X
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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—
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Ireland
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98-1108930
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer
Identification No.)
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Title of each class
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Name of each exchange on which registered
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Ordinary Shares,
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New York Stock Exchange
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Par Value $0.01 per Share
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Large accelerated filer
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Accelerated filer
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Non-accelerated filer
X
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Smaller reporting company
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(Do not check if a smaller reporting company)
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Page
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Part I
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Item 1.
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Item 1A.
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Item 1B.
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Item 2.
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Item 3.
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Item 4.
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Part II
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Item 5.
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Item 6.
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Item 7.
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Item 7A.
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Item 8.
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Item 9.
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Item 9A.
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Item 9B.
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Part III
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Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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Part IV
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Item 15.
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•
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economic, political and business conditions in the markets in which we operate;
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the demand for our products and services;
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competitive factors in the industry in which we compete;
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the ability to protect and use intellectual property;
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fluctuations in currency exchange rates
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the ability to complete and integrate any acquisitions
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changes in tax requirements (including tax rate changes, new tax laws and revised tax law interpretations);
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the outcome of any litigation, governmental investigations or proceedings;
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interest rate fluctuations and other changes in borrowing costs;
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other capital market conditions, including availability of funding sources and currency exchange rate fluctuations;
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availability of and fluctuations in the prices of key commodities and the impact of higher energy prices;
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the ability to achieve cost savings in connection with our productivity programs;
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potential further impairment of our goodwill, indefinite-lived intangible assets and/or our long-lived assets;
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the possible effects on us of future legislation in the U.S. that may limit or eliminate potential U.S. tax benefits resulting from our incorporation in a non-U.S. jurisdiction, such as Ireland, or deny U.S. government contracts to us based upon our incorporation in such non-U.S. jurisdiction; and
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our ability to fully realize the expected benefits of our spin-off from Ingersoll Rand.
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the impact of potential technology or data security breaches
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the impact our substantial leverage may have on our business and operations
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Allegion Principal Products
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Door closers and controls
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Door and door frames (steel)
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Electronic security products
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Electronic and biometric access control systems
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Exit devices
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Locks, locksets and key systems
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Time, attendance and workforce productivity systems
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Video analytics systems
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Other accessories
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•
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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;
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Our consultative approach and expertise, 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
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Our operational excellence capabilities, including our global manufacturing operations and agile supply chain, which facilitate our ability to deliver specific product and system configurations to end-users worldwide, quickly and efficiently.
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recovery of construction markets in key North American markets
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heightened awareness of security requirements,
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increased global urbanization, and
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the shift to a digital, interconnected environment.
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Allegion Brands
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(listed alphabetically for each region)
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Product Category
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Americas
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EMEIA
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Asia Pacific
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Locks/Locksets/Key Systems
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Door Closers and Controls/Exit Devices
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Electronic Products and Access Control Systems, including Time, Attendance and Workforce Productivity and Video Analytics Systems
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Doors and Door Frames
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Other Accessories
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Americas
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EMEIA
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Asia Pacific
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Other Accessories (continued)
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Revenue By Geographic Destination
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Revenue By Product Category
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Von Duprin, established in 1908, was awarded the first exit device patent;
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Schlage, established in 1920, was awarded the first patents granted for the cylindrical lock and the push button lock;
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LCN, established in 1926, created the first door closure;
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CISA, established in 1926, devised the first electronically controlled lock; and
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Steelcraft Doors, established in 1927, developed the first mass-produced hollow metal door in 1942.
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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.
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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.
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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 openers, in addition to numerous other supporting components. Our electronics strategy includes designing products that employ interoperable, non-proprietary technologies, which we believe provide end-users with a level of flexibility they prefer. For instance, Schlage’s AD-series electronic lock employs open architecture that is compatible with nearly any existing access-control software system.
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in 2013, the launch of the Schlage CO-220 classroom remote lockdown lock;
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in 2013, the launch of aptiQmobile virtual credential platform, enabling use of smart phones for access control;
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in 2013, Schlage Touchscreen Deadbolt lock, designed for the home that combines stylish design with high-quality functionality, including alarm and motion detection capabilities;
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in 2013, our CISA eSigno hospitality platform that allows hotel owners to choose easily between different product types compatible with a single modular platform;
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in 2013, our CISA Multi-top Pro platform, a modular mechanical and electronic high security locking platform for glass doors;
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in 2012, our Interflex eVayo platform, an award-winning platform of access control and time and attendance reader terminals;
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in 2012, our innovative Von Duprin concealed vertical cable platform that enables shorter installation time and simplifies maintenance; and
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in 2012, our aptiQ credential and reader platform that allows end-users to use a single product family globally while also enabling the utilization of magnetic stripe, proximity and smart card credentials.
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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.
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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.
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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.
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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.
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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.
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Doors and Door Frames
: A portfolio of hollow metal doors and door frames. In select geographies, we also provide installation and service maintenance services.
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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.
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Production Facilities
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Americas
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EMEIA
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Asia Pacific
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Blue Ash, Ohio
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Durchhausen, Germany
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Auckland, New Zealand
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Bogota, Colombia
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Duzce, Turkey
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Jinshan, China
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Caracas, Venezuela
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Faenza, Italy
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Chino, California
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Feuquieres, France
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Ensenada, Mexico
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Renchen, Germany
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Indianapolis, Indiana
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Monsampolo, Italy
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Princeton, Illinois
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Sittingbourne, England
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Security, Colorado
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Tecate, Mexico
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Tijuana, Mexico
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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 crises 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 in 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 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 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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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 statements reflect allocations of corporate expenses from Ingersoll Rand for these functions and may not reflect the costs we will incur for similar services in the future as an independent company. Furthermore, we are 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, we 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 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 certain amounts of 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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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;
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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 or 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 last 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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Ordinary shares
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2013
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High
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Low
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Dividend
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Fourth quarter (since November 18, 2013)
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48.00
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40.70
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N/A
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At and for the years ended December 31,
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2013
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2012
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2011
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2010
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2009
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Net revenues
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$
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2,093.5
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$
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2,046.6
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$
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2,021.2
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$
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1,967.7
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$
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2,038.8
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Net earnings (loss) attributable to Allegion plc ordinary shareholders:
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Continuing operations (a)
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31.8
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(b)
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222.3
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225.4
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194.3
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180.4
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Discontinued operations
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(0.8
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)
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(2.7
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)
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(7.3
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)
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(2.5
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)
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(3.0
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)
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Total assets
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1,979.9
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1,983.8
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2,036.2
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2,052.5
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2,016.2
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Total debt
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1,343.9
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5.0
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4.9
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6.2
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7.9
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Total Allegion plc shareholders’ equity
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(86.8
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)
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1,343.2
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1,413.8
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1,457.4
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1,378.8
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Earnings (loss) per share attributable to Allegion plc ordinary shareholders:
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Basic:
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Continuing operations
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$
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0.33
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$
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2.32
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$
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2.35
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$
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2.02
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$
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1.88
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Discontinued operations
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(0.01
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)
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(0.03
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)
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(0.08
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)
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(0.03
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)
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(0.03
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)
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Diluted:
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Continuing operations
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$
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0.33
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|
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$
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2.32
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$
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2.35
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$
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2.02
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$
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1.88
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Discontinued operations
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(0.01
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)
|
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(0.03
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)
|
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(0.08
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)
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(0.03
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)
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(0.03
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)
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(a)
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Net earnings from continuing operations includes
$174.5 million
, $176.7 million, $160.5 million, $157.8 million and $160.9 million of centrally managed service costs and corporate allocations from Ingersoll Rand for the years ended December 31, 2013, 2012, 2011, 2010 and 2009, respectively.
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(b)
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Net earnings from continuing operations for the year ended December 31, 2013 includes an after tax, non cash goodwill impairment charge of $131.2 million and $44.8 million of discrete tax adjustments consisting of $31.5 million of expense related to valuation allowances on deferred tax assets that are no longer expected to be utilized and $13.3 million of net tax expense resulting primarily from transactions occurring to effect the Spin-off.
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Dollar amounts in millions, except per share data
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2013
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|
% of
Revenues |
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2012
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% of
Revenues |
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2011
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% of
Revenues |
|||||||||
Net revenues
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$
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2,093.5
|
|
|
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$
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2,046.6
|
|
|
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$
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2,021.2
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|
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Cost of goods sold
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1,233.9
|
|
|
58.9
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%
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1,220.6
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|
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59.7
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%
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1,211.4
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|
|
59.9
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%
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|||
Selling and administrative expenses
|
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486.2
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|
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23.2
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%
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457.4
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|
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22.3
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%
|
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450.8
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|
|
22.3
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%
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|||
Asset impairment
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137.6
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|
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6.6
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%
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—
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|
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—
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%
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|
—
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|
|
—
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%
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|||
Operating income
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235.8
|
|
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11.3
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%
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|
368.6
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|
|
18.0
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%
|
|
359.0
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|
|
17.8
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%
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Interest expense
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10.2
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|
|
|
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1.5
|
|
|
|
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1.4
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|
|
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||||||
Other expense (income), net
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7.1
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|
|
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3.2
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|
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(4.6
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)
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|
|
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Earnings before income taxes
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|
218.5
|
|
|
|
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363.9
|
|
|
|
|
362.2
|
|
|
|
||||||
Provision for income taxes
|
|
174.2
|
|
|
|
|
135.9
|
|
|
|
|
130.5
|
|
|
|
||||||
Earnings from continuing operations
|
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44.3
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|
|
|
|
228.0
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|
|
|
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231.7
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|
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|
||||||
Discontinued operations, net of tax
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|
(0.8
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)
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|
|
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(2.7
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)
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|
|
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(7.3
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)
|
|
|
||||||
Net earnings
|
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43.5
|
|
|
|
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225.3
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|
|
|
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224.4
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|
|
|
||||||
Less: Net earnings attributable to noncontrolling interests
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12.5
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|
|
|
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5.7
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|
|
|
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6.3
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|
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||||||
Net earnings attributable to Allegion plc
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|
$
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31.0
|
|
|
|
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$
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219.6
|
|
|
|
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$
|
218.1
|
|
|
|
|||
Diluted net earnings per ordinary share attributable to Allegion plc ordinary shareholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Continuing operations
|
|
$
|
0.33
|
|
|
|
|
$
|
2.32
|
|
|
|
|
$
|
2.35
|
|
|
|
|||
Discontinued operations
|
|
(0.01
|
)
|
|
|
|
(0.03
|
)
|
|
|
|
(0.08
|
)
|
|
|
||||||
Net earnings
|
|
$
|
0.32
|
|
|
|
|
$
|
2.29
|
|
|
|
|
$
|
2.27
|
|
|
|
Pricing
|
1.7
|
%
|
Volume/product mix
|
2.3
|
%
|
Impact of consolidated Asia joint venture order flow change
|
(1.3
|
)%
|
Currency exchange rates / other
|
(0.4
|
)%
|
Total
|
2.3
|
%
|
Volume/product mix
|
0.3
|
%
|
Pricing
|
2.3
|
%
|
Currency exchange rates
|
(1.3
|
)%
|
Total
|
1.3
|
%
|
In millions
|
|
2013
|
|
2012
|
|
2011
|
||||||
Interest income
|
|
$
|
(0.8
|
)
|
|
$
|
(0.1
|
)
|
|
$
|
(0.4
|
)
|
Exchange gain (loss)
|
|
7.9
|
|
|
3.3
|
|
|
(4.1
|
)
|
|||
Other
|
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
|||
Other, net
|
|
$
|
7.1
|
|
|
$
|
3.2
|
|
|
$
|
(4.6
|
)
|
Dollar amounts in millions
|
|
2013
|
|
% change
|
|
2012
|
|
% change
|
|
2011
|
||||||
Net revenues
|
|
$
|
1,514.7
|
|
|
2.9%
|
|
$
|
1,471.9
|
|
|
5.0%
|
|
$
|
1,402.2
|
|
Segment operating income
|
|
390.0
|
|
|
3.4%
|
|
377.2
|
|
|
8.5%
|
|
347.8
|
|
|||
Segment operating margin
|
|
25.7
|
%
|
|
|
|
25.6
|
%
|
|
|
|
24.8
|
%
|
Pricing
|
2.1
|
%
|
Volume/product mix
|
3.9
|
%
|
Impact of consolidated joint venture order flow change
|
(1.8
|
)%
|
Currency exchange rates/other
|
(1.3
|
)%
|
Total
|
2.9
|
%
|
Volume/product mix
|
2.3
|
%
|
Pricing
|
2.9
|
%
|
Currency exchange rates
|
(0.2
|
)%
|
Total
|
5.0
|
%
|
Dollar amounts in millions
|
|
2013
|
|
% change
|
|
2012
|
|
% change
|
|
2011
|
||||||
Net revenues
|
|
$
|
425.3
|
|
|
(0.7)%
|
|
$
|
428.3
|
|
|
(10.0)%
|
|
$
|
476.0
|
|
Segment operating income
|
|
(3.1
|
)
|
|
(137.8)%
|
|
8.2
|
|
|
(57.7)%
|
|
19.4
|
|
|||
Segment operating margin
|
|
(0.7
|
)%
|
|
|
|
1.9
|
%
|
|
|
|
4.1
|
%
|
Pricing
|
0.9
|
%
|
Volume/product mix
|
(3.7
|
)%
|
Currency exchange rates
|
2.1
|
%
|
Total
|
(0.7
|
)%
|
Volume/product mix
|
(5.0
|
)%
|
Pricing
|
1.3
|
%
|
Currency exchange rates
|
(6.3
|
)%
|
Total
|
(10.0
|
)%
|
Dollar amounts in millions
|
|
2013
|
|
% change
|
|
2012
|
|
% change
|
|
2011
|
||||||
Net revenues
|
|
$
|
153.5
|
|
|
4.8%
|
|
$
|
146.4
|
|
|
2.4%
|
|
$
|
143.0
|
|
Segment operating income
|
|
25.4
|
|
|
122.8%
|
|
11.4
|
|
|
(4.2)%
|
|
11.9
|
|
|||
Segment operating margin
|
|
16.5
|
%
|
|
|
|
7.8
|
%
|
|
|
|
8.3
|
%
|
Volume/product mix
|
3.5
|
%
|
Pricing
|
0.5
|
%
|
Currency exchange rates
|
0.8
|
%
|
Total
|
4.8
|
%
|
Volume/product mix
|
(0.2
|
)%
|
Pricing
|
0.8
|
%
|
Currency exchange rates
|
1.8
|
%
|
Total
|
2.4
|
%
|
In millions
|
|
2013
|
|
2012
|
|
2011
|
||||||
Cash provided by operating activities
|
|
$
|
223.9
|
|
|
$
|
269.2
|
|
|
$
|
265.5
|
|
Cash used in investing activities
|
|
(18.7
|
)
|
|
(17.5
|
)
|
|
(3.5
|
)
|
|||
Cash used in financing activities
|
|
(292.4
|
)
|
|
(317.9
|
)
|
|
(253.6
|
)
|
In millions
|
2013
|
|
2012
|
||||
Term Loan A Facility due 2018
|
$
|
500.0
|
|
|
$
|
—
|
|
Term Loan B Facility due 2020
|
500.0
|
|
|
—
|
|
||
5.75% Senior notes due 2021
|
300.0
|
|
|
—
|
|
||
Other debt, including capital leases, maturing in various amounts through 2016
|
2.8
|
|
|
2.8
|
|
||
Other short-term borrowings
|
41.1
|
|
|
2.2
|
|
||
Total long-term debt
|
$
|
1,343.9
|
|
|
$
|
5.0
|
|
Less current portion of long term debt
|
71.9
|
|
|
2.2
|
|
||
|
$
|
1,272.0
|
|
|
$
|
2.8
|
|
|
|
Less than
1 year
|
|
1 - 3
years
|
|
3 - 5
years
|
|
More than
5 years
|
|
Total
|
||||||||||
Short-term debt
|
|
$
|
41.9
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
41.9
|
|
Long-term debt
|
|
30.0
|
|
|
87.0
|
|
|
410.0
|
|
|
775.0
|
|
|
1,302.0
|
|
|||||
Interest payments on long-term debt
|
|
44.3
|
|
|
86.2
|
|
|
78.6
|
|
|
70.4
|
|
|
279.5
|
|
|||||
Purchase obligations
|
|
124.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
124.7
|
|
|||||
Operating leases
|
|
15.9
|
|
|
18.8
|
|
|
5.5
|
|
|
0.2
|
|
|
40.4
|
|
|||||
Total contractual cash obligations
|
|
$
|
256.8
|
|
|
$
|
192.0
|
|
|
$
|
494.1
|
|
|
$
|
845.6
|
|
|
$
|
1,788.5
|
|
•
|
Allowance for doubtful accounts – We have provided 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 policy, derived from our knowledge of our end markets, customer base and products.
|
•
|
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; and
|
•
|
Increases in our market-participant risk-adjusted weighted-average cost of capital;
|
•
|
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 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, environmental and asbestos matters and product liability, product warranty, worker’s compensation and other claims. We have recorded reserves in the combined and consolidated 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 demonstration that established criteria have been satisfied. If uncertainty exists about customer acceptance, revenue is not recognized until acceptance has occurred.
|
•
|
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 – We provide 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. We review our actuarial assumptions at each measurement date and make modifications 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
|
(a)
|
The following Combined and Consolidated Financial Statements and Financial Statement Schedules and the report thereon of PricewaterhouseCoopers LLP dated
March 10, 2014
, are presented following Item 15 of this Annual Report on Form 10-K.
|
(b)
|
The unaudited selected quarterly financial data for the two years ended
December 31,
is as follows:
|
In millions, except per share amounts
|
|
2013
|
||||||||||||||
|
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Fourth
Quarter
|
||||||||
Net revenues
|
|
$
|
473.3
|
|
|
$
|
534.3
|
|
|
$
|
535.3
|
|
|
$
|
550.6
|
|
Cost of goods sold
|
|
287.2
|
|
|
315.8
|
|
|
296.8
|
|
|
334.1
|
|
||||
Operating income (loss)
|
|
68.8
|
|
|
99.3
|
|
|
(22.1
|
)
|
|
89.8
|
|
||||
Net earnings (loss)
|
|
41.0
|
|
|
62.5
|
|
|
(68.1
|
)
|
|
8.1
|
|
||||
Net earnings (loss) attributable to Allegion plc
|
|
39.4
|
|
|
60.3
|
|
|
(78.2
|
)
|
|
9.5
|
|
||||
Earnings (loss) per share attributable to Allegion plc ordinary shareholders:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
$
|
0.41
|
|
|
$
|
0.63
|
|
|
$
|
(0.81
|
)
|
|
$
|
0.10
|
|
Diluted
|
|
$
|
0.41
|
|
|
$
|
0.63
|
|
|
$
|
(0.81
|
)
|
|
$
|
0.10
|
|
|
|
2012
|
||||||||||||||
|
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Fourth
Quarter
|
||||||||
Net revenues
|
|
$
|
479.5
|
|
|
$
|
518.5
|
|
|
$
|
502.4
|
|
|
$
|
546.2
|
|
Cost of goods sold
|
|
287.1
|
|
|
310.1
|
|
|
297.0
|
|
|
326.4
|
|
||||
Operating income
|
|
79.6
|
|
|
93.2
|
|
|
96.4
|
|
|
99.4
|
|
||||
Net earnings
|
|
47.7
|
|
|
59.4
|
|
|
57.7
|
|
|
60.5
|
|
||||
Net earnings attributable to Allegion plc
|
|
46.4
|
|
|
57.8
|
|
|
56.7
|
|
|
58.7
|
|
||||
Earnings per share attributable to Allegion plc ordinary shareholders:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
$
|
0.48
|
|
|
$
|
0.60
|
|
|
$
|
0.59
|
|
|
$
|
0.61
|
|
Diluted
|
|
$
|
0.48
|
|
|
$
|
0.60
|
|
|
$
|
0.59
|
|
|
$
|
0.61
|
|
•
|
The $137.6 million non-cash pre-tax goodwill impairment charge of ($131.2 million after-tax) recorded in the third quarter.
|
•
|
The $21.5 million gain on a property sale in China recorded in the third quarter.
|
•
|
$44.8 million of discrete tax adjustments consisting of $31.5 million of expense related to valuation allowances on deferred tax assets that are no longer expected to be utilized and $13.3 million of net tax expense resulting primarily from transactions occurring to effect the Spin-off recorded in the fourth quarter.
|
(a)
|
Evaluation of Disclosure Controls and Procedures
|
(b)
|
Management's Report on Internal Control Over Financial Reporting
|
(c)
|
Changes in Internal Control Over Financial Reporting
|
(a) 1. and 2.
|
Financial statements and financial statement schedule
See Item 8.
|
|
|
3.
|
Exhibits
|
|
The exhibits listed on the accompanying index to exhibits are filed as part of this Annual Report on Form 10-K.
|
Exhibit
Number
|
|
Exhibit Description
|
|
Method of Filing
|
|
|
|
|
|
||
2.1
|
|
|
Separation and Distribution Agreement between Ingersoll-Rand plc and Allegion plc, dated November 29, 2013.
|
|
Incorporated by reference to Exhibit 2.1 to the Company’s Form 8-K filed with the SEC on December 2, 2013 (File No. 001-35971).
|
|
|
|
|
||
4.1
|
|
|
Amended and Restated Memorandum and Articles of Association of Allegion plc
|
|
Incorporated by reference to Exhibit 3.1 to the Company’s Registration Statement on Form 10 filed with the SEC on June 17, 2013, as amended (File No. 001-35971).
|
|
|
|
|
||
4.2
|
|
|
Certificate of Incorporation of Allegion plc
|
|
Incorporated by reference to Exhibit 3.2 to the Company’s Registration Statement on Form 10 filed with the SEC on June 17, 2013, as amended (File No. 001-35971).
|
|
|
|
|
|
|
4.1
|
|
|
Indenture, dated as of October 4, 2013, among Allegion plc, Allegion US Holding Company Inc., the subsidiary guarantors party thereto and Wells Fargo Bank, National Association
|
|
Incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form 10 filed with the SEC on June 17, 2013, as amended (File No. 001-35971).
|
|
|
|
|
|
|
4.2
|
|
|
Exchange and Registration Rights Agreement, dated as of October 4, 2013, among Allegion plc, Allegion US Holding Company Inc., the subsidiary guarantors party thereto and the Representatives of the Initial Purchasers named therein
|
|
Incorporated by reference to Exhibit 4.2 to the Company’s Registration Statement on Form 10 filed with the SEC on June 17, 2013, as amended (File No. 001-35971).
|
|
|
|
|
|
|
10.1
|
|
|
Tax Matters Agreement between Ingersoll-Rand plc and Allegion plc
|
|
Incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed with the SEC on December 2, 2013 (File No. 001-35971).
|
|
|
|
|
||
10.2
|
|
|
Employee Matters Agreement between Ingersoll-Rand plc and Allegion plc
|
|
Incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed with the SEC on December 2, 2013 (File No. 001-35971).
|
|
|
|
|
||
10.3
|
|
|
Credit Agreement, among Allegion plc, Allegion US Holding Company Inc., JPMorgan Chase Bank, N.A., as administrative agent, and the lenders and issuing banks party thereto
|
|
Incorporated by reference to Exhibit 10.3 to the Company’s Form 8-K filed with the SEC on December 2, 2013 (File No. 001-35971).
|
|
|
|
|
|
|
10.4
|
|
|
Guarantee and Collateral Agreement, among Allegion plc, Allegion US Holding Company Inc., the restricted subsidiaries from time to time party thereto and JPMorgan Chase Bank, N.A., as administrative agent and collateral agent
|
|
Incorporated by reference to Exhibit 10.4 to the Company’s Form 8-K/A filed with the SEC on December 3, 2013 (File No. 001-35971).
|
|
|
|
|
|
10.5
|
|
|
2013 Incentive Stock Plan
|
|
Incorporated by reference to Exhibit 10.5 to the Company’s Registration Statement on Form 10 filed with the SEC on June 17, 2013, as amended (File No. 001-35971).
|
|
|
|
|
||
10.6
|
|
|
Executive Deferred Compensation Plan
|
|
Incorporated by reference to Exhibit 10.6 to the Company’s Registration Statement on Form 10 filed with the SEC on June 17, 2013, as amended (File No. 001-35971).
|
|
|
|
|
10.7
|
|
|
Supplemental Employee Savings Plan
|
|
Incorporated by reference to Exhibit 10.7 to the Company’s Registration Statement on Form 10 filed with the SEC on June 17, 2013, as amended (File No. 001-35971).
|
|
|
|
|
|
|
10.8
|
|
|
Elected Officer Supplemental Program
|
|
Incorporated by reference to Exhibit 10.8 to the Company’s Registration Statement on Form 10 filed with the SEC on June 17, 2013, as amended (File No. 001-35971).
|
|
|
|
|
|
|
10.9
|
|
|
Key Management Supplemental Program
|
|
Incorporated by reference to Exhibit 10.9 to the Company’s Registration Statement on Form 10 filed with the SEC on June 17, 2013, as amended (File No. 001-35971).
|
|
|
|
|
|
|
10.10
|
|
|
Supplemental Pension Plan
|
|
Incorporated by reference to Exhibit 10.10 to the Company’s Registration Statement on Form 10 filed with the SEC on June 17, 2013, as amended (File No. 001-35971).
|
|
|
|
|
|
|
10.11
|
|
|
Senior Executive Performance Plan
|
|
Incorporated by reference to Exhibit 10.11 to the Company’s Registration Statement on Form 10 filed with the SEC on June 17, 2013, as amended (File No. 001-35971).
|
|
|
|
|
|
|
10.12
|
|
|
Spin-off Protection Plan
|
|
Incorporated by reference to Exhibit 10.12 to the Company’s Registration Statement on Form 10 filed with the SEC on June 17, 2013, as amended (File No. 001-35971).
|
|
|
|
|
|
|
10.13
|
|
|
David D. Petratis Offer Letter, dated June 19, 2013
|
|
Incorporated by reference to Exhibit 10.14 to the Company’s Registration Statement on Form 10 filed with the SEC on June 17, 2013, as amended (File No. 001-35971).
|
|
|
|
|
|
|
10.14
|
|
|
Patrick S. Shannon Offer Letter, dated April 9, 2013
|
|
Incorporated by reference to Exhibit 10.15 to the Company’s Registration Statement on Form 10 filed with the SEC on June 17, 2013, as amended (File No. 001-35971).
|
|
|
|
|
|
|
10.15
|
|
|
Timothy P. Eckersley Offer Letter, dated October 3, 2013
|
|
Incorporated by reference to Exhibit 10.16 to the Company’s Registration Statement on Form 10 filed with the SEC on June 17, 2013, as amended (File No. 001-35971).
|
|
|
|
|
|
|
10.16
|
|
|
Barbara A. Santoro Offer Letter, dated April 9, 2013
|
|
Incorporated by reference to Exhibit 10.17 to the Company’s Registration Statement on Form 10 filed with the SEC on June 17, 2013, as amended (File No. 001-35971).
|
|
|
|
|
|
|
10.17
|
|
|
Feng (William) Yu Offer Letter, dated October 4, 2013
|
|
Incorporated by reference to Exhibit 10.18 to the Company’s Registration Statement on Form 10 filed with the SEC on June 17, 2013, as amended (File No. 001-35971).
|
|
|
|
|
|
|
10.18
|
|
|
Form of Transition Bonus Agreement (U.S.)
|
|
Incorporated by reference to Exhibit 10.19 to the Company’s Registration Statement on Form 10 filed with the SEC on June 17, 2013, as amended (File No. 001-35971).
|
|
|
|
|
|
|
10.19
|
|
|
Form of Transition Bonus Agreement (China)
|
|
Incorporated by reference to Exhibit 10.20 to the Company’s Registration Statement on Form 10 filed with the SEC on June 17, 2013, as amended (File No. 001-35971).
|
|
|
|
|
|
|
10.20
|
|
|
Form of Allegion plc Deed Poll Indemnity
|
|
Incorporated by reference to Exhibit 10.21 to the Company’s Registration Statement on Form 10 filed with the SEC on June 17, 2013, as amended (File No. 001-35971).
|
|
|
|
|
|
10.21
|
|
|
Form of Allegion US Holding Company, Inc. Deed Poll Indemnity
|
|
Incorporated by reference to Exhibit 10.22 to the Company’s Registration Statement on Form 10 filed with the SEC on June 17, 2013, as amended (File No. 001-35971).
|
|
|
|
|
|
|
10.22
|
|
|
Form of Allegion Irish Holding Company Limited Deed Poll Indemnity
|
|
Incorporated by reference to Exhibit 10.23 to the Company’s Registration Statement on Form 10 filed with the SEC on June 17, 2013, as amended (File No. 001-35971).
|
|
|
|
|
|
|
10.23
|
|
|
Form of Stock Option Grant Agreement (US)
|
|
Incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed with the SEC on February 14, 2014 (File No. 001-35971).
|
|
|
|
|
|
|
10.24
|
|
|
Form of Restricted Stock Unit Grant Agreement (US)
|
|
Incorporated by reference to Exhibit 10.2 to the Company’s Form 8-K filed with the SEC on February 14, 2014 (File No. 001-35971).
|
|
|
|
|
|
|
10.25
|
|
|
Form of Performance Stock Unit Grant Agreement (US)
|
|
Incorporated by reference to Exhibit 10.3 to the Company’s Form 8-K filed with the SEC on February 14, 2014 (File No. 001-35971).
|
|
|
|
|
|
|
10.26
|
|
|
Form of Stock Option Grant Agreement (Non-US)
|
|
Incorporated by reference to Exhibit 10.4 to the Company’s Form 8-K filed with the SEC on February 14, 2014 (File No. 001-35971).
|
|
|
|
|
|
|
10.27
|
|
|
Form of Restricted Stock Unit Grant Agreement (Non-US)
|
|
Incorporated by reference to Exhibit 10.5 to the Company’s Form 8-K filed with the SEC on February 14, 2014 (File No. 001-35971).
|
|
|
|
|
|
|
10.28
|
|
|
Form of Performance Stock Unit Grant Agreement (Non-US)
|
|
Incorporated by reference to Exhibit 10.6 to the Company’s Form 8-K filed with the SEC on February 14, 2014 (File No. 001-35971).
|
|
|
|
|
|
|
10.29
|
|
|
Form of Special Stock Option Grant Agreement (US)
|
|
Incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed with the SEC on December 13, 2013 (File No. 001-35971).
|
|
|
|
|
|
|
10.30
|
|
|
Form of Special Performance Stock Unit Grant Agreement (US)
|
|
Incorporated by reference to Exhibit 10.2 to the Company’s Form 8-K filed with the SEC on December 13, 2013 (File No. 001-35971).
|
|
|
|
|
|
|
10.31
|
|
|
Form of Special Stock Option Grant Agreement (Non-US)
|
|
Incorporated by reference to Exhibit 10.3 to the Company’s Form 8-K filed with the SEC on December 13, 2013 (File No. 001-35971).
|
|
|
|
|
|
|
10.32
|
|
|
Form of Special Performance Stock Unit Grant Agreement (Non-US)
|
|
Incorporated by reference to Exhibit 10.4 to the Company’s Form 8-K filed with the SEC on December 13, 2013 (File No. 001-35971).
|
|
|
|
|
|
|
10.33
|
|
|
Annual Incentive Plan
|
|
Filed herewith.
|
|
|
|
|
|
|
10.34
|
|
|
Change in Control Severance Plan
|
|
Filed herewith.
|
|
|
|
|
|
|
21.1
|
|
|
List of subsidiaries of Allegion plc
|
|
Filed herewith.
|
|
|
|
|
|
|
23.1
|
|
|
Consent of Independent Registered Public Accounting Firm
|
|
Filed herewith.
|
|
|
|
|
|
|
31.1
|
|
|
Certification of Chief Executive Officer Pursuant to Rule 13a-14(a) or Rule 15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
Filed herewith.
|
|
|
|
|
|
|
31.2
|
|
|
Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) or Rule 15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
Filed herewith.
|
|
|
|
|
|
32.1
|
|
|
Certifications of Chief Executive Officer and Chief Financial Officer Pursuant to Rule 13a-14(b) or Rule 15d-14(b) and 18U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
Furnished herewith.
|
|
|
|
|
|
By:
|
|
/s/ David D. Petratis
|
|
|
David D. Petratis
|
|
|
Chief Executive Officer
|
Date:
|
|
March 10, 2014
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ David D. Petratis
|
|
Chairman of the Board, President and Chief Executive Officer (Principal Executive Officer)
|
|
March 10, 2014
|
(David D. Petratis)
|
|
|
|
|
|
|
|
|
|
/s/ Patrick S. Shannon
|
|
Senior Vice President and Chief Financial Officer (Principal Financial Officer)
|
|
March 10, 2014
|
(Patrick S. Shannon)
|
|
|
|
|
|
|
|
|
|
/s/ Douglas P. Ranck
|
|
Vice President and Controller (Principal Accounting Officer)
|
|
March 10, 2014
|
(Douglas P. Ranck)
|
|
|
|
|
|
|
|
|
|
/s/ Michael J. Chesser
|
|
Director
|
|
March 10, 2014
|
(Michael J. Chesser)
|
|
|
|
|
|
|
|
|
|
/s/ Carla Cico
|
|
Director
|
|
March 10, 2014
|
(Carla Cico)
|
|
|
|
|
|
|
|
|
|
/s/ Kirk S. Hachigian
|
|
Director
|
|
March 10, 2014
|
(Kirk S. Hachigian)
|
|
|
|
|
|
|
|
|
|
/s/ Martin E. Welch III
|
|
Director
|
|
March 10, 2014
|
(Martin E. Welch III)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allegion plc
Combined and Consolidated Statements of Comprehensive Income
In millions, except per share amounts
|
||||||||||||
For the years ended December 31,
|
|
2013
|
|
2012
|
|
2011
|
||||||
Net revenues
|
|
$
|
2,093.5
|
|
|
$
|
2,046.6
|
|
|
$
|
2,021.2
|
|
Cost of goods sold
|
|
1,233.9
|
|
|
1,220.6
|
|
|
1,211.4
|
|
|||
Selling and administrative expenses
|
|
486.2
|
|
|
457.4
|
|
|
450.8
|
|
|||
Goodwill impairment charge
|
|
137.6
|
|
|
—
|
|
|
—
|
|
|||
Operating income
|
|
235.8
|
|
|
368.6
|
|
|
359.0
|
|
|||
Interest expense
|
|
10.2
|
|
|
1.5
|
|
|
1.4
|
|
|||
Other expense (income), net
|
|
7.1
|
|
|
3.2
|
|
|
(4.6
|
)
|
|||
Earnings before income taxes
|
|
218.5
|
|
|
363.9
|
|
|
362.2
|
|
|||
Provision for income taxes
|
|
174.2
|
|
|
135.9
|
|
|
130.5
|
|
|||
Earnings from continuing operations
|
|
44.3
|
|
|
228.0
|
|
|
231.7
|
|
|||
Discontinued operations, net of tax
|
|
(0.8
|
)
|
|
(2.7
|
)
|
|
(7.3
|
)
|
|||
Net earnings
|
|
43.5
|
|
|
225.3
|
|
|
224.4
|
|
|||
Less: Net earnings attributable to noncontrolling interests
|
|
12.5
|
|
|
5.7
|
|
|
6.3
|
|
|||
Net earnings attributable to Allegion plc
|
|
$
|
31.0
|
|
|
$
|
219.6
|
|
|
$
|
218.1
|
|
Amounts attributable to Allegion plc ordinary shareholders:
|
|
|
|
|
|
|
||||||
Continuing operations
|
|
$
|
31.8
|
|
|
$
|
222.3
|
|
|
$
|
225.4
|
|
Discontinued operations
|
|
(0.8
|
)
|
|
(2.7
|
)
|
|
(7.3
|
)
|
|||
Net earnings
|
|
$
|
31.0
|
|
|
$
|
219.6
|
|
|
$
|
218.1
|
|
Earnings (loss) per share attributable to Allegion plc ordinary shareholders:
|
|
|
|
|
|
|
||||||
Basic:
|
|
|
|
|
|
|
||||||
Continuing operations
|
|
$
|
0.33
|
|
|
$
|
2.32
|
|
|
$
|
2.35
|
|
Discontinued operations
|
|
(0.01
|
)
|
|
(0.03
|
)
|
|
(0.08
|
)
|
|||
Net earnings
|
|
$
|
0.32
|
|
|
$
|
2.29
|
|
|
$
|
2.27
|
|
Diluted:
|
|
|
|
|
|
|
||||||
Continuing operations
|
|
$
|
0.33
|
|
|
$
|
2.32
|
|
|
$
|
2.35
|
|
Discontinued operations
|
|
(0.01
|
)
|
|
(0.03
|
)
|
|
(0.08
|
)
|
|||
Net earnings
|
|
$
|
0.32
|
|
|
$
|
2.29
|
|
|
$
|
2.27
|
|
Allegion plc
Combined and Consolidated Statements of Comprehensive Income (continued)
In millions, except per share amounts
|
||||||||||||
For the years ended December 31,
|
|
2013
|
|
2012
|
|
2011
|
||||||
Net earnings
|
|
$
|
43.5
|
|
|
$
|
225.3
|
|
|
$
|
224.4
|
|
Other comprehensive income (loss)
|
|
|
|
|
|
|
||||||
Currency translation
|
|
(58.3
|
)
|
|
21.4
|
|
|
(17.9
|
)
|
|||
Cash flow hedges and marketable securities
|
|
|
|
|
|
|
||||||
Unrealized net gains (losses) arising during period
|
|
7.0
|
|
|
5.3
|
|
|
(3.5
|
)
|
|||
Net (gains) losses reclassified into earnings
|
|
(0.9
|
)
|
|
0.2
|
|
|
1.3
|
|
|||
Tax (expense) benefit
|
|
(0.3
|
)
|
|
0.2
|
|
|
(0.4
|
)
|
|||
Total cash flow hedges and marketable securities, net of tax
|
|
5.8
|
|
|
5.7
|
|
|
(2.6
|
)
|
|||
Pension and OPEB adjustments:
|
|
|
|
|
|
|
||||||
Prior service gains (costs) for the period
|
|
(2.3
|
)
|
|
13.8
|
|
|
—
|
|
|||
Net actuarial gains (losses) for the period
|
|
34.1
|
|
|
(23.0
|
)
|
|
(5.5
|
)
|
|||
Amortization reclassified into earnings
|
|
4.2
|
|
|
5.0
|
|
|
5.7
|
|
|||
Settlements/curtailments reclassified to earnings
|
|
(0.1
|
)
|
|
2.7
|
|
|
—
|
|
|||
Net loss resulting from Spin-off
|
|
(42.9
|
)
|
|
—
|
|
|
—
|
|
|||
Currency translation and other
|
|
(0.4
|
)
|
|
(1.2
|
)
|
|
(0.8
|
)
|
|||
Tax (expense) benefit
|
|
(28.2
|
)
|
|
(2.5
|
)
|
|
1.9
|
|
|||
Total pension and OPEB adjustments, net of tax
|
|
(35.6
|
)
|
|
(5.2
|
)
|
|
1.3
|
|
|||
Other comprehensive income (loss), net of tax
|
|
(88.1
|
)
|
|
21.9
|
|
|
(19.2
|
)
|
|||
Total comprehensive income (loss), net of tax
|
|
$
|
(44.6
|
)
|
|
$
|
247.2
|
|
|
$
|
205.2
|
|
Less: Total comprehensive income attributable to noncontrolling interests
|
|
13.3
|
|
|
6.2
|
|
|
8.2
|
|
|||
Total comprehensive income (loss) attributable to Allegion plc
|
|
$
|
(57.9
|
)
|
|
$
|
241.0
|
|
|
$
|
197.0
|
|
December 31,
|
|
2013
|
|
2012
|
||||
ASSETS
|
|
|
|
|
||||
Current assets:
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
227.4
|
|
|
$
|
317.5
|
|
Restricted cash
|
|
40.2
|
|
|
—
|
|
||
Accounts and notes receivable, net
|
|
266.1
|
|
|
288.2
|
|
||
Costs in excess of billings on uncompleted contracts
|
|
158.8
|
|
|
93.7
|
|
||
Inventories
|
|
155.8
|
|
|
166.4
|
|
||
Deferred taxes and current tax receivable
|
|
51.2
|
|
|
37.2
|
|
||
Other current assets
|
|
23.7
|
|
|
6.9
|
|
||
Total current assets
|
|
923.2
|
|
|
909.9
|
|
||
Property, plant and equipment, net
|
|
203.0
|
|
|
232.0
|
|
||
Goodwill
|
|
504.9
|
|
|
637.9
|
|
||
Intangible assets, net
|
|
146.1
|
|
|
150.5
|
|
||
Other noncurrent assets
|
|
202.7
|
|
|
53.5
|
|
||
Total assets
|
|
$
|
1,979.9
|
|
|
$
|
1,983.8
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
||||
Current liabilities:
|
|
|
|
|
||||
Accounts payable
|
|
$
|
211.3
|
|
|
$
|
227.2
|
|
Accrued compensation and benefits
|
|
71.8
|
|
|
60.5
|
|
||
Accrued expenses and other current liabilities
|
|
111.6
|
|
|
92.7
|
|
||
Deferred taxes and current tax payable
|
|
23.9
|
|
|
0.1
|
|
||
Short-term borrowings and current maturities of long-term debt
|
|
71.9
|
|
|
2.2
|
|
||
Total current liabilities
|
|
490.5
|
|
|
382.7
|
|
||
Long-term debt
|
|
1,272.0
|
|
|
2.8
|
|
||
Postemployment and other benefit liabilities
|
|
110.6
|
|
|
121.5
|
|
||
Deferred and noncurrent income taxes
|
|
86.7
|
|
|
92.0
|
|
||
Other noncurrent liabilities
|
|
75.8
|
|
|
18.6
|
|
||
Total liabilities
|
|
2,035.6
|
|
|
617.6
|
|
||
Equity:
|
|
|
|
|
||||
Allegion plc shareholders’ equity (deficit)
|
|
|
|
|
||||
Ordinary shares, $0.01 par value (96,028,568 shares issued at December 31, 2013)
|
|
1.0
|
|
|
—
|
|
||
Capital in excess of par value
|
|
8.4
|
|
|
—
|
|
||
Retained earnings
|
|
0.4
|
|
|
—
|
|
||
Parent company investment
|
|
—
|
|
|
1,350.9
|
|
||
Accumulated other comprehensive loss
|
|
(96.6
|
)
|
|
(7.7
|
)
|
||
Total Allegion plc shareholders’ equity (deficit)
|
|
(86.8
|
)
|
|
1,343.2
|
|
||
Noncontrolling interest
|
|
31.1
|
|
|
23.0
|
|
||
Total equity (deficit)
|
|
(55.7
|
)
|
|
1,366.2
|
|
||
Total liabilities and equity
|
|
$
|
1,979.9
|
|
|
$
|
1,983.8
|
|
Allegion plc
Combined and Consolidated Statements of Equity
|
|||||||||||||||||||||||||||||||
|
|
|
|
Allegion plc Shareholders' equity
|
|
|
|||||||||||||||||||||||||
In millions
|
|
Total
equity (deficit)
|
|
Ordinary Shares
|
|
Capital in excess of par value
|
|
Retained earnings
|
|
Accumulated
other
comprehensive
income (loss)
|
|
Parent company's net investment
|
|
Non-controlling Interest
|
|||||||||||||||||
|
|
Amount
|
|
Shares
|
|
|
|
|
|||||||||||||||||||||||
Balance at December 31, 2010
|
|
$
|
1,481.6
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(8.0
|
)
|
|
$
|
1,465.4
|
|
|
$
|
24.2
|
|
Net earnings
|
|
224.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
218.1
|
|
|
6.3
|
|
|||||||
Other comprehensive income (loss)
|
|
(19.2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(21.1
|
)
|
|
—
|
|
|
1.9
|
|
|||||||
Dividends declared to noncontrolling interest
|
|
(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
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(29.1
|
)
|
|
1,442.9
|
|
|
22.0
|
|
|||||||
Net earnings
|
|
225.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
219.6
|
|
|
5.7
|
|
|||||||
Other comprehensive income (loss)
|
|
21.9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
21.4
|
|
|
—
|
|
|
0.5
|
|
|||||||
Dividends declared to noncontrolling interest
|
|
(5.2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5.2
|
)
|
|||||||
Distribution/contribution to/from Parent Company
|
|
(311.6
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(311.6
|
)
|
|
—
|
|
|||||||
Balance at December 31, 2012
|
|
1,366.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7.7
|
)
|
|
1,350.9
|
|
|
23.0
|
|
|||||||
Net earnings
|
|
43.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4.7
|
|
|
—
|
|
|
26.3
|
|
|
12.5
|
|
|||||||
Other comprehensive income (loss)
|
|
(88.1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(88.9
|
)
|
|
—
|
|
|
0.8
|
|
|||||||
Shares issued under incentive stock plans
|
|
1.3
|
|
|
—
|
|
|
—
|
|
|
1.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Share-based compensation
|
|
5.5
|
|
|
—
|
|
|
—
|
|
|
0.8
|
|
|
—
|
|
|
—
|
|
|
4.7
|
|
|
—
|
|
|||||||
Dividends declared to noncontrolling interest
|
|
(5.2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5.2
|
)
|
|||||||
Change in Parent Company investment
|
|
(1,378.9
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,378.9
|
)
|
|
—
|
|
|||||||
Conversion of Parent Company investment
|
|
—
|
|
|
1.0
|
|
|
96.0
|
|
|
6.3
|
|
|
(4.3
|
)
|
|
—
|
|
|
(3.0
|
)
|
|
—
|
|
|||||||
Balance at December 31, 2013
|
|
$
|
(55.7
|
)
|
|
$
|
1.0
|
|
|
96.0
|
|
|
$
|
8.4
|
|
|
$
|
0.4
|
|
|
$
|
(96.6
|
)
|
|
$
|
—
|
|
|
$
|
31.1
|
|
Allegion plc
Combined and Consolidated Statements of Cash Flows
In millions
|
||||||||||||
For the years ended December 31,
|
|
2013
|
|
2012
|
|
2011
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
||||||
Net earnings
|
|
$
|
43.5
|
|
|
$
|
225.3
|
|
|
$
|
224.4
|
|
Loss from discontinued operations, net of tax
|
|
0.8
|
|
|
2.7
|
|
|
7.3
|
|
|||
Adjustments to arrive at net cash provided by operating activities:
|
|
|
|
|
|
|
||||||
Goodwill impairment charge
|
|
137.6
|
|
|
—
|
|
|
—
|
|
|||
Depreciation and amortization
|
|
46.1
|
|
|
43.8
|
|
|
46.0
|
|
|||
(Gain) loss on sale of property, plant and equipment
|
|
(21.8
|
)
|
|
0.1
|
|
|
2.0
|
|
|||
Deferred income taxes
|
|
16.8
|
|
|
(3.9
|
)
|
|
0.8
|
|
|||
Other items
|
|
(29.3
|
)
|
|
12.8
|
|
|
9.5
|
|
|||
Changes in other assets and liabilities
|
|
|
|
|
|
|
||||||
(Increase) decrease in:
|
|
|
|
|
|
|
||||||
Accounts and notes receivable
|
|
26.8
|
|
|
1.9
|
|
|
(12.0
|
)
|
|||
Inventories
|
|
5.4
|
|
|
(0.6
|
)
|
|
(12.9
|
)
|
|||
Other current and noncurrent assets
|
|
79.4
|
|
|
(14.6
|
)
|
|
(22.3
|
)
|
|||
Increase (decrease) in:
|
|
|
|
|
|
|
||||||
Accounts payable
|
|
(16.7
|
)
|
|
8.0
|
|
|
25.5
|
|
|||
Other current and noncurrent liabilities
|
|
(63.9
|
)
|
|
(3.6
|
)
|
|
4.5
|
|
|||
Net cash provided by continuing operating activities
|
|
224.7
|
|
|
271.9
|
|
|
272.8
|
|
|||
Net cash used in discontinued operating activities
|
|
(0.8
|
)
|
|
(2.7
|
)
|
|
(7.3
|
)
|
|||
Net cash provided by operating activities
|
|
223.9
|
|
|
269.2
|
|
|
265.5
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
|
||||||
Capital expenditures
|
|
(20.2
|
)
|
|
(19.6
|
)
|
|
(25.5
|
)
|
|||
Restricted cash
|
|
(40.2
|
)
|
|
—
|
|
|
—
|
|
|||
Proceeds from sale of property, plant and equipment
|
|
41.7
|
|
|
2.1
|
|
|
2.8
|
|
|||
Proceeds from business dispositions, net of cash sold
|
|
—
|
|
|
—
|
|
|
19.2
|
|
|||
Net cash used in investing activities
|
|
(18.7
|
)
|
|
(17.5
|
)
|
|
(3.5
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
|
||||||
Short-term borrowings, net
|
|
38.9
|
|
|
(1.0
|
)
|
|
(2.5
|
)
|
|||
Proceeds from long-term debt
|
|
1,300.0
|
|
|
—
|
|
|
—
|
|
|||
Payments of long-term debt
|
|
—
|
|
|
(0.1
|
)
|
|
(0.1
|
)
|
|||
Net proceeds (repayments) in debt
|
|
1,338.9
|
|
|
(1.1
|
)
|
|
(2.6
|
)
|
|||
Debt issuance costs
|
|
(29.1
|
)
|
|
—
|
|
|
—
|
|
|||
Dividends paid to noncontrolling interests
|
|
(5.2
|
)
|
|
(5.2
|
)
|
|
(9.3
|
)
|
|||
Net transfers to Parent and affiliates
|
|
(1,598.3
|
)
|
|
(311.6
|
)
|
|
(240.6
|
)
|
|||
Proceeds from shares issued under incentive plans
|
|
1.3
|
|
|
—
|
|
|
—
|
|
|||
Other, net
|
|
—
|
|
|
—
|
|
|
(1.1
|
)
|
|||
Net cash used in financing activities
|
|
(292.4
|
)
|
|
(317.9
|
)
|
|
(253.6
|
)
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
|
(2.9
|
)
|
|
6.9
|
|
|
(9.9
|
)
|
|||
Net decrease in cash and cash equivalents
|
|
(90.1
|
)
|
|
(59.3
|
)
|
|
(1.5
|
)
|
|||
Cash and cash equivalents – beginning of period
|
|
317.5
|
|
|
376.8
|
|
|
378.3
|
|
|||
Cash and cash equivalents – end of period
|
|
$
|
227.4
|
|
|
$
|
317.5
|
|
|
$
|
376.8
|
|
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
|
|
|
2013
|
|
2012
|
||||||||||||||||||||
In millions
|
|
Amortized cost or cost
|
|
Unrealized
gains
|
|
Fair
value
|
|
Amortized cost or cost
|
|
Unrealized
gains
|
|
Fair
value
|
||||||||||||
Equity securities
|
|
$
|
4.0
|
|
|
$
|
16.2
|
|
|
$
|
20.2
|
|
|
$
|
5.5
|
|
|
$
|
11.2
|
|
|
$
|
16.7
|
|
In millions
|
|
2013
|
|
2012
|
||||
Raw materials
|
|
$
|
68.3
|
|
|
$
|
80.4
|
|
Work-in-process
|
|
34.5
|
|
|
22.2
|
|
||
Finished goods
|
|
86.8
|
|
|
95.5
|
|
||
|
|
189.6
|
|
|
198.1
|
|
||
LIFO reserve
|
|
(33.8
|
)
|
|
(31.7
|
)
|
||
Total
|
|
$
|
155.8
|
|
|
$
|
166.4
|
|
In millions
|
|
2013
|
|
2012
|
||||
Land
|
|
$
|
16.5
|
|
|
$
|
16.5
|
|
Buildings
|
|
126.3
|
|
|
132.7
|
|
||
Machinery and equipment
|
|
344.4
|
|
|
356.3
|
|
||
Software
|
|
82.0
|
|
|
81.3
|
|
||
|
|
569.2
|
|
|
586.8
|
|
||
Accumulated depreciation
|
|
(366.2
|
)
|
|
(354.8
|
)
|
||
Total
|
|
$
|
203.0
|
|
|
$
|
232.0
|
|
In millions
|
|
Americas
|
|
EMEIA
|
|
Asia Pacific
|
|
Total
|
||||||||
December 31, 2011 (gross)
|
|
$
|
339.0
|
|
|
$
|
532.3
|
|
|
$
|
107.5
|
|
|
$
|
978.8
|
|
Currency translation
|
|
—
|
|
|
4.4
|
|
|
2.6
|
|
|
7.0
|
|
||||
December 31, 2012 (gross)
|
|
339.0
|
|
|
536.7
|
|
|
110.1
|
|
|
985.8
|
|
||||
Acquisitions and adjustments *
|
|
23.8
|
|
|
—
|
|
|
(23.8
|
)
|
|
—
|
|
||||
Currency translation
|
|
—
|
|
|
3.3
|
|
|
1.3
|
|
|
4.6
|
|
||||
December 31, 2013 (gross)
|
|
362.8
|
|
|
540.0
|
|
|
87.6
|
|
|
990.4
|
|
||||
Accumulated impairment **
|
|
—
|
|
|
(478.6
|
)
|
|
(6.9
|
)
|
|
(485.5
|
)
|
||||
Goodwill (net)
|
|
$
|
362.8
|
|
|
$
|
61.4
|
|
|
$
|
80.7
|
|
|
$
|
504.9
|
|
|
|
2013
|
|
2012
|
||||||||||||||||||||
In millions
|
|
Gross carrying amount
|
|
Accumulated amortization
|
|
Net carrying amount
|
|
Gross carrying amount
|
|
Accumulated amortization
|
|
Net carrying amount
|
||||||||||||
Completed technologies/patents
|
|
$
|
26.4
|
|
|
$
|
(23.6
|
)
|
|
$
|
2.8
|
|
|
$
|
24.1
|
|
|
$
|
(21.7
|
)
|
|
$
|
2.4
|
|
Customer relationships
|
|
107.8
|
|
|
(38.1
|
)
|
|
69.7
|
|
|
103.7
|
|
|
(32.9
|
)
|
|
70.8
|
|
||||||
Trademarks (finite-lived)
|
|
101.4
|
|
|
(36.8
|
)
|
|
64.6
|
|
|
97.4
|
|
|
(31.5
|
)
|
|
65.9
|
|
||||||
Other
|
|
13.4
|
|
|
(13.4
|
)
|
|
—
|
|
|
15.8
|
|
|
(13.4
|
)
|
|
2.4
|
|
||||||
Total finite-lived intangible assets
|
|
249.0
|
|
|
$
|
(111.9
|
)
|
|
137.1
|
|
|
241.0
|
|
|
$
|
(99.5
|
)
|
|
141.5
|
|
||||
Trademarks (indefinite-lived)
|
|
9.0
|
|
|
|
|
9.0
|
|
|
9.0
|
|
|
|
|
9.0
|
|
||||||||
Total
|
|
$
|
258.0
|
|
|
|
|
$
|
146.1
|
|
|
$
|
250.0
|
|
|
|
|
$
|
150.5
|
|
In millions
|
December 31,
2013 |
|
December 31,
2012 |
||||
Term Loan A Facility due 2018
|
$
|
500.0
|
|
|
$
|
—
|
|
Term Loan B Facility due 2020
|
500.0
|
|
|
—
|
|
||
5.75% Senior notes due 2021
|
300.0
|
|
|
—
|
|
||
Other debt, including capital leases, maturing in various amounts through 2016
|
2.8
|
|
|
2.8
|
|
||
Other short-term borrowings
|
41.1
|
|
|
2.2
|
|
||
Total long-term debt
|
$
|
1,343.9
|
|
|
$
|
5.0
|
|
Less current portion of long term debt
|
71.9
|
|
|
2.2
|
|
||
|
$
|
1,272.0
|
|
|
$
|
2.8
|
|
In millions
|
|
||
2014
|
$
|
30.0
|
|
2015
|
30.0
|
|
|
2016
|
55.0
|
|
|
2017
|
55.0
|
|
|
2018
|
355.0
|
|
|
Thereafter
|
775.0
|
|
|
Total
|
$
|
1,300.0
|
|
|
|
Asset derivatives
|
|
Liability derivatives
|
||||||||||||
In millions
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
Derivatives designated as hedges:
|
|
|
|
|
|
|
|
|
||||||||
Currency derivatives
|
|
$
|
0.7
|
|
|
$
|
0.1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Derivatives not designated as hedges:
|
|
|
|
|
|
|
|
|
||||||||
Currency derivatives
|
|
—
|
|
|
—
|
|
|
2.7
|
|
|
0.3
|
|
||||
Total derivatives
|
|
$
|
0.7
|
|
|
$
|
0.1
|
|
|
$
|
2.7
|
|
|
$
|
0.3
|
|
|
|
U.S.
|
|
NON-U.S.
|
||||||||||||
In millions
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
Change in benefit obligations:
|
|
|
|
|
|
|
|
|
||||||||
Benefit obligation at beginning of year
|
|
$
|
276.9
|
|
|
$
|
273.5
|
|
|
$
|
235.9
|
|
|
$
|
198.6
|
|
Service cost
|
|
7.8
|
|
|
9.6
|
|
|
3.5
|
|
|
3.1
|
|
||||
Interest cost
|
|
10.1
|
|
|
11.0
|
|
|
10.7
|
|
|
10.3
|
|
||||
Employee contributions
|
|
—
|
|
|
—
|
|
|
0.3
|
|
|
0.2
|
|
||||
Amendments
|
|
2.3
|
|
|
0.2
|
|
|
—
|
|
|
—
|
|
||||
Actuarial (gains) losses
|
|
(58.5
|
)
|
|
9.6
|
|
|
8.0
|
|
|
25.2
|
|
||||
Benefits paid
|
|
(14.8
|
)
|
|
(15.0
|
)
|
|
(9.0
|
)
|
|
(8.4
|
)
|
||||
Currency translation
|
|
—
|
|
|
—
|
|
|
8.2
|
|
|
9.8
|
|
||||
Curtailments and settlements
|
|
—
|
|
|
(8.6
|
)
|
|
(1.2
|
)
|
|
(2.2
|
)
|
||||
Transfers
|
|
—
|
|
|
(2.0
|
)
|
|
—
|
|
|
—
|
|
||||
Liabilities assumed from Spin-off
|
|
8.3
|
|
|
—
|
|
|
133.4
|
|
(a)
|
—
|
|
||||
Other, including expenses paid
|
|
(0.8
|
)
|
|
(1.4
|
)
|
|
8.1
|
|
|
(0.7
|
)
|
||||
Benefit obligation at end of year
|
|
$
|
231.3
|
|
|
$
|
276.9
|
|
|
$
|
397.9
|
|
|
$
|
235.9
|
|
Change in plan assets:
|
|
|
|
|
|
|
|
|
||||||||
Fair value at beginning of year
|
|
$
|
230.9
|
|
|
$
|
226.1
|
|
|
$
|
183.4
|
|
|
$
|
166.9
|
|
Actual return on assets
|
|
1.6
|
|
|
17.1
|
|
|
17.6
|
|
|
10.5
|
|
||||
Company contributions
|
|
—
|
|
|
3.2
|
|
|
11.6
|
|
|
9.5
|
|
||||
Employee contributions
|
|
—
|
|
|
—
|
|
|
0.3
|
|
|
0.2
|
|
||||
Benefits paid
|
|
(14.8
|
)
|
|
(15.0
|
)
|
|
(9.0
|
)
|
|
(8.4
|
)
|
||||
Currency translation
|
|
—
|
|
|
—
|
|
|
7.6
|
|
|
8.1
|
|
||||
Settlements
|
|
—
|
|
|
—
|
|
|
(1.1
|
)
|
|
(2.1
|
)
|
||||
Assets received from Spin-off
|
|
10.2
|
|
|
—
|
|
|
121.6
|
|
(a)
|
—
|
|
||||
Other, including expenses paid
|
|
(19.4
|
)
|
(b)
|
(0.5
|
)
|
|
5.6
|
|
|
(1.3
|
)
|
||||
Fair value of assets end of year
|
|
$
|
208.5
|
|
|
$
|
230.9
|
|
|
$
|
337.6
|
|
|
$
|
183.4
|
|
Funded status:
|
|
|
|
|
|
|
|
|
||||||||
Plan assets less than the benefit obligations
|
|
$
|
(22.8
|
)
|
|
$
|
(46.0
|
)
|
|
$
|
(60.3
|
)
|
|
$
|
(52.5
|
)
|
Amounts included in the balance sheet:
|
|
|
|
|
|
|
|
|
||||||||
Accrued compensation and benefits
|
|
—
|
|
|
—
|
|
|
(1.2
|
)
|
|
(0.9
|
)
|
||||
Postemployment and other benefit liabilities
|
|
(22.8
|
)
|
|
(46.0
|
)
|
|
(59.1
|
)
|
|
(51.6
|
)
|
||||
Net amount recognized
|
|
$
|
(22.8
|
)
|
|
$
|
(46.0
|
)
|
|
$
|
(60.3
|
)
|
|
$
|
(52.5
|
)
|
(a)
|
Represents the benefit obligation and plan assets transferred to the Allegion UK plan as a result of the combination of plans related to Allegion employees, former Allegion employees and those members for whom Ingersoll Rand Security Technologies Ltd. was legally responsible.
|
(b)
|
Consists of the difference between the preliminary assets allocated to Allegion for the Combined Financial Statements as of December 31, 2012 and 2011 (which were allocated based on relative accumulated benefit obligations) and the actual assets allocated in the Spin-off in accordance with the agreed upon methodology between Allegion and Ingersoll Rand (based on the provisions of Section 414(l) of the Code).
|
Benefit obligations at December 31,
|
|
2013
|
|
2012
|
||
Discount rate:
|
|
|
|
|
||
U.S. plans
|
|
5.00
|
%
|
|
3.75
|
%
|
Non-U.S. plans
|
|
4.50
|
%
|
|
4.50
|
%
|
Rate of compensation increase:
|
|
|
|
|
||
U.S. plans
|
|
3.50
|
%
|
|
4.00
|
%
|
Non-U.S. plans
|
|
4.75
|
%
|
|
4.25
|
%
|
In millions
|
U.S.
|
|
NON-U.S.
|
||||
2014
|
$
|
13.5
|
|
|
$
|
15.8
|
|
2015
|
13.6
|
|
|
15.4
|
|
||
2016
|
12.9
|
|
|
15.9
|
|
||
2017
|
13.8
|
|
|
16.7
|
|
||
2018
|
15.1
|
|
|
17.1
|
|
||
2019 - 2023
|
90.4
|
|
|
98.6
|
|
|
|
NON-U.S.
|
||||||||||
In millions
|
|
2013
|
|
2012
|
|
2011
|
||||||
Service cost
|
|
$
|
3.5
|
|
|
$
|
3.1
|
|
|
$
|
2.9
|
|
Interest cost
|
|
10.7
|
|
|
10.3
|
|
|
11.1
|
|
|||
Expected return on plan assets
|
|
(10.0
|
)
|
|
(9.7
|
)
|
|
(10.7
|
)
|
|||
Other adjustments
|
|
2.1
|
|
|
—
|
|
|
—
|
|
|||
Net amortization of:
|
|
|
|
|
|
|
||||||
Prior service costs
|
|
0.1
|
|
|
—
|
|
|
0.1
|
|
|||
Plan net actuarial losses
|
|
1.8
|
|
|
1.7
|
|
|
2.0
|
|
|||
Net periodic pension benefit cost
|
|
8.2
|
|
|
5.4
|
|
|
5.4
|
|
|||
Net curtailment and settlement (gains) losses
|
|
(0.2
|
)
|
|
0.3
|
|
|
—
|
|
|||
Net periodic pension benefit cost after net curtailment and settlement (gains) losses
|
|
$
|
8.0
|
|
|
$
|
5.7
|
|
|
$
|
5.4
|
|
Amounts recorded in continuing operations
|
|
$
|
8.0
|
|
|
$
|
5.7
|
|
|
$
|
5.4
|
|
Net periodic pension cost for the year ended December 31,
|
|
2013
|
|
2012
|
|
2011
|
|||
Discount rate:
|
|
|
|
|
|
|
|||
U.S. plans
|
|
|
|
|
|
|
|||
For the period January 1 to June 7
|
|
3.75
|
%
|
|
4.25
|
%
|
|
5.00
|
%
|
For the period June 8 to November 30
|
|
3.75
|
%
|
|
4.00
|
%
|
|
5.00
|
%
|
For the period December 1 to December 31
|
|
4.75
|
%
|
|
4.00
|
%
|
|
5.00
|
%
|
Non-U.S. plans
|
|
4.50
|
%
|
|
5.00
|
%
|
|
5.50
|
%
|
Rate of compensation increase:
|
|
|
|
|
|
|
|||
U.S. plans
|
|
4.00
|
%
|
|
4.00
|
%
|
|
4.00
|
%
|
Non-U.S. plans
|
|
4.25
|
%
|
|
4.00
|
%
|
|
4.50
|
%
|
Expected return on plan assets:
|
|
|
|
|
|
|
|||
U.S. plans
|
|
4.75
|
%
|
|
5.75
|
%
|
|
7.25
|
%
|
Non-U.S. plans
|
|
5.25
|
%
|
|
5.75
|
%
|
|
6.25
|
%
|
|
|
Fair value measurements
|
|
Total
fair value
|
||||||||||||
In millions
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
|||||||||
Cash and cash equivalents
|
|
$
|
—
|
|
|
$
|
1.5
|
|
|
$
|
—
|
|
|
$
|
1.5
|
|
Equity mutual funds
|
|
—
|
|
|
42.1
|
|
|
—
|
|
|
42.1
|
|
||||
Fixed income investments:
|
|
|
|
|
|
|
|
|
||||||||
U.S. government and agency obligations
|
|
—
|
|
|
74.9
|
|
|
—
|
|
|
74.9
|
|
||||
Corporate and non-U.S. bonds
(a)
|
|
—
|
|
|
68.2
|
|
|
—
|
|
|
68.2
|
|
||||
|
|
—
|
|
|
143.1
|
|
|
—
|
|
|
143.1
|
|
||||
Total assets at fair value
|
|
$
|
—
|
|
|
$
|
186.7
|
|
|
$
|
—
|
|
|
$
|
186.7
|
|
Receivables and payables, net
(b)
|
|
|
|
|
|
|
|
21.8
|
|
|||||||
Net assets available for benefits
|
|
|
|
|
|
|
|
$
|
208.5
|
|
(a)
|
This includes state and municipal bonds.
|
(b)
|
Includes a $20 million receivable from Ingersoll Rand in accordance with the terms of the Employee Matters Agreement.
|
|
|
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
|
|
(a)
|
This includes commingled and registered mutual funds that focus on equity investments. It includes both indexed and actively managed funds.
|
(b)
|
This includes state and municipal bonds.
|
(c)
|
This includes group annuity and guaranteed interest contracts as well as other miscellaneous fixed income securities.
|
(d)
|
This includes several private equity funds that invest in real estate. It includes both direct investment funds and funds-of-funds.
|
|
|
Fair value measurements
|
|
Total
fair value
|
||||||||||||
In millions
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
|||||||||
Cash and cash equivalents
|
|
$
|
—
|
|
|
$
|
10.2
|
|
|
$
|
—
|
|
|
$
|
10.2
|
|
Equity mutual funds
|
|
—
|
|
|
134.2
|
|
|
—
|
|
|
134.2
|
|
||||
Corporate and non-U.S. bonds
|
|
—
|
|
|
185.6
|
|
|
—
|
|
|
185.6
|
|
||||
Real estate
(a)
|
|
—
|
|
|
—
|
|
|
0.7
|
|
|
0.7
|
|
||||
Other
(b)
|
|
—
|
|
|
—
|
|
|
2.6
|
|
|
2.6
|
|
||||
Total assets at fair value
|
|
$
|
—
|
|
|
$
|
330.0
|
|
|
$
|
3.3
|
|
|
$
|
333.3
|
|
Receivables and payables, net
|
|
|
|
|
|
|
|
4.3
|
|
|||||||
Net assets available for benefits
|
|
|
|
|
|
|
|
$
|
337.6
|
|
(a)
|
This includes several private equity funds that invest in real estate. It includes both direct investment funds and funds-of-funds.
|
(b)
|
This primarily includes insurance contracts.
|
|
|
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
|
|
(a)
|
This includes commingled and registered mutual funds that focus on equity investments. It includes both indexed and actively managed funds.
|
(b)
|
This comprises commingled and registered mutual funds that focus on fixed income securities.
|
(c)
|
This includes several private equity funds that invest in real estate. It includes both direct investment funds and funds-of-funds.
|
In millions
|
|
2013
|
|
2012
|
||||
Change in benefit obligations:
|
|
|
|
|
||||
Benefit obligation at beginning of year
|
|
$
|
18.0
|
|
|
$
|
28.9
|
|
Service cost
|
|
0.3
|
|
|
0.3
|
|
||
Interest cost
|
|
0.5
|
|
|
0.7
|
|
||
Plan participants’ contributions
|
|
—
|
|
|
0.3
|
|
||
Actuarial (gains) losses
|
|
(3.6
|
)
|
|
3.1
|
|
||
Benefits paid, net of Medicare Part D subsidy
|
|
(1.0
|
)
|
|
(1.3
|
)
|
||
Amendments
|
|
—
|
|
|
(14.0
|
)
|
||
Benefit obligations at end of year
|
|
$
|
14.2
|
|
|
$
|
18.0
|
|
Funded status:
|
|
|
|
|
||||
Plan assets less than benefit obligations
|
|
$
|
(14.2
|
)
|
|
$
|
(18.0
|
)
|
Amounts included in the balance sheet:
|
|
|
|
|
||||
Accrued compensation and benefits
|
|
$
|
(1.1
|
)
|
|
$
|
(1.0
|
)
|
Postemployment and other benefit liabilities
|
|
(13.1
|
)
|
|
(17.0
|
)
|
||
Total
|
|
$
|
(14.2
|
)
|
|
$
|
(18.0
|
)
|
In millions
|
|
Prior service gains
|
|
Net actuarial losses
|
|
Total
|
||||||
Balance at December 31, 2012
|
|
$
|
12.1
|
|
|
$
|
(6.6
|
)
|
|
$
|
5.5
|
|
Current year changes recorded to Accumulated other comprehensive income (loss)
|
|
—
|
|
|
3.6
|
|
|
3.6
|
|
|||
Amortization reclassified to earnings
|
|
(2.2
|
)
|
|
0.1
|
|
|
(2.1
|
)
|
|||
Net gain / (loss) resulting from Spin-off
|
|
(2.8
|
)
|
|
1.2
|
|
|
(1.6
|
)
|
|||
Balance at December 31, 2013
|
|
$
|
7.1
|
|
|
$
|
(1.7
|
)
|
|
$
|
5.4
|
|
In millions
|
|
2013
|
|
2012
|
|
2011
|
||||||
Service cost
|
|
$
|
0.3
|
|
|
$
|
0.3
|
|
|
$
|
0.8
|
|
Interest cost
|
|
0.5
|
|
|
0.7
|
|
|
1.3
|
|
|||
Net amortization of:
|
|
|
|
|
|
|
||||||
Prior service gains
|
|
(2.2
|
)
|
|
(2.0
|
)
|
|
(0.4
|
)
|
|||
Net actuarial losses
|
|
0.1
|
|
|
0.2
|
|
|
—
|
|
|||
Net periodic postretirement benefit cost (income)
|
|
$
|
(1.3
|
)
|
|
$
|
(0.8
|
)
|
|
$
|
1.7
|
|
Assumptions:
|
|
2013
|
|
2012
|
|
2011
|
|||
Weighted-average discount rate assumption to determine:
|
|
|
|
|
|
|
|||
Benefit obligations at December 31
|
|
4.00
|
%
|
|
3.25
|
%
|
|
4.00
|
%
|
Net periodic benefit cost
|
|
|
|
|
|
|
|||
For the period January 1 to January 31
|
|
3.25
|
%
|
|
4.00
|
%
|
|
5.00
|
%
|
For the period February 1 to November 30
|
|
3.25
|
%
|
|
3.75
|
%
|
|
5.00
|
%
|
For the period December 1 to December 31
|
|
4.00
|
%
|
|
3.75
|
%
|
|
5.00
|
%
|
Assumed health-care cost trend rates at December 31:
|
|
|
|
|
|
|
|||
Current year medical inflation
|
|
7.65
|
%
|
|
8.05
|
%
|
|
8.45
|
%
|
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
|
|
$
|
0.1
|
|
|
$
|
(0.1
|
)
|
In millions
|
|
||
2014
|
$
|
1.1
|
|
2015
|
1.2
|
|
|
2016
|
1.2
|
|
|
2017
|
1.2
|
|
|
2018
|
1.3
|
|
|
2019 - 2023
|
5.9
|
|
•
|
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
|
$
|
20.2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
20.2
|
|
Derivative instruments
|
—
|
|
|
0.7
|
|
|
—
|
|
|
0.7
|
|
||||
Total asset recurring fair value measurements
|
$
|
20.2
|
|
|
$
|
0.7
|
|
|
$
|
—
|
|
|
$
|
20.9
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Derivative instruments
|
$
|
—
|
|
|
$
|
2.7
|
|
|
$
|
—
|
|
|
$
|
2.7
|
|
Total liability recurring fair value measurements
|
$
|
—
|
|
|
$
|
2.7
|
|
|
$
|
—
|
|
|
$
|
2.7
|
|
Financial instruments not carried at fair value:
|
|
|
|
|
|
|
|
||||||||
Total debt
|
$
|
—
|
|
|
$
|
1,312.6
|
|
|
$
|
—
|
|
|
$
|
1,312.6
|
|
Total financial instruments not carried at fair value
|
$
|
—
|
|
|
$
|
1,312.6
|
|
|
$
|
—
|
|
|
$
|
1,312.6
|
|
|
|||||||||||||||
|
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 and instruments related to non-functional currency balance sheet exposures. 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.
|
•
|
Debt
– These securities are recorded at cost and include senior notes and borrowings under the Company's senior secured credit facility. The fair value of the long-term debt instruments is obtained based on observable market prices quoted on public exchanges for similar assets.
|
In millions
|
|
Cash flow hedges and marketable securities
|
|
Pension and OPEB Items
|
|
Foreign Currency Items
|
|
Total
|
||||||||
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
|
)
|
Other comprehensive income (loss), net of tax
|
|
5.8
|
|
|
(35.5
|
)
|
|
(59.2
|
)
|
|
(88.9
|
)
|
||||
December 31, 2013
|
|
$
|
16.7
|
|
|
$
|
(131.3
|
)
|
|
$
|
18.0
|
|
|
$
|
(96.6
|
)
|
In millions
|
|
2013
|
|
2012
|
|
2011
|
||||||
Foreign currency items
|
|
$
|
0.8
|
|
|
$
|
0.5
|
|
|
$
|
1.9
|
|
Total other comprehensive income (loss) attributable to noncontrolling interests
|
|
$
|
0.8
|
|
|
$
|
0.5
|
|
|
$
|
1.9
|
|
In millions
|
|
2013
|
|
2012
|
|
2011
|
||||||
Stock options
|
|
$
|
2.4
|
|
|
$
|
1.7
|
|
|
$
|
2.1
|
|
RSUs
|
|
3.3
|
|
|
2.6
|
|
|
2.4
|
|
|||
PSUs
|
|
1.0
|
|
|
1.5
|
|
|
(0.1
|
)
|
|||
Deferred compensation
|
|
1.7
|
|
|
0.5
|
|
|
(0.1
|
)
|
|||
Pre-tax expense
|
|
8.4
|
|
|
6.3
|
|
|
4.3
|
|
|||
Tax benefit
|
|
(3.2
|
)
|
|
(2.4
|
)
|
|
(1.6
|
)
|
|||
Total
|
|
$
|
5.2
|
|
|
$
|
3.9
|
|
|
$
|
2.7
|
|
|
|
2013
|
|
2012
|
||
Dividend yield
|
|
1.27
|
%
|
|
1.33
|
%
|
Volatility
|
|
39.22
|
%
|
|
43.62
|
%
|
Risk-free rate of return
|
|
1.53
|
%
|
|
0.92
|
%
|
Expected life
|
|
5.9 years
|
|
|
5.1 years
|
|
|
|
Shares
subject
to option
|
|
Weighted-
average
exercise price (a)
|
|
Aggregate
intrinsic
value (millions)
|
|
Weighted-
average
remaining life (years)
|
|||||
December 31, 2010
|
|
1,947,180
|
|
|
$
|
33.54
|
|
|
|
|
|
||
Granted
|
|
207,962
|
|
|
44.95
|
|
|
|
|
|
|||
Exercised
|
|
(526,327
|
)
|
|
32.54
|
|
|
|
|
|
|||
Cancelled
|
|
(145,565
|
)
|
|
33.91
|
|
|
|
|
|
|||
Transferred, 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
|
|
|
|
|
|
|||
Transferred, net
|
|
(113,460
|
)
|
|
35.00
|
|
|
|
|
|
|||
December 31, 2012
|
|
1,102,129
|
|
|
37.77
|
|
|
|
|
|
|||
Granted
|
|
321,808
|
|
|
47.35
|
|
|
|
|
|
|||
Exercised
|
|
(611,792
|
)
|
|
33.78
|
|
|
|
|
|
|||
Impact of spin-off
|
|
1,669,911
|
|
|
$
|
—
|
|
|
|
|
|
||
Outstanding December 31, 2013
|
|
2,482,056
|
|
|
$
|
25.21
|
|
|
$
|
47.1
|
|
|
5.1
|
Exercisable December 31, 2013
|
|
1,829,827
|
|
|
$
|
22.54
|
|
|
$
|
39.6
|
|
|
4.2
|
(a)
|
The weighted average exercise price for periods ending prior to December 1, 2013 represents the exercise price of awards prior to conversion to awards of the Company. The weighted average exercise price of awards on or after December 1, 2013 represents the exercise price of the awards on the grant date converted to ordinary shares of the Company.
|
|
|
|
|
|
|
Options outstanding
|
|
Options exercisable
|
|||||||||||||||||
Range of
exercise price
|
|
Number
outstanding at
December 31,
2013
|
|
Weighted-
average
remaining
life (years)
|
|
Weighted-
average
exercise
price
|
|
Number
outstanding at
December 31,
2013
|
|
Weighted-
average
remaining
life (years)
|
|
Weighted-
average
exercise
price
|
|||||||||||||
10.01
|
|
|
—
|
|
20.00
|
|
|
610,645
|
|
|
4.4
|
|
15.90
|
|
|
589,110
|
|
|
4.3
|
|
|
15.80
|
|
||
20.01
|
|
|
—
|
|
30.00
|
|
|
1,425,513
|
|
|
4.7
|
|
25.61
|
|
|
1,196,973
|
|
|
4.2
|
|
|
25.50
|
|
||
30.01
|
|
|
—
|
|
40.00
|
|
|
267,480
|
|
|
8.2
|
|
32.30
|
|
|
43,744
|
|
|
4.0
|
|
|
32.22
|
|
||
40.01
|
|
|
—
|
|
50.00
|
|
|
178,418
|
|
|
6.5
|
|
43.27
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
|
|
|
|
|
|
|
|
2,482,056
|
|
|
5.1
|
|
$
|
25.21
|
|
|
1,829,827
|
|
|
4.2
|
|
|
$
|
22.54
|
|
|
|
RSUs
|
|
Weighted-
average grant
date fair value (a)
|
|||
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
|
|
Granted
|
|
195,590
|
|
|
48.42
|
|
|
Vested
|
|
(71,776
|
)
|
|
38.94
|
|
|
Impact of spin-off
|
|
110,350
|
|
|
—
|
|
|
Outstanding and unvested at December 31, 2013
|
|
378,217
|
|
|
$
|
33.59
|
|
(a)
|
The weighted average grant date fair value for periods ending prior to December 1, 2013 represents the fair value of awards granted with respect to Ingersoll Rand ordinary shares, prior to conversion to awards of the Company. The weighted average grant date fair value of awards on or after December 1, 2013 represents the fair value of the awards on the grant date converted to ordinary shares of the Company.
|
|
|
PSUs
|
|
Weighted-average grant date fair value (a)
|
|||
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
|
|
Granted
|
|
75,172
|
|
|
34.90
|
|
|
Vested
|
|
(34,701
|
)
|
|
34.94
|
|
|
Impact of spin-off
|
|
(120,044
|
)
|
|
—
|
|
|
Outstanding and unvested at December 31, 2013
|
|
62,883
|
|
|
$
|
29.27
|
|
(a)
|
The weighted average grant date fair value for periods ending prior to December 1, 2013 represents the fair value of awards granted with respect to Ingersoll Rand ordinary shares, prior to conversion to awards of the Company. The weighted average grant date fair value of awards on or after December 1, 2013 represents the fair value of the awards on the grant date converted to ordinary shares of the Company.
|
In millions
|
|
2013
|
|
2012
|
|
2011
|
||||||
Americas
|
|
$
|
0.1
|
|
|
$
|
1.7
|
|
|
$
|
(0.8
|
)
|
EMEIA
|
|
5.7
|
|
|
5.8
|
|
|
1.1
|
|
|||
Total
|
|
$
|
5.8
|
|
|
$
|
7.5
|
|
|
$
|
0.3
|
|
Cost of goods sold
|
|
$
|
3.1
|
|
|
$
|
3.0
|
|
|
$
|
0.1
|
|
Selling and administrative expenses
|
|
2.7
|
|
|
4.5
|
|
|
0.2
|
|
|||
Total
|
|
$
|
5.8
|
|
|
$
|
7.5
|
|
|
$
|
0.3
|
|
In millions
|
|
Americas
|
|
EMEIA
|
|
Total
|
||||||
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
|
)
|
|||
December 31, 2012
|
|
—
|
|
|
3.0
|
|
|
3.0
|
|
|||
Additions, net of reversals
|
|
0.1
|
|
|
5.7
|
|
|
5.8
|
|
|||
Cash and non-cash uses
|
|
(0.1
|
)
|
|
(6.1
|
)
|
|
(6.2
|
)
|
|||
Currency translation
|
|
—
|
|
|
0.2
|
|
|
0.2
|
|
|||
December 31, 2013
|
|
$
|
—
|
|
|
$
|
2.8
|
|
|
$
|
2.8
|
|
IT related
|
$
|
1.5
|
|
HR releated
|
1.9
|
|
|
Finance related
|
0.7
|
|
|
Marketing and rebranding
|
0.6
|
|
|
Other
|
1.2
|
|
|
|
$
|
5.9
|
|
In millions
|
|
2013
|
|
2012
|
|
2011
|
||||||
Interest income
|
|
$
|
(0.8
|
)
|
|
$
|
(0.1
|
)
|
|
$
|
(0.4
|
)
|
Exchange (gain) loss
|
|
7.9
|
|
|
3.3
|
|
|
(4.1
|
)
|
|||
Other
|
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
|||
Other expense (income), net
|
|
$
|
7.1
|
|
|
$
|
3.2
|
|
|
$
|
(4.6
|
)
|
In millions
|
|
2013
|
|
2012
|
|
2011
|
||||||
United States
|
|
$
|
318.0
|
|
|
$
|
317.0
|
|
|
$
|
291.1
|
|
Non-U.S.
|
|
(99.5
|
)
|
|
46.9
|
|
|
71.1
|
|
|||
Total
|
|
$
|
218.5
|
|
|
$
|
363.9
|
|
|
$
|
362.2
|
|
In millions
|
|
2013
|
|
2012
|
|
2011
|
||||||
Current tax expense (benefit):
|
|
|
|
|
|
|
||||||
United States
|
|
$
|
118.5
|
|
|
$
|
121.3
|
|
|
$
|
102.4
|
|
Non-U.S.
|
|
37.6
|
|
|
18.6
|
|
|
27.3
|
|
|||
Total:
|
|
156.1
|
|
|
139.9
|
|
|
129.7
|
|
|||
Deferred tax expense (benefit):
|
|
|
|
|
|
|
||||||
United States
|
|
6.9
|
|
|
(4.0
|
)
|
|
(0.4
|
)
|
|||
Non-U.S.
|
|
11.2
|
|
|
—
|
|
|
1.2
|
|
|||
Total:
|
|
18.1
|
|
|
(4.0
|
)
|
|
0.8
|
|
|||
Total tax expense (benefit):
|
|
|
|
|
|
|
||||||
United States
|
|
125.4
|
|
|
117.3
|
|
|
102.0
|
|
|||
Non-U.S.
|
|
48.8
|
|
|
18.6
|
|
|
28.5
|
|
|||
Total
|
|
$
|
174.2
|
|
|
$
|
135.9
|
|
|
$
|
130.5
|
|
|
|
Percent of pretax income
|
|||||||
|
|
2013
|
|
2012
|
|
2011
|
|||
Statutory U.S. rate
|
|
35.0
|
%
|
|
35.0
|
%
|
|
35.0
|
%
|
Increase (decrease) in rates resulting from:
|
|
|
|
|
|
|
|||
Non-U.S. tax rate differential
|
|
(2.6
|
)
|
|
(0.5
|
)
|
|
(1.1
|
)
|
State and local income taxes (1)
|
|
5.6
|
|
|
2.8
|
|
|
2.3
|
|
Valuation allowances
|
|
16.4
|
|
|
0.5
|
|
|
0.6
|
|
Goodwill impairment charge
|
|
18.6
|
|
|
—
|
|
|
—
|
|
Reserves for uncertain tax positions
|
|
4.5
|
|
|
0.6
|
|
|
1.7
|
|
Tax on unremitted earnings
|
|
3.4
|
|
|
—
|
|
|
—
|
|
Production incentives
|
|
(2.3
|
)
|
|
—
|
|
|
—
|
|
Other adjustments
|
|
1.1
|
|
|
(1.1
|
)
|
|
(2.5
|
)
|
Effective tax rate
|
|
79.7
|
%
|
|
37.3
|
%
|
|
36.0
|
%
|
(1)
|
Net of changes in valuation allowances
|
In millions
|
|
2013
|
|
2012
|
||||
Deferred tax assets:
|
|
|
|
|
||||
Inventory and accounts receivable
|
|
$
|
5.6
|
|
|
$
|
7.0
|
|
Fixed assets and intangibles
|
|
116.4
|
|
|
1.5
|
|
||
Postemployment and other benefit liabilities
|
|
17.5
|
|
|
12.7
|
|
||
Other reserves and accruals
|
|
3.7
|
|
|
10.3
|
|
||
Net operating losses and credit carryforwards
|
|
35.0
|
|
|
25.3
|
|
||
Investment and other asset basis differences
|
|
—
|
|
|
7.3
|
|
||
Other
|
|
0.3
|
|
|
1.2
|
|
||
Gross deferred tax assets
|
|
178.5
|
|
|
65.3
|
|
||
Less: deferred tax valuation allowances
|
|
(46.9
|
)
|
|
(5.8
|
)
|
||
Deferred tax assets net of valuation allowances
|
|
$
|
131.6
|
|
|
$
|
59.5
|
|
Deferred tax liabilities:
|
|
|
|
|
||||
Fixed assets and intangibles
|
|
$
|
(33.4
|
)
|
|
$
|
(46.3
|
)
|
Unremitted earnings of foreign subsidiaries
|
|
(7.5
|
)
|
|
—
|
|
||
Other reserves and accruals
|
|
(0.5
|
)
|
|
(1.8
|
)
|
||
Other
|
|
(1.5
|
)
|
|
(0.7
|
)
|
||
Gross deferred tax liabilities
|
|
(42.9
|
)
|
|
(48.8
|
)
|
||
Net deferred tax assets (liabilities)
|
|
$
|
88.7
|
|
|
$
|
10.7
|
|
In millions
|
|
Amount
|
|
Expiration
Period
|
||
U.S. Federal net operating loss carryforwards
|
|
$
|
15.0
|
|
|
2026 & 2027
|
U.S. Federal credit carryforwards
|
|
0.3
|
|
|
2024-Unlimited
|
|
U.S. State net operating loss carryforwards
|
|
7.9
|
|
|
2014-2032
|
|
Non-U.S. net operating loss carryforwards
|
|
100.0
|
|
|
2014-Unlimited
|
|
Non-U.S. credit carryforwards
|
|
9.9
|
|
|
Unlimited
|
In millions
|
|
2013
|
|
2012
|
|
2011
|
||||||
Beginning balance
|
|
$
|
5.8
|
|
|
$
|
9.7
|
|
|
$
|
9.8
|
|
Increase to valuation allowance
|
|
44.9
|
|
|
1.8
|
|
|
2.0
|
|
|||
Decrease to valuation allowance
|
|
(0.5
|
)
|
|
(0.1
|
)
|
|
—
|
|
|||
Net equity with parent
|
|
(4.0
|
)
|
|
(5.9
|
)
|
|
(1.6
|
)
|
|||
Accumulated other comprehensive income (loss)
|
|
0.7
|
|
|
0.3
|
|
|
(0.5
|
)
|
|||
Ending balance
|
|
$
|
46.9
|
|
|
$
|
5.8
|
|
|
$
|
9.7
|
|
In millions
|
|
2013
|
|
2012
|
|
2011
|
||||||
Beginning balance
|
|
$
|
63.6
|
|
|
$
|
63.0
|
|
|
$
|
53.3
|
|
Additions based on tax positions related to the current year
|
|
9.0
|
|
|
1.7
|
|
|
1.6
|
|
|||
Net equity adjustment with former parent
|
|
(25.4
|
)
|
|
—
|
|
|
—
|
|
|||
Additions based on tax positions related to prior years
|
|
0.5
|
|
|
4.3
|
|
|
17.6
|
|
|||
Reductions based on tax positions related to prior years
|
|
(6.9
|
)
|
|
(3.7
|
)
|
|
(8.7
|
)
|
|||
Reductions related to settlements with tax authorities
|
|
—
|
|
|
(1.6
|
)
|
|
—
|
|
|||
Reductions related to lapses of statute of limitations
|
|
(0.7
|
)
|
|
—
|
|
|
(0.1
|
)
|
|||
Translation (gain)/loss
|
|
0.5
|
|
|
(0.1
|
)
|
|
(0.7
|
)
|
|||
Ending balance
|
|
$
|
40.6
|
|
|
$
|
63.6
|
|
|
$
|
63.0
|
|
In millions
|
2013
|
|
2012
|
|
2011
|
||||||
Net revenues
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
72.2
|
|
After-tax earnings (loss) from operations
|
$
|
(0.3
|
)
|
|
$
|
(0.5
|
)
|
|
$
|
(1.3
|
)
|
Gain (loss) on sale, net of tax
|
—
|
|
|
(1.5
|
)
|
|
(5.2
|
)
|
|||
Discontinued operations, net of tax
|
$
|
(0.3
|
)
|
|
$
|
(2.0
|
)
|
|
$
|
(6.5
|
)
|
In millions
|
|
2013
|
|
2012
|
|
2011
|
|||
Weighted-average number of basic shares
|
|
96.0
|
|
|
96.0
|
|
|
96.0
|
|
Shares issuable under incentive stock plans
|
|
0.1
|
|
|
—
|
|
|
—
|
|
Weighted-average number of diluted shares
|
|
96.1
|
|
|
96.0
|
|
|
96.0
|
|
|
2013
|
|
2012
|
|
2011
|
||||||
Centrally managed service costs
|
$
|
104.6
|
|
|
$
|
94.8
|
|
|
$
|
86.7
|
|
Historical Ingersoll Rand corporate overhead allocations
|
36.6
|
|
|
53.5
|
|
|
52.0
|
|
|||
Incremental corporate costs not previously allocated to businesses
|
33.3
|
|
|
28.4
|
|
|
21.8
|
|
|||
Total
|
$
|
174.5
|
|
|
$
|
176.7
|
|
|
$
|
160.5
|
|
In millions
|
2013
|
|
2012
|
||||
Balance at beginning of period
|
$
|
9.6
|
|
|
$
|
9.1
|
|
Reductions for payments
|
(5.7
|
)
|
|
(4.9
|
)
|
||
Accruals for warranties issued during the current period
|
5.0
|
|
|
4.9
|
|
||
Changes to accruals related to preexisting warranties
|
1.0
|
|
|
0.4
|
|
||
Translation
|
—
|
|
|
0.1
|
|
||
Balance at end of period
|
$
|
9.9
|
|
|
$
|
9.6
|
|
Dollar amounts in millions
|
|
2013
|
|
2012
|
|
2011
|
||||||
Americas
|
|
|
|
|
|
|
||||||
Net revenues
|
|
$
|
1,514.7
|
|
|
$
|
1,471.9
|
|
|
$
|
1,402.2
|
|
Segment operating income
|
|
390.0
|
|
|
377.2
|
|
|
347.8
|
|
|||
Segment operating margin
|
|
25.7
|
%
|
|
25.6
|
%
|
|
24.8
|
%
|
|||
Depreciation and amortization
|
|
26.5
|
|
|
23.3
|
|
|
22.8
|
|
|||
Capital expenditures
|
|
10.5
|
|
|
16.9
|
|
|
18.9
|
|
|||
Total segment assets
|
|
856.6
|
|
|
883.3
|
|
|
883.4
|
|
|||
|
|
|
|
|
|
|
||||||
EMEIA
|
|
|
|
|
|
|
||||||
Net revenues
|
|
425.3
|
|
|
428.3
|
|
|
476.0
|
|
|||
Segment operating income (loss) (a)
|
|
(3.1
|
)
|
|
8.2
|
|
|
19.4
|
|
|||
Segment operating margin
|
|
(0.7
|
)%
|
|
1.9
|
%
|
|
4.1
|
%
|
|||
Depreciation and amortization
|
|
18.2
|
|
|
18.3
|
|
|
20.9
|
|
|||
Capital expenditures
|
|
5.6
|
|
|
1.7
|
|
|
5.5
|
|
|||
Total segment assets
|
|
525.6
|
|
|
724.4
|
|
|
798.5
|
|
|||
|
|
|
|
|
|
|
||||||
Asia Pacific
|
|
|
|
|
|
|
||||||
Net revenues
|
|
153.5
|
|
|
146.4
|
|
|
143.0
|
|
|||
Segment operating income (b)
|
|
25.4
|
|
|
11.4
|
|
|
11.9
|
|
|||
Segment operating margin
|
|
16.5
|
%
|
|
7.8
|
%
|
|
8.3
|
%
|
|||
Depreciation and amortization
|
|
0.9
|
|
|
2.2
|
|
|
2.3
|
|
|||
Capital expenditures
|
|
0.8
|
|
|
1.0
|
|
|
1.1
|
|
|||
Total segment assets
|
|
403.3
|
|
|
310.9
|
|
|
294.8
|
|
|||
|
|
|
|
|
|
|
||||||
Total net revenues
|
|
$
|
2,093.5
|
|
|
$
|
2,046.6
|
|
|
$
|
2,021.2
|
|
|
|
|
|
|
|
|
||||||
Reconciliation to Operating Income
|
|
|
|
|
|
|
||||||
Segment operating income from reportable segments
|
|
$
|
412.3
|
|
|
$
|
396.8
|
|
|
$
|
379.1
|
|
Asset impairment (a)
|
|
(137.6
|
)
|
|
—
|
|
|
—
|
|
|||
Unallocated corporate expense
|
|
(38.9
|
)
|
|
(28.2
|
)
|
|
(20.1
|
)
|
|||
Total operating income
|
|
$
|
235.8
|
|
|
$
|
368.6
|
|
|
$
|
359.0
|
|
Total operating income as a percentage of revenues
|
|
11.3
|
%
|
|
18.0
|
%
|
|
17.8
|
%
|
|||
Depreciation and amortization from reportable segments
|
|
$
|
45.6
|
|
|
$
|
43.8
|
|
|
$
|
46.0
|
|
Unallocated depreciation and amortization
|
|
0.5
|
|
|
—
|
|
|
—
|
|
|||
Total depreciation and amortization
|
|
$
|
46.1
|
|
|
$
|
43.8
|
|
|
$
|
46.0
|
|
Capital expenditures from reportable segments
|
|
$
|
16.9
|
|
|
$
|
19.6
|
|
|
$
|
25.5
|
|
Corporate capital expenditures
|
|
3.3
|
|
|
—
|
|
|
—
|
|
|||
Total capital expenditures
|
|
$
|
20.2
|
|
|
$
|
19.6
|
|
|
$
|
25.5
|
|
Assets from reportable segments
|
|
$
|
1,785.5
|
|
|
$
|
1,918.6
|
|
|
$
|
1,976.7
|
|
Unallocated assets (c)
|
|
194.4
|
|
|
65.2
|
|
|
59.5
|
|
|||
Total assets
|
|
$
|
1,979.9
|
|
|
$
|
1,983.8
|
|
|
$
|
2,036.2
|
|
In millions
|
|
2013
|
|
2012
|
|
2011
|
||||||
Revenues
|
|
|
|
|
|
|
||||||
United States
|
|
$
|
1,331.5
|
|
|
$
|
1,299.3
|
|
|
$
|
1,241.3
|
|
Non-U.S.
|
|
762.0
|
|
|
747.3
|
|
|
779.9
|
|
|||
Total
|
|
$
|
2,093.5
|
|
|
$
|
2,046.6
|
|
|
$
|
2,021.2
|
|
In millions
|
|
2013
|
|
2012
|
||||
Long-lived assets
|
|
|
|
|
||||
United States
|
|
$
|
103.1
|
|
|
$
|
148.1
|
|
Non-U.S.
|
|
237.0
|
|
|
225.4
|
|
||
Total
|
|
$
|
340.1
|
|
|
$
|
373.5
|
|
Allowances for Doubtful Accounts:
|
|
||
|
|
||
Balance December 31, 2010
|
$
|
4.3
|
|
Additions charged to costs and expenses
|
0.9
|
|
|
Deductions*
|
(2.0
|
)
|
|
Business acquisitions and divestitures, net
|
0.2
|
|
|
Currency translation
|
—
|
|
|
|
|
||
Balance December 31, 2011
|
3.4
|
|
|
Additions charged to costs and expenses
|
2.4
|
|
|
Deductions*
|
(1.4
|
)
|
|
Currency translation
|
—
|
|
|
|
|
||
Balance December 31, 2012
|
4.4
|
|
|
Additions charged to costs and expenses
|
2.9
|
|
|
Deductions*
|
(1.7
|
)
|
|
Currency translation
|
(0.1
|
)
|
|
Other
|
—
|
|
|
|
|
||
Balance December 31, 2013
|
$
|
5.5
|
|
(*)
|
“Deductions” include accounts and advances written off, less recoveries.
|
1.
|
Your active employment with the Company will cease as of ________ (the “Termination Date”). Your compensation will continue through the Termination Date.
|
2.
|
Your separation arrangements will consist of the following:
|
1.
|
In exchange for the benefits described in paragraph 2 above:
|
a)
|
You agree to promptly provide to the Company by the Termination Date, all expense reports, all documents whether in written or electronic format, as well as all Company assets, such as cell phones, personal electronic devices, computer equipment, keys, security cards and/or company identification cards in your possession pertaining to your work at the Company.
|
b)
|
You acknowledge:
|
•
|
that any trade secrets, or confidential business/technical information of the Company, its suppliers or customers, (whether reduced to writing, maintained on any form of electronic media, maintained in your mind or memory or whether compiled by you or the Company) derive independent economic value from not being readily known to or ascertainable by proper means by others, who can obtain such economic value from their disclosure or use;
|
•
|
that reasonable efforts have been made by the Company to maintain the secrecy of such information;
|
•
|
that such information is the sole property of the Company (or its suppliers or customers); and
|
•
|
that you agree not to retain, use or disclose such information during or after your employment. You further agree that any such retention, use or disclosure, in violation of this Agreement, will constitute a misappropriation of trade secrets of the Company (or its suppliers or customers) and a violation of the Code of Conduct and Proprietary Agreements that you have previously made with the Company. You also agree that the Company may seek injunctive relief and damages to enforce this provision.
|
c)
|
You agree not to disclose the existence or the terms of this agreement to anyone inside or outside the Company, subordinates or any other employees of the Company. This shall not preclude disclosure to your spouse, attorney, financial advisor, designated Company representative, or in response to a governmental tax audit or judicial subpoena. You also agree to instruct those to whom you disclose the terms of this agreement not to disclose the existence of its terms and conditions to anyone else. This provision shall also not preclude you from disclosing this agreement and its terms in a legal proceeding to enforce its terms. The Company will hold you personally responsible for losses it incurs as a result of violation by you of this confidentiality obligation.
|
d)
|
For a period of []
Insert number equal to a Participant’s Severance Multiple multiplied by 12.
months following the Termination Date, you agree not to directly or indirectly recruit or attempt to recruit or hire any employee(s), sales representative(s), agent(s) or consultant(s) of the Company to terminate their employment, representation or other association with the Company without the prior written consent of the Company.
|
e)
|
For a period of []
Insert number equal to a Participant’s Severance Multiple multiplied by 12.
months following the Termination Date, you agree not to directly or indirectly be engaged in, or have a financial interest (other than an ownership position of less than 5% in any company whose shares are publicly traded or any non-voting, non-convertible debt securities in any company), in any business which competes with any business of the Company Group.
|
f)
|
You agree not to make any statement or criticism that could reasonably be deemed to be adverse to the interests of the Company or its current or former officers, directors, or employees. Without limiting the generality of the foregoing, this includes any disparaging statements concerning, or criticisms of, the Company and its current or former directors, officers or, employees, made in public forums or to the Company’s investors, external analysts, customers and service providers. You agree that any violation of these commitments will be a material breach by you of this Agreement and the Company will have no further obligation to provide any compensation or benefits referred to in this Agreement. You will also be liable for damages (both compensatory and punitive) to the fullest extent of the law as a result of the injury incurred by the Company as a result of such remarks or communications.
|
g)
|
[DELETE this section if employee works in California, Montana, North Dakota, Oklahoma, or Oregon.] For a period of _____ weeks [Note: should be equal to amount of weeks of Base Salary provided as severance benefits under the Plan] following the Termination Date, you agree to refrain from competing with the Company with respect to any aspect of its businesses, including without limitation, the design, manufacture, sale or distribution of similar or competitive products as an employee or consultant/representative of a competitor of any IR component, sector or business you have worked for in the last 5 years. If an arbitrator or a court shall finally hold that the time or territory or any other provisions stated in this Section (Non-Competition) constitute an unreasonable restriction upon you, the provisions of this Agreement shall not be rendered void, but shall instead apply to a lesser extent as such arbitrator or court may determine constitutes a reasonable restriction under the circumstances involved.
|
h)
|
[DELETE this section if employee works in California, Montana, North Dakota, Oklahoma, or Oregon.] For a period of _____ weeks [Note: should be equal to amount of weeks of Base Salary provided as severance benefits under the Plan] following the Termination Date, you agree you will not, directly or indirectly, for your own account or for the account of others, solicit the business of or perform services for the business of any “Company Customer”. Company Customer means any individual or entity for whom/which the Company provides or has provided services or products or has made a proposal to provide services or products and with whom/which you have had contact on behalf of the Company or for whom/which you were engaged in preparing a proposal during the last 5 years preceding the end of my employment.
|
1.
|
a)
You hereby irrevocably and unconditionally release and forever discharge the Company and each and all of its successors, predecessors, businesses, affiliates, and assigns and all person acting by, through and under or in concert with any of them from any and all complaints, claims, compensation program payments and liabilities of any kind (with the exception of claims for workers’ compensation and unemployment claims), suspected or unsuspected (hereinafter referred to as “Claim” or “Claims”) which you ever had, now have, or which may arise in the future, regarding any matter arising on or before the date of your execution of this Agreement, including but not limited to any Claims under the Age Discrimination in Employment Act (29 U.S.C 621), the Older Workers Benefit Protection Act of 1990 (29 U.S.C. 626
et seq
.), Title VII of the Civil Rights Act of 1964, (42 U.S.C. 2000e
et seq
.), as amended by the Civil Rights Act of 1991, (42 U.S.C. 1981
et seq
.), Sections 1981 through 1988 of Title 42 of the United States Code, the Americans with Disabilities Act (42 U.S.C. 12101
et seq
.), Title II of the Genetic Information Nondiscrimination Act of 2008, 42 U.S.C. §2000ff
et seq
.) [Add pertinent state statutes] and/or other applicable federal, state or local law, regulation, ordinance or order, and including all claims for, or entitlement to, attorney fees. This section and the release hereunder, does not waive any claims under the ADEA that may arise
after
the date of your execution of this Agreement.
|
a)
|
Nothing in this Agreement shall prevent you (or your attorneys) from (i) commencing an action or proceeding to enforce this Agreement or (ii) exercising your right under the Older Workers Benefit Protection Act of 1990 to challenge the validity of your waiver of ADEA claims set forth in this Agreement.
|
b)
|
Nothing in this Agreement shall be construed to prohibit you from filing any charge or complaint with the EEOC or State Counterpart Agency or participating in any investigation or proceeding conducted by the EEOC or State Counterpart Agency, nor shall any provision of this Agreement adversely affect your right to engage in such conduct. Notwithstanding the foregoing you waive the right to obtain any monetary relief from the EEOC or State Counterpart Agency or recover any monies or compensation as a result of filing any such charge or complaint.
|
c)
|
FOR CALIFORNIA ADD: It is a further condition of the consideration hereof and your agreement that in executing this Agreement that it should be effective as a bar to each and every claim, demand and cause of action stated above. In furtherance of this intention, you hereby expressly waive any and all rights and benefits conferred upon you by the provisions of Section 1542 of the California Civil Code and expressly consent that this Agreement shall be given full force and effect according to each and all of its express terms and provisions, including those relating to unknown and unsuspected claims, demands and causes of action, if any, as well as those relating to any other claims, demands, and causes of action referred to above. Under Section 1542 of the California Code, a general release does not extend to claims which the creditor (employee) does not know or suspect to exist in his favor at the time of executing the Release, which if known by him must have materially affected his settlement with the debtor (Company).
|
2.
|
You represent, warrant and acknowledge that the Company has paid you for all hours worked. You represent, warrant and acknowledge that the Company owes you no vacation pay other than your accrued, unused vacation attributable to the year in which your last day of active employment occurs, which will be paid in a lump sum based on your base salary at termination.
|
6.
|
You also hereby acknowledge and agree that you have received any and all leave(s) of absence to which you may have been entitled pursuant to the federal Family and Medical Leave Act of 1993, and if any such leave was taken, you were not discriminated against or retaliated against regarding same. Except as may be expressly stated herein, any rights to benefits under Company sponsored benefit plans are governed exclusively by the written plan documents.
|
7.
|
This release of Claims does not affect any pending claim for workers’ compensation benefits. You affirm that you have no known and unreported work related injuries or occupational diseases as of the date of this Agreement.
|
1.
|
You acknowledge that you have no pending, contemplated or submitted disability claims. You acknowledge that you are aware of no facts that would give rise to a disability claim. You acknowledge that any disability payments for time periods covering the Termination Date forward would be withheld as an offset to the severance amounts provided above. Alternatively, if you obtain disability payments for the Termination Date forward, then the severance described above would be reduced. The Company has a right to reimbursement to the extent you obtain both disability payments for time periods after the Termination Date and Severance.
|
2.
|
If you accept another position with the Company prior to the Termination Date, the severance benefits described in Paragraph 2 of this Agreement will be withdrawn. Alternatively, if you have already received the severance benefits described in Paragraph 2 of this Agreement at the time you accept a position with the Company, you will only be entitled to retain the portion to the lump sum payment representing the number of weeks you were not employed by the Company. You will be required to repay to the Company the portion of the lump sum payment representing the number of weeks after which you became re-employed by the Company.
|
10. a)
|
You agree that you will personally provide reasonable assistance and cooperation to the Company in activities related to the prosecution or defense of any pending or future lawsuits or claims involving the Company especially on matters you have been privy to, holding all privileged attorney-client matters in strictest confidence.
|
a)
|
You will promptly notify the Company if you receive any requests from anyone for information regarding the Company or if you become aware of any potential claims or proposed litigation against the Company.
|
b)
|
You shall immediately notify the Company if you are served with a subpoena, order, directive or other legal process requiring you to provide sworn testimony regarding a Company-related matter.
|
1.
|
If the Company reasonably determines that you have violated any of your obligations under this Agreement, you agree to:
|
a)
|
Forfeit any right to receive the payments described in paragraph 2 above,
|
b)
|
Forfeit all rights to all outstanding stock options, vested or not, that were previously awarded, and
|
c)
|
Upon demand, return all payments set forth in this Agreement that have been made to you. If you fail to do so, the Company has the right to recover costs and attorney’s fees associated with such recovery.
|
2.
|
This Agreement sets forth the entire agreement between you and the Company and fully supersedes any and all prior agreements or understandings, written or oral, between you and the Company pertaining to the subject matter hereof.
|
3.
|
This Agreement shall be interpreted in accordance with the plain meaning of its terms and not strictly for or against any of the parties hereto.
|
4.
|
This Agreement is governed by the laws of the State in which the employee worked at the time of the employee’s termination without regard to
its choice of law provisions, to the extent not governed by federal law.
|
5.
|
Should any provision of this Agreement be declared or be determined by any court of competent jurisdiction to be wholly or partially illegal, invalid, or unenforceable, the legality, validity, and enforceability of the remaining parts, terms, or provisions shall not be affected thereby, and said illegal, invalid or unenforceable part, term, or provision shall be deemed not to be a part of this Agreement.
|
6.
|
You understand and agree that:
|
a)
|
You are signing this Agreement voluntarily and with full knowledge and understanding of its terms, which include a waiver of all rights or claims you have or may have against the Company as set forth herein including, but not limited to, all claims of age discrimination and all claims of retaliation;
|
a)
|
You are, through this Agreement, releasing, among others, the Company and its direct and indirect subsidiaries, each and all of their officers, agents, directors, supervisors, employees, representatives, and their successors and assigns, from any and all claims you may have against them;
|
b)
|
You are not being asked or required to waive rights or claims that may arise
after
the date of your execution of this Agreement, including, without limitation, any rights or claims that you may have to secure enforcement of the terms and conditions of this Agreement;
|
c)
|
The consideration provided to you under this Agreement is in addition to anything of value to which you are already entitled;
|
d)
|
You knowingly and voluntarily agree to all of the terms set forth in this Agreement;
|
e)
|
You knowingly and voluntarily intend to be legally bound by the same;
|
f)
|
You were advised and hereby are advised in writing to consider the terms of the Agreement and consult with an attorney of your choice prior to executing this Agreement;
|
g)
|
You have been provided with sufficient opportunity to consult with an attorney or have waived that opportunity;
|
h)
|
You have a full [twenty-one (21)] [forty-five (45)] days
Time period to be selected based on whether applicable termination was “in connection with an exit incentive or other employment termination program” (as such phrase is defined in the Age Discrimination in Employment Act of 1967). If 45 days is used, include attachment with required
|
i)
|
You have the right to revoke this Agreement within seven consecutive calendar days (“Revocation Period”) after signing and dating it, by providing written notice of revocation to [INSERT Name & Address of Appropriate HR Professional]. If you revoke this Agreement during this Revocation Period, it becomes null and void in its entirety. If you do not revoke this Agreement, after the Revocation Period, it becomes final.
|
Subsidiary
|
|
Jurisdiction of Formation
|
A.B.S. - R.I.C.A.
|
|
France
|
Administradora Lockey CA**
|
|
Venezuela
|
Allegion A/S
|
|
Denmark
|
Allegion B.V.
|
|
Netherlands
|
Allegion LLC
|
|
Delaware
|
Allegion NV
|
|
Belgium
|
Allegion SA
|
|
Venezuela
|
Allegion (Australia) Pty Limited
|
|
Australia
|
Allegion Canada Inc.
|
|
Canada
|
Allegion Chile SpA
|
|
Chile
|
Allegion Colombia S.A.S.
|
|
Colombia
|
Allegion de Mexico, S. de R.L. de C.V.
|
|
Mexico
|
Allegion Deutsche Holding GmbH
|
|
Germany
|
Allegion EMEA BVBA
|
|
Belgium
|
Allegion Emniyet ve Guvenlik Sistemleri Sanayi AS
|
|
Turkey
|
Allegion Fu Hsing Limited**
|
|
Hong Kong
|
Allegion Fu Hsing Holdings Limited**
|
|
BVI
|
Allegion (Gibraltar) Holding Limited
|
|
Gibraltar
|
Allegion (Hong Kong) Limited
|
|
Hong Kong
|
Allegion Immobilien GmbH
|
|
Germany
|
Allegion India Private Limited
|
|
India
|
Allegion International AG
|
|
Switzerland
|
Allegion Investments (UK) Limited
|
|
United Kingdom
|
Allegion Irish Holding Company Limited
|
|
Ireland
|
Allegion Luxembourg Holding and Financing S.à r.l.
|
|
Luxembourg
|
Allegion Lux Financing I S.à r.l
|
|
Luxembourg
|
Allegion Lux Financing II S.à r.l.
|
|
Luxembourg
|
Allegion (New Zealand) Limited
|
|
New Zealand
|
Allegion Panama, S. de R.L.
|
|
Panama
|
Allegion S&S Holding Company Inc.
|
|
Delaware
|
Allegion S&S Lock Holding Company Inc.
|
|
Delaware
|
Allegion Security Technologies (China) Co. Ltd.
|
|
China
|
Allegion (UK) Limited
|
|
United Kingdom
|
Allegion US Holding Company Inc.
|
|
Delaware
|
Beijing Bocom Video Communication Systems Co., Ltd.*
|
|
China
|
Beijing Metal Door Co., Ltd.*
|
|
China
|
Bricard S.A.
|
|
France
|
CISA Cerraduras S.A.
|
|
Spain
|
CISA SpA
|
|
Italy
|
D. Purdue & Sons Ltd.
*
|
|
South Africa
|
Dor-O-Matic (Illinois) LLC
|
|
Illinois
|
Dor-o-Matic of Mid Atlantic States, Inc.
|
|
New Jersey
|
Electronic Technologies Corporation USA
|
|
New York
|
Fu Hsing Industrial (Shanghai) Co., Ltd.**
|
|
China
|
Fu Jia Hardware Products (Shanghai) Co., Ltd.**
|
|
China
|
Fu Yang Investment Company Limited
|
|
Taiwan
|
Harrow Industries LLC
|
|
Delaware
|
Harrow Products (Delaware) LLC
|
|
Delaware
|
Harrow Products, LLC
|
|
Delaware
|
Interflex Datensysteme GesmbH
|
|
Austria
|
Interflex Datensysteme GmbH & Co KG
|
|
Germany
|
Inversora Lockey Ltda.**
|
|
Colombia
|
Inversora Lockey CA**
|
|
Venezuela
|
Lockey Corp.**
|
|
Florida
|
Newman Tonks (Overseas Holdings) Limited
|
|
United Kingdom
|
Normbau Beschlage und Ausstattungs GmbH
|
|
Germany
|
Normbau France SAS
|
|
France
|
NT Group Properties Limited
|
|
United Kingdom
|
NT Leamington Limited
|
|
United Kingdom
|
Recognition Systems LLC
|
|
California
|
Schlage de Mexico SA de CV
|
|
Mexico
|
Schlage Lock Company LLC
|
|
Delaware
|
Shanghai Bocom Video Communication System Co. Ltd.
|
|
China
|
Shenzhen Bocom System Engineering Company Ltd
|
|
China
|
Taiwan Fu Hsing Industrial Company*
|
|
Taiwan
|
Tratamaq CA*
|
|
Venezuela
|
XceedID Corporation
|
|
Delaware
|
Von Duprin LLC
|
|
Indiana
|
1.
|
I have reviewed the Annual Report on Form 10-K of Allegion plc for the year ended December 31, 2013;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
c.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
1.
|
I have reviewed the Annual Report on Form 10-K of Allegion plc for the year ended December 31, 2013;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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a.
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b.
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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c.
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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a.
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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b.
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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a)
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“Allegion” means Allegion plc (or any successor thereto).
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b)
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“Award” means an award entitling a Participant to receive cash incentive compensation subject to the terms and conditions of the Plan.
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c)
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“Board” means the Board of Directors of Allegion.
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d)
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“
Cause
” means (i) any action by the Participant involving willful malfeasance or willful gross misconduct having a demonstrable adverse effect on any member of the Company Group; (ii) substantial failure or refusal by the Participant to perform his or her employment duties, which failure or refusal continues for a period of 10 days following delivery of written notice of such failure or refusal to the Participant by the Employer; (iii) the Participant being convicted of, or entering a plea of guilty or “no contest to”, a felony
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a)
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Change in Control: The date (i) any individual, corporation, partnership, group, association or other person or entity, together with its Affiliates and Associates (other than a trustee or other fiduciary holding securities under an employee benefit plan of the Company or Schlage Lock Company, LLC, a Delaware corporation), is or becomes the Beneficial Owner of securities of the Company representing 30% or more of the combined voting power of the Company’s Voting Securities; (ii) the Continuing Directors fail to constitute a majority of the members of the Board; (iii) of consummation of any transaction or series of transactions under which the Company is merged or consolidated with any other company which is not an Affiliate; (iv) of any sale, lease, exchange or other transfer, in one transaction or a series of related transactions, of all, or substantially all, of the assets of the Company, other than any sale, lease, exchange or other transfer to any Person or entity where the Company owns, directly or indirectly, at least 80% of the combined voting power of the Voting Securities of such Person or entity or its parent corporation after any such transfer; or (v) any other event that the Continuing Directors determine to be a Change in Control; provided, however, that in the case of a transaction described in (i), (iii) or (v) above, there shall not be a Change in Control if the shareholders of the Company immediately prior to any such transaction own (or continue to own by remaining outstanding or by being converted into Voting Securities of the surviving entity or parent entity) more than 50% of the combined voting power of the Voting Securities of the Company, the surviving entity or any parent of either immediately following such transaction, in substantially the same proportion to each other as prior to such transaction.
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b)
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“Code” means the Internal Revenue Code of 1986, as amended, including any successor law thereto.
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c)
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“ Committee” means the Compensation Committee of the Board, or such other committee as is appointed or designated by the Board to administer the Plan, in each case which shall be comprised solely of two or more “outside directors” (as defined under Section 162(m) of the Code and the regulations promulgated thereunder); provided, however, that with respect to Participants who are not executive officers of the Company, to the extent permitted by the Committee’s charter, the powers and authority of the Committee under the Plan are hereby delegated to the Company’s Chief Executive Officer and, in connection therewith, all references to the Committee in this Plan shall be deemed references to the Company’s Chief Executive Officer as it relates to those aspects of the Plan that have been so delegated.
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d)
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“Company” means Allegion and any subsidiary entity or affiliate thereof, including subsidiaries or affiliates which become such after adoption of the Plan.
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e)
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“Employee(s)” means a person(s) actively employed by the Company.
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f)
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“Participant” means any Employee who is selected by the Committee to participate under the Plan for a Performance Period.
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g)
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“Performance Goal” means, in relation to any Performance Period, the level of performance that must be achieved with respect to a Performance Measure.
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h)
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“Performance Measures” means the performance objectives established pursuant to this Plan for Participants who have received Awards. Performance Measures may apply individually or in any combination, and shall be subject to such modifications or variations as specified by the Committee.
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i)
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“Performance Period” means, in relation to any Award, the calendar year for which a Participant’s performance is being calculated.
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j)
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“Section 409A” shall mean Section 409A of the Code, the regulations and other binding guidance promulgated thereunder.
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k)
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“Retirement” shall mean retirement under the terms of any retirement plan maintained by the Company under which the Participant is covered or, in the event no such plan exists or the Participant is not covered under any such plan, the applicable definition used in the Participant’s work location, which will typically be stated as a combination of age and years of service at the end of employment.
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l)
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“Total and Permanent Disability” shall be defined as a disability determined under the long-term disability plan maintained by the Company under which the Participant is covered or, in the no such plan exists or the Participant is not covered under any such plan, as a total and permanent disability pursuant to the human resources policy at the Participant’s work location.
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