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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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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Emerging growth company
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¨
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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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Item 16.
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•
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economic, political and business conditions in the markets in which we operate;
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•
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the demand for our products and services, including changes in customer preferences, conditions of the commercial and residential construction and remodeling markets and our ability to maintain beneficial relationships with large customers;
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•
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competitive factors in the industry in which we compete, including new technical developments;
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the development, commercialization and acceptance of new products and services;
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•
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the ability to protect and use intellectual property;
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•
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fluctuations in currency exchange rates;
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•
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the ability to complete and integrate any acquisitions;
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•
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results of investments made to complement our existing businesses and our pursuit of business opportunities that may diverge from our core businesses;
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•
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our ability to operate efficiently and productively;
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•
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disruptions in our global supply chain, including product manufacturing and logistical services provided by outsourcing partners;
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•
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improper conduct by any of our employees, agents or business partners;
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•
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our ability to manage risks related to our information technology and operational technology systems and cyber-security, including disruption and breaches of our information systems and implementation of new processes that may cause disruptions and be more difficult, costly or time consuming than expected;
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•
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our reliance on third-party vendors for many of the critical elements of our global information and operational technology infrastructure and their failure to provide effective support for such infrastructure;
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•
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changes in tax requirements, including tax rate changes, the adoption of new United States (U.S.) or non-U.S. tax legislation or exposure to additional tax liabilities and revised tax law interpretations;
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•
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changes to trade agreements, sanctions, import and export regulations and custom duties;
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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, in addition to risks associated with our outstanding and future indebtedness;
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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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potential further impairment of our goodwill, indefinite-lived intangible assets and/or our long-lived assets;
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ability to recruit and retain a highly qualified and diverse workforce;
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risks related to our spin-off from Ingersoll Rand plc;
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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
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•
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the impact our outstanding indebtedness 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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Doors and door systems
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Electronic security products
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Electronic, biometric and mobile access control systems
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Exit devices
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Locks, locksets, portable locks, key systems and services
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Time, attendance and workforce productivity 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 and to successfully and securely integrate into leading technology and systems;
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•
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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;
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Our access to and management of key channels in the market, which is critical to delivering our products in an efficient and consistent manner; and
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•
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Our enterprise 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 and consumers worldwide, quickly and efficiently.
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•
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the convergence of mechanical and electronic security products;
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•
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heightened awareness of security requirements;
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•
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increased global urbanization; and
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•
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the shift to a digital, interconnected environment.
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Allegion Brands
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(listed for each region)
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•
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Von Duprin, established in 1908, was awarded the first exit device patent;
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•
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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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•
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LCN, established in 1926, created the first door closer;
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•
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CISA, established in 1926, devised the first electronically controlled lock; and
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•
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SimonsVoss, established in 1995, created the first keyless digital transponder.
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•
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Improvements to the user experience, product design and ergonomics;
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•
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New technology solutions, software, mobile applications and integration with leading platforms; and
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•
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Improved locks and lights for portable security.
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Product
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Brands
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Year
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Innovation
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Residential Locks, Cylinders and Levers
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Schlage (Touch, Connect, Sense, Control, Encode, Custom, SEL, Q6, X7), Bricard, Milre
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2016/2017/ 2018
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Updates to single and multi-family residential electronic locking platforms that provide for keyless entry (Touch); connected locking (Connect); integration with the Internet of Things (IoT), Apple HomeKit, Amazon Alexa, Google Assistant and Android platforms (Sense); multi-family interconnected locking (Control); next-generation smart lock that is the first-ever WiFi enabled deadbolt to work with Key by Amazon and Ring devices with built-in connectivity (Encode); and 4-in-1 lock with fingerprint sensors, smart card, code access or a physical key (SEL).
Expanded handlesets for Schlage’s new universal functionality solution that allows homeowners to change from a doorknob to a lever and convert a non-locking door to lockable in minutes (Custom) and expanded ranges of cylinders and new aluminum trims for DIY customers (Bricard).
Continual technology upgrades include Z-Wave Plus and Zigbee Certified to improve battery life and range, improve the user experience and enable partnerships with leading providers like Key by Amazon (Connect).
New residential e-locks for Asia Pacific and improved biometric sensors, new designs and push-pull electronic locks with Bluetooth modules (Q6, X7, Milre).
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Commercial Locks, Cylinders, Levers and Electronic Access Platforms
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Schlage (AD, CO, LE, NDE, S-series), Bricard, Briton, SimonsVoss, CISA
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2016/2017/ 2018
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Enhancements to the comprehensive portfolio of globally available mechanical, wired electrified and wireless electronic solutions to give a common aesthetic and consistent user experience throughout a building; wireless locks can be managed with Allegion’s ENGAGE web and mobile apps or with Software Alliance Member systems (AD, CO, LE, NDE).
New rim and mortice locks for Southeast Asia (S-series), expanded cylinders for the European locksmith channel and multipoint mortise locks (Bricard), new stainless-steel trims (Bricard, Briton) and enhancements to the electronic Smart Handle (SimonsVoss).
Firmware releases for the U.S. channel-partner readers to give new functionality and USB communication mode for readers (Schlage). Mobile credentials, new Bluetooth Low Energy and RFID technology and integrations between electronic locks and exit devices (CISA).
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Exit Devices and Closers
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Von Duprin, Falcon, CISA
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2018
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New award-winning and cost-effective retrofit exit device that allows for remote undogging and monitoring with partner software (Von Duprin).
New fire-rated retrofit series (Falcon), quiet exit solutions (Von Duprin) and a new range of asymmetric rack-and-pinion door closers (CISA).
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Bike Lighting and Portable Locking Solutions
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AXA, Kryptonite, Trelock
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2017/2018
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Broad range of innovation in bike safety from each of our Global Portable Security brands (AXA, Kryptonite and Trelock), ranging from compact dynamo lights and e-bike lights to USB, battery powered and rechargeable lights.
New and expanded lines of folding locks, integrated chains and ring locks and applications for bikes and motorcycles (AXA, Kryptonite, Trelock) and expanded track-and-trace services (AXA).
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Software, Mobile and Web Applications
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Allegion (Overtur, ENGAGE), Interflex
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2018
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Introduction of a new cloud-based suite of tools for project teams to collaborate on specifications and the security design of doors and openings, which provides a centralized place to capture and maintain door hardware requirements and decisions with easy options to push information back to the design tools (Overtur).
Multiple enhancements to the user experience include biometric login for the mobile app, simplified account and site set-up and gateway site survey (ENGAGE).
New modules for visitor management, encouraging self-service and Microsoft Outlook functionality (Interflex).
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•
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Locks, locksets, portable locks and key systems and services
: A broad array of cylindrical and mortise door locksets, security levers and master key systems that are used to protect and control access and a range of portable security products, including bicycle, small vehicle and travel locks. We also offer locksmith services in select locations;
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•
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Door closers, controls 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 egress;
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•
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Electronic security products and access control systems
: A broad range of electrified locks, access control systems, key card and reader systems and accessories, including Internet of Things (IoT), Bluetooth Low Energy (BLE), Power over Ethernet and cloud-based solutions;
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•
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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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•
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Doors and door systems
: A portfolio of hollow metal, glass, wood and specialty doors and door systems; and
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•
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Other accessories
: A variety of additional security and product components, including hinges, door levers, door stops, bike lights, louvers, weather stripping, thresholds and other accessories, as well as certain bathroom fittings and accessibility aids.
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•
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changes in laws and regulations or imposition of currency restrictions and other restraints in various jurisdictions;
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•
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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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•
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sovereign debt crises and currency instability in developed and developing countries;
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changes in applicable tax regulations and interpretations;
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•
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changes to trade agreements, sanctions, import and export regulations, including imposition of burdensome tariffs and quotas, and customs duties;
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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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•
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political unrest, national and international conflict, including war, civil disturbances and terrorist acts; and
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•
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economic downturns and social and political instability.
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•
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diversion of management time and attention from daily operations;
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•
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difficulties integrating acquired businesses, technologies and personnel into our business;
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•
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difficulties completing the transaction in a timely manner;
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•
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difficulties realizing synergies expected to result from acquisitions;
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•
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difficulties in obtaining and verifying the financial statements and other business information of acquired businesses;
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•
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inability to obtain regulatory approvals and/or required financing on favorable terms;
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•
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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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•
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difficulties competing in the new markets we enter;
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•
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assumption of the liabilities and exposure to unforeseen liabilities of acquired companies;
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•
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dilution of interests of holders of our ordinary shares through the issuance of equity securities or equity-linked securities; and
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•
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difficulty in integrating financial reporting systems and implementing controls, procedures and policies, including disclosure controls and procedures and internal control over financial reporting, appropriate for public companies of our size at companies that, prior to the acquisition, had lacked such controls, procedures and policies.
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•
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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, directly or indirectly, of 10% or more 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, directly or indirectly, or 1% or more of our voting shares), subject to certain exceptions;
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•
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rules regarding how shareholders may present proposals or nominate directors for election at shareholder meetings;
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•
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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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•
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the ability of our Board of Directors to set the number of directors and to fill vacancies on our Board of Directors in certain circumstances.
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December 1, 2013
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December 31, 2013
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December 31, 2014
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December 31, 2015
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December 31, 2016
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December 31, 2017
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December 31, 2018
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Allegion plc
|
|
100.00
|
|
102.20
|
|
129.03
|
|
154.37
|
|
150.97
|
|
189.19
|
|
191.42
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S&P 500
|
|
100.00
|
|
102.53
|
|
116.57
|
|
118.18
|
|
132.31
|
|
161.20
|
|
154.13
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S&P 400 Capital Goods
|
|
100.00
|
|
104.58
|
|
104.84
|
|
99.07
|
|
130.70
|
|
162.97
|
|
140.14
|
As of and for the years ended December 31,
|
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2018
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2017
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2016
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2015
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2014
|
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||||||||||
Net revenues
|
|
$
|
2,731.7
|
|
|
$
|
2,408.2
|
|
|
$
|
2,238.0
|
|
|
$
|
2,068.1
|
|
|
$
|
2,118.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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||||||||||
Net earnings (loss) attributable to Allegion plc ordinary shareholders:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Continuing operations
|
|
434.9
|
|
(a)
|
273.3
|
|
(b)
|
229.1
|
|
(c)
|
154.3
|
|
(d)
|
186.3
|
|
(e)
|
|||||
Discontinued operations
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.4
|
)
|
|
(11.1
|
)
|
|
|||||
|
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Total assets
|
|
2,810.2
|
|
|
2,542.0
|
|
|
2,247.4
|
|
|
2,263.0
|
|
|
2,015.9
|
|
|
|||||
|
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Total debt
|
|
1,444.8
|
|
|
1,477.3
|
|
|
1,463.8
|
|
|
1,523.1
|
|
|
1,264.6
|
|
|
|||||
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||||||||||
Total Allegion plc shareholders’ equity (deficit)
|
|
651.0
|
|
|
401.6
|
|
|
113.3
|
|
|
25.6
|
|
|
(4.8
|
)
|
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|||||
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Earnings (loss) per share attributable to Allegion plc ordinary shareholders:
|
|
|
|
|
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||||||||||
Basic:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Continuing operations
|
|
$
|
4.58
|
|
|
$
|
2.87
|
|
|
$
|
2.39
|
|
|
$
|
1.61
|
|
|
$
|
1.94
|
|
|
Discontinued operations
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.01
|
)
|
|
(0.12
|
)
|
|
|||||
|
|
|
|
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|
||||||||||
Diluted:
|
|
|
|
|
|
|
|
|
|
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|
||||||||||
Continuing operations
|
|
$
|
4.54
|
|
|
$
|
2.85
|
|
|
$
|
2.36
|
|
|
$
|
1.59
|
|
|
$
|
1.92
|
|
|
Discontinued operations
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.12
|
)
|
|
|||||
|
|
|
|
|
|
|
|
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|
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|
||||||||||
Dividends declared per ordinary share
|
|
$
|
0.84
|
|
|
$
|
0.64
|
|
|
$
|
0.48
|
|
|
$
|
0.40
|
|
|
$
|
0.32
|
|
|
(a)
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Net earnings for the year ended December 31, 2018 includes a $21.9 million tax benefit related to an adjustment to the provisional amounts previously recognized related to the enactment of the U.S. Tax Reform Act.
|
(b)
|
Net earnings for the year ended December 31, 2017 includes
$44.7 million
of costs related to the refinancing of our credit facilities and senior notes and a net tax charge of
$53.5 million
related to the U.S. Tax Reform Act.
|
(c)
|
Net earnings for the year ended December 31, 2016 includes $84.4 million of losses related to our previously divested Systems Integration business.
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(d)
|
Net earnings from continuing operations for the year ended December 31, 2015 includes $104.2 million of losses related to the divestitures of our Venezuelan operations and our majority stake in our Systems Integration business.
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(e)
|
Net earnings from continuing operations for the year ended December 31, 2014 includes an after-tax, non-cash inventory impairment charge of $18.7 million and a $9.1 million after-tax, non-cash charge related to the devaluation of the Venezuelan bolivar.
|
Business
|
|
Date
|
Republic Doors & Frames, LLC ("Republic")
|
|
January 2017
|
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
|
Gainsborough Hardware and API Locksmiths ("Door and Access Systems")
|
|
July 2018
|
ISONAS Security Systems, Inc. ("ISONAS")
|
|
July 2018
|
Dollar amounts in millions, except per share amounts
|
|
2018
|
|
% of Net
Revenues |
|
2017
|
|
% of Net
Revenues |
|
2016
|
|
% of Net
Revenues |
|||||||||
Net revenues
|
|
$
|
2,731.7
|
|
|
|
|
$
|
2,408.2
|
|
|
|
|
$
|
2,238.0
|
|
|
|
|||
Cost of goods sold
|
|
1,558.4
|
|
|
57.0
|
%
|
|
1,335.3
|
|
|
55.4
|
%
|
|
1,248.3
|
|
|
55.8
|
%
|
|||
Selling and administrative expenses
|
|
647.5
|
|
|
23.7
|
%
|
|
580.4
|
|
|
24.1
|
%
|
|
555.4
|
|
|
24.8
|
%
|
|||
Operating income
|
|
525.8
|
|
|
19.2
|
%
|
|
492.5
|
|
|
20.5
|
%
|
|
434.3
|
|
|
19.4
|
%
|
|||
Interest expense
|
|
54.0
|
|
|
|
|
105.7
|
|
|
|
|
64.3
|
|
|
|
||||||
Loss on divestitures
|
|
—
|
|
|
|
|
—
|
|
|
|
|
84.4
|
|
|
|
||||||
Other income, net
|
|
(3.4
|
)
|
|
|
|
(8.9
|
)
|
|
|
|
(9.4
|
)
|
|
|
||||||
Earnings before income taxes
|
|
475.2
|
|
|
|
|
395.7
|
|
|
|
|
295.0
|
|
|
|
||||||
Provision for income taxes
|
|
39.8
|
|
|
|
|
119.0
|
|
|
|
|
63.8
|
|
|
|
||||||
Net earnings
|
|
435.4
|
|
|
|
|
276.7
|
|
|
|
|
231.2
|
|
|
|
||||||
Less: Net earnings attributable to noncontrolling interests
|
|
0.5
|
|
|
|
|
3.4
|
|
|
|
|
2.1
|
|
|
|
||||||
Net earnings attributable to Allegion plc
|
|
$
|
434.9
|
|
|
|
|
$
|
273.3
|
|
|
|
|
$
|
229.1
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Diluted net earnings per ordinary share attributable to Allegion plc ordinary shareholders:
|
|
$
|
4.54
|
|
|
|
|
$
|
2.85
|
|
|
|
|
$
|
2.36
|
|
|
|
Pricing
|
1.6
|
%
|
Volume
|
4.4
|
%
|
Acquisitions
|
6.6
|
%
|
Currency exchange rates
|
0.8
|
%
|
Total
|
13.4
|
%
|
Inflation in excess of pricing and productivity
|
0.1
|
%
|
Volume / product mix
|
(0.1
|
)%
|
Acquisitions
|
1.5
|
%
|
Investment spending
|
0.3
|
%
|
Currency exchange rates
|
(0.1
|
)%
|
Restructuring / acquisition costs
|
(0.1
|
)%
|
Total
|
1.6
|
%
|
In millions
|
Operating Income
|
|
Operating Margin
|
|||
December 31, 2017
|
$
|
492.5
|
|
|
20.5
|
%
|
Inflation in excess of pricing and productivity
|
(6.4
|
)
|
|
(0.6
|
)%
|
|
Volume / product mix
|
45.3
|
|
|
0.9
|
%
|
|
Currency exchange rates
|
3.1
|
|
|
—
|
%
|
|
Investment spending
|
(13.5
|
)
|
|
(0.5
|
)%
|
|
Acquisitions
|
2.8
|
|
|
(1.2
|
)%
|
|
Restructuring / acquisition costs
|
2.0
|
|
|
0.1
|
%
|
|
December 31, 2018
|
$
|
525.8
|
|
|
19.2
|
%
|
In millions
|
Operating Income
|
|
Operating Margin
|
|||
December 31, 2016
|
$
|
434.3
|
|
|
19.4
|
%
|
Pricing and productivity in excess of inflation
|
30.7
|
|
|
1.0
|
%
|
|
Volume / product mix
|
29.4
|
|
|
0.5
|
%
|
|
Currency exchange rates
|
4.2
|
|
|
0.1
|
%
|
|
Investment spending
|
(15.4
|
)
|
|
(0.7
|
)%
|
|
Acquisitions
|
(0.6
|
)
|
|
(0.3
|
)%
|
|
Environmental remediation charge
|
15.0
|
|
|
0.7
|
%
|
|
Restructuring / acquisition costs
|
(5.1
|
)
|
|
(0.2
|
)%
|
|
December 31, 2017
|
$
|
492.5
|
|
|
20.5
|
%
|
In millions
|
|
2018
|
|
2017
|
|
2016
|
||||||
Interest income
|
|
$
|
(0.8
|
)
|
|
$
|
(1.2
|
)
|
|
$
|
(1.9
|
)
|
Foreign currency exchange loss
|
|
0.3
|
|
|
0.7
|
|
|
2.0
|
|
|||
Earnings from and gains on the sale of equity investments
|
|
(0.4
|
)
|
|
(5.4
|
)
|
|
(3.6
|
)
|
|||
Net periodic pension and postretirement benefit (income) cost, less service cost
|
|
(2.8
|
)
|
|
4.3
|
|
|
8.8
|
|
|||
Other
|
|
0.3
|
|
|
(7.3
|
)
|
|
(14.7
|
)
|
|||
Other income, net
|
|
$
|
(3.4
|
)
|
|
$
|
(8.9
|
)
|
|
$
|
(9.4
|
)
|
In millions
|
2018
|
|
2017
|
|
% Change
|
|
2017
|
|
2016
|
|
% Change
|
||||||||||
Net revenues
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Americas
|
$
|
1,988.6
|
|
|
$
|
1,767.5
|
|
|
12.5
|
%
|
|
$
|
1,767.5
|
|
|
$
|
1,645.7
|
|
|
7.4
|
%
|
EMEIA
|
589.9
|
|
|
523.5
|
|
|
12.7
|
%
|
|
523.5
|
|
|
485.9
|
|
|
7.7
|
%
|
||||
Asia Pacific
|
153.2
|
|
|
117.2
|
|
|
30.7
|
%
|
|
117.2
|
|
|
106.4
|
|
|
10.2
|
%
|
||||
Total
|
$
|
2,731.7
|
|
|
$
|
2,408.2
|
|
|
|
|
$
|
2,408.2
|
|
|
$
|
2,238.0
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Segment operating income
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Americas
|
$
|
544.5
|
|
|
$
|
508.5
|
|
|
7.1
|
%
|
|
$
|
508.5
|
|
|
$
|
456.7
|
|
|
11.3
|
%
|
EMEIA
|
49.3
|
|
|
44.1
|
|
|
11.8
|
%
|
|
44.1
|
|
|
35.3
|
|
|
24.9
|
%
|
||||
Asia Pacific
|
6.9
|
|
|
9.5
|
|
|
(27.4
|
)%
|
|
9.5
|
|
|
6.1
|
|
|
55.7
|
%
|
||||
Total
|
$
|
600.7
|
|
|
$
|
562.1
|
|
|
|
|
$
|
562.1
|
|
|
$
|
498.1
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Segment operating margin
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Americas
|
27.4
|
%
|
|
28.8
|
%
|
|
|
|
28.8
|
%
|
|
27.8
|
%
|
|
|
||||||
EMEIA
|
8.4
|
%
|
|
8.4
|
%
|
|
|
|
8.4
|
%
|
|
7.3
|
%
|
|
|
||||||
Asia Pacific
|
4.5
|
%
|
|
8.1
|
%
|
|
|
|
8.1
|
%
|
|
5.7
|
%
|
|
|
Pricing
|
1.7
|
%
|
Volume
|
5.1
|
%
|
Acquisitions
|
5.7
|
%
|
Total
|
12.5
|
%
|
In millions
|
Operating Income
|
|
Operating Margin
|
|||
December 31, 2017
|
$
|
508.5
|
|
|
28.8
|
%
|
Inflation in excess of pricing and productivity
|
(4.2
|
)
|
|
(0.8
|
)%
|
|
Volume / product mix
|
42.1
|
|
|
0.9
|
%
|
|
Currency exchange rates
|
0.7
|
|
|
0.1
|
%
|
|
Investment spending
|
(7.2
|
)
|
|
(0.4
|
)%
|
|
Acquisitions
|
3.3
|
|
|
(1.3
|
)%
|
|
Restructuring / acquisition costs
|
1.3
|
|
|
0.1
|
%
|
|
December 31, 2018
|
$
|
544.5
|
|
|
27.4
|
%
|
In millions
|
Operating Income
|
|
Operating Margin
|
|||
December 31, 2016
|
$
|
456.7
|
|
|
27.8
|
%
|
Pricing and productivity in excess of inflation
|
25.9
|
|
|
1.0
|
%
|
|
Volume / product mix
|
22.2
|
|
|
0.3
|
%
|
|
Currency exchange rates
|
2.6
|
|
|
0.1
|
%
|
|
Investment spending
|
(10.7
|
)
|
|
(0.7
|
)%
|
|
Acquisitions
|
0.3
|
|
|
(0.4
|
)%
|
|
Environmental remediation charge
|
15.0
|
|
|
0.9
|
%
|
|
Restructuring / acquisition costs
|
(3.5
|
)
|
|
(0.2
|
)%
|
|
December 31, 2017
|
$
|
508.5
|
|
|
28.8
|
%
|
Pricing
|
1.5
|
%
|
Volume
|
2.2
|
%
|
Acquisitions
|
5.1
|
%
|
Currency exchange rates
|
3.9
|
%
|
Total
|
12.7
|
%
|
In millions
|
Operating Income
|
|
Operating Margin
|
|||
December 31, 2017
|
$
|
44.1
|
|
|
8.4
|
%
|
Pricing and productivity in excess of inflation
|
0.2
|
|
|
(0.1
|
)%
|
|
Volume / product mix
|
5.3
|
|
|
0.8
|
%
|
|
Currency exchange rates
|
3.0
|
|
|
0.3
|
%
|
|
Investment spending
|
(4.1
|
)
|
|
(0.8
|
)%
|
|
Acquisitions
|
(2.6
|
)
|
|
(0.9
|
)%
|
|
Restructuring / acquisition costs
|
3.4
|
|
|
0.7
|
%
|
|
December 31, 2018
|
$
|
49.3
|
|
|
8.4
|
%
|
Pricing
|
1.6
|
%
|
Volume
|
3.1
|
%
|
Acquisitions / divestitures
|
1.6
|
%
|
Currency exchange rates
|
1.4
|
%
|
Total
|
7.7
|
%
|
In millions
|
Operating Income
|
|
Operating Margin
|
|||
December 31, 2016
|
$
|
35.3
|
|
|
7.3
|
%
|
Pricing and productivity in excess of inflation
|
4.6
|
|
|
0.8
|
%
|
|
Volume / product mix
|
5.2
|
|
|
0.8
|
%
|
|
Currency exchange rates
|
1.3
|
|
|
0.1
|
%
|
|
Investment spending
|
(2.4
|
)
|
|
(0.5
|
)%
|
|
Acquisitions
|
(0.9
|
)
|
|
(0.3
|
)%
|
|
Restructuring / acquisition costs
|
1.0
|
|
|
0.2
|
%
|
|
December 31, 2017
|
$
|
44.1
|
|
|
8.4
|
%
|
Pricing
|
(0.1
|
)%
|
Volume
|
3.2
|
%
|
Acquisitions
|
28.6
|
%
|
Currency exchange rates
|
(1.0
|
)%
|
Total
|
30.7
|
%
|
In millions
|
Operating Income
|
|
Operating Margin
|
|||
December 31, 2017
|
$
|
9.5
|
|
|
8.1
|
%
|
Pricing and productivity in excess of inflation
|
1.3
|
|
|
1.1
|
%
|
|
Volume / product mix
|
(2.1
|
)
|
|
(2.0
|
)%
|
|
Currency exchange rates
|
(0.6
|
)
|
|
(0.4
|
)%
|
|
Investment spending
|
(1.0
|
)
|
|
(0.8
|
)%
|
|
Acquisitions
|
2.1
|
|
|
(0.4
|
)%
|
|
Restructuring / acquisition costs
|
(2.3
|
)
|
|
(1.1
|
)%
|
|
December 31, 2018
|
$
|
6.9
|
|
|
4.5
|
%
|
Pricing
|
0.4
|
%
|
Volume
|
7.3
|
%
|
Acquisitions
|
0.7
|
%
|
Currency exchange rates
|
1.8
|
%
|
Total
|
10.2
|
%
|
In millions
|
Operating Income
|
|
Operating Margin
|
|||
December 31, 2016
|
$
|
6.1
|
|
|
5.7
|
%
|
Pricing and productivity in excess of inflation
|
1.5
|
|
|
1.3
|
%
|
|
Volume / product mix
|
2.0
|
|
|
1.3
|
%
|
|
Currency exchange rates
|
0.4
|
|
|
0.3
|
%
|
|
Investment spending
|
(0.4
|
)
|
|
(0.4
|
)%
|
|
Acquisitions
|
(0.1
|
)
|
|
(0.1
|
)%
|
|
December 31, 2017
|
$
|
9.5
|
|
|
8.1
|
%
|
In millions
|
|
2018
|
|
2017
|
|
2016
|
||||||
Net cash provided by operating activities
|
|
$
|
457.8
|
|
|
$
|
347.2
|
|
|
$
|
377.5
|
|
Net cash used in investing activities
|
|
(443.8
|
)
|
|
(50.2
|
)
|
|
(64.0
|
)
|
|||
Net cash used in financing activities
|
|
$
|
(183.4
|
)
|
|
$
|
(150.9
|
)
|
|
$
|
(196.0
|
)
|
In millions
|
2018
|
|
2017
|
||||
Term Facility
|
$
|
656.3
|
|
|
$
|
691.3
|
|
Revolving Facility
|
—
|
|
|
—
|
|
||
3.200% Senior Notes due 2024
|
400.0
|
|
|
400.0
|
|
||
3.550% Senior Notes due 2027
|
400.0
|
|
|
400.0
|
|
||
Other debt
|
1.2
|
|
|
1.0
|
|
||
Total borrowings outstanding
|
1,457.5
|
|
|
1,492.3
|
|
||
Less discounts and debt issuance costs, net
|
(12.7
|
)
|
|
(15.0
|
)
|
||
Total debt
|
1,444.8
|
|
|
1,477.3
|
|
||
Less current portion of long-term debt
|
35.3
|
|
|
35.0
|
|
||
Total long-term debt
|
$
|
1,409.5
|
|
|
$
|
1,442.3
|
|
In millions
|
|
2019
|
|
2020-2021
|
|
2022-2023
|
|
Thereafter
|
|
Total
|
||||||||||
Long-term debt (including current maturities)
|
|
$
|
35.3
|
|
|
$
|
105.0
|
|
|
$
|
516.3
|
|
|
$
|
800.9
|
|
|
$
|
1,457.5
|
|
Interest payments on long-term debt
|
|
49.9
|
|
|
99.6
|
|
|
69.5
|
|
|
62.9
|
|
|
281.9
|
|
|||||
Purchase obligations
|
|
402.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
402.7
|
|
|||||
Operating leases
|
|
30.3
|
|
|
35.5
|
|
|
14.8
|
|
|
17.4
|
|
|
98.0
|
|
|||||
Total contractual cash obligations
|
|
$
|
518.2
|
|
|
$
|
240.1
|
|
|
$
|
600.6
|
|
|
$
|
881.2
|
|
|
$
|
2,240.1
|
|
•
|
Goodwill and indefinite-lived intangible assets – We have significant goodwill and indefinite-lived intangible assets on our Consolidated Balance Sheets related to previous business combinations. Our goodwill and other indefinite-lived intangible assets are tested 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 market volatility, 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 intangible assets – Long-lived assets and finite-lived intangible assets 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 could 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. The estimates of fair value are based on the best information available as of the date of the assessment, and 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 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 – Net revenues are recognized based on the satisfaction of performance obligations under the terms of a contract. A performance obligation is a promise in a contract to transfer control of a distinct product or to provide a
|
•
|
Income taxes – We account for income taxes in accordance with ASC Topic 740. 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 future tax benefits.
|
•
|
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 into Accumulated other comprehensive loss and amortized into earnings over future periods.
|
•
|
Business combinations – The fair value of the consideration paid in a business combination is allocated to tangible assets and identifiable intangible assets, liabilities assumed and goodwill. Acquired intangible assets primarily include indefinite-lived trade names, customer relationships and completed technologies. The accounting for acquisitions involves a considerable amount of judgment and estimation, including the fair value of acquired intangible assets involving projections of future revenues and cash flows that are either discounted at an estimated discount rate or measured at an estimated royalty rate; fair value of other acquired assets and assumed liabilities, including potential contingencies; and the useful lives of the acquired assets. The assumptions used to determine the fair value of acquired intangible assets include projections developed using internal forecasts, available industry and market data, estimates of long-term growth rates, profitability, customer attrition and royalty rates, which are determined at the time of the business combination. The Company uses an income approach or market approach (or both) in accordance with accepted valuation models for each acquired intangible asset to determine the fair value. The impact of prior or future business combinations on our financial condition or results of operations may be materially impacted by the change in or initial selection of assumptions and estimates.
|
(a)
|
The following Consolidated Financial Statements and Financial Statement Schedule and the report thereon of PricewaterhouseCoopers LLP dated
February 19, 2019
, are presented following Item 16 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
|
|
2018
|
||||||||||||||
|
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Fourth
Quarter
|
||||||||
Net revenues
|
|
$
|
613.1
|
|
|
$
|
704.7
|
|
|
$
|
711.5
|
|
|
$
|
702.4
|
|
Cost of goods sold
|
|
355.3
|
|
|
399.1
|
|
|
402.1
|
|
|
401.9
|
|
||||
Operating income
|
|
98.7
|
|
|
143.4
|
|
|
142.3
|
|
|
141.4
|
|
||||
Net earnings
|
|
72.4
|
|
|
114.0
|
|
|
116.1
|
|
|
132.9
|
|
||||
Net earnings attributable to Allegion plc
|
|
72.2
|
|
|
113.9
|
|
|
116.0
|
|
|
132.8
|
|
||||
Earnings per share attributable to Allegion plc ordinary shareholders:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
$
|
0.76
|
|
|
$
|
1.20
|
|
|
$
|
1.22
|
|
|
$
|
1.40
|
|
Diluted
|
|
$
|
0.75
|
|
|
$
|
1.19
|
|
|
$
|
1.21
|
|
|
$
|
1.39
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
|
|
2017
|
||||||||||||||
|
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Fourth
Quarter
|
||||||||
Net revenues
|
|
$
|
548.8
|
|
|
$
|
627.0
|
|
|
$
|
609.4
|
|
|
$
|
623.0
|
|
Cost of goods sold
|
|
307.6
|
|
|
345.7
|
|
|
335.0
|
|
|
347.0
|
|
||||
Operating income
|
|
99.5
|
|
|
135.0
|
|
|
127.1
|
|
|
130.9
|
|
||||
Net earnings
|
|
68.7
|
|
|
105.8
|
|
|
90.1
|
|
|
12.1
|
|
||||
Net earnings attributable to Allegion plc
|
|
68.4
|
|
|
105.5
|
|
|
89.8
|
|
|
9.6
|
|
||||
Earnings per share attributable to Allegion plc ordinary shareholders:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
$
|
0.72
|
|
|
$
|
1.11
|
|
|
$
|
0.95
|
|
|
$
|
0.10
|
|
Diluted
|
|
$
|
0.71
|
|
|
$
|
1.10
|
|
|
$
|
0.94
|
|
|
$
|
0.10
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Evaluation of Disclosure Controls and Procedures
|
(b)
|
Management's Report on Internal Control Over Financial Reporting
|
•
|
pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the Company’s assets;
|
•
|
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that the Company’s receipts and expenditures are being made only in accordance with authorizations of the Company’s management and directors; and
|
•
|
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements.
|
(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
|
|
|
|
|
|
|
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).
|
|
|
|
|
|
|
|
Amended and Restated Memorandum and Articles of Association of Allegion plc.
|
|
Incorporated by reference to Exhibit 3.1 to the Company’s Form 8-K filed with the SEC on June 13, 2016 (File No. 001-35971).
|
|
|
|
|
|
|
|
Indenture, dated as of October 2, 2017, among Allegion US Holding Company Inc., Allegion plc and Wells Fargo Bank, National Association.
|
|
Incorporated by reference to Exhibit 4.1 of Allegion plc's Current Report on Form 8-K filed October 2, 2017.
|
|
|
|
|
|
|
|
First Supplemental Indenture, dated as of October 2, 2017, among Allegion US Holding Company Inc., Allegion plc and Wells Fargo Bank, National Association.
|
|
Incorporated by reference to Exhibit 4.2 of Allegion plc's Current Report on Form 8-K filed October 2, 2017.
|
|
|
|
|
|
|
|
Form of Global Note representing the 3.200% Senior Notes due 2024.
|
|
Incorporated by reference to Exhibit 4.3 of Allegion plc's Current Report on Form 8-K filed October 2, 2017 (included in Exhibit 4.2).
|
|
|
|
|
|
|
|
Second Supplemental Indenture, dated as of October 2, 2017, among Allegion US Holding Company Inc., Allegion plc and Wells Fargo Bank, National Association.
|
|
Incorporated by reference to Exhibit 4.4 of Allegion plc's Current Report on Form 8-K filed October 2, 2017.
|
|
|
|
|
|
|
|
Form of Global Note representing the 3.550% Senior Notes due 2027.
|
|
Incorporated by reference to Exhibit 4.5 of Allegion plc's Current Report on Form 8-K filed October 2, 2017 (included in Exhibit 4.4).
|
|
|
|
|
|
|
|
Form of Separation Agreement and Release. *
|
|
Filed herewith.
|
|
|
|
|
|
|
|
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).
|
|
|
|
|
|
|
|
Credit Agreement, dated as of September 12, 2017.
|
|
Incorporated by reference to Exhibit 10.1 of Allegion plc's Current Report on Form 8-K filed September 15, 2017.
|
|
|
|
|
|
|
Employee Matters Agreement between Ingersoll-Rand plc and Allegion plc.
|
|
Incorporated by reference to Exhibit 10.2 to the Company’s Form 8-K filed with the SEC on December 2, 2013 (File No. 001-35971).
|
|
|
|
|
|
|
|
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).
|
|
|
|
|
|
|
|
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).
|
|
|
|
|
|
|
|
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).
|
|
|
|
|
|
|
|
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).
|
|
|
|
|
|
|
|
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).
|
|
|
|
|
|
|
|
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).
|
|
|
|
|
|
|
|
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).
|
|
|
|
|
|
|
|
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).
|
|
|
|
|
|
|
|
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).
|
|
|
|
|
|
|
|
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).
|
|
|
|
|
|
|
|
Lucia V. Moretti, Offer Letter, dated February 19, 2014. *
|
|
Incorporated by reference to Exhibit 10.1 to the Company's Form 10-K filed with the SEC on February 26, 2016 (File No. 001-35971).
|
|
|
|
|
|
|
|
Jeffrey N. Braun Offer Letter, dated June 13, 2014. *
|
|
Incorporated by reference to Exhibit 10.15 to the Company's Form 10-K filed with the SEC on February 17, 2017 (File No. 001-35971).
|
|
|
|
|
|
|
|
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).
|
|
|
|
|
|
|
|
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).
|
|
|
|
|
|
|
|
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).
|
|
|
|
|
|
|
|
Annual Incentive Plan. *
|
|
Incorporated by reference to Exhibit 10.1 to the Company's Form 10-K filed with the SEC on March 10, 2014 (File No. 001-35971).
|
|
|
|
|
|
|
|
Change in Control Severance Plan. *
|
|
Incorporated by reference to Exhibit 10.2 to the Company's Form 10-K filed with the SEC on March 10, 2014 (File No. 001-35971).
|
|
|
|
|
|
|
|
Form of Restricted Stock Unit Award Agreement. *
|
|
Filed herewith.
|
|
|
|
|
|
|
|
Form of Stock Option Award Agreement. *
|
|
Filed herewith.
|
|
|
|
|
|
|
|
Form of Performance Share Unit Award Agreement. *
|
|
Filed herewith.
|
|
|
|
|
|
|
|
Form of Special Restricted Stock Unit Award Agreement. *
|
|
Incorporated by reference to Exhibit 10.4 to the Company's Form 8-K filed with the SEC on February 9, 2016 (File No. 001-35971).
|
|
|
|
|
|
|
|
Form of Non-Employee Director Restricted Stock Unit Award Agreement. *
|
|
Incorporated by reference to Exhibit 10.1 to the Company's Form 10-Q filed with the SEC on April 30, 2015 (File No. 001-35971).
|
|
|
|
|
|
|
|
Share Purchase Agreement dated June 26, 2015 between SimonsVoss Luxco S.à r.l., SimonsVoss Co-Invest GmbH & Co. KG, Mr Frank Rövekamp and Allegion Luxembourg Holding & Financing S.à r.l.
|
|
Incorporated by reference to Exhibit 10.1 to the Company's Form 10-Q filed with the SEC on July 30, 2015 (File No. 001-35971).
|
|
|
|
|
|
|
|
List of subsidiaries of Allegion plc.
|
|
Filed herewith.
|
|
|
|
|
|
|
|
Consent of Independent Registered Public Accounting Firm.
|
|
Filed herewith.
|
|
|
|
|
|
|
|
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.
|
|
|
|
|
|
|
|
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.
|
|
|
|
|
|
|
|
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.
|
|
|
|
|
|
|
101
|
|
The following materials from the Company’s Annual Report on Form 10-K for the year ended December 31, 2018, formatted in XBRL (Extensible Business Reporting Language): (i) the Consolidated Statements of Comprehensive Income, (ii) the Consolidated Balance Sheets, (iii) the Consolidated Statements of Cash Flows, (iv) the Consolidated Statements of Equity and (v) Notes to Consolidated Financial Statements.
|
|
Filed herewith.
|
By:
|
|
/s/ David D. Petratis
|
|
|
David D. Petratis
|
|
|
Chief Executive Officer
|
Date:
|
|
February 19, 2019
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ David D. Petratis
|
|
Chairman of the Board, President and Chief Executive Officer (Principal Executive Officer)
|
|
February 19, 2019
|
(David D. Petratis)
|
|
|
|
|
|
|
|
|
|
/s/ Patrick S. Shannon
|
|
Senior Vice President and Chief Financial Officer (Principal Financial Officer)
|
|
February 19, 2019
|
(Patrick S. Shannon)
|
|
|
|
|
|
|
|
|
|
/s/ Douglas P. Ranck
|
|
Vice President, Controller and Chief Accounting Officer (Principal Accounting Officer)
|
|
February 19, 2019
|
(Douglas P. Ranck)
|
|
|
|
|
|
|
|
|
|
/s/ Carla Cico
|
|
Director
|
|
February 19, 2019
|
(Carla Cico)
|
|
|
|
|
|
|
|
|
|
/s/ Kirk S. Hachigian
|
|
Director
|
|
February 19, 2019
|
(Kirk S. Hachigian)
|
|
|
|
|
|
|
|
|
|
/s/ Nicole Parent Haughey
|
|
Director
|
|
February 19, 2019
|
(Nicole Parent Haughey)
|
|
|
|
|
|
|
|
|
|
/s/ Dean Schaffer
|
|
Director
|
|
February 19, 2019
|
(Dean Schaffer)
|
|
|
|
|
|
|
|
|
|
/s/ Charles L. Szews
|
|
Director
|
|
February 19, 2019
|
(Charles L. Szews)
|
|
|
|
|
|
|
|
|
|
/s/ Martin E. Welch III
|
|
Director
|
|
February 19, 2019
|
(Martin E. Welch III)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allegion plc
Consolidated Statements of Comprehensive Income
In millions, except per share amounts
|
||||||||||||
For the years ended December 31,
|
|
2018
|
|
2017
|
|
2016
|
||||||
Net revenues
|
|
$
|
2,731.7
|
|
|
$
|
2,408.2
|
|
|
$
|
2,238.0
|
|
Cost of goods sold
|
|
1,558.4
|
|
|
1,335.3
|
|
|
1,248.3
|
|
|||
Selling and administrative expenses
|
|
647.5
|
|
|
580.4
|
|
|
555.4
|
|
|||
Operating income
|
|
525.8
|
|
|
492.5
|
|
|
434.3
|
|
|||
Interest expense
|
|
54.0
|
|
|
105.7
|
|
|
64.3
|
|
|||
Loss on divestitures
|
|
—
|
|
|
—
|
|
|
84.4
|
|
|||
Other income, net
|
|
(3.4
|
)
|
|
(8.9
|
)
|
|
(9.4
|
)
|
|||
Earnings before income taxes
|
|
475.2
|
|
|
395.7
|
|
|
295.0
|
|
|||
Provision for income taxes
|
|
39.8
|
|
|
119.0
|
|
|
63.8
|
|
|||
Net earnings
|
|
435.4
|
|
|
276.7
|
|
|
231.2
|
|
|||
Less: Net earnings attributable to noncontrolling interests
|
|
0.5
|
|
|
3.4
|
|
|
2.1
|
|
|||
Net earnings attributable to Allegion plc
|
|
$
|
434.9
|
|
|
$
|
273.3
|
|
|
$
|
229.1
|
|
Amounts attributable to Allegion plc ordinary shareholders:
|
|
|
|
|
|
|
||||||
Earnings per share attributable to Allegion plc ordinary shareholders:
|
|
|
|
|
|
|
||||||
Basic net earnings:
|
|
$
|
4.58
|
|
|
$
|
2.87
|
|
|
$
|
2.39
|
|
Diluted net earnings:
|
|
$
|
4.54
|
|
|
$
|
2.85
|
|
|
$
|
2.36
|
|
|
|
|
|
|
|
|
||||||
Dividends declared per ordinary share
|
|
$
|
0.84
|
|
|
$
|
0.64
|
|
|
$
|
0.48
|
|
|
|
|
|
|
|
|
||||||
Net earnings
|
|
$
|
435.4
|
|
|
$
|
276.7
|
|
|
$
|
231.2
|
|
Other comprehensive income (loss), net of tax
|
|
|
|
|
|
|
||||||
Currency translation
|
|
(56.9
|
)
|
|
97.5
|
|
|
(40.7
|
)
|
|||
Cash flow hedges and marketable securities:
|
|
|
|
|
|
|
||||||
Unrealized net gains arising during period
|
|
4.6
|
|
|
5.2
|
|
|
9.7
|
|
|||
Net gains reclassified into earnings
|
|
(2.3
|
)
|
|
(4.7
|
)
|
|
(19.0
|
)
|
|||
Tax expense
|
|
(0.5
|
)
|
|
(0.1
|
)
|
|
(1.3
|
)
|
|||
Total cash flow hedges and marketable securities, net of tax
|
|
1.8
|
|
|
0.4
|
|
|
(10.6
|
)
|
|||
Pension and OPEB adjustments:
|
|
|
|
|
|
|
||||||
Net actuarial (losses) gains for the period
|
|
(16.6
|
)
|
|
25.5
|
|
|
3.1
|
|
|||
Amortization reclassified into earnings
|
|
4.5
|
|
|
5.2
|
|
|
6.0
|
|
|||
Settlements/curtailments reclassified to earnings
|
|
—
|
|
|
0.1
|
|
|
0.3
|
|
|||
Currency translation and other
|
|
5.1
|
|
|
0.7
|
|
|
14.4
|
|
|||
Tax benefit (expense)
|
|
1.6
|
|
|
(12.2
|
)
|
|
(5.0
|
)
|
|||
Total pension and OPEB adjustments, net of tax
|
|
(5.4
|
)
|
|
19.3
|
|
|
18.8
|
|
|||
Other comprehensive (loss) income, net of tax
|
|
(60.5
|
)
|
|
117.2
|
|
|
(32.5
|
)
|
|||
Total comprehensive income, net of tax
|
|
374.9
|
|
|
393.9
|
|
|
198.7
|
|
|||
Less: Total comprehensive income attributable to noncontrolling interests
|
|
0.9
|
|
|
2.8
|
|
|
1.7
|
|
|||
Total comprehensive income attributable to Allegion plc
|
|
$
|
374.0
|
|
|
$
|
391.1
|
|
|
$
|
197.0
|
|
As of December 31,
|
|
2018
|
|
2017
|
||||
ASSETS
|
|
|
|
|
||||
Current assets:
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
283.8
|
|
|
$
|
466.2
|
|
Restricted cash
|
|
6.8
|
|
|
—
|
|
||
Accounts and notes receivable, net
|
|
324.9
|
|
|
296.6
|
|
||
Inventories
|
|
280.3
|
|
|
239.8
|
|
||
Current tax receivable
|
|
15.4
|
|
|
12.2
|
|
||
Other current assets
|
|
19.6
|
|
|
17.0
|
|
||
Assets held for sale
|
|
0.8
|
|
|
0.9
|
|
||
Total current assets
|
|
931.6
|
|
|
1,032.7
|
|
||
Property, plant and equipment, net
|
|
276.7
|
|
|
252.2
|
|
||
Goodwill
|
|
883.0
|
|
|
761.2
|
|
||
Intangible assets, net
|
|
547.1
|
|
|
394.3
|
|
||
Deferred and noncurrent income taxes
|
|
84.6
|
|
|
35.4
|
|
||
Other noncurrent assets
|
|
87.2
|
|
|
66.2
|
|
||
Total assets
|
|
$
|
2,810.2
|
|
|
$
|
2,542.0
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
||||
Current liabilities:
|
|
|
|
|
||||
Accounts payable
|
|
$
|
235.0
|
|
|
$
|
188.3
|
|
Accrued compensation and benefits
|
|
95.3
|
|
|
84.7
|
|
||
Accrued expenses and other current liabilities
|
|
135.0
|
|
|
134.6
|
|
||
Current tax payable
|
|
20.2
|
|
|
18.2
|
|
||
Short-term borrowings and current maturities of long-term debt
|
|
35.3
|
|
|
35.0
|
|
||
Total current liabilities
|
|
520.8
|
|
|
460.8
|
|
||
Long-term debt
|
|
1,409.5
|
|
|
1,442.3
|
|
||
Postemployment and other benefit liabilities
|
|
81.2
|
|
|
85.9
|
|
||
Deferred and noncurrent income taxes
|
|
115.9
|
|
|
123.6
|
|
||
Other noncurrent liabilities
|
|
28.8
|
|
|
23.9
|
|
||
Total liabilities
|
|
2,156.2
|
|
|
2,136.5
|
|
||
Equity:
|
|
|
|
|
||||
Allegion plc shareholders’ equity
|
|
|
|
|
||||
Ordinary shares, $0.01 par value (94,637,450 and 95,062,385 shares issued and outstanding at December 31, 2018 and 2017, respectively)
|
|
0.9
|
|
|
1.0
|
|
||
Capital in excess of par value
|
|
—
|
|
|
9.1
|
|
||
Retained earnings
|
|
873.6
|
|
|
544.4
|
|
||
Accumulated other comprehensive loss
|
|
(223.5
|
)
|
|
(152.9
|
)
|
||
Total Allegion plc shareholders’ equity
|
|
651.0
|
|
|
401.6
|
|
||
Noncontrolling interest
|
|
3.0
|
|
|
3.9
|
|
||
Total equity
|
|
654.0
|
|
|
405.5
|
|
||
Total liabilities and equity
|
|
$
|
2,810.2
|
|
|
$
|
2,542.0
|
|
Allegion plc
Consolidated Statements of Equity
|
|||||||||||||||||||||||||||
|
|
|
|
Allegion plc Shareholders' equity
|
|
||||||||||||||||||||||
In millions
|
|
Total
equity
|
|
Ordinary Shares
|
|
Capital in excess of par value
|
|
Retained earnings
|
|
Accumulated
other
comprehensive loss
|
|
Non-controlling Interest
|
|||||||||||||||
|
|
Amount
|
|
Shares
|
|
|
|
||||||||||||||||||||
Balance at December 31, 2015
|
|
$
|
29.7
|
|
|
$
|
1.0
|
|
|
96.0
|
|
|
$
|
24.4
|
|
|
$
|
232.4
|
|
|
$
|
(232.2
|
)
|
|
$
|
4.1
|
|
Net earnings
|
|
231.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
229.1
|
|
|
—
|
|
|
2.1
|
|
||||||
Other comprehensive loss
|
|
(32.5
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(32.1
|
)
|
|
(0.4
|
)
|
||||||
Shares issued under incentive stock plans
|
|
5.8
|
|
|
—
|
|
|
—
|
|
|
5.8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Repurchase of ordinary shares
|
|
(85.1
|
)
|
|
—
|
|
|
(1.3
|
)
|
|
(46.4
|
)
|
|
(38.7
|
)
|
|
—
|
|
|
—
|
|
||||||
Share-based compensation
|
|
16.6
|
|
|
—
|
|
|
0.6
|
|
|
16.6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Acquisition/divestiture of noncontrolling interest
|
|
(0.4
|
)
|
|
—
|
|
|
—
|
|
|
(0.4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Dividends declared to noncontrolling interest
|
|
(2.7
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2.7
|
)
|
||||||
Cash dividends declared ($0.48 per share)
|
|
(46.0
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(46.0
|
)
|
|
—
|
|
|
—
|
|
||||||
Other
|
|
(0.2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.2
|
)
|
|
—
|
|
|
—
|
|
||||||
Balance at December 31, 2016
|
|
116.4
|
|
|
1.0
|
|
|
95.3
|
|
|
—
|
|
|
376.6
|
|
|
(264.3
|
)
|
|
3.1
|
|
||||||
Cumulative effect of change in accounting principle
|
|
(5.0
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5.0
|
)
|
|
—
|
|
|
—
|
|
||||||
Net earnings
|
|
276.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
273.3
|
|
|
—
|
|
|
3.4
|
|
||||||
Other comprehensive income (loss)
|
|
117.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
117.8
|
|
|
(0.6
|
)
|
||||||
Shares issued under incentive stock plans
|
|
7.2
|
|
|
—
|
|
|
—
|
|
|
7.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Repurchase of ordinary shares
|
|
(60.0
|
)
|
|
—
|
|
|
(0.8
|
)
|
|
(13.9
|
)
|
|
(46.1
|
)
|
|
—
|
|
|
—
|
|
||||||
Share-based compensation
|
|
15.8
|
|
|
—
|
|
|
0.6
|
|
|
15.8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Dividends declared to noncontrolling interest
|
|
(1.8
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1.8
|
)
|
||||||
Cash dividends declared ($0.64 per share)
|
|
(60.9
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(60.9
|
)
|
|
—
|
|
|
—
|
|
||||||
Other (see Note 13)
|
|
(0.1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6.5
|
|
|
(6.4
|
)
|
|
(0.2
|
)
|
||||||
Balance at December 31, 2017
|
|
405.5
|
|
|
1.0
|
|
|
95.1
|
|
|
9.1
|
|
|
544.4
|
|
|
(152.9
|
)
|
|
3.9
|
|
||||||
Net earnings
|
|
435.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
434.9
|
|
|
—
|
|
|
0.5
|
|
||||||
Other comprehensive (loss) income
|
|
(60.5
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(60.9
|
)
|
|
0.4
|
|
||||||
Shares issued under incentive stock plans
|
|
3.2
|
|
|
—
|
|
|
—
|
|
|
3.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Repurchase of ordinary shares
|
|
(67.3
|
)
|
|
(0.1
|
)
|
|
(0.9
|
)
|
|
(31.5
|
)
|
|
(35.7
|
)
|
|
—
|
|
|
—
|
|
||||||
Share-based compensation
|
|
19.2
|
|
|
—
|
|
|
0.4
|
|
|
19.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Dividends declared to noncontrolling interest
|
|
(1.8
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1.8
|
)
|
||||||
Cash dividends declared ($0.84 per share)
|
|
(79.7
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(79.7
|
)
|
|
—
|
|
|
—
|
|
||||||
Reclassification due to adoption of ASU 2018-02 (see Note 2)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9.7
|
|
|
(9.7
|
)
|
|
—
|
|
||||||
Balance at December 31, 2018
|
|
$
|
654.0
|
|
|
$
|
0.9
|
|
|
94.6
|
|
|
$
|
—
|
|
|
$
|
873.6
|
|
|
$
|
(223.5
|
)
|
|
$
|
3.0
|
|
Allegion plc
Consolidated Statements of Cash Flows
In millions
|
||||||||||||
For the years ended December 31,
|
|
2018
|
|
2017
|
|
2016
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
||||||
Net earnings
|
|
$
|
435.4
|
|
|
$
|
276.7
|
|
|
$
|
231.2
|
|
Adjustments to arrive at net cash provided by operating activities:
|
|
|
|
|
|
|
||||||
Debt extinguishment costs
|
|
—
|
|
|
43.1
|
|
|
—
|
|
|||
Depreciation and amortization
|
|
86.2
|
|
|
66.9
|
|
|
66.9
|
|
|||
Share-based compensation
|
|
19.6
|
|
|
16.2
|
|
|
16.6
|
|
|||
Loss on divestitures
|
|
—
|
|
|
—
|
|
|
84.4
|
|
|||
Gain on sale of marketable securities
|
|
—
|
|
|
—
|
|
|
(12.4
|
)
|
|||
Loss (gain) on sale of property, plant and equipment
|
|
0.4
|
|
|
(0.1
|
)
|
|
1.3
|
|
|||
Equity earnings, net of dividends
|
|
(0.1
|
)
|
|
(5.3
|
)
|
|
(3.2
|
)
|
|||
Discretionary pension plan contribution
|
|
—
|
|
|
(50.0
|
)
|
|
—
|
|
|||
Deferred income taxes
|
|
(64.4
|
)
|
|
24.9
|
|
|
6.3
|
|
|||
Other items
|
|
(8.3
|
)
|
|
3.0
|
|
|
(7.7
|
)
|
|||
Changes in other assets and liabilities
|
|
|
|
|
|
|
||||||
Accounts and notes receivable
|
|
(8.6
|
)
|
|
(22.7
|
)
|
|
(19.8
|
)
|
|||
Inventories
|
|
(19.7
|
)
|
|
(4.4
|
)
|
|
(15.6
|
)
|
|||
Other current and noncurrent assets
|
|
(3.3
|
)
|
|
3.5
|
|
|
62.0
|
|
|||
Accounts payable
|
|
33.9
|
|
|
0.4
|
|
|
3.4
|
|
|||
Other current and noncurrent liabilities
|
|
(13.3
|
)
|
|
(5.0
|
)
|
|
(35.9
|
)
|
|||
Net cash provided by operating activities
|
|
457.8
|
|
|
347.2
|
|
|
377.5
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
|
||||||
Capital expenditures
|
|
(49.1
|
)
|
|
(49.3
|
)
|
|
(42.5
|
)
|
|||
Acquisition of and equity investments in businesses, net of cash acquired
|
|
(376.1
|
)
|
|
(20.8
|
)
|
|
(31.4
|
)
|
|||
Proceeds from sale of property, plant and equipment
|
|
0.2
|
|
|
3.1
|
|
|
0.1
|
|
|||
Proceeds from sale of equity investment
|
|
—
|
|
|
15.6
|
|
|
—
|
|
|||
Proceeds (payments) related to business dispositions
|
|
—
|
|
|
1.2
|
|
|
(4.3
|
)
|
|||
Purchase of investments
|
|
(14.3
|
)
|
|
—
|
|
|
—
|
|
|||
Proceeds from sale of marketable securities
|
|
—
|
|
|
—
|
|
|
14.1
|
|
|||
Other investing activities, net
|
|
(4.5
|
)
|
|
—
|
|
|
—
|
|
|||
Net cash used in investing activities
|
|
$
|
(443.8
|
)
|
|
$
|
(50.2
|
)
|
|
$
|
(64.0
|
)
|
Allegion plc
Consolidated Statements of Cash Flows - (Continued)
In millions
|
||||||||||||
For the years ended December 31,
|
|
2018
|
|
2017
|
|
2016
|
||||||
Cash flows from financing activities:
|
|
|
|
|
|
|
||||||
Short-term borrowings, net
|
|
$
|
(0.6
|
)
|
|
$
|
(1.3
|
)
|
|
$
|
(17.4
|
)
|
Proceeds from revolving facility
|
|
115.0
|
|
|
165.0
|
|
|
—
|
|
|||
Repayments of revolving facility
|
|
(115.0
|
)
|
|
(165.0
|
)
|
|
—
|
|
|||
Issuance of term facility
|
|
—
|
|
|
700.0
|
|
|
—
|
|
|||
Settlement of second amended credit facility
|
|
—
|
|
|
(856.3
|
)
|
|
—
|
|
|||
Proceeds from issuance of senior notes
|
|
—
|
|
|
800.0
|
|
|
—
|
|
|||
Redemption of senior notes
|
|
—
|
|
|
(600.0
|
)
|
|
—
|
|
|||
Payments of long-term debt
|
|
(35.5
|
)
|
|
(32.3
|
)
|
|
(47.0
|
)
|
|||
Net (repayments of) proceeds from debt
|
|
(36.1
|
)
|
|
10.1
|
|
|
(64.4
|
)
|
|||
Debt issuance costs
|
|
—
|
|
|
(9.5
|
)
|
|
(0.3
|
)
|
|||
Redemption premium
|
|
—
|
|
|
(33.2
|
)
|
|
—
|
|
|||
Dividends paid to ordinary shareholders
|
|
(79.4
|
)
|
|
(60.9
|
)
|
|
(46.0
|
)
|
|||
Repurchase of ordinary shares
|
|
(67.3
|
)
|
|
(60.0
|
)
|
|
(85.1
|
)
|
|||
Proceeds from shares issued under incentive plans
|
|
3.2
|
|
|
7.2
|
|
|
5.8
|
|
|||
Other financing activities, net
|
|
(3.8
|
)
|
|
(4.6
|
)
|
|
(6.0
|
)
|
|||
Net cash used in financing activities
|
|
(183.4
|
)
|
|
(150.9
|
)
|
|
(196.0
|
)
|
|||
Effect of exchange rate changes on cash, cash equivalents and restricted cash
|
|
(6.2
|
)
|
|
7.7
|
|
|
(4.8
|
)
|
|||
Net (decrease) increase in cash, cash equivalents and restricted cash
|
|
(175.6
|
)
|
|
153.8
|
|
|
112.7
|
|
|||
Cash, cash equivalents and restricted cash – beginning of period
|
|
466.2
|
|
|
312.4
|
|
|
199.7
|
|
|||
Cash, cash equivalents and restricted cash – end of period
|
|
$
|
290.6
|
|
|
$
|
466.2
|
|
|
$
|
312.4
|
|
Buildings
|
10
|
to
|
50
|
years
|
Machinery and equipment
|
2
|
to
|
12
|
years
|
Software
|
2
|
to
|
7
|
years
|
Customer relationships
|
20
|
years
|
Trade names (finite-lived)
|
25
|
years
|
Completed technology/patents
|
10
|
years
|
Other
|
25
|
years
|
•
|
The Company has elected to not separate non-lease components from lease components and instead to account for each separate lease component and the non-lease components associated with that lease component as a single lease component.
|
•
|
If at the lease commencement date, a lease has a lease term of 12 months or less and does not include a purchase option that is reasonably certain to exercise, the Company will elect not to apply ASC 842 recognition requirements. Nonetheless, the Company intends to include leases of less than 12 months within the updated footnote disclosures, if material.
|
•
|
If the Company enters into a large number of leases in the same month with the same terms and conditions, these will be looked at as a group (portfolio) assuming the lease model under this approach will not materially differ from applying to each individual lease.
|
•
|
As the Company has applied the new transition method allowed per ASU 2018-11, the Company has elected to not reassess arrangements entered into prior than January 1, 2019 for whether an arrangement is or contains a lease, the lease classification applied or to separate initial direct costs.
|
•
|
The Company has elected to use hindsight in determining the lease term for lease contracts that have historically been renewed or amended.
|
In millions
|
|
2018
|
|
2017
|
||||
Raw materials
|
|
$
|
117.2
|
|
|
$
|
66.6
|
|
Work-in-process
|
|
34.4
|
|
|
29.8
|
|
||
Finished goods
|
|
128.7
|
|
|
143.4
|
|
||
Total
|
|
$
|
280.3
|
|
|
$
|
239.8
|
|
In millions
|
|
2018
|
|
2017
|
||||
Land
|
|
$
|
15.6
|
|
|
$
|
16.0
|
|
Buildings
|
|
148.4
|
|
|
142.2
|
|
||
Machinery and equipment
|
|
407.7
|
|
|
383.9
|
|
||
Software
|
|
146.0
|
|
|
141.4
|
|
||
Construction in progress
|
|
31.1
|
|
|
24.4
|
|
||
|
|
748.8
|
|
|
707.9
|
|
||
Accumulated depreciation
|
|
(472.1
|
)
|
|
(455.7
|
)
|
||
Total
|
|
$
|
276.7
|
|
|
$
|
252.2
|
|
In millions
|
|
Americas
|
|
EMEIA
|
|
Asia Pacific
|
|
Total
|
||||||||
December 31, 2016 (gross)
|
|
$
|
372.9
|
|
|
$
|
736.1
|
|
|
$
|
93.3
|
|
|
$
|
1,202.3
|
|
Accumulated impairment *
|
|
—
|
|
|
(478.6
|
)
|
|
(6.9
|
)
|
|
(485.5
|
)
|
||||
December 31, 2016 (net)
|
|
372.9
|
|
|
257.5
|
|
|
86.4
|
|
|
716.8
|
|
||||
Acquisitions and settlements
|
|
2.3
|
|
|
(1.6
|
)
|
|
1.3
|
|
|
2.0
|
|
||||
Currency translation
|
|
—
|
|
|
35.3
|
|
|
7.1
|
|
|
42.4
|
|
||||
December 31, 2017 (net)
|
|
375.2
|
|
|
291.2
|
|
|
94.8
|
|
|
761.2
|
|
||||
Acquisitions and settlements
|
|
111.1
|
|
|
10.2
|
|
|
20.5
|
|
|
141.8
|
|
||||
Currency translation
|
|
(0.2
|
)
|
|
(12.9
|
)
|
|
(6.9
|
)
|
|
(20.0
|
)
|
||||
December 31, 2018 (net)
|
|
$
|
486.1
|
|
|
$
|
288.5
|
|
|
$
|
108.4
|
|
|
$
|
883.0
|
|
|
|
2018
|
|
2017
|
||||||||||||||||||||
In millions
|
|
Gross carrying amount
|
|
Accumulated amortization
|
|
Net carrying amount
|
|
Gross carrying amount
|
|
Accumulated amortization
|
|
Net carrying amount
|
||||||||||||
Completed technologies/patents
|
|
$
|
59.4
|
|
|
$
|
(14.2
|
)
|
|
$
|
45.2
|
|
|
$
|
32.6
|
|
|
$
|
(10.0
|
)
|
|
$
|
22.6
|
|
Customer relationships
|
|
419.3
|
|
|
(88.5
|
)
|
|
330.8
|
|
|
324.5
|
|
|
(74.1
|
)
|
|
250.4
|
|
||||||
Trade names (finite-lived)
|
|
84.9
|
|
|
(47.4
|
)
|
|
37.5
|
|
|
89.0
|
|
|
(46.1
|
)
|
|
42.9
|
|
||||||
Other
|
|
9.5
|
|
|
(6.5
|
)
|
|
3.0
|
|
|
7.9
|
|
|
(4.9
|
)
|
|
3.0
|
|
||||||
Total finite-lived intangible assets
|
|
573.1
|
|
|
$
|
(156.6
|
)
|
|
416.5
|
|
|
454.0
|
|
|
$
|
(135.1
|
)
|
|
318.9
|
|
||||
Trade names (indefinite-lived)
|
|
130.6
|
|
|
|
|
130.6
|
|
|
75.4
|
|
|
|
|
75.4
|
|
||||||||
Total
|
|
$
|
703.7
|
|
|
|
|
$
|
547.1
|
|
|
$
|
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")
|
|
March 2018
|
Gainsborough Hardware and API Locksmiths ("Door and Access Systems")
|
|
July 2018
|
ISONAS Security Systems, Inc. ("ISONAS")
|
|
July 2018
|
In millions
|
|
||
Accounts receivable, net
|
$
|
28.9
|
|
Inventories
|
28.5
|
|
|
Other current assets
|
1.3
|
|
|
Property, plant and equipment, net
|
27.6
|
|
|
Goodwill
|
141.8
|
|
|
Intangible assets, net
|
204.3
|
|
|
Other noncurrent assets
|
—
|
|
|
Accounts payable
|
(11.1
|
)
|
|
Accrued expenses and other current liabilities
|
(35.7
|
)
|
|
Other noncurrent liabilities
|
(11.1
|
)
|
|
Total consideration
|
$
|
374.5
|
|
In millions, except per share amounts
|
|
2018
|
|
2017
|
||||
Net revenues
|
|
$
|
2,774.2
|
|
|
$
|
2,612.1
|
|
Net earnings attributable to Allegion plc
|
|
$
|
446.8
|
|
|
$
|
256.9
|
|
Basic net earnings per share
|
|
$
|
4.70
|
|
|
$
|
2.70
|
|
Diluted net earnings per share
|
|
$
|
4.67
|
|
|
$
|
2.68
|
|
In millions
|
|
2018
|
||
Net revenues
|
|
$
|
160.2
|
|
|
|
|
||
Loss before income taxes
|
|
$
|
(3.2
|
)
|
In millions
|
2018
|
|
2017
|
||||
Term Facility
|
$
|
656.3
|
|
|
$
|
691.3
|
|
Revolving Facility
|
—
|
|
|
—
|
|
||
3.200% Senior Notes due 2024
|
400.0
|
|
|
400.0
|
|
||
3.550% Senior Notes due 2027
|
400.0
|
|
|
400.0
|
|
||
Other debt
|
1.2
|
|
|
1.0
|
|
||
Total borrowings outstanding
|
1,457.5
|
|
|
1,492.3
|
|
||
Less discounts and debt issuance costs, net
|
(12.7
|
)
|
|
(15.0
|
)
|
||
Total debt
|
1,444.8
|
|
|
1,477.3
|
|
||
Less current portion of long-term debt
|
35.3
|
|
|
35.0
|
|
||
Total long-term debt
|
$
|
1,409.5
|
|
|
$
|
1,442.3
|
|
In millions
|
|
||
2019
|
$
|
35.3
|
|
2020
|
35.0
|
|
|
2021
|
70.0
|
|
|
2022
|
516.3
|
|
|
2023
|
—
|
|
|
Thereafter
|
800.9
|
|
|
Total
|
$
|
1,457.5
|
|
|
|
Asset derivatives
|
|
Liability derivatives
|
||||||||||||
In millions
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Derivatives designated as hedges:
|
|
|
|
|
|
|
|
|
||||||||
Currency derivatives
|
|
$
|
1.7
|
|
|
$
|
0.2
|
|
|
$
|
—
|
|
|
$
|
0.3
|
|
Interest rate swaps
|
|
5.7
|
|
|
5.3
|
|
|
—
|
|
|
—
|
|
||||
Derivatives not designated as hedges:
|
|
|
|
|
|
|
|
|
||||||||
Currency derivatives
|
|
0.4
|
|
|
—
|
|
|
0.1
|
|
|
0.4
|
|
||||
Total derivatives
|
|
$
|
7.8
|
|
|
$
|
5.5
|
|
|
$
|
0.1
|
|
|
$
|
0.7
|
|
|
|
Amount of gain recognized in Accumulated other comprehensive loss
|
|
Location of gain (loss) recognized in Net earnings
|
|
Amount of gain (loss) reclassified from Accumulated other comprehensive loss and recognized into Net earnings
|
||||||||||||||||||||
In millions
|
|
2018
|
|
2017
|
|
2016
|
|
|
2018
|
|
2017
|
|
2016
|
|||||||||||||
Currency derivatives
|
|
$
|
4.3
|
|
|
$
|
4.0
|
|
|
$
|
4.2
|
|
|
Cost of goods sold
|
|
$
|
2.3
|
|
|
$
|
4.7
|
|
|
$
|
5.4
|
|
Interest rate swaps
|
|
2.5
|
|
|
1.2
|
|
|
5.4
|
|
|
Interest expense
|
|
2.2
|
|
|
(0.3
|
)
|
|
—
|
|
||||||
Total
|
|
$
|
6.8
|
|
|
$
|
5.2
|
|
|
$
|
9.6
|
|
|
|
|
$
|
4.5
|
|
|
$
|
4.4
|
|
|
$
|
5.4
|
|
|
|
U.S.
|
|
NON-U.S.
|
||||||||||||
In millions
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Change in benefit obligations:
|
|
|
|
|
|
|
|
|
||||||||
Benefit obligation at beginning of year
|
|
$
|
317.5
|
|
|
$
|
286.9
|
|
|
$
|
396.3
|
|
|
$
|
380.5
|
|
Service cost
|
|
8.6
|
|
|
8.7
|
|
|
3.3
|
|
|
3.3
|
|
||||
Interest cost
|
|
10.4
|
|
|
10.5
|
|
|
8.4
|
|
|
8.9
|
|
||||
Employee contributions
|
|
—
|
|
|
—
|
|
|
0.3
|
|
|
0.3
|
|
||||
Amendments
|
|
—
|
|
|
—
|
|
|
5.0
|
|
|
—
|
|
||||
Actuarial (gains) losses
|
|
(25.4
|
)
|
|
17.5
|
|
|
(14.9
|
)
|
|
(15.4
|
)
|
||||
Benefits paid
|
|
(16.5
|
)
|
|
(12.4
|
)
|
|
(19.4
|
)
|
|
(13.7
|
)
|
||||
Foreign exchange rate changes
|
|
—
|
|
|
—
|
|
|
(21.1
|
)
|
|
34.3
|
|
||||
Curtailments and settlements
|
|
—
|
|
|
—
|
|
|
(0.2
|
)
|
|
(0.9
|
)
|
||||
Acquisitions
|
|
—
|
|
|
7.3
|
|
|
0.5
|
|
|
—
|
|
||||
Other, including expenses paid
|
|
(1.3
|
)
|
|
(1.0
|
)
|
|
(1.4
|
)
|
|
(1.0
|
)
|
||||
Benefit obligation at end of year
|
|
$
|
293.3
|
|
|
$
|
317.5
|
|
|
$
|
356.8
|
|
|
$
|
396.3
|
|
Change in plan assets:
|
|
|
|
|
|
|
|
|
||||||||
Fair value at beginning of year
|
|
$
|
283.2
|
|
|
$
|
202.4
|
|
|
$
|
398.4
|
|
|
$
|
353.4
|
|
Actual return on plan assets
|
|
(12.1
|
)
|
|
31.9
|
|
|
(9.8
|
)
|
|
22.3
|
|
||||
Company contributions
|
|
6.1
|
|
|
55.7
|
|
|
5.4
|
|
|
5.2
|
|
||||
Employee contributions
|
|
—
|
|
|
—
|
|
|
0.3
|
|
|
0.3
|
|
||||
Benefits paid
|
|
(16.5
|
)
|
|
(12.4
|
)
|
|
(19.4
|
)
|
|
(13.7
|
)
|
||||
Foreign exchange rate changes
|
|
—
|
|
|
—
|
|
|
(20.8
|
)
|
|
33.7
|
|
||||
Settlements
|
|
—
|
|
|
—
|
|
|
(0.2
|
)
|
|
(0.9
|
)
|
||||
Acquisitions
|
|
—
|
|
|
6.5
|
|
|
—
|
|
|
—
|
|
||||
Other, including expenses paid
|
|
(1.3
|
)
|
|
(0.9
|
)
|
|
(1.7
|
)
|
|
(1.9
|
)
|
||||
Fair value of assets at end of year
|
|
$
|
259.4
|
|
|
$
|
283.2
|
|
|
$
|
352.2
|
|
|
$
|
398.4
|
|
Funded status:
|
|
|
|
|
|
|
|
|
||||||||
Plan assets (less than) over benefit obligations
|
|
$
|
(33.9
|
)
|
|
$
|
(34.3
|
)
|
|
$
|
(4.6
|
)
|
|
$
|
2.1
|
|
Amounts included in the balance sheet:
|
|
|
|
|
|
|
|
|
||||||||
Other noncurrent assets
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
21.1
|
|
|
$
|
28.5
|
|
Accrued compensation and benefits
|
|
(0.3
|
)
|
|
(0.2
|
)
|
|
(1.1
|
)
|
|
(1.3
|
)
|
||||
Postemployment and other benefit liabilities
|
|
(33.6
|
)
|
|
(34.1
|
)
|
|
(24.6
|
)
|
|
(25.1
|
)
|
||||
Net amount recognized
|
|
$
|
(33.9
|
)
|
|
$
|
(34.3
|
)
|
|
$
|
(4.6
|
)
|
|
$
|
2.1
|
|
|
|
NON-U.S.
|
||||||||||
In millions
|
|
Prior service cost
|
|
Net actuarial losses
|
|
Total
|
||||||
December 31, 2016
|
|
$
|
—
|
|
|
$
|
(79.6
|
)
|
|
$
|
(79.6
|
)
|
Current year changes recorded to Accumulated other comprehensive loss
|
|
—
|
|
|
23.3
|
|
|
23.3
|
|
|||
Amortization reclassified to earnings
|
|
—
|
|
|
1.8
|
|
|
1.8
|
|
|||
Settlements/curtailments reclassified to earnings
|
|
—
|
|
|
0.1
|
|
|
0.1
|
|
|||
Currency translation and other
|
|
0.1
|
|
|
(6.2
|
)
|
|
(6.1
|
)
|
|||
December 31, 2017
|
|
$
|
0.1
|
|
|
$
|
(60.6
|
)
|
|
$
|
(60.5
|
)
|
Current year changes recorded to Accumulated other comprehensive loss
|
|
(5.0
|
)
|
|
(10.4
|
)
|
|
(15.4
|
)
|
|||
Amortization reclassified to earnings
|
|
—
|
|
|
0.9
|
|
|
0.9
|
|
|||
Currency translation and other
|
|
0.2
|
|
|
3.9
|
|
|
4.1
|
|
|||
December 31, 2018
|
|
$
|
(4.7
|
)
|
|
$
|
(66.2
|
)
|
|
$
|
(70.9
|
)
|
Benefit obligations at December 31,
|
|
2018
|
|
2017
|
||
Discount rate:
|
|
|
|
|
||
U.S. plans
|
|
4.3
|
%
|
|
3.6
|
%
|
Non-U.S. plans
|
|
2.8
|
%
|
|
2.5
|
%
|
Rate of compensation increase:
|
|
|
|
|
||
U.S. plans
|
|
3.0
|
%
|
|
3.0
|
%
|
Non-U.S. plans
|
|
3.3
|
%
|
|
3.2
|
%
|
In millions
|
U.S.
|
|
NON-U.S.
|
||||
2019
|
$
|
17.0
|
|
|
$
|
16.9
|
|
2020
|
24.2
|
|
|
17.4
|
|
||
2021
|
17.8
|
|
|
18.3
|
|
||
2022
|
18.4
|
|
|
19.1
|
|
||
2023
|
20.3
|
|
|
19.6
|
|
||
2024 - 2028
|
$
|
103.2
|
|
|
$
|
110.4
|
|
|
|
NON-U.S.
|
||||||||||
In millions
|
|
2018
|
|
2017
|
|
2016
|
||||||
Service cost
|
|
$
|
1.7
|
|
|
$
|
1.5
|
|
|
$
|
1.4
|
|
Interest cost
|
|
8.4
|
|
|
8.9
|
|
|
10.7
|
|
|||
Expected return on plan assets
|
|
(15.4
|
)
|
|
(14.3
|
)
|
|
(13.7
|
)
|
|||
Administrative costs and other
|
|
1.8
|
|
|
2.5
|
|
|
1.7
|
|
|||
Net amortization of:
|
|
|
|
|
|
|
||||||
Plan net actuarial losses
|
|
0.9
|
|
|
1.9
|
|
|
2.2
|
|
|||
Net periodic pension benefit (income) cost
|
|
(2.6
|
)
|
|
0.5
|
|
|
2.3
|
|
|||
Net curtailment and settlement losses
|
|
—
|
|
|
0.1
|
|
|
0.3
|
|
|||
Net periodic pension benefit (income) cost after net curtailment and settlement losses
|
|
$
|
(2.6
|
)
|
|
$
|
0.6
|
|
|
$
|
2.6
|
|
|
|
Fair value measurements
|
|
|
|
Total
fair value
|
||||||||||||||
In millions
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Assets measured at NAV
|
|
|||||||||||
Cash, cash equivalents and short-term investments
|
|
$
|
—
|
|
|
$
|
3.1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3.1
|
|
Equity mutual funds
|
|
—
|
|
|
—
|
|
|
—
|
|
|
53.7
|
|
|
53.7
|
|
|||||
Fixed income investments:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. government and agency obligations
|
|
—
|
|
|
—
|
|
|
—
|
|
|
94.0
|
|
|
94.0
|
|
|||||
Corporate and non-U.S. bonds
(a)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
89.9
|
|
|
89.9
|
|
|||||
|
|
—
|
|
|
—
|
|
|
—
|
|
|
183.9
|
|
|
183.9
|
|
|||||
Other
(b)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
18.7
|
|
|
18.7
|
|
|||||
Total assets at fair value
|
|
$
|
—
|
|
|
$
|
3.1
|
|
|
$
|
—
|
|
|
$
|
256.3
|
|
|
$
|
259.4
|
|
(a)
|
Includes state and municipal bonds.
|
(b)
|
Includes group trust diversified credit fund.
|
|
|
Fair value measurements
|
|
|
|
Total
fair value
|
||||||||||||||
In millions
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Assets measured at NAV
|
|
|||||||||||
Cash, cash equivalents and short-term investments
|
|
$
|
—
|
|
|
$
|
3.2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3.2
|
|
Equity mutual funds
|
|
—
|
|
|
—
|
|
|
—
|
|
|
70.9
|
|
|
70.9
|
|
|||||
Fixed income investments:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. government and agency obligations
|
|
—
|
|
|
83.6
|
|
|
—
|
|
|
—
|
|
|
83.6
|
|
|||||
Corporate and non-U.S. bonds
(a)
|
|
—
|
|
|
111.3
|
|
|
—
|
|
|
12.8
|
|
|
124.1
|
|
|||||
|
|
—
|
|
|
194.9
|
|
|
—
|
|
|
12.8
|
|
|
207.7
|
|
|||||
Total assets at fair value
|
|
$
|
—
|
|
|
$
|
198.1
|
|
|
$
|
—
|
|
|
$
|
83.7
|
|
|
$
|
281.8
|
|
Receivables and payables, net
|
|
|
|
|
|
|
|
|
|
1.4
|
|
|||||||||
Net assets available for benefits
|
|
|
|
|
|
|
|
|
|
$
|
283.2
|
|
(a)
|
Includes state and municipal bonds.
|
•
|
Cash, cash equivalents and short-term investments
– Short-term investments are valued at the closing price or amount held on deposit by the custodian bank or at fair value by discounting the related cash flows based on current yields of similar instruments with comparable durations considering the credit-worthiness of the issuer. As these investments are not traded on active markets, they are classified as Level 2.
|
•
|
Equity mutual funds
– Equity mutual funds are valued at their daily net asset value (NAV) per share or the equivalent. NAV per share or the equivalent is used for fair value purposes as a practical expedient. NAV is calculated by the investment manager or sponsor of the fund.
|
•
|
U.S. government and agency obligations
– Quoted market prices are not available for these securities. Fair values are either estimated using pricing models and/or quoted prices of securities with similar characteristics or discounted cash flows, in which instances such securities are classified as Level 2, or valued at their net asset value (NAV) per share or the equivalent. NAV per share or the equivalent is used for fair value purposes as a practical expedient and are calculated by the investment manager or sponsor of the fund.
|
•
|
Corporate and non-U.S. bonds
– Quoted market prices are not available for these securities. Fair values are either estimated using pricing models and/or quoted prices of securities with similar characteristics or discounted cash flows, in which instances such securities are classified as Level 2 or valued at their net asset value (NAV) per share or the equivalent. NAV per share or the equivalent is used for fair value purposes as a practical expedient and are calculated by the investment manager or sponsor of the fund.
|
|
|
Fair value measurements
|
|
|
|
Total
fair value
|
||||||||||||||
In millions
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Assets measured at NAV
|
|
|||||||||||
Cash, cash equivalents and short-term investments
|
|
$
|
1.3
|
|
|
$
|
36.1
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
37.4
|
|
|
Equity mutual funds
|
|
—
|
|
|
2.6
|
|
|
—
|
|
|
88.7
|
|
|
91.3
|
|
|||||
Corporate and non-U.S. bonds
|
|
—
|
|
|
109.4
|
|
|
—
|
|
|
31.7
|
|
|
141.1
|
|
|||||
Other
(a)
|
|
—
|
|
|
41.3
|
|
|
3.2
|
|
|
37.9
|
|
|
82.4
|
|
|||||
Total assets at fair value
|
|
$
|
1.3
|
|
|
$
|
189.4
|
|
|
$
|
3.2
|
|
|
$
|
158.3
|
|
|
$
|
352.2
|
|
|
|
Fair value measurements
|
|
|
|
Total
fair value
|
||||||||||||||
In millions
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Assets measured at NAV
|
|
|||||||||||
Cash and cash equivalents
|
|
$
|
36.7
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
36.7
|
|
Equity mutual funds
|
|
—
|
|
|
2.0
|
|
|
—
|
|
|
103.1
|
|
|
105.1
|
|
|||||
Corporate and non-U.S. bonds
|
|
—
|
|
|
176.9
|
|
|
—
|
|
|
—
|
|
|
176.9
|
|
|||||
Real estate
|
|
—
|
|
|
—
|
|
|
0.8
|
|
|
—
|
|
|
0.8
|
|
|||||
Other
(a)
|
|
—
|
|
|
46.7
|
|
|
2.3
|
|
|
29.9
|
|
|
78.9
|
|
|||||
Total assets at fair value
|
|
$
|
36.7
|
|
|
$
|
225.6
|
|
|
$
|
3.1
|
|
|
$
|
133.0
|
|
|
$
|
398.4
|
|
•
|
Cash, cash equivalents and short-term investments
– Cash equivalents are valued using a market approach with inputs including quoted market prices for either identical or similar instruments. Short-term investments are valued at the closing price or amount held on deposit by the custodian bank or at fair value by discounting the related cash flows based on current yields of similar instruments with comparable durations considering the credit-worthiness of the issuer. As these investments are not traded on active markets, these investments are classified as Level 2.
|
•
|
Equity mutual funds
– Equity mutual funds are primarily valued at their daily net asset value (NAV) per share or the equivalent. NAV per share or the equivalent is used for fair value purposes as a practical expedient. NAV is calculated by the investment manager or sponsor of the fund.
|
•
|
Corporate and non-U.S. bonds
– Quoted market prices are not available for these securities. Fair values are either estimated using pricing models and/or quoted prices of securities with similar characteristics or discounted cash flows, in which instances such securities are classified as Level 2 or valued at their net asset value (NAV) per share or the equivalent. NAV per share or the equivalent is used for fair value purposes as a practical expedient and are calculated by the investment manager or sponsor of the fund.
|
•
|
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:
|
|
|
|
|
|
|
|
||||||||
Investments
|
$
|
—
|
|
|
$
|
14.3
|
|
|
$
|
—
|
|
|
$
|
14.3
|
|
Interest rate swaps
|
—
|
|
|
5.7
|
|
|
—
|
|
|
5.7
|
|
||||
Foreign currency contracts
|
—
|
|
|
2.1
|
|
|
—
|
|
|
2.1
|
|
||||
Total asset recurring fair value measurements
|
$
|
—
|
|
|
$
|
22.1
|
|
|
$
|
—
|
|
|
$
|
22.1
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Foreign currency contracts
|
$
|
—
|
|
|
$
|
0.1
|
|
|
$
|
—
|
|
|
$
|
0.1
|
|
Deferred compensation and other retirement plans
|
—
|
|
|
19.1
|
|
|
—
|
|
|
19.1
|
|
||||
Total liability recurring fair value measurements
|
$
|
—
|
|
|
$
|
19.2
|
|
|
$
|
—
|
|
|
$
|
19.2
|
|
Financial instruments not carried at fair value:
|
|
|
|
|
|
|
|
||||||||
Total debt
|
$
|
—
|
|
|
$
|
1,403.2
|
|
|
$
|
—
|
|
|
$
|
1,403.2
|
|
Total financial instruments not carried at fair value
|
$
|
—
|
|
|
$
|
1,403.2
|
|
|
$
|
—
|
|
|
$
|
1,403.2
|
|
|
|||||||||||||||
|
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 and other retirement 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
|
|
•
|
Investments
– These instruments include equity mutual funds and corporate bond funds. The fair value is obtained based on observable market prices quoted on public exchanges for similar instruments.
|
•
|
Interest rate swaps
– These instruments include forward-starting interest rate swap contracts for
$250.0 million
of the Company's variable rate debt. The fair value of the derivative instruments is 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 is 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 and other retirement plans
- These include obligations related to deferred compensation and other retirement plans adjusted for market performance. The fair value is obtained based on observable market prices quoted on public exchanges for similar instruments.
|
•
|
Debt
– These instruments 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
|
0.4
|
|
Repurchase of ordinary shares
|
(0.9
|
)
|
December 31, 2018
|
94.6
|
|
In millions
|
|
Cash flow hedges and marketable securities
|
|
Pension and OPEB items
|
|
Foreign currency items
|
|
Total
|
||||||||
December 31, 2015
|
|
$
|
14.0
|
|
|
$
|
(139.3
|
)
|
|
$
|
(106.9
|
)
|
|
$
|
(232.2
|
)
|
Other comprehensive (loss) income, net of tax
|
|
(10.6
|
)
|
|
18.8
|
|
|
(40.3
|
)
|
|
(32.1
|
)
|
||||
December 31, 2016
|
|
3.4
|
|
|
(120.5
|
)
|
|
(147.2
|
)
|
|
(264.3
|
)
|
||||
Other comprehensive income, net of tax
|
|
0.4
|
|
|
19.3
|
|
|
98.1
|
|
|
117.8
|
|
||||
Other
(a)
|
|
—
|
|
|
(6.4
|
)
|
|
—
|
|
|
(6.4
|
)
|
||||
December 31, 2017
|
|
3.8
|
|
|
(107.6
|
)
|
|
(49.1
|
)
|
|
(152.9
|
)
|
||||
Other comprehensive income (loss), net of tax
|
|
1.8
|
|
|
(5.4
|
)
|
|
(57.3
|
)
|
|
(60.9
|
)
|
||||
Reclassification to Retained earnings upon adoption of ASU 2018-02 (see Note 2)
|
|
0.5
|
|
|
(10.2
|
)
|
|
—
|
|
|
(9.7
|
)
|
||||
December 31, 2018
|
|
$
|
6.1
|
|
|
$
|
(123.2
|
)
|
|
$
|
(106.4
|
)
|
|
$
|
(223.5
|
)
|
(a)
|
During 2017, the Company reclassified
$6.4 million
between Accumulated other comprehensive loss and Retained earnings to correct a prior period classification error of Pension and OPEB items. The Company does not believe this reclassification is material to 2017 or to any of its previously issued annual or interim financial statements.
|
In millions
|
|
2018
|
|
2017
|
|
2016
|
||||||
Stock options
|
|
$
|
4.3
|
|
|
$
|
3.3
|
|
|
$
|
4.1
|
|
RSUs
|
|
9.6
|
|
|
7.0
|
|
|
7.7
|
|
|||
PSUs
|
|
5.7
|
|
|
5.8
|
|
|
4.8
|
|
|||
Deferred compensation
|
|
(0.8
|
)
|
|
2.8
|
|
|
0.8
|
|
|||
Pre-tax expense
|
|
18.8
|
|
|
18.9
|
|
|
17.4
|
|
|||
Tax benefit
|
|
(1.9
|
)
|
|
(6.4
|
)
|
|
(5.6
|
)
|
|||
Total
|
|
$
|
16.9
|
|
|
$
|
12.5
|
|
|
$
|
11.8
|
|
|
|
2018
|
|
2017
|
|
2016
|
|||
Dividend yield
|
|
0.97
|
%
|
|
0.89
|
%
|
|
0.83
|
%
|
Volatility
|
|
22.38
|
%
|
|
24.93
|
%
|
|
28.85
|
%
|
Risk-free rate of return
|
|
2.75
|
%
|
|
2.08
|
%
|
|
1.38
|
%
|
Expected life
|
|
6.0 years
|
|
|
6.0 years
|
|
|
6.0 years
|
|
|
|
Shares
subject
to option
|
|
Weighted-
average
exercise price
(a)
|
|
Aggregate
intrinsic
value (millions)
|
|
Weighted-
average
remaining life (years)
|
|||||
December 31, 2015
|
|
1,592,167
|
|
|
$
|
33.91
|
|
|
|
|
|
||
Granted
|
|
231,521
|
|
|
57.91
|
|
|
|
|
|
|||
Exercised
|
|
(447,019
|
)
|
|
26.04
|
|
|
|
|
|
|||
Canceled
|
|
(63,599
|
)
|
|
53.40
|
|
|
|
|
|
|||
December 31, 2016
|
|
1,313,070
|
|
|
39.87
|
|
|
|
|
|
|||
Granted
|
|
165,113
|
|
|
71.84
|
|
|
|
|
|
|||
Exercised
|
|
(410,397
|
)
|
|
31.54
|
|
|
|
|
|
|||
Canceled
|
|
(15,906
|
)
|
|
60.84
|
|
|
|
|
|
|||
December 31, 2017
|
|
1,051,880
|
|
|
47.80
|
|
|
|
|
|
|||
Granted
|
|
160,849
|
|
|
86.92
|
|
|
|
|
|
|||
Exercised
|
|
(239,427
|
)
|
|
36.50
|
|
|
|
|
|
|||
Canceled
|
|
(16,104
|
)
|
|
74.23
|
|
|
|
|
|
|||
Outstanding December 31, 2018
|
|
957,198
|
|
|
$
|
56.71
|
|
|
$
|
23.1
|
|
|
6.1
|
Exercisable December 31, 2018
|
|
638,441
|
|
|
$
|
46.94
|
|
|
$
|
20.9
|
|
|
5.0
|
(a)
|
The weighted-average exercise price of awards 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, 2018 |
|
Weighted-
average
remaining
life (years)
|
|
Weighted-
average
exercise
price
|
|
Number
exercisable at December 31, 2018 |
|
Weighted-
average
remaining
life (years)
|
|
Weighted-
average
exercise
price
|
||||||||||||||
$
|
10.01
|
|
|
—
|
|
$
|
20.00
|
|
|
43,401
|
|
|
0.7
|
|
$
|
16.18
|
|
|
43,401
|
|
|
0.7
|
|
$
|
16.18
|
|
20.01
|
|
|
—
|
|
30.00
|
|
|
84,921
|
|
|
2.6
|
|
26.73
|
|
|
84,921
|
|
|
2.6
|
|
26.73
|
|
||||
30.01
|
|
|
—
|
|
40.00
|
|
|
51,823
|
|
|
4.0
|
|
32.33
|
|
|
51,823
|
|
|
4.0
|
|
32.33
|
|
||||
40.01
|
|
|
—
|
|
50.00
|
|
|
102,403
|
|
|
5.0
|
|
43.37
|
|
|
102,403
|
|
|
5.0
|
|
43.37
|
|
||||
50.01
|
|
|
—
|
|
60.00
|
|
|
373,873
|
|
|
6.2
|
|
56.90
|
|
|
309,915
|
|
|
6.0
|
|
56.70
|
|
||||
60.01
|
|
|
—
|
|
70.00
|
|
|
421
|
|
|
7.8
|
|
63.93
|
|
|
210
|
|
|
7.8
|
|
63.93
|
|
||||
70.01
|
|
|
—
|
|
80.00
|
|
|
146,698
|
|
|
8.0
|
|
71.84
|
|
|
45,514
|
|
|
8.0
|
|
71.84
|
|
||||
$
|
80.01
|
|
|
—
|
|
$
|
90.00
|
|
|
153,658
|
|
|
9.1
|
|
86.92
|
|
|
254
|
|
|
2.9
|
|
86.93
|
|
||
|
|
|
|
|
|
|
|
957,198
|
|
|
6.1
|
|
$
|
56.71
|
|
|
638,441
|
|
|
5.0
|
|
$
|
46.94
|
|
|
|
RSUs
|
|
Weighted-
average grant
date fair value
(a)
|
|||
Outstanding and unvested at December 31, 2015
|
|
344,930
|
|
|
$
|
49.59
|
|
Granted
|
|
123,299
|
|
|
59.49
|
|
|
Vested
|
|
(220,854
|
)
|
|
45.83
|
|
|
Canceled
|
|
(41,741
|
)
|
|
52.40
|
|
|
Outstanding and unvested at December 31, 2016
|
|
205,634
|
|
|
58.99
|
|
|
Granted
|
|
124,933
|
|
|
73.76
|
|
|
Vested
|
|
(90,523
|
)
|
|
58.78
|
|
|
Canceled
|
|
(10,038
|
)
|
|
60.47
|
|
|
Outstanding and unvested at December 31, 2017
|
|
230,006
|
|
|
66.83
|
|
|
Granted
|
|
132,865
|
|
|
84.65
|
|
|
Vested
|
|
(104,065
|
)
|
|
65.42
|
|
|
Canceled
|
|
(14,459
|
)
|
|
76.25
|
|
|
Outstanding and unvested at December 31, 2018
|
|
244,347
|
|
|
$
|
76.51
|
|
(a)
|
The weighted-average grant date fair value 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, 2015
|
|
202,043
|
|
|
$
|
64.92
|
|
Granted
|
|
94,201
|
|
|
64.83
|
|
|
Vested
|
|
(64,979
|
)
|
|
72.69
|
|
|
Forfeited
|
|
(21,661
|
)
|
|
57.07
|
|
|
Outstanding and unvested at December 31, 2016
|
|
209,604
|
|
|
56.02
|
|
|
Granted
|
|
99,832
|
|
|
78.13
|
|
|
Vested
|
|
(146,830
|
)
|
|
72.01
|
|
|
Forfeited
|
|
(1,783
|
)
|
|
67.10
|
|
|
Outstanding and unvested at December 31, 2017
|
|
160,823
|
|
|
55.02
|
|
|
Granted
|
|
93,018
|
|
|
86.46
|
|
|
Vested
|
|
(90,967
|
)
|
|
68.05
|
|
|
Forfeited
|
|
(6,833
|
)
|
|
79.93
|
|
|
Outstanding and unvested at December 31, 2018
|
|
156,041
|
|
|
$
|
65.07
|
|
(a)
|
The weighted-average grant date fair value represents the fair value of the awards on the grant date converted to ordinary shares of the Company.
|
In millions
|
|
Total
|
||
December 31, 2016
|
|
$
|
3.5
|
|
Additions
|
|
12.3
|
|
|
Cash and non-cash uses
|
|
(11.8
|
)
|
|
Currency translation
|
|
0.2
|
|
|
December 31, 2017
|
|
4.2
|
|
|
Additions
|
|
4.9
|
|
|
Cash and non-cash uses
|
|
(6.9
|
)
|
|
Currency translation
|
|
(0.1
|
)
|
|
December 31, 2018
|
|
$
|
2.1
|
|
In millions
|
|
2018
|
|
2017
|
|
2016
|
||||||
Interest income
|
|
$
|
(0.8
|
)
|
|
$
|
(1.2
|
)
|
|
$
|
(1.9
|
)
|
Foreign currency exchange loss
|
|
0.3
|
|
|
0.7
|
|
|
2.0
|
|
|||
Earnings from and gains on the sale of equity investments
|
|
(0.4
|
)
|
|
(5.4
|
)
|
|
(3.6
|
)
|
|||
Net periodic pension and postretirement benefit (income) cost, less service cost
|
|
(2.8
|
)
|
|
4.3
|
|
|
8.8
|
|
|||
Other
|
|
0.3
|
|
|
(7.3
|
)
|
|
(14.7
|
)
|
|||
Other income, net
|
|
$
|
(3.4
|
)
|
|
$
|
(8.9
|
)
|
|
$
|
(9.4
|
)
|
In millions
|
|
2018
|
|
2017
|
|
2016
|
||||||
U.S.
|
|
$
|
151.4
|
|
|
$
|
166.5
|
|
|
$
|
129.9
|
|
Non-U.S.
|
|
323.8
|
|
|
229.2
|
|
|
165.1
|
|
|||
Total
|
|
$
|
475.2
|
|
|
$
|
395.7
|
|
|
$
|
295.0
|
|
In millions
|
|
2018
|
|
2017
|
|
2016
|
||||||
Current tax expense:
|
|
|
|
|
|
|
||||||
U.S.
|
|
$
|
86.4
|
|
|
$
|
78.8
|
|
|
$
|
43.8
|
|
Non-U.S.
|
|
18.1
|
|
|
15.0
|
|
|
13.8
|
|
|||
Total:
|
|
104.5
|
|
|
93.8
|
|
|
57.6
|
|
|||
Deferred tax (benefit) expense:
|
|
|
|
|
|
|
||||||
U.S.
|
|
(56.1
|
)
|
|
41.2
|
|
|
14.4
|
|
|||
Non-U.S.
|
|
(8.6
|
)
|
|
(16.0
|
)
|
|
(8.2
|
)
|
|||
Total:
|
|
(64.7
|
)
|
|
25.2
|
|
|
6.2
|
|
|||
Total tax expense (benefit):
|
|
|
|
|
|
|
||||||
U.S.
|
|
30.3
|
|
|
120.0
|
|
|
58.2
|
|
|||
Non-U.S.
|
|
9.5
|
|
|
(1.0
|
)
|
|
5.6
|
|
|||
Total
|
|
$
|
39.8
|
|
|
$
|
119.0
|
|
|
$
|
63.8
|
|
|
|
Percent of pretax income
|
|||||||
|
|
2018
|
|
2017
|
|
2016
|
|||
Statutory U.S. rate
|
|
21.0
|
%
|
|
35.0
|
%
|
|
35.0
|
%
|
Increase (decrease) in rates resulting from:
|
|
|
|
|
|
|
|||
Non-U.S. tax rate differential (1)
|
|
(11.9
|
)
|
|
(20.0
|
)
|
|
(17.4
|
)
|
State and local income taxes (1)
|
|
2.1
|
|
|
1.8
|
|
|
2.0
|
|
Reserves for uncertain tax positions
|
|
2.1
|
|
|
0.8
|
|
|
2.0
|
|
Tax on unremitted earnings
|
|
(1.2
|
)
|
|
0.8
|
|
|
1.2
|
|
Tax Reform Act
|
|
(4.6
|
)
|
|
13.5
|
|
|
—
|
|
Trade incentives
|
|
0.6
|
|
|
—
|
|
|
—
|
|
Production incentives
|
|
—
|
|
|
(0.9
|
)
|
|
(0.6
|
)
|
Other adjustments
|
|
0.3
|
|
|
(0.9
|
)
|
|
(0.6
|
)
|
Effective tax rate
|
|
8.4
|
%
|
|
30.1
|
%
|
|
21.6
|
%
|
(1)
|
Net of changes in valuation allowances
|
In millions
|
|
2018
|
|
2017
|
||||
Deferred tax assets:
|
|
|
|
|
||||
Inventory and accounts receivable
|
|
$
|
15.3
|
|
|
$
|
17.0
|
|
Fixed assets and intangibles
|
|
2.2
|
|
|
2.6
|
|
||
Postemployment and other benefit liabilities
|
|
29.1
|
|
|
29.9
|
|
||
Other reserves and accruals
|
|
12.8
|
|
|
12.5
|
|
||
Net operating losses, tax credits and other carryforwards
|
|
419.9
|
|
|
309.5
|
|
||
Other
|
|
0.7
|
|
|
4.2
|
|
||
Gross deferred tax assets
|
|
480.0
|
|
|
375.7
|
|
||
Less: deferred tax valuation allowances
|
|
(357.1
|
)
|
|
(312.9
|
)
|
||
Deferred tax assets net of valuation allowances
|
|
$
|
122.9
|
|
|
$
|
62.8
|
|
Deferred tax liabilities:
|
|
|
|
|
||||
Fixed assets and intangibles
|
|
$
|
(104.9
|
)
|
|
$
|
(101.7
|
)
|
Postemployment and other benefit liabilities
|
|
(3.5
|
)
|
|
(4.7
|
)
|
||
Unremitted earnings of foreign subsidiaries
|
|
(0.5
|
)
|
|
(6.0
|
)
|
||
Other
|
|
(6.3
|
)
|
|
(7.4
|
)
|
||
Gross deferred tax liabilities
|
|
(115.2
|
)
|
|
(119.8
|
)
|
||
Net deferred tax assets (liabilities)
|
|
$
|
7.7
|
|
|
$
|
(57.0
|
)
|
In millions
|
|
Amount
|
|
Expiration
Period
|
||
U.S. Federal tax loss carryforwards
|
|
$
|
20.4
|
|
|
2027-2037
|
U.S. Federal and State credit carryforwards
|
|
22.0
|
|
|
2020-2027
|
|
U.S. State tax loss carryforwards
|
|
25.5
|
|
|
2019-2037
|
|
Non-U.S. tax loss carryforwards
|
|
$
|
1,286.6
|
|
|
2019-Unlimited
|
In millions
|
|
2018
|
|
2017
|
|
2016
|
||||||
Beginning balance
|
|
$
|
312.9
|
|
|
$
|
225.5
|
|
|
$
|
133.3
|
|
Increase to valuation allowance
|
|
70.9
|
|
|
96.9
|
|
|
109.0
|
|
|||
Decrease to valuation allowance
|
|
(25.0
|
)
|
|
(11.9
|
)
|
|
(13.9
|
)
|
|||
Foreign exchange translation
|
|
(1.7
|
)
|
|
2.4
|
|
|
(3.3
|
)
|
|||
Accumulated other comprehensive income
|
|
—
|
|
|
—
|
|
|
0.4
|
|
|||
Ending balance
|
|
$
|
357.1
|
|
|
$
|
312.9
|
|
|
$
|
225.5
|
|
In millions
|
|
2018
|
|
2017
|
|
2016
|
||||||
Beginning balance
|
|
$
|
29.0
|
|
|
$
|
32.0
|
|
|
$
|
23.8
|
|
Additions based on tax positions related to the current year
|
|
9.5
|
|
|
6.4
|
|
|
9.1
|
|
|||
Additions based on tax positions related to prior years
|
|
8.2
|
|
|
1.6
|
|
|
7.1
|
|
|||
Reductions based on tax positions related to prior years
|
|
(1.4
|
)
|
|
(5.0
|
)
|
|
(5.5
|
)
|
|||
Reductions related to settlements with tax authorities
|
|
(1.5
|
)
|
|
(7.1
|
)
|
|
(0.6
|
)
|
|||
Reductions related to lapses of statute of limitations
|
|
(1.1
|
)
|
|
(1.2
|
)
|
|
(0.9
|
)
|
|||
Translation (gain)/loss
|
|
(0.7
|
)
|
|
2.3
|
|
|
(1.0
|
)
|
|||
Ending balance
|
|
$
|
42.0
|
|
|
$
|
29.0
|
|
|
$
|
32.0
|
|
In millions
|
|
2018
|
|
2017
|
|
2016
|
|||
Weighted-average number of basic shares
|
|
95.0
|
|
|
95.1
|
|
|
95.8
|
|
Shares issuable under incentive stock plans
|
|
0.7
|
|
|
0.9
|
|
|
1.1
|
|
Weighted-average number of diluted shares
|
|
95.7
|
|
|
96.0
|
|
|
96.9
|
|
|
2018
|
||||||||||||||
in millions
|
Americas
|
|
EMEIA
|
|
Asia Pacific
|
|
Consolidated
|
||||||||
Net revenues
|
|
|
|
|
|
|
|
||||||||
Products
|
$
|
1,988.6
|
|
|
$
|
567.8
|
|
|
$
|
148.9
|
|
|
$
|
2,705.3
|
|
Services
|
—
|
|
|
22.1
|
|
|
4.3
|
|
|
26.4
|
|
||||
Total Net revenues
|
$
|
1,988.6
|
|
|
$
|
589.9
|
|
|
$
|
153.2
|
|
|
$
|
2,731.7
|
|
|
2017
(a)
|
||||||||||||||
in millions
|
Americas
|
|
EMEIA
|
|
Asia Pacific
|
|
Consolidated
|
||||||||
Net revenues
|
|
|
|
|
|
|
|
||||||||
Products
|
$
|
1,767.5
|
|
|
$
|
501.9
|
|
|
$
|
117.2
|
|
|
$
|
2,386.6
|
|
Services
|
—
|
|
|
21.6
|
|
|
—
|
|
|
21.6
|
|
||||
Total Net revenues
|
$
|
1,767.5
|
|
|
$
|
523.5
|
|
|
$
|
117.2
|
|
|
$
|
2,408.2
|
|
|
2016
(a)
|
||||||||||||||
in millions
|
Americas
|
|
EMEIA
|
|
Asia Pacific
|
|
Consolidated
|
||||||||
Net revenues
|
|
|
|
|
|
|
|
||||||||
Products
|
$
|
1,645.7
|
|
|
$
|
464.9
|
|
|
$
|
106.4
|
|
|
$
|
2,217.0
|
|
Services
|
—
|
|
|
21.0
|
|
|
—
|
|
|
21.0
|
|
||||
Total Net revenues
|
$
|
1,645.7
|
|
|
$
|
485.9
|
|
|
$
|
106.4
|
|
|
$
|
2,238.0
|
|
(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 years ended December 31, 2017 and 2016, are based on ASC 605.
|
In millions
|
2018
|
|
2017
|
|
2016
|
||||||
Balance at beginning of period
|
$
|
14.1
|
|
|
$
|
13.3
|
|
|
$
|
11.7
|
|
Reductions for payments
|
(7.9
|
)
|
|
(7.8
|
)
|
|
(6.5
|
)
|
|||
Accruals for warranties issued during the current period
|
7.8
|
|
|
9.0
|
|
|
8.1
|
|
|||
Changes to accruals related to preexisting warranties
|
0.2
|
|
|
(0.8
|
)
|
|
0.2
|
|
|||
Acquisitions
|
0.5
|
|
|
—
|
|
|
—
|
|
|||
Translation
|
(0.2
|
)
|
|
0.4
|
|
|
(0.2
|
)
|
|||
Balance at end of period
|
$
|
14.5
|
|
|
$
|
14.1
|
|
|
$
|
13.3
|
|
Dollar amounts in millions
|
|
2018
|
|
2017
|
|
2016
|
||||||
Americas
|
|
|
|
|
|
|
||||||
Net revenues
|
|
$
|
1,988.6
|
|
|
$
|
1,767.5
|
|
|
$
|
1,645.7
|
|
Segment operating income
|
|
544.5
|
|
|
508.5
|
|
|
456.7
|
|
|||
Segment operating margin
|
|
27.4
|
%
|
|
28.8
|
%
|
|
27.8
|
%
|
|||
Depreciation and amortization
|
|
42.2
|
|
|
26.4
|
|
|
26.4
|
|
|||
Capital expenditures
|
|
22.5
|
|
|
26.1
|
|
|
21.5
|
|
|||
Total segment assets
|
|
1,175.8
|
|
|
872.4
|
|
|
852.7
|
|
|||
|
|
|
|
|
|
|
||||||
EMEIA
|
|
|
|
|
|
|
||||||
Net revenues
|
|
589.9
|
|
|
523.5
|
|
|
485.9
|
|
|||
Segment operating income
|
|
49.3
|
|
|
44.1
|
|
|
35.3
|
|
|||
Segment operating margin
|
|
8.4
|
%
|
|
8.4
|
%
|
|
7.3
|
%
|
|||
Depreciation and amortization
|
|
32.0
|
|
|
28.6
|
|
|
27.6
|
|
|||
Capital expenditures
|
|
16.2
|
|
|
17.1
|
|
|
13.6
|
|
|||
Total segment assets
|
|
1,052.1
|
|
|
1,027.7
|
|
|
886.2
|
|
|||
|
|
|
|
|
|
|
||||||
Asia Pacific
|
|
|
|
|
|
|
||||||
Net revenues
|
|
153.2
|
|
|
117.2
|
|
|
106.4
|
|
|||
Segment operating income
|
|
6.9
|
|
|
9.5
|
|
|
6.1
|
|
|||
Segment operating margin
|
|
4.5
|
%
|
|
8.1
|
%
|
|
5.7
|
%
|
|||
Depreciation and amortization
|
|
3.9
|
|
|
2.5
|
|
|
2.4
|
|
|||
Capital expenditures
|
|
4.2
|
|
|
1.5
|
|
|
1.1
|
|
|||
Total segment assets
|
|
286.6
|
|
|
196.3
|
|
|
177.4
|
|
|||
|
|
|
|
|
|
|
||||||
Total Net revenues
|
|
$
|
2,731.7
|
|
|
$
|
2,408.2
|
|
|
$
|
2,238.0
|
|
|
|
|
|
|
|
|
||||||
Reconciliation to earnings before income taxes
|
|
|
|
|
|
|
||||||
Segment operating income from reportable segments
|
|
$
|
600.7
|
|
|
$
|
562.1
|
|
|
$
|
498.1
|
|
Unallocated corporate expense
|
|
74.9
|
|
|
69.6
|
|
|
63.8
|
|
|||
Interest expense
|
|
54.0
|
|
|
105.7
|
|
|
64.3
|
|
|||
Loss on divestitures
|
|
—
|
|
|
—
|
|
|
84.4
|
|
|||
Other income, net
|
|
(3.4
|
)
|
|
(8.9
|
)
|
|
(9.4
|
)
|
|||
Total earnings before income taxes
|
|
$
|
475.2
|
|
|
$
|
395.7
|
|
|
$
|
295.0
|
|
|
|
|
|
|
|
|
||||||
Depreciation and amortization from reportable segments
|
|
$
|
78.1
|
|
|
$
|
57.5
|
|
|
$
|
56.4
|
|
Unallocated depreciation and amortization
|
|
4.2
|
|
|
4.1
|
|
|
5.0
|
|
|||
Total depreciation and amortization
|
|
$
|
82.3
|
|
|
$
|
61.6
|
|
|
$
|
61.4
|
|
Capital expenditures from reportable segments
|
|
$
|
42.9
|
|
|
$
|
44.7
|
|
|
$
|
36.2
|
|
Corporate capital expenditures
|
|
6.2
|
|
|
4.6
|
|
|
6.3
|
|
|||
Total capital expenditures
|
|
$
|
49.1
|
|
|
$
|
49.3
|
|
|
$
|
42.5
|
|
Assets from reportable segments
|
|
$
|
2,514.5
|
|
|
$
|
2,096.4
|
|
|
$
|
1,916.3
|
|
Unallocated assets
(a)
|
|
295.7
|
|
|
445.6
|
|
|
331.1
|
|
|||
Total assets
|
|
$
|
2,810.2
|
|
|
$
|
2,542.0
|
|
|
$
|
2,247.4
|
|
(a)
|
Unallocated assets consist of investments in unconsolidated affiliates, fixed assets, deferred income taxes and cash.
|
In millions
|
|
2018
|
|
2017
|
|
2016
|
||||||
Net revenues
|
|
|
|
|
|
|
||||||
U.S.
|
|
$
|
1,852.8
|
|
|
$
|
1,645.6
|
|
|
$
|
1,531.2
|
|
Non-U.S.
|
|
878.9
|
|
|
762.6
|
|
|
706.8
|
|
|||
Total
|
|
$
|
2,731.7
|
|
|
$
|
2,408.2
|
|
|
$
|
2,238.0
|
|
In millions
|
|
2018
|
|
2017
|
|
2016
|
||||||
Net revenues
|
|
|
|
|
|
|
||||||
Mechanical products
|
|
$
|
2,155.2
|
|
|
$
|
1,906.4
|
|
|
$
|
1,793.1
|
|
All other
|
|
576.5
|
|
|
501.8
|
|
|
444.9
|
|
|||
Total
|
|
$
|
2,731.7
|
|
|
$
|
2,408.2
|
|
|
$
|
2,238.0
|
|
In millions
|
Allegion plc
|
|
Allegion US Holding
|
|
Other
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Total
|
||||||||||
Net revenues
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,731.7
|
|
|
$
|
—
|
|
|
$
|
2,731.7
|
|
Cost of goods sold
|
—
|
|
|
—
|
|
|
1,558.4
|
|
|
—
|
|
|
1,558.4
|
|
|||||
Selling and administrative expenses
|
6.3
|
|
|
0.1
|
|
|
641.1
|
|
|
—
|
|
|
647.5
|
|
|||||
Operating income (loss)
|
(6.3
|
)
|
|
(0.1
|
)
|
|
532.2
|
|
|
—
|
|
|
525.8
|
|
|||||
Equity earnings (loss) in affiliates, net of tax
|
468.2
|
|
|
228.7
|
|
|
—
|
|
|
(696.9
|
)
|
|
—
|
|
|||||
Interest expense
|
27.4
|
|
|
25.8
|
|
|
0.8
|
|
|
—
|
|
|
54.0
|
|
|||||
Intercompany interest and fees
|
(0.4
|
)
|
|
107.3
|
|
|
(106.9
|
)
|
|
—
|
|
|
—
|
|
|||||
Other income, net
|
—
|
|
|
—
|
|
|
(3.4
|
)
|
|
—
|
|
|
(3.4
|
)
|
|||||
Earnings (loss) before income taxes
|
434.9
|
|
|
95.5
|
|
|
641.7
|
|
|
(696.9
|
)
|
|
475.2
|
|
|||||
Provision (benefit) for income taxes
|
—
|
|
|
(28.2
|
)
|
|
68.0
|
|
|
—
|
|
|
39.8
|
|
|||||
Net earnings (loss)
|
434.9
|
|
|
123.7
|
|
|
573.7
|
|
|
(696.9
|
)
|
|
435.4
|
|
|||||
Less: Net earnings attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
0.5
|
|
|
—
|
|
|
0.5
|
|
|||||
Net earnings (loss) attributable to Allegion plc
|
$
|
434.9
|
|
|
$
|
123.7
|
|
|
$
|
573.2
|
|
|
$
|
(696.9
|
)
|
|
$
|
434.9
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total comprehensive income (loss)
|
$
|
374.0
|
|
|
$
|
133.6
|
|
|
$
|
501.9
|
|
|
$
|
(634.6
|
)
|
|
$
|
374.9
|
|
Less: Total comprehensive income attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
0.9
|
|
|
—
|
|
|
0.9
|
|
|||||
Total comprehensive income (loss) attributable to Allegion plc
|
$
|
374.0
|
|
|
$
|
133.6
|
|
|
$
|
501.0
|
|
|
$
|
(634.6
|
)
|
|
$
|
374.0
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
In millions
|
Allegion plc
|
|
Allegion US Holding
|
|
Other
Subsidiaries |
|
Consolidating
Adjustments |
|
Total
|
||||||||||
Net revenues
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,408.2
|
|
|
$
|
—
|
|
|
$
|
2,408.2
|
|
Cost of goods sold
|
—
|
|
|
—
|
|
|
1,335.3
|
|
|
—
|
|
|
1,335.3
|
|
|||||
Selling and administrative expenses
|
5.3
|
|
|
0.2
|
|
|
574.9
|
|
|
—
|
|
|
580.4
|
|
|||||
Operating income (loss)
|
(5.3
|
)
|
|
(0.2
|
)
|
|
498.0
|
|
|
—
|
|
|
492.5
|
|
|||||
Equity earnings (loss) in affiliates, net of tax
|
348.3
|
|
|
154.3
|
|
|
—
|
|
|
(502.6
|
)
|
|
—
|
|
|||||
Interest expense
|
70.6
|
|
|
34.8
|
|
|
0.3
|
|
|
—
|
|
|
105.7
|
|
|||||
Intercompany interest and fees
|
(0.9
|
)
|
|
111.1
|
|
|
(110.2
|
)
|
|
—
|
|
|
—
|
|
|||||
Other income, net
|
—
|
|
|
—
|
|
|
(8.9
|
)
|
|
—
|
|
|
(8.9
|
)
|
|||||
Earnings (loss) before income taxes
|
273.3
|
|
|
8.2
|
|
|
616.8
|
|
|
(502.6
|
)
|
|
395.7
|
|
|||||
Provision (benefit) for income taxes
|
—
|
|
|
(30.4
|
)
|
|
149.4
|
|
|
—
|
|
|
119.0
|
|
|||||
Net earnings (loss)
|
273.3
|
|
|
38.6
|
|
|
467.4
|
|
|
(502.6
|
)
|
|
276.7
|
|
|||||
Less: Net earnings attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
3.4
|
|
|
—
|
|
|
3.4
|
|
|||||
Net earnings (loss) attributable to Allegion plc
|
$
|
273.3
|
|
|
$
|
38.6
|
|
|
$
|
464.0
|
|
|
$
|
(502.6
|
)
|
|
$
|
273.3
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total comprehensive income (loss)
|
$
|
391.1
|
|
|
$
|
39.3
|
|
|
$
|
584.1
|
|
|
$
|
(620.6
|
)
|
|
$
|
393.9
|
|
Less: Total comprehensive income attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
2.8
|
|
|
—
|
|
|
2.8
|
|
|||||
Total comprehensive income (loss) attributable to Allegion plc
|
$
|
391.1
|
|
|
$
|
39.3
|
|
|
$
|
581.3
|
|
|
$
|
(620.6
|
)
|
|
$
|
391.1
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
In millions
|
Allegion plc
|
|
Allegion US Holding
|
|
Other
Subsidiaries |
|
Consolidating
Adjustments |
|
Total
|
||||||||||
Net revenues
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,238.0
|
|
|
$
|
—
|
|
|
$
|
2,238.0
|
|
Cost of goods sold
|
—
|
|
|
—
|
|
|
1,248.3
|
|
|
—
|
|
|
1,248.3
|
|
|||||
Selling and administrative expenses
|
4.7
|
|
|
—
|
|
|
550.7
|
|
|
—
|
|
|
555.4
|
|
|||||
Operating income (loss)
|
(4.7
|
)
|
|
—
|
|
|
439.0
|
|
|
—
|
|
|
434.3
|
|
|||||
Equity earnings (loss) in affiliates, net of tax
|
277.3
|
|
|
155.5
|
|
|
—
|
|
|
(432.8
|
)
|
|
—
|
|
|||||
Interest expense
|
43.5
|
|
|
20.2
|
|
|
0.6
|
|
|
—
|
|
|
64.3
|
|
|||||
Intercompany interest and fees
|
(0.5
|
)
|
|
109.4
|
|
|
(108.9
|
)
|
|
—
|
|
|
—
|
|
|||||
Other expense, net
|
—
|
|
|
—
|
|
|
75.0
|
|
|
—
|
|
|
75.0
|
|
|||||
Earnings (loss) before income taxes
|
229.6
|
|
|
25.9
|
|
|
472.3
|
|
|
(432.8
|
)
|
|
295.0
|
|
|||||
Provision (benefit) for income taxes
|
0.5
|
|
|
(49.9
|
)
|
|
113.2
|
|
|
—
|
|
|
63.8
|
|
|||||
Net earnings (loss)
|
229.1
|
|
|
75.8
|
|
|
359.1
|
|
|
(432.8
|
)
|
|
231.2
|
|
|||||
Less: Net earnings attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
2.1
|
|
|
—
|
|
|
2.1
|
|
|||||
Net earnings (loss) attributable to Allegion plc
|
$
|
229.1
|
|
|
$
|
75.8
|
|
|
$
|
357.0
|
|
|
$
|
(432.8
|
)
|
|
$
|
229.1
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total comprehensive income (loss)
|
$
|
197.0
|
|
|
$
|
79.6
|
|
|
$
|
320.8
|
|
|
$
|
(398.7
|
)
|
|
$
|
198.7
|
|
Less: Total comprehensive income attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
1.7
|
|
|
—
|
|
|
1.7
|
|
|||||
Total comprehensive income (loss) attributable to Allegion plc
|
$
|
197.0
|
|
|
$
|
79.6
|
|
|
$
|
319.1
|
|
|
$
|
(398.7
|
)
|
|
$
|
197.0
|
|
In millions
|
Allegion plc
|
|
Allegion US Holding
|
|
Other
Subsidiaries |
|
Consolidating
Adjustments |
|
Total
|
||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
4.2
|
|
|
$
|
1.0
|
|
|
$
|
278.6
|
|
|
$
|
—
|
|
|
$
|
283.8
|
|
Restricted cash
|
—
|
|
|
—
|
|
|
6.8
|
|
|
—
|
|
|
6.8
|
|
|||||
Accounts and notes receivable, net
|
—
|
|
|
—
|
|
|
324.9
|
|
|
—
|
|
|
324.9
|
|
|||||
Inventories
|
—
|
|
|
—
|
|
|
280.3
|
|
|
—
|
|
|
280.3
|
|
|||||
Other current assets
|
0.5
|
|
|
33.7
|
|
|
19.1
|
|
|
(18.3
|
)
|
|
35.0
|
|
|||||
Assets held for sale
|
—
|
|
|
—
|
|
|
0.8
|
|
|
—
|
|
|
0.8
|
|
|||||
Accounts and notes receivable affiliates
|
—
|
|
|
816.2
|
|
|
369.8
|
|
|
(1,186.0
|
)
|
|
—
|
|
|||||
Total current assets
|
4.7
|
|
|
850.9
|
|
|
1,280.3
|
|
|
(1,204.3
|
)
|
|
931.6
|
|
|||||
Investment in affiliates
|
1,265.8
|
|
|
718.2
|
|
|
—
|
|
|
(1,984.0
|
)
|
|
—
|
|
|||||
Property, plant and equipment, net
|
—
|
|
|
—
|
|
|
276.7
|
|
|
—
|
|
|
276.7
|
|
|||||
Intangible assets, net
|
—
|
|
|
—
|
|
|
1,430.1
|
|
|
—
|
|
|
1,430.1
|
|
|||||
Notes receivable affiliates
|
30.8
|
|
|
1,061.2
|
|
|
2,553.4
|
|
|
(3,645.4
|
)
|
|
—
|
|
|||||
Other noncurrent assets
|
4.0
|
|
|
61.2
|
|
|
106.6
|
|
|
—
|
|
|
171.8
|
|
|||||
Total assets
|
$
|
1,305.3
|
|
|
$
|
2,691.5
|
|
|
$
|
5,647.1
|
|
|
$
|
(6,833.7
|
)
|
|
$
|
2,810.2
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts payable and accruals
|
$
|
2.0
|
|
|
$
|
6.8
|
|
|
$
|
495.0
|
|
|
$
|
(18.3
|
)
|
|
$
|
485.5
|
|
Short-term borrowings and current maturities of long-term debt
|
35.0
|
|
|
—
|
|
|
0.3
|
|
|
—
|
|
|
35.3
|
|
|||||
Accounts and note payable affiliates
|
0.3
|
|
|
369.5
|
|
|
816.2
|
|
|
(1,186.0
|
)
|
|
—
|
|
|||||
Total current liabilities
|
37.3
|
|
|
376.3
|
|
|
1,311.5
|
|
|
(1,204.3
|
)
|
|
520.8
|
|
|||||
Long-term debt
|
615.8
|
|
|
792.8
|
|
|
0.9
|
|
|
—
|
|
|
1,409.5
|
|
|||||
Notes payable affiliates
|
—
|
|
|
2,553.4
|
|
|
1,092.0
|
|
|
(3,645.4
|
)
|
|
—
|
|
|||||
Other noncurrent liabilities
|
1.2
|
|
|
5.5
|
|
|
219.2
|
|
|
—
|
|
|
225.9
|
|
|||||
Total liabilities
|
654.3
|
|
|
3,728.0
|
|
|
2,623.6
|
|
|
(4,849.7
|
)
|
|
2,156.2
|
|
|||||
Equity:
|
|
|
|
|
|
|
|
|
|
||||||||||
Total shareholders’ equity (deficit)
|
651.0
|
|
|
(1,036.5
|
)
|
|
3,020.5
|
|
|
(1,984.0
|
)
|
|
651.0
|
|
|||||
Noncontrolling interests
|
—
|
|
|
—
|
|
|
3.0
|
|
|
—
|
|
|
3.0
|
|
|||||
Total equity (deficit)
|
651.0
|
|
|
(1,036.5
|
)
|
|
3,023.5
|
|
|
(1,984.0
|
)
|
|
654.0
|
|
|||||
Total liabilities and equity
|
$
|
1,305.3
|
|
|
$
|
2,691.5
|
|
|
$
|
5,647.1
|
|
|
$
|
(6,833.7
|
)
|
|
$
|
2,810.2
|
|
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
|
|
|
16.7
|
|
|
(44.1
|
)
|
|
29.2
|
|
|||||
Assets held for sale
|
—
|
|
|
—
|
|
|
0.9
|
|
|
—
|
|
|
0.9
|
|
|||||
Accounts and notes 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
|
|
|||||
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 note 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 payable affiliates
|
—
|
|
|
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
|
$
|
209.3
|
|
|
$
|
(59.5
|
)
|
|
$
|
631.7
|
|
|
$
|
(323.7
|
)
|
|
$
|
457.8
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Capital expenditures
|
—
|
|
|
—
|
|
|
(49.1
|
)
|
|
—
|
|
|
(49.1
|
)
|
|||||
Acquisition of and equity investments in businesses, net of cash acquired
|
—
|
|
|
(248.5
|
)
|
|
(127.6
|
)
|
|
—
|
|
|
(376.1
|
)
|
|||||
Purchase of investments
|
—
|
|
|
—
|
|
|
(14.3
|
)
|
|
—
|
|
|
(14.3
|
)
|
|||||
Other investing activities, net
|
—
|
|
|
(1.0
|
)
|
|
(4.3
|
)
|
|
1.0
|
|
|
(4.3
|
)
|
|||||
Net cash (used in) provided by investing activities
|
—
|
|
|
(249.5
|
)
|
|
(195.3
|
)
|
|
1.0
|
|
|
(443.8
|
)
|
|||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Debt repayments, net
|
(35.0
|
)
|
|
—
|
|
|
(1.1
|
)
|
|
—
|
|
|
(36.1
|
)
|
|||||
Net inter-company proceeds (payments)
|
(27.3
|
)
|
|
309.7
|
|
|
(282.4
|
)
|
|
—
|
|
|
—
|
|
|||||
Dividends paid to shareholders
|
(79.4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(79.4
|
)
|
|||||
Dividends paid
|
—
|
|
|
—
|
|
|
(323.7
|
)
|
|
323.7
|
|
|
—
|
|
|||||
Proceeds from shares issued under incentive plans
|
3.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3.2
|
|
|||||
Repurchase of ordinary shares
|
(67.3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(67.3
|
)
|
|||||
Other financing activities, net
|
—
|
|
|
—
|
|
|
(2.8
|
)
|
|
(1.0
|
)
|
|
(3.8
|
)
|
|||||
Net cash (used in) provided by financing activities
|
(205.8
|
)
|
|
309.7
|
|
|
(610.0
|
)
|
|
322.7
|
|
|
(183.4
|
)
|
|||||
Effect of exchange rate changes on cash and cash equivalents
|
—
|
|
|
—
|
|
|
(6.2
|
)
|
|
—
|
|
|
(6.2
|
)
|
|||||
Net increase (decrease) in cash, cash equivalents and restricted cash
|
3.5
|
|
|
0.7
|
|
|
(179.8
|
)
|
|
—
|
|
|
(175.6
|
)
|
|||||
Cash, cash equivalents and restricted cash – beginning of period
|
0.7
|
|
|
0.3
|
|
|
465.2
|
|
|
—
|
|
|
466.2
|
|
|||||
Cash, cash equivalents and restricted cash – end of period
|
$
|
4.2
|
|
|
$
|
1.0
|
|
|
$
|
285.4
|
|
|
$
|
—
|
|
|
$
|
290.6
|
|
In millions
|
Allegion plc
|
|
Allegion US Holding
|
|
Other
Subsidiaries |
|
Consolidating
Adjustments |
|
Total
|
||||||||||
Net cash provided by (used in) operating activities
|
$
|
581.3
|
|
|
$
|
63.3
|
|
|
$
|
565.0
|
|
|
$
|
(862.4
|
)
|
|
$
|
347.2
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Capital expenditures
|
—
|
|
|
—
|
|
|
(49.3
|
)
|
|
—
|
|
|
(49.3
|
)
|
|||||
Acquisition of businesses, net of cash acquired
|
—
|
|
|
—
|
|
|
(20.8
|
)
|
|
—
|
|
|
(20.8
|
)
|
|||||
Proceeds from sale of property, plant and equipment
|
—
|
|
|
—
|
|
|
3.1
|
|
|
—
|
|
|
3.1
|
|
|||||
Proceeds from sale of equity investment
|
—
|
|
|
—
|
|
|
15.6
|
|
|
—
|
|
|
15.6
|
|
|||||
Proceeds (payments) related to business dispositions
|
—
|
|
|
—
|
|
|
1.2
|
|
|
—
|
|
|
1.2
|
|
|||||
Net cash used in investing activities
|
—
|
|
|
—
|
|
|
(50.2
|
)
|
|
—
|
|
|
(50.2
|
)
|
|||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Debt repayments, net
|
(488.5
|
)
|
|
500.0
|
|
|
(1.4
|
)
|
|
—
|
|
|
10.1
|
|
|||||
Debt issuance costs
|
(4.0
|
)
|
|
(5.5
|
)
|
|
—
|
|
|
—
|
|
|
(9.5
|
)
|
|||||
Net inter-company proceeds (payments)
|
49.7
|
|
|
(546.3
|
)
|
|
496.6
|
|
|
—
|
|
|
—
|
|
|||||
Redemption premium
|
(24.6
|
)
|
|
(8.6
|
)
|
|
—
|
|
|
—
|
|
|
(33.2
|
)
|
|||||
Dividends paid to shareholders
|
(60.9
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(60.9
|
)
|
|||||
Dividends paid
|
—
|
|
|
—
|
|
|
(862.4
|
)
|
|
862.4
|
|
|
—
|
|
|||||
Proceeds from shares issued under incentive plans
|
7.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7.2
|
|
|||||
Repurchase of ordinary shares
|
(60.0
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(60.0
|
)
|
|||||
Other financing activities, net
|
—
|
|
|
(2.8
|
)
|
|
(1.8
|
)
|
|
—
|
|
|
(4.6
|
)
|
|||||
Net cash (used in) provided by financing activities
|
(581.1
|
)
|
|
(63.2
|
)
|
|
(369.0
|
)
|
|
862.4
|
|
|
(150.9
|
)
|
|||||
Effect of exchange rate changes on cash and cash equivalents
|
—
|
|
|
—
|
|
|
7.7
|
|
|
—
|
|
|
7.7
|
|
|||||
Net increase in cash and cash equivalents
|
0.2
|
|
|
0.1
|
|
|
153.5
|
|
|
—
|
|
|
153.8
|
|
|||||
Cash and cash equivalents - beginning of period
|
0.5
|
|
|
0.2
|
|
|
311.7
|
|
|
—
|
|
|
312.4
|
|
|||||
Cash and cash equivalents - end of period
|
$
|
0.7
|
|
|
$
|
0.3
|
|
|
$
|
465.2
|
|
|
$
|
—
|
|
|
$
|
466.2
|
|
In millions
|
Allegion plc
|
|
Allegion US Holding
|
|
Other
Subsidiaries |
|
Consolidating
Adjustments |
|
Total
|
||||||||||
Net cash (used in) provided by operating activities
|
$
|
(25.6
|
)
|
|
$
|
156.6
|
|
|
$
|
542.2
|
|
|
$
|
(295.7
|
)
|
|
$
|
377.5
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Capital expenditures
|
—
|
|
|
—
|
|
|
(42.5
|
)
|
|
—
|
|
|
(42.5
|
)
|
|||||
Acquisition of businesses, net of cash acquired
|
—
|
|
|
—
|
|
|
(31.4
|
)
|
|
—
|
|
|
(31.4
|
)
|
|||||
Proceeds from sales and maturities of marketable securities
|
—
|
|
|
—
|
|
|
14.1
|
|
|
—
|
|
|
14.1
|
|
|||||
Proceeds (payments) related to business disposition
|
—
|
|
|
—
|
|
|
(4.3
|
)
|
|
—
|
|
|
(4.3
|
)
|
|||||
Other investing activities, net
|
—
|
|
|
—
|
|
|
0.1
|
|
|
—
|
|
|
0.1
|
|
|||||
Net cash used in investing activities
|
—
|
|
|
—
|
|
|
(64.0
|
)
|
|
—
|
|
|
(64.0
|
)
|
|||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Debt repayments, net
|
(47.0
|
)
|
|
—
|
|
|
(17.4
|
)
|
|
—
|
|
|
(64.4
|
)
|
|||||
Debt issuance costs
|
(0.3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.3
|
)
|
|||||
Net inter-company proceeds (payments)
|
195.4
|
|
|
(157.4
|
)
|
|
(38.0
|
)
|
|
—
|
|
|
—
|
|
|||||
Dividends paid to shareholders
|
(46.0
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(46.0
|
)
|
|||||
Dividends paid to noncontrolling interests
|
—
|
|
|
—
|
|
|
(2.7
|
)
|
|
—
|
|
|
(2.7
|
)
|
|||||
Dividends paid
|
—
|
|
|
—
|
|
|
(295.7
|
)
|
|
295.7
|
|
|
—
|
|
|||||
Acquisition of noncontrolling interest
|
—
|
|
|
—
|
|
|
(3.3
|
)
|
|
—
|
|
|
(3.3
|
)
|
|||||
Proceeds from shares issued under incentive plans
|
5.8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5.8
|
|
|||||
Repurchase of ordinary shares
|
(85.1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(85.1
|
)
|
|||||
Net cash provided by (used in) financing activities
|
22.8
|
|
|
(157.4
|
)
|
|
(357.1
|
)
|
|
295.7
|
|
|
(196.0
|
)
|
|||||
Effect of exchange rate changes on cash and cash equivalents
|
—
|
|
|
—
|
|
|
(4.8
|
)
|
|
—
|
|
|
(4.8
|
)
|
|||||
Net (decrease) increase in cash and cash equivalents
|
(2.8
|
)
|
|
(0.8
|
)
|
|
116.3
|
|
|
—
|
|
|
112.7
|
|
|||||
Cash and cash equivalents - beginning of period
|
3.3
|
|
|
1.0
|
|
|
195.4
|
|
|
—
|
|
|
199.7
|
|
|||||
Cash and cash equivalents - end of period
|
$
|
0.5
|
|
|
$
|
0.2
|
|
|
$
|
311.7
|
|
|
$
|
—
|
|
|
$
|
312.4
|
|
Allowances for Doubtful Accounts:
|
|
||
|
|
||
Balance December 31, 2015
|
$
|
3.8
|
|
Additions charged to costs and expenses
|
0.1
|
|
|
Deductions*
|
(1.1
|
)
|
|
Currency translation
|
(0.1
|
)
|
|
Balance December 31, 2016
|
2.7
|
|
|
Additions charged to costs and expenses
|
0.8
|
|
|
Deductions*
|
(0.9
|
)
|
|
Currency translation
|
0.2
|
|
|
Balance December 31, 2017
|
2.8
|
|
|
Additions charged to costs and expenses
|
1.6
|
|
|
Deductions*
|
(1.0
|
)
|
|
Currency translation
|
(0.1
|
)
|
|
Balance December 31, 2018
|
$
|
3.3
|
|
*
|
"Deductions" include accounts and advances written off, less recoveries.
|
1.
|
Your active employment with the Company will cease as of ___________ (the “Effective Date”). Your compensation will continue through the Effective Date.
|
2.
|
Provided that you execute and do not revoke this Agreement, and comply with the terms of this Agreement, your separation arrangements will consist of:
|
a.
|
Payment of ________ (less applicable statutory tax withholdings) equivalent to ________ weeks of your base salary, paid as a lump sum as soon as administratively practical after the expiration of the “Revocation Period” set forth in this Agreement.
|
b.
|
[
Include only if applicable
] Payment of AIP (Annual Incentive Plan) for work completed during the prior calendar year in the amount of _____________, which is anticipated to be paid in March _____.
|
c.
|
[
Include only if applicable
] Continued participation in the AIP (Annual Incentive Plan) program, pro-rated to your last day worked and not to exceed the pro-rated target, using the same goals and objectives determined prior to this agreement. Regardless of the Company’s performance, the maximum award under this provision will not exceed 100% of your pro-rata target amount. Any payment will be made at the conclusion of the program’s regular process, which is anticipated to be in March _________.
|
d.
|
Outplacement support consistent with your position and needs, up to _______ months.
|
e.
|
Payment of $________ paid as a lump sum (less applicable statutory tax withholdings), to assist with the cost of ____ months’ worth of COBRA coverage. The lump sum will be paid no later than ten (10) business days after the expiration of the “Revocation Period” set forth in this Agreement.
|
3.
|
In exchange for the benefits described in paragraph 2 above:
|
a.
|
You agree to promptly provide to the Company by the Effective Date, all expense reports, all documents whether written or electronic format, as well as all Company Assets, hereafter defined, in your possession pertaining to your work at the Company.
|
i.
|
In the event you incurred personal expenses on any Company credit card, you agree to immediately reimburse the Company any amount owed prior to any payment of severance under this Agreement.
|
ii.
|
You acknowledge and agree that failure to reimburse said personal expenses shall be deemed as a breach of your obligations under this Agreement.
|
iii.
|
In the event such breach occurs, you acknowledge and agree that the Company shall have the right to retain, set off, or recoup the amount of said personal expenses against any amount owed to you under this Agreement, in addition to all remedies available at equity or at law.
|
iv.
|
“Company Assets” shall include but are not limited to:
|
1.
|
Cell phones, mobile devices and accessories
|
2.
|
Personal electronic devices,
|
3.
|
Computer/ Notebook computer equipment and accessories,
|
4.
|
Keys,
|
5.
|
Building security cards,
|
6.
|
All electronic storage devices, i.e., portable hard drive, flash drive, Cloud etc.
|
7.
|
You should disable passcode/activation lock (including the “find my phone” app which allows for remote erasing of data)
|
8.
|
Company credit cards
|
9.
|
Wireless card
|
10.
|
Parking Pass
|
11.
|
Uniform/tools
|
12.
|
Company car (if applicable, please schedule drop off)
|
13.
|
Documents (whether electronic or paper from that are off-site)
|
14.
|
Company property stored on personal computers and/or
|
15.
|
Company identification cards
|
a.
|
You acknowledge:
|
•
|
that any Confidential and Proprietary Business Information and Trade Secrets 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.
|
b.
|
Except as may be required by law, 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 further 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.
|
4.
|
For a period of twelve (12) months following the Effective 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.
|
5.
|
You shall not make any disparaging or defamatory statements, written or oral, regarding the Company or its current or former officers, directors, or employees, including but not limited to statements 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. Nothing in this Agreement shall be construed to prohibit Employee from reporting conduct to, providing truthful information to or participating in any investigation or proceeding conducted by any federal or state government agency or self-regulatory organization, nor does anything herein preclude Employee from engaging in protected concerted activity under the National Labor Relations Act.
|
6.
|
[
Include only for certain states, as applicable
] For a period of ______weeks following the Effective 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 Allegion component, sector or business you have worked for in the last five (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.
|
7.
|
[
Include only for certain states, as applicable
] For a period of ________weeks following the Effective 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 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 five (5) years preceding the end of your employment.
|
8.
|
|
a.
|
You hereby irrevocably and unconditionally release and forever discharge the Company and each and all of its successors, businesses, affiliates, and assigns, and all person(s) 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 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
.), the Family and Medical Leave Act (“FMLA”), 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
.), any claims under the Occupational Safety and Health Act (“OSHA”), any claims under the Fair Credit Reporting Act “FCRA”), any claims under Sarbanes-Oxley Act, any claims under any federal, state, or local military leave laws, including the Uniformed Services Employment and Reemployment Rights Act (“USERRA”) [
Add state statutes, as applicable
] 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 this Agreement.
|
b.
|
The parties understand the word “claims”, to include all claims, including all employment discrimination claims, as defined above, whether actual or potential, known or unknown, and specifically but not exclusively all claims arising out of your employment with the Company and termination. All such claims (including related attorney’s fees and costs) are forever barred by this Agreement and without regard to whether those claims are based on any alleged breach of duty arising in contract or tort or any alleged unlawful act, including, without limitation, age discrimination or any other claim or cause of action and regardless of the forum in which it might be brought.
|
c.
|
Nothing in this Agreement shall prevent you (or your attorneys) from (i) commencing an action or proceeding to enforce this Agreement, (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, or (iii) pursuing any claims or rights that, pursuant to law, cannot be legally waived or released, such as claims for unemployment or workers’ compensation benefits or rights to vested benefits under any applicable retirement plans as of the Effective Date.
|
d.
|
Nothing in this Agreement shall be construed to prohibit, impede, or preclude you from filing any charge or complaint with the EEOC, State Counterpart Agency, or other administrative agency with respect to which such right cannot be waived, or participating in any investigation or proceeding conducted by the EEOC, State Counterpart Agency, or other administrative 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, to the fullest extent permitted by law.
|
e.
|
[
For California only, as applicable
] 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). You hereby acknowledge that you may have sustained losses that are presently unknown or unsuspected, that such damages and other losses as were sustained may give rise to additional complaints, actions, causes of action, claims, demands and debts in the future. Nevertheless, you acknowledge that this Agreement has been negotiated and agreed upon in light of this realization and, being fully aware of the situation, you intend to release, acquit and forever discharge the Company from any and all such unknown claims including damages that are unknown or unanticipated.
|
f.
|
[
For California only, as applicable
] The Parties acknowledge that this Agreement provides adequate money as consideration for, and settles or discharges, any and all claims for all species of workers’ compensation benefits, filed or not, including but not limited to death benefits, any and all interest and penalties of all types, any and all retroactive temporary total disability, permanent disability, vocational rehabilitation maintenance allowance or other vocational rehabilitation benefits, including voucher buyout, any and all self-procured or out of pocket expenses for medical treatment, prescriptions, parking and mileage, and any and all claims against the employer under California Labor Code Section 132a.
|
g.
|
For any claim not subject to release, you agree to waive, to the extent permitted by law, any right or ability to be a class or collective action representative, or otherwise participate as a party in any putative or certified class, collective or multi-party action or proceeding based upon such a claim in which the Company or any other Releasee identified in this Agreement, is a party. You further waive any right or ability to be a class or collective action representative, or to otherwise participate as a party in any putative or certified class, collective or multi-party action or proceeding based on such a claim in which the Company or any other Releasee identified in this Agreement, is a party. You promise not to consent to become a member of any class or collective action in a case in which claims are asserted against the Company or any other Releasee identified in this Agreement, that are related in any way to your employment or the termination of your employment with the Company. If, without your prior knowledge and consent, you are made a member of a class in any proceeding, you agree to opt out of the
|
9.
|
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.
|
10.
|
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.
|
11.
|
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.
|
12.
|
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 Effective Date forward would be withheld as an offset to the severance amounts provided above. Alternatively, if you obtain disability payments for the Effective 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 Effective Date and Severance.
|
13.
|
You represent that you do not desire re-employment with the Company and hereby expressly waive any and all rights, if any, that you may have to employment or consideration for employment with the Company. Furthermore, you agree to never again seek or accept employment with the Company.
|
14.
|
[Include additional disclaimer language for certain states, as applicable.]
|
15.
|
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 and will hold 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.
|
16.
|
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.
|
17.
|
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; provided, however, that this Agreement does not replace or supersede any pre-existing obligations you may have to the Company concerning confidentiality, trade secrets, non-disclosure, non-solicitation, or assignment of inventions or other intellectual property developments, all of which shall remain in full force and effect.
|
18.
|
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.
|
19.
|
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.
|
20.
|
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.
|
21.
|
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;
|
b.
|
You are, through this Agreement, releasing, among others, the Company, its affiliates and 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;
|
c.
|
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;
|
d.
|
The consideration provided to you under this Agreement is in addition to anything of value to which you are already entitled;
|
e.
|
You knowingly and voluntarily agree to all of the terms set forth in this Agreement;
|
f.
|
You knowingly and voluntarily intend to be legally bound by the same;
|
g.
|
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;
|
h.
|
You have been provided with sufficient opportunity to consult with an attorney or have voluntarily waived that opportunity;
|
i.
|
You have a full ___________ days from the date of receipt of this Agreement within which to consider this Agreement before executing it; and
|
j.
|
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 _________________. 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.
|
a)
|
A severance package is being offered to Allegion employees whose positions are being eliminated due to _______ (typically “the Company’s need to restructure and optimize its business.”) (the “Program”). All individuals selected for inclusion in the Program were selected solely based on business necessity and economic factors.
|
b)
|
The decisional unit is all employees in _________ positions in the _________ group (the “Group”).
|
c)
|
In order to be eligible to receive any benefits pursuant to the Program, you must be an employee of the Group whose employment was involuntary terminated for reasons other than for cause during the period on or about August 2017, and you must execute, and not revoke, the Agreement and Release attached hereto (the “Agreement”). The Agreement includes a general release of any and all claims which you may have against the Company, including any claims under the Age Discrimination in Employment Act.
|
d)
|
All employees age forty (40) and over who are being selected for inclusion in the Program shall have a period of forty-five (45) days from receipt of the Agreement to consider whether to execute the Agreement, and also shall have respective period of seven (7) days to revoke the Agreement after its execution (the “Revocation Period”). To be effective, any revocation must be in writing, addressed to Emily Betz, 11819 N Pennsylvania Street, Carmel, IN 46032, and must be received by the Company within the Revocation Period. If you do not sign the Agreement, or sign the Agreement and then revoke it, you shall not be eligible to receive severance.
|
e)
|
The Company advises you to consult with an attorney prior to executing the Agreement.
|
f)
|
The job classification(s) and ages of all individuals selected for the Program are as follows:
|
g)
|
The job classification(s) and ages of all individuals not selected for the Program are as follows:
|
1.
|
Vesting Schedule
.
|
2.
|
Dividend Equivalents
.
|
3.
|
Termination of Employment
.
|
4.
|
Settlement
.
|
5.
|
Change in Control
.
|
6.
|
Responsibility for Taxes
.
|
(a)
|
withholding from Participant’s wages or other cash compensation paid to Participant by the Company or the Employer,
|
(b)
|
withholding from proceeds of the sale of Shares acquired upon settlement of the RSUs either through a voluntary sale or through a mandatory sale arranged by the Company (on Participant’s behalf pursuant to this authorization without further consent) and/or
|
(c)
|
requiring Participant to tender a cash payment to the Company or an Affiliate in the amount of the Tax-Related Items;
|
7.
|
Nature of Grant
.
|
8.
|
No Advice Regarding Grant
.
|
9.
|
Data Privacy
.
|
10.
|
Electronic Delivery and Participation
.
|
11.
|
Insider Trading/Market Abuse Laws
.
|
12.
|
Country-Specific Terms and Conditions
.
|
13.
|
Imposition of Other Requirements
.
|
14.
|
Recoupment Provision
.
|
15.
|
Choice of Law and Venue
.
|
16.
|
Severability
.
|
17.
|
Language
.
|
18.
|
Waiver
.
|
19.
|
Acknowledgement of Availability of Plan Prospectus
.
|
20.
|
Acknowledgement & Acceptance within 120 Days
.
|
(a)
|
withholding from Participant’s wages or other cash compensation paid to Participant by the Company and/or the Employer;
|
(b)
|
withholding from proceeds of the sale of Shares acquired upon exercise of the Option either through a voluntary sale or through a mandatory sale arranged by the Company (on Participant’s behalf pursuant to this authorization without further consent);
|
(c)
|
requiring Participant to tender a cash payment to the Company or an Affiliate in the amount of the Tax-Related Items; and/or
|
(d)
|
withholding in Shares to be issued upon exercise of the Option; provided, however, that if Participant is a Section 16 officer of the Company under the Act, then the Committee (as constituted to satisfy Rule 16b-3 of the Act) will determine the method of withholding from alternatives (a) - (d) above and, if the Committee does not exercise its discretion prior to the applicable withholding event, then Participant will be entitled to elect the method of withholding from alternatives (a) - (c) above.
|
1.
|
Number of Shares
.
|
2.
|
Performance Period
.
|
3.
|
Vesting
.
|
4.
|
Dividend Equivalents
.
|
5.
|
Termination of Employment
.
|
6.
|
Settlement
.
|
7.
|
Change in Control
.
|
8.
|
Responsibility for Taxes
.
|
(a)
|
withholding from Participant’s wages or other cash compensation paid to Participant by the Company or the Employer,
|
(b)
|
withholding from proceeds of the sale of Shares acquired upon settlement of the PSUs either through a voluntary sale or through a mandatory sale arranged by the Company
(on Participant’s behalf pursuant to this authorization without further consent) and/or
|
(c)
|
requiring Participant to tender a cash payment to the Company or an Affiliate in the amount of the Tax-Related Items;
|
9.
|
Nature of Grant
.
|
10.
|
No Advice Regarding Grant
.
|
11.
|
Data Privacy
.
|
12.
|
Electronic Delivery and Participation
.
|
13.
|
Insider Trading/Market Abuse Laws
.
|
14.
|
Country-Specific Terms and Conditions
.
|
15.
|
Imposition of Other Requirements
.
|
16.
|
Recoupment Provision
.
|
17.
|
Choice of Law and Venue
.
|
18.
|
Severability
.
|
19.
|
Language
.
|
20.
|
Waiver
.
|
21.
|
Acknowledgement of Availability of Plan Prospectus
.
|
22.
|
Acknowledgement & Acceptance within 120 Days
.
|
Subsidiary
|
|
Jurisdiction of Formation
|
A.B.S. - R.I.C.A.
|
|
France
|
AD Solutions, Inc.
|
|
Washington
|
Allegion B.V.
|
|
Netherlands
|
Allegion NV
|
|
Belgium
|
Allegion S.A.
|
|
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 Güvenlik Sistemleri Sanayi AS
|
|
Turkey
|
Allegion (Ireland) Finance Designated Activity Company
|
|
Ireland
|
Allegion Fu Hsing Limited**
|
|
Hong Kong
|
Allegion German Financing GmbH & Co. KG
|
|
Germany
|
Allegion German Holding I GmbH
|
|
Germany
|
Allegion German Holding II GmbH
|
|
Germany
|
Allegion (Gibraltar) Holding Limited
|
|
Gibraltar
|
Allegion Gulf Trading WLL
|
|
Qatar
|
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 Investments Holding LLC
|
|
Delaware
|
Allegion Irish Holding Company Limited
|
|
Ireland
|
Allegion Irish Holding Company II Ltd
|
|
Ireland
|
Allegion Irish Holding Company III Limited
|
|
Ireland
|
Allegion Korea Ltd.
|
|
Republic of Korea
|
Allegion LLC
|
|
Delaware
|
Allegion Luxembourg Holding and Financing S.à r.l.
|
|
Luxembourg
|
Allegion Luxembourg Holding II SCS
|
|
Luxembourg
|
Allegion Luxembourg Holding III S.á.r.l
|
|
Luxembourg
|
Allegion Lux Financing I S.à r.l
|
|
Luxembourg
|
Allegion Lux Financing III S.à r.l.
|
|
Luxembourg
|
Allegion (Malaysia) Sdn. Bhd.
|
|
Malaysia
|
Allegion (New Zealand) Limited
|
|
New Zealand
|
Allegion Panama, S. de R.L.
|
|
Panama
|
Allegion public limited company
|
|
Ireland
|
Allegion S&S Lock Holding Company Inc.
|
|
Delaware
|
Allegion Security Technologies (China) Co. Ltd.
|
|
China
|
Allegion (Southeast Asia) Pte. Ltd.
|
|
Singapore
|
Allegion (Thailand) Limited
|
|
Thailand
|
Allegion (UK) Limited
|
|
United Kingdom
|
Allegion US Holding Company Inc.
|
|
Delaware
|
Allegion Ventures LLC
|
|
Delaware
|
API Services and Solutions Pty Limited
|
|
Australia
|
AXA Stenman Deutschland GmbH
|
|
Germany
|
AXA Stenman France S.A.S.
|
|
France
|
AXA Stenman Holding B.V.
|
|
Netherlands
|
AXA Stenman Industries B.V.
|
|
Netherlands
|
AXA Stenman Nederland B.V.
|
|
Netherlands
|
AXA Stenman Poland Sp Z.O.O
|
|
Poland
|
BASTA Group A/S Denmark
|
|
Denmark
|
Bricard S.A.S
|
|
France
|
CISA Cerraduras S.A.
|
|
Spain
|
CISA S.p.A.
|
|
Italy
|
Dor-O-Matic (Illinois) LLC
|
|
Illinois
|
Dor-o-Matic of Mid Atlantic States, Inc.
|
|
New Jersey
|
Electronic Technologies Corporation USA
|
|
New York
|
Fire and Security Hardware Pty Limited
|
|
Australia
|
Harrow Industries LLC
|
|
Delaware
|
Harrow Products (Delaware) LLC
|
|
Delaware
|
Harrow Products LLC
|
|
Delaware
|
Gainsborough Hardware Industries Limited
|
|
Australia
|
Interflex Datensysteme GesmbH
|
|
Austria
|
Interflex Datensysteme GmbH
|
|
Germany
|
Isonas, Inc.
|
|
Colorado
|
Milre Systek Co., Ltd
|
|
Republic of Korea
|
Newman Tonks (Overseas Holdings) Limited
|
|
United Kingdom
|
Normbau France SAS
|
|
France
|
Normbau GmbH
|
|
Germany
|
NT Group Properties Limited
|
|
United Kingdom
|
NT Leamington Limited
|
|
United Kingdom
|
Qatar Metal Const. Ind. LLC
|
|
United Arab Emirates
|
QMI Building Metal Products Manufacturing LLC
|
|
United Arab Emirates
|
Recognition Systems LLC
|
|
California
|
Republic Doors and Frames, LLC
|
|
Delaware
|
S&S Lock Indemnity (Barbados) Limited
|
|
Barbados
|
S&S Lock Insurance (Arizona) Company
|
|
Arizona
|
Schlage de Mexico SA de C.V.
|
|
Mexico
|
Schlage Lock Company LLC
|
|
Delaware
|
SimonsVoss Technologies AB
|
|
Sweden
|
SimonsVoss Technologies BV
|
|
Netherlands
|
SimonsVoss Technologies FZE
|
|
United Arab Emirates
|
SimonsVoss Technologies GmbH
|
|
Germany
|
SimonsVoss Technologies Limited (Hong Kong)
|
|
Hong Kong
|
SimonsVoss Technologies Limited (UK)
|
|
United Kingdom
|
SimonsVoss Technologies SAS
|
|
France
|
Technical Glass Products DMCC
|
|
United Arab Emirates
|
Technical Glass Products, Inc.
|
|
Washington
|
TGP Canada Enterprises, ULC
|
|
Canada
|
TGP International, Inc.
|
|
Washington
|
Trelock Asia Pacific Limited
|
|
Hong Kong
|
Trelock GmbH
|
|
Germany
|
Trelock Production GmbH
|
|
Germany
|
Trelock Trading (Shenzhen) Company Ltd.
|
|
China
|
Zero Seal Systems Limited**
|
|
United Kingdom
|
1.
|
I have reviewed the Annual Report on Form 10-K of Allegion plc for the year ended December 31, 2018;
|
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)) and internal control over financial reporting (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.
|
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;
|
c.
|
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
|
d.
|
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, 2018;
|
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)) and internal control over financial reporting (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.
|
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;
|
c.
|
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
|
d.
|
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.
|