Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2022 | Oct. 24, 2022 | |
Class of Stock [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2022 | |
Document Transition Report | false | |
Entity File Number | 001-35971 | |
Entity Central Index Key | 0001579241 | |
Entity Registrant Name | Allegion plc | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Incorporation, State or Country Code | L2 | |
Entity Tax Identification Number | 98-1108930 | |
Entity Address, Address Line One | Block D | |
Entity Address, Address Line Two | Iveagh Court | |
Entity Address, Address Line Three | Harcourt Road | |
Entity Address, City or Town | Dublin 2 | |
Entity Address, Postal Zip Code | D02 VH94 | |
Entity Address, Country | IE | |
Country Region | 353 | |
City Area Code | 1 | |
Local Phone Number | 2546200 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 87,844,822 | |
Ordinary shares | ||
Class of Stock [Line Items] | ||
Title of 12(b) Security | Ordinary shares, par value $0.01 per share | |
Trading Symbol | ALLE | |
Security Exchange Name | NYSE | |
3.500% Senior Notes Due 2029 | ||
Class of Stock [Line Items] | ||
Title of 12(b) Security | 3.500% Senior Notes due 2029 | |
Trading Symbol | ALLE 3 ½ | |
Security Exchange Name | NYSE |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Comprehensive Income - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Statement of Comprehensive Income [Abstract] | ||||
Net revenues | $ 913.7 | $ 717 | $ 2,410.4 | $ 2,158.2 |
Cost of goods sold | 545.7 | 416.5 | 1,438.7 | 1,239.8 |
Selling and administrative expenses | 205.1 | 162.1 | 544.7 | 503.3 |
Operating income | 162.9 | 138.4 | 427 | 415.1 |
Interest expense | 23.1 | 12.3 | 52.2 | 37 |
Loss on divestitures | 7.6 | 0 | 7.6 | 0 |
Other income, net | (1.5) | (14.7) | (7.1) | (21.4) |
Earnings before income taxes | 133.7 | 140.8 | 374.3 | 399.5 |
Provision for (benefit from) income taxes | 19.1 | (2.8) | 51.4 | 28.9 |
Net earnings | 114.6 | 143.6 | 322.9 | 370.6 |
Less: Net earnings attributable to noncontrolling interests | 0 | 0.1 | 0.2 | 0.4 |
Net earnings attributable to Allegion plc | $ 114.6 | $ 143.5 | $ 322.7 | $ 370.2 |
Earnings per share attributable to Allegion plc ordinary shareholders: | ||||
Basic net earnings (in dollars per share) | $ 1.30 | $ 1.60 | $ 3.67 | $ 4.11 |
Diluted net earnings (in dollars per share) | $ 1.30 | $ 1.59 | $ 3.65 | $ 4.08 |
Weighted-average shares outstanding: | ||||
Basic (in shares) | 87.9 | 89.7 | 88 | 90.1 |
Diluted (in shares) | 88.2 | 90.3 | 88.4 | 90.7 |
Total comprehensive income | $ 46.3 | $ 121.2 | $ 183.8 | $ 326.7 |
Less: Total comprehensive (loss) income attributable to noncontrolling interests | (0.4) | 0 | (0.8) | 0.4 |
Total comprehensive income attributable to Allegion plc | $ 46.7 | $ 121.2 | $ 184.6 | $ 326.3 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
ASSETS | ||
Cash and cash equivalents | $ 282.2 | $ 397.9 |
Accounts and notes receivable, net | 422.5 | 283.3 |
Inventories | 477.9 | 380.4 |
Other current assets | 53.3 | 56 |
Total current assets | 1,235.9 | 1,117.6 |
Property, plant and equipment, net | 290.7 | 283.7 |
Goodwill | 1,373.5 | 803.8 |
Intangible assets, net | 599.7 | 447.5 |
Other noncurrent assets | 443.5 | 398.4 |
Total assets | 3,943.3 | 3,051 |
LIABILITIES AND EQUITY | ||
Accounts payable | 266.4 | 259.1 |
Accrued expenses and other current liabilities | 410.2 | 329.5 |
Short-term borrowings and current maturities of long-term debt | 12.6 | 12.6 |
Total current liabilities | 689.2 | 601.2 |
Long-term debt | 2,214.5 | 1,429.5 |
Other noncurrent liabilities | 246 | 257.9 |
Total liabilities | 3,149.7 | 2,288.6 |
Equity: | ||
Ordinary shares, $0.01 par value (87,844,572 and 88,215,625 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively) | 0.9 | 0.9 |
Capital in excess of par value | 9.2 | 0 |
Retained earnings | 1,113.7 | 952.6 |
Accumulated other comprehensive loss | (332.5) | (194.4) |
Total Allegion plc shareholders’ equity | 791.3 | 759.1 |
Noncontrolling interests | 2.3 | 3.3 |
Total equity | 793.6 | 762.4 |
Total liabilities and equity | $ 3,943.3 | $ 3,051 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Ordinary shares, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Ordinary shares, issued (in shares) | 87,844,572 | 88,215,625 |
Ordinary shares, outstanding (in shares) | 87,844,572 | 88,215,625 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Cash flows from operating activities | ||
Net earnings | $ 322.9 | $ 370.6 |
Adjustments to arrive at net cash provided by operating activities: | ||
Depreciation and amortization | 69.6 | 62 |
Loss on divestitures | 7.1 | 0 |
Changes in assets and liabilities and other non-cash items | (132.5) | (76.2) |
Net cash provided by operating activities | 267.1 | 356.4 |
Cash flows from investing activities | ||
Capital expenditures | (41.5) | (28.7) |
Acquisition of and equity investments in businesses, net of cash acquired | (923.1) | (6.5) |
Proceeds from sale of equity method investment | 0 | 7.6 |
Other investing activities, net | (1.3) | 12.7 |
Net cash used in investing activities | (965.9) | (14.9) |
Cash flows from financing activities | ||
Debt repayments, net | (9.4) | (0.1) |
Proceeds from revolving facility | 340 | 0 |
Repayments of revolving facility | (141) | 0 |
Proceeds from issuance of senior notes | 600 | 0 |
Net proceeds from (repayments of) debt | 789.6 | (0.1) |
Debt financing costs | (10.2) | 0 |
Dividends paid to ordinary shareholders | (107.9) | (96.9) |
Repurchase of ordinary shares | (61) | (212.7) |
Other financing activities, net | (4.4) | 0.4 |
Net cash provided by (used in) financing activities | 606.1 | (309.3) |
Effect of exchange rate changes on cash and cash equivalents | (23) | (8.7) |
Net (decrease) increase in cash and cash equivalents | (115.7) | 23.5 |
Cash and cash equivalents - beginning of period | 397.9 | 480.4 |
Cash and cash equivalents - end of period | $ 282.2 | $ 503.9 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | BASIS OF PRESENTATIONThe accompanying Condensed and Consolidated Financial Statements of Allegion plc, an Irish public limited company, and its consolidated subsidiaries ("Allegion" or "the Company"), reflect the consolidated operations of the Company and have been prepared in accordance with United States ("U.S.") Securities and Exchange Commission ("SEC") interim reporting requirements. Accordingly, the accompanying Condensed and Consolidated Financial Statements do not include all disclosures required by accounting principles generally accepted in the United States of America ("GAAP") for full financial statements and should be read in conjunction with the Consolidated Financial Statements included in the Allegion Annual Report on Form 10-K for the year ended December 31, 2021. In the opinion of management, the accompanying Condensed and Consolidated Financial Statements contain all adjustments, which include normal recurring adjustments, necessary to state fairly the consolidated unaudited results for the interim periods presented. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Recent Accounting Pronouncements | RECENT ACCOUNTING PRONOUNCEMENTS Recently Adopted Accounting Pronouncements: In October 2021, the FASB issued ASU No. 2021-08, "Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers." This ASU requires contract assets and contract liabilities (e.g. deferred revenue) acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC 606, "Revenue from Contracts with Customers". Generally, this new guidance will result in the acquirer recognizing contract assets and contract liabilities at the same amounts recorded by the acquiree. Historically, such amounts were recognized by the acquirer at fair value in purchase accounting. This ASU is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption is permitted, including in interim periods, for any financial statements that have not yet been issued. The Company elected to early adopt ASU 2021-08 on January 1, 2022, and as such, applied this new guidance to the Access Technologies business combination (see Note 3), which did not result in a material impact to the Condensed and Consolidated Financial Statements for the three and nine months ended September 30, 2022. |
Acquisitions
Acquisitions | 9 Months Ended |
Sep. 30, 2022 | |
Business Combinations [Abstract] | |
Acquisitions | ACQUISITIONS On July 5, 2022, the Company, through its subsidiaries, completed the acquisition of Stanley Access Technologies LLC and assets related to the automatic entrance solutions business from Stanley Black & Decker, Inc. (the "Access Technologies business"). The total preliminary cash consideration paid for the acquisition was $923.1 million, and the acquisition was accounted for as a business combination. The Access Technologies business is a leading manufacturer, installer and service provider of automatic doors in North America, primarily in the U.S. and Canada. Its diversified customer base centers on non-residential settings, including retail, healthcare, education, commercial offices, hospitality and government. This acquisition helps the Company create a more comprehensive portfolio of access solutions, with the addition of automated entrances. Additionally, the Access Technologies business adds an expansive service and support network throughout the U.S. and Canada, broadening the Company's solutions to national, regional and local customers and complementing the Company's existing strengths in these non-residential markets. The Access Technologies business has been integrated into the Allegion Americas segment. The following table summarizes the preliminary allocation of the purchase price to assets acquired and liabilities assumed as of the acquisition date: In millions Accounts receivable, net $ 78.2 Inventories 50.3 Other current assets 0.3 Property, plant and equipment 15.2 Goodwill 616.0 Intangible assets 222.5 Other noncurrent assets 13.7 Accounts payable (22.4) Accrued expenses and other current liabilities (43.1) Other noncurrent liabilities (7.6) Total net assets acquired and liabilities assumed $ 923.1 The valuation of assets acquired and liabilities assumed has not yet been finalized as of September 30, 2022. Finalization of the valuation during the measurement period could result in a change in the amounts recorded for acquired tangible and intangible assets, goodwill and income tax assets and liabilities, among other items. The completion of the valuation will occur no later than one year from the acquisition date. Intangible assets recognized as of the acquisition date were comprised of the following: In millions Value (in millions) Useful life (in years) Completed technologies/patents $ 6.2 5 Customer relationships 137.4 23 Trade names (finite-lived) 56.8 5 Backlog revenue 22.1 2 Goodwill results from several factors, including Allegion-specific synergies that were excluded from the cash flow projections used in the valuation of intangible assets and intangible assets that do not qualify for separate recognition, such as an assembled workforce. Goodwill resulting from this acquisition is expected to be deductible for tax purposes. The following unaudited pro forma financial information for the three and nine months ended September 30, 2022 and 2021, reflects the consolidated results of operations of the Company as if this acquisition had taken place on January 1, 2021: Three months ended Nine months ended In millions 2022 2021 2022 2021 Net revenues $ 913.7 $ 802.7 $ 2,587.5 $ 2,407.6 Net earnings attributable to Allegion plc 135.5 140.7 340.1 330.2 The unaudited pro forma financial information is presented for informational purposes only and does not purport to be indicative of results of operations that would have occurred had the pro forma events taken place on the date indicated or the future consolidated results of operations of the combined company. The unaudited pro forma financial information has been calculated after applying the Company's accounting policies and adjusting the historical financial results to reflect additional items directly attributable to the acquisition that would have been incurred assuming the acquisition had occurred on January 1, 2021. Adjustments to historical financial information for the three and nine months ended September 30 include: Three months ended Nine months ended In millions 2022 2021 2022 2021 Intangible asset amortization expense, net of tax $ 1.7 $ (5.0) $ (10.1) $ (18.3) Interest expense, net of tax 1.6 (6.2) (10.7) (21.4) Acquisition and integration costs, net of tax 13.5 — 19.4 (19.4) Inventory fair value step-up amortization, net of tax 4.1 — 4.1 (4.1) The following financial information reflects the Net revenues and Loss before income taxes generated by the Access Technologies business since the acquisition date included within the Company's Condensed and Consolidated Statements of Comprehensive Income: In millions Three and nine months ended September 30, 2022 Net revenues $ 88.7 Loss before income taxes (3.3) |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2022 | |
Inventory, Net [Abstract] | |
Inventories | INVENTORIES Inventories are stated at the lower of cost and net realizable value using the first-in, first-out (FIFO) method. The major classes of inventories were as follows: In millions September 30, December 31, Raw materials $ 193.1 $ 144.4 Work-in-process 44.9 42.2 Finished goods 239.9 193.8 Total $ 477.9 $ 380.4 |
Goodwill
Goodwill | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | GOODWILL The changes in the carrying amount of goodwill for the nine months ended September 30, 2022, were as follows: In millions Allegion Americas Allegion International Total December 31, 2021 (gross) $ 501.2 $ 876.2 $ 1,377.4 Accumulated impairment — (573.6) (573.6) December 31, 2021 (net) 501.2 302.6 803.8 Acquisitions and adjustments 616.0 — 616.0 Currency translation (6.1) (40.2) (46.3) September 30, 2022 (net) $ 1,111.1 $ 262.4 $ 1,373.5 |
Intangible Assets
Intangible Assets | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | INTANGIBLE ASSETS The gross amount of the Company’s intangible assets and related accumulated amortization were as follows: September 30, 2022 December 31, 2021 In millions Gross carrying amount Accumulated amortization Net carrying amount Gross carrying amount Accumulated amortization Net carrying amount Completed technologies/patents $ 60.7 $ (29.0) $ 31.7 $ 57.9 $ (28.8) $ 29.1 Customer relationships 488.9 (139.3) 349.6 395.9 (141.6) 254.3 Trade names (finite-lived) 128.9 (54.1) 74.8 84.0 (56.9) 27.1 Other 66.8 (28.9) 37.9 45.8 (22.7) 23.1 Total finite-lived intangible assets 745.3 $ (251.3) 494.0 583.6 $ (250.0) 333.6 Trade names (indefinite-lived) 105.7 105.7 113.9 113.9 Total $ 851.0 $ 599.7 $ 697.5 $ 447.5 Intangible asset amortization expense was $32.6 million and $25.2 million for the nine months ended September 30, 2022 and 2021, respectively. Intangible asset amortization expense for the nine months ended September 30, 2022, included $9.0 million related to intangible assets acquired as part of the recent Access Technologies business acquisition. |
Divestitures
Divestitures | 9 Months Ended |
Sep. 30, 2022 | |
Discontinued Operation, Income (Loss) from Discontinued Operation Disclosures [Abstract] | |
Divestitures | DIVESTITURESIn September 2022, the Company sold Milre Systek Co. Ltd. ("Milre") in South Korea for an immaterial amount. As a result of the sale, the Company recorded a Loss on divestiture of $7.6 million, of which $1.6 million related to the reclassification of accumulated foreign currency translation adjustments to earnings upon sale. This divestiture is not expected to have a material impact on the Company's future results of operations or cash flows. |
Debt and Credit Facilities
Debt and Credit Facilities | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Debt and Credit Facilities | DEBT AND CREDIT FACILITIES Long-term debt and other borrowings consisted of the following: In millions September 30, December 31, 2021 Term Facility $ 240.6 $ 250.0 2021 Revolving Facility 199.0 — 3.200% Senior Notes due 2024 400.0 400.0 3.550% Senior Notes due 2027 400.0 400.0 3.500% Senior Notes due 2029 400.0 400.0 5.411% Senior Notes due 2032 600.0 — Other debt 0.2 0.3 Total borrowings outstanding 2,239.8 1,450.3 Discounts and debt issuance costs, net (12.7) (8.2) Total debt 2,227.1 1,442.1 Less current portion of long-term debt 12.6 12.6 Total long-term debt $ 2,214.5 $ 1,429.5 Unsecured Credit Facilities As of September 30, 2022, the Company has an unsecured Credit Agreement in place, consisting of a $250.0 million term loan facility (the “2021 Term Facility”), of which $240.6 million was outstanding at September 30, 2022, and a $500.0 million revolving credit facility (the “2021 Revolving Facility” and, together with the 2021 Term Facility, the “2021 Credit Facilities”). The 2021 Credit Facilities mature on November 18, 2026, and are unconditionally guaranteed jointly and severally on an unsecured basis by Allegion plc and Allegion US Holding Company Inc. ("Allegion US Hold Co"), the Company’s wholly-owned subsidiary. The 2021 Term Facility will amortize in quarterly installments at the following rates: 1.25% per quarter starting March 31, 2022 through March 31, 2025, 2.5% per quarter starting June 30, 2025 through September 30, 2026, with the balance due on November 18, 2026. The Company repaid $9.4 million of principa l on its 2021 Term Facility during the nine months ended September 30, 2022. The 2021 Revolving Facility provides aggregate commitments of up to $500.0 million, which includes up to $100.0 million for the issuance of letters of credit. On July 1, 2022, the Company borrowed $340.0 million on the 2021 Revolving Facility to partially fund the acquisition of the Access Technologies business. The Company has subsequently made $141.0 million in repayments, resulting in $199.0 million of borrowings outstanding on the 2021 Revolving Facility as of September 30, 2022. The Company also had $7.6 million of letters of credit outstanding. Commitments under the 2021 Revolving Facility may be reduced at any time without premium or penalty, and amounts repaid may be reborrowed. Outstanding borrowings under the 2021 Credit Facilities accrue interest, at the option of the Company, of (i) a Bloomberg Short-Term Bank Yield Index ("BSBY") rate plus the applicable margin or (ii) a base rate plus the applicable margin. The applicable margin ranges from 0.875% to 1.375% depending on the Company’s credit ratings. At September 30, 2022, the Company's outstanding borrowings under the 2021 Credit Facilities accrue interest at BSBY plus a margin of 1.125%, resulting in an interest rate of 4.241%. The 2021 Credit Facilities also contain negative and affirmative covenants and events of default that, among other things, limit or restrict the Company’s ability to enter into certain transactions. In addition, the 2021 Credit Facilities require the Company to comply with a maximum leverage ratio as defined within the agreement. As of September 30, 2022, the Company was in compliance with all covenants. Senior Notes On June 22, 2022, Allegion US Hold Co issued $600.0 million aggregate principal amount of its 5.411% Senior Notes due 2032 (the “5.411% Senior Notes”) to partially fund the acquisition of the Access Technologies business, in addition to the $340.0 million drawn on the 2021 Revolving Facility, as discussed above. The 5.411% Senior Notes require semi-annual interest payments on January 1 and July 1, beginning January 1, 2023, and will mature on July 1, 2032. The Company incurred and deferred $5.9 million of discounts and financing costs associated with the 5.411% Senior Notes, which will be amortized to Interest expense over their 10-year term, as well as $4.3 million of third party financing costs that were recorded within Interest expense on the Condensed and Consolidated Statement of Income for the nine months ended September 30, 2022. The 5.411% Senior Notes are senior unsecured obligations of Allegion US Hold Co and rank equally with all of Allegion US Hold Co’s existing and future senior unsecured and unsubordinated indebtedness. The guarantee of the 5.411% Senior Notes is the senior unsecured obligation of Allegion plc and ranks equally with all of the Company’s existing and future senior unsecured and unsubordinated indebtedness. As of September 30, 2022, Allegion US Hold Co also has $400.0 million outstanding of its 3.200% Senior Notes due 2024 (the “3.200% Senior Notes”) and $400.0 million outstanding of its 3.550% Senior Notes due 2027 (the “3.550% Senior Notes”), while Allegion plc has $400.0 million outstanding of its 3.500% Senior Notes due 2029 (the “3.500% Senior Notes”, and all four senior notes collectively, the “Senior Notes”). The 3.200% Senior Notes, 3.550% Senior Notes and 3.500% Senior Notes all require semi-annual interest payments on April 1 and October 1 of each year and will mature on October 1, 2024, October 1, 2027 and October 1, 2029, respectively. The 3.200% Senior Notes and the 3.550% Senior Notes are senior unsecured obligations of Allegion US Hold Co and rank equally with all of Allegion US Hold Co’s existing and future senior unsecured and unsubordinated indebtedness. The guarantee of the 3.200% Senior Notes and the 3.550% Senior Notes is the senior unsecured obligation of Allegion plc and ranks equally with all of the Company’s existing and future senior unsecured and unsubordinated indebtedness. The 3.500% Senior Notes are senior unsecured obligations of Allegion plc, are guaranteed by Allegion US Hold Co and rank equally with all of the Company’s existing and future senior unsecured indebtedness. |
Financial Instruments
Financial Instruments | 9 Months Ended |
Sep. 30, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Financial Instruments | FINANCIAL INSTRUMENTS Currency Hedging Instruments The gross notional amount of the Company’s currency derivatives was $168.1 million and $164.9 million at September 30, 2022 and December 31, 2021, respectively. Neither the fair values of currency derivatives, which are determined based on a pricing model that uses spot rates and forward prices from actively quoted currency markets that are readily observable (Level 2 inputs under the fair value hierarchy described in Note 12), nor the balances included in Accumulated other comprehensive loss were material as of September 30, 2022 and December 31, 2021. Currency derivatives designated as cash flow hedges did not have a material impact to either Net earnings or Other comprehensive loss during the three or nine months ended September 30, 2022 and 2021, nor is the amount to be reclassified into Net earnings over the next twelve months expected to be material, although the actual amounts that will be reclassified to Net earnings may vary as a result of future changes in market conditions. At September 30, 2022, the maximum term of the Company’s currency derivatives, both those that are designated as cash flow hedges and those that are not, was less than one year. Concentration of Credit Risk The counterparties to the Company’s forward contracts consist of a number of investment grade major international financial institutions. The Company could be exposed to losses in the event of nonperformance by the counterparties. However, the credit ratings and the concentration of risk in these financial institutions are monitored on a continuous basis and present no significant credit risk to the Company. |
Leases
Leases | 9 Months Ended |
Sep. 30, 2022 | |
Leases [Abstract] | |
Leases | LEASES Total rental expense for the nine months ended September 30, 2022 and 2021, was $34.9 million and $33.6 million, respectively, and is classified within Cost of goods sold and Selling and administrative expenses within the Condensed and Consolidated Statements of Comprehensive Income. Rental expense related to short-term leases, variable lease payments or other leases or lease components not included within the ROU asset or lease liability totaled $7.0 million and $6.0 million, respectively, for the nine months ended September 30, 2022 and 2021. No material lease costs have been capitalized on the Condensed and Consolidated Balance Sheets as of September 30, 2022 or December 31, 2021. As a lessee, the Company categorizes its leases into two general categories: real estate leases and equipment leases. Amounts included within the Condensed and Consolidated Balance Sheets related to the Company’s ROU asset and lease liability were as follows: September 30, 2022 December 31, 2021 In millions Balance Sheet classification Real estate Equipment Total Real estate Equipment Total ROU asset Other noncurrent assets $ 70.9 $ 28.4 $ 99.3 $ 58.2 $ 31.7 $ 89.9 Lease liability - current Accrued expenses and other current liabilities 17.5 13.4 30.9 15.5 13.6 29.1 Lease liability - noncurrent Other noncurrent liabilities 56.6 15.0 71.6 45.1 18.2 63.3 Other information: Weighted-average remaining term (years) 5.9 2.5 6.5 2.8 Weighted-average discount rate 3.4 % 1.9 % 3.4 % 2.1 % The following table summarizes additional information related to the Company’s leases for the nine months ended September 30: 2022 2021 In millions Real estate Equipment Total Real estate Equipment Total Cash paid for amounts included in the measurement of lease liabilities $ 15.3 $ 12.6 $ 27.9 $ 14.7 $ 12.9 $ 27.6 ROU assets obtained in exchange for new lease liabilities 31.3 8.6 39.9 12.0 8.8 20.8 The Company frequently enters into both real estate and equipment leases in the normal course of business. While there have been lease agreements entered into that have not yet commenced as of September 30, 2022, none of these leases provide new rights or obligations to the Company that are material individually or in the aggregate. Future Repayments Scheduled minimum lease payments required under non-cancellable operating leases for both the real estate and equipment lease portfolios for the remainder of 2022 and for each of the years thereafter as of September 30, 2022, are as follows: In millions Remainder of 2022 2023 2024 2025 2026 Thereafter Total Real estate leases $ 4.9 $ 19.3 $ 15.4 $ 13.0 $ 9.9 $ 20.0 $ 82.5 Equipment leases 3.9 12.9 7.9 3.6 0.6 0.1 29.0 Total $ 8.8 $ 32.2 $ 23.3 $ 16.6 $ 10.5 $ 20.1 $ 111.5 The difference between the total undiscounted minimum lease payments and the combined current and noncurrent lease liabilities as of September 30, 2022, is due to imputed interest of $9.0 million. |
Defined Benefit Plans
Defined Benefit Plans | 9 Months Ended |
Sep. 30, 2022 | |
Retirement Benefits, Description [Abstract] | |
Defined Benefit Plans | DEFINED BENEFIT PLANS The Company sponsors several U.S. and non-U.S. defined benefit pension plans to eligible employees and retirees. The noncontributory defined benefit pension plans covering non-collectively bargained U.S. employees provide benefits on an average pay formula while most plans for collectively bargained U.S. employees provide benefits on a flat dollar benefit formula. The non-U.S. pension plans generally provide benefits based on earnings and years of service. The Company also maintains other supplemental plans for officers and other key employees. The components of the Company’s Net periodic pension benefit cost (income) for the three and nine months ended September 30 were as follows: U.S. Three months ended Nine months ended In millions 2022 2021 2022 2021 Service cost $ 1.7 $ 1.6 $ 4.6 $ 5.0 Interest cost 2.1 1.7 6.1 5.1 Expected return on plan assets (3.3) (3.6) (10.1) (10.5) Administrative costs and other 0.2 0.3 0.8 0.9 Net amortization of: Prior service costs — 0.1 0.1 0.2 Plan net actuarial losses 0.3 0.8 0.8 2.6 Net periodic pension benefit cost $ 1.0 $ 0.9 $ 2.3 $ 3.3 Non-U.S. Three months ended Nine months ended In millions 2022 2021 2022 2021 Service cost $ 0.4 $ 0.6 $ 1.1 $ 1.7 Interest cost 1.8 1.3 5.4 3.8 Expected return on plan assets (3.9) (3.4) (11.7) (10.3) Administrative costs and other 0.4 0.4 1.2 1.4 Net amortization of: Prior service costs — — 0.1 0.1 Plan net actuarial losses 0.2 0.4 0.6 1.1 Net periodic pension benefit income $ (1.1) $ (0.7) $ (3.3) $ (2.2) Service cost is recorded in Cost of goods sold and Selling and administrative expenses, while the remaining components of Net periodic pension benefit cost (income) are recorded in Other income, net within the Condensed and Consolidated Statements of Comprehensive Income. Employer contributions were not material during the nine months ended September 30, 2022 and 2021. Contributions of approximately $5 million are e xpected during the remainder of 2022. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | FAIR VALUE MEASUREMENTS Fair value is defined as the exchange price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Fair value measurements are based on a framework that utilizes the inputs market participants use to determine the fair value of an asset or liability and establishes a fair value hierarchy to prioritize those inputs. The fair value hierarchy is comprised of three levels that are described below: • 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. The fair value hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Observable inputs are obtained from independent sources and can be validated by a third party, whereas unobservable inputs reflect assumptions regarding what a third party would use in pricing an asset or liability based on the best information available under the circumstances. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Assets and liabilities measured at fair value at September 30, 2022, were as follows: Fair value measurements Total 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 $ — $ 19.1 $ — $ 19.1 Total asset recurring fair value measurements $ — $ 19.1 $ — $ 19.1 Liabilities: Deferred compensation and other retirement plans $ — $ 19.2 $ — $ 19.2 Total liability recurring fair value measurements $ — $ 19.2 $ — $ 19.2 Financial instruments not carried at fair value Total debt $ — $ 2,064.2 $ — $ 2,064.2 Total financial instruments not carried at fair value $ — $ 2,064.2 $ — $ 2,064.2 Assets and liabilities measured at fair value at December 31, 2021, were as follows: Fair value measurements Total 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 $ — $ 24.5 $ — $ 24.5 Total asset recurring fair value measurements $ — $ 24.5 $ — $ 24.5 Liabilities: Deferred compensation and other retirement plans $ — $ 25.9 $ — $ 25.9 Total liability recurring fair value measurements $ — $ 25.9 $ — $ 25.9 Financial instruments not carried at fair value Total debt $ — $ 1,510.4 $ — $ 1,510.4 Total financial instruments not carried at fair value $ — $ 1,510.4 $ — $ 1,510.4 The Company determines the fair value of its financial assets and liabilities using the following methodologies: • 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. • 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 2032. The fair value of these debt instruments is obtained based on observable market prices quoted on public exchanges for similar instruments. The methodologies used by the Company to determine the fair value of its financial assets and liabilities at September 30, 2022, are the same as those used at December 31, 2021. The carrying values of Cash and cash equivalents, Accounts and notes receivable, net, Accounts payable and Accrued expenses and other current liabilities are a reasonable estimate of their fair value due to the short-term nature of these instruments. The Company also had investments in debt and equity securities without readily determinable fair values of $41.6 million and $35.8 million as of September 30, 2022 and December 31, 2021, respectively, which are classified as Other noncurrent assets within the Condensed and Consolidated Balance Sheets. These investments are considered to be nonrecurring fair value measurements, and thus, are not included in the fair value tables above. |
Equity
Equity | 9 Months Ended |
Sep. 30, 2022 | |
Stockholders' Equity Note [Abstract] | |
Equity | EQUITY The changes in the components of Equity for the nine months ended September 30, 2022, were as follows: Allegion plc shareholders' equity Ordinary shares In millions, except per share amounts Total equity Amount Shares Capital in excess of par value Retained earnings Accumulated other comprehensive loss Noncontrolling Balance at December 31, 2021 $ 762.4 $ 0.9 88.2 $ — $ 952.6 $ (194.4) $ 3.3 Net earnings 93.1 — — — 93.0 — 0.1 Other comprehensive loss, net (21.0) — — — — (21.0) — Repurchase of ordinary shares (61.0) — (0.5) (7.5) (53.5) — — Share-based compensation activity 7.5 — 0.1 7.5 — — — Dividends to ordinary shareholders ($0.41 per share) (36.0) — — — (36.0) — — Balance at March 31, 2022 745.0 0.9 87.8 — 956.1 (215.4) 3.4 Net earnings 115.2 — — — 115.1 — 0.1 Other comprehensive loss, net (49.8) — — — — (49.2) (0.6) Share-based compensation activity 5.4 — — 5.4 — — — Dividends to noncontrolling interests (0.1) — — — — — (0.1) Dividends to ordinary shareholders ($0.41 per share) (36.0) — — — (36.0) — — Balance at June 30, 2022 779.7 0.9 87.8 5.4 1,035.2 (264.6) 2.8 Net earnings 114.6 — — — 114.6 — — Other comprehensive loss, net (68.3) — — — — (67.9) (0.4) Share-based compensation activity 3.8 — — 3.8 — — — Dividends to noncontrolling interests (0.1) — — — — — (0.1) Dividends to ordinary shareholders ($0.41 per share) (36.1) — — — (36.1) — — Balance at September 30, 2022 $ 793.6 $ 0.9 87.8 $ 9.2 $ 1,113.7 $ (332.5) $ 2.3 The changes in the components of Equity for the nine months ended September 30, 2021, were as follows: Allegion plc shareholders' equity Ordinary shares In millions, except per share amounts Total equity Amount Shares Capital in excess of par value Retained earnings Accumulated other comprehensive loss Noncontrolling Balance at December 31, 2020 $ 832.6 $ 0.9 91.2 $ — $ 985.6 $ (157.1) $ 3.2 Net earnings 108.2 — — — 108.0 — 0.2 Other comprehensive loss, net (32.0) — — — — (32.0) — Repurchase of ordinary shares (149.7) — (1.3) (4.4) (145.3) — — Share-based compensation activity 4.4 — 0.1 4.4 — — — Dividends to ordinary shareholders ($0.36 per share) (32.5) — — — (32.5) — — Other — — — — 0.1 — (0.1) Balance at March 31, 2021 731.0 0.9 90.0 — 915.9 (189.1) 3.3 Net earnings 118.8 — — — 118.7 — 0.1 Other comprehensive income, net 10.5 — — — — 10.4 0.1 Repurchase of ordinary shares (50.1) — (0.4) (9.7) (40.4) — — Share-based compensation activity 9.7 — 0.2 9.7 — — — Dividends to noncontrolling interests (0.1) — — — — — (0.1) Dividends to ordinary shareholders ($0.36 per share) (32.4) — — — (32.4) — — Balance at June 30, 2021 787.4 0.9 89.8 — 961.8 (178.7) 3.4 Net earnings 143.6 — — — 143.5 — 0.1 Other comprehensive loss, net (22.4) — — — — (22.3) (0.1) Repurchase of ordinary shares (12.9) — (0.1) (1.4) (11.5) — — Share-based compensation activity 4.2 — — 4.2 — — — Dividends to ordinary shareholders ($0.36 per share) (32.3) — — — (32.3) — — Balance at September 30, 2021 $ 867.6 $ 0.9 89.7 $ 2.8 $ 1,061.5 $ (201.0) $ 3.4 In February 2020, the Company’s Board of Directors approved a share repurchase authorization of up to, and including, $800 million of the Company’s ordinary shares (the "2020 Share Repurchase Authorization"). During the nine months ended September 30, 2022 and 2021, the Company paid $61.0 million and $212.7 million, respectively, to repurchase the ordinary shares reflected in the tables above on the open market under the 2020 Share Repurchase Authorization. As of September 30, 2022, the Company has approximately $140.5 million still available to be repurchased under the 2020 Share Repurchase Authorization. Accumulated Other Comprehensive Loss The changes in Accumulated other comprehensive loss for the nine months ended September 30, 2022, were as follows: In millions Cash flow hedges Pension and OPEB items Foreign currency items Total December 31, 2021 $ 0.9 $ (96.0) $ (99.3) $ (194.4) Other comprehensive income (loss) before reclassifications 8.8 10.0 (159.8) (141.0) Amounts reclassified from accumulated other comprehensive loss (a) (0.1) 1.3 1.6 2.8 Tax (expense) benefit (0.6) 0.7 — 0.1 September 30, 2022 $ 9.0 $ (84.0) $ (257.5) $ (332.5) The changes in Accumulated other comprehensive loss for the nine months ended September 30, 2021, were as follows: In millions Cash flow hedges Pension and OPEB items Foreign currency items Total December 31, 2020 $ (0.9) $ (120.3) $ (35.9) $ (157.1) Other comprehensive income (loss) before reclassifications 2.8 1.5 (50.8) (46.5) Amounts reclassified from accumulated other comprehensive loss (a) (0.2) 3.5 — 3.3 Tax expense (0.7) — — (0.7) September 30, 2021 $ 1.0 $ (115.3) $ (86.7) $ (201.0) (a) Amounts reclassified from Accumulated other comprehensive loss and recognized into Net earnings related to cash flow hedges are recorded in Cost of goods sold and Interest expense. Amounts reclassified from Accumulated other comprehensive loss and recognized into Net earnings related to pension and postretirement benefits other than pensions ("OPEB") items are record ed in Other income, net. Amounts reclassified from Accumulated other comprehensive loss and recognized into Net earnings related to foreign currency items are record |
Share-Based Compensation
Share-Based Compensation | 9 Months Ended |
Sep. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Share-Based Compensation | SHARE-BASED COMPENSATION The Company’s share-based compensation plans include programs for stock options, restricted stock units ("RSUs"), performance stock units ("PSUs") and deferred compensation. Share-based compensation expense is included in Cost of goods sold and Selling and administrative expenses within the Condensed and Consolidated Statements of Comprehensive Income. The following table summarizes the expenses recognized for the three and nine months ended September 30: Three months ended Nine months ended In millions 2022 2021 2022 2021 Stock options $ 0.4 $ 0.5 $ 3.8 $ 3.7 RSUs 2.2 2.2 11.7 10.1 PSUs 1.5 0.5 4.5 4.4 Deferred compensation (0.5) (0.1) (3.6) 1.3 Pre-tax expense 3.6 3.1 16.4 19.5 Tax benefit (0.4) (0.4) (1.3) (2.4) After-tax expense $ 3.2 $ 2.7 $ 15.1 $ 17.1 Stock Options / RSUs Eligible participants may receive (i) stock options, (ii) RSUs or (iii) a combination of both stock options and RSUs. Grants issued during the nine months ended September 30 were as follows: 2022 2021 Number Weighted- Number Weighted- Stock options 234,809 $ 28.24 179,743 $ 24.99 RSUs 176,003 $ 112.07 130,126 $ 112.21 The weighted-average fair value of the stock options granted is determined using the Black-Scholes option-pricing model. The following weighted-average assumptions were used during the nine months ended September 30: 2022 2021 Dividend yield 1.46 % 1.32 % Volatility 27.12 % 27.14 % Risk-free rate of return 2.13 % 0.75 % Expected life (years) 6.0 6.0 Volatility is based on the Company’s historic volatility. The risk-free rate of return is based on the yield curve of a zero-coupon U.S. Treasury bond on the date the award is granted with a maturity equal to the expected term of the award. The expected life of the Company’s stock option awards is derived from the simplified approach based on the weighted-average time to vest and the remaining contractual term and represents the period of time that awards are expected to be outstanding. Performance Stock During the nine months ended September 30, 2022, the Company granted PSUs with a maximum award level of approximately 0.1 million shares. In February 2020, 2021 and 2022, the Company’s Compensation Committee granted PSUs that were earned based 50% upon a performance condition, measured at each reporting period by earnings per share ("EPS") performance in relation to pre-established targets set by the Compensation Committee, and 50% upon a market condition, measured by the Company’s relative total shareholder return against the S&P 400 Capital Goods Index over a three-year performance period. The fair values of the market conditions are estimated using a Monte Carlo Simulation approach in a risk-neutral framework to model future stock price movements based upon historical volatility, risk-free rates of return and correlation matrix. Deferred Compensation Prior to 2019, the Company allowed key employees to defer a portion of their eligible granted PSUs and/or compensation into a number of investment choices including its ordinary share equivalents. Any amounts invested in ordinary share equivalents will be settled in ordinary shares of the Company at the time of distribution. |
Restructuring Activities
Restructuring Activities | 9 Months Ended |
Sep. 30, 2022 | |
Restructuring Charges [Abstract] | |
Restructuring Activities | RESTRUCTURING ACTIVITIES During the nine months ended September 30, 2022 and 2021, the Company recorded $3.1 million and $3.8 million, respectively, of expenses associated with restructuring activities, which are included within Cost of goods sold and Selling and administrative expenses within the Condensed and Consolidated Statements of Comprehensive Income. The changes in the restructuring reserve during the nine months ended September 30, 2022, were as follows: In millions Total December 31, 2021 $ 0.4 Additions, net of reversals 3.1 Cash payments (3.2) Currency translation (0.1) September 30, 2022 $ 0.2 The Company also incurred other non-qualified restructuring charges of $1.6 million during the nine months ended September 30, 2022, which represent costs that are directly attributable to restructuring activities, but that do not fall into the severance, exit or disposal category. These expenses are included in Cost of goods sold within the Condensed and Consolidated Statements of Comprehensive Income. |
Other Income, Net
Other Income, Net | 9 Months Ended |
Sep. 30, 2022 | |
Other Income and Expenses [Abstract] | |
Other, Net | OTHER INCOME, NET The components of Other income, net for the three and nine months ended September 30 were as follows: Three months ended Nine months ended In millions 2022 2021 2022 2021 Interest income $ (0.4) $ (0.3) $ (0.6) $ (0.4) Foreign currency exchange loss — 0.8 1.9 2.0 Earnings from equity method investments, net — (6.3) (0.6) (6.0) Net periodic pension and postretirement benefit income, less service cost (2.1) (2.1) (7.1) (6.0) Other 1.0 (6.8) (0.7) (11.0) Other income, net $ (1.5) $ (14.7) $ (7.1) $ (21.4) Other income, net for the three and nine months ended September 30, 2021, included a gain of $6.4 million from the sale of the Company's interest in an equity method affiliate, which is included within Earnings from equity method investments, net in the table above. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXESThe effective income tax rates for the three months ended September 30, 2022 and 2021, were 14.3% and (2.0)%, respectively. The increase in the effective tax rate compared to 2021 is primarily due to the favorable resolutions of uncertain tax positions and other discrete tax benefits in 2021 that have not recurred in 2022, changes in jurisdictional tax rates, the mix of income earned in higher tax rate jurisdictions and the unfavorable tax impact from the divestiture of Milre.The effective income tax rates for the nine months ended September 30, 2022 and 2021, were 13.7% and 7.2%, respectively. The increase in the effective tax rate compared to 2021 is primarily due to the favorable resolutions of uncertain tax positions and other discrete tax benefits in 2021 that have not recurred in 2022, changes in jurisdictional tax rates, the mix of income earned in higher tax rate jurisdictions and the unfavorable tax impact from the divestiture of Milre. |
Earnings Per Share (EPS)
Earnings Per Share (EPS) | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Earnings Per Share (EPS) | EARNINGS PER SHARE (EPS) Basic EPS is calculated by dividing Net earnings attributable to Allegion plc by the weighted-average number of ordinary shares outstanding for the applicable period. Diluted EPS is calculated after adjusting the denominator of the basic EPS calculation for the effect of all potentially dilutive ordinary shares, which in the Company’s case, includes shares issuable under share-based compensation plans. The following table summarizes the weighted-average number of ordinary shares outstanding for basic and diluted EPS calculations for the three and nine months ended September 30: Three months ended Nine months ended In millions 2022 2021 2022 2021 Weighted-average number of basic shares 87.9 89.7 88.0 90.1 Shares issuable under share-based compensation plans 0.3 0.6 0.4 0.6 Weighted-average number of diluted shares 88.2 90.3 88.4 90.7 At September 30, 2022, 0.5 million stock options were excluded from the computation of weighted-average diluted shares outstanding because the effect of including these shares would have been anti-dilutive. |
Net Revenues
Net Revenues | 9 Months Ended |
Sep. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Net Revenues | NET REVENUES The following tables show the Company’s Net revenues related to both tangible product sales and services for the three and nine months ended September 30, 2022 and 2021, respectively, disaggregated by business segment. Net revenues are shown by tangible product sales and services, as contract terms, conditions and economic factors affecting the nature, amount, timing and uncertainty around revenue recognition and cash flows are substantially similar within each of these two principal revenue streams: Three months ended September 30, 2022 Nine months ended September 30, 2022 In millions Allegion Americas Allegion International Total Allegion Americas Allegion International Total Net revenues Products $ 714.6 $ 156.8 $ 871.4 $ 1,834.0 $ 519.5 $ 2,353.5 Services 32.6 9.7 42.3 33.7 23.2 56.9 Total Net revenues $ 747.2 $ 166.5 $ 913.7 $ 1,867.7 $ 542.7 $ 2,410.4 Three months ended September 30, 2021 Nine months ended September 30, 2021 In millions Allegion Americas Allegion International Total Allegion Americas Allegion International Total Net revenues Products $ 524.1 $ 185.5 $ 709.6 $ 1,571.2 $ 563.9 $ 2,135.1 Services 0.3 7.1 7.4 1.5 21.6 23.1 Total Net revenues $ 524.4 $ 192.6 $ 717.0 $ 1,572.7 $ 585.5 $ 2,158.2 Historically, approximately 99% of the Company's consolidated Net revenues have involved contracts with a single performance obligation, the transfer of control of a product or bundle of products to a customer. However, the percentage of Net revenues from services is expected to increase with the recent acquisition of the Access Technologies business. As of September 30, 2022, neither the contract assets related to the Company’s right to consideration for work completed but not billed, nor the contract liabilities associated with contract revenue were material. The Company does not have any costs to obtain or fulfill a contract that are capitalized on its Condensed and Consolidated Balance Sheets. During the three and nine months ended September 30, 2022 and 2021, no adjustments related to performance obligations satisfied in previous periods were recorded. |
Business Segment Information
Business Segment Information | 9 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
Business Segment Information | BUSINESS SEGMENT INFORMATION The Company classifies its business into the following two reportable segments based on industry and market focus: Allegion Americas and Allegion International. The Company largely evaluates performance based on Segment operating income and Segment operating margins. 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 resource allocation, performance reviews and compensation. For these reasons, the Company believes that Segment operating income represents the most relevant measure of segment profit and loss. The Company’s chief operating decision maker may exclude certain charges or gains, such as corporate charges and other special charges, from Operating income to arrive at a Segment operating income that is a more meaningful measure of profit and loss upon which to base operating decisions. The Company defines Segment operating margin as Segment operating income as a percentage of the segment’s Net revenues. A summary of operations by reportable segment for the three and nine months ended September 30 was as follows: Three months ended Nine months ended In millions 2022 2021 2022 2021 Net revenues Allegion Americas $ 747.2 $ 524.4 $ 1,867.7 $ 1,572.7 Allegion International 166.5 192.6 542.7 585.5 Total $ 913.7 $ 717.0 $ 2,410.4 $ 2,158.2 Segment operating income Allegion Americas $ 178.4 $ 133.7 $ 455.9 $ 419.5 Allegion International 14.9 20.5 45.9 54.0 Total 193.3 154.2 501.8 473.5 Reconciliation to Operating income Unallocated corporate expense (30.4) (15.8) (74.8) (58.4) Operating income 162.9 138.4 427.0 415.1 Reconciliation to earnings before income taxes Interest expense 23.1 12.3 52.2 37.0 Loss on divestitures 7.6 — 7.6 — Other income, net (1.5) (14.7) (7.1) (21.4) Earnings before income taxes $ 133.7 $ 140.8 $ 374.3 $ 399.5 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES The Company is involved in various litigation, claims and administrative proceedings, including those related to environmental and product warranty matters. Amounts recorded for identified contingent liabilities are estimates, which are reviewed periodically and adjusted to reflect additional information when it becomes available. Subject to the uncertainties inherent in estimating future costs for contingent liabilities, except as expressly set forth in this note, management believes that any liability which may result from these legal matters would not have a material adverse effect on the financial condition, results of operations, liquidity or cash flows of the Company. Environmental Matters As of September 30, 2022 and December 31, 2021, the Company has recorded reserves for environmental matters of $24.2 million and $16.4 million, respectively. The total reserve at September 30, 2022 and December 31, 2021, included $14.0 million and $4.3 million, respectively, related to remediation of sites previously disposed by the Company. Environmental reserves are classified as Accrued expenses and other current liabilities or Other noncurrent liabilities within the Condensed and Consolidated Balance Sheets based on the timing of their expected future payment. The Company’s total current environmental reserve at September 30, 2022 and December 31, 2021, was $4.1 million and $3.7 million, respectively, and the remainder is classified as noncurrent. During the nine months ended September 30, 2022 and 2021, the Company incurred $2.9 million and $0.9 million, respectively, of expenses for environmental remediation at sites presently or formerly owned or leased by the Company. Given the evolving nature of environmental laws, regulations and technology, the ultimate cost of future compliance is uncertain. Warranty Liability The changes in the standard product warranty liability for the nine months ended September 30 were as follows: In millions 2022 2021 Balance at beginning of period $ 17.7 $ 16.5 Reductions for payments (6.9) (7.5) Accruals for warranties issued during the current period 6.4 9.1 Acquisitions 1.7 — Currency translation (1.0) (0.2) Balance at end of period $ 17.9 $ 17.9 Standard product warranty liabilities are classified as either Accrued expenses and other current liabilities or Other noncurrent liabilities within the Condensed and Consolidated Balance Sheets based on the timing of the expected future payments. |
Recent Accounting Pronounceme_2
Recent Accounting Pronouncements (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Recent Accounting Pronouncements | RECENT ACCOUNTING PRONOUNCEMENTS Recently Adopted Accounting Pronouncements: In October 2021, the FASB issued ASU No. 2021-08, "Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers." This ASU requires contract assets and contract liabilities (e.g. deferred revenue) acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC 606, "Revenue from Contracts with Customers". Generally, this new guidance will result in the acquirer recognizing contract assets and contract liabilities at the same amounts recorded by the acquiree. Historically, such amounts were recognized by the acquirer at fair value in purchase accounting. This ASU is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption is permitted, including in interim periods, for any financial statements that have not yet been issued. The Company elected to early adopt ASU 2021-08 on January 1, 2022, and as such, applied this new guidance to the Access Technologies business combination (see Note 3), which did not result in a material impact to the Condensed and Consolidated Financial Statements for the three and nine months ended September 30, 2022. |
Acquisitions (Tables)
Acquisitions (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Business Combinations [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table summarizes the preliminary allocation of the purchase price to assets acquired and liabilities assumed as of the acquisition date: In millions Accounts receivable, net $ 78.2 Inventories 50.3 Other current assets 0.3 Property, plant and equipment 15.2 Goodwill 616.0 Intangible assets 222.5 Other noncurrent assets 13.7 Accounts payable (22.4) Accrued expenses and other current liabilities (43.1) Other noncurrent liabilities (7.6) Total net assets acquired and liabilities assumed $ 923.1 |
Schedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination | Intangible assets recognized as of the acquisition date were comprised of the following: In millions Value (in millions) Useful life (in years) Completed technologies/patents $ 6.2 5 Customer relationships 137.4 23 Trade names (finite-lived) 56.8 5 Backlog revenue 22.1 2 |
Business Acquisition, Pro Forma Information | The following unaudited pro forma financial information for the three and nine months ended September 30, 2022 and 2021, reflects the consolidated results of operations of the Company as if this acquisition had taken place on January 1, 2021: Three months ended Nine months ended In millions 2022 2021 2022 2021 Net revenues $ 913.7 $ 802.7 $ 2,587.5 $ 2,407.6 Net earnings attributable to Allegion plc 135.5 140.7 340.1 330.2 The unaudited pro forma financial information is presented for informational purposes only and does not purport to be indicative of results of operations that would have occurred had the pro forma events taken place on the date indicated or the future consolidated results of operations of the combined company. The unaudited pro forma financial information has been calculated after applying the Company's accounting policies and adjusting the historical financial results to reflect additional items directly attributable to the acquisition that would have been incurred assuming the acquisition had occurred on January 1, 2021. Adjustments to historical financial information for the three and nine months ended September 30 include: Three months ended Nine months ended In millions 2022 2021 2022 2021 Intangible asset amortization expense, net of tax $ 1.7 $ (5.0) $ (10.1) $ (18.3) Interest expense, net of tax 1.6 (6.2) (10.7) (21.4) Acquisition and integration costs, net of tax 13.5 — 19.4 (19.4) Inventory fair value step-up amortization, net of tax 4.1 — 4.1 (4.1) The following financial information reflects the Net revenues and Loss before income taxes generated by the Access Technologies business since the acquisition date included within the Company's Condensed and Consolidated Statements of Comprehensive Income: In millions Three and nine months ended September 30, 2022 Net revenues $ 88.7 Loss before income taxes (3.3) |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Inventory, Net [Abstract] | |
Major classes of inventory | The major classes of inventories were as follows: In millions September 30, December 31, Raw materials $ 193.1 $ 144.4 Work-in-process 44.9 42.2 Finished goods 239.9 193.8 Total $ 477.9 $ 380.4 |
Goodwill (Tables)
Goodwill (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Changes in carrying amount of goodwill | The changes in the carrying amount of goodwill for the nine months ended September 30, 2022, were as follows: In millions Allegion Americas Allegion International Total December 31, 2021 (gross) $ 501.2 $ 876.2 $ 1,377.4 Accumulated impairment — (573.6) (573.6) December 31, 2021 (net) 501.2 302.6 803.8 Acquisitions and adjustments 616.0 — 616.0 Currency translation (6.1) (40.2) (46.3) September 30, 2022 (net) $ 1,111.1 $ 262.4 $ 1,373.5 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets, net of Goodwill | The gross amount of the Company’s intangible assets and related accumulated amortization were as follows: September 30, 2022 December 31, 2021 In millions Gross carrying amount Accumulated amortization Net carrying amount Gross carrying amount Accumulated amortization Net carrying amount Completed technologies/patents $ 60.7 $ (29.0) $ 31.7 $ 57.9 $ (28.8) $ 29.1 Customer relationships 488.9 (139.3) 349.6 395.9 (141.6) 254.3 Trade names (finite-lived) 128.9 (54.1) 74.8 84.0 (56.9) 27.1 Other 66.8 (28.9) 37.9 45.8 (22.7) 23.1 Total finite-lived intangible assets 745.3 $ (251.3) 494.0 583.6 $ (250.0) 333.6 Trade names (indefinite-lived) 105.7 105.7 113.9 113.9 Total $ 851.0 $ 599.7 $ 697.5 $ 447.5 |
Debt and Credit Facilities (Tab
Debt and Credit Facilities (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | Long-term debt and other borrowings consisted of the following: In millions September 30, December 31, 2021 Term Facility $ 240.6 $ 250.0 2021 Revolving Facility 199.0 — 3.200% Senior Notes due 2024 400.0 400.0 3.550% Senior Notes due 2027 400.0 400.0 3.500% Senior Notes due 2029 400.0 400.0 5.411% Senior Notes due 2032 600.0 — Other debt 0.2 0.3 Total borrowings outstanding 2,239.8 1,450.3 Discounts and debt issuance costs, net (12.7) (8.2) Total debt 2,227.1 1,442.1 Less current portion of long-term debt 12.6 12.6 Total long-term debt $ 2,214.5 $ 1,429.5 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Leases [Abstract] | |
Lessee, Operating Lease Asset and Liability, and Other Information | Amounts included within the Condensed and Consolidated Balance Sheets related to the Company’s ROU asset and lease liability were as follows: September 30, 2022 December 31, 2021 In millions Balance Sheet classification Real estate Equipment Total Real estate Equipment Total ROU asset Other noncurrent assets $ 70.9 $ 28.4 $ 99.3 $ 58.2 $ 31.7 $ 89.9 Lease liability - current Accrued expenses and other current liabilities 17.5 13.4 30.9 15.5 13.6 29.1 Lease liability - noncurrent Other noncurrent liabilities 56.6 15.0 71.6 45.1 18.2 63.3 Other information: Weighted-average remaining term (years) 5.9 2.5 6.5 2.8 Weighted-average discount rate 3.4 % 1.9 % 3.4 % 2.1 % |
Lease, Cost | The following table summarizes additional information related to the Company’s leases for the nine months ended September 30: 2022 2021 In millions Real estate Equipment Total Real estate Equipment Total Cash paid for amounts included in the measurement of lease liabilities $ 15.3 $ 12.6 $ 27.9 $ 14.7 $ 12.9 $ 27.6 ROU assets obtained in exchange for new lease liabilities 31.3 8.6 39.9 12.0 8.8 20.8 |
Scheduled minimum lease payments under non-cancellable operating leases | Scheduled minimum lease payments required under non-cancellable operating leases for both the real estate and equipment lease portfolios for the remainder of 2022 and for each of the years thereafter as of September 30, 2022, are as follows: In millions Remainder of 2022 2023 2024 2025 2026 Thereafter Total Real estate leases $ 4.9 $ 19.3 $ 15.4 $ 13.0 $ 9.9 $ 20.0 $ 82.5 Equipment leases 3.9 12.9 7.9 3.6 0.6 0.1 29.0 Total $ 8.8 $ 32.2 $ 23.3 $ 16.6 $ 10.5 $ 20.1 $ 111.5 |
Defined Benefit Plans (Tables)
Defined Benefit Plans (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Retirement Benefits, Description [Abstract] | |
Schedule of Net Periodic Benefit Cost | The components of the Company’s Net periodic pension benefit cost (income) for the three and nine months ended September 30 were as follows: U.S. Three months ended Nine months ended In millions 2022 2021 2022 2021 Service cost $ 1.7 $ 1.6 $ 4.6 $ 5.0 Interest cost 2.1 1.7 6.1 5.1 Expected return on plan assets (3.3) (3.6) (10.1) (10.5) Administrative costs and other 0.2 0.3 0.8 0.9 Net amortization of: Prior service costs — 0.1 0.1 0.2 Plan net actuarial losses 0.3 0.8 0.8 2.6 Net periodic pension benefit cost $ 1.0 $ 0.9 $ 2.3 $ 3.3 Non-U.S. Three months ended Nine months ended In millions 2022 2021 2022 2021 Service cost $ 0.4 $ 0.6 $ 1.1 $ 1.7 Interest cost 1.8 1.3 5.4 3.8 Expected return on plan assets (3.9) (3.4) (11.7) (10.3) Administrative costs and other 0.4 0.4 1.2 1.4 Net amortization of: Prior service costs — — 0.1 0.1 Plan net actuarial losses 0.2 0.4 0.6 1.1 Net periodic pension benefit income $ (1.1) $ (0.7) $ (3.3) $ (2.2) |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements, Recurring and Nonrecurring | Assets and liabilities measured at fair value at September 30, 2022, were as follows: Fair value measurements Total 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 $ — $ 19.1 $ — $ 19.1 Total asset recurring fair value measurements $ — $ 19.1 $ — $ 19.1 Liabilities: Deferred compensation and other retirement plans $ — $ 19.2 $ — $ 19.2 Total liability recurring fair value measurements $ — $ 19.2 $ — $ 19.2 Financial instruments not carried at fair value Total debt $ — $ 2,064.2 $ — $ 2,064.2 Total financial instruments not carried at fair value $ — $ 2,064.2 $ — $ 2,064.2 Assets and liabilities measured at fair value at December 31, 2021, were as follows: Fair value measurements Total 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 $ — $ 24.5 $ — $ 24.5 Total asset recurring fair value measurements $ — $ 24.5 $ — $ 24.5 Liabilities: Deferred compensation and other retirement plans $ — $ 25.9 $ — $ 25.9 Total liability recurring fair value measurements $ — $ 25.9 $ — $ 25.9 Financial instruments not carried at fair value Total debt $ — $ 1,510.4 $ — $ 1,510.4 Total financial instruments not carried at fair value $ — $ 1,510.4 $ — $ 1,510.4 |
Equity (Tables)
Equity (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Stockholders' Equity Note [Abstract] | |
Components of Equity | The changes in the components of Equity for the nine months ended September 30, 2022, were as follows: Allegion plc shareholders' equity Ordinary shares In millions, except per share amounts Total equity Amount Shares Capital in excess of par value Retained earnings Accumulated other comprehensive loss Noncontrolling Balance at December 31, 2021 $ 762.4 $ 0.9 88.2 $ — $ 952.6 $ (194.4) $ 3.3 Net earnings 93.1 — — — 93.0 — 0.1 Other comprehensive loss, net (21.0) — — — — (21.0) — Repurchase of ordinary shares (61.0) — (0.5) (7.5) (53.5) — — Share-based compensation activity 7.5 — 0.1 7.5 — — — Dividends to ordinary shareholders ($0.41 per share) (36.0) — — — (36.0) — — Balance at March 31, 2022 745.0 0.9 87.8 — 956.1 (215.4) 3.4 Net earnings 115.2 — — — 115.1 — 0.1 Other comprehensive loss, net (49.8) — — — — (49.2) (0.6) Share-based compensation activity 5.4 — — 5.4 — — — Dividends to noncontrolling interests (0.1) — — — — — (0.1) Dividends to ordinary shareholders ($0.41 per share) (36.0) — — — (36.0) — — Balance at June 30, 2022 779.7 0.9 87.8 5.4 1,035.2 (264.6) 2.8 Net earnings 114.6 — — — 114.6 — — Other comprehensive loss, net (68.3) — — — — (67.9) (0.4) Share-based compensation activity 3.8 — — 3.8 — — — Dividends to noncontrolling interests (0.1) — — — — — (0.1) Dividends to ordinary shareholders ($0.41 per share) (36.1) — — — (36.1) — — Balance at September 30, 2022 $ 793.6 $ 0.9 87.8 $ 9.2 $ 1,113.7 $ (332.5) $ 2.3 The changes in the components of Equity for the nine months ended September 30, 2021, were as follows: Allegion plc shareholders' equity Ordinary shares In millions, except per share amounts Total equity Amount Shares Capital in excess of par value Retained earnings Accumulated other comprehensive loss Noncontrolling Balance at December 31, 2020 $ 832.6 $ 0.9 91.2 $ — $ 985.6 $ (157.1) $ 3.2 Net earnings 108.2 — — — 108.0 — 0.2 Other comprehensive loss, net (32.0) — — — — (32.0) — Repurchase of ordinary shares (149.7) — (1.3) (4.4) (145.3) — — Share-based compensation activity 4.4 — 0.1 4.4 — — — Dividends to ordinary shareholders ($0.36 per share) (32.5) — — — (32.5) — — Other — — — — 0.1 — (0.1) Balance at March 31, 2021 731.0 0.9 90.0 — 915.9 (189.1) 3.3 Net earnings 118.8 — — — 118.7 — 0.1 Other comprehensive income, net 10.5 — — — — 10.4 0.1 Repurchase of ordinary shares (50.1) — (0.4) (9.7) (40.4) — — Share-based compensation activity 9.7 — 0.2 9.7 — — — Dividends to noncontrolling interests (0.1) — — — — — (0.1) Dividends to ordinary shareholders ($0.36 per share) (32.4) — — — (32.4) — — Balance at June 30, 2021 787.4 0.9 89.8 — 961.8 (178.7) 3.4 Net earnings 143.6 — — — 143.5 — 0.1 Other comprehensive loss, net (22.4) — — — — (22.3) (0.1) Repurchase of ordinary shares (12.9) — (0.1) (1.4) (11.5) — — Share-based compensation activity 4.2 — — 4.2 — — — Dividends to ordinary shareholders ($0.36 per share) (32.3) — — — (32.3) — — Balance at September 30, 2021 $ 867.6 $ 0.9 89.7 $ 2.8 $ 1,061.5 $ (201.0) $ 3.4 |
Accumulated Other Comprehensive Loss | The changes in Accumulated other comprehensive loss for the nine months ended September 30, 2022, were as follows: In millions Cash flow hedges Pension and OPEB items Foreign currency items Total December 31, 2021 $ 0.9 $ (96.0) $ (99.3) $ (194.4) Other comprehensive income (loss) before reclassifications 8.8 10.0 (159.8) (141.0) Amounts reclassified from accumulated other comprehensive loss (a) (0.1) 1.3 1.6 2.8 Tax (expense) benefit (0.6) 0.7 — 0.1 September 30, 2022 $ 9.0 $ (84.0) $ (257.5) $ (332.5) The changes in Accumulated other comprehensive loss for the nine months ended September 30, 2021, were as follows: In millions Cash flow hedges Pension and OPEB items Foreign currency items Total December 31, 2020 $ (0.9) $ (120.3) $ (35.9) $ (157.1) Other comprehensive income (loss) before reclassifications 2.8 1.5 (50.8) (46.5) Amounts reclassified from accumulated other comprehensive loss (a) (0.2) 3.5 — 3.3 Tax expense (0.7) — — (0.7) September 30, 2021 $ 1.0 $ (115.3) $ (86.7) $ (201.0) (a) Amounts reclassified from Accumulated other comprehensive loss and recognized into Net earnings related to cash flow hedges are recorded in Cost of goods sold and Interest expense. Amounts reclassified from Accumulated other comprehensive loss and recognized into Net earnings related to pension and postretirement benefits other than pensions ("OPEB") items are record ed in Other income, net. Amounts reclassified from Accumulated other comprehensive loss and recognized into Net earnings related to foreign currency items are record |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Share-Based Compensation Expense | The following table summarizes the expenses recognized for the three and nine months ended September 30: Three months ended Nine months ended In millions 2022 2021 2022 2021 Stock options $ 0.4 $ 0.5 $ 3.8 $ 3.7 RSUs 2.2 2.2 11.7 10.1 PSUs 1.5 0.5 4.5 4.4 Deferred compensation (0.5) (0.1) (3.6) 1.3 Pre-tax expense 3.6 3.1 16.4 19.5 Tax benefit (0.4) (0.4) (1.3) (2.4) After-tax expense $ 3.2 $ 2.7 $ 15.1 $ 17.1 |
Grants of Stock Options and RSUs | Grants issued during the nine months ended September 30 were as follows: 2022 2021 Number Weighted- Number Weighted- Stock options 234,809 $ 28.24 179,743 $ 24.99 RSUs 176,003 $ 112.07 130,126 $ 112.21 |
Stock Options Fair Value Assumptions | The following weighted-average assumptions were used during the nine months ended September 30: 2022 2021 Dividend yield 1.46 % 1.32 % Volatility 27.12 % 27.14 % Risk-free rate of return 2.13 % 0.75 % Expected life (years) 6.0 6.0 |
Restructuring Activities (Table
Restructuring Activities (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Restructuring Charges [Abstract] | |
Schedule of Changes in Restructuring Reserve | The changes in the restructuring reserve during the nine months ended September 30, 2022, were as follows: In millions Total December 31, 2021 $ 0.4 Additions, net of reversals 3.1 Cash payments (3.2) Currency translation (0.1) September 30, 2022 $ 0.2 |
Other Income, Net (Tables)
Other Income, Net (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Other Income and Expenses [Abstract] | |
Other Income, Net | The components of Other income, net for the three and nine months ended September 30 were as follows: Three months ended Nine months ended In millions 2022 2021 2022 2021 Interest income $ (0.4) $ (0.3) $ (0.6) $ (0.4) Foreign currency exchange loss — 0.8 1.9 2.0 Earnings from equity method investments, net — (6.3) (0.6) (6.0) Net periodic pension and postretirement benefit income, less service cost (2.1) (2.1) (7.1) (6.0) Other 1.0 (6.8) (0.7) (11.0) Other income, net $ (1.5) $ (14.7) $ (7.1) $ (21.4) Other income, net for the three and nine months ended September 30, 2021, included a gain of $6.4 million from the sale of the Company's interest in an equity method affiliate, which is included within Earnings from equity method investments, net in the table above. |
Earnings Per Share (EPS) (Table
Earnings Per Share (EPS) (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share Basic and Diluted Shares | The following table summarizes the weighted-average number of ordinary shares outstanding for basic and diluted EPS calculations for the three and nine months ended September 30: Three months ended Nine months ended In millions 2022 2021 2022 2021 Weighted-average number of basic shares 87.9 89.7 88.0 90.1 Shares issuable under share-based compensation plans 0.3 0.6 0.4 0.6 Weighted-average number of diluted shares 88.2 90.3 88.4 90.7 |
Net Revenues (Tables)
Net Revenues (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The following tables show the Company’s Net revenues related to both tangible product sales and services for the three and nine months ended September 30, 2022 and 2021, respectively, disaggregated by business segment. Net revenues are shown by tangible product sales and services, as contract terms, conditions and economic factors affecting the nature, amount, timing and uncertainty around revenue recognition and cash flows are substantially similar within each of these two principal revenue streams: Three months ended September 30, 2022 Nine months ended September 30, 2022 In millions Allegion Americas Allegion International Total Allegion Americas Allegion International Total Net revenues Products $ 714.6 $ 156.8 $ 871.4 $ 1,834.0 $ 519.5 $ 2,353.5 Services 32.6 9.7 42.3 33.7 23.2 56.9 Total Net revenues $ 747.2 $ 166.5 $ 913.7 $ 1,867.7 $ 542.7 $ 2,410.4 Three months ended September 30, 2021 Nine months ended September 30, 2021 In millions Allegion Americas Allegion International Total Allegion Americas Allegion International Total Net revenues Products $ 524.1 $ 185.5 $ 709.6 $ 1,571.2 $ 563.9 $ 2,135.1 Services 0.3 7.1 7.4 1.5 21.6 23.1 Total Net revenues $ 524.4 $ 192.6 $ 717.0 $ 1,572.7 $ 585.5 $ 2,158.2 |
Business Segment Information (T
Business Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
Summary of Operations by Reportable Segments | A summary of operations by reportable segment for the three and nine months ended September 30 was as follows: Three months ended Nine months ended In millions 2022 2021 2022 2021 Net revenues Allegion Americas $ 747.2 $ 524.4 $ 1,867.7 $ 1,572.7 Allegion International 166.5 192.6 542.7 585.5 Total $ 913.7 $ 717.0 $ 2,410.4 $ 2,158.2 Segment operating income Allegion Americas $ 178.4 $ 133.7 $ 455.9 $ 419.5 Allegion International 14.9 20.5 45.9 54.0 Total 193.3 154.2 501.8 473.5 Reconciliation to Operating income Unallocated corporate expense (30.4) (15.8) (74.8) (58.4) Operating income 162.9 138.4 427.0 415.1 Reconciliation to earnings before income taxes Interest expense 23.1 12.3 52.2 37.0 Loss on divestitures 7.6 — 7.6 — Other income, net (1.5) (14.7) (7.1) (21.4) Earnings before income taxes $ 133.7 $ 140.8 $ 374.3 $ 399.5 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Product Warranty Liability | The changes in the standard product warranty liability for the nine months ended September 30 were as follows: In millions 2022 2021 Balance at beginning of period $ 17.7 $ 16.5 Reductions for payments (6.9) (7.5) Accruals for warranties issued during the current period 6.4 9.1 Acquisitions 1.7 — Currency translation (1.0) (0.2) Balance at end of period $ 17.9 $ 17.9 |
Acquisitions (Recognized Identi
Acquisitions (Recognized Identified Assets Acquired and Liabilities Assumed) (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Jul. 05, 2022 | Dec. 31, 2021 |
Business Acquisition [Line Items] | |||
Goodwill | $ 1,373.5 | $ 803.8 | |
Access Technologies | |||
Business Acquisition [Line Items] | |||
Accounts receivable, net | $ 78.2 | ||
Inventories | 50.3 | ||
Other current assets | 0.3 | ||
Property, plant and equipment | 15.2 | ||
Goodwill | 616 | ||
Intangible assets | 222.5 | ||
Other noncurrent assets | 13.7 | ||
Accounts payable | (22.4) | ||
Accrued expenses and other current liabilities | (43.1) | ||
Other noncurrent liabilities | (7.6) | ||
Total net assets acquired and liabilities assumed | $ 923.1 |
Acquisitions (Finite-Lived Inta
Acquisitions (Finite-Lived Intangible Assets Acquired as Part of Business Combination) (Details) - Access Technologies $ in Millions | Jul. 05, 2022 USD ($) |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Intangible assets | $ 222.5 |
Completed technologies/patents | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Intangible assets | $ 6.2 |
Finite-lived intangible assets acquired, weighted-average useful life | 5 years |
Customer relationships | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Intangible assets | $ 137.4 |
Finite-lived intangible assets acquired, weighted-average useful life | 23 years |
Trade names (finite-lived) | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Intangible assets | $ 56.8 |
Finite-lived intangible assets acquired, weighted-average useful life | 5 years |
Backlog revenue | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Intangible assets | $ 22.1 |
Finite-lived intangible assets acquired, weighted-average useful life | 2 years |
Acquisitions (Pro Forma Informa
Acquisitions (Pro Forma Information) (Details) - Access Technologies - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Pro forma Net revenues | $ 913.7 | $ 802.7 | $ 2,587.5 | $ 2,407.6 |
Pro forma Net earnings attributable to Allegion plc | 135.5 | 140.7 | 340.1 | 330.2 |
Net revenues of acquiree since acquisition date | 88.7 | 88.7 | ||
Net earnings or (loss) before income taxes of acquiree since acquisition date | (3.3) | (3.3) | ||
Intangible Asset Amortization Expense, Net of Tax Adjustment | ||||
Pro forma Net earnings attributable to Allegion plc | 1.7 | (5) | (10.1) | (18.3) |
Interest Expense, Net of Tax Adjustment | ||||
Pro forma Net earnings attributable to Allegion plc | 1.6 | (6.2) | (10.7) | (21.4) |
Acquisition and Integration Costs, Net of Tax Adjustment | ||||
Pro forma Net earnings attributable to Allegion plc | 13.5 | 0 | 19.4 | (19.4) |
Inventory Fair Value Step-Up Amortization, Net of Tax Adjustment | ||||
Pro forma Net earnings attributable to Allegion plc | $ 4.1 | $ 0 | $ 4.1 | $ (4.1) |
Acquisitions - Narrative (Detai
Acquisitions - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Jul. 05, 2022 | Dec. 31, 2022 | Sep. 30, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | |
Amortization of intangible assets | $ 32.6 | $ 25.2 | |||
Access Technologies | |||||
Business Combination, Consideration Transferred | $ 923.1 | ||||
Amortization of intangible assets | 9 | ||||
Inventory Fair Value Step-Up Adjustment | 5.5 | ||||
Acquisition and integration related expenses | $ 18.6 | 27.4 | |||
Net earnings or (loss) before income taxes of acquiree since acquisition date | $ (3.3) | $ (3.3) | |||
Access Technologies | Forecast | |||||
Acquisition and integration related expenses | $ 5 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Inventory, Net [Abstract] | ||
Raw materials | $ 193.1 | $ 144.4 |
Work-in-process | 44.9 | 42.2 |
Finished goods | 239.9 | 193.8 |
Total inventories | $ 477.9 | $ 380.4 |
Goodwill (Details)
Goodwill (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Goodwill [Roll Forward] | |
Goodwill, gross | $ 1,377.4 |
Accumulated impairment | (573.6) |
Goodwill, net beginning balance | 803.8 |
Goodwill, Acquired During Period | 616 |
Currency translation | (46.3) |
Goodwill, net ending balance | 1,373.5 |
Allegion Americas | |
Goodwill [Roll Forward] | |
Goodwill, gross | 501.2 |
Accumulated impairment | 0 |
Goodwill, net beginning balance | 501.2 |
Goodwill, Acquired During Period | 616 |
Currency translation | (6.1) |
Goodwill, net ending balance | 1,111.1 |
Allegion International | |
Goodwill [Roll Forward] | |
Goodwill, gross | 876.2 |
Accumulated impairment | (573.6) |
Goodwill, net beginning balance | 302.6 |
Goodwill, Acquired During Period | 0 |
Currency translation | (40.2) |
Goodwill, net ending balance | $ 262.4 |
Intangible Assets (Schedule of
Intangible Assets (Schedule of Intangible Assets, net of Goodwill) (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Schedule of Acquired Finite-Lived and Indefinite-Lived Intangible Assets by Major Class [Line Items] | ||
Finite-lived intangible assets, gross | $ 745.3 | $ 583.6 |
Finite-lived intangible assets, accumulated amortization | (251.3) | (250) |
Finite-lived intangible assets, net | 494 | 333.6 |
Intangible assets, gross | 851 | 697.5 |
Intangible assets, net | 599.7 | 447.5 |
Completed technologies/patents | ||
Schedule of Acquired Finite-Lived and Indefinite-Lived Intangible Assets by Major Class [Line Items] | ||
Finite-lived intangible assets, gross | 60.7 | 57.9 |
Finite-lived intangible assets, accumulated amortization | (29) | (28.8) |
Finite-lived intangible assets, net | 31.7 | 29.1 |
Customer relationships | ||
Schedule of Acquired Finite-Lived and Indefinite-Lived Intangible Assets by Major Class [Line Items] | ||
Finite-lived intangible assets, gross | 488.9 | 395.9 |
Finite-lived intangible assets, accumulated amortization | (139.3) | (141.6) |
Finite-lived intangible assets, net | 349.6 | 254.3 |
Trade names (finite-lived) | ||
Schedule of Acquired Finite-Lived and Indefinite-Lived Intangible Assets by Major Class [Line Items] | ||
Finite-lived intangible assets, gross | 128.9 | 84 |
Finite-lived intangible assets, accumulated amortization | (54.1) | (56.9) |
Finite-lived intangible assets, net | 74.8 | 27.1 |
Other | ||
Schedule of Acquired Finite-Lived and Indefinite-Lived Intangible Assets by Major Class [Line Items] | ||
Finite-lived intangible assets, gross | 66.8 | 45.8 |
Finite-lived intangible assets, accumulated amortization | (28.9) | (22.7) |
Finite-lived intangible assets, net | 37.9 | 23.1 |
Trade names (finite-lived) | ||
Schedule of Acquired Finite-Lived and Indefinite-Lived Intangible Assets by Major Class [Line Items] | ||
Indefinite-lived intangible assets | $ 105.7 | $ 113.9 |
Intangible Assets (Narrative) (
Intangible Assets (Narrative) (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Amortization of intangible assets | $ 32.6 | $ 25.2 |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||
Intangible amortization expense, year one | 44.5 | |
Intangible amortization expense, year two | 56.4 | |
Intangible amortization expense, year three | 51.7 | |
Intangible amortization expense, year four | 46.1 | |
Intangible amortization expense year five | 43.1 | |
Access Technologies | ||
Amortization of intangible assets | $ 9 |
Divestitures (Details)
Divestitures (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Loss on divestitures | $ 7.6 | $ 0 | $ 7.6 | $ 0 |
Milre [Member] | ||||
Loss on divestitures | 7.6 | 7.6 | ||
Translation Adjustment Functional to Reporting Currency, Gain (Loss), Reclassified to Earnings, Net of Tax | $ (1.6) | $ (1.6) |
Debt and Credit Facilities (Sum
Debt and Credit Facilities (Summary of Debt) (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Debt Instrument [Line Items] | ||
Total borrowings outstanding | $ 2,239.8 | $ 1,450.3 |
Discounts and debt issuance costs, net | (12.7) | (8.2) |
Total debt | 2,227.1 | 1,442.1 |
Less current portion of long-term debt | 12.6 | 12.6 |
Total long-term debt | 2,214.5 | 1,429.5 |
Other debt | ||
Debt Instrument [Line Items] | ||
Total borrowings outstanding | $ 0.2 | 0.3 |
Senior Notes | 3.200% Senior Note due 2024 | ||
Debt Instrument [Line Items] | ||
Stated interest rate | 3.20% | |
Total borrowings outstanding | $ 400 | 400 |
Senior Notes | 3.550% Senior Note due 2027 | ||
Debt Instrument [Line Items] | ||
Stated interest rate | 3.55% | |
Total borrowings outstanding | $ 400 | 400 |
Senior Notes | 3.500% Senior Notes Due 2029 | ||
Debt Instrument [Line Items] | ||
Stated interest rate | 3.50% | |
Total borrowings outstanding | $ 400 | 400 |
Senior Notes | 5.411% Senior Notes Due 2032 | ||
Debt Instrument [Line Items] | ||
Stated interest rate | 5.411% | |
Total borrowings outstanding | $ 600 | 0 |
Line of Credit | Term Loan | ||
Debt Instrument [Line Items] | ||
Total borrowings outstanding | 240.6 | 250 |
Line of Credit | Revolving Facility | ||
Debt Instrument [Line Items] | ||
Total borrowings outstanding | $ 199 | $ 0 |
Debt and Credit Facilities (Nar
Debt and Credit Facilities (Narrative) (Details) - USD ($) $ in Millions | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Debt Instrument [Line Items] | |||
Total borrowings outstanding | $ 2,239.8 | $ 1,450.3 | |
Proceeds from revolving facility | 340 | $ 0 | |
Repayments of revolving facility | $ (141) | $ 0 | |
Line of Credit | |||
Debt Instrument [Line Items] | |||
Interest rate | 4.241% | ||
Line of Credit | Bloomberg Short-Term Bank Yield Index | |||
Debt Instrument [Line Items] | |||
Variable rate | 1.125% | ||
Line of Credit | Term Loan | |||
Debt Instrument [Line Items] | |||
Principal amount | $ 250 | ||
Total borrowings outstanding | 240.6 | 250 | |
Repayment of debt | 9.4 | ||
Line of Credit | Revolving Facility | |||
Debt Instrument [Line Items] | |||
Total borrowings outstanding | 199 | 0 | |
Line of credit facility, borrowing capacity | 500 | ||
Line of Credit Facility, Capacity available for issuance of letters of credit | 100 | ||
Letters of credit outstanding amount | $ 7.6 | ||
Line of Credit | 3/31/22 through 3/31/25 | Term Loan | |||
Debt Instrument [Line Items] | |||
Repayment terms | 1.25 | ||
Line of Credit | 6/30/25 through 11/18/26 | Term Loan | |||
Debt Instrument [Line Items] | |||
Repayment terms | 2.5 | ||
Line of Credit | Minimum | |||
Debt Instrument [Line Items] | |||
Variable rate | 0.875% | ||
Line of Credit | Maximum | |||
Debt Instrument [Line Items] | |||
Variable rate | 1.375% | ||
Senior Notes | 5.411% Senior Notes Due 2032 | |||
Debt Instrument [Line Items] | |||
Principal amount | $ 600 | ||
Total borrowings outstanding | $ 600 | 0 | |
Stated interest rate | 5.411% | ||
Debt issuance costs | $ 5.9 | ||
Debt term | 10 years | ||
Interest expense | $ 4.3 | ||
Senior Notes | 3.200% Senior Note due 2024 | |||
Debt Instrument [Line Items] | |||
Principal amount | 400 | ||
Total borrowings outstanding | $ 400 | 400 | |
Stated interest rate | 3.20% | ||
Senior Notes | 3.550% Senior Note due 2027 | |||
Debt Instrument [Line Items] | |||
Principal amount | $ 400 | ||
Total borrowings outstanding | $ 400 | 400 | |
Stated interest rate | 3.55% | ||
Senior Notes | 3.500% Senior Notes Due 2029 | |||
Debt Instrument [Line Items] | |||
Principal amount | $ 400 | ||
Total borrowings outstanding | $ 400 | $ 400 | |
Stated interest rate | 3.50% |
Financial Instruments (Narrativ
Financial Instruments (Narrative) (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Currency derivatives | ||
Derivative [Line Items] | ||
Derivatives, notional amount | $ 168.1 | $ 164.9 |
Leases - Narrative (Details)
Leases - Narrative (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Leases [Abstract] | ||
Total rental expense | $ 34.9 | $ 33.6 |
Rental expense related to short-term leases, variable lease payments, or other leases not included in lease liability | 7 | $ 6 |
Imputed interest | $ 9 |
Leases - Operating Lease Asset
Leases - Operating Lease Asset and Liability, and Other Information (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Lessee, Lease, Description | ||
ROU Asset | $ 99.3 | $ 89.9 |
Lease liability - current | 30.9 | 29.1 |
Lease liability - noncurrent | 71.6 | 63.3 |
Real estate | ||
Lessee, Lease, Description | ||
ROU Asset | 70.9 | 58.2 |
Lease liability - current | 17.5 | 15.5 |
Lease liability - noncurrent | $ 56.6 | $ 45.1 |
Weighted-average remaining term (years) | 5 years 10 months 24 days | 6 years 6 months |
Weighted-average discount rate | 3.40% | 3.40% |
Equipment | ||
Lessee, Lease, Description | ||
ROU Asset | $ 28.4 | $ 31.7 |
Lease liability - current | 13.4 | 13.6 |
Lease liability - noncurrent | $ 15 | $ 18.2 |
Weighted-average remaining term (years) | 2 years 6 months | 2 years 9 months 18 days |
Weighted-average discount rate | 1.90% | 2.10% |
Leases - Operating Leases, Addi
Leases - Operating Leases, Additional Information (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Lessee, Lease, Description | ||
Cash paid for amounts included in the measurement of lease liabilities | $ 27.9 | $ 27.6 |
ROU assets obtained in exchange for new lease liabilities | 39.9 | 20.8 |
Real estate | ||
Lessee, Lease, Description | ||
Cash paid for amounts included in the measurement of lease liabilities | 15.3 | 14.7 |
ROU assets obtained in exchange for new lease liabilities | 31.3 | 12 |
Equipment | ||
Lessee, Lease, Description | ||
Cash paid for amounts included in the measurement of lease liabilities | 12.6 | 12.9 |
ROU assets obtained in exchange for new lease liabilities | $ 8.6 | $ 8.8 |
Leases - Operating Lease Liabil
Leases - Operating Lease Liability Maturity (Details) $ in Millions | Sep. 30, 2022 USD ($) |
Lessee, Lease, Description | |
Remainder of 2022 | $ 8.8 |
2023 | 32.2 |
2024 | 23.3 |
2025 | 16.6 |
2026 | 10.5 |
Thereafter | 20.1 |
Total | 111.5 |
Real estate | |
Lessee, Lease, Description | |
Remainder of 2022 | 4.9 |
2023 | 19.3 |
2024 | 15.4 |
2025 | 13 |
2026 | 9.9 |
Thereafter | 20 |
Total | 82.5 |
Equipment | |
Lessee, Lease, Description | |
Remainder of 2022 | 3.9 |
2023 | 12.9 |
2024 | 7.9 |
2025 | 3.6 |
2026 | 0.6 |
Thereafter | 0.1 |
Total | $ 29 |
Defined Benefit Plans (Componen
Defined Benefit Plans (Components of Net Periodic Pension Costs) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
U.S. | ||||
Service cost | $ 1.7 | $ 1.6 | $ 4.6 | $ 5 |
Interest cost | 2.1 | 1.7 | 6.1 | 5.1 |
Expected return on plan assets | (3.3) | (3.6) | (10.1) | (10.5) |
Administrative costs and other | 0.2 | 0.3 | 0.8 | 0.9 |
Prior service costs | 0 | 0.1 | 0.1 | 0.2 |
Plan net actuarial losses | 0.3 | 0.8 | 0.8 | 2.6 |
Net periodic pension benefit cost (income) | 1 | 0.9 | 2.3 | 3.3 |
Non-U.S. | ||||
Service cost | 0.4 | 0.6 | 1.1 | 1.7 |
Interest cost | 1.8 | 1.3 | 5.4 | 3.8 |
Expected return on plan assets | (3.9) | (3.4) | (11.7) | (10.3) |
Administrative costs and other | 0.4 | 0.4 | 1.2 | 1.4 |
Prior service costs | 0 | 0 | 0.1 | 0.1 |
Plan net actuarial losses | 0.2 | 0.4 | 0.6 | 1.1 |
Net periodic pension benefit cost (income) | $ (1.1) | $ (0.7) | $ (3.3) | $ (2.2) |
Defined Benefit Plans (Narrativ
Defined Benefit Plans (Narrative) (Details) $ in Millions | Sep. 30, 2022 USD ($) |
Retirement Benefits, Description [Abstract] | |
Employer contributions expected during the remainder of the year | $ 5 |
Fair Value Measurements (Tabl_2
Fair Value Measurements (Tables) (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Assets, fair value measurements [Abstract] | ||
Investments | $ 19.1 | $ 24.5 |
Total asset recurring fair value measurements | 19.1 | 24.5 |
Liabilities, fair value measurements [Abstract] | ||
Deferred compensation and other retirement plans | 19.2 | 25.9 |
Total liability recurring fair value measurements | 19.2 | 25.9 |
Fair Value Measurements, Nonrecurring Value Measurement [Abstract] | ||
Total debt | 2,064.2 | 1,510.4 |
Total financial instruments not carried at fair value | 2,064.2 | 1,510.4 |
Quoted prices in active markets for identical assets (Level 1) | ||
Assets, fair value measurements [Abstract] | ||
Investments | 0 | 0 |
Total asset recurring fair value measurements | 0 | 0 |
Liabilities, fair value measurements [Abstract] | ||
Deferred compensation and other retirement plans | 0 | 0 |
Total liability recurring fair value measurements | 0 | 0 |
Fair Value Measurements, Nonrecurring Value Measurement [Abstract] | ||
Total debt | 0 | 0 |
Total financial instruments not carried at fair value | 0 | 0 |
Significant other observable inputs (Level 2) | ||
Assets, fair value measurements [Abstract] | ||
Investments | 19.1 | 24.5 |
Total asset recurring fair value measurements | 19.1 | 24.5 |
Liabilities, fair value measurements [Abstract] | ||
Deferred compensation and other retirement plans | 19.2 | 25.9 |
Total liability recurring fair value measurements | 19.2 | 25.9 |
Fair Value Measurements, Nonrecurring Value Measurement [Abstract] | ||
Total debt | 2,064.2 | 1,510.4 |
Total financial instruments not carried at fair value | 2,064.2 | 1,510.4 |
Significant unobservable inputs (Level 3) | ||
Assets, fair value measurements [Abstract] | ||
Investments | 0 | 0 |
Total asset recurring fair value measurements | 0 | 0 |
Liabilities, fair value measurements [Abstract] | ||
Deferred compensation and other retirement plans | 0 | 0 |
Total liability recurring fair value measurements | 0 | 0 |
Fair Value Measurements, Nonrecurring Value Measurement [Abstract] | ||
Total debt | 0 | 0 |
Total financial instruments not carried at fair value | $ 0 | $ 0 |
Fair Value Measurements (Narrat
Fair Value Measurements (Narrative) (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Fair Value Disclosures [Abstract] | ||
Debt and equity investments without readily determinable fair values | $ 41.6 | $ 35.8 |
Equity (Components of Sharehold
Equity (Components of Shareholders' Equity Rollforward) (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Beginning balance | $ 779.7 | $ 745 | $ 762.4 | $ 787.4 | $ 731 | $ 832.6 | $ 762.4 | $ 832.6 |
Net earnings | 114.6 | 115.2 | 93.1 | 143.6 | 118.8 | 108.2 | 322.9 | 370.6 |
Other comprehensive income (loss), net of tax | (68.3) | (49.8) | (21) | (22.4) | 10.5 | (32) | ||
Repurchase of ordinary shares | (61) | (12.9) | (50.1) | (149.7) | (61) | (212.7) | ||
Share-based compensation activity | 3.8 | 5.4 | 7.5 | 4.2 | 9.7 | 4.4 | ||
Dividends to noncontrolling interests | (0.1) | (0.1) | (0.1) | |||||
Dividends to ordinary shareholders ($0.41 per share) | (36.1) | (36) | (36) | (32.3) | (32.4) | (32.5) | ||
Other | 0 | |||||||
Ending balance | $ 793.6 | $ 779.7 | $ 745 | $ 867.6 | $ 787.4 | $ 731 | 793.6 | 867.6 |
Dividends per share (in dollars per share) | $ 0.41 | $ 0.41 | $ 0.41 | $ 0.36 | $ 0.36 | $ 0.36 | ||
Ordinary shares | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Beginning balance | $ 0.9 | $ 0.9 | $ 0.9 | $ 0.9 | $ 0.9 | $ 0.9 | $ 0.9 | $ 0.9 |
Beginning balance (in shares) | 87.8 | 87.8 | 88.2 | 89.8 | 90 | 91.2 | 88.2 | 91.2 |
Repurchase of ordinary shares | $ 0 | $ 0 | $ 0 | $ 0 | ||||
Repurchase of ordinary shares (in shares) | (0.5) | (0.1) | (0.4) | (1.3) | ||||
Share-based compensation activity | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | ||
Share-based compensation activity, shares (in shares) | 0 | 0 | 0.1 | 0 | 0.2 | 0.1 | ||
Ending balance | $ 0.9 | $ 0.9 | $ 0.9 | $ 0.9 | $ 0.9 | $ 0.9 | $ 0.9 | $ 0.9 |
Ending balance (in shares) | 87.8 | 87.8 | 87.8 | 89.7 | 89.8 | 90 | 87.8 | 89.7 |
Capital in excess of par value | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Beginning balance | $ 5.4 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 |
Repurchase of ordinary shares | (7.5) | (1.4) | (9.7) | (4.4) | ||||
Share-based compensation activity | 3.8 | 5.4 | 7.5 | 4.2 | 9.7 | 4.4 | ||
Ending balance | 9.2 | 5.4 | 0 | 2.8 | 0 | 0 | 9.2 | 2.8 |
Retained earnings | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Beginning balance | 1,035.2 | 956.1 | 952.6 | 961.8 | 915.9 | 985.6 | 952.6 | 985.6 |
Net earnings | 114.6 | 115.1 | 93 | 143.5 | 118.7 | 108 | ||
Repurchase of ordinary shares | (53.5) | (11.5) | (40.4) | (145.3) | ||||
Dividends to ordinary shareholders ($0.41 per share) | (36.1) | (36) | (36) | (32.3) | (32.4) | (32.5) | ||
Other | (0.1) | |||||||
Ending balance | 1,113.7 | 1,035.2 | 956.1 | 1,061.5 | 961.8 | 915.9 | 1,113.7 | 1,061.5 |
Accumulated other comprehensive loss | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Beginning balance | (264.6) | (215.4) | (194.4) | (178.7) | (189.1) | (157.1) | (194.4) | (157.1) |
Other comprehensive income (loss), net of tax | (67.9) | (49.2) | (21) | (22.3) | 10.4 | (32) | ||
Ending balance | (332.5) | (264.6) | (215.4) | (201) | (178.7) | (189.1) | (332.5) | (201) |
Noncontrolling interests | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Beginning balance | 2.8 | 3.4 | 3.3 | 3.4 | 3.3 | 3.2 | 3.3 | 3.2 |
Net earnings | 0 | 0.1 | 0.1 | 0.1 | 0.1 | 0.2 | ||
Other comprehensive income (loss), net of tax | (0.4) | (0.6) | 0 | (0.1) | 0.1 | 0 | ||
Dividends to noncontrolling interests | (0.1) | (0.1) | (0.1) | |||||
Other | 0.1 | |||||||
Ending balance | $ 2.3 | $ 2.8 | $ 3.4 | $ 3.4 | $ 3.4 | $ 3.3 | $ 2.3 | $ 3.4 |
Equity (Schedule of Accumulated
Equity (Schedule of Accumulated Other Comprehensive Income (Loss)) (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Accumulated Other Comprehensive Loss Roll Forward | ||
Beginning balance | $ (194.4) | $ (157.1) |
Other comprehensive income (loss) before reclassifications | (141) | (46.5) |
Amounts reclassified from accumulated other comprehensive loss | 2.8 | 3.3 |
Tax (expense) benefit | 0.1 | (0.7) |
Ending balance | (332.5) | (201) |
Cash flow hedges | ||
Accumulated Other Comprehensive Loss Roll Forward | ||
Beginning balance | 0.9 | (0.9) |
Other comprehensive income (loss) before reclassifications | 8.8 | 2.8 |
Amounts reclassified from accumulated other comprehensive loss | (0.1) | (0.2) |
Tax (expense) benefit | (0.6) | (0.7) |
Ending balance | 9 | 1 |
Pension and OPEB items | ||
Accumulated Other Comprehensive Loss Roll Forward | ||
Beginning balance | (96) | (120.3) |
Other comprehensive income (loss) before reclassifications | 10 | 1.5 |
Amounts reclassified from accumulated other comprehensive loss | 1.3 | 3.5 |
Tax (expense) benefit | 0.7 | 0 |
Ending balance | (84) | (115.3) |
Foreign currency items | ||
Accumulated Other Comprehensive Loss Roll Forward | ||
Beginning balance | (99.3) | (35.9) |
Other comprehensive income (loss) before reclassifications | (159.8) | (50.8) |
Amounts reclassified from accumulated other comprehensive loss | 1.6 | 0 |
Tax (expense) benefit | 0 | 0 |
Ending balance | $ (257.5) | $ (86.7) |
Equity (Narrative) (Details)
Equity (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Mar. 31, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Equity, Class of Treasury Stock [Line Items] | ||||||
Payments for repurchase of ordinary shares | $ 61 | $ 12.9 | $ 50.1 | $ 149.7 | $ 61 | $ 212.7 |
Stock Repurchase Program, Remaining authorized repurchase amount | 140.5 | |||||
2020 Share Repurchase Authorization | ||||||
Equity, Class of Treasury Stock [Line Items] | ||||||
Authorized repurchase amount | $ 800 |
Share-Based Compensation (Share
Share-Based Compensation (Share-Based Compensation Expense) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Share based compensation expense (benefit) | $ 3.6 | $ 3.1 | $ 16.4 | $ 19.5 |
Tax benefit | (0.4) | (0.4) | (1.3) | (2.4) |
After-tax expense | 3.2 | 2.7 | 15.1 | 17.1 |
Stock options | ||||
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Share based compensation expense (benefit) | 0.4 | 0.5 | 3.8 | 3.7 |
Restricted Stock Units (RSUs) | ||||
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Share based compensation expense (benefit) | 2.2 | 2.2 | 11.7 | 10.1 |
Performance Share Units (PSUs) | ||||
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Share based compensation expense (benefit) | 1.5 | 0.5 | 4.5 | 4.4 |
Deferred compensation | ||||
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Share based compensation expense (benefit) | $ (0.5) | $ (0.1) | $ (3.6) | $ 1.3 |
Share-Based Compensation (Grant
Share-Based Compensation (Grants of Stock Options and RSUs) (Details) - $ / shares | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Stock options | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Equity awards, granted, in shares | 234,809 | 179,743 |
Weighted-average fair value per award, in dollars per share | $ 28.24 | $ 24.99 |
Restricted Stock Units (RSUs) | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Equity awards, granted, in shares | 176,003 | 130,126 |
Weighted-average fair value per award, in dollars per share | $ 112.07 | $ 112.21 |
Share-Based Compensation (Avera
Share-Based Compensation (Average Fair Value of Stock Options Granted, Assumptions) (Details) | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Share-Based Payment Arrangement [Abstract] | ||
Dividend yield | 1.46% | 1.32% |
Volatility | 27.12% | 27.14% |
Risk-free rate of return | 2.13% | 0.75% |
Expected life (years) | 6 years | 6 years |
Share-Based Compensation (Narra
Share-Based Compensation (Narrative) (Details) shares in Millions | 9 Months Ended |
Sep. 30, 2022 shares | |
Performance Share Units (PSUs) | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Maximum award level for eligible employees (in shares) | 0.1 |
Restructuring Activities (Sched
Restructuring Activities (Schedule of Changes in Restructuring Reserve) (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Restructuring Reserve [Roll Forward] | |
Restructuring reserve beginning balance | $ 0.4 |
Additions, net of reversals | 3.1 |
Cash payments | (3.2) |
Currency translation | (0.1) |
Restructuring reserve ending balance | $ 0.2 |
Restructuring Activities (Narra
Restructuring Activities (Narrative) (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Qualified restructuring | ||
Restructuring Cost and Reserve [Line Items] | ||
Expenses recorded associated with restructuring activities | $ 3.1 | $ 3.8 |
Nonqualified restructuring [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Expenses recorded associated with restructuring activities | $ 1.6 |
Other Income, Net (Details)
Other Income, Net (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Other Income and Expenses [Abstract] | ||||
Interest income | $ (0.4) | $ (0.3) | $ (0.6) | $ (0.4) |
Foreign currency exchange loss | 0 | 0.8 | 1.9 | 2 |
Earnings from equity method investments, net | 0 | (6.3) | (0.6) | (6) |
Net periodic pension and postretirement benefit income, less service cost | (2.1) | (2.1) | (7.1) | (6) |
Other | 1 | (6.8) | (0.7) | (11) |
Other income, net | $ (1.5) | $ (14.7) | $ (7.1) | $ (21.4) |
Other Income, Net (Narrative) (
Other Income, Net (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2021 | Sep. 30, 2021 | |
Other Income and Expenses [Abstract] | ||
Equity Method Investment, Realized Gain (Loss) on Disposal | $ 6.4 | $ 6.4 |
Income Taxes (Details)
Income Taxes (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | ||||
Effective income tax rate (percent) | 14.30% | (2.00%) | 13.70% | 7.20% |
Earnings Per Share (EPS) (Detai
Earnings Per Share (EPS) (Details) - shares shares in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Earnings Per Share [Abstract] | ||||
Weighted-average number of basic shares (in shares) | 87.9 | 89.7 | 88 | 90.1 |
Shares issuable under share-based compensation plans (in shares) | 0.3 | 0.6 | 0.4 | 0.6 |
Weighted-average number of diluted shares (in shares) | 88.2 | 90.3 | 88.4 | 90.7 |
Earnings Per Share (EPS) (Narra
Earnings Per Share (EPS) (Narrative) (Details) shares in Millions | 9 Months Ended |
Sep. 30, 2022 shares | |
Earnings Per Share [Abstract] | |
Antidilutive stock options excluded from computation of weighted-average diluted shares outstanding (in shares) | 0.5 |
Net Revenues (Details)
Net Revenues (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Disaggregation of Revenue [Line Items] | ||||
Net revenues | $ 913.7 | $ 717 | $ 2,410.4 | $ 2,158.2 |
Allegion Americas | Operating Segments | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenues | 747.2 | 524.4 | 1,867.7 | 1,572.7 |
Allegion International | Operating Segments | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenues | 166.5 | 192.6 | 542.7 | 585.5 |
Products | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenues | 871.4 | 709.6 | 2,353.5 | 2,135.1 |
Products | Allegion Americas | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenues | 714.6 | 524.1 | 1,834 | 1,571.2 |
Products | Allegion International | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenues | 156.8 | 185.5 | 519.5 | 563.9 |
Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenues | 42.3 | 7.4 | 56.9 | 23.1 |
Services | Allegion Americas | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenues | 32.6 | 0.3 | 33.7 | 1.5 |
Services | Allegion International | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenues | $ 9.7 | $ 7.1 | $ 23.2 | $ 21.6 |
Business Segment Information (S
Business Segment Information (Summary of Operations by Reportable Segments) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Segment Reporting Information [Line Items] | ||||
Net revenues | $ 913.7 | $ 717 | $ 2,410.4 | $ 2,158.2 |
Operating income (loss) | 162.9 | 138.4 | 427 | 415.1 |
Interest expense | 23.1 | 12.3 | 52.2 | 37 |
Loss on divestitures | 7.6 | 0 | 7.6 | 0 |
Other income, net | (1.5) | (14.7) | (7.1) | (21.4) |
Earnings before income taxes | 133.7 | 140.8 | 374.3 | 399.5 |
Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Operating income (loss) | 193.3 | 154.2 | 501.8 | 473.5 |
Operating Segments | Allegion Americas | ||||
Segment Reporting Information [Line Items] | ||||
Net revenues | 747.2 | 524.4 | 1,867.7 | 1,572.7 |
Operating income (loss) | 178.4 | 133.7 | 455.9 | 419.5 |
Operating Segments | Allegion International | ||||
Segment Reporting Information [Line Items] | ||||
Net revenues | 166.5 | 192.6 | 542.7 | 585.5 |
Operating income (loss) | 14.9 | 20.5 | 45.9 | 54 |
Corporate, Non-Segment | ||||
Segment Reporting Information [Line Items] | ||||
Operating income (loss) | $ (30.4) | $ (15.8) | $ (74.8) | $ (58.4) |
Business Segment Information Na
Business Segment Information Narrative (Details) | 9 Months Ended |
Sep. 30, 2022 segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 2 |
Commitments and Contingencies_2
Commitments and Contingencies (Narrative) (Details) - USD ($) $ in Millions | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Environmental Remediation Obligations [Line Items] | |||
Reserves for environmental matters | $ 24.2 | $ 16.4 | |
Reserves for environmental matters, current | 4.1 | 3.7 | |
Expense for environmental remediation | 2.9 | $ 0.9 | |
Segment, Discontinued Operations | |||
Environmental Remediation Obligations [Line Items] | |||
Reserves for environmental matters | $ 14 | $ 4.3 |
Commitments and Contingencies_3
Commitments and Contingencies (Product Warranty Liability) (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Movement in Standard Product Warranty Liability [Roll Forward] | ||
Balance at beginning of period | $ 17.7 | $ 16.5 |
Reductions for payments | (6.9) | (7.5) |
Accruals for warranties issued during the current period | 6.4 | 9.1 |
Acquisitions | 1.7 | 0 |
Currency translation | (1) | (0.2) |
Balance at end of period | $ 17.9 | $ 17.9 |