Allegion plc
For the period ended Jun 30, 2024. Filed Jul 24, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Jul 24, 2024
ALLE$185.39-0.9%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-04-25.
0001579241-24-000031
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-07-24.
0001579241-24-000045
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 121 previous paragraphs and 144 current paragraphs.
84 unchanged; 25 reworded; 32 added; 12 removed; 0 previous and 3 current paragraphs rearranged.
Tables are not compared: 13 previous and 21 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (32)
Current report
In the second quarter of 2024, we experienced a mid-single digits percent increase in revenue as compared to the same period in 2023, driven by favorable pricing and volume growth from most of our major businesses. We expect the business to continue to grow in the second half of 2024.
Current report
On June 3, 2024, we, through our subsidiaries, acquired 100% of Krieger Specialty Products, LLC ("Krieger"), a leading manufacturer of high-performance special purpose doors and windows based in the United States. Krieger is reported in the Company's Allegion Americas segment.
Current report
On June 10, 2024, we, through our subsidiaries, acquired 100% of Unicel Architectural Corp. ("Unicel"), a leading manufacturer of advanced glass, timber and aluminum building solutions based in Canada. Unicel is reported in the Company's Allegion Americas segment.
Current report
Net revenues for the three months ended June 30, 2024, increased by 5.8%, or $53.1 million, compared with the same period in 2023, due to the following:
Current report
The increase in Net revenues was driven by higher volumes, improved pricing across our major businesses, and the acquisitions made during the year, which was partially offset by unfavorable foreign currency exchange rate movements.
Current report
The increase in Operating income and Operating margin was driven by pricing and productivity improvements in excess of inflation and investment spending, favorable volume/product mix and the contribution to operating income from recent acquisition activity. These increases were partially offset by unfavorable foreign currency exchange rate movements and higher acquisition, integration and restructuring expenses.
Current report
Results of Operations – Six months ended June 30
Current report
Net revenues for the six months ended June 30, 2024, increased by 1.3%, or $24.0 million, compared with the same period in 2023, due to the following:
Current report
Operating income for the six months ended June 30, 2024, increased $25.5 million compared to the same period in 2023. Operating margin for the six months ended June 30, 2024, increased to 20.5% from 19.4% for the same period in 2023, due to the following:
Current report
Interest Expense
Current report
Interest expense for the six months ended June 30, 2024, increased $0.7 million compared with the same period in 2023, primarily due to higher outstanding indebtedness compared to the same period in the prior year.
Current report
Other Income, net
Current report
The increase in interest income for the six months ended June 30, 2024 compared with the same period in 2023 is due to higher cash on hand and higher interest rates.
Current report
Provision for Income Taxes
Current report
Net revenues for the three months ended June 30, 2024, increased by 6.0%, or $43.5 million, compared to the same period in 2023, due to the following:
Current report
The increase in Net revenues was driven by improved pricing across our major businesses, higher volumes, and the acquisitions made during the year, which was partially offset by unfavorable foreign currency exchange rate movements.
Current report
Net revenues for the six months ended June 30, 2024, increased by 0.8%, or $11.9 million, compared to the same period in 2023, due to the following:
Current report
The increase in Net revenues was driven by improved pricing and acquisition activity, partially offset by lower volumes and unfavorable currency exchange rate movements.
Current report
Net revenues from non-residential products for the six months ended June 30, 2024, increased by a low-single digits percent compared to the same period in the prior year, driven by improved pricing and acquisition activity, partially offset by lower volumes.
Current report
Net revenues from residential products for the six months ended June 30, 2024, increased by a low-single digits percent compared to the same period in the prior year, driven by higher volumes.
Current report
Segment operating income for the three months ended June 30, 2024, increased $18.9 million compared to the same period in 2023, and Segment operating margin for the three months ended June 30, 2024, increased to 27.8% from 26.9%, due to the following:
Current report
The increase in Segment operating income and Segment operating margin was primarily driven by pricing and productivity improvements in excess of inflation and investment spending, favorable volume/product mix and the contribution to operating income from recent acquisition activity. These increases were partially offset by unfavorable foreign currency exchange rate movements and higher acquisition, integration and restructuring expenses.
Current report
Segment operating income for the six months ended June 30, 2024, increased $19.3 million compared to the same period in 2023, and Segment operating margin for the six months ended June 30, 2024, increased to 27.1% from 26.0%, due to the following:
Current report
The increase in Segment operating income and Segment operating margin was primarily driven by pricing and productivity improvements in excess of inflation and investment spending and the contribution to operating income from recent acquisition activity. These increases were partially offset by unfavorable volume/product mix, unfavorable foreign currency exchange rate movements, and higher acquisition, integration and restructuring expenses.
Current report
Net revenues for the three months ended June 30, 2024, increased by 5.2%, or $9.6 million, compared to the same period in 2023, due to the following:
Current report
The increase in Net revenues was primarily driven by improved pricing, higher volumes, and the favorable impact from the current year acquisitions, which was partially offset by unfavorable foreign currency exchange rate movements.
Current report
Net revenues for the six months ended June 30, 2024, increased by 3.3%, or $12.1 million, compared to the same period in 2023, due to the following:
Current report
Operating income/margin
Current report
Segment operating income for the three months ended June 30, 2024, increased $3.8 million compared to the same period in 2023, and Segment operating margin for the three months ended June 30, 2024, increased to 9.1% from 7.5%, due to the following:
Current report
The increase in Segment operating income and Segment operating margin was primarily driven by favorable volume/product mix, current year acquisitions, and lower acquisition, integration and restructuring expenses. These increases were partially offset by inflation and investment spending in excess of pricing and productivity, and the unfavorable impact to Segment operating income from foreign currency exchange rate movements.
Current report
Segment operating income for the six months ended June 30, 2024, increased $6.2 million compared to the same period in 2023, and Segment operating margin for the six months ended June 30, 2024, increased to 8.1% from 6.7%, due to the following:
Current report
The increase in Segment operating income and Segment operating margin was primarily driven by favorable volume/product mix, current year acquisitions, the favorable impact from foreign currency exchange rate movements, and lower acquisition, integration and restructuring expenses. These increases were partially offset by inflation and investment spending in excess of pricing and productivity.
Removed paragraphs (12)
Previous report
In the first quarter of 2024, we experienced a modest decline in revenue as compared to the same period in 2023, which was a seasonally stronger first quarter than normal due to previously experienced supply chain disruptions and recoveries. We expect the business to return to normal levels of seasonality in 2024.
Previous report
Demand for electronic security products has remained healthy. We continue to experience softness in demand in certain international markets in which we operate, which continue to operate in challenging economic environments.
Previous report
Pricing remained strong throughout the first quarter of 2024, and we expect positive price realization to continue in 2024.
Previous report
The acquisitions were accounted for as business combinations. Total consideration for these acquisitions was approximately $19.3 million (net of cash acquired). The initial allocation of the aggregate purchase price to assets acquired and liabilities assumed as of the acquisition dates includes $13.3 million of intangible assets, $2.3 million of goodwill, and $3.7 million of net tangible assets.
Previous report
Net revenues for the three months ended March 31, 2024, decreased by 3.2%, or $29.1 million, compared with the same period in 2023, due to the following:
Previous report
Net revenues for the three months ended March 31, 2024, decreased by 4.3%, or $31.6 million, compared to the same period in 2023, due to the following:
Previous report
The decrease in Net revenues was driven by lower volumes partially offset by improved pricing.
Previous report
Segment operating income for the three months ended March 31, 2024, increased $0.4 million compared to the same period in 2023, and Segment operating margin for the three months ended March 31, 2024, increased to 26.4% from 25.2%, due to the following:
Previous report
The increase in Segment operating income and Segment operating margin was primarily driven by pricing and productivity improvements in excess of inflation and investment spending and lower acquisition, integration and restructuring expenses. These increases were partially offset by unfavorable volume/product mix and unfavorable foreign currency exchange rate movements.
Previous report
Net revenues for the three months ended March 31, 2024, increased by 1.4%, or $2.5 million, compared to the same period in 2023, due to the following:
Previous report
Segment operating income for the three months ended March 31, 2024, increased $2.4 million compared to the same period in 2023, and Segment operating margin for the three months ended March 31, 2024, increased to 7.0% from 5.8%, due to the following:
Previous report
The increase in Segment operating income and Segment operating margin was primarily driven by pricing and productivity improvements in excess of inflation and investment spending, the favorable impact to Segment operating income from favorable foreign currency exchange rate movements, the favorable impact from lower acquisition, integration and restructuring expenses,and the current year acquisitions of Boss Door Controls and Dorcas. These increases were partially offset by unfavorable volume/product mix.
Reworded paragraphs (25)
Previous wording
On February 1, 2024, we, through our subsidiaries, acquired Boss Door Controls, a door solutions provider in the United Kingdom. The Boss Door Controls business has been incorporated into the Allegion International segment.
Current wording
On February 1, 2024, we, through our subsidiaries, acquired 100% of Boss Door Controls, a door solutions provider in the United Kingdom. Boss Door Controls is reported in the Allegion International segment.
Previous wording
On March 4, 2024, we, through our subsidiaries, acquired Montajes electronicos Dorcas S.L. ("Dorcas"), a leading manufacturer of electro-mechanical access control solutions based in Spain. The Dorcas business has been incorporated into the Allegion International segment.
Current wording
On March 4, 2024, we, through our subsidiaries, acquired 100% of Montajes electronicos Dorcas S.L. ("Dorcas"), a leading manufacturer of electro-mechanical access control solutions based in Spain. Dorcas is reported in the Allegion International segment.
Previous wording
During the three months ended March 31, 2024, we paid dividends of $0.48 per ordinary share to shareholders and repurchased approximately 0.3 million shares for $40.0 million.
Current wording
During the six months ended June 30, 2024, we paid dividends of $0.96 per ordinary share to shareholders and repurchased approximately 0.6 million shares for $80.0 million.
Previous wording
Operating income for the three months ended March 31, 2024, increased $1.1 million compared to the same period in 2023. Operating margin, which we define as Operating income as a percentage of total Net revenues, for the three months ended March 31, 2024, increased to 19.3% from 18.5% for the same period in 2023, due to the following:
Current wording
Operating income for the three months ended June 30, 2024, increased $24.4 million compared to the same period in 2023. Operating margin, which we define as Operating income as a percentage of total Net revenues, for the three months ended June 30, 2024, increased to 21.6% from 20.2% for the same period in 2023, due to the following:
Previous wording
Interest expense for the three months ended March 31, 2024, decreased $0.7 million compared with the same period in 2023, primarily due to lower outstanding indebtedness compared to the same period in the prior year.
Current wording
Interest expense for the three months ended June 30, 2024, increased $1.4 million compared with the same period in 2023, primarily due to higher outstanding indebtedness compared to the same period in the prior year.
Previous wording
The effective income tax rates for the three months ended March 31, 2024 and 2023, were 19.0% and 16.3%, respectively. The increase in the effective income tax rate compared to 2023 is primarily due to the enactment of global minimum tax in 2024 and the unfavorable change in the mix of income earned in higher tax rate jurisdictions, which are partially offset by the favorable change in share-based compensation deductions.
Current wording
The effective income tax rates for the three months ended June 30, 2024 and 2023, were 17.8% and 12.6%, respectively. The increase in the effective income tax rate compared to 2023 is primarily due to the enactment of global minimum tax in 2024 and the unfavorable change in the mix of income earned in higher tax rate jurisdictions, which are partially offset by the realization of discrete tax credits.
Previous wording
The decrease in Net revenues was driven by lower volumes, which was partially offset by improved pricing across our major businesses, the acquisitions of the Boss Door Controls and Dorcas businesses and favorable foreign currency exchange rate movements. The lower volumes are compared against the first quarter of 2023, which was a seasonally stronger first quarter than normal.
Current wording
The increase in Net revenues was driven by improved pricing across our major businesses and the acquisitions made during the year, which was partially offset by lower volumes and unfavorable foreign currency exchange rate movements. The lower volumes are compared against the first half of 2023, which was a seasonally stronger period than normal.
Previous wording
Segment Results of Operations - For the three months ended March 31:
Current wording
Segment Results of Operations - For the three and six months ended June 30:
Previous wording
Net revenues from non-residential products for the three months ended March 31, 2024, including Net revenues from our Access Technologies business, decreased by a mid-single digits percent compared to the same period in the prior year, driven by lower volumes partially offset by price. We currently anticipate growth in revenues from our non-residential products and services through the remainder of 2024.
Current wording
Net revenues from our non-residential business for the three months ended June 30, 2024, increased by a mid-single digits percent compared to the same period in the prior year, driven by improved pricing, higher volumes, and acquisition activity, which was partially offset by unfavorable foreign currency exchange rate movements. We currently anticipate growth from our non-residential products and services through the remainder of 2024.
Previous wording
Net revenues from residential products for the three months ended March 31, 2024, decreased by a low-single digits percent compared to the same period in the prior year. Given current market conditions around new construction and consumer sentiment, we expect continued softness in demand for our residential products in 2024.
Current wording
Net revenues from residential products for the three months ended June 30, 2024, increased by a low-single digits percent compared to the same period in the prior year, driven by higher volumes. Given current market conditions, we expect demand to remain stable for our residential products for the remainder of 2024.
Previous wording
The increase in Net revenues was primarily driven by improved pricing, favorable foreign currency exchange rate movements and the favorable impact from the current year acquisitions of Boss Door Controls and Dorcas. This increase was partially offset by lower volumes, due to continued weakness in certain markets in which we operate.
Current wording
The increase in Net revenues was primarily driven by improved pricing and the favorable impact from the current year acquisitions, which was partially offset by lower volumes and unfavorable foreign currency exchange rate movements.
Previous wording
Our primary source of liquidity is cash provided by operating activities. Cash provided by operating activities is used to invest in new product development and fund capital expenditures and working capital requirements. Our ability to generate cash from operating activities, our unused borrowing capacity under the 2021 Revolving Facility and our access to the capital and credit markets enable us to fund these capital needs, execute our long-term growth strategies and return value to our shareholders. Further, our business operates with strong operating cash flows, low leverage and low capital intensity, providing financial flexibility, including sufficient access to credit markets.
Current wording
Our primary source of liquidity is cash provided by operating activities. Cash provided by operating activities is used to invest in new product development and fund capital expenditures and working capital requirements. Our ability to generate cash from operating activities, our unused borrowing capacity under the Revolving Facility and our access to the capital and credit markets enable us to fund these capital needs, execute our long-term growth strategies and return value to our shareholders. Further, our business operates with strong operating cash flows, low leverage and low capital intensity, providing financial flexibility, including sufficient access to credit markets.
Previous wording
Our short-term financing needs primarily consist of working capital requirements, restructuring initiatives, capital spending, dividend payments and principal and interest payments on our long-term debt. Long-term financing needs depend largely on potential growth opportunities, including potential acquisitions, repayment or refinancing of our long-term obligations and repurchases of our ordinary shares. Of our total outstanding indebtedness as of March 31, 2024, approximately 89% incurs fixed-rate interest and is therefore not exposed to the risk of rising variable interest rates.
Current wording
Our short-term financing needs primarily consist of working capital requirements, restructuring initiatives, capital spending, dividend payments and principal and interest payments on our long-term debt. Long-term financing needs depend largely on potential growth opportunities, including potential acquisitions, repayment or refinancing of our long-term obligations and repurchases of our ordinary shares. Of our total outstanding indebtedness as of June 30, 2024, approximately 91% incurs fixed-rate interest and is therefore not exposed to the risk of rising variable interest rates.
Previous wording
Based upon our operations, existing cash balances and unused borrowing capacity under the 2021 Revolving Facility, as of March 31, 2024, we expect our cash flows from operations will be sufficient to maintain a sound financial position and liquidity and to meet our current financing needs for at least the next 12 months. Further, we do not anticipate any covenant compliance challenges with any of our outstanding indebtedness for at least the next 12 months. We also believe existing borrowing capacity under the 2021 Credit Facilities, together with financing we believe would be accessible to us in the credit and capital markets, are sufficient to achieve our longer-term strategic plans.
Current wording
Based upon our operations, existing cash balances and unused borrowing capacity under the Revolving Facility, as of June 30, 2024, we expect our cash flows from operations will be sufficient to maintain a sound financial position and liquidity and to meet our current financing needs for at least the next 12 months. Further, we do not anticipate any covenant compliance challenges with any of our outstanding indebtedness for at least the next 12 months. We also believe existing borrowing capacity under the Revolving Facility, together with financing we believe would be accessible to us in the credit and capital markets, are sufficient to achieve our longer-term strategic plans.
Previous wording
The following table reflects the major categories of cash flows for the three months ended March 31. For additional details, see the Condensed and Consolidated Statements of Cash Flows in the Condensed and Consolidated Financial Statements.
Current wording
The following table reflects the major categories of cash flows for the six months ended June 30. For additional details, see the Condensed and Consolidated Statements of Cash Flows in the Condensed and Consolidated Financial Statements.
Previous wording
Operating Activities: Net cash provided by operating activities during the three months ended March 31, 2024, decreased $17.9 million compared to the same period in 2023, primarily driven by higher cash used for working capital.
Current wording
Operating Activities: Net cash provided by operating activities during the six months ended June 30, 2024, decreased $6.0 million compared to the same period in 2023, primarily driven by higher cash used for working capital.
Previous wording
Investing Activities: Net cash used in investing activities during the three months ended March 31, 2024, decreased $8.0 million compared to the same period in 2023, primarily due to lower cash used for acquisitions. This decrease was partially offset by an increase in capital expenditures and a decrease in cash provided from other investing activities compared to the same period in 2023.
Current wording
Investing Activities: Net cash used in investing activities during the six months ended June 30, 2024, increased $104.8 million compared to the same period in 2023, primarily due to cash used for acquisitions and higher capital expenditures.
Previous wording
Financing Activities: Net cash used in financing activities during the three months ended March 31, 2024, increased $64.6 million compared to the same period in 2023, primarily due to the cash used to repurchase shares in the current period, and proceeds from the 2021 Revolving Facility in the prior year used for the purchase of plano.
Current wording
Financing Activities: Net cash provided by financing activities during the six months ended June 30, 2024, increased $366.6 million compared to the same period in 2023, primarily due to the proceeds from the issuance of the 5.600% Senior Notes. The increase was partially offset by an increase in the cash used to repurchase shares compared to the same period in 2023.
Previous wording
We are party to an unsecured credit agreement consisting of a $250.0 million term loan facility (the “2021 Term Facility”), of which $221.9 million was outstanding at March 31, 2024, 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 there was no balance outstanding at March 31, 2024. The 2021 Credit Facilities mature on November 18, 2026.
Current wording
We have an unsecured credit agreement consisting of a $250.0 million term loan facility (the “Term Facility”), of which $218.8 million was outstanding at June 30, 2024, and a revolving credit facility (the “Revolving Facility” and, together with the Term Facility, the “Credit Facilities”), of which there was no balance outstanding at June 30, 2024. On May 20, 2024, the Company amended and restated the Credit Facilities which, among other things, (i) increased the total commitment on the Revolving Facility from $500.0 million to $750.0 million, (ii) extended the maturity of the Revolving Facility from November 18, 2026 to May 20, 2029, (iii) transitioned the benchmark interest rate from the Bloomberg Short-Term Bank Yield Index (“BSBY”) to the Secured Overnight Financing Rate (“SOFR”) for the Credit Facilities, and (iv) added Allegion (Ireland) Finance Designated Activity Company (“Allegion Ireland DAC”), the Company’s wholly-owned subsidiary, as borrower.
Previous wording
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. We repaid $3.1 million of principal on the 2021 Term Facility during the three months ended March 31, 2024. Principal amounts repaid on the 2021 Term Facility may not be reborrowed. The 2021 Revolving Facility provides aggregate commitments of up to $500.0 million, including up to $100.0 million for the issuance of letters of credit. We had $18.3 million of letters of credit outstanding at March 31, 2024. Borrowings under the 2021 Revolving Facility may be repaid at any time without premium or penalty, and amounts repaid may be reborrowed.
Current wording
The Term Facility requires quarterly principal payments through its maturity on November 18, 2026. Future payments total $6.3 million for the remainder of 2024, $21.9 million due in 2025, and $190.6 million due in 2026. We repaid $6.3 million of principal on the Term Facility during the six months ended June 30, 2024. Principal amounts repaid on the Term Facility may not be reborrowed. The Revolving Facility aggregate commitments of up to $750.0 million includes up to $100.0 million for the issuance of letters of credit. We had $18.5 million of letters of credit outstanding at June 30, 2024. Borrowings under the Revolving Facility may be repaid at any time without premium or penalty, and amounts repaid may be reborrowed.
Previous wording
Outstanding borrowings under the 2021 Credit Facilities accrue interest, at our option, 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 our credit ratings. At March 31, 2024, outstanding borrowings under the 2021 Credit Facilities accrued interest at BSBY plus a margin of 1.125%, resulting in an interest rate of 6.472%. The 2021 Credit Facilities also contain negative and affirmative covenants and events of default that, among other things, limit or restrict our ability to enter into certain transactions. In addition, the 2021 Credit Facilities require us to comply with a maximum leverage ratio as defined within the credit agreement. As of March 31, 2024, we were in compliance with all applicable covenants under the credit agreement.
Current wording
Outstanding borrowings under the Credit Facilities accrue interest, at the option of the Company, equal to either: (i) a Secured Overnight Financing Rate ("SOFR") 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 June 30, 2024, the Company's outstanding borrowings under the Credit Facilities accrued interest at SOFR plus a margin of 1.225%, resulting in an interest rate of 6.569%. The 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 Credit Facilities require the Company to comply with a maximum leverage ratio as defined in the credit agreement. As of June 30, 2024, the Company was in compliance with all applicable covenants under the credit agreement.
Previous wording
As of March 31, 2024, Allegion US Hold Co has $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"), while Allegion plc has $400.0 million outstanding of its 3.500% Senior Notes due 2029 (the “3.500% Senior Notes”, and all four senior notes collectively, the “Senior Notes”). The 3.200% Senior Notes, 3.550% Senior Notes and 3.500% Senior Notes all require semi-annual interest payments on April 1 and October 1 of each year and will mature on October 1, 2024, October 1, 2027 and October 1, 2029, respectively. The 5.411% Senior Notes require semi-annual interest payments on January 1 and July 1 of each year, beginning January 1, 2023, and will mature on July 1, 2032. We expect the availability on the 2021 Revolving Facility, along with cash on hand, will provide sufficient liquidity to repay the 3.200% Senior Notes due in the fourth quarter of 2024, if needed.
Current wording
As of June 30, 2024, Allegion US Hold Co has $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”), $600.0 million outstanding of its 5.411% Senior Notes due 2032 (the "5.411% Senior Notes") and $400.0 million of its 5.600% Senior Notes due 2034 (the "5.600% Senior Notes"), and Allegion plc has $400.0 million outstanding of its 3.500% Senior Notes due 2029 (the “3.500% Senior Notes”, and all five 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, beginning January 1, 2023, and will mature on July 1, 2032. The 5.600% Senior Notes require semi-annual interest payments on May 29 and November 29 of each year and will mature on May 29, 2034. We expect to use the proceeds of the 5.600% Senior Notes to repay the 3.200% Senior Notes that mature in the second half of 2024.
Previous wording
Allegion US Hold Co is the issuer of the 3.200% Senior Notes, 3.550% Senior Notes, and 5.411% Senior Notes and is the guarantor of the 3.500% Senior Notes. Allegion plc (the “Parent”) is the issuer of the 3.500% Senior Notes and is the guarantor of the 3.200% Senior Notes, 3.550% Senior Notes, and 5.411% Senior Notes. Allegion US Hold Co is directly or indirectly 100% owned by the Parent and each of the guarantees of Allegion US Hold Co and the Parent is full and unconditional and joint and several.
Current wording
Allegion US Hold Co is the issuer of the 3.200% Senior Notes, 3.550% Senior Notes, 5.411% Senior Notes, and 5.600% Senior Notes and is the guarantor of the 3.500% Senior Notes. Allegion plc (the “Parent”) is the issuer of the 3.500% Senior Notes and is the guarantor of the 3.200% Senior Notes, 3.550% Senior Notes, 5.411% Senior Notes, and 5.600% Senior Notes. Allegion US Hold Co is directly or indirectly 100% owned by the Parent and each of the guarantees of Allegion US Hold Co and the Parent is full and unconditional and joint and several.
Previous wording
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, 3.550% Senior Notes, and 5.411% Senior Notes is the senior unsecured obligation of the Parent and ranks equally with all of the Parent’s existing and future senior unsecured and unsubordinated indebtedness. The 3.500% Senior Notes are senior unsecured obligations of the Parent and rank equally with all of the Parent’s existing and future senior unsecured and unsubordinated indebtedness. The guarantee of the 3.500% Senior Notes is the senior unsecured obligation of Allegion US Hold Co and ranks equally with all of Allegion US Hold Co's existing and future senior unsecured and unsubordinated indebtedness.
Current wording
The 3.200% Senior Notes, 3.550% Senior Notes, 5.411% Senior Notes, and 5.600% 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, 3.550% Senior Notes, 5.411% Senior Notes, and 5.600% Senior Notes is the senior unsecured obligation of the Parent and ranks equally with all of the Parent’s existing and future senior unsecured and unsubordinated indebtedness. The 3.500% Senior Notes are senior unsecured obligations of the Parent and rank equally with all of the Parent’s existing and future senior unsecured and unsubordinated indebtedness. The guarantee of the 3.500% Senior Notes is the senior unsecured obligation of Allegion US Hold Co and ranks equally with all of Allegion US Hold Co's existing and future senior unsecured and unsubordinated indebtedness.
Previous wording
Management believes there have been no significant changes during the three months ended March 31, 2024, to the items we disclosed as our critical accounting policies in "Management’s Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended December 31, 2023.
Current wording
Management believes there have been no significant changes during the six months ended June 30, 2024, to the items we disclosed as our critical accounting policies in "Management’s Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended December 31, 2023.
Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
The discussions that follow describe the significant factors contributing to the changes in our results of operations for the periods presented and form the basis used by management to evaluate the financial performance of the business.
Current report — wording carried from elsewhere
The components of Other income, net for the six months ended June 30 were as follows:
Current report — wording carried from elsewhere
The effective income tax rates for the six months ended June 30, 2024 and 2023, were 18.3% and 14.4%, respectively. The increase in the effective income tax rate compared to 2023 is primarily due to the enactment of global minimum tax in 2024 and the unfavorable change in the mix of income earned in higher tax rate jurisdictions, which are partially offset by the realization of discrete tax credits.