Exhibit 99.1
HISTORICAL UNAUDITED BUSINESS SEGMENTS
The following tables provide revised segment net revenues, segment operating income, depreciation and amortization, and capital expenditures, as well as unallocated corporate expense for the years ended December 31, 2012 and 2011. The following annual results exclude Allegion’s results and spin-related costs. The stranded costs related to the historic Allegion business are reflected as unallocated corporate expense. The revision of previously issued financial information does not represent a restatement of previously issued financial statements and does not affect our reported net income, earnings per share, total assets, or stockholders’ equity for any of the previously reported periods.
Segment operating income is the measure of profit and loss that the Company's chief operating decision maker uses to evaluate the financial performance of the business and as the basis for performance reviews, compensation and resource allocation. For these reasons, the Company believes that Segment operating income represents the most relevant measure of segment profit and loss. The Company may exclude certain charges or gains from operating income to arrive at Segment operating income that is a more meaningful measure of profit and loss upon which to base its operating decisions.
| Years ended | |||||||
| Dollar amounts in millions | 2012 | 2011 | |||||
| Climate | |||||||
| Net revenues | $ | 9,042.5 | $ | 9,907.9 | |||
| Segment operating income * | 817.6 | 837.1 | |||||
| Segment operating income as a percentage of revenues | 9.0 | % | 8.4 | % | |||
| Depreciation and amortization | 257.0 | 273.6 | |||||
| Capital expenditures | 105.1 | 105.4 | |||||
| Industrial | |||||||
| Net revenues | 2,945.8 | 2,852.9 | |||||
| Segment operating income | 455.8 | 415.5 | |||||
| Segment operating income as a percentage of revenues | 15.5 | % | 14.6 | % | |||
| Depreciation and amortization | 42.9 | 40.3 | |||||
| Capital expenditures | 62.6 | 57.2 | |||||
| Total net revenues | $ | 11,988.3 | $ | 12,760.8 | |||
| Reconciliation to Operating Income | |||||||
| Segment operating income from reportable segments | 1,273.4 | 1,252.6 | |||||
| Gain (loss) on sale/asset impairment * | 4.5 | (646.9 | ) | ||||
| Unallocated corporate expense | (206.0 | ) | (166.9 | ) | |||
| Total operating income | $ | 1,071.9 | $ | 438.8 | |||
| Total operating income as a percentage of revenues | 8.9 | % | 3.4 | % | |||
| Depreciation and amortization from reportable segments | 299.9 | 313.9 | |||||
| Unallocated depreciation and amortization | 32.6 | 44.5 | |||||
| Total depreciation and amortization | $ | 332.5 | $ | 358.4 | |||
| Capital expenditures from reportable segments | 167.7 | 162.6 | |||||
| Corporate capital expenditures | 75.4 | 54.6 | |||||
| Total capital expenditures | $ | 243.1 | $ | 217.2 | |||
* During the year ended December 31, 2011, the Company recorded a pre-tax asset impairment charge related to the Hussmann divestiture totaling $646.9 million. During the year ended December 31, 2012, the Company recorded $4.5 million of purchase price adjustments related to the Hussmann sale. These amounts have been excluded from Segment operating income within the Climate segment as management excludes these charges from operating income when making operating decisions about the business.
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The following table provides revised segment revenue and operating income, as well as unallocated corporate expense for the quarters ended September 30, 2013, June 30, 2013, and March 31, 2013 (Table 1) and for the quarters ended December 31, 2012, September 30, 2012, June 30, 2012, and March 31, 2012 (Table 2). The following quarterly results exclude Allegion’s results and spin-related costs. The stranded costs related to the historic Allegion business are reflected as unallocated corporate expense. The revision of previously issued financial information does not represent a restatement of previously issued financial statements and does not affect our reported net income, earnings per share, total assets, or stockholders’ equity for any of the previously reported periods.
| TABLE 1 | Three months ended | ||||||||||
| Dollar amounts in millions | Q3 2013 | Q2 2013 | Q1 2013 | ||||||||
| Climate | |||||||||||
| Net revenues | $ | 2,492.3 | $ | 2,635.5 | $ | 1,958.7 | |||||
| Segment operating income | 322.3 | 328.7 | 70.1 | ||||||||
| Segment operating income as a percentage of revenues | 12.9 | % | 12.5 | % | 3.6 | % | |||||
| Industrial | |||||||||||
| Net revenues | 721.9 | 762.9 | 680.3 | ||||||||
| Segment operating income | 116.2 | 122.4 | 102.1 | ||||||||
| Segment operating income as a percentage of revenues | 16.1 | % | 16.0 | % | 15.0 | % | |||||
| Total net revenues | $ | 3,214.2 | $ | 3,398.4 | $ | 2,639.0 | |||||
| Reconciliation to Operating income | |||||||||||
| Segment operating income from reportable segments | 438.5 | 451.1 | 172.2 | ||||||||
| Unallocated corporate expense | (59.0 | ) | (63.5 | ) | (52.2 | ) | |||||
| Operating income | $ | 379.5 | $ | 387.6 | $ | 120.0 | |||||
| TABLE 2 | Three months ended | ||||||||||||||
| Dollar amounts in millions | Q4 2012 | Q3 2012 | Q2 2012 | Q1 2012 | |||||||||||
| Climate | |||||||||||||||
| Net revenues | $ | 2,158.7 | $ | 2,388.8 | $ | 2,512.5 | $ | 1,982.5 | |||||||
| Segment operating income * | 200.9 | 274.2 | 271.1 | 71.4 | |||||||||||
| Segment operating income as a percentage of revenues | 9.3 | % | 11.5 | % | 10.8 | % | 3.6 | % | |||||||
| Industrial | |||||||||||||||
| Net revenues | 765.3 | 701.5 | 790.3 | 688.7 | |||||||||||
| Segment operating income | 123.3 | 106.6 | 134.4 | 91.5 | |||||||||||
| Segment operating income as a percentage of revenues | 16.1 | % | 15.2 | % | 17.0 | % | 13.3 | % | |||||||
| Total net revenues | $ | 2,924.0 | $ | 3,090.3 | $ | 3,302.8 | $ | 2,671.2 | |||||||
| Reconciliation to Operating income | |||||||||||||||
| Segment operating income from reportable segments | 324.2 | 380.8 | 405.5 | 162.9 | |||||||||||
| Gain (loss) on sale/asset impairment * | — | — | 4.2 | 0.3 | |||||||||||
| Unallocated corporate expense | (76.6 | ) | (43.2 | ) | (39.4 | ) | (46.8 | ) | |||||||
| Operating income | $ | 247.6 | $ | 337.6 | $ | 370.3 | $ | 116.4 | |||||||
* During the quarters ended June 30, 2012 and March 31, 2012, the Company recorded $4.2 million and $0.3 million of purchase price adjustments related to the Hussmann sale, respectively. These amounts have been excluded from Segment operating income within the Climate segment as management excludes these charges from Operating income when making operating decisions about the business.
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