x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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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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Large accelerated filer
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x
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Accelerated filer
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¨
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Non-accelerated filer
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¨
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Smaller reporting company
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¨
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(Do not check if a smaller reporting company)
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Emerging growth company
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¨
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Item 1 -
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Item 2 -
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Item 3 -
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Item 4 -
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Item 1 -
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Item 1A -
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Item 2 -
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Item 6 -
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Item 1.
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Financial Statements
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Three months ended
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||||||
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March 31,
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||||||
In millions, except per share amounts
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2018
|
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2017
|
||||
Net revenues
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$
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613.1
|
|
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$
|
548.8
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Cost of goods sold
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355.3
|
|
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307.6
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Selling and administrative expenses
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159.1
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|
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141.7
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Operating income
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98.7
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|
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99.5
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|
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Interest expense
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12.9
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|
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15.9
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|
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Other (income) expense, net
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(0.4
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)
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1.3
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|
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Earnings before income taxes
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86.2
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|
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82.3
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Provision for income taxes
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13.8
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13.6
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Net earnings
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72.4
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|
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68.7
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Less: Net earnings attributable to noncontrolling interests
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0.2
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0.3
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Net earnings attributable to Allegion plc
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$
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72.2
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$
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68.4
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Earnings per share attributable to Allegion plc ordinary shareholders:
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Basic net earnings
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$
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0.76
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$
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0.72
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Diluted net earnings
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$
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0.75
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$
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0.71
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Weighted-average shares outstanding
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||||
Basic
|
95.1
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|
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95.3
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Diluted
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95.8
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96.1
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Dividends declared per ordinary share
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$
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0.21
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$
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0.16
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Total comprehensive income
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$
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99.5
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$
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81.7
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Less: Total comprehensive income attributable to noncontrolling interests
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1.2
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0.5
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Total comprehensive income attributable to Allegion plc
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$
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98.3
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$
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81.2
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In millions
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March 31,
2018 |
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December 31,
2017 |
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ASSETS
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Current assets:
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Cash and cash equivalents
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$
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151.8
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$
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466.2
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Accounts and notes receivable, net
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336.4
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296.6
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Inventories
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271.5
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239.8
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Other current assets
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42.9
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30.1
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Total current assets
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802.6
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1,032.7
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Property, plant and equipment, net
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277.4
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252.2
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Goodwill
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878.0
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761.2
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Intangible assets, net
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545.8
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394.3
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Other noncurrent assets
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124.3
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101.6
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Total assets
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$
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2,628.1
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$
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2,542.0
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LIABILITIES AND EQUITY
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Current liabilities:
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Accounts payable
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$
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197.5
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$
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188.3
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Accrued expenses and other current liabilities
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219.3
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237.5
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Short-term borrowings and current maturities of long-term debt
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35.3
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35.0
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Total current liabilities
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452.1
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460.8
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Long-term debt
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1,474.1
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1,442.3
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Other noncurrent liabilities
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240.8
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233.4
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Total liabilities
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2,167.0
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2,136.5
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Equity:
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Allegion plc shareholders’ equity:
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Ordinary shares, $0.01 par value (94,953,338 and 95,062,385 shares issued and outstanding at March 31, 2018 and December 31, 2017, respectively)
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0.9
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1.0
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Capital in excess of par value
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—
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9.1
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Retained earnings
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581.9
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544.4
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Accumulated other comprehensive loss
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(126.8
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)
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(152.9
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)
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Total Allegion plc shareholders’ equity
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456.0
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401.6
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Noncontrolling interests
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5.1
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3.9
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Total equity
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461.1
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405.5
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Total liabilities and equity
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$
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2,628.1
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$
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2,542.0
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Three months ended
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||||||
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March 31,
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||||||
In millions
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2018
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2017
|
||||
Cash flows from operating activities:
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Net earnings
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$
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72.4
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$
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68.7
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Adjustments to arrive at net cash used in operating activities:
|
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Depreciation and amortization
|
22.5
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16.5
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Discretionary pension plan contribution
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—
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(50.0
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)
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Changes in assets and liabilities and other non-cash items
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(105.0
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)
|
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(76.1
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)
|
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Net cash used in operating activities
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(10.1
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)
|
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(40.9
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)
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Cash flows from investing activities:
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Capital expenditures
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(8.7
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)
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(7.8
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)
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Acquisition of and equity investments in businesses, net of cash acquired
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(276.3
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)
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(20.8
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)
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Other investing activities, net
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0.1
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0.8
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Net cash used in investing activities
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(284.9
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)
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(27.8
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)
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Cash flows from financing activities:
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Short-term borrowings, net
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—
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(1.1
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)
|
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Proceeds from revolving facility
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40.0
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—
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Payments of long-term debt
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(8.8
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)
|
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(11.8
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)
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Net proceeds from (repayments of) debt
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31.2
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(12.9
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)
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Dividends paid to ordinary shareholders
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(19.7
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)
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(15.2
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)
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Repurchase of ordinary shares
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(30.0
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)
|
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(30.0
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)
|
||
Other financing activities, net
|
(2.4
|
)
|
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2.1
|
|
||
Net cash used in financing activities
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(20.9
|
)
|
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(56.0
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)
|
||
Effect of exchange rate changes on cash and cash equivalents
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1.5
|
|
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1.9
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|
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Net decrease in cash and cash equivalents
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(314.4
|
)
|
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(122.8
|
)
|
||
Cash and cash equivalents - beginning of period
|
466.2
|
|
|
312.4
|
|
||
Cash and cash equivalents - end of period
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$
|
151.8
|
|
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$
|
189.6
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In millions
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March 31,
2018 |
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December 31,
2017 |
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Raw materials
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$
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84.8
|
|
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$
|
66.6
|
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Work-in-process
|
33.7
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29.8
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Finished goods
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153.0
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|
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143.4
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Total
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$
|
271.5
|
|
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$
|
239.8
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In millions
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Americas
|
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EMEIA
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Asia Pacific
|
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Total
|
||||||||
December 31, 2017 (gross)
|
$
|
375.2
|
|
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$
|
769.8
|
|
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$
|
101.7
|
|
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$
|
1,246.7
|
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Accumulated impairment
|
—
|
|
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(478.6
|
)
|
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(6.9
|
)
|
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(485.5
|
)
|
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December 31, 2017 (net)
|
375.2
|
|
|
291.2
|
|
|
94.8
|
|
|
761.2
|
|
||||
Acquisitions
|
97.1
|
|
|
9.4
|
|
|
—
|
|
|
106.5
|
|
||||
Currency translation
|
0.3
|
|
|
7.9
|
|
|
2.1
|
|
|
10.3
|
|
||||
March 31, 2018 (net)
|
$
|
472.6
|
|
|
$
|
308.5
|
|
|
$
|
96.9
|
|
|
$
|
878.0
|
|
|
|
March 31, 2018
|
|
December 31, 2017
|
||||||||||||||||||||
In millions
|
|
Gross carrying amount
|
|
Accumulated amortization
|
|
Net carrying amount
|
|
Gross carrying amount
|
|
Accumulated amortization
|
|
Net carrying amount
|
||||||||||||
Completed technologies/patents
|
|
$
|
57.3
|
|
|
$
|
(11.3
|
)
|
|
$
|
46.0
|
|
|
$
|
32.6
|
|
|
$
|
(10.0
|
)
|
|
$
|
22.6
|
|
Customer relationships
|
|
411.9
|
|
|
(80.7
|
)
|
|
331.2
|
|
|
324.5
|
|
|
(74.1
|
)
|
|
250.4
|
|
||||||
Trade names (finite-lived)
|
|
91.4
|
|
|
(48.3
|
)
|
|
43.1
|
|
|
89.0
|
|
|
(46.1
|
)
|
|
42.9
|
|
||||||
Other
|
|
14.9
|
|
|
(8.6
|
)
|
|
6.3
|
|
|
7.9
|
|
|
(4.9
|
)
|
|
3.0
|
|
||||||
Total finite-lived intangible assets
|
|
575.5
|
|
|
$
|
(148.9
|
)
|
|
426.6
|
|
|
454.0
|
|
|
$
|
(135.1
|
)
|
|
318.9
|
|
||||
Trade names (indefinite-lived)
|
|
119.2
|
|
|
|
|
119.2
|
|
|
75.4
|
|
|
|
|
75.4
|
|
||||||||
Total
|
|
$
|
694.7
|
|
|
|
|
$
|
545.8
|
|
|
$
|
529.4
|
|
|
|
|
$
|
394.3
|
|
Business
|
|
Date
|
Technical Glass Products, Inc. ("TGP")
|
|
January 2018
|
Hammond Enterprises, Inc. ("Hammond")
|
|
January 2018
|
Qatar Metal Industries LLC ("QMI")
|
|
February 2018
|
AD Systems, Inc. ("AD Systems")
|
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March 2018
|
In millions
|
|
||
Accounts receivable, net
|
$
|
19.0
|
|
Inventories
|
16.9
|
|
|
Other current assets
|
2.1
|
|
|
Property, plant and equipment, net
|
25.0
|
|
|
Goodwill
|
106.5
|
|
|
Intangible assets, net
|
151.9
|
|
|
Other noncurrent assets
|
0.8
|
|
|
Accounts payable
|
(8.4
|
)
|
|
Accrued expenses and other current liabilities
|
(31.3
|
)
|
|
Total consideration
|
$
|
282.5
|
|
In millions, except per share amounts
|
Three months ended March 31, 2018
|
|
Three months ended March 31, 2017
|
||||
Net revenues
|
$
|
616.8
|
|
|
$
|
578.5
|
|
Net earnings attributable to Allegion plc
|
$
|
75.3
|
|
|
$
|
66.0
|
|
Basic net earnings per share
|
$
|
0.79
|
|
|
$
|
0.69
|
|
Diluted net earnings per share
|
$
|
0.79
|
|
|
$
|
0.69
|
|
In millions
|
Three months ended March 31, 2018
|
||
Net revenues
|
$
|
26.0
|
|
|
|
||
Earnings before income taxes
|
$
|
(1.1
|
)
|
In millions
|
March 31,
2018 |
|
December 31,
2017 |
||||
Term Facility
|
$
|
682.5
|
|
|
$
|
691.3
|
|
Revolving Facility
|
40.0
|
|
|
—
|
|
||
3.200% Senior Notes due 2024
|
400.0
|
|
|
400.0
|
|
||
3.550% Senior Notes due 2027
|
400.0
|
|
|
400.0
|
|
||
Other debt
|
1.4
|
|
|
1.0
|
|
||
Total borrowings outstanding
|
1,523.9
|
|
|
1,492.3
|
|
||
Less discounts and debt issuance costs, net
|
(14.5
|
)
|
|
(15.0
|
)
|
||
Total debt
|
1,509.4
|
|
|
1,477.3
|
|
||
Less current portion of long-term debt
|
35.3
|
|
|
35.0
|
|
||
Total long-term debt
|
$
|
1,474.1
|
|
|
$
|
1,442.3
|
|
|
Asset derivatives
|
|
Liability derivatives
|
||||||||||||
In millions
|
March 31,
2018 |
|
December 31,
2017 |
|
March 31,
2018 |
|
December 31,
2017 |
||||||||
Derivatives designated as hedges:
|
|
|
|
|
|
|
|
||||||||
Currency derivatives
|
$
|
0.9
|
|
|
$
|
0.2
|
|
|
$
|
—
|
|
|
$
|
0.3
|
|
Interest rate swaps
|
7.7
|
|
|
5.3
|
|
|
—
|
|
|
—
|
|
||||
Derivatives not designated as hedges:
|
|
|
|
|
|
|
|
||||||||
Currency derivatives
|
0.1
|
|
|
—
|
|
|
—
|
|
|
0.4
|
|
||||
Total derivatives
|
$
|
8.7
|
|
|
$
|
5.5
|
|
|
$
|
—
|
|
|
$
|
0.7
|
|
|
Amount of gain recognized in Accumulated other comprehensive loss
|
|
Location of gain recognized
in Net earnings |
|
Amount of gain reclassified from Accumulated other comprehensive loss and
recognized into Net earnings |
||||||||||||
In millions
|
2018
|
|
2017
|
|
|
2018
|
|
2017
|
|||||||||
Currency derivatives
|
$
|
1.8
|
|
|
$
|
0.9
|
|
|
Cost of goods sold
|
|
$
|
0.6
|
|
|
$
|
1.1
|
|
Interest rate swaps
|
2.3
|
|
|
0.3
|
|
|
Interest expense
|
|
0.2
|
|
|
—
|
|
||||
Total
|
$
|
4.1
|
|
|
$
|
1.2
|
|
|
|
|
$
|
0.8
|
|
|
$
|
1.1
|
|
|
U.S.
|
||||||
In millions
|
2018
|
|
2017
|
||||
Service cost
|
$
|
1.7
|
|
|
$
|
1.8
|
|
Interest cost
|
2.6
|
|
|
2.5
|
|
||
Expected return on plan assets
|
(3.7
|
)
|
|
(2.9
|
)
|
||
Administrative costs and other
|
0.5
|
|
|
0.4
|
|
||
Net amortization of:
|
|
|
|
||||
Prior service costs
|
0.1
|
|
|
0.1
|
|
||
Plan net actuarial losses
|
1.0
|
|
|
1.1
|
|
||
Net periodic pension benefit cost
|
$
|
2.2
|
|
|
$
|
3.0
|
|
|
Non-U.S.
|
||||||
In millions
|
2018
|
|
2017
|
||||
Service cost
|
$
|
0.6
|
|
|
$
|
0.4
|
|
Interest cost
|
2.1
|
|
|
2.1
|
|
||
Expected return on plan assets
|
(3.9
|
)
|
|
(3.4
|
)
|
||
Administrative costs and other
|
0.4
|
|
|
0.4
|
|
||
Amortization of plan net actuarial losses
|
0.2
|
|
|
0.4
|
|
||
Net periodic pension benefit income
|
$
|
(0.6
|
)
|
|
$
|
(0.1
|
)
|
•
|
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:
|
|
|
|
|
|
|
|
||||||||
Interest rate swaps
|
$
|
—
|
|
|
$
|
7.7
|
|
|
$
|
—
|
|
|
$
|
7.7
|
|
Foreign currency contracts
|
—
|
|
|
1.0
|
|
|
—
|
|
|
1.0
|
|
||||
Total asset recurring fair value measurements
|
—
|
|
|
8.7
|
|
|
—
|
|
|
8.7
|
|
||||
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Deferred compensation plans
|
—
|
|
|
20.0
|
|
|
—
|
|
|
20.0
|
|
||||
Total liability recurring fair value measurements
|
—
|
|
|
20.0
|
|
|
—
|
|
|
20.0
|
|
||||
Financial instruments not carried at fair value
|
|
|
|
|
|
|
|
||||||||
Total debt
|
—
|
|
|
1,492.2
|
|
|
—
|
|
|
1,492.2
|
|
||||
Total financial instruments not carried at fair value
|
$
|
—
|
|
|
$
|
1,492.2
|
|
|
$
|
—
|
|
|
$
|
1,492.2
|
|
|
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:
|
|
|
|
|
|
|
|
||||||||
Interest rate swaps
|
$
|
—
|
|
|
$
|
5.3
|
|
|
$
|
—
|
|
|
$
|
5.3
|
|
Foreign currency contracts
|
—
|
|
|
0.2
|
|
|
—
|
|
|
0.2
|
|
||||
Total asset recurring fair value measurements
|
—
|
|
|
5.5
|
|
|
—
|
|
|
5.5
|
|
||||
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Foreign currency contracts
|
—
|
|
|
0.7
|
|
|
—
|
|
|
0.7
|
|
||||
Deferred compensation plans
|
—
|
|
|
20.9
|
|
|
—
|
|
|
20.9
|
|
||||
Total liability recurring fair value measurements
|
—
|
|
|
21.6
|
|
|
—
|
|
|
21.6
|
|
||||
Financial instruments not carried at fair value
|
|
|
|
|
|
|
|
||||||||
Total debt
|
—
|
|
|
1,485.2
|
|
|
—
|
|
|
1,485.2
|
|
||||
Total financial instruments not carried at fair value
|
$
|
—
|
|
|
$
|
1,485.2
|
|
|
$
|
—
|
|
|
$
|
1,485.2
|
|
•
|
Interest rate swaps
– These instruments include interest rate swap contracts for
$250.0 million
of the Company's variable rate debt. The fair value of the derivative instruments are determined based on quoted prices for the Company's swaps, which are not considered an active market.
|
•
|
Foreign currency contracts
– These instruments include foreign currency contracts for non-functional currency balance sheet exposures. The fair value of the foreign currency contracts 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.
|
•
|
Deferred compensation plans
- These include obligations related to deferred compensation adjusted for market performance. The fair value is obtained based on observable market prices quoted on public exchanges for similar instruments.
|
•
|
Debt
– These securities are recorded at cost and include senior notes maturing through
2027
. The fair value of the long-term debt instruments is obtained based on observable market prices quoted on public exchanges for similar instruments.
|
In millions
|
Total
|
|
December 31, 2017
|
95.1
|
|
Shares issued under incentive plans, net
|
0.3
|
|
Repurchase of ordinary shares
|
(0.4
|
)
|
March 31, 2018
|
95.0
|
|
In millions
|
Allegion plc
shareholders’ equity |
|
Noncontrolling
interests |
|
Total
equity |
||||||
Balance at December 31, 2017
|
$
|
401.6
|
|
|
$
|
3.9
|
|
|
$
|
405.5
|
|
Net earnings
|
72.2
|
|
|
0.2
|
|
|
72.4
|
|
|||
Currency translation
|
24.9
|
|
|
1.0
|
|
|
25.9
|
|
|||
Change in value of derivatives qualifying as cash flow hedges, net of tax
|
2.5
|
|
|
—
|
|
|
2.5
|
|
|||
Pension and OPEB adjustments, net of tax
|
(1.3
|
)
|
|
—
|
|
|
(1.3
|
)
|
|||
Total comprehensive income
|
98.3
|
|
|
1.2
|
|
|
99.5
|
|
|||
Share-based compensation
|
6.4
|
|
|
—
|
|
|
6.4
|
|
|||
Dividends to ordinary shareholders
|
(19.9
|
)
|
|
—
|
|
|
(19.9
|
)
|
|||
Repurchase of ordinary shares
|
(30.0
|
)
|
|
—
|
|
|
(30.0
|
)
|
|||
Other
|
(0.4
|
)
|
|
—
|
|
|
(0.4
|
)
|
|||
Balance at March 31, 2018
|
$
|
456.0
|
|
|
$
|
5.1
|
|
|
$
|
461.1
|
|
In millions
|
Allegion plc
shareholders’ equity |
|
Noncontrolling
interests |
|
Total
equity |
||||||
Balance at December 31, 2016
|
$
|
113.3
|
|
|
$
|
3.1
|
|
|
$
|
116.4
|
|
Net earnings
|
68.4
|
|
|
0.3
|
|
|
68.7
|
|
|||
Currency translation
|
13.1
|
|
|
0.2
|
|
|
13.3
|
|
|||
Pension and OPEB adjustments, net of tax
|
(0.3
|
)
|
|
—
|
|
|
(0.3
|
)
|
|||
Total comprehensive income
|
81.2
|
|
|
0.5
|
|
|
81.7
|
|
|||
Cumulative effect of change in accounting principle
|
(5.0
|
)
|
|
—
|
|
|
(5.0
|
)
|
|||
Share-based compensation
|
5.0
|
|
|
—
|
|
|
5.0
|
|
|||
Dividends to ordinary shareholders
|
(15.2
|
)
|
|
—
|
|
|
(15.2
|
)
|
|||
Repurchase of ordinary shares
|
(30.0
|
)
|
|
—
|
|
|
(30.0
|
)
|
|||
Shares issued under incentive plans, net
|
2.1
|
|
|
—
|
|
|
2.1
|
|
|||
Balance at March 31, 2017
|
$
|
151.4
|
|
|
$
|
3.6
|
|
|
$
|
155.0
|
|
In millions
|
|
Cash flow hedges
|
|
Pension and OPEB Items
|
|
Foreign Currency Items
|
|
Total
|
||||||||
December 31, 2017
|
|
$
|
3.8
|
|
|
$
|
(107.6
|
)
|
|
$
|
(49.1
|
)
|
|
$
|
(152.9
|
)
|
Other comprehensive income (loss) before reclassifications
|
|
4.1
|
|
|
(2.0
|
)
|
|
24.9
|
|
|
27.0
|
|
||||
Amounts reclassified from accumulated other comprehensive loss
(a)
|
|
(0.5
|
)
|
|
1.1
|
|
|
—
|
|
|
0.6
|
|
||||
Tax expense
|
|
(1.1
|
)
|
|
(0.4
|
)
|
|
—
|
|
|
(1.5
|
)
|
||||
March 31, 2018
|
|
$
|
6.3
|
|
|
$
|
(108.9
|
)
|
|
$
|
(24.2
|
)
|
|
$
|
(126.8
|
)
|
(a)
|
Amounts reclassified from Accumulated other comprehensive loss and recognized into Net earnings related to cash flow hedges are recorded in Cost of goods sold and Interest expense. Amounts reclassified from Accumulated other comprehensive loss and recognized into Net earnings related to pension and OPEB items and foreign currency items are recorded in Other (income) expense, net.
|
In millions
|
|
Cash flow hedges
|
|
Pension and OPEB Items
|
|
Foreign Currency Items
|
|
Total
|
||||||||
December 31, 2016
|
|
$
|
3.4
|
|
|
$
|
(120.5
|
)
|
|
$
|
(147.2
|
)
|
|
$
|
(264.3
|
)
|
Other comprehensive income (loss) before reclassifications
|
|
1.2
|
|
|
(1.2
|
)
|
|
13.1
|
|
|
13.1
|
|
||||
Amounts reclassified from accumulated other comprehensive loss
(a)
|
|
(1.1
|
)
|
|
1.2
|
|
|
—
|
|
|
0.1
|
|
||||
Tax expense
|
|
—
|
|
|
(0.3
|
)
|
|
—
|
|
|
(0.3
|
)
|
||||
March 31, 2017
|
|
$
|
3.5
|
|
|
$
|
(120.8
|
)
|
|
$
|
(134.1
|
)
|
|
$
|
(251.4
|
)
|
(a)
|
Amounts reclassified from Accumulated other comprehensive loss and recognized into Net earnings related to cash flow hedges are recorded in Cost of goods sold and Interest expense. Amounts reclassified from Accumulated other comprehensive loss and recognized into Net earnings related to pension and OPEB items and foreign currency items are recorded in Other (income) expense, net.
|
|
Three months ended
|
||||||
In millions
|
2018
|
|
2017
|
||||
Stock options
|
$
|
1.6
|
|
|
$
|
1.2
|
|
RSUs
|
3.1
|
|
|
2.4
|
|
||
PSUs
|
1.8
|
|
|
1.7
|
|
||
Deferred compensation
|
0.1
|
|
|
0.8
|
|
||
Pre-tax expense
|
6.6
|
|
|
6.1
|
|
||
Tax benefit
|
(0.5
|
)
|
|
(2.0
|
)
|
||
After-tax expense
|
$
|
6.1
|
|
|
$
|
4.1
|
|
|
2018
|
|
2017
|
||||||||||
|
Number
granted |
|
Weighted-
average fair value per award |
|
Number
granted |
|
Weighted-
average fair value per award |
||||||
Stock options
|
160,525
|
|
|
$
|
21.29
|
|
|
165,113
|
|
|
$
|
18.22
|
|
RSUs
|
91,374
|
|
|
$
|
86.55
|
|
|
96,609
|
|
|
$
|
71.84
|
|
|
2018
|
|
2017
|
||
Dividend yield
|
0.97
|
%
|
|
0.89
|
%
|
Volatility
|
22.38
|
%
|
|
24.93
|
%
|
Risk-free rate of return
|
2.75
|
%
|
|
2.08
|
%
|
Expected life
|
6.0 years
|
|
|
6.0 years
|
|
|
Three months ended
|
||||||
In millions
|
2018
|
|
2017
|
||||
Americas
|
$
|
—
|
|
|
$
|
(0.1
|
)
|
EMEIA
|
0.2
|
|
|
0.9
|
|
||
Asia Pacific
|
0.5
|
|
|
—
|
|
||
Total
|
$
|
0.7
|
|
|
$
|
0.8
|
|
In millions
|
Americas
|
|
EMEIA
|
|
Asia Pacific
|
|
Corporate/Other
|
|
Total
|
||||||||||
December 31, 2017
|
$
|
0.3
|
|
|
$
|
3.8
|
|
|
$
|
—
|
|
|
$
|
0.1
|
|
|
$
|
4.2
|
|
Additions, net of reversals
|
—
|
|
|
0.2
|
|
|
0.5
|
|
|
—
|
|
|
0.7
|
|
|||||
Cash and non-cash uses
|
(0.1
|
)
|
|
(1.7
|
)
|
|
(0.5
|
)
|
|
(0.1
|
)
|
|
(2.4
|
)
|
|||||
Currency translation
|
—
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
|||||
March 31, 2018
|
$
|
0.2
|
|
|
$
|
2.4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2.6
|
|
|
Three months ended
|
||||||
In millions
|
2018
|
|
2017
|
||||
Interest income
|
$
|
(0.2
|
)
|
|
$
|
(0.1
|
)
|
Foreign currency exchange loss
|
0.4
|
|
|
0.1
|
|
||
Loss from equity investments
|
—
|
|
|
0.6
|
|
||
Net periodic pension and postretirement benefit (income) cost, less service cost
|
(0.8
|
)
|
|
0.7
|
|
||
Other
|
0.2
|
|
|
—
|
|
||
Other (income) expense, net
|
$
|
(0.4
|
)
|
|
$
|
1.3
|
|
|
Three months ended
|
||||
In millions
|
2018
|
|
2017
|
||
Weighted-average number of basic shares
|
95.1
|
|
|
95.3
|
|
Shares issuable under incentive stock plans
|
0.7
|
|
|
0.8
|
|
Weighted-average number of diluted shares
|
95.8
|
|
|
96.1
|
|
|
Three months ended March 31, 2018
|
|||||||||||
in millions
|
Americas
|
EMEIA
|
Asia Pacific
|
Consolidated
|
||||||||
Net revenues
|
|
|
|
|
||||||||
Products
|
$
|
439.1
|
|
$
|
146.8
|
|
$
|
23.7
|
|
$
|
609.6
|
|
Services
|
—
|
|
3.5
|
|
—
|
|
3.5
|
|
||||
Total Net Revenues
|
$
|
439.1
|
|
$
|
150.3
|
|
$
|
23.7
|
|
$
|
613.1
|
|
|
Three months ended March 31, 2017
(a)
|
|||||||||||
in millions
|
Americas
|
EMEIA
|
Asia Pacific
|
Consolidated
|
||||||||
Net revenues
|
|
|
|
|
||||||||
Products
|
$
|
407.6
|
|
$
|
114.9
|
|
$
|
22.8
|
|
$
|
545.3
|
|
Services
|
—
|
|
3.5
|
|
—
|
|
3.5
|
|
||||
Total Net Revenues
|
$
|
407.6
|
|
$
|
118.4
|
|
$
|
22.8
|
|
$
|
548.8
|
|
(a)
|
The Company adopted ASU 2014-09 and related updates as of January 1, 2018 on a modified retrospective basis, and as such, amounts presented for the three months ended March 31, 2017 are based on ASC 605.
|
|
Three months ended
|
||||||
In millions
|
2018
|
|
2017
|
||||
Net revenues
|
|
|
|
||||
Americas
|
$
|
439.1
|
|
|
$
|
407.6
|
|
EMEIA
|
150.3
|
|
|
118.4
|
|
||
Asia Pacific
|
23.7
|
|
|
22.8
|
|
||
Total
|
$
|
613.1
|
|
|
$
|
548.8
|
|
Segment operating income
|
|
|
|
||||
Americas
|
$
|
109.7
|
|
|
$
|
108.8
|
|
EMEIA
|
8.5
|
|
|
6.4
|
|
||
Asia Pacific
|
(1.5
|
)
|
|
0.6
|
|
||
Total
|
116.7
|
|
|
115.8
|
|
||
Reconciliation to Operating income
|
|
|
|
||||
Unallocated corporate expense
|
(18.0
|
)
|
|
(16.3
|
)
|
||
Operating income
|
$
|
98.7
|
|
|
$
|
99.5
|
|
Reconciliation to earnings before income taxes
|
|
|
|
||||
Interest expense
|
12.9
|
|
|
15.9
|
|
||
Other (income) expense, net
|
(0.4
|
)
|
|
1.3
|
|
||
Earnings before income taxes
|
$
|
86.2
|
|
|
$
|
82.3
|
|
In millions
|
2018
|
|
2017
|
||||
Balance at beginning of period
|
$
|
14.1
|
|
|
$
|
13.3
|
|
Reductions for payments
|
(1.8
|
)
|
|
(1.7
|
)
|
||
Accruals for warranties issued during the current period
|
2.0
|
|
|
2.2
|
|
||
Changes to accruals related to preexisting warranties
|
(0.1
|
)
|
|
(0.1
|
)
|
||
Acquisitions
|
0.4
|
|
|
—
|
|
||
Translation
|
0.1
|
|
|
—
|
|
||
Balance at end of period
|
$
|
14.7
|
|
|
$
|
13.7
|
|
In millions
|
Allegion plc
|
|
Allegion US Holding
|
|
Other
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Total
|
||||||||||
Net revenues
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
613.1
|
|
|
$
|
—
|
|
|
$
|
613.1
|
|
Cost of goods sold
|
—
|
|
|
—
|
|
|
355.3
|
|
|
—
|
|
|
355.3
|
|
|||||
Selling and administrative expenses
|
1.1
|
|
|
—
|
|
|
158.0
|
|
|
—
|
|
|
159.1
|
|
|||||
Operating income (loss)
|
(1.1
|
)
|
|
—
|
|
|
99.8
|
|
|
—
|
|
|
98.7
|
|
|||||
Equity earnings (loss) in affiliates, net of tax
|
79.4
|
|
|
29.9
|
|
|
—
|
|
|
(109.3
|
)
|
|
—
|
|
|||||
Interest expense
|
6.1
|
|
|
6.8
|
|
|
—
|
|
|
—
|
|
|
12.9
|
|
|||||
Intercompany interest and fees
|
—
|
|
|
25.5
|
|
|
(25.5
|
)
|
|
—
|
|
|
—
|
|
|||||
Other expense, net
|
—
|
|
|
—
|
|
|
(0.4
|
)
|
|
—
|
|
|
(0.4
|
)
|
|||||
Earnings (loss) before income taxes
|
72.2
|
|
|
(2.4
|
)
|
|
125.7
|
|
|
(109.3
|
)
|
|
86.2
|
|
|||||
Provision (benefit) for income taxes
|
—
|
|
|
(8.2
|
)
|
|
22.0
|
|
|
—
|
|
|
13.8
|
|
|||||
Net earnings (loss)
|
72.2
|
|
|
5.8
|
|
|
103.7
|
|
|
(109.3
|
)
|
|
72.4
|
|
|||||
Less: Net loss attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
0.2
|
|
|
—
|
|
|
0.2
|
|
|||||
Net earnings (loss) attributable to Allegion plc
|
$
|
72.2
|
|
|
$
|
5.8
|
|
|
$
|
103.5
|
|
|
$
|
(109.3
|
)
|
|
$
|
72.2
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total comprehensive income (loss)
|
$
|
98.3
|
|
|
$
|
7.7
|
|
|
$
|
128.9
|
|
|
$
|
(135.4
|
)
|
|
$
|
99.5
|
|
Less: Total comprehensive income attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
1.2
|
|
|
—
|
|
|
1.2
|
|
|||||
Total comprehensive income (loss) attributable to Allegion plc
|
$
|
98.3
|
|
|
$
|
7.7
|
|
|
$
|
127.7
|
|
|
$
|
(135.4
|
)
|
|
$
|
98.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In millions
|
Allegion plc
|
|
Allegion US Holding
|
|
Other
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Total
|
||||||||||
Net revenues
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
548.8
|
|
|
$
|
—
|
|
|
$
|
548.8
|
|
Cost of goods sold
|
—
|
|
|
—
|
|
|
307.6
|
|
|
—
|
|
|
307.6
|
|
|||||
Selling and administrative expenses
|
1.2
|
|
|
—
|
|
|
140.5
|
|
|
—
|
|
|
141.7
|
|
|||||
Operating income (loss)
|
(1.2
|
)
|
|
—
|
|
|
100.7
|
|
|
—
|
|
|
99.5
|
|
|||||
Equity earnings (loss) in affiliates, net of tax
|
80.6
|
|
|
19.0
|
|
|
—
|
|
|
(99.6
|
)
|
|
—
|
|
|||||
Interest expense
|
11.0
|
|
|
4.8
|
|
|
0.1
|
|
|
—
|
|
|
15.9
|
|
|||||
Intercompany interest and fees
|
—
|
|
|
27.0
|
|
|
(27.0
|
)
|
|
—
|
|
|
—
|
|
|||||
Other (income) expense, net
|
—
|
|
|
—
|
|
|
1.3
|
|
|
—
|
|
|
1.3
|
|
|||||
Earnings (loss) before income taxes
|
68.4
|
|
|
(12.8
|
)
|
|
126.3
|
|
|
(99.6
|
)
|
|
82.3
|
|
|||||
Provision (benefit) for income taxes
|
—
|
|
|
(12.2
|
)
|
|
25.8
|
|
|
—
|
|
|
13.6
|
|
|||||
Net earnings (loss)
|
68.4
|
|
|
(0.6
|
)
|
|
100.5
|
|
|
(99.6
|
)
|
|
68.7
|
|
|||||
Less: Net earnings attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
0.3
|
|
|
—
|
|
|
0.3
|
|
|||||
Net earnings (loss) attributable to Allegion plc
|
$
|
68.4
|
|
|
$
|
(0.6
|
)
|
|
$
|
100.2
|
|
|
$
|
(99.6
|
)
|
|
$
|
68.4
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total comprehensive income (loss)
|
$
|
81.2
|
|
|
$
|
(0.2
|
)
|
|
$
|
113.6
|
|
|
$
|
(112.9
|
)
|
|
$
|
81.7
|
|
Less: Total comprehensive income attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
0.5
|
|
|
—
|
|
|
0.5
|
|
|||||
Total comprehensive income (loss) attributable to Allegion plc
|
$
|
81.2
|
|
|
$
|
(0.2
|
)
|
|
$
|
113.1
|
|
|
$
|
(112.9
|
)
|
|
$
|
81.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In millions
|
Allegion plc
|
|
Allegion US Holding
|
|
Other
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Total
|
||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
1.0
|
|
|
$
|
13.6
|
|
|
$
|
137.2
|
|
|
$
|
—
|
|
|
$
|
151.8
|
|
Accounts and notes receivable, net
|
—
|
|
|
—
|
|
|
336.4
|
|
|
—
|
|
|
336.4
|
|
|||||
Inventories
|
—
|
|
|
—
|
|
|
271.5
|
|
|
—
|
|
|
271.5
|
|
|||||
Other current assets
|
0.4
|
|
|
8.2
|
|
|
34.3
|
|
|
—
|
|
|
42.9
|
|
|||||
Accounts and notes receivable affiliates
|
—
|
|
|
443.8
|
|
|
342.8
|
|
|
(786.6
|
)
|
|
—
|
|
|||||
Total current assets
|
1.4
|
|
|
465.6
|
|
|
1,122.2
|
|
|
(786.6
|
)
|
|
802.6
|
|
|||||
Investment in affiliates
|
1,123.3
|
|
|
581.2
|
|
|
—
|
|
|
(1,704.5
|
)
|
|
—
|
|
|||||
Property, plant and equipment, net
|
—
|
|
|
—
|
|
|
277.4
|
|
|
—
|
|
|
277.4
|
|
|||||
Goodwill and other intangible assets, net
|
—
|
|
|
—
|
|
|
1,423.8
|
|
|
—
|
|
|
1,423.8
|
|
|||||
Notes receivable affiliates
|
35.5
|
|
|
1,543.2
|
|
|
2,603.8
|
|
|
(4,182.5
|
)
|
|
—
|
|
|||||
Other noncurrent assets
|
4.8
|
|
|
11.6
|
|
|
107.9
|
|
|
—
|
|
|
124.3
|
|
|||||
Total assets
|
$
|
1,165.0
|
|
|
$
|
2,601.6
|
|
|
$
|
5,535.1
|
|
|
$
|
(6,673.6
|
)
|
|
$
|
2,628.1
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts payable and accruals
|
$
|
1.7
|
|
|
$
|
13.6
|
|
|
$
|
401.5
|
|
|
$
|
—
|
|
|
$
|
416.8
|
|
Short-term borrowings and current maturities of long-term debt
|
35.0
|
|
|
—
|
|
|
0.3
|
|
|
—
|
|
|
35.3
|
|
|||||
Accounts and notes payable affiliates
|
0.2
|
|
|
342.5
|
|
|
443.9
|
|
|
(786.6
|
)
|
|
—
|
|
|||||
Total current liabilities
|
36.9
|
|
|
356.1
|
|
|
845.7
|
|
|
(786.6
|
)
|
|
452.1
|
|
|||||
Long-term debt
|
671.0
|
|
|
802.0
|
|
|
1.1
|
|
|
—
|
|
|
1,474.1
|
|
|||||
Notes payable affiliate
|
—
|
|
|
2,603.8
|
|
|
1,578.7
|
|
|
(4,182.5
|
)
|
|
—
|
|
|||||
Other noncurrent liabilities
|
1.1
|
|
|
—
|
|
|
239.7
|
|
|
—
|
|
|
240.8
|
|
|||||
Total liabilities
|
709.0
|
|
|
3,761.9
|
|
|
2,665.2
|
|
|
(4,969.1
|
)
|
|
2,167.0
|
|
|||||
Equity:
|
|
|
|
|
|
|
|
|
|
||||||||||
Total shareholders equity (deficit)
|
456.0
|
|
|
(1,160.3
|
)
|
|
2,864.8
|
|
|
(1,704.5
|
)
|
|
456.0
|
|
|||||
Noncontrolling interests
|
—
|
|
|
—
|
|
|
5.1
|
|
|
—
|
|
|
5.1
|
|
|||||
Total equity (deficit)
|
456.0
|
|
|
(1,160.3
|
)
|
|
2,869.9
|
|
|
(1,704.5
|
)
|
|
461.1
|
|
|||||
Total liabilities and equity
|
$
|
1,165.0
|
|
|
$
|
2,601.6
|
|
|
$
|
5,535.1
|
|
|
$
|
(6,673.6
|
)
|
|
$
|
2,628.1
|
|
In millions
|
Allegion plc
|
|
Allegion US Holding
|
|
Other
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Total
|
||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
0.7
|
|
|
$
|
0.3
|
|
|
$
|
465.2
|
|
|
$
|
—
|
|
|
$
|
466.2
|
|
Accounts and notes receivable, net
|
—
|
|
|
—
|
|
|
296.6
|
|
|
—
|
|
|
296.6
|
|
|||||
Inventories
|
—
|
|
|
—
|
|
|
239.8
|
|
|
—
|
|
|
239.8
|
|
|||||
Other current assets
|
0.3
|
|
|
56.3
|
|
|
17.6
|
|
|
(44.1
|
)
|
|
30.1
|
|
|||||
Accounts receivable affiliates
|
—
|
|
|
430.0
|
|
|
305.3
|
|
|
(735.3
|
)
|
|
—
|
|
|||||
Total current assets
|
1.0
|
|
|
486.6
|
|
|
1,324.5
|
|
|
(779.4
|
)
|
|
1,032.7
|
|
|||||
Investment in affiliates
|
1,079.6
|
|
|
240.8
|
|
|
—
|
|
|
(1,320.4
|
)
|
|
—
|
|
|||||
Property, plant and equipment, net
|
—
|
|
|
—
|
|
|
252.2
|
|
|
—
|
|
|
252.2
|
|
|||||
Goodwill and other intangible assets, net
|
—
|
|
|
—
|
|
|
1,155.5
|
|
|
—
|
|
|
1,155.5
|
|
|||||
Notes receivable affiliates
|
3.5
|
|
|
1,580.3
|
|
|
2,381.0
|
|
|
(3,964.8
|
)
|
|
—
|
|
|||||
Other noncurrent assets
|
5.1
|
|
|
5.5
|
|
|
91.0
|
|
|
—
|
|
|
101.6
|
|
|||||
Total assets
|
$
|
1,089.2
|
|
|
$
|
2,313.2
|
|
|
$
|
5,204.2
|
|
|
$
|
(6,064.6
|
)
|
|
$
|
2,542.0
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts payable and accruals
|
$
|
1.9
|
|
|
$
|
7.0
|
|
|
$
|
461.0
|
|
|
$
|
(44.1
|
)
|
|
$
|
425.8
|
|
Short-term borrowings and current maturities of long-term debt
|
35.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
35.0
|
|
|||||
Accounts and notes payable affiliates
|
0.2
|
|
|
304.9
|
|
|
430.2
|
|
|
(735.3
|
)
|
|
—
|
|
|||||
Total current liabilities
|
37.1
|
|
|
311.9
|
|
|
891.2
|
|
|
(779.4
|
)
|
|
460.8
|
|
|||||
Long-term debt
|
649.3
|
|
|
792.0
|
|
|
1.0
|
|
|
—
|
|
|
1,442.3
|
|
|||||
Notes payables affiliate
|
—
|
|
|
2,381.0
|
|
|
1,583.8
|
|
|
(3,964.8
|
)
|
|
—
|
|
|||||
Other noncurrent liabilities
|
1.2
|
|
|
4.2
|
|
|
228.0
|
|
|
—
|
|
|
233.4
|
|
|||||
Total liabilities
|
687.6
|
|
|
3,489.1
|
|
|
2,704.0
|
|
|
(4,744.2
|
)
|
|
2,136.5
|
|
|||||
Equity:
|
|
|
|
|
|
|
|
|
|
||||||||||
Total shareholders equity (deficit)
|
401.6
|
|
|
(1,175.9
|
)
|
|
2,496.3
|
|
|
(1,320.4
|
)
|
|
401.6
|
|
|||||
Noncontrolling interests
|
—
|
|
|
—
|
|
|
3.9
|
|
|
—
|
|
|
3.9
|
|
|||||
Total equity (deficit)
|
401.6
|
|
|
(1,175.9
|
)
|
|
2,500.2
|
|
|
(1,320.4
|
)
|
|
405.5
|
|
|||||
Total liabilities and equity
|
$
|
1,089.2
|
|
|
$
|
2,313.2
|
|
|
$
|
5,204.2
|
|
|
$
|
(6,064.6
|
)
|
|
$
|
2,542.0
|
|
In millions
|
Allegion plc
|
|
Allegion US Holding
|
|
Other
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Total
|
||||||||||
Net cash provided by (used in) operating activities
|
$
|
61.2
|
|
|
$
|
(23.2
|
)
|
|
$
|
15.5
|
|
|
$
|
(63.6
|
)
|
|
$
|
(10.1
|
)
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Capital expenditures
|
—
|
|
|
—
|
|
|
(8.7
|
)
|
|
—
|
|
|
(8.7
|
)
|
|||||
Acquisition of and equity investments in businesses, net of cash acquired
|
—
|
|
|
(233.4
|
)
|
|
(42.9
|
)
|
|
—
|
|
|
(276.3
|
)
|
|||||
Other investing activities, net
|
—
|
|
|
—
|
|
|
0.1
|
|
|
—
|
|
|
0.1
|
|
|||||
Net cash used in investing activities
|
—
|
|
|
(233.4
|
)
|
|
(51.5
|
)
|
|
—
|
|
|
(284.9
|
)
|
|||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Debt repayments, net
|
21.2
|
|
|
10.0
|
|
|
—
|
|
|
—
|
|
|
31.2
|
|
|||||
Net inter-company proceeds (payments)
|
(32.1
|
)
|
|
259.9
|
|
|
(227.8
|
)
|
|
—
|
|
|
—
|
|
|||||
Dividends paid
|
—
|
|
|
—
|
|
|
(63.6
|
)
|
|
63.6
|
|
|
—
|
|
|||||
Dividends paid to shareholders
|
(19.7
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(19.7
|
)
|
|||||
Repurchase of ordinary shares
|
(30.0
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(30.0
|
)
|
|||||
Other financing activities, net
|
(0.3
|
)
|
|
—
|
|
|
(2.1
|
)
|
|
—
|
|
|
(2.4
|
)
|
|||||
Net cash provided by (used in) financing activities
|
(60.9
|
)
|
|
269.9
|
|
|
(293.5
|
)
|
|
63.6
|
|
|
(20.9
|
)
|
|||||
Effect of exchange rate changes on cash and cash equivalents
|
—
|
|
|
—
|
|
|
1.5
|
|
|
—
|
|
|
1.5
|
|
|||||
Net increase (decrease) in cash and cash equivalents
|
0.3
|
|
|
13.3
|
|
|
(328.0
|
)
|
|
—
|
|
|
(314.4
|
)
|
|||||
Cash and cash equivalents - beginning of period
|
0.7
|
|
|
0.3
|
|
|
465.2
|
|
|
—
|
|
|
466.2
|
|
|||||
Cash and cash equivalents - end of period
|
$
|
1.0
|
|
|
$
|
13.6
|
|
|
$
|
137.2
|
|
|
$
|
—
|
|
|
$
|
151.8
|
|
In millions
|
Allegion plc
|
|
Allegion US Holding
|
|
Other
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Total
|
||||||||||
Net cash provided by (used in) operating activities
|
$
|
3.1
|
|
|
$
|
15.9
|
|
|
$
|
(7.3
|
)
|
|
$
|
(52.6
|
)
|
|
$
|
(40.9
|
)
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Capital expenditures
|
—
|
|
|
—
|
|
|
(7.8
|
)
|
|
—
|
|
|
(7.8
|
)
|
|||||
Acquisition of businesses, net of cash acquired
|
—
|
|
|
—
|
|
|
(20.8
|
)
|
|
—
|
|
|
(20.8
|
)
|
|||||
Other investing activities, net
|
—
|
|
|
—
|
|
|
0.8
|
|
|
—
|
|
|
0.8
|
|
|||||
Net cash used in investing activities
|
—
|
|
|
—
|
|
|
(27.8
|
)
|
|
—
|
|
|
(27.8
|
)
|
|||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Debt repayments, net
|
(11.8
|
)
|
|
—
|
|
|
(1.1
|
)
|
|
—
|
|
|
(12.9
|
)
|
|||||
Net inter-company proceeds (payments)
|
53.2
|
|
|
(7.3
|
)
|
|
(45.9
|
)
|
|
—
|
|
|
—
|
|
|||||
Dividends paid
|
—
|
|
|
—
|
|
|
(52.6
|
)
|
|
52.6
|
|
|
—
|
|
|||||
Dividends paid to shareholders
|
(15.2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(15.2
|
)
|
|||||
Repurchase of ordinary shares
|
(30.0
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(30.0
|
)
|
|||||
Other financing activities, net
|
2.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2.1
|
|
|||||
Net cash provided by (used in) financing activities
|
(1.7
|
)
|
|
(7.3
|
)
|
|
(99.6
|
)
|
|
52.6
|
|
|
(56.0
|
)
|
|||||
Effect of exchange rate changes on cash and cash equivalents
|
—
|
|
|
—
|
|
|
1.9
|
|
|
—
|
|
|
1.9
|
|
|||||
Net increase (decrease) in cash and cash equivalents
|
1.4
|
|
|
8.6
|
|
|
(132.8
|
)
|
|
—
|
|
|
(122.8
|
)
|
|||||
Cash and cash equivalents - beginning of period
|
0.5
|
|
|
0.2
|
|
|
311.7
|
|
|
—
|
|
|
312.4
|
|
|||||
Cash and cash equivalents - end of period
|
$
|
1.9
|
|
|
$
|
8.8
|
|
|
$
|
178.9
|
|
|
$
|
—
|
|
|
$
|
189.6
|
|
Business
|
|
Date
|
Technical Glass Products, Inc. ("TGP")
|
|
January 2018
|
Hammond Enterprises, Inc. ("Hammond")
|
|
January 2018
|
Qatar Metal Industries LLC ("QMI")
|
|
February 2018
|
AD Systems, Inc. ("AD Systems")
|
|
March 2018
|
In millions, except per share amounts
|
2018
|
|
% of
revenues |
|
2017
|
|
% of
revenues |
||||||
Net revenues
|
$
|
613.1
|
|
|
|
|
$
|
548.8
|
|
|
|
||
Cost of goods sold
|
355.3
|
|
|
58.0
|
%
|
|
307.6
|
|
|
56.0
|
%
|
||
Selling and administrative expenses
|
159.1
|
|
|
26.0
|
%
|
|
141.7
|
|
|
25.8
|
%
|
||
Operating income
|
98.7
|
|
|
16.1
|
%
|
|
99.5
|
|
|
18.1
|
%
|
||
Interest expense
|
12.9
|
|
|
|
|
15.9
|
|
|
|
||||
Other (income) expense, net
|
(0.4
|
)
|
|
|
|
1.3
|
|
|
|
||||
Earnings before income taxes
|
86.2
|
|
|
|
|
82.3
|
|
|
|
||||
Provision for income taxes
|
13.8
|
|
|
|
|
13.6
|
|
|
|
||||
Net earnings
|
72.4
|
|
|
|
|
68.7
|
|
|
|
||||
Less: Net earnings attributable to noncontrolling interests
|
0.2
|
|
|
|
|
0.3
|
|
|
|
||||
Net earnings attributable to Allegion plc
|
$
|
72.2
|
|
|
|
|
$
|
68.4
|
|
|
|
||
Diluted net earnings per ordinary share attributable to Allegion plc ordinary shareholders:
|
|
|
|
|
|
|
|
||||||
Net earnings
|
$
|
0.75
|
|
|
|
|
$
|
0.71
|
|
|
|
Pricing
|
1.3
|
%
|
Volume
|
2.0
|
%
|
Acquisitions
|
4.7
|
%
|
Currency exchange rates
|
3.7
|
%
|
Total
|
11.7
|
%
|
in millions
|
Operating Income
|
Operating Margin
|
|||
March 31, 2017
|
$
|
99.5
|
|
18.1
|
%
|
Inflation in excess of pricing and productivity
|
(1.1
|
)
|
(0.5
|
)%
|
|
Volume/product mix
|
2.9
|
|
0.2
|
%
|
|
Restructuring / acquisition expenses
|
(0.7
|
)
|
(0.1
|
)%
|
|
Currency exchange rates
|
1.9
|
|
(0.2
|
)%
|
|
Investment spending and other items
|
(3.6
|
)
|
(0.6
|
)%
|
|
Acquisitions
|
(0.2
|
)
|
(0.8
|
)%
|
|
March 31, 2018
|
$
|
98.7
|
|
16.1
|
%
|
In millions
|
2018
|
|
2017
|
||||
Interest income
|
$
|
(0.2
|
)
|
|
$
|
(0.1
|
)
|
Foreign currency exchange loss
|
0.4
|
|
|
0.1
|
|
||
Loss from equity investments
|
—
|
|
|
0.6
|
|
||
Net periodic pension and postretirement benefit (income) cost, less service cost
|
(0.8
|
)
|
|
0.7
|
|
||
Other
|
0.2
|
|
|
—
|
|
||
Other (income) expense, net
|
$
|
(0.4
|
)
|
|
$
|
1.3
|
|
|
Three months ended
|
|||||||||
in millions
|
2018
|
|
2017
|
|
% Change
|
|||||
Net revenues
|
|
|
|
|
|
|||||
Americas
|
$
|
439.1
|
|
|
$
|
407.6
|
|
|
7.7
|
%
|
EMEIA
|
150.3
|
|
|
118.4
|
|
|
26.9
|
%
|
||
Asia Pacific
|
23.7
|
|
|
22.8
|
|
|
3.9
|
%
|
||
Total
|
$
|
613.1
|
|
|
$
|
548.8
|
|
|
|
|
|
|
|
|
|
|
|||||
Segment operating income (loss)
|
|
|
|
|
|
|||||
Americas
|
$
|
109.7
|
|
|
$
|
108.8
|
|
|
0.8
|
%
|
EMEIA
|
8.5
|
|
|
6.4
|
|
|
32.8
|
%
|
||
Asia Pacific
|
(1.5
|
)
|
|
0.6
|
|
|
(350.0
|
)%
|
||
Total
|
$
|
116.7
|
|
|
$
|
115.8
|
|
|
|
|
|
|
|
|
|
|
|||||
Segment operating margin
|
|
|
|
|
|
|||||
Americas
|
25.0
|
%
|
|
26.7
|
%
|
|
|
|||
EMEIA
|
5.7
|
%
|
|
5.4
|
%
|
|
|
|||
Asia Pacific
|
(6.3
|
)%
|
|
2.6
|
%
|
|
|
Pricing
|
|
1.4
|
%
|
Volume
|
|
1.3
|
%
|
Acquisitions
|
|
4.7
|
%
|
Currency exchange rates
|
|
0.3
|
%
|
Total
|
|
7.7
|
%
|
in millions
|
|
Operating Income
|
|
Operating Margin
|
|||
March 31, 2017
|
|
$
|
108.8
|
|
|
26.7
|
%
|
Pricing and productivity in excess of inflation
|
|
2.9
|
|
|
0.3
|
%
|
|
Volume/product mix
|
|
1.3
|
|
|
—
|
%
|
|
Currency exchange rates
|
|
(0.3
|
)
|
|
(0.1
|
)%
|
|
Investment spending
|
|
(1.4
|
)
|
|
(0.3
|
)%
|
|
Acquisitions
|
|
(0.8
|
)
|
|
(1.4
|
)%
|
|
Restructuring / acquisition expenses
|
|
(0.8
|
)
|
|
(0.2
|
)%
|
|
March 31, 2018
|
|
$
|
109.7
|
|
|
25.0
|
%
|
Pricing
|
|
1.4
|
%
|
Volume
|
|
4.5
|
%
|
Acquisitions
|
|
5.6
|
%
|
Currency exchange rates
|
|
15.4
|
%
|
Total
|
|
26.9
|
%
|
in millions
|
|
Operating Income
|
|
Operating Margin
|
|||
March 31, 2017
|
|
$
|
6.4
|
|
|
5.4
|
%
|
Inflation in excess of pricing and productivity
|
|
(2.4
|
)
|
|
(2.0
|
)%
|
|
Volume/product mix
|
|
2.1
|
|
|
1.5
|
%
|
|
Currency exchange rates
|
|
2.3
|
|
|
1.0
|
%
|
|
Investment spending
|
|
(1.5
|
)
|
|
(1.3
|
)%
|
|
Acquisitions
|
|
0.5
|
|
|
0.2
|
%
|
|
Restructuring / acquisition expenses
|
|
1.1
|
|
|
0.9
|
%
|
|
March 31, 2018
|
|
$
|
8.5
|
|
|
5.7
|
%
|
Pricing
|
|
0.4
|
%
|
Volume
|
|
(0.2
|
)%
|
Currency exchange rates
|
|
3.7
|
%
|
Total
|
|
3.9
|
%
|
in millions
|
|
Operating Income
|
|
Operating Margin
|
|||
March 31, 2017
|
|
$
|
0.6
|
|
|
2.6
|
%
|
Inflation in excess of pricing and productivity
|
|
(0.6
|
)
|
|
(2.7
|
)%
|
|
Volume/product mix
|
|
(0.4
|
)
|
|
(1.9
|
)%
|
|
Currency exchange rates
|
|
(0.1
|
)
|
|
(0.4
|
)%
|
|
Investment spending
|
|
(0.4
|
)
|
|
(1.5
|
)%
|
|
Restructuring expenses
|
|
(0.6
|
)
|
|
(2.4
|
)%
|
|
March 31, 2018
|
|
$
|
(1.5
|
)
|
|
(6.3
|
)%
|
In millions
|
2018
|
|
2017
|
||||
Net cash used in operating activities
|
$
|
(10.1
|
)
|
|
$
|
(40.9
|
)
|
Net cash used in investing activities
|
(284.9
|
)
|
|
(27.8
|
)
|
||
Net cash used in financing activities
|
(20.9
|
)
|
|
(56.0
|
)
|
In millions
|
March 31,
2018 |
|
December 31,
2017 |
||||
Term Facility
|
$
|
682.5
|
|
|
$
|
691.3
|
|
Revolving Facility
|
40.0
|
|
|
—
|
|
||
3.200% Senior Notes due 2024
|
400.0
|
|
|
400.0
|
|
||
3.550% Senior Notes due 2027
|
400.0
|
|
|
400.0
|
|
||
Other debt
|
1.4
|
|
|
1.0
|
|
||
Total borrowings outstanding
|
1,523.9
|
|
|
1,492.3
|
|
||
Less discounts and debt issuance costs, net
|
(14.5
|
)
|
|
(15.0
|
)
|
||
Total debt
|
1,509.4
|
|
|
1,477.3
|
|
||
Less current portion of long-term debt
|
35.3
|
|
|
35.0
|
|
||
Total long-term debt
|
$
|
1,474.1
|
|
|
$
|
1,442.3
|
|
•
|
economic, political and business conditions in the markets in which we operate;
|
•
|
the demand for our products and services;
|
•
|
competitive factors in the industry in which we compete;
|
•
|
the ability to protect and use intellectual property;
|
•
|
emerging products and services introduced by competitors and their adoption by our customers;
|
•
|
fluctuations in currency exchange rates;
|
•
|
the ability to complete and integrate any acquisitions;
|
•
|
our ability to operate efficiently and productively;
|
•
|
our ability to manage risks related to our information technology and cyber-security;
|
•
|
changes in tax requirements (including tax rate changes, new tax laws and revised tax law interpretations);
|
•
|
the outcome of any litigation, governmental investigations or proceedings;
|
•
|
interest rate fluctuations and other changes in borrowing costs;
|
•
|
other capital market conditions, including availability of funding sources and currency exchange rate fluctuations;
|
•
|
availability of and fluctuations in the prices of key commodities and the impact of higher energy prices;
|
•
|
potential further impairment of our goodwill, indefinite-lived intangible assets and/or our long-lived assets;
|
•
|
the possible effects on us of future legislation or interpretations 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
|
•
|
the impact our outstanding indebtedness may have on our business and operations.
|
Period
|
|
Total number of shares purchased (000s)
|
|
Average price paid per share
|
|
Total number of shares purchased as part of program (000s)
|
|
Approximate dollar value of shares still available to be purchased under the program (000s)
|
||||||
January 1 - January 31
|
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
439,992
|
|
|
February 1 - February 28
|
|
238
|
|
|
$
|
86.55
|
|
|
238
|
|
|
419,359
|
|
|
March 1 - March 31
|
|
114
|
|
|
82.52
|
|
|
114
|
|
|
409,999
|
|
||
Total
|
|
352
|
|
|
$
|
85.25
|
|
|
352
|
|
|
$
|
409,999
|
|
Exhibit No.
|
|
Description
|
|
Method of Filing
|
|
|
|
||
|
Ratio of Earnings to Fixed Charges.
|
|
Filed herewith.
|
|
|
|
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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.
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Filed herewith.
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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.
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Filed herewith.
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Certifications of Chief Executive Officer and Chief Financial Officer Pursuant to Rule 13a-14(b) or Rule 15d-14(b) and 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
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Furnished herewith.
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101
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The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2018, formatted in XBRL (Extensible Business Reporting Language): (i) the Condensed and Consolidated Statements of Comprehensive Income, (ii) the Condensed and Consolidated Balance Sheets, (iii) the Condensed and Consolidated Statement of Cash Flows, and (iv) Notes to Condensed and Consolidated Financial Statements.
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Filed herewith.
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ALLEGION PLC
(Registrant)
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Date:
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April 26, 2018
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/s/ Patrick S. Shannon
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Patrick S. Shannon, Senior Vice President
and Chief Financial Officer
Principal Financial Officer
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Date:
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April 26, 2018
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/s/ Douglas P. Ranck
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Douglas P. Ranck, Vice President,
Controller and Chief Accounting Officer
Principal Accounting Officer
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Three months ended March 31,
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Year Ended December 31,
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2018
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2017
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2017
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2016
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2015
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2014
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2013
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Earnings from continuing operations
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before income taxes
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$
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86.2
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$
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82.9
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$
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395.7
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291.3
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$
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209.5
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$
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267.4
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$
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223.4
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Fixed charges
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16.2
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18.8
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117.5
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75.1
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63.6
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60.1
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22.0
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Total earnings
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$
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102.4
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$
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101.7
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$
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513.2
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$
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366.4
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$
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273.1
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$
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327.5
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$
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245.4
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Fixed charges:
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Interest expense*
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$
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12.9
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$
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15.9
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$
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105.7
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$
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64.3
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$
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52.9
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$
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49.3
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$
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10.2
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Rentals (one-third of rentals)
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3.3
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2.9
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11.8
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10.8
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10.7
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10.8
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11.8
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Total fixed charges
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$
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16.2
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$
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18.8
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$
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117.5
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$
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75.1
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$
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63.6
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$
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60.1
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$
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22.0
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Ratio of earnings to fixed charges
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6.3
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5.4
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4.4
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4.9
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4.3
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5.4
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11.2
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1.
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I have reviewed the Quarterly Report on Form 10-Q of Allegion plc for the
three
months ended
March 31, 2018
;
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2.
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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;
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3.
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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)) and internal control over financial reporting (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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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c.
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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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d.
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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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Date:
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April 26, 2018
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/s/ David D. Petratis
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David D. Petratis
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Principal Executive Officer
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1.
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I have reviewed the Quarterly Report on Form 10-Q of Allegion plc for the
three
months ended
March 31, 2018
;
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2.
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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;
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3.
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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)) and internal control over financial reporting (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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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c.
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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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d.
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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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Date:
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April 26, 2018
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/s/ Patrick S. Shannon
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Patrick S. Shannon
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Principal Financial Officer
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/s/ David D. Petratis
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David D. Petratis
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Principal Executive Officer
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April 26, 2018
|
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/s/ Patrick S. Shannon
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Patrick S. Shannon
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Principal Financial Officer
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April 26, 2018
|