Allegion plc

Previous wording

Business and Industry Trends and Outlook

Current wording

Business and Industry Trends and Outlook and Global Trade and Macroeconomic Environment

Previous wording

In February 2025, the US government announced tariffs on imports from Mexico, Canada and China, countries from which we manufacture and/or import products and components. Subsequently, the tariffs on imports from Mexico and Canada were paused. We are evaluating the potential impact of these actions and considering what, if any, steps, including pricing actions, we take to mitigate the impact of the tariffs.

Current wording

Throughout 2025, the U.S. government announced tariffs on imports from several countries from which we manufacture and/or import products and components. In 2025, we offset inflation due to tariffs with pricing actions. We continue to analyze the impact of changes in tariffs and what, if any, steps, including pricing actions, we may take to mitigate the impact of the tariffs. We estimate we source approximately 20-25% of cost of goods sold ("COGS") from Mexico, less than 5% of COGS from China, and 5-10% of COGS from all other non-US countries. Additionally, this could impact future demand.

Previous wording

During 2023, we paid quarterly dividends of $0.45 per ordinary share to shareholders on record as of March 15, 2023, June 15, 2023, September 18, 2023, and December 18, 2023, for a total of $158.7 million, and repurchased approximately 0.5 million ordinary shares for approximately $59.9 million.

Current wording

During 2025, we paid quarterly dividends of $0.51 per ordinary share to shareholders on record as of March 14, 2025, June 13, 2025, September 15, 2025, and December 16, 2025, for a total of $175.3 million, and repurchased approximately 0.6 million ordinary shares for approximately $80.0 million.

Previous wording

For the year ended December 31, 2024, Cost of goods sold as a percentage of Net revenues decreased to 55.8% from 56.7%, as compared to the year ended December 31, 2023, due to the following:

Current wording

For the year ended December 31, 2025, Cost of goods sold as a percentage of Net revenues decreased to 54.8% from 55.8%, as compared to the year ended December 31, 2024, due to the following:

Previous wording

Cost of goods sold as a percentage of Net revenues decreased primarily due to pricing and productivity, which exceeded the impacts from inflation and investment spending, favorable product mix and favorable foreign currency exchange rate movements. These decreases were partially offset by the impacts to gross margin associated with our acquired businesses.

Current wording

Cost of goods sold as a percentage of Net revenues decreased primarily due to favorable product mix, favorable foreign currency exchange rate movements, a year-over-year decrease in restructuring, integration, and acquisition expenses and pricing and productivity, which exceeded the impacts from inflation and investment spending.

Previous wording

Pricing and productivity in excess of inflation and investment spending includes the impact to Costs of goods sold from pricing, as defined above, in addition to productivity, inflation and investment spending. Productivity represents improvements in unit costs of materials and cost reductions related to improvements to our manufacturing design and processes. Inflation includes unit costs for the current period compared to the average actual cost for the prior period, multiplied by current year volumes.

Current wording

Pricing and productivity in excess of inflation and investment spending includes the impact to Cost of goods sold from pricing, as defined above, in addition to productivity, inflation and investment spending. Productivity represents improvements in unit costs of materials and cost reductions related to improvements to our manufacturing design and processes. Inflation includes unit costs for the current period compared to the average actual cost for the prior period, multiplied by current year volumes. Expenses related to increased head count for strategic initiatives, new facilities or other significant spending for strategic initiatives or new product and channel development, are captured in investment spending. Volume/product mix represents the impact due to increases or decreases of revenue due to changes in unit volume, including new products and services, including the effect of changes in the mix of products and services sold on Cost of goods sold.

Previous wording

For the year ended December 31, 2024, Selling and administrative expenses as a percentage of Net revenues decreased to 23.5% from 23.7%, as compared to the year ended December 31, 2023, due to the following:

Current wording

For the year ended December 31, 2025, Selling and administrative expenses as a percentage of Net revenues increased to 24.1% from 23.5%, as compared to the year ended December 31, 2024, due to the following:

Previous wording

Selling and administrative expenses as a percentage of Net revenues decreased due to a year-over-year decrease in restructuring, integration, and acquisition expenses and the beneficial impacts from current and prior year acquisition activity. These decreases were partially offset by inflation in excess of productivity and investment spending, as well as the unfavorable impact of lower volumes.

Current wording

Selling and administrative expenses as a percentage of Net revenues increased due to inflation in excess of productivity and investment spending and a year-over-year increase in restructuring, integration, and acquisition expenses. These increases were partially offset by the favorable impact of higher volume leverage.

Previous wording

Operating income for the year ended December 31, 2024, increased $72.3 million as compared to the year ended December 31, 2023, and Operating margin increased to 20.7% from 19.4%, due to the following:

Current wording

Operating income for the year ended December 31, 2025, increased $78.8 million as compared to the year ended December 31, 2024, and Operating margin increased to 21.1% from 20.7%, due to the following:

Previous wording

The increase in Operating income was driven by pricing and productivity improvements in excess of inflation and investment spending, favorable foreign currency exchange rate movements, the contributions from recent acquisition activity, a year-over-year decrease in restructuring, integration, and acquisition costs and impairment charges on intangible assets recorded in the prior year. These increases were partially offset by unfavorable volume/product mix.

Current wording

The increase in Operating income was driven by favorable volume/product mix, the favorable impact from acquisitions/divestitures, favorable foreign currency exchange rate movements, and pricing and productivity improvements in excess of inflation and investment spending. These increases were partially offset by higher restructuring, integration, and acquisition expenses.

Previous wording

Interest expense for the year ended December 31, 2024, increased $8.9 million as compared to the year ended December 31, 2023, primarily due to higher outstanding indebtedness compared to the same period in the prior year.

Current wording

Interest expense for the year ended December 31, 2025, decreased $1.0 million as compared to the year ended December 31, 2024, primarily due to a lower weighted-average interest rate on our outstanding indebtedness.

Previous wording

For the year ended December 31, 2024, our effective tax rate was 14.5%, compared to 12.4% for the year ended December 31, 2023. The increase in the effective tax rate was primarily due to the enactment of Global Minimum Tax and the mix of income earned in higher tax rate jurisdictions.

Current wording

For the year ended December 31, 2025, our effective tax rate was 16.2%, compared to 14.5% for the year ended December 31, 2024. The increase in the effective income tax rate was primarily due to the unfavorable mix of income earned in higher tax rate jurisdictions and year over year changes in amounts recognized for uncertain tax positions and income tax credits, which were partially offset by the enactment of legislative changes.

Previous wording

We operate in and report financial results for two segments: Allegion Americas and Allegion International. These segments represent the level at which our chief operating decision maker (the "CODM") reviews our financial performance and makes operating decisions.

Current wording

We operate in and report financial results for two segments: Allegion Americas and Allegion International. These segments represent the level at which our chief operating decision maker ("CODM") reviews our financial performance and makes operating decisions.

Previous wording

Our Allegion Americas segment is a leading provider of security products, services and solutions throughout North America. The segment sells a broad range of products and solutions including, locks, locksets, portable locks, key systems, door controls and door control systems, exit devices, doors, glass and door systems, accessories, electronic security products, access control systems and software and service solutions to customers in commercial, institutional and residential facilities, including the education, healthcare, government, hospitality, retail, commercial office and single and multi-family residential markets. This segment’s primary brands are LCN, Schlage, Von Duprin and Stanley Access Technologies, which we utilize with permission in accordance with the terms of an agreement with Stanley Black & Decker ("Stanley" is the property of Stanley Logistics L.L.C).

Current wording

Our Allegion Americas segment is a leading provider of security products, services and solutions throughout North America. The segment sells a broad range of products and solutions including, locks, locksets, portable locks, key systems, door controls and door control systems, exit devices, doors, glass and door systems, accessories, electronic security products, access control systems and software and service solutions to customers in commercial, institutional and residential facilities, including the education, healthcare, government, hospitality, retail, commercial office and single and multi-family residential markets. This segment’s primary brands are LCN, Schlage, Von Duprin and Stanley Access Technologies, which we utilize with permission in accordance with the terms of an agreement with STANLEY Black & Decker.

Previous wording

Growth in Americas electronic security products and solutions is a metric monitored by management and a focus of our investors. Electronic products encompass both residential and non-residential products, and include all electrified product categories including, but not limited to, electronic and electrified locks, access control systems and electronic and electrified door controls and systems and exit devices. Net revenues from the sale of electronic products decreased by a low single-digits percent compared to 2023. In 2023, we experienced a low-twenties percent increase compared to 2022, driven by improvements around the availability of materials and components. We continue to believe electronic products are a long-term growth driver.

Current wording

Growth in Americas electronic security products and solutions is a metric monitored by management and a focus of our investors. Electronic products encompass both residential and non-residential products, and include all electrified product categories including, but not limited to, electronic and electrified locks, access control systems and electronic and electrified door controls and systems and exit devices. Net revenues from the sale of electronic products increased by a low-double digits percent compared to 2024. We continue to believe electronic products are a long-term growth driver.

Previous wording

The increase in Segment operating income was primarily driven by pricing and productivity improvements in excess of inflation and investment spending, favorable volume/product mix, favorable foreign currency exchange rate movements, operating income from our acquired businesses and a year-over-year decrease in restructuring, integration, and acquisition expenses.

Current wording

The increase in Segment operating income was primarily driven by favorable volume/product mix, pricing and productivity in excess of inflation and investment spending, the favorable impact of recent acquisitions, lower restructuring, integration, and acquisition expenses and favorable foreign currency exchange rate movements.

Previous wording

The increase in Segment operating margin was driven by pricing and productivity improvements in excess of inflation and investment spending, favorable foreign currency exchange rate movements, and a year-over-year decrease in restructuring, integration and acquisition expenses.

Current wording

The increase in Segment operating margin was driven by favorable volume/product mix, lower restructuring, integration and acquisition expenses and favorable foreign currency exchange rate movements. These increases were partially offset by lower operating margin from pricing and productivity in excess of inflation and investment spending and the unfavorable impact on operating margin from recent acquisitions.

Previous wording

Our Allegion International segment provides security products, services and solutions primarily throughout Europe, Asia and Oceania. The segment offers end-users a broad range of products, services and solutions including locks, locksets, portable locks, key systems, door controls and door control systems, exit devices, doors, electronic security products, access control systems, time and attendance and workforce productivity solutions, among other software and service solutions. This segment’s primary brands are AXA, CISA, Gainsborough, Interflex, and SimonsVoss.

Current wording

Our Allegion International segment provides security products, services and solutions primarily throughout Europe, Asia and Oceania. The segment offers end-users a broad range of products, services and solutions including locks, locksets, portable locks, key systems, door controls and door control systems, exit devices, doors, electronic security products, access control systems, time and attendance and workforce productivity solutions, among other software and service solutions. This segment’s primary brands are AXA, CISA, ELATEC, Gainsborough, Interflex, and SimonsVoss.

Previous wording

The increases in Segment operating income and Segment operating margin were primarily driven by pricing and productivity improvements in excess of inflation and investment spending, favorable movements in foreign currency exchange rates, current year acquisition activity and impairment charges on intangible assets recorded in the prior year. These increases were partially offset by unfavorable volume/product mix and a year-over-year increase in restructuring, integration and acquisition expenses.

Current wording

The increases in Segment operating income and Segment operating margin were primarily driven by the favorable impact from acquisitions/divestitures and favorable movements in foreign currency exchange rates. These increases were partially offset by higher restructuring, integration and acquisition expenses, unfavorable volume/product mix and inflation and investment spending in excess of pricing and productivity improvements. Macroeconomic conditions in our International markets remain mixed.

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 December 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, potential acquisitions, 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 December 31, 2025, approximately 90% 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 availability under the Revolving Facility, as of December 31, 2024, we expect cash flows from operations to be sufficient to maintain a sound financial position and liquidity and to meet our 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 availability under the Credit Facilities and access to credit and capital markets are sufficient to achieve our longer-term strategic plans.

Current wording

Based upon our operations, existing cash balances and unused availability under the Revolving Facility, as of December 31, 2025, we expect cash flows from operations to be sufficient to maintain a sound financial position and liquidity and to meet our financing needs for at least the next twelve months. Further, we do not anticipate any covenant compliance challenges with any of our outstanding indebtedness for at least the next twelve months. We also believe unused availability under the Revolving Facility and access to credit and capital markets are sufficient to achieve our longer-term strategic plans.

Previous wording

Operating activities: Net cash provided by operating activities for the year ended December 31, 2024, increased by $74.4 million compared to 2023, driven primarily by higher net earnings and improvements in working capital.

Current wording

Operating activities: Net cash provided by operating activities for the year ended December 31, 2025, increased by $108.8 million compared to 2024, driven primarily by higher net earnings and less cash used for working capital.

Previous wording

Investing activities: Net cash used in investing activities for the year ended December 31, 2024, increased by $99.3 million compared to 2023, primarily due to the acquisition activity in 2024 and a $7.9 million increase in capital expenditures compared to 2023. These increases were partially offset by a decrease in other investments compared to 2023.

Current wording

Investing activities: Net cash used in investing activities for the year ended December 31, 2025, increased by $457.1 million compared to 2024, primarily due to higher cash used for acquisitions and an increase in capital expenditures.

Previous wording

Financing activities: Net cash used in financing activities for the year ended December 31, 2024, increased by $95.8 million compared to 2023. The change in cash used in financing activities was primarily due to an increase in cash used for share repurchases and dividend payments, partially offset by lower net repayments on debt compared to 2023.

Current wording

Financing activities: Net cash used in financing activities for the year ended December 31, 2025, decreased by $127.8 million compared to 2024. The change in cash used in financing activities was primarily due to a decrease in cash used for share repurchases, partially offset by higher net repayments on debt and higher dividend payments.

Previous wording

We have an unsecured credit agreement in place, consisting of a $250.0 million term loan facility (the "Term Facility"), of which $212.5 million was outstanding at December 31, 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 December 31, 2024. On May 20, 2024, we 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, and (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.

Current wording

We have an unsecured revolving credit facility (the "Revolving Facility") in place, of which $190.6 million was outstanding at December 31, 2025. We paid the outstanding $212.5 million principal balance and interest on a term loan facility during the year ended December 31, 2025 using cash on hand and borrowings under the Revolving Facility. On December 9, 2025, we amended and restated the Revolving Facility which, among other things, increased the total commitment from $750.0 million to $1.0 billion, and extended the maturity from May 20, 2029 to May 20, 2030.

Previous wording

The Term Facility requires quarterly principal payments through its maturity on November 18, 2026. Future payments total$21.9 million due in 2025 and $190.6 million due in 2026. We repaid $12.5 million of principal on the Term Facility during the year ended December 31, 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 December 31, 2024. Borrowings under the Revolving Facility may be repaid at any time without premium or penalty, and amounts repaid may be reborrowed.

Current wording

The Revolving Facility provides aggregate commitments of up to $1.0 billion, which includes up to $100.0 million for the issuance of letters of credit. We had $25.2 million and $18.4 million of letters of credit outstanding at December 31, 2025 and 2024, respectively. Borrowings under the Revolving Facility may be repaid at any time without premium or penalty, and amounts repaid may be reborrowed. We pay certain fees with respect to the Revolving Facility, including an unused commitment fee on the undrawn portion of between 0.080% and 0.200% per year, depending on the Company's credit ratings, as well as certain other fees.

Previous wording

Outstanding borrowings under the Credit Facilities accrue interest, at our option, equal to either: (i) SOFR 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 December 31, 2024, our outstanding borrowings under the Credit Facilities accrued interest at SOFR plus a margin of 1.225%, resulting in an interest rate of 5.582%. The 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 Credit Facilities require us to comply with a maximum leverage ratio as defined in the credit agreement. As of December 31, 2024, we were in compliance with all applicabl e covenants under the credit agreement, and we do not anticipate any potential concerns for at least the next 12 months.

Current wording

Outstanding borrowings under the Revolving Facility accrue interest, at our option, of (i) a SOFR plus an applicable margin, or (ii) a base rate (as defined in the credit agreement) plus an applicable margin. The applicable margin ranges from 0.875% to 1.375% depending on our credit ratings. At December 31, 2025, our outstanding borrowings under the Revolving Facility accrued interest at SOFR plus a margin of 1.125%, resulting in an interest rate of 4.902%. The credit agreement also contains 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 Revolving Facility requires us to comply with a maximum leverage ratio as defined in the credit agreement. As of December 31, 2025, we were in compliance with all applicable covenants under the credit agreement.

Previous wording

As of December 31, 2024, we also have $400.0 million outstanding of 3.550% Senior Notes due 2027 (the “3.550% Senior Notes”), $400.0 million outstanding of 3.500% Senior Notes due 2029 (the “3.500% Senior Notes”), $600.0 million outstanding of 5.411% Senior Notes due 2032 (the “5.411% Senior Notes”), and $400.0 million outstanding of our 5.600% Senior Notes (all four senior notes collectively, the "Senior Notes"). The 3.550% Senior Notes, 3.500% Senior Notes, 5.411% Senior Notes, and 5.600% Senior Notes all require semi-annual interest payments, and mature on October 1, 2027, October 1, 2029, July 1, 2032, and May 29, 2034, respectively.

Current wording

As of December 31, 2025, we also have $400.0 million outstanding of our 3.550% Senior Notes due 2027 (the “3.550% Senior Notes”), $600.0 million outstanding of our 5.411% Senior Notes due 2032 (the “5.411% Senior Notes”), $400.0 million outstanding of the 5.600% Senior Notes due 2034 (the "5.600% Senior Notes") and $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 3.550% Senior Notes and 3.500% Senior Notes both require semi-annual interest payments on April 1 and October 1 of each year and mature on 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 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 mature on May 29, 2034.

Previous wording

Scheduled future principal repayments on our outstanding indebtedness can be found in Note 9 to the Consolidated Financial Statements. Expected principal and interest payments related to our long-term indebtedness in 2025 amount to$21.9 million and approximately $95.0 million, respe ctively, given our current level of indebtedness and effective interest rates as of December 31, 2024.

Current wording

Scheduled future principal repayments on our outstanding indebtedness can be found in Note 8 to the Consolidated Financial Statements. Interest payments related to our long-term indebtedness in 2026 are expected to be $90-95 million, given our current level of indebtedness and effective interest rates as of December 31, 2025.

Previous wording

Purchase Commitments– We occasionally enter into short-term, firm purchase commitments to mitigate pricing risk related to certain of our commodity, parts and component purchases, which represent commitments under enforceable and legally binding agreements. Such purchase commitments are made in the normal course of business and are not anticipated to materially impact our liquidity or financial position over the next 12 months.

Current wording

Purchase Commitments– We occasionally enter into short-term, firm purchase commitments to mitigate pricing risk related to certain of our commodity, parts and component purchases, which represent commitments under enforceable and legally binding agreements. Such purchase commitments are made in the normal course of business and are not anticipated to materially impact our liquidity or financial position over the next twelve months. See Note 19 to the Consolidated Financial Statements for further information.

Previous wording

At December 31, 2024, we had net pension assets of $5.3 million, which consist of plan assets of $473.0 million and benefit obligations of $467.7 million. It is our objective to contribute to our pension plans in order to ensure adequate funds are available to make benefit payments to plan participants and beneficiaries when required. At December 31, 2024, the funded status of our U.S. pension plans decreased to 100.8% from 101.6% at December 31, 2023. The funded status for our non-U.S. pension plans increased to 101.4% at December 31, 2024 from 98.5% at December 31, 2023. The funded status for all of our pension plans at December 31, 2024 increased to 101.1% from 99.9% at December 31, 2023. We currently expect to contribute approximately $5 million to our plans worldwide in 2025.

Current wording

At December 31, 2025, we had net pension assets of $14.6 million, which consist of plan assets of $498.5 million and benefit obligations of $483.9 million. It is our objective to contribute to our pension plans in order to ensure adequate funds are available to make benefit payments to plan participants and beneficiaries when required. At December 31, 2025, the funded status of our U.S. pension plans increased to 101.0% from 100.8% at December 31, 2024. The funded status for our non-U.S. pension plans increased to 104.8% at December 31, 2025 from 101.4% at December 31, 2024. The funded status for all of our pension plans at December 31, 2025 increased to 103.0% from 101.1% at December 31, 2024. We currently expect to contribute approximately $3.9 million to our plans worldwide in 2026.

Previous wording

Income Taxes– At December 31, 2024, we have total unrecognized tax benefits for uncertain tax positions of $44.5 million and $9.2 million of related accrued interest and penalties, net of tax, although we are unable to reasonably estimate the timing over which these liabilities might be paid. See Note 18 to the Consolidated Financial Statements for additional information regarding matters relating to income taxes, including unrecognized tax benefits and tax authority disputes.

Current wording

Income Taxes– At December 31, 2025, we have total unrecognized tax benefits for uncertain tax positions of $54.8 million and $12.0 million of related accrued interest and penalties, net of tax, although we are unable to reasonably estimate the timing over which these liabilities might be paid. See Note 16 to the Consolidated Financial Statements for additional information regarding matters relating to income taxes, including unrecognized tax benefits and tax authority disputes.

Previous wording

Allegion US Hold Co is or was, as applicable, 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 or was, as applicable, the issuer of the 3.500% Senior Notes and is or was, as applicable, 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.

Current wording

Allegion US Hold Co is the issuer of the 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 3.550% 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, 5.411% Senior Notes, and 5.600% Senior Notes are or were, as applicable, 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 or was, as applicable, 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 3.550% 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 3.550% 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

Each guarantee is effectively subordinated to any secured indebtedness of the applicable guarantor to the extent of the value of the assets securing such indebtedness. The Senior Notes are structurally subordinated to indebtedness and other liabilities of the subsidiaries of the applicable guarantor, none of which guarantee the notes. The obligations of the applicable guarantor under its guarantee are limited as necessary to prevent such guarantee from constituting a fraudulent conveyance under applicable law and, therefore, are limited to the amount that the applicable guarantor could guarantee without such guarantee constituting a fraudulent conveyance; this limitation, however, may not be effective to prevent such guarantee from constituting a fraudulent conveyance. If the guarantee was rendered voidable, it could be subordinated by a court to all other indebtedness (including guarantees and other contingent liabilities) of the applicable guarantor, and, depending on the amount of such indebtedness, the applicable guarantor’s liability on its guarantee could be reduced to zero. In such an event, the notes would be structurally subordinated to the indebtedness and other liabilities of the applicable guarantor.

Current wording

Each guarantee is effectively subordinated to any secured indebtedness of the guarantor to the extent of the value of the assets securing such indebtedness. The Senior Notes are structurally subordinated to indebtedness and other liabilities of the subsidiaries of the guarantor, none of which guarantee the notes. The obligations of the guarantor under its guarantee are limited as necessary to prevent such guarantee from constituting a fraudulent conveyance under applicable law and, therefore, are limited to the amount that the applicable guarantor could guarantee without such guarantee constituting a fraudulent conveyance; this limitation, however, may not be effective to prevent such guarantee from constituting a fraudulent conveyance. If the guarantee was rendered voidable, it could be subordinated by a court to all other indebtedness (including guarantees and other contingent liabilities) of the guarantor, and, depending on the amount of such indebtedness, the applicable guarantor’s liability on its guarantee could be reduced to zero. In such an event, the notes would be structurally subordinated to the indebtedness and other liabilities of the applicable guarantor.