
Prior service gains
|
(1.7
|
)
|
|
(1.5
|
)
|
||
Net actuarial losses
|
0.2
|
|
|
0.1
|
|
||
Net periodic postretirement benefit cost (income)
|
$
|
(0.9
|
)
|
|
$
|
(0.6
|
)
|
Amounts recorded in continuing operations
|
$
|
(0.9
|
)
|
|
$
|
(0.6
|
)
|
•
|
Level 1 – Inputs based on quoted prices in active markets for identical assets or liabilities.
|
•
|
Level 2 – Inputs other than Level 1 quoted prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the asset or liability.
|
•
|
Level 3 – Unobservable inputs based on little or no market activity and that are significant to the fair value of the assets and liabilities.
|
|
Fair value measurements
|
|
Total
fair value |
||||||||||||
In millions
|
Quoted Prices in Active Markets for Identical Assets (Level 1)
|
|
Significant Other Observable Inputs (Level 2)
|
|
Significant Unobservable Inputs (Level 3)
|
|
|||||||||
Recurring fair value measurements
|
|
|
|
|
|
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Marketable securities
|
$
|
20.1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
20.1
|
|
Derivative instruments
|
—
|
|
|
0.3
|
|
|
—
|
|
|
0.3
|
|
||||
Total asset recurring fair value measurements
|
$
|
20.1
|
|
|
$
|
0.3
|
|
|
$
|
—
|
|
|
$
|
20.4
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Derivative instruments
|
$
|
—
|
|
|
$
|
0.3
|
|
|
$
|
—
|
|
|
$
|
0.3
|
|
Total liability recurring fair value measurements
|
$
|
—
|
|
|
$
|
0.3
|
|
|
$
|
—
|
|
|
$
|
0.3
|
|
|
|||||||||||||||
|
Fair value measurements
|
|
Total
fair value |
||||||||||||
In millions
|
Quoted Prices in Active Markets for Identical Assets (Level 1)
|
|
Significant Other Observable Inputs (Level 2)
|
|
Significant Unobservable Inputs (Level 3)
|
|
|||||||||
Recurring fair value measurements
|
|
|
|
|
|
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Marketable securities
|
$
|
16.7
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
16.7
|
|
Derivative instruments
|
—
|
|
|
0.1
|
|
|
—
|
|
|
0.1
|
|
||||
Total asset recurring fair value measurements
|
$
|
16.7
|
|
|
$
|
0.1
|
|
|
$
|
—
|
|
|
$
|
16.8
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Derivative instruments
|
$
|
—
|
|
|
$
|
0.3
|
|
|
$
|
—
|
|
|
$
|
0.3
|
|
Total liability recurring fair value measurements
|
$
|
—
|
|
|
$
|
0.3
|
|
|
$
|
—
|
|
|
$
|
0.3
|
|
•
|
Marketable securities
– These securities include investments in publicly-traded stock of non-U.S. companies held by non-U.S. subsidiaries of the Company. The fair value is obtained for the securities based on observable market prices quoted on public stock exchanges.
|
•
|
Derivative instruments
– These instruments include forward foreign currency contracts. The fair value of the derivative instruments are determined based on a pricing model that uses spot rates and forward prices from actively quoted currency markets that are readily accessible and observable.
|
In millions
|
Parent company's net investment
|
|
Noncontrolling
interests |
|
Total
equity |
||||||
Balance at December 31, 2012
|
$
|
1,343.2
|
|
|
$
|
23.0
|
|
|
$
|
1,366.2
|
|
Net earnings
|
21.6
|
|
|
13.9
|
|
|
35.5
|
|
|||
Currency translation
|
(56.9
|
)
|
|
0.9
|
|
|
(56.0
|
)
|
|||
Change in value of marketable securities and derivatives qualifying as cash flow hedges, net of tax
|
4.9
|
|
|
—
|
|
|
4.9
|
|
|||
Pension and OPEB adjustments, net of tax
|
3.3
|
|
|
—
|
|
|
3.3
|
|
|||
Total comprehensive income
|
(27.1
|
)
|
|
14.8
|
|
|
(12.3
|
)
|
|||
Acquisition/divestiture of noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|||
Dividends to noncontrolling interests
|
—
|
|
|
(5.2
|
)
|
|
(5.2
|
)
|
|||
Distribution/contribution to/from Parent Company
|
(47.7
|
)
|
|
—
|
|
|
(47.7
|
)
|
|||
Balance at September 30, 2013
|
$
|
1,268.4
|
|
|
$
|
32.6
|
|
|
$
|
1,301.0
|
|
In millions
|
Parent company's net investment
|
|
Noncontrolling
interests |
|
Total
equity |
||||||
Balance at December 31, 2011
|
$
|
1,413.8
|
|
|
$
|
22.0
|
|
|
$
|
1,435.8
|
|
Net earnings
|
160.9
|
|
|
3.9
|
|
|
164.8
|
|
|||
Currency translation
|
19.9
|
|
|
0.2
|
|
|
20.1
|
|
|||
Change in value of marketable securities and derivatives qualifying as cash flow hedges, net of tax
|
3.7
|
|
|
—
|
|
|
3.7
|
|
|||
Pension and OPEB adjustments, net of tax
|
15.0
|
|
|
—
|
|
|
15.0
|
|
|||
Total comprehensive income
|
199.5
|
|
|
4.1
|
|
|
203.6
|
|
|||
Dividends to noncontrolling interests
|
—
|
|
|
(2.9
|
)
|
|
(2.9
|
)
|
|||
Distribution/contribution to/from Parent Company
|
(238.8
|
)
|
|
—
|
|
|
(238.8
|
)
|
|||
Balance at September 30, 2012
|
$
|
1,374.5
|
|
|
$
|
23.2
|
|
|
$
|
1,397.7
|
|
In millions
|
|
Cash flow hedges and marketable securities
|
|
Pension and OPEB Items
|
|
Foreign Currency Items
|
|
Total
|
||||||||
December 31, 2012
|
|
$
|
10.9
|
|
|
$
|
(95.7
|
)
|
|
$
|
77.1
|
|
|
$
|
(7.7
|
)
|
Other comprehensive income before reclassifications
|
|
5.8
|
|
|
0.2
|
|
|
(56.9
|
)
|
|
(50.9
|
)
|
||||
Amounts reclassified from accumulated other comprehensive income
|
|
(0.9
|
)
|
|
3.1
|
|
|
—
|
|
|
2.2
|
|
||||
Tax (expense) benefit
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
September 30, 2013
|
|
$
|
15.8
|
|
|
$
|
(92.4
|
)
|
|
$
|
20.2
|
|
|
$
|
(56.4
|
)
|
In millions
|
2013
|
|
2012
|
||||
Stock options
|
$
|
1.4
|
|
|
$
|
1.4
|
|
RSUs
|
2.1
|
|
|
2.0
|
|
||
PSUs
|
0.9
|
|
|
1.0
|
|
||
Deferred compensation
|
1.2
|
|
|
0.4
|
|
||
Pre-tax expense
|
5.6
|
|
|
4.8
|
|
||
Tax benefit
|
(2.1
|
)
|
|
(1.8
|
)
|
||
After-tax expense
|
$
|
3.5
|
|
|
$
|
3.0
|
|
|
|
2013
|
|
2012
|
||
Dividend yield
|
|
1.60
|
%
|
|
1.33
|
%
|
Volatility
|
|
42.14
|
%
|
|
43.62
|
%
|
Risk-free rate of return
|
|
0.85
|
%
|
|
0.92
|
%
|
Expected life
|
|
5.06 years
|
|
|
5.14 years
|
|
In millions
|
2013
|
|
2012
|
||||
Americas
|
$
|
0.1
|
|
|
$
|
1.7
|
|
EMEIA
|
5.5
|
|
|
6.1
|
|
||
Asia Pacific
|
—
|
|
|
—
|
|
||
Total
|
$
|
5.6
|
|
|
$
|
7.8
|
|
Cost of goods sold
|
$
|
2.9
|
|
|
$
|
3.4
|
|
Selling and administrative expenses
|
2.7
|
|
|
4.4
|
|
||
Total
|
$
|
5.6
|
|
|
$
|
7.8
|
|
In millions
|
Americas
|
|
EMEIA
|
|
Asia Pacific
|
|
Total
|
||||||||
December 31, 2012
|
$
|
—
|
|
|
$
|
3.0
|
|
|
$
|
—
|
|
|
$
|
3.0
|
|
Additions, net of reversals
|
0.1
|
|
|
5.5
|
|
|
—
|
|
|
5.6
|
|
||||
Cash and non-cash uses
|
(0.1
|
)
|
|
(3.6
|
)
|
|
—
|
|
|
(3.7
|
)
|
||||
Currency translation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
September 30, 2013
|
$
|
—
|
|
|
$
|
4.9
|
|
|
$
|
—
|
|
|
$
|
4.9
|
|
In millions
|
2013
|
|
2012
|
||||
Interest income
|
$
|
0.1
|
|
|
$
|
(0.1
|
)
|
Exchange gain (loss)
|
(6.9
|
)
|
|
(2.4
|
)
|
||
Other
|
(0.1
|
)
|
|
(0.1
|
)
|
||
Other, net
|
$
|
(6.9
|
)
|
|
$
|
(2.6
|
)
|
In millions
|
2013
|
|
2012
|
||||
Balance at beginning of period
|
$
|
9.6
|
|
|
$
|
9.1
|
|
Reductions for payments
|
(4.4
|
)
|
|
(3.3
|
)
|
||
Accruals for warranties issued during the current period
|
3.5
|
|
|
3.6
|
|
||
Changes to accruals related to preexisting warranties
|
0.2
|
|
|
—
|
|
||
Translation
|
—
|
|
|
0.1
|
|
||
Balance at end of period
|
$
|
8.9
|
|
|
$
|
9.5
|
|
In millions
|
2013
|
|
2012
|
||||
Net revenues
|
|
|
|
||||
Americas
|
1,154.2
|
|
|
1,107.2
|
|
||
EMEIA
|
303.0
|
|
|
311.8
|
|
||
Asia Pacific
|
85.7
|
|
|
81.4
|
|
||
Total
|
$
|
1,542.9
|
|
|
$
|
1,500.4
|
|
Segment operating income
|
|
|
|
||||
Americas
|
302.8
|
|
|
282.7
|
|
||
EMEIA (a)
|
(13.2
|
)
|
|
—
|
|
||
Asia Pacific (b)
|
18.7
|
|
|
2.5
|
|
||
Total
|
$
|
308.3
|
|
|
$
|
285.2
|
|
Reconciliation to Operating income
|
|
|
|
||||
Asset impairment (a)
|
(137.6
|
)
|
|
—
|
|
||
Unallocated corporate expense
|
(24.7
|
)
|
|
(16.0
|
)
|
||
Operating income
|
$
|
146.0
|
|
|
$
|
269.2
|
|
Albania Armenia
Australia Austria Bahrain Belarus Belgium Bosnia & Herzegovina Bulgaria Canada Chile China Croatia Cyprus Czech Republic Denmark Egypt Estonia Finland France Georgia Germany Greece Hong Kong Hungary Iceland India Israel Italy Japan
Korea (Rep. of)
Kuwait Latvia Lithuania Luxembourg |
Macedonia
Malaysia Malta Mexico Moldova Montenegro Morocco Netherlands New Zealand Norway Pakistan Panama Poland Portugal Qatar Romania Russia Saudi Arabia Serbia Singapore Slovak Republic Slovenia South Africa Spain Sweden Switzerland Turkey Ukraine United Arab Emirates United Kingdom United States of America Uzbekistan Vietnam Zambia |