Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 31, 2023 | Apr. 20, 2023 | |
Class of Stock [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2023 | |
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 | 2023 | |
Document Fiscal Period Focus | Q1 | |
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 | 87,946,675 | |
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 | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Statement of Comprehensive Income [Abstract] | ||
Net revenues | $ 923 | $ 723.6 |
Cost of goods sold | 532 | 434.9 |
Selling and administrative expenses | 220 | 171.7 |
Operating income | 171 | 117 |
Interest expense | 23.6 | 11.9 |
Other income, net | (0.3) | (2.2) |
Earnings before income taxes | 147.7 | 107.3 |
Provision for income taxes | 24.1 | 14.2 |
Net earnings | 123.6 | 93.1 |
Less: Net earnings attributable to noncontrolling interests | 0.1 | 0.1 |
Net earnings attributable to Allegion plc | $ 123.5 | $ 93 |
Earnings per share attributable to Allegion plc ordinary shareholders: | ||
Basic net earnings (in dollars per share) | $ 1.40 | $ 1.05 |
Diluted net earnings (in dollars per share) | $ 1.40 | $ 1.05 |
Weighted-average shares outstanding: | ||
Basic (in shares) | 88 | 88.2 |
Diluted (in shares) | 88.4 | 88.6 |
Total comprehensive income | $ 133.9 | $ 72.1 |
Less: Total comprehensive income attributable to noncontrolling interests | 0.2 | 0.1 |
Total comprehensive income attributable to Allegion plc | $ 133.7 | $ 72 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
ASSETS | ||
Cash and cash equivalents | $ 292.8 | $ 288 |
Accounts and notes receivable, net | 445 | 395.6 |
Inventories | 472.7 | 479 |
Other current assets | 42.9 | 48.5 |
Assets held for sale | 0 | 3.5 |
Total current assets | 1,253.4 | 1,214.6 |
Property, plant and equipment, net | 319.6 | 308.7 |
Goodwill | 1,441.3 | 1,413.1 |
Intangible assets, net | 614.8 | 608.9 |
Other noncurrent assets | 495.3 | 445.9 |
Total assets | 4,124.4 | 3,991.2 |
LIABILITIES AND EQUITY | ||
Accounts payable | 277.8 | 280.7 |
Accrued expenses and other current liabilities | 378.1 | 410.3 |
Short-term borrowings and current maturities of long-term debt | 12.6 | 12.6 |
Total current liabilities | 668.5 | 703.6 |
Long-term debt | 2,109.3 | 2,081.9 |
Other noncurrent liabilities | 302 | 261.2 |
Total liabilities | 3,079.8 | 3,046.7 |
Equity: | ||
Ordinary shares, $0.01 par value (87,946,030 and 87,852,777 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively) | 0.9 | 0.9 |
Capital in excess of par value | 19.6 | 13.9 |
Retained earnings | 1,296.8 | 1,212.8 |
Accumulated other comprehensive loss | (275.6) | (285.8) |
Total Allegion plc shareholders’ equity | 1,041.7 | 941.8 |
Noncontrolling interests | 2.9 | 2.7 |
Total equity | 1,044.6 | 944.5 |
Total liabilities and equity | $ 4,124.4 | $ 3,991.2 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Ordinary shares, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Ordinary shares, issued (in shares) | 87,946,030 | 87,852,777 |
Ordinary shares, outstanding (in shares) | 87,946,030 | 87,852,777 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Cash flows from operating activities | ||
Net earnings | $ 123.6 | $ 93.1 |
Adjustments to arrive at net cash provided by operating activities: | ||
Depreciation and amortization | 28.3 | 20.4 |
Changes in assets and liabilities and other non-cash items | (82.9) | (93) |
Net cash provided by operating activities | 69 | 20.5 |
Cash flows from investing activities | ||
Capital expenditures | (22.3) | (8.7) |
Acquisition of businesses, net of cash acquired | (36.6) | 0 |
Other investing activities, net | 7.5 | 2.4 |
Net cash used in investing activities | (51.4) | (6.3) |
Cash flows from financing activities | ||
Debt repayments, net | (3.1) | (3.1) |
Proceeds from 2021 Revolving Facility | 30 | 0 |
Net proceeds from (repayments of) debt | 26.9 | (3.1) |
Dividends paid to ordinary shareholders | (39.4) | (35.8) |
Repurchase of ordinary shares | 0 | (61) |
Other financing activities, net | (2.9) | (5) |
Net cash used in financing activities | (15.4) | (104.9) |
Effect of exchange rate changes on cash and cash equivalents | 2.6 | (2.1) |
Net increase (decrease) in cash and cash equivalents | 4.8 | (92.8) |
Cash and cash equivalents - beginning of period | 288 | 397.9 |
Cash and cash equivalents - end of period | $ 292.8 | $ 305.1 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2023 | |
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 U.S. ("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, 2022. 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. |
Acquisitions
Acquisitions | 3 Months Ended |
Mar. 31, 2023 | |
Business Combinations [Abstract] | |
Acquisitions | ACQUISITIONS 2023 On January 3, 2023, the Company, through its subsidiaries, completed an acquisition of the assets of plano. group, a SaaS workforce management solution business based in Germany ("plano"), for initial cash consideration of $36.6 million. Additional consideration may be payable in future periods in the event plano achieves certain specified financial results. This acquisition was accounted for as a business combination, and plano has been incorporated into the Allegion International segment. The preliminary allocation of the purchase price, which includes initial cash consideration and the estimated fair value of contingent consideration, to assets acquired and liabilities assumed as of the acquisition date includes approximately $3 million of net working capital, approximately $17 million of finite-lived intangible assets and approximately $22 million of goodwill. The finite-lived intangible assets have a weighted average useful life of approximately 15 years. The valuation of assets acquired and liabilities assumed had not yet been finalized as of March 31, 2023, and finalization of the valuation during the measurement period could result in a change in the amounts recorded. The completion of the valuation will occur no later than one year from the acquisition date as required by GAAP. 2022 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") for preliminary cash consideration of $923.1 million. The Access Technologies business 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. This acquisition was accounted for as a business combination, and 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 $ 69.7 Inventories 50.8 Other current assets 0.3 Property, plant and equipment 14.6 Goodwill 634.1 Intangible assets 222.5 Other noncurrent assets 6.2 Accounts payable (20.8) Accrued expenses and other current liabilities (31.3) Other noncurrent liabilities (23.0) Total net assets acquired and liabilities assumed $ 923.1 The valuation of assets acquired and liabilities assumed had not yet been finalized as of March 31, 2023. Finalization of the valuation during the measurement period could result in a change in the amounts recorded for acquired tangible 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 as required by GAAP. Intangible assets recognized as of the acquisition date were comprised of the following: 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 the Access Technologies business acquisition is expected to be deductible for tax purposes. The following unaudited pro forma financial information for the three months ended March 31, 2023 and 2022, reflects the consolidated results of operations of the Company as if the Access Technologies business acquisition had taken place on January 1, 2021: In millions 2023 2022 Net revenues $ 923.0 $ 812.9 Net earnings attributable to Allegion plc 128.2 94.5 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 months ended March 31, 2023 and 2022, include: In millions 2023 2022 Intangible asset amortization expense, net of tax $ 1.6 $ (5.1) Interest expense, net of tax — (6.2) Acquisition and integration costs, net of tax 3.1 2.9 The following financial information reflects the Net revenues and Earnings before income taxes generated by the Access Technologies business included within the Company's Condensed and Consolidated Statement of Comprehensive Income for the three months ended March 31, 2023: In millions Net revenues $ 103.1 Earnings before income taxes 7.9 Intangible asset amortization of $6.8 million is included in the Earnings before income taxes amount presented above, while acquisition and integration related expenses and Interest expense related to acquisition financing are excluded from this amount. During the three months ended March 31, 2023 and 2022, the Company incurred $4.1 million and $4.8 million, respectively, of acquisition and integration related expenses, which are included in Selling and administrative expenses in the Condensed and Consolidated Statements of Comprehensive Income. |
Inventories
Inventories | 3 Months Ended |
Mar. 31, 2023 | |
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 March 31, December 31, Raw materials $ 225.7 $ 212.2 Work-in-process 46.0 41.7 Finished goods 201.0 225.1 Total $ 472.7 $ 479.0 |
Goodwill
Goodwill | 3 Months Ended |
Mar. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | GOODWILL The changes in the carrying amount of goodwill for the three months ended March 31, 2023, were as follows: In millions Allegion Americas Allegion International Total December 31, 2022 (gross) $ 1,128.1 $ 858.6 $ 1,986.7 Accumulated impairment — (573.6) (573.6) December 31, 2022 (net) 1,128.1 285.0 1,413.1 Acquisitions and adjustments 2.6 21.7 24.3 Currency translation 0.3 3.6 3.9 March 31, 2023 (net) $ 1,131.0 $ 310.3 $ 1,441.3 |
Intangible Assets
Intangible Assets | 3 Months Ended |
Mar. 31, 2023 | |
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: March 31, 2023 December 31, 2022 In millions Gross carrying amount Accumulated amortization Net carrying amount Gross carrying amount Accumulated amortization Net carrying amount Completed technologies/patents $ 66.1 $ (33.9) $ 32.2 $ 63.0 $ (32.1) $ 30.9 Customer relationships 528.7 (163.4) 365.3 515.0 (155.8) 359.2 Trade names (finite-lived) 140.6 (67.0) 73.6 135.7 (62.6) 73.1 Other 73.2 (40.4) 32.8 71.2 (35.9) 35.3 Total finite-lived intangible assets 808.6 $ (304.7) 503.9 784.9 $ (286.4) 498.5 Trade names (indefinite-lived) 110.9 110.9 110.4 110.4 Total $ 919.5 $ 614.8 $ 895.3 $ 608.9 |
Debt and Credit Facilities
Debt and Credit Facilities | 3 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
Debt and Credit Facilities | DEBT AND CREDIT FACILITIES Long-term debt and other borrowings consisted of the following: In millions March 31, December 31, 2021 Term Facility $ 234.4 $ 237.5 2021 Revolving Facility 99.0 69.0 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 600.0 600.0 Other debt 0.2 0.2 Total borrowings outstanding 2,133.6 2,106.7 Discounts and debt issuance costs, net (11.7) (12.2) Total debt 2,121.9 2,094.5 Less current portion of long-term debt 12.6 12.6 Total long-term debt $ 2,109.3 $ 2,081.9 Unsecured Credit Facilities The Company is party to an unsecured credit agreement consisting of a $250.0 million term loan facility (the “2021 Term Facility”), of which $234.4 million was outstanding at March 31, 2023, and a $500.0 million revolving credit facility (the “2021 Revolving Facility” and, together with the 2021 Term Facility, the “2021 Credit Facilities”), of which $99.0 million was outstanding at March 31, 2023. 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 amortizes 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 $3.1 million of principa l on the 2021 Term Facility during the three months ended March 31, 2023. 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. The Company had $13.4 million of letters of credit outstanding at March 31, 2023. Borrowings under the 2021 Revolving Facility may be repaid 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, equal to either: (i) a Bloomberg Short-Term Bank Yield Index ("BSBY") rate plus an 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 March 31, 2023, the Company's outstanding borrowings under the 2021 Credit Facilities accrued interest at BSBY plus a margin of 1.125%, resulting in an interest rate of 6.019%. 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 in the credit agreement. As of March 31, 2023, the Company was in compliance with all applicable covenants under the credit agreement. Senior Notes As of March 31, 2023, Allegion US Hold Co had $400.0 million outstanding of its 3.200% Senior Notes due 2024 (the “3.200% Senior Notes”), $400.0 million outstanding of its 3.550% Senior Notes due 2027 (the “3.550% Senior Notes”) and $600.0 million outstanding of its 5.411% Senior Notes due 2032 (the "5.411% Senior Notes"), and Allegion plc had $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 5.411% Senior Notes require semi-annual interest payments on January 1 and July 1 of each year, and will mature on July 1, 2032. The 3.200% Senior Notes, 3.550% Senior Notes and 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 3.200% Senior Notes, the 3.550% Senior Notes and 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. 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 | 3 Months Ended |
Mar. 31, 2023 | |
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 $181.1 million and $161.5 million at March 31, 2023 and December 31, 2022, 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 10), nor the balances included in Accumulated other comprehensive loss were material as of March 31, 2023 or December 31, 2022. Currency derivatives designated as cash flow hedges did not have a material impact to either Net earnings or Other comprehensive income during the three months ended March 31, 2023 and 2022, 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 March 31, 2023, 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 therefore, the Company believes they present no significant credit risk to the Company. |
Leases
Leases | 3 Months Ended |
Mar. 31, 2023 | |
Leases [Abstract] | |
Leases | LEASES Total rental expense for the three months ended March 31, 2023 and 2022, was $13.6 million and $10.7 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 right of use ("ROU") asset or lease liability totaled $3.2 million and $1.6 million, respectively, for the three months ended March 31, 2023 and 2022. No material lease costs have been capitalized on the Condensed and Consolidated Balance Sheets as of March 31, 2023 or December 31, 2022. 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 for both real estate and equipment leases were as follows: March 31, 2023 December 31, 2022 In millions Balance Sheet classification Real estate Equipment Total Real estate Equipment Total ROU asset Other noncurrent assets $ 106.2 $ 28.1 $ 134.3 $ 69.3 $ 28.8 $ 98.1 Lease liability - current Accrued expenses and other current liabilities 17.7 13.9 31.6 17.7 14.1 31.8 Lease liability - noncurrent Other noncurrent liabilities 91.9 14.3 106.2 54.8 14.7 69.5 Other information: Weighted-average remaining term (years) 12.2 2.4 5.9 2.4 Weighted-average discount rate 4.8 % 2.8 % 3.5 % 2.1 % The following table summarizes additional information related to the Company’s leases for the three months ended March 31: 2023 2022 In millions Real estate Equipment Total Real estate Equipment Total Cash paid for amounts included in the measurement of lease liabilities $ 5.9 $ 4.5 $ 10.4 $ 4.9 $ 4.2 $ 9.1 ROU assets obtained in exchange for new lease liabilities 41.4 1.9 43.3 18.8 1.4 20.2 During the three months ended March 31, 2023, the Company commenced a new long-term lease of a manufacturing facility in Mexico, which added an ROU asset and corresponding lease liability of approximately $37 million. 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 2023 and for each of the years thereafter as of March 31, 2023, are as follows: In millions Remainder of 2023 2024 2025 2026 2027 Thereafter Total Real estate leases $ 16.7 $ 18.6 $ 16.3 $ 13.0 $ 10.3 $ 87.7 $ 162.6 Equipment leases 11.3 10.6 5.5 1.3 0.2 0.1 29.0 Total $ 28.0 $ 29.2 $ 21.8 $ 14.3 $ 10.5 $ 87.8 $ 191.6 The difference between the total undiscounted minimum lease payments and the combined current and noncurrent lease liabilities as of March 31, 2023, is due to imputed interest of $53.8 million. |
Defined Benefit Plans
Defined Benefit Plans | 3 Months Ended |
Mar. 31, 2023 | |
Retirement Benefits, Description [Abstract] | |
Defined Benefit Plans | DEFINED BENEFIT PLANSThe Company sponsors several U.S. and non-U.S. defined benefit pension plans for eligible employees and retirees and 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 months ended March 31 were as follows: U.S. In millions 2023 2022 Service cost $ 0.2 $ 1.5 Interest cost 2.9 2.0 Expected return on plan assets (3.7) (3.4) Administrative costs and other 0.3 0.3 Net amortization of: Plan net actuarial losses 0.2 0.3 Net periodic pension benefit (income) cost $ (0.1) $ 0.7 Non-U.S. In millions 2023 2022 Service cost $ 0.4 $ 0.3 Interest cost 3.0 1.8 Expected return on plan assets (3.9) (3.9) Administrative costs and other 0.4 0.5 Net amortization of: Plan net actuarial losses 0.9 0.2 Net periodic pension benefit cost (income) $ 0.8 $ (1.1) 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 to the plans were not material during the three months ended March 31, 2023 or 2022. Employer contributions totaling approximately $12 million are e xpected to be made during the remainder of 2023. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2023 | |
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 as of March 31, 2023, 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 $ — $ 17.8 $ — $ 17.8 Total asset recurring fair value measurements $ — $ 17.8 $ — $ 17.8 Liabilities: Deferred compensation and other retirement plans $ — $ 17.8 $ — $ 17.8 Total liability recurring fair value measurements $ — $ 17.8 $ — $ 17.8 Financial instruments not carried at fair value Total debt $ — $ 2,058.1 $ — $ 2,058.1 Total financial instruments not carried at fair value $ — $ 2,058.1 $ — $ 2,058.1 Assets and liabilities measured at fair value as of December 31, 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 $ — $ 19.9 $ — $ 19.9 Total asset recurring fair value measurements $ — $ 19.9 $ — $ 19.9 Liabilities: Deferred compensation and other retirement plans $ — $ 20.3 $ — $ 20.3 Total liability recurring fair value measurements $ — $ 20.3 $ — $ 20.3 Financial instruments not carried at fair value Total debt $ — $ 1,978.4 $ — $ 1,978.4 Total financial instruments not carried at fair value $ — $ 1,978.4 $ — $ 1,978.4 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 the 2021 Credit Facilities and 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 as of March 31, 2023, are the same as those used as of December 31, 2022. 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 $46.8 million as of both March 31, 2023 and December 31, 2022, 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 | 3 Months Ended |
Mar. 31, 2023 | |
Stockholders' Equity Note [Abstract] | |
Equity | EQUITY The changes in the components of Equity for the three months ended March 31, 2023, 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, 2022 $ 944.5 $ 0.9 87.9 $ 13.9 $ 1,212.8 $ (285.8) $ 2.7 Net earnings 123.6 — — — 123.5 — 0.1 Other comprehensive income, net 10.3 — — — — 10.2 0.1 Share-based compensation activity 5.7 — — 5.7 — — — Dividends to ordinary shareholders ($0.45 per share) (39.5) — — — (39.5) — — Balance at March 31, 2023 $ 1,044.6 $ 0.9 87.9 $ 19.6 $ 1,296.8 $ (275.6) $ 2.9 The changes in the components of Equity for the three months ended March 31, 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 In February 2020, the Company’s Board of Directors (the "Board") 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 three months ended March 31, 2022, the Company paid $61.0 million to repurchase the ordinary shares reflected above on the open market under the 2020 Share Repurchase Authorization. As of March 31, 2023, the Company had 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 three months ended March 31, 2023, were as follows: In millions Cash flow hedges Defined benefit items Foreign currency items Total December 31, 2022 $ 6.1 $ (117.1) $ (174.8) $ (285.8) Other comprehensive (loss) income before reclassifications (0.7) (1.9) 11.7 9.1 Amounts reclassified from accumulated other comprehensive loss (a) (0.2) 1.0 — 0.8 Tax benefit 0.2 0.1 — 0.3 March 31, 2023 $ 5.4 $ (117.9) $ (163.1) $ (275.6) The changes in Accumulated other comprehensive loss for the three months ended March 31, 2022, were as follows: In millions Cash flow hedges Defined benefit items Foreign currency items Total December 31, 2021 $ 0.9 $ (96.0) $ (99.3) $ (194.4) Other comprehensive (loss) income before reclassifications (0.3) 2.3 (22.5) (20.5) Amounts reclassified from accumulated other comprehensive loss (a) (0.4) (0.4) — (0.8) Tax benefit 0.2 0.1 — 0.3 March 31, 2022 $ 0.4 $ (94.0) $ (121.8) $ (215.4) |
Share-Based Compensation
Share-Based Compensation | 3 Months Ended |
Mar. 31, 2023 | |
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") and performance stock units ("PSUs"). 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 share-based compensation expense recognized for the three months ended March 31: In millions 2023 2022 Stock options $ 2.1 $ 2.9 RSUs 5.0 7.3 PSUs 1.7 1.6 Pre-tax expense 8.8 11.8 Tax benefit (1.2) (1.2) After-tax expense $ 7.6 $ 10.6 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 three months ended March 31 were as follows: 2023 2022 Number Weighted- Number Weighted- Stock options 156,929 $ 33.66 157,880 $ 28.59 RSUs 117,923 $ 112.59 101,609 $ 115.33 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 three months ended March 31: 2023 2022 Dividend yield 1.60 % 1.42 % Volatility 28.47 % 27.05 % Risk-free rate of return 4.10 % 1.89 % 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 three months ended March 31, 2023, the Company granted PSUs with a maximum award level of approximately 0.1 million shares. In February 2021, 2022 and 2023, 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 for each performance period set by the Compensation and Human Capital Committee of the |
Restructuring Activities
Restructuring Activities | 3 Months Ended |
Mar. 31, 2023 | |
Restructuring Charges [Abstract] | |
Restructuring Activities | RESTRUCTURING ACTIVITIES During the three months ended March 31, 2023 and 2022, the Company recorded $3.0 million and $0.2 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 three months ended March 31, 2023, were as follows: In millions Total December 31, 2022 $ 0.2 Additions, net of reversals 3.0 Cash payments (0.8) March 31, 2023 $ 2.4 The majority of the costs accrued as of March 31, 2023, are expected to be paid within one year. The Company also incurred other non-qualified restructuring charges of $0.2 million and $0.5 million during the three months ended March 31, 2023 and 2022, respectively, 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 and Selling and administrative expenses within the Condensed and Consolidated Statements of Comprehensive Income. |
Other Income, Net
Other Income, Net | 3 Months Ended |
Mar. 31, 2023 | |
Other Income and Expenses [Abstract] | |
Other, Net | OTHER INCOME, NET The components of Other income, net for the three months ended March 31 were as follows: In millions 2023 2022 Interest income $ (0.7) $ (0.1) Foreign currency exchange loss 1.4 1.0 Net periodic pension and postretirement benefit income, less service cost — (2.6) Other (1.0) (0.5) Other income, net $ (0.3) $ (2.2) |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXESThe effective income tax rates for the three months ended March 31, 2023 and 2022, were 16.3% and 13.2%, respectively. The increase in the effective income tax rate compared to 2022 is primarily due to a change in the mix of income earned in higher tax rate jurisdictions. |
Earnings Per Share (EPS)
Earnings Per Share (EPS) | 3 Months Ended |
Mar. 31, 2023 | |
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 months ended March 31: In millions 2023 2022 Weighted-average number of basic shares 88.0 88.2 Shares issuable under share-based compensation plans 0.4 0.4 Weighted-average number of diluted shares 88.4 88.6 At March 31, 2023, 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 | 3 Months Ended |
Mar. 31, 2023 | |
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 months ended March 31, 2023 and 2022, respectively, disaggregated by business segment: Three months ended March 31, 2023 In millions Allegion Americas Allegion International Total Net revenues Products $ 697.4 $ 175.5 $ 872.9 Services 43.5 6.6 50.1 Total Net revenues $ 740.9 $ 182.1 $ 923.0 Three months ended March 31, 2022 In millions Allegion Americas Allegion International Total Net revenues Products $ 521.4 $ 195.1 $ 716.5 Services 0.5 6.6 7.1 Total Net revenues $ 521.9 $ 201.7 $ 723.6 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. Product sales involve contracts with a single performance obligation, the transfer of control of a product or bundle of products to a customer. Service revenue, which includes inspection, maintenance and repair, design and installation, aftermarket and locksmith services, as well as software-as-a-service offerings such as access control, IoT integration and workforce management solutions, is delayed until the service performance obligations are satisfied. As of March 31, 2023, 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 months ended March 31, 2023 and 2022, no adjustments related to performance obligations satisfied in previous periods were recorded. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2023 | |
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 March 31, 2023 and December 31, 2022, the Company had reserves for environmental matters of $23.5 million and $24.1 million, respectively. The total reserve at March 31, 2023 and December 31, 2022, included $13.3 million and $13.8 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 March 31, 2023 and December 31, 2022, was $3.6 million and $3.9 million, respectively, and the remainder was classified as noncurrent. Expenses related to environmental remediation were not material during either the three months ended March 31, 2023, or 2022. 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 three months ended March 31 were as follows: In millions 2023 2022 Balance at beginning of period $ 18.2 $ 17.7 Reductions for payments (2.0) (2.4) Accruals for warranties issued during the current period 2.3 3.1 Currency translation — (0.1) Balance at end of period $ 18.5 $ 18.3 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. |
Business Segment Information
Business Segment Information | 3 Months Ended |
Mar. 31, 2023 | |
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. Due to a reporting change effective January 1, 2023, results for the Company's Global Portable Security brands (inclusive of the AXA, Kryptonite and Trelock businesses) are now fully reflected within the Allegion International segment. Accordingly, the summary of operations by reportable segment below for the three months ended March 31, 2022, has been recast to conform with the current year presentation. The impact of this recast was to re-align approximately $6.3 million and $1.3 million of Net revenues and Segment operating income, respectively, from the Allegion Americas segment to the Allegion International segment. A summary of operations by reportable segment for the three months ended March 31 was as follows: In millions 2023 2022 Net revenues Allegion Americas $ 740.9 $ 521.9 Allegion International 182.1 201.7 Total $ 923.0 $ 723.6 Segment operating income Allegion Americas $ 186.6 $ 122.6 Allegion International 10.6 20.9 Total 197.2 143.5 Reconciliation to Operating income Unallocated corporate expense (26.2) (26.5) Operating income 171.0 117.0 Reconciliation to earnings before income taxes Interest expense 23.6 11.9 Other income, net (0.3) (2.2) Earnings before income taxes $ 147.7 $ 107.3 |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 20 - SUBSEQUENT EVENTS Dividend Declaration On April 13, 2023, the Board declared a quarterly dividend of $0.45 per ordinary share. The dividend is payable June 30, 2023, to shareholders of record on June 15, 2023. |
Acquisitions (Tables)
Acquisitions (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
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 $ 69.7 Inventories 50.8 Other current assets 0.3 Property, plant and equipment 14.6 Goodwill 634.1 Intangible assets 222.5 Other noncurrent assets 6.2 Accounts payable (20.8) Accrued expenses and other current liabilities (31.3) Other noncurrent liabilities (23.0) 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: 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 months ended March 31, 2023 and 2022, reflects the consolidated results of operations of the Company as if the Access Technologies business acquisition had taken place on January 1, 2021: In millions 2023 2022 Net revenues $ 923.0 $ 812.9 Net earnings attributable to Allegion plc 128.2 94.5 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 months ended March 31, 2023 and 2022, include: In millions 2023 2022 Intangible asset amortization expense, net of tax $ 1.6 $ (5.1) Interest expense, net of tax — (6.2) Acquisition and integration costs, net of tax 3.1 2.9 The following financial information reflects the Net revenues and Earnings before income taxes generated by the Access Technologies business included within the Company's Condensed and Consolidated Statement of Comprehensive Income for the three months ended March 31, 2023: In millions Net revenues $ 103.1 Earnings before income taxes 7.9 |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Inventory, Net [Abstract] | |
Major classes of inventory | The major classes of inventories were as follows: In millions March 31, December 31, Raw materials $ 225.7 $ 212.2 Work-in-process 46.0 41.7 Finished goods 201.0 225.1 Total $ 472.7 $ 479.0 |
Goodwill (Tables)
Goodwill (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Changes in carrying amount of goodwill | The changes in the carrying amount of goodwill for the three months ended March 31, 2023, were as follows: In millions Allegion Americas Allegion International Total December 31, 2022 (gross) $ 1,128.1 $ 858.6 $ 1,986.7 Accumulated impairment — (573.6) (573.6) December 31, 2022 (net) 1,128.1 285.0 1,413.1 Acquisitions and adjustments 2.6 21.7 24.3 Currency translation 0.3 3.6 3.9 March 31, 2023 (net) $ 1,131.0 $ 310.3 $ 1,441.3 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
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: March 31, 2023 December 31, 2022 In millions Gross carrying amount Accumulated amortization Net carrying amount Gross carrying amount Accumulated amortization Net carrying amount Completed technologies/patents $ 66.1 $ (33.9) $ 32.2 $ 63.0 $ (32.1) $ 30.9 Customer relationships 528.7 (163.4) 365.3 515.0 (155.8) 359.2 Trade names (finite-lived) 140.6 (67.0) 73.6 135.7 (62.6) 73.1 Other 73.2 (40.4) 32.8 71.2 (35.9) 35.3 Total finite-lived intangible assets 808.6 $ (304.7) 503.9 784.9 $ (286.4) 498.5 Trade names (indefinite-lived) 110.9 110.9 110.4 110.4 Total $ 919.5 $ 614.8 $ 895.3 $ 608.9 |
Debt and Credit Facilities (Tab
Debt and Credit Facilities (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | Long-term debt and other borrowings consisted of the following: In millions March 31, December 31, 2021 Term Facility $ 234.4 $ 237.5 2021 Revolving Facility 99.0 69.0 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 600.0 600.0 Other debt 0.2 0.2 Total borrowings outstanding 2,133.6 2,106.7 Discounts and debt issuance costs, net (11.7) (12.2) Total debt 2,121.9 2,094.5 Less current portion of long-term debt 12.6 12.6 Total long-term debt $ 2,109.3 $ 2,081.9 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
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 for both real estate and equipment leases were as follows: March 31, 2023 December 31, 2022 In millions Balance Sheet classification Real estate Equipment Total Real estate Equipment Total ROU asset Other noncurrent assets $ 106.2 $ 28.1 $ 134.3 $ 69.3 $ 28.8 $ 98.1 Lease liability - current Accrued expenses and other current liabilities 17.7 13.9 31.6 17.7 14.1 31.8 Lease liability - noncurrent Other noncurrent liabilities 91.9 14.3 106.2 54.8 14.7 69.5 Other information: Weighted-average remaining term (years) 12.2 2.4 5.9 2.4 Weighted-average discount rate 4.8 % 2.8 % 3.5 % 2.1 % |
Lease, Cost | The following table summarizes additional information related to the Company’s leases for the three months ended March 31: 2023 2022 In millions Real estate Equipment Total Real estate Equipment Total Cash paid for amounts included in the measurement of lease liabilities $ 5.9 $ 4.5 $ 10.4 $ 4.9 $ 4.2 $ 9.1 ROU assets obtained in exchange for new lease liabilities 41.4 1.9 43.3 18.8 1.4 20.2 |
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 2023 and for each of the years thereafter as of March 31, 2023, are as follows: In millions Remainder of 2023 2024 2025 2026 2027 Thereafter Total Real estate leases $ 16.7 $ 18.6 $ 16.3 $ 13.0 $ 10.3 $ 87.7 $ 162.6 Equipment leases 11.3 10.6 5.5 1.3 0.2 0.1 29.0 Total $ 28.0 $ 29.2 $ 21.8 $ 14.3 $ 10.5 $ 87.8 $ 191.6 |
Defined Benefit Plans (Tables)
Defined Benefit Plans (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
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 months ended March 31 were as follows: U.S. In millions 2023 2022 Service cost $ 0.2 $ 1.5 Interest cost 2.9 2.0 Expected return on plan assets (3.7) (3.4) Administrative costs and other 0.3 0.3 Net amortization of: Plan net actuarial losses 0.2 0.3 Net periodic pension benefit (income) cost $ (0.1) $ 0.7 Non-U.S. In millions 2023 2022 Service cost $ 0.4 $ 0.3 Interest cost 3.0 1.8 Expected return on plan assets (3.9) (3.9) Administrative costs and other 0.4 0.5 Net amortization of: Plan net actuarial losses 0.9 0.2 Net periodic pension benefit cost (income) $ 0.8 $ (1.1) |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements, Recurring and Nonrecurring | Assets and liabilities measured at fair value as of March 31, 2023, 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 $ — $ 17.8 $ — $ 17.8 Total asset recurring fair value measurements $ — $ 17.8 $ — $ 17.8 Liabilities: Deferred compensation and other retirement plans $ — $ 17.8 $ — $ 17.8 Total liability recurring fair value measurements $ — $ 17.8 $ — $ 17.8 Financial instruments not carried at fair value Total debt $ — $ 2,058.1 $ — $ 2,058.1 Total financial instruments not carried at fair value $ — $ 2,058.1 $ — $ 2,058.1 Assets and liabilities measured at fair value as of December 31, 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 $ — $ 19.9 $ — $ 19.9 Total asset recurring fair value measurements $ — $ 19.9 $ — $ 19.9 Liabilities: Deferred compensation and other retirement plans $ — $ 20.3 $ — $ 20.3 Total liability recurring fair value measurements $ — $ 20.3 $ — $ 20.3 Financial instruments not carried at fair value Total debt $ — $ 1,978.4 $ — $ 1,978.4 Total financial instruments not carried at fair value $ — $ 1,978.4 $ — $ 1,978.4 |
Equity (Tables)
Equity (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Stockholders' Equity Note [Abstract] | |
Components of Equity | The changes in the components of Equity for the three months ended March 31, 2023, 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, 2022 $ 944.5 $ 0.9 87.9 $ 13.9 $ 1,212.8 $ (285.8) $ 2.7 Net earnings 123.6 — — — 123.5 — 0.1 Other comprehensive income, net 10.3 — — — — 10.2 0.1 Share-based compensation activity 5.7 — — 5.7 — — — Dividends to ordinary shareholders ($0.45 per share) (39.5) — — — (39.5) — — Balance at March 31, 2023 $ 1,044.6 $ 0.9 87.9 $ 19.6 $ 1,296.8 $ (275.6) $ 2.9 The changes in the components of Equity for the three months ended March 31, 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 |
Accumulated Other Comprehensive Loss | The changes in Accumulated other comprehensive loss for the three months ended March 31, 2023, were as follows: In millions Cash flow hedges Defined benefit items Foreign currency items Total December 31, 2022 $ 6.1 $ (117.1) $ (174.8) $ (285.8) Other comprehensive (loss) income before reclassifications (0.7) (1.9) 11.7 9.1 Amounts reclassified from accumulated other comprehensive loss (a) (0.2) 1.0 — 0.8 Tax benefit 0.2 0.1 — 0.3 March 31, 2023 $ 5.4 $ (117.9) $ (163.1) $ (275.6) The changes in Accumulated other comprehensive loss for the three months ended March 31, 2022, were as follows: In millions Cash flow hedges Defined benefit items Foreign currency items Total December 31, 2021 $ 0.9 $ (96.0) $ (99.3) $ (194.4) Other comprehensive (loss) income before reclassifications (0.3) 2.3 (22.5) (20.5) Amounts reclassified from accumulated other comprehensive loss (a) (0.4) (0.4) — (0.8) Tax benefit 0.2 0.1 — 0.3 March 31, 2022 $ 0.4 $ (94.0) $ (121.8) $ (215.4) |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Share-Based Compensation Expense | The following table summarizes the share-based compensation expense recognized for the three months ended March 31: In millions 2023 2022 Stock options $ 2.1 $ 2.9 RSUs 5.0 7.3 PSUs 1.7 1.6 Pre-tax expense 8.8 11.8 Tax benefit (1.2) (1.2) After-tax expense $ 7.6 $ 10.6 |
Grants of Stock Options and RSUs | Grants issued during the three months ended March 31 were as follows: 2023 2022 Number Weighted- Number Weighted- Stock options 156,929 $ 33.66 157,880 $ 28.59 RSUs 117,923 $ 112.59 101,609 $ 115.33 |
Stock Options Fair Value Assumptions | The following weighted-average assumptions were used during the three months ended March 31: 2023 2022 Dividend yield 1.60 % 1.42 % Volatility 28.47 % 27.05 % Risk-free rate of return 4.10 % 1.89 % Expected life (years) 6.0 6.0 |
Restructuring Activities (Table
Restructuring Activities (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Restructuring Charges [Abstract] | |
Schedule of Changes in Restructuring Reserve | The changes in the restructuring reserve during the three months ended March 31, 2023, were as follows: In millions Total December 31, 2022 $ 0.2 Additions, net of reversals 3.0 Cash payments (0.8) March 31, 2023 $ 2.4 |
Other Income, Net (Tables)
Other Income, Net (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Other Income and Expenses [Abstract] | |
Other Income, Net | The components of Other income, net for the three months ended March 31 were as follows: In millions 2023 2022 Interest income $ (0.7) $ (0.1) Foreign currency exchange loss 1.4 1.0 Net periodic pension and postretirement benefit income, less service cost — (2.6) Other (1.0) (0.5) Other income, net $ (0.3) $ (2.2) |
Earnings Per Share (EPS) (Table
Earnings Per Share (EPS) (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
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 months ended March 31: In millions 2023 2022 Weighted-average number of basic shares 88.0 88.2 Shares issuable under share-based compensation plans 0.4 0.4 Weighted-average number of diluted shares 88.4 88.6 |
Net Revenues (Tables)
Net Revenues (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
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 months ended March 31, 2023 and 2022, respectively, disaggregated by business segment: Three months ended March 31, 2023 In millions Allegion Americas Allegion International Total Net revenues Products $ 697.4 $ 175.5 $ 872.9 Services 43.5 6.6 50.1 Total Net revenues $ 740.9 $ 182.1 $ 923.0 Three months ended March 31, 2022 In millions Allegion Americas Allegion International Total Net revenues Products $ 521.4 $ 195.1 $ 716.5 Services 0.5 6.6 7.1 Total Net revenues $ 521.9 $ 201.7 $ 723.6 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Product Warranty Liability | The changes in the standard product warranty liability for the three months ended March 31 were as follows: In millions 2023 2022 Balance at beginning of period $ 18.2 $ 17.7 Reductions for payments (2.0) (2.4) Accruals for warranties issued during the current period 2.3 3.1 Currency translation — (0.1) Balance at end of period $ 18.5 $ 18.3 |
Business Segment Information (T
Business Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Segment Reporting [Abstract] | |
Summary of Operations by Reportable Segments | A summary of operations by reportable segment for the three months ended March 31 was as follows: In millions 2023 2022 Net revenues Allegion Americas $ 740.9 $ 521.9 Allegion International 182.1 201.7 Total $ 923.0 $ 723.6 Segment operating income Allegion Americas $ 186.6 $ 122.6 Allegion International 10.6 20.9 Total 197.2 143.5 Reconciliation to Operating income Unallocated corporate expense (26.2) (26.5) Operating income 171.0 117.0 Reconciliation to earnings before income taxes Interest expense 23.6 11.9 Other income, net (0.3) (2.2) Earnings before income taxes $ 147.7 $ 107.3 |
Acquisitions (Recognized Identi
Acquisitions (Recognized Identified Assets Acquired and Liabilities Assumed) (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 | Jul. 05, 2022 |
Business Acquisition [Line Items] | |||
Goodwill | $ 1,441.3 | $ 1,413.1 | |
Access Technologies | |||
Business Acquisition [Line Items] | |||
Accounts receivable, net | $ 69.7 | ||
Inventories | 50.8 | ||
Other current assets | 0.3 | ||
Property, plant and equipment | 14.6 | ||
Goodwill | 634.1 | ||
Intangible assets | 222.5 | ||
Other noncurrent assets | 6.2 | ||
Accounts payable | (20.8) | ||
Accrued expenses and other current liabilities | (31.3) | ||
Other noncurrent liabilities | (23) | ||
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 | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Pro forma Net revenues | $ 923 | $ 812.9 |
Pro forma Net earnings attributable to Allegion plc | 128.2 | 94.5 |
Net revenues of acquiree since acquisition date | 103.1 | |
Net earnings or (loss) before income taxes of acquiree since acquisition date | 7.9 | |
Intangible Asset Amortization Expense, Net of Tax Adjustment | ||
Pro forma Net earnings attributable to Allegion plc | 1.6 | (5.1) |
Interest Expense, Net of Tax Adjustment | ||
Pro forma Net earnings attributable to Allegion plc | 0 | (6.2) |
Acquisition and Integration Costs, Net of Tax Adjustment | ||
Pro forma Net earnings attributable to Allegion plc | $ 3.1 | $ 2.9 |
Acquisitions - Narrative (Detai
Acquisitions - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | ||||
Jan. 03, 2023 | Jul. 05, 2022 | Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Goodwill | $ 1,441.3 | $ 1,413.1 | |||
Access Technologies | |||||
Business Combination, Consideration Transferred | $ 923.1 | ||||
Intangible assets | 222.5 | ||||
Goodwill | $ 634.1 | ||||
Acquisition and integration related expenses | $ 4.1 | $ 4.8 | |||
plano | |||||
Business Combination, Consideration Transferred | $ 36.6 | ||||
Business Combinations, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net Working Capital | 3 | ||||
Intangible assets | 17 | ||||
Goodwill | $ 22 | ||||
Finite-lived intangible assets acquired, weighted-average useful life | 15 years |
Inventories (Details)
Inventories (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Inventory, Net [Abstract] | ||
Raw materials | $ 225.7 | $ 212.2 |
Work-in-process | 46 | 41.7 |
Finished goods | 201 | 225.1 |
Total inventories | $ 472.7 | $ 479 |
Goodwill (Details)
Goodwill (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2023 USD ($) | |
Goodwill [Roll Forward] | |
Goodwill, gross | $ 1,986.7 |
Accumulated impairment | (573.6) |
Goodwill, net beginning balance | 1,413.1 |
Goodwill, Acquired During Period | 24.3 |
Currency translation | 3.9 |
Goodwill, net ending balance | 1,441.3 |
Allegion Americas | |
Goodwill [Roll Forward] | |
Goodwill, gross | 1,128.1 |
Accumulated impairment | 0 |
Goodwill, net beginning balance | 1,128.1 |
Goodwill, Acquired During Period | 2.6 |
Currency translation | 0.3 |
Goodwill, net ending balance | 1,131 |
Allegion International | |
Goodwill [Roll Forward] | |
Goodwill, gross | 858.6 |
Accumulated impairment | (573.6) |
Goodwill, net beginning balance | 285 |
Goodwill, Acquired During Period | 21.7 |
Currency translation | 3.6 |
Goodwill, net ending balance | $ 310.3 |
Intangible Assets (Schedule of
Intangible Assets (Schedule of Intangible Assets, net of Goodwill) (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Schedule of Acquired Finite-Lived and Indefinite-Lived Intangible Assets by Major Class [Line Items] | ||
Finite-lived intangible assets, gross | $ 808.6 | $ 784.9 |
Finite-lived intangible assets, accumulated amortization | (304.7) | (286.4) |
Finite-lived intangible assets, net | 503.9 | 498.5 |
Intangible assets, gross | 919.5 | 895.3 |
Intangible assets, net | 614.8 | 608.9 |
Completed technologies/patents | ||
Schedule of Acquired Finite-Lived and Indefinite-Lived Intangible Assets by Major Class [Line Items] | ||
Finite-lived intangible assets, gross | 66.1 | 63 |
Finite-lived intangible assets, accumulated amortization | (33.9) | (32.1) |
Finite-lived intangible assets, net | 32.2 | 30.9 |
Customer relationships | ||
Schedule of Acquired Finite-Lived and Indefinite-Lived Intangible Assets by Major Class [Line Items] | ||
Finite-lived intangible assets, gross | 528.7 | 515 |
Finite-lived intangible assets, accumulated amortization | (163.4) | (155.8) |
Finite-lived intangible assets, net | 365.3 | 359.2 |
Trade names (finite-lived) | ||
Schedule of Acquired Finite-Lived and Indefinite-Lived Intangible Assets by Major Class [Line Items] | ||
Finite-lived intangible assets, gross | 140.6 | 135.7 |
Finite-lived intangible assets, accumulated amortization | (67) | (62.6) |
Finite-lived intangible assets, net | 73.6 | 73.1 |
Other | ||
Schedule of Acquired Finite-Lived and Indefinite-Lived Intangible Assets by Major Class [Line Items] | ||
Finite-lived intangible assets, gross | 73.2 | 71.2 |
Finite-lived intangible assets, accumulated amortization | (40.4) | (35.9) |
Finite-lived intangible assets, net | 32.8 | 35.3 |
Trade names (finite-lived) | ||
Schedule of Acquired Finite-Lived and Indefinite-Lived Intangible Assets by Major Class [Line Items] | ||
Indefinite-lived intangible assets | $ 110.9 | $ 110.4 |
Intangible Assets (Narrative) (
Intangible Assets (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Amortization of intangible assets | $ 15.8 | $ 8.2 |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||
Intangible amortization expense, year one | 60.9 | |
Intangible amortization expense, year two | 55.4 | |
Intangible amortization expense, year three | 49.6 | |
Intangible amortization expense, year four | 46.4 | |
Intangible amortization expense year five | $ 39.6 |
Debt and Credit Facilities (Sum
Debt and Credit Facilities (Summary of Debt) (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Debt Instrument [Line Items] | ||
Total borrowings outstanding | $ 2,133.6 | $ 2,106.7 |
Discounts and debt issuance costs, net | (11.7) | (12.2) |
Total debt | 2,121.9 | 2,094.5 |
Less current portion of long-term debt | 12.6 | 12.6 |
Total long-term debt | 2,109.3 | 2,081.9 |
Other debt | ||
Debt Instrument [Line Items] | ||
Total borrowings outstanding | 0.2 | 0.2 |
Line of Credit | Term Loan | ||
Debt Instrument [Line Items] | ||
Total borrowings outstanding | 234.4 | 237.5 |
Line of Credit | Revolving Facility | ||
Debt Instrument [Line Items] | ||
Total borrowings outstanding | $ 99 | 69 |
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 | $ 600 |
Debt and Credit Facilities (Nar
Debt and Credit Facilities (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Dec. 31, 2022 | |
Debt Instrument [Line Items] | ||
Total borrowings outstanding | $ 2,133.6 | $ 2,106.7 |
Line of Credit | ||
Debt Instrument [Line Items] | ||
Interest rate | 6.019% | |
Line of Credit | Bloomberg Short-Term Bank Yield Index | ||
Debt Instrument [Line Items] | ||
Variable rate | 1.125% | |
Line of Credit | Minimum | ||
Debt Instrument [Line Items] | ||
Variable rate | 0.875% | |
Line of Credit | Maximum | ||
Debt Instrument [Line Items] | ||
Variable rate | 1.375% | |
Line of Credit | Term Loan | ||
Debt Instrument [Line Items] | ||
Principal amount | $ 250 | |
Total borrowings outstanding | 234.4 | 237.5 |
Repayment of debt | $ 3.1 | |
Line of Credit | Term Loan | 3/31/22 through 3/31/25 | ||
Debt Instrument [Line Items] | ||
Repayment terms | 1.25 | |
Line of Credit | Term Loan | 6/30/25 through 11/18/26 | ||
Debt Instrument [Line Items] | ||
Repayment terms | 2.5 | |
Line of Credit | Revolving Facility | ||
Debt Instrument [Line Items] | ||
Total borrowings outstanding | $ 99 | 69 |
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 | 13.4 | |
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% | |
Senior Notes | 5.411% Senior Notes Due 2032 | ||
Debt Instrument [Line Items] | ||
Total borrowings outstanding | $ 600 | $ 600 |
Stated interest rate | 5.411% |
Financial Instruments (Narrativ
Financial Instruments (Narrative) (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Currency derivatives | ||
Derivative [Line Items] | ||
Derivatives, notional amount | $ 181.1 | $ 161.5 |
Leases - Operating Lease Asset
Leases - Operating Lease Asset and Liability, and Other Information (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Lessee, Lease, Description | ||
ROU Asset | $ 134.3 | $ 98.1 |
Lease liability - current | 31.6 | 31.8 |
Lease liability - noncurrent | 106.2 | 69.5 |
Real estate | ||
Lessee, Lease, Description | ||
ROU Asset | 106.2 | 69.3 |
Lease liability - current | 17.7 | 17.7 |
Lease liability - noncurrent | $ 91.9 | $ 54.8 |
Weighted-average remaining term (years) | 12 years 2 months 12 days | 5 years 10 months 24 days |
Weighted-average discount rate | 4.80% | 3.50% |
Equipment | ||
Lessee, Lease, Description | ||
ROU Asset | $ 28.1 | $ 28.8 |
Lease liability - current | 13.9 | 14.1 |
Lease liability - noncurrent | $ 14.3 | $ 14.7 |
Weighted-average remaining term (years) | 2 years 4 months 24 days | 2 years 4 months 24 days |
Weighted-average discount rate | 2.80% | 2.10% |
Leases - Operating Leases, Addi
Leases - Operating Leases, Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Lessee, Lease, Description | ||
Cash paid for amounts included in the measurement of lease liabilities | $ 10.4 | $ 9.1 |
ROU assets obtained in exchange for new lease liabilities | 43.3 | 20.2 |
Real estate | ||
Lessee, Lease, Description | ||
Cash paid for amounts included in the measurement of lease liabilities | 5.9 | 4.9 |
ROU assets obtained in exchange for new lease liabilities | 41.4 | 18.8 |
Equipment | ||
Lessee, Lease, Description | ||
Cash paid for amounts included in the measurement of lease liabilities | 4.5 | 4.2 |
ROU assets obtained in exchange for new lease liabilities | $ 1.9 | $ 1.4 |
Leases - Operating Lease Liabil
Leases - Operating Lease Liability Maturity (Details) $ in Millions | Mar. 31, 2023 USD ($) |
Lessee, Lease, Description | |
Remainder of 2023 | $ 28 |
2024 | 29.2 |
2025 | 21.8 |
2026 | 14.3 |
2027 | 10.5 |
Thereafter | 87.8 |
Total | 191.6 |
Real estate | |
Lessee, Lease, Description | |
Remainder of 2023 | 16.7 |
2024 | 18.6 |
2025 | 16.3 |
2026 | 13 |
2027 | 10.3 |
Thereafter | 87.7 |
Total | 162.6 |
Equipment | |
Lessee, Lease, Description | |
Remainder of 2023 | 11.3 |
2024 | 10.6 |
2025 | 5.5 |
2026 | 1.3 |
2027 | 0.2 |
Thereafter | 0.1 |
Total | $ 29 |
Leases - Narrative (Details)
Leases - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Leases [Abstract] | |||
Total rental expense | $ 13.6 | $ 10.7 | |
Rental expense related to short-term leases, variable lease payments, or other leases not included in lease liability | 3.2 | 1.6 | |
Imputed interest | 53.8 | ||
ROU Asset | 134.3 | $ 98.1 | |
ROU assets obtained in exchange for new lease liabilities | 43.3 | 20.2 | |
Real estate | |||
ROU Asset | 106.2 | $ 69.3 | |
ROU assets obtained in exchange for new lease liabilities | 41.4 | $ 18.8 | |
Real estate | New Manufacturing Facility | |||
ROU assets obtained in exchange for new lease liabilities | $ 37 |
Defined Benefit Plans (Componen
Defined Benefit Plans (Components of Net Periodic Pension Costs) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
U.S. | ||
Service cost | $ 0.2 | $ 1.5 |
Interest cost | 2.9 | 2 |
Expected return on plan assets | (3.7) | (3.4) |
Administrative costs and other | 0.3 | 0.3 |
Plan net actuarial losses | 0.2 | 0.3 |
Net periodic pension benefit cost (income) | (0.1) | 0.7 |
Non-U.S. | ||
Service cost | 0.4 | 0.3 |
Interest cost | 3 | 1.8 |
Expected return on plan assets | (3.9) | (3.9) |
Administrative costs and other | 0.4 | 0.5 |
Plan net actuarial losses | 0.9 | 0.2 |
Net periodic pension benefit cost (income) | $ 0.8 | $ (1.1) |
Defined Benefit Plans (Narrativ
Defined Benefit Plans (Narrative) (Details) $ in Millions | Mar. 31, 2023 USD ($) |
Retirement Benefits, Description [Abstract] | |
Employer contributions expected during the remainder of the year | $ 12 |
Fair Value Measurements (Tabl_2
Fair Value Measurements (Tables) (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Assets, fair value measurements [Abstract] | ||
Investments | $ 17.8 | $ 19.9 |
Total asset recurring fair value measurements | 17.8 | 19.9 |
Liabilities, fair value measurements [Abstract] | ||
Deferred compensation and other retirement plans | 17.8 | 20.3 |
Total liability recurring fair value measurements | 17.8 | 20.3 |
Fair Value Measurements, Nonrecurring Value Measurement [Abstract] | ||
Total debt | 2,058.1 | 1,978.4 |
Total financial instruments not carried at fair value | 2,058.1 | 1,978.4 |
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 | 17.8 | 19.9 |
Total asset recurring fair value measurements | 17.8 | 19.9 |
Liabilities, fair value measurements [Abstract] | ||
Deferred compensation and other retirement plans | 17.8 | 20.3 |
Total liability recurring fair value measurements | 17.8 | 20.3 |
Fair Value Measurements, Nonrecurring Value Measurement [Abstract] | ||
Total debt | 2,058.1 | 1,978.4 |
Total financial instruments not carried at fair value | 2,058.1 | 1,978.4 |
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 | Mar. 31, 2023 | Dec. 31, 2022 |
Fair Value Disclosures [Abstract] | ||
Debt and equity investments without readily determinable fair values | $ 46.8 | $ 46.8 |
Equity (Components of Sharehold
Equity (Components of Shareholders' Equity Rollforward) (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Beginning balance | $ 944.5 | $ 762.4 |
Net earnings | 123.6 | 93.1 |
Other comprehensive income (loss), net of tax | 10.3 | (21) |
Repurchase of ordinary shares | 0 | (61) |
Share-based compensation activity | 5.7 | 7.5 |
Dividends to ordinary shareholders ($0.45 per share) | (39.5) | |
Other | 36 | |
Ending balance | $ 1,044.6 | $ 745 |
Dividends per share (in dollars per share) | $ 0.45 | $ 0.41 |
Ordinary shares | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Beginning balance | $ 0.9 | $ 0.9 |
Beginning balance (in shares) | 87.9 | 88.2 |
Repurchase of ordinary shares (in shares) | (0.5) | |
Share-based compensation activity, shares (in shares) | 0.1 | |
Ending balance | $ 0.9 | $ 0.9 |
Ending balance (in shares) | 87.9 | 87.8 |
Capital in excess of par value | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Beginning balance | $ 13.9 | $ 0 |
Repurchase of ordinary shares | (7.5) | |
Share-based compensation activity | 5.7 | 7.5 |
Ending balance | 19.6 | 0 |
Retained earnings | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Beginning balance | 1,212.8 | 952.6 |
Net earnings | 123.5 | 93 |
Repurchase of ordinary shares | (53.5) | |
Dividends to ordinary shareholders ($0.45 per share) | (39.5) | |
Other | 36 | |
Ending balance | 1,296.8 | 956.1 |
Accumulated other comprehensive loss | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Beginning balance | (285.8) | (194.4) |
Other comprehensive income (loss), net of tax | 10.2 | (21) |
Ending balance | (275.6) | (215.4) |
Noncontrolling interests | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Beginning balance | 2.7 | 3.3 |
Net earnings | 0.1 | 0.1 |
Other comprehensive income (loss), net of tax | 0.1 | |
Other | 0 | |
Ending balance | $ 2.9 | $ 3.4 |
Equity (Schedule of Accumulated
Equity (Schedule of Accumulated Other Comprehensive Income (Loss)) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Accumulated Other Comprehensive Loss Roll Forward | ||
Beginning balance | $ (285.8) | $ (194.4) |
Other comprehensive (loss) income before reclassifications | 9.1 | (20.5) |
Amounts reclassified from accumulated other comprehensive loss | 0.8 | (0.8) |
Tax benefit | 0.3 | 0.3 |
Ending balance | (275.6) | (215.4) |
Cash flow hedges | ||
Accumulated Other Comprehensive Loss Roll Forward | ||
Beginning balance | 6.1 | 0.9 |
Other comprehensive (loss) income before reclassifications | (0.7) | (0.3) |
Amounts reclassified from accumulated other comprehensive loss | (0.2) | (0.4) |
Tax benefit | 0.2 | 0.2 |
Ending balance | 5.4 | 0.4 |
Defined benefit items | ||
Accumulated Other Comprehensive Loss Roll Forward | ||
Beginning balance | (117.1) | (96) |
Other comprehensive (loss) income before reclassifications | (1.9) | 2.3 |
Amounts reclassified from accumulated other comprehensive loss | 1 | (0.4) |
Tax benefit | 0.1 | 0.1 |
Ending balance | (117.9) | (94) |
Foreign currency items | ||
Accumulated Other Comprehensive Loss Roll Forward | ||
Beginning balance | (174.8) | (99.3) |
Other comprehensive (loss) income before reclassifications | 11.7 | (22.5) |
Amounts reclassified from accumulated other comprehensive loss | 0 | 0 |
Tax benefit | 0 | 0 |
Ending balance | $ (163.1) | $ (121.8) |
Equity (Narrative) (Details)
Equity (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Equity, Class of Treasury Stock [Line Items] | ||
Payments for repurchase of ordinary shares | $ 0 | $ 61 |
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 | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Share based compensation expense (benefit) | $ 8.8 | $ 11.8 |
Tax benefit | (1.2) | (1.2) |
After-tax expense | 7.6 | 10.6 |
Stock options | ||
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Share based compensation expense (benefit) | 2.1 | 2.9 |
Restricted Stock Units (RSUs) | ||
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Share based compensation expense (benefit) | 5 | 7.3 |
Performance Share Units (PSUs) | ||
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Share based compensation expense (benefit) | $ 1.7 | $ 1.6 |
Share-Based Compensation (Grant
Share-Based Compensation (Grants of Stock Options and RSUs) (Details) - $ / shares | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Stock options | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Equity awards, granted, in shares | 156,929 | 157,880 |
Weighted-average fair value per award, in dollars per share | $ 33.66 | $ 28.59 |
Restricted Stock Units (RSUs) | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Equity awards, granted, in shares | 117,923 | 101,609 |
Weighted-average fair value per award, in dollars per share | $ 112.59 | $ 115.33 |
Share-Based Compensation (Avera
Share-Based Compensation (Average Fair Value of Stock Options Granted, Assumptions) (Details) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | ||
Dividend yield | 1.60% | 1.42% |
Volatility | 28.47% | 27.05% |
Risk-free rate of return | 4.10% | 1.89% |
Expected life (years) | 6 years | 6 years |
Share-Based Compensation (Narra
Share-Based Compensation (Narrative) (Details) shares in Millions | 3 Months Ended |
Mar. 31, 2023 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 | 3 Months Ended |
Mar. 31, 2023 USD ($) | |
Restructuring Reserve [Roll Forward] | |
Restructuring reserve beginning balance | $ 0.2 |
Additions, net of reversals | 3 |
Cash payments | (0.8) |
Restructuring reserve ending balance | $ 2.4 |
Restructuring Activities (Narra
Restructuring Activities (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Qualified restructuring | ||
Restructuring Cost and Reserve [Line Items] | ||
Expenses recorded associated with restructuring activities | $ 3 | $ 0.2 |
Nonqualified restructuring [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Expenses recorded associated with restructuring activities | $ 0.2 | $ 0.5 |
Other Income, Net (Details)
Other Income, Net (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Other Income and Expenses [Abstract] | ||
Interest income | $ (0.7) | $ (0.1) |
Foreign currency exchange loss | 1.4 | 1 |
Net periodic pension and postretirement benefit income, less service cost | 0 | (2.6) |
Other | (1) | (0.5) |
Other income, net | $ (0.3) | $ (2.2) |
Income Taxes (Details)
Income Taxes (Details) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | ||
Effective income tax rate (percent) | 16.30% | 13.20% |
Earnings Per Share (EPS) (Detai
Earnings Per Share (EPS) (Details) - shares shares in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Earnings Per Share [Abstract] | ||
Weighted-average number of basic shares (in shares) | 88 | 88.2 |
Shares issuable under share-based compensation plans (in shares) | 0.4 | 0.4 |
Weighted-average number of diluted shares (in shares) | 88.4 | 88.6 |
Earnings Per Share (EPS) (Narra
Earnings Per Share (EPS) (Narrative) (Details) shares in Millions | 3 Months Ended |
Mar. 31, 2023 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 | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Disaggregation of Revenue [Line Items] | ||
Net revenues | $ 923 | $ 723.6 |
Allegion Americas | Operating Segments | ||
Disaggregation of Revenue [Line Items] | ||
Net revenues | 740.9 | 521.9 |
Allegion International | Operating Segments | ||
Disaggregation of Revenue [Line Items] | ||
Net revenues | 182.1 | 201.7 |
Products | ||
Disaggregation of Revenue [Line Items] | ||
Net revenues | 872.9 | 716.5 |
Products | Allegion Americas | ||
Disaggregation of Revenue [Line Items] | ||
Net revenues | 697.4 | 521.4 |
Products | Allegion International | ||
Disaggregation of Revenue [Line Items] | ||
Net revenues | 175.5 | 195.1 |
Services | ||
Disaggregation of Revenue [Line Items] | ||
Net revenues | 50.1 | 7.1 |
Services | Allegion Americas | ||
Disaggregation of Revenue [Line Items] | ||
Net revenues | 43.5 | 0.5 |
Services | Allegion International | ||
Disaggregation of Revenue [Line Items] | ||
Net revenues | $ 6.6 | $ 6.6 |
Commitments and Contingencies_2
Commitments and Contingencies (Narrative) (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Environmental Remediation Obligations [Line Items] | ||
Reserves for environmental matters | $ 23.5 | $ 24.1 |
Reserves for environmental matters, current | 3.6 | 3.9 |
Segment, Discontinued Operations | ||
Environmental Remediation Obligations [Line Items] | ||
Reserves for environmental matters | $ 13.3 | $ 13.8 |
Commitments and Contingencies_3
Commitments and Contingencies (Product Warranty Liability) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Movement in Standard Product Warranty Liability [Roll Forward] | ||
Balance at beginning of period | $ 18.2 | $ 17.7 |
Reductions for payments | (2) | (2.4) |
Accruals for warranties issued during the current period | 2.3 | 3.1 |
Currency translation | 0 | (0.1) |
Balance at end of period | $ 18.5 | $ 18.3 |
Business Segment Information (S
Business Segment Information (Summary of Operations by Reportable Segments) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Segment Reporting Information [Line Items] | ||
Net revenues | $ 923 | $ 723.6 |
Operating income (loss) | 171 | 117 |
Interest expense | 23.6 | 11.9 |
Other income, net | (0.3) | (2.2) |
Earnings before income taxes | 147.7 | 107.3 |
Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Operating income (loss) | 197.2 | 143.5 |
Operating Segments | Allegion Americas | ||
Segment Reporting Information [Line Items] | ||
Net revenues | 740.9 | 521.9 |
Operating income (loss) | 186.6 | 122.6 |
Operating Segments | Allegion International | ||
Segment Reporting Information [Line Items] | ||
Net revenues | 182.1 | 201.7 |
Operating income (loss) | 10.6 | 20.9 |
Corporate, Non-Segment | ||
Segment Reporting Information [Line Items] | ||
Operating income (loss) | $ (26.2) | $ (26.5) |
Business Segment Information Na
Business Segment Information Narrative (Details) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 USD ($) segment | Mar. 31, 2022 USD ($) | |
Segment Reporting [Abstract] | ||
Number of reportable segments | segment | 2 | |
Net revenues | $ 923 | $ 723.6 |
Operating Income (Loss) | 171 | 117 |
Operating Segments | ||
Operating Income (Loss) | 197.2 | 143.5 |
Operating Segments | Allegion Americas | ||
Net revenues | 740.9 | 521.9 |
Operating Income (Loss) | 186.6 | 122.6 |
Operating Segments | Allegion International | ||
Net revenues | 182.1 | 201.7 |
Operating Income (Loss) | $ 10.6 | 20.9 |
Operating Segments | Allegion International | Global Portable Security Brand's Segment Reclassification | ||
Net revenues | 6.3 | |
Operating Income (Loss) | $ 1.3 |
Subsequent Events (Details)
Subsequent Events (Details) | Apr. 13, 2023 $ / shares |
Subsequent Event | |
Subsequent Event [Line Items] | |
Dividends declared per ordinary share (in dollars per share) | $ 0.45 |