Allegion (ALLE) 10-K risk factor changes: FY2020 vs FY2019

Our global operations depend on products manufactured, purchased and sold in the U.S. and internationally, including in Australia, [added: Canada,] China, Europe, Korea, Mexico, New Zealand and the [removed: United Arab Emirates.][added: Middle East.]

[removed: | • |] [added: -] Changes to trade agreements, sanctions, import and export regulations, including imposition of burdensome tariffs and quotas, and customs duties; [removed: |]

[removed: | • |] [added: -] Changes in applicable tax regulations and interpretations; [removed: |]

[removed: | • |] [added: -] Changes in laws and regulations or imposition of currency restrictions and other restraints in various jurisdictions; [removed: |]

[removed: | • |] [added: -] Limitation of ownership rights, including expropriation of assets by a local government, and limitation on the ability to repatriate earnings; [removed: |]

[removed: | • |] [added: -] Sovereign debt crises and currency instability in developed and developing countries; [removed: |]

[removed: | • |] [added: -] Difficulty in staffing and managing global operations; [removed: |]

[removed: | • |] [added: -] Difficulty in enforcing agreements, collecting receivables and protecting assets through non-U.S. legal systems; and [removed: |]

[removed: | • |] [added: -] Political unrest, national and international conflict, including war, border closures, civil disturbances and terrorist acts. [removed: |]

Weakness or instability in [added: one or more of] these markets may cause current and potential customers to delay or [added: cancel major capital projects, or otherwise] choose not to make purchases, which could negatively impact the demand for our products and [removed: services.][added: solutions and erode average selling prices.]

The markets in which we operate include a large number of participants, including [removed: multi-national companies,] [added: multi-national,] regional [removed: companies] and [removed: small] [added: small,] local companies.

Further, in a number of our product offerings, we compete with our retail customers [added: and technology partners] who use their own private labels.

[added: Our success depends, in part, upon the research,] development and implementation of new technologies and products including obtaining, maintaining and enforcing necessary intellectual property protections.

We must develop and commercialize new products and services [added: that meet the varied and evolving needs of our customers and end-users] in order to remain competitive in our current and future markets and in order to continue to grow our business.

Approximately 30% of our [removed: 2019] [added: 2020] Net revenues were derived outside the U.S., and we expect sales to non-U.S. customers to continue to represent a significant portion of our consolidated Net revenues.

We may not be successful in this [removed: regard] [added: regard,] and we may encounter other difficulties in integrating acquired businesses into our existing operations.

[removed: | • |] [added: -] Diversion of [removed: management] [added: management's] time and attention from daily operations; [removed: |]

[removed: | • |] [added: -] Difficulties integrating acquired businesses, technologies and personnel into our business; [removed: |]

[removed: | • |] [added: -] Difficulties completing the transaction in a timely manner; [removed: |]

[removed: | • |] [added: -] Difficulties realizing synergies expected to result from acquisitions; [removed: |]

[removed: | • |] [added: -] Difficulties in obtaining and verifying the financial statements and other business information of acquired businesses; [removed: |]

[removed: | • |] [added: -] Inability to obtain regulatory approvals and/or required financing on favorable terms; [removed: |]

[removed: | • |] [added: -] Potential loss of key employees, key contractual relationships or key customers of acquired companies or of us; [removed: |]

[removed: | • |] [added: -] Difficulties competing in the new markets we enter; [removed: |]

[removed: | • |] [added: -] Assumption of the liabilities and exposure to unforeseen liabilities of acquired companies; [removed: |]

[removed: | • |] [added: -] Dilution of interests of holders of our ordinary shares through the issuance of equity securities or equity-linked securities; and [removed: |]

[removed: | • |] [added: -] Difficulty in integrating financial reporting systems and implementing controls, procedures and policies, including disclosure controls and procedures and internal control over financial reporting, appropriate for public companies of our size at companies that, prior to the acquisition, had lacked such controls, procedures and policies. [removed: |]

Further, as part of [removed: Allegion’s] [added: our] innovation strategy, from time to time we invest in start-up companies and/or development stage technology or other companies.

We continually look to expand our services and products into [added: new] international [added: markets, and as we do, we will have only limited experience in marketing and operating services and products in such] markets.

In some instances, we may rely on the efforts and abilities of [added: third-party and] foreign business partners in such markets.

Certain international markets may be slower than [removed: U.S.] [added: our established] markets in adopting our services and products, and our operations in such markets may not develop at a rate that supports our level of investment.

In addition to the risks outlined above, expansion into certain [removed: international] [added: new] markets may require us to compete with local businesses with greater knowledge of the market, including the tastes and preferences of [removed: customers] [added: end-users] and businesses with dominant market shares.

Any acquisitions or investments may ultimately [added: not be successful, may] harm our business or financial [removed: condition; as such, acquisitions may not be successful and may ultimately] [added: condition and/or] result in impairment charges.

We may pursue business opportunities that diverge from [added: our] core business.

We can offer no assurance that any such business opportunities will prove [removed: to be] successful.

[removed: Among other negative effects,] our investment in new business opportunities may exceed the returns we realize.

We [removed: have in the past] [added: have, from time to time,] restructured or made other adjustments to our workforce and manufacturing footprint in response to market [removed: changes,] [added: or] product changes, performance issues, changes in strategy, acquisitions [removed: and] [added: and/or] other internal and external considerations.

[removed: In addition,] [added: If] we [added: are unable to successfully manage and implement these and other organizational changes, we] may not achieve or sustain the expected growth or cost savings benefits of these [removed: restructurings] [added: activities] or do so within the expected timeframe.

These effects could recur in connection with future acquisitions and other [removed: restructurings] [added: organizational changes] and our Net revenues and other results of operations could be negatively affected.

As required by [removed: U.S. generally accepted accounting principles ("GAAP"),] [added: GAAP,] we establish reserves based on our assessment of contingencies.

Strategic and Operational Risks

Our normal business operations have been, and are expected to continue to be, adversely impacted by the global COVID-19 pandemic.

The COVID-19 outbreak, which was declared by the WHO as a pandemic in March 2020, and preventative measures taken to contain or mitigate this pandemic have caused, and are continuing to cause, business slowdowns or shutdowns in various regions around the world.

This pandemic has also caused, and may continue to cause, disruption to our global supply chain and business operations, in addition to the various effects noted elsewhere within the risk factors contained in this Annual Report on Form 10-K.

Actions taken to help limit the spread of COVID-19, such as general public health decrees or other government mandates to restrict business activities and travel, avoid large gatherings or to self-quarantine, have impacted and will likely continue to impact our ability to carry out business as usual, including the temporary suspension of some of our operations, shortages in materials, reduction in customer demand, increased absenteeism, costs associated with operational changes and an extended period of remote work arrangements for some of our employees which could increase cybersecurity risks and other operational risks.

Conversely, as governments ease their restrictions and social interactions increase prior to the development and distribution of an effective vaccine or treatments for COVID-19, preventative and precautionary measures may not be sufficient to mitigate the risk of increased infection and could result in increased illness among our employees, business partners and others, and lead to further business interruption.

In addition, a significant number of our customers, suppliers, vendors and other business partners have been adversely affected by the COVID-19 pandemic.

While we cannot predict the impact that this pandemic will continue to have on our customers, suppliers, vendors and other business partners and each of their financial conditions, any material adverse effects on these parties could adversely impact us.

The global economic uncertainty due to this pandemic has also negatively impacted, and may continue to adversely affect, our results of operations and financial condition.

For example, this pandemic has led to changes in commercial real estate occupancy, increases in work-from-home arrangements, constraints on government and institutional budgets and an uncertain business climate, which have all contributed to declines and delays in new construction and renovation activity during 2020, including in many of the commercial and institutional construction markets we serve.

These challenges may be significant and continue beyond the COVID-19 pandemic, and the rate and sustainability of future growth remains uncertain, as the long-term impacts of the pandemic and related market disruption are not yet known.

Additionally, as a result of the global economic disruption and uncertainty due to the COVID-19 pandemic, interim impairment tests were performed on select goodwill and indefinite-lived trade name assets in the first quarter of 2020, resulting in impairment charges of approximately $96.3 million.

If the on-going economic impact of the COVID-19 pandemic proves to be more severe than estimated, the economic recovery takes longer to materialize or does not materialize as strongly as anticipated, this could result in further impairment charges in the future.

Despite our efforts to manage and mitigate these impacts to the Company, their ultimate impact also depends on factors beyond our knowledge or control, including the duration and severity of this pandemic, third-party actions taken to contain its spread and mitigate its public health effects, the development, distribution and acceptance of an effective vaccine and the pace of global economic recovery following containment of the spread.

The impact of the COVID-19 pandemic continues to evolve, and its ultimate impact on our business is highly uncertain and difficult to predict.

The continued spread of COVID-19 may have further adverse impacts on our business, operations, customer demand, supply chain, cash flow generation, financial position and liquidity and may also exacerbate other risks and uncertainties described in this Annual Report on Form 10-K.

Further, our management is focused on mitigating the impacts of COVID-19 which has required, and will continue to require, a large investment of time and resources, which may divert attention and resources from other business matters.

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If our products or solutions fail to meet certification and specification requirements, are defective, or otherwise fall short of end-users' needs and expectations, our business may be negatively impacted.

The security and access control product markets we serve often have unique certification and specification requirements, reflecting local regulatory requirements and highly variable end-user needs.

While we strive to meet all certification and specification requirements, if any of our products or solutions do not meet such requirements, or contain, or are perceived to contain, defects or otherwise fall short of end-users' needs and expectations, we may incur significant costs and our business, results of operations or financial condition may be negatively impacted.

Additionally, as end-users have continued to adopt newer technologies in their facilities and homes, accelerated by the increasing adoption of IoT technologies, growth in sales of electronic security products and solutions are expected to outperform growth in sales of mechanical security products.

Electronic security products and solutions are increasingly more sophisticated and technologically complex than the mechanical security products we sell, and have an increased risk of design or manufacturing defects, which could lead to product liability claims, recalls, product replacements or modifications, write-offs

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of inventory or other assets and significant warranty and other expenses.

Product quality issues can also adversely affect the end-user experience, resulting in reputational harm, loss of competitive advantage, poor market acceptance, reduced demand for products and solutions, delay in new product and service introductions and lost sales.

Among other negative effects,

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We may not be able to effectively manage and implement restructuring initiatives or other organizational changes.

For example, we recently announced that effective January 1, 2021, our EMEA and Asia Pacific operating segments would be combined to form the new Allegion International segment.

These restructuring activities and other organizational changes often result in increased restructuring costs, diversion of management’s time and attention from daily operations and temporarily reduced productivity.

These events and disruptions could also adversely affect our customers’ and suppliers’ financial condition or ability to operate, resulting in reduced customer demand, delays in payments received or supply chain disruptions.

In particular, the ultimate extent of the impact of any epidemic, pandemic or other global health crisis on our business, financial condition and results of operations will depend on future developments which are highly uncertain and cannot be predicted,

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including new information that may emerge concerning the duration and severity of such epidemic, pandemic or other global health crisis, actions taken to contain or prevent their further spread and the pace of global economic recovery following containment of the spread.

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Economic, Market and Financial Risks

- Economic downturns and social and political instability;

Demand for our security products and solutions relies on the institutional, commercial and residential construction and remodeling markets, which are marked by cyclicality based on overall economic conditions, including consumer confidence and disposable income, corporate and government spending, work-from-home trends, availability of credit and demand for new housing and infrastructure.

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Risks Related to Our Business

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| • | Economic downturns and social and political instability, including uncertainties and financial, legal, tax and trade implications of the implementation of the United Kingdom’s withdrawal of its membership from the European Union (commonly known as “Brexit”); |

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We primarily rely on the institutional, commercial and residential construction and remodeling markets, which are marked by cyclicality based on overall economic conditions.

Our success depends, in part, upon the research,

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We are a leading global provider of security products and solutions operating in three geographic regions: Americas, [removed: EMEIA] [added: EMEA] and Asia Pacific.

The [removed: economic conditions discussed above] [added: challenges] and [added: uncertainties related to the COVID-19 pandemic and its potential impact on our business, results of operations, financial condition and cash flows, as well as] a number of other challenges and uncertainties that could affect our businesses are described [added: further] under Part I, Item [removed: 1A, "Risk Factors."][added: 1A.]

[removed: 2019] [added: 2020] and [removed: 2018] [added: 2019] Significant Events

[removed: During the fourth quarter of] [added: In] 2019, we [added: closed our production facility in Turkey and subsequently] sold certain of the [removed: former] production assets [removed: of our Turkey facility] [added: thereof, which represented a business,] for total proceeds of approximately $4.1 million.

[removed: The Company] [added: We] recorded a loss on divestiture of $24.2 million ($25.5 million, net of tax), primarily driven by [added: the reclassification of] $25.0 million of [removed: cumulative] [added: accumulated foreign] currency translation adjustments [removed: previously deferred in equity that were reclassified into] [added: to] earnings upon sale.

We paid quarterly dividends of [removed: $0.27] [added: $0.32] per ordinary share to shareholders on record as of March [removed: 15, 2019,] [added: 17, 2020,] June [removed: 14, 2019,] [added: 16, 2020,] September 16, [removed: 2019,] [added: 2020,] and December [removed: 17, 2019.][added: 16, 2020.]

We paid a total of [removed: $100.6] [added: $117.3] million in cash for dividends to ordinary shareholders [added: and repurchased approximately 1.9 million shares for approximately $208.8 million] during the year ended December 31, [removed: 2019.][added: 2020.]

[removed: Financing activities][added: Other Financing Activities]

[removed: Additionally, in] [added: In] 2019, we issued $400.0 million of 3.500% Senior Notes due 2029 (the "3.500% Senior Notes").

| Dollar amounts in millions, except per share amounts | | [removed: 2019] | | | | [added: 2020 | | | | | |] % of [removed: NetRevenues] [added: Net revenues] | | | [removed: 2018] | | | [added: 2019] | [added: | | | | |] % of [removed: NetRevenues] [added: Net revenues] | | | [removed: 2017] | | | | [removed: % of NetRevenues] | | [added: | | | | | |]

| Net revenues | | [added: | | | |] $ | [removed: 2,854.0] [added: 2,719.9] | | | | | | [added: | | | | |] $ | [removed: 2,731.7] [added: 2,854.0] | | | | | | [removed: $] | [removed: 2,408.2] | | | | | [added: | | | | | | | |]

| Cost of goods sold | | [removed: 1,601.7] | | | | [removed: 56.1] [added: 1,541.1] | [removed: %] | | [removed: 1,558.4] | | | [added: 56.7] | [removed: 57.0] | % | | [removed: 1,335.3] | | [added: 1,601.7] | | [removed: 55.4] | [added: | | | 56.1 | |] % | [added: | | | | | | | | | | | |]

| Operating income | | [removed: 565.1] | | | | [removed: 19.8] [added: 403.5] | [removed: %] | | [removed: 525.8] | | | [added: 14.8] | [removed: 19.2] | % | | [removed: 492.5] | | [added: 565.1] | | [removed: 20.5] | [added: | | | 19.8 | |] % | [added: | | | | | | | | | | | |]

| Interest expense | | [added: | | | | 51.1 | | | | | | | | | | | |] 56.0 | | | | | | | [removed: 54.0] | | | | | | | [removed: 105.7] | | | | | | [added: |]

| Loss on divestitures | | [added: | | | | — | | | | | | | | | | | |] 30.1 | | | | | | | [removed: —] | | | | | | | [removed: —] | | | | | | [added: |]

| Other [removed: expense (income),] [added: (income) expense,] net | | [added: | | | | (13.0) | | | | | | | | | | | |] 3.8 | | | | | | | [removed: (3.4] | | [removed: )] | | | | | [removed: (8.9] | | [removed: )] | | | | [added: |]

| Earnings before income taxes | | [removed: 475.2] | | | | [added: 365.4] | | | [added: | | | | | | | | |] 475.2 | | | | | | | [removed: 395.7] | | | | | | [added: | | | | | | | |]

| Provision for income taxes | | [added: | | | | 50.9 | | | | | | | | | | | |] 73.1 | | | | | | | [removed: 39.8] | | | | | | | [removed: 119.0] | | | | | | [added: |]

| Net earnings | | [added: | | | | 314.5 | | | | | | | | | | | |] 402.1 | | | | | | | [removed: 435.4] | | | | | | | [removed: 276.7] | | | | | | [added: |]

| Less: Net earnings attributable to noncontrolling interests | | [added: | | | | 0.2 | | | | | | | | | | | |] 0.3 | | | | | | | [removed: 0.5] | | | | | | | [removed: 3.4] | | | | | | [added: |]

| Net earnings attributable to Allegion plc | | [added: | | | |] $ | [removed: 401.8] [added: 314.3] | | | | | | [added: | | | | |] $ | [removed: 434.9] [added: 401.8] | | | | | | [removed: $] | [removed: 273.3] | | | | | [added: | | | | | | | |]

| [removed: Diluted] [added: Diluted] net earnings per ordinary share attributable to Allegion plc ordinary [removed: shareholders:] [added: shareholders:] | | [added: | | | |] $ | [removed: 4.26] [added: 3.39] | | | | | | [added: | | | | |] $ | [removed: 4.54] [added: 4.26] | | | | | | [removed: $] | [removed: 2.85] | | | | | [added: | | | | | | | |]

Net revenues for the year ended December 31, [removed: 2019, increased] [added: 2020, decreased] by [removed: 4.5%,] [added: 4.7%,] or [removed: $122.3] [added: $134.1] million, compared to the same period in [removed: 2018] [added: 2019,] due to the following:

| Currency exchange rates | [removed: (1.4] | [removed: )%] | [added: 0.4 | | % |]

These [removed: increases] [added: decreases] were partially offset by [removed: unfavorable] [added: improved pricing and favorable] foreign currency exchange rate movements.

Net revenues for the year ended December 31, [removed: 2018, increased] [added: 2020, decreased] by [removed: 13.4%,] [added: 4.6%,] or [removed: $323.5] [added: $97.8] million, compared to the same period in [removed: 2017] [added: 2019,] due to the following:

| Currency exchange rates | [removed: 0.8] | [added: | (0.2) | |] % |

For the year ended December 31, [removed: 2019,] [added: 2020,] Cost of goods sold as a percentage of Net revenues [removed: decreased] [added: increased] to [removed: 56.1%] [added: 56.7%] from [removed: 57.0%] [added: 56.1%,] due to the following:

| [removed: Pricing and productivity] [added: Inflation] in excess of [removed: inflation] [added: pricing and productivity] | [removed: (1.6] | [removed: )%] | [added: 0.2 | | % |]

| Volume / product mix | [removed: 0.2] | [added: | 0.8 | |] % |

| [removed: Acquisitions / divestitures] [added: Divestitures] | [removed: 0.2] | [added: | (0.2) | |] % |

| Currency exchange rates | [removed: 0.1] | [added: | (0.1) | |] % |

Costs of goods sold as a percentage of Net revenues for the year ended December 31, [removed: 2019, decreased] [added: 2020, increased primarily] due to [removed: pricing] [added: the impact of reduced volumes] and [removed: productivity] [added: product mix and, to a lesser extent, inflation] in excess of [removed: inflation.][added: pricing and productivity.]

For the year ended December 31, [removed: 2018, Cost of goods sold] [added: 2020, Selling and administrative expenses] as a percentage of Net revenues [removed: increased] [added: decreased] to [removed: 57.0%] [added: 23.4%] from [removed: 55.4%] [added: 23.9%,] due to the following:

| [removed: Inflation] [added: Pricing and productivity] in excess of [removed: pricing and productivity] [added: inflation] | [removed: 0.1] | [added: | 66.7 | | | | | | 2.1 | |] % |

| Volume / product mix | [removed: (0.1] | [removed: )%] | [added: (94.9) | | | | | | (2.3) | | % |]

| Investment spending | [removed: 0.3] | [added: | (0.3) | | | | | | (0.1) | |] % |

| Currency exchange rates | [removed: (0.1] | [removed: )%] | [added: (0.1) | | | | | | (0.1) | | % |]

| Restructuring / acquisition [removed: costs] [added: expenses] | [removed: (0.1] | [removed: )%] | [added: (2.2) | | | | | | (0.1) | | % |]

[removed: Costs of goods sold] [added: Selling and administrative expenses] as a percentage of Net revenues for the year ended December 31, [removed: 2018, increased] [added: 2020, decreased] primarily due to [removed: inflation] [added: productivity benefits] in excess of [removed: pricing and productivity, the impact of acquisitions] [added: inflation] and [removed: increased investment spending.][added: foreign currency exchange rate movements.]

Recent Developments

COVID-19 Pandemic

In March 2020, a global pandemic was declared by the WHO related to COVID-19.

The impacts of the COVID-19 pandemic negatively affected the global economy, disrupted supply chains and created significant volatility and disruption in financial markets.

The outbreak and spread of COVID-19 also resulted in a substantial curtailment of business activities worldwide, including the major geographic markets we serve.

As part of the efforts to contain the spread of COVID-19, federal, state and local governments have imposed various restrictions on the conduct of business and travel, such as stay-at-home orders, travel restrictions and quarantines.

These measures, as well as changes in employee health and safety concerns and consumer spending patterns, trends and preferences, have led to widespread business closures and lower demand for our products, with the most pronounced negative impacts of these measures on our results of operations occurring during the second quarter of 2020.

Further, changes in commercial real estate occupancy, constraints on government and institutional budgets and the uncertain business climate have led to declines and delays in new construction activity and discretionary projects, including in many of the commercial and institutional construction markets we serve.

As the pandemic and resulting economic challenges have adversely impacted, and will likely continue to adversely impact us, we continue to closely monitor their effects on all aspects of our business and the markets in which we operate.

Throughout the pandemic, our primary focus has been, and continues to be, the health and safety of employees, our business continuity plan, meeting the evolving needs of our customers and the well-being of the many communities around the world in which we operate.

During the early months of the pandemic, we experienced temporary production shut-downs due either to government mandate or to help ensure employee safety, most notably in Italy and the Baja region of Mexico.

However, the vast majority of our manufacturing facilities have remained open and operational throughout 2020, in part due to the numerous health and safety measures we adopted to promote the health and safety of our workforce and because many of our global operations have been deemed essential businesses.

All of our global production and assembly facilities were operational as of December 31, 2020, and while we currently expect they will remain operational for the foreseeable future, such expectation is dependent upon future governmental actions, demand for our products, the stability of our global supply chain and our ability to continue to operate in a safe manner.

We remain focused on business continuity and ensuring our facilities remain operational where safe and appropriate to do so.

We will also continue to serve our customers when needed through our channel partners or inventory on hand.

To the extent any additional temporary closures or adjustments to production are necessary, such measures will be implemented in a way that allows us to resume operations in an efficient and safe manner, while also minimizing disruption to customers and our overall business, including prudent measures to mitigate, to the extent possible, any financial impacts, although any additional local orders or decrees resulting in new temporary shut-downs will drive further unfavorable impacts to our operations, ability to serve our customers and potentially, our financial position and liquidity.

The pandemic will likely continue to impact us in numerous and evolving ways that we may not be able to accurately predict; however, we will continue to closely monitor its impact on our business, employees, customers, suppliers, distribution channels and other business partners, and we believe that our actions taken to date, our financial flexibility and potential measures within our control will allow us to maintain a sound financial position and provide for adequate resources to fund our ongoing operating and financing needs.

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Additionally, as a response to the COVID-19 pandemic, on March 27, 2020, the Coronavirus Aid, Relief and Economic Security Act (the "CARES Act") was enacted and signed into law, which included measures to assist companies in response to the COVID-19 pandemic.

One measure allowed companies to defer the remittance of the employer portion of the social security tax through December 31, 2020, with half the amount deferred required to be paid by December 31, 2021, and the other half by December 31, 2022.

Through December 31, 2020, we have elected to defer approximately $13 million under this provision, which is classified in Accrued expenses and other current liabilities and Other noncurrent liabilities within our Consolidated Balance Sheet.

A second measure of the CARES Act raised the limit on business interest deductions from 30% to 50% of adjusted taxable income for tax years 2019 and 2020.

This increased interest limitation resulted in approximately $20 million of reduced cash tax payments in 2020.

Each of these two measures has resulted in a benefit to our cash flows from operations for the year ended December 31, 2020; however, neither measure is expected to materially impact our effective tax rate, and no income tax effects have been recorded during the year ended December 31, 2020.

"Risk Factors."

In December 2020, we acquired Yonomi, Inc. ("Yonomi), a U.S. based smart home integration platform provider and innovation leader in IoT Cloud platforms.

Yonomi has been integrated into our Americas segment.

Impairment of Goodwill and Intangible Assets

As a result of the global economic disruption and uncertainty due to the COVID-19 pandemic, we performed interim impairment tests on the goodwill balances of our EMEA and Asia Pacific reporting units, as well as on certain indefinite-lived trade name assets in these two regions, during the first quarter of 2020.

As discussed in Notes 5 and 6 to the Consolidated Financial Statements, the results of these interim impairment tests indicated that the estimated fair value of our Asia Pacific reporting unit and three indefinite-lived trade names were impaired.

Consequently, goodwill and intangible asset impairment charges totaling $96.3 million were recorded.

Further impairment charges were recorded in our Asia Pacific segment during the year ended December 31, 2020, including $2.6 million related to supply chain disruptions that reduced a brand's expected future cash flows and $2.8 million related to declines in volumes and pricing pressure for a separate subsidiary in the region.

Loss on Assets Held for Sale

The assets and liabilities of our QMI business met the criteria to be classified as held for sale as of December 31, 2020.

Accordingly, QMI's net assets, which primarily included working capital and long-lived assets, were written down to fair value, estimated based on expected sales proceeds, less cost to sell, resulting in a Loss on assets held for sale of $37.9 million.

Turkey and Colombia Divestitures

We also sold our interests in our Colombia operations in 2019 for a nominal amount, recording a net loss on divestiture of $5.9 million, of which $1.2 million related to the reclassification of accumulated foreign currency translation adjustments to earnings upon sale.

2020 Dividends and Share Repurchases

[Table of](#id905981cbc9343d5aac81ea1e75f9719_7) [Contents](#id905981cbc9343d5aac81ea1e75f9719_7)

Subsequent Event

Trends and Economic Events

The security products industry has benefited from accelerated growth in institutional, commercial and residential end-markets in recent years.

We also expect the security products industry will benefit from favorable long-term demographic trends such as continued urbanization of the global population, increased concerns about safety and security and technology-driven innovation.

In recent years, growth in electronic security products and solutions continues to outperform mechanical products, and we expect growth in the global electronic security product and solution categories we serve to continue to outperform growth in mechanical products and solutions, as end-users adopt newer technologies in their facilities and homes.

Turkey Restructuring and Divestiture

In June 2019, the Company closed its production facility in Turkey to help streamline our footprint in EMEIA.

Associated with this closure, we have incurred approximately $8.4 million of qualified restructuring expenses during 2019, which primarily relate to severance and other employee separation costs.

We also incurred $4.3 million of non-qualified restructuring expenses during 2019, which represent costs that were directly attributable to the closure, but that did not fall into the severance, exit or disposal category.

Colombia Divestiture

During the fourth quarter of 2019, the Company sold its interests in its Colombia operations.

As a result of the sale, the Company recorded a net loss on divestiture of $5.9 million, of which $1.2 million relates to cumulative currency translation adjustments previously deferred in equity that were reclassified into earnings upon sale.

We completed six business acquisitions in 2018:

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| --- | --- | --- |

| | | |

| Business | | Date |

| Technical Glass Products, Inc. ("TGP") | | January 2018 |

| Hammond Enterprises, Inc. ("Hammond") | | January 2018 |

| Qatar Metal Industries LLC ("QMI") | | February 2018 |

| AD Systems, Inc. ("AD Systems") | | March 2018 |

| Gainsborough Hardware and API Locksmiths ("Door and Access Systems") | | July 2018 |

| ISONAS Security Systems, Inc. ("ISONAS") | | July 2018 |

Total cash paid for these acquisitions was approximately $373 million (net of cash acquired), including $4.6 million during the year ended December 31, 2019.

The incremental impact of these acquisitions for the twelve months ended December 31, 2018 was an increase in Net revenues of approximately $160.2 million and an increase in Operating income of approximately $2.8 million.

During the years ended December 31, 2019 and 2018, we incurred $2.0 million and $10.0 million of acquisition and integration related expenses, respectively.

2019 Dividends

During the year ended December 31, 2019, the Company paid $226.0 million to repurchase 2.3 million ordinary shares on the open market under our 2017 Share Repurchase Authorization.

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| | | | | | | | | | | | | | | | | | | | | | |

| Selling and administrative expenses | | 687.2 | | | | 24.1 | % | | 647.5 | | | | 23.7 | % | | 580.4 | | | | 24.1 | % |

| | | | | | | | | | | | | | | | | | | | | | |

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| | | |

| Pricing | 1.8 | % |

| Volume | 2.8 | % |

| Acquisitions / divestitures | 1.3 | % |

| Total | 4.5 | % |

The increase in Net revenues was primarily driven by higher volumes, improved pricing and incremental Net revenues from the acquisitions, less divestitures, discussed above.

Based on the firmly committed currency derivative instruments in place at December 31, [removed: 2019,] [added: 2020,] a hypothetical change in fair value of those derivative instruments assuming a 10% adverse change in exchange rates would result in an additional unrealized loss of approximately [removed: $12.7] [added: $16.9] million.

We do not have committed commodity derivative instruments in place at December 31, [removed: 2019.][added: 2020.]

At December 31, [removed: 2019,] [added: 2020,] the outstanding borrowings of $238.8 million under the Term Facility accrue interest at LIBOR plus a margin of 1.250%.

We are also exposed to the risk of rising interest rates to the extent that we fund our operations with short-term or variable-rate borrowings, as we [added: currently] have [removed: the ability to incur up to $500 million] [added: unused availability] of [removed: additional variable-rate debt] [added: $485.0 million] under our Revolving [removed: Facility.][added: Facility as of December 31, 2020.]

[Table of](#id905981cbc9343d5aac81ea1e75f9719_7) [Contents](#id905981cbc9343d5aac81ea1e75f9719_7)

To manage our exposure to fluctuations in LIBOR rates, we have interest rate swaps to fix the interest rate for $200.0 million of the outstanding borrowings, which expire in September 2020.

Allegion plc ("Allegion," "we," "us" or "the Company") is a leading global provider of security products and solutions that [removed: keeps] [added: keep] people and assets safe and secure in the places where they reside, work and thrive.

We offer an extensive and versatile portfolio of mechanical and electronic security products [added: and solutions] across a range of market-leading brands.

| Allegion Principal Products | | [added: | | | |]

| Door closers and controls | [added: | |] Doors and door systems | [added: | |]

| Electronic security products | [added: | |] Electronic, biometric and mobile access control systems | [added: | |]

| Exit devices | [added: | |] Locks, locksets, portable locks, key systems and services | [added: | |]

| Time, attendance and workforce productivity systems | [added: | |] Other accessories | [added: | |]

Moreover, with the increasing adoption of the Internet of Things ("IoT"), security products [added: – including keys –] are increasingly linked electronically, integrated into software and popular consumer technology platforms and controlled with mobile applications, creating additional functionality and complexity.

We believe our ability to deliver a wide range of solutions that can be [removed: custom-configured] [added: custom configured] to meet end-users’ security needs is a key driver of our success.

[removed: | • |] [added: -] Our extensive and versatile product portfolio, combined with our deep expertise, which enables us to deliver the right products and solutions to meet diverse security and functional specifications and to successfully and securely integrate into leading technology and systems; [removed: |]

[removed: | • |] [added: -] Our consultative approach and expertise, which enables us to develop the most efficient and appropriate building security and access-control specifications to fulfill the unique needs of our end-users and their partners, including architects, contractors, [removed: home-builders] [added: homebuilders] and engineers; [removed: |]

[removed: | • |] [added: -] Our access to and management of key channels in the market, which is critical to delivering our products in an efficient and consistent manner; and [removed: |]

[removed: | • |] [added: -] Our enterprise excellence capabilities, including our global manufacturing operations and agile supply chain, which facilitate our ability to deliver specific product and system configurations to end-users and consumers worldwide, quickly and efficiently. [removed: |]

We believe [removed: that] the security products industry [removed: is growing and] will [removed: continue to] benefit from several global macroeconomic [removed: and long-term demographic] trends, including:

[removed: | • |] [added: -] Heightened awareness of security and privacy requirements; [removed: |]

[removed: | • |] [added: -] The shift to a digital, interconnected environment. [removed: |]

[removed: As] [added: - Expected growth in global electronic products as] end-users adopt newer technologies in their facilities and [removed: homes, we also expect growth in the global electronic product categories we serve to outperform growth in mechanical products.][added: homes;]

We operate in three geographic regions: Americas; Europe, Middle [removed: East, India] [added: East] and Africa [removed: ("EMEIA");] [added: ("EMEA");] and Asia Pacific.

We believe LCN, Schlage and Von Duprin hold the No. 1 position in their primary product categories in North America while CISA, Interflex and SimonsVoss hold the [removed: No.1] [added: No. 1] or No. 2 position in their primary product categories in certain European markets.

During the year ended December 31, [removed: 2019,] [added: 2020,] we generated Net revenues of [removed: $2,854.0] [added: $2,719.9] million and Operating income of [removed: $565.1] [added: $403.5] million.

We were incorporated in Ireland on May 9, 2013, to hold the commercial and residential security businesses of [added: what was then] Ingersoll Rand plc ("Ingersoll Rand").

Several of our brands were established [removed: nearly] [added: more than] 100 years ago, and many originally created their categories:

[removed: | • |] [added: -] Von Duprin, established in 1908, was awarded the first exit device patent; [removed: |]

[removed: | • |] [added: -] Schlage, established in 1920, was awarded the first patents granted for the cylindrical lock and the push button lock; [removed: |]

[removed: | • |] [added: -] LCN, established in 1926, created the first door closer; [removed: |]

[removed: | • |] [added: -] CISA, established in 1926, devised the first electronically controlled lock; and [removed: |]

[removed: | • |] [added: -] SimonsVoss, established in 1995, created the first keyless digital transponder. [removed: |]

[removed: In addition,] [added: For example,] in [removed: 2018] [added: 2018,] we announced the formation of Allegion Ventures, a corporate venture fund that invests in and helps accelerate the growth of companies that have innovative technologies and [removed: products.][added: products such as touchless access and workspace monitoring solutions that complement our core business solutions.]

Since its formation, Allegion Ventures has invested nearly [removed: $10] [added: $15] million in several early-stage companies that share our pioneering vision and seek to find smart and innovative solutions that help keep people and assets safe and secure in the places where they reside, work and thrive.

Recent examples of successful product launches [added: by Allegion] are illustrated in the table below:

| Product | | [added: | | | |] Brands | | [added: | | | |] Year | | [added: | | | |] Innovation | [added: | |]

| Commercial Locks, Cylinders, Levers and Electronic Access Platforms | | [added: | | | |] Schlage, [removed: CISA,] SimonsVoss, [removed: Bricard] [added: CISA] | | [removed: 2017/2018/ 2019] | | [added: | | 2018/2019/ 2020 | | | | | |] Enhancements to our comprehensive portfolio of globally available mechanical, wired electrified and wireless electronic solutions provide a common aesthetic and consistent user experience throughout a [removed: building (Schlage). Firmware] [added: building; firmware] releases [removed: for U.S. channel-partner readers to give new] [added: added] functionality and USB communication mode for readers (Schlage). [removed: Mobile] [added: Mobile-enabled versions of locks, readers and controllers (Schlage NDE, LE, MTB and CTE), mobile] credentials, [removed: new] Bluetooth Low Energy and RFID technology and integrations between electronic locks and exit devices [removed: (CISA). New rim and mortice locks] [added: (Schlage, CISA). SimonsVoss offers new option] for [removed: Southeast Asia (S-series)] [added: wireless online connections to a virtual network (SmartHandle AX, SmartIntego)] and [removed: expanded cylinders] [added: a retrofit, no-drill locking option] for [added: lockers and furniture in schools, hospitals and industry facilities that integrates into] the [added: existing SimonsVoss digital eco-system for offline and online access (SmartLocker). Expanded radio network technology to include] European [removed: locksmith channel. Multipoint mortise locks] [added: frequency band 868MHz] and [removed: a new offering for two-door leaves (Bricard); multipoint] [added: 920MHz technology. Mortice] self-locking system with [removed: remote-open capability] [added: a mono-point motorized lock variant (CISA)] and [removed: the highest European-standard security grade (CISA). New enhancements to the electronic Smart Handle (SimonsVoss).] [added: new platformed, modular replacement of cylindrical locks (Schlage ALX).] | [added: | |]

| Exit Devices and Closers | | [added: | | | |] Von Duprin, Falcon, [added: LCN,] CISA | | [removed: 2018/2019] | | [removed: New award-winning] [added: | | 2018/2019/2020 | | | | | | Award-winning] and cost-effective retrofit exit device that allows for remote undogging and monitoring with partner software (Von Duprin); new fire-rated retrofit series (Falcon); and quiet exit solutions (Von Duprin). [removed: New] [added: Range of touchless solutions, including automatic operators, actuators and wireless transmitters (LCN) and a] range of asymmetric rack-and-pinion door closers and an [removed: entry-level] [added: entry-level,] high-efficiency option (CISA). | [added: | |]

| Doors and Door [removed: Closers] [added: Systems] | | [added: | | | |] TGP, AD Systems | | [added: | | | |] 2019 | | [added: | | | |] First to the market surface mounted, top-hung [removed: single-leaf door that offers clean, modern aesthetic of] [added: single-leaf,] sliding flush wood doors that achieve a 45-minute UL 10B fire rating (FireSlide). [removed: New fire-rated] [added: Fire-rated] and impact safety-rated glass doors with a heat resistive perimeter frame, which features nearly colorless transitions between adjoining pieces of low-iron glass, eliminating the need for colored internal glass unit spacers or vertical frame mullions (Fireframes ClearView). | [added: | |]

| Bike Lighting and Portable Locking Solutions | | [added: | | | |] AXA, Kryptonite, Trelock | | [removed: 2017/2018/2019] | | [removed: Broad range of innovation] [added: | | 2018/2019 | | | | | | Innovation] in bike safety [added: including rechargeable lights and expanded lines of folding locks] from each of our Global Portable Security brands (AXA, [removed: Kryptonite and Trelock), ranging from compact dynamo and e-bike lights to USB, battery powered and rechargeable lights. Expanded lines of folding locks, integrated chains, ring locks and applications for bikes and motorcycles (AXA,] Kryptonite, Trelock); [removed: new] [added: and] ergonomic cable and chain locks and expanded track-and-trace services (AXA). | [added: | |]

| Software, Mobile and Web Applications | | [added: | | | |] Allegion (Overtur, ENGAGE), Schlage, [removed: Briton,] [added: Gainsborough,] Interflex, ISONAS | | [removed: 2018/2019] | | [added: | | 2018/2019/2020 | | | | | |] Cloud-based suite of tools for project teams to collaborate on specifications and the security design of doors and [removed: openings, which provides a centralized place to capture and maintain door hardware requirements and decisions with easy options to push information back to the design tools] [added: openings] (Overtur). Multiple enhancements to the user experience include [removed: biometric login for the mobile app,] simplified account and site set-up and gateway site survey (ENGAGE) and mobile apps [removed: (Briton] [added: for iOS] and [removed: Schlage) let users] [added: Android phones (Schlage, CISA, Gainsborough) to] lock, unlock, issue mobile [removed: keys, check] [added: keys and] status [added: check. Schlage Mobile Student ID allows university students, faculty] and [removed: more. New modules] [added: staff to add student ID cards to their Apple Wallet or Google Pay] for [removed: visitor management, encouraging self-service] [added: door access, payments, attendance tracking] and [removed: Microsoft Outlook functionality] [added: ticketing. Visitor management modules] and managed service featuring a cloud-based solution of time recording (Interflex); [removed: updated] cloud-hosted access control platform with real time events, [removed: alerting,] [added: alerting] and user-initiated door control (ISONAS). | [added: | |]

The global markets we serve encompass institutional, commercial and residential construction and remodeling markets throughout North America, [removed: EMEIA] [added: EMEA] and Asia Pacific.

[removed: In recent years, as] [added: As] end-users [added: continue to] adopt newer [removed: technologies] [added: technologies, including IoT,] in their facilities and single and multi-family homes, [removed: including IoT,] growth in electronic security products and solutions [removed: continues] [added: is expected] to outperform growth in mechanical security products and solutions.

As we move into more [removed: technologically-advanced] [added: technologically advanced] product categories, we may also compete against new, more specialized competitors.

Although price often serves as an important customer decision point, we also compete based on the [removed: breadth] [added: breadth, innovation] and quality of our products and solutions, our ability to custom-configure solutions to meet individual end-user requirements and our global supply chain.

Seamless access allows authorized, automated and safe passage and movement through spaces and places in the most efficient and frictionless manner possible.

Central to our vision is partnering and developing ecosystems to create a flawless experience and enable an uninterrupted and secure flow of people and assets.

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Seamless access capitalizes on the ability for multiple products and brands to work in tandem, allowing people and assets to move efficiently and safely by adapting access rights for various settings or use cases.

These solutions can also provide insights on usage and traffic patterns to improve hygiene of high-traffic areas, boost efficiency and improve visitor, staff and tenant experiences.

- Increased focus on touchless solutions that help promote a healthy environment; and

[Table of](#id905981cbc9343d5aac81ea1e75f9719_7) [Contents](#id905981cbc9343d5aac81ea1e75f9719_7)

[Table of](#id905981cbc9343d5aac81ea1e75f9719_7) [Contents](#id905981cbc9343d5aac81ea1e75f9719_7)

[Table of](#id905981cbc9343d5aac81ea1e75f9719_7) [Contents](#id905981cbc9343d5aac81ea1e75f9719_7)

[Table of](#id905981cbc9343d5aac81ea1e75f9719_7) [Contents](#id905981cbc9343d5aac81ea1e75f9719_7)

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| Residential Locks, Cylinders and Levers | | | | | | Schlage, Gainsborough, CISA | | | | | | 2018/2019/ 2020 | | | | | | Next-generation Schlage smart locks include the first WiFi enabled deadbolt to work with Key by Amazon and Ring devices with built-in connectivity (Schlage Encode); Z-wave smart deadbolt and Zigbee-certified model compatible with Amazon Key and Ring devices (Schlage Connect); fire-rated smart lock for Australia and New Zealand paired with a mobile app (Schlage Omnia Breeze) for convenient access and security that meets current fire and accessibility requirements. Next generation Gainsborough Freestyle Trilock features three-in-one functionality: passage, privacy or dead lock mode; and can be operated using the built-in keypad, a key override or through the mobile app. In conjunction with the optional WiFi bridge, the lock can be programmed and operated from anywhere in the world. First CISA motorized lock solution for high security connected smart doors (Domo Connexa), manageable in proximity and remotely using a mobile app. | | |

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[Table of](#id905981cbc9343d5aac81ea1e75f9719_7) [Contents](#id905981cbc9343d5aac81ea1e75f9719_7)

We also expect the security products industry will continue to benefit from favorable trends such as increased concerns about safety and security, new attention on touchless solutions that help promote a healthy environment and technology-driven innovation that enables seamless access and a better user experience as people and assets traverse multiple locations and facilities.

We also offer locksmith services in select locations;

Door controls include both mechanical door closers and automatic door operators.

Exit devices, also known as panic hardware, provide rapid egress to allow building occupants to exit safely in an emergency;

We also offer ongoing aftermarket services in addition to design and installation offerings;

[Table of](#id905981cbc9343d5aac81ea1e75f9719_7) [Contents](#id905981cbc9343d5aac81ea1e75f9719_7)

In managing our network of production and assembly facilities, we focus on continuous improvement in customer experience, employee health and safety, productivity, resource utilization and operational excellence.

[Table of](#id905981cbc9343d5aac81ea1e75f9719_7) [Contents](#id905981cbc9343d5aac81ea1e75f9719_7)

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| McKenzie, Tennessee | | | | | | Veenendaal, Netherlands | | | | | | | | |

| Mississauga, Ontario | | | | | | Zawiercie, Poland | | | | | | | | |

In 2020, we experienced lower sales volumes during the second quarter, principally due to the economic challenges stemming from the COVID-19 pandemic, which were most pronounced during this quarter.

This is not anticipated to be a long-term trend in the seasonality of our businesses.

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| 2020 | | | | | | 25% | | | | | | 21% | | | | | | 27% | | | | | | 27% | | |

[Table of](#id905981cbc9343d5aac81ea1e75f9719_7) [Contents](#id905981cbc9343d5aac81ea1e75f9719_7)

Human Capital

The Company’s human capital strategy is foundational to achieving our business strategy and the responsibility of our Senior Vice President – Human Resources and Communications.

To ensure we attract and retain top talent, we strive for a diverse and inclusive culture that rewards performance, provides growth and development opportunities and supports employees and their families through competitive compensation, benefits and numerous volunteer and charitable giving opportunities.

As of December 31, 2020, we had approximately 11,500 employees around the world, the vast majority working full time.

Our employee base is supplemented by contingent labor where demand fluctuates or we experience short-term needs for specialized skills.

*Compensation and Benefits*

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| • | The convergence of mechanical and electronic security products; |

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| • | Increased global urbanization; and |

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We believe the security products industry will also benefit from continued growth in institutional, commercial and residential end-markets.

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| Allegion Brands | | | |

| (listed for each region) | | | |

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[removed: FORM 10-K][added: Form 10-K]

| ☒ | [added: | |] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | [added: | |]

For the fiscal year [removed: ended December] [added: ended December] 31, [removed: 2019][added: 2020]

| ☐ | [added: | |] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | [added: | |]

Commission File [removed: No. 001-35971][added: No. 001-35971]

| Ireland | | [added: | | | |] 98-1108930 | [added: | |]

| *(State or other jurisdiction of incorporation or organization)* | | [added: | | | |] *(I.R.S. [removed: Employer* *Identification] [added: Employer Identification] No.)* | [added: | |]

[removed: Dublin 2, Ireland][added: Dublin 2, D02 VH94, Ireland]

[removed: +(353) (1) 2546200][added: +(353) (1) 2546200]

| Title of each class | [added: | |] Trading symbols | [added: | |] Name of each exchange on which registered | [added: | |]

| Ordinary shares, par value $0.01 per share | [added: | |] ALLE | [added: | |] New York Stock Exchange | [added: | |]

| 3.500% Senior Notes due 2029 | [added: | |] ALLE 3 ½ | [added: | |] New York Stock Exchange | [added: | |]

| Large accelerated filer | [added: | |] ☒ | [added: | |] Accelerated filer | [added: | |] ☐ | [added: | |]

| Non-accelerated filer | [added: | |] ☐ | [added: | |] Smaller reporting company | [added: | |] ☐ | [added: | |]

| | | [added: | | | |] Emerging growth company | [added: | |] ☐ | [added: | |]

The aggregate market value of ordinary shares held by non-affiliates on June 30, [removed: 2019] [added: 2020] was approximately [removed: $10.3] [added: $9.4] billion based on the closing price of such stock on the New York Stock Exchange.

The number of ordinary shares outstanding of Allegion plc as of February [removed: 13, 2020] [added: 11, 2021] was [removed: 92,600,522.][added: 90,732,297.]

Portions of the registrant’s definitive proxy statement to be filed within 120 days of the close of the registrant’s fiscal year in connection with the registrant’s Annual General Meeting of Shareholders to be held June [removed: 4, 2020] [added: 3, 2021] (the "Proxy Statement") are incorporated by reference into Part II and Part III of this Form [removed: 10-K.][added: 10-K as described herein.]

For the Fiscal Year [removed: Ended December] [added: Ended December] 31, [removed: 2019][added: 2020]

| | | | [added: | | | | | |] Page | [added: | |]

| Part I | [added: | |] Item 1. | [removed: [Business](#s7600EE63EDF95202B04B8DEBB68B6C4D)] | [removed: [4](#s7600EE63EDF95202B04B8DEBB68B6C4D)] | [added: [Business](#id905981cbc9343d5aac81ea1e75f9719_16) | | | [4](#id905981cbc9343d5aac81ea1e75f9719_16) | | |]

| | [added: | |] Item 1A. | [added: | |] [Risk [removed: Factors](#s06AD9F2F061A54849BB5E5E795DA0A27)] [added: Factors](#id905981cbc9343d5aac81ea1e75f9719_19)] | [removed: [13](#s06AD9F2F061A54849BB5E5E795DA0A27)] | [added: | [16](#id905981cbc9343d5aac81ea1e75f9719_19) | | |]

| | [added: | |] Item 1B. | [added: | |] [Unresolved Staff [removed: Comments](#sC85BF16E413E5682A0665B15D48F993E)] [added: Comments](#id905981cbc9343d5aac81ea1e75f9719_22)] | [removed: [22](#sC85BF16E413E5682A0665B15D48F993E)] | [added: | [27](#id905981cbc9343d5aac81ea1e75f9719_22) | | |]

| | [added: | |] Item 2. | [removed: [Properties](#s006E352E52985B0086823D25A3B10719)] | [removed: [22](#s006E352E52985B0086823D25A3B10719)] | [added: [Properties](#id905981cbc9343d5aac81ea1e75f9719_25) | | | [27](#id905981cbc9343d5aac81ea1e75f9719_25) | | |]

| | [added: | |] Item 3. | [added: | |] [Legal [removed: Proceedings](#s11A7D75CC12C5015B3D6E4BD14234D34)] [added: Proceedings](#id905981cbc9343d5aac81ea1e75f9719_28)] | [removed: [23](#s11A7D75CC12C5015B3D6E4BD14234D34)] | [added: | [27](#id905981cbc9343d5aac81ea1e75f9719_28) | | |]

| | [added: | |] Item 4. | [added: | |] [Mine Safety [removed: Disclosures](#sEF2D0DFD4B7155A799DCE62F060E26DD)] [added: Disclosures](#id905981cbc9343d5aac81ea1e75f9719_31)] | [removed: [23](#sEF2D0DFD4B7155A799DCE62F060E26DD)] | [added: | [27](#id905981cbc9343d5aac81ea1e75f9719_31) | | |]

| Part II | [added: | |] Item 5. | [added: | |] [Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#s6A2E9566AA555E76B4B24632A00042E4)] [added: Securities](#id905981cbc9343d5aac81ea1e75f9719_37)] | [removed: [24](#s6A2E9566AA555E76B4B24632A00042E4)] | [added: | [29](#id905981cbc9343d5aac81ea1e75f9719_37) | | |]

| | [added: | |] Item 6. | [added: | |] [Selected Financial [removed: Data](#s4602483CCACC5435A67FA58F01FF004F)] [added: Data](#id905981cbc9343d5aac81ea1e75f9719_40)] | [removed: [26](#s4602483CCACC5435A67FA58F01FF004F)] | [added: | [31](#id905981cbc9343d5aac81ea1e75f9719_40) | | |]

| | [added: | |] Item 7. | [added: | |] [Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations](#sFE0207A2FC125454899FDE31315077A4)] [added: Operations](#id905981cbc9343d5aac81ea1e75f9719_43)] | [removed: [27](#sFE0207A2FC125454899FDE31315077A4)] | [added: | [32](#id905981cbc9343d5aac81ea1e75f9719_43) | | |]

| | [added: | |] Item 7A. | [added: | |] [Quantitative and Qualitative [removed: Disclosure About] [added: Disclosure](#id905981cbc9343d5aac81ea1e75f9719_55)[s](#id905981cbc9343d5aac81ea1e75f9719_55) [About] Market [removed: Risk](#sE1F1DBBD91DF58EC878894BA9096B6FE)] [added: Risk](#id905981cbc9343d5aac81ea1e75f9719_55)] | [removed: [45](#sE1F1DBBD91DF58EC878894BA9096B6FE)] | [added: | [48](#id905981cbc9343d5aac81ea1e75f9719_55) | | |]

| | [added: | |] Item 8. | [added: | |] [Financial Statements and Supplementary [removed: Data](#sACE20B1E873859AAB3917B3C894F7B44)] [added: Data](#id905981cbc9343d5aac81ea1e75f9719_58)] | [removed: [46](#sACE20B1E873859AAB3917B3C894F7B44)] | [added: | [49](#id905981cbc9343d5aac81ea1e75f9719_58) | | |]

| | [added: | |] Item 9. | [added: | |] [Changes in and Disagreements with Accountants on Accounting and Financial [removed: Disclosure](#sDD6AA9116E50524A8DBC05D1176B0D2A)] [added: Disclosure](#id905981cbc9343d5aac81ea1e75f9719_61)] | [removed: [47](#sDD6AA9116E50524A8DBC05D1176B0D2A)] | [added: | [50](#id905981cbc9343d5aac81ea1e75f9719_61) | | |]

| | [added: | |] Item 9A. | [added: | |] [Controls and [removed: Procedures](#s93E2CDC5BCFB52F3A21E6ABFE519D1F1)] [added: Procedures](#id905981cbc9343d5aac81ea1e75f9719_64)] | [removed: [47](#s93E2CDC5BCFB52F3A21E6ABFE519D1F1)] | [added: | [50](#id905981cbc9343d5aac81ea1e75f9719_64) | | |]

| | [added: | |] Item 9B. | [added: | |] [Other [removed: Information](#s68BFF738D6D45EACBAB4A7C8A78969B7)] [added: Information](#id905981cbc9343d5aac81ea1e75f9719_67)] | [removed: [47](#s68BFF738D6D45EACBAB4A7C8A78969B7)] | [added: | [50](#id905981cbc9343d5aac81ea1e75f9719_67) | | |]

| Part III | [added: | |] Item 10. | [added: | |] [Directors, Executive Officers and Corporate [removed: Governance](#sD383CAA17C4D5933804F32CC816600E5)] [added: Governance](#id905981cbc9343d5aac81ea1e75f9719_73)] | [removed: [48](#sD383CAA17C4D5933804F32CC816600E5)] | [added: | [51](#id905981cbc9343d5aac81ea1e75f9719_73) | | |]

| | [added: | |] Item 11. | [added: | |] [Executive [removed: Compensation](#s4E413B9DE8BF5156A75452A759D523F4)] [added: Compensation](#id905981cbc9343d5aac81ea1e75f9719_76)] | [removed: [48](#s4E413B9DE8BF5156A75452A759D523F4)] | [added: | [51](#id905981cbc9343d5aac81ea1e75f9719_76) | | |]

| | [added: | |] Item 12. | [added: | |] [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder [removed: Matters](#s515C0A0C3520597E8200677855849786)] [added: Matters](#id905981cbc9343d5aac81ea1e75f9719_79)] | [removed: [48](#s515C0A0C3520597E8200677855849786)] | [added: | [51](#id905981cbc9343d5aac81ea1e75f9719_79) | | |]

| | [added: | |] Item 13. | [added: | |] [Certain Relationships and Related Transactions, and Director [removed: Independence](#s5DCB77548C6F5608AB911E38843D488C)] [added: Independence](#id905981cbc9343d5aac81ea1e75f9719_82)] | [removed: [48](#s5DCB77548C6F5608AB911E38843D488C)] | [added: | [51](#id905981cbc9343d5aac81ea1e75f9719_82) | | |]

| | [added: | |] Item 14. | [added: | |] [Principal Accountant Fees and [removed: Services](#s379C2600966655B1B465548C3F882781)] [added: Services](#id905981cbc9343d5aac81ea1e75f9719_85)] | [removed: [48](#s379C2600966655B1B465548C3F882781)] | [added: | [51](#id905981cbc9343d5aac81ea1e75f9719_85) | | |]

| Part IV | [added: | |] Item 15. | [added: | |] [Exhibits, Financial Statement [removed: Schedules](#s82083E009AAD5602A79982F390839A03)] [added: Schedules](#id905981cbc9343d5aac81ea1e75f9719_91)] | [removed: [49](#s82083E009AAD5602A79982F390839A03)] | [added: | [52](#id905981cbc9343d5aac81ea1e75f9719_91) | | |]

[Table of](#id905981cbc9343d5aac81ea1e75f9719_7) [Contents](#id905981cbc9343d5aac81ea1e75f9719_7)

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Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of

the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C.

7262(b)) by the registered public accounting firm that prepared or issued its audit report.

[Table of](#id905981cbc9343d5aac81ea1e75f9719_7) [Contents](#id905981cbc9343d5aac81ea1e75f9719_7)

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We operate through a broad network of sales offices, engineering centers, [removed: 32] [added: 30] production and assembly facilities and several distribution centers throughout the world.

Our active properties represent about [removed: 6.6] [added: 6.3] million square feet, of which approximately [removed: 39%] [added: 37%] is leased.

[removed: The majority] [added: We own 16] of our [removed: plant facilities are owned by us] [added: production and assembly facilities,] with the remainder under long-term lease arrangements.

The following is a list of executive officers of the Company as of February [removed: 18, 2020.][added: 16, 2021.]

Petratis*, age [removed: 62,] [added: 63,] has served as our Chairman, President and Chief Executive Officer since 2013.

Shannon*, age [removed: 57,] [added: 58,] has served as our Senior Vice President and Chief Financial Officer since 2013.

Braun*, age [removed: 60,] [added: 61,] has served as our Senior Vice President and General Counsel since [removed: 2014, and Secretary since 2018.][added: 2014.]

Eckersley*, age [removed: 58,] [added: 59,] has served as our Senior Vice President [removed: - Americas] [added: – Allegion International] since [removed: 2013.][added: 2021.]

Kemp*, age [removed: 51,] [added: 52,] has served as our Senior Vice President [removed: -] [added: –] Chief [removed: Customer] [added: Information] and Digital Officer since [removed: 2019.][added: December 2020.]

Ms. Kemp [added: also] served as our Senior Vice President and Chief Information Officer from 2015 to 2019.

Martens*, age [removed: 49,] [added: 50,] has served as our Senior Vice President [removed: -] [added: –] Chief Innovation and Design Officer since [removed: December] 2019 and Futurist and President of Allegion Ventures since 2017.

Meador*, age [removed: 48,] [added: 49,] has served as our Senior Vice President [removed: -] [added: –] Human Resources and Communications since 2016.

Ms. Meador served as our Vice President [removed: -] [added: –] Tax from 2013 to 2016.

[removed: *Lucia Veiga Moretti*,] [added: Orbegoso*,] age [removed: 55,] [added: 50,] has served as our Senior Vice President [removed: - EMEIA] [added: – Allegion Americas] since [removed: 2014.][added: February 2021.]

[removed: Muhlenkamp,*] [added: Farrer,*] age [removed: 62,] [added: 58,] has served as our [removed: Senior] Vice President [removed: -] [added: –] Global Operations and Integrated Supply Chain since [removed: 2014.][added: October 2020.]

Ranck*, age [removed: 61,] [added: 62,] has served as our Vice President, Controller and Chief Accounting Officer since 2013.

*Vincent Wenos,* age [removed: 53,] [added: 54,] has served as our Senior Vice President [removed: -] [added: –] Chief Technology Officer since 2019.

Mr. Wenos served as our Vice President [removed: -] [added: –] Global Technology and Engineering from 2018 to 2019 and served as both our Vice President [removed: -] [added: –] Americas Engineering and Vice President [removed: -] [added: –] Global Mechanical Products from 2016 to 2018.

Mr. Wenos previously served as Vice President [removed: - Global] [added: –] Product Development and Technology at Stanley Black & Decker, Inc. (a global diversified consumer and industrial products company).

[removed: Mr. Wood] [added: Ms. Farrer] served as our Vice President, Global Supply Management from [added: 2017 to 2020 and as our Vice President, Operations – Americas from] 2013 to 2017.

All above-listed officers except for Mr. [added: Orbegoso and Mr.] Wenos have been employed by the Company for more than the past five years.

All officers are elected to hold office for one year or until their successors are elected and [removed: qualified.][added: qualified or their earlier death, resignation or removal from office by the Board of Directors of the Company.]

Mr. Braun also served as Secretary from 2018 to 2020.

Mr. Eckersley served as our Senior Vice President – Americas from 2013 to 2020.

*Cynthia D.

Ms. Kemp served as our Senior Vice President – Chief Customer and Digital Officer from 2019 to December 2020.

[Table of](#id905981cbc9343d5aac81ea1e75f9719_7) [Contents](#id905981cbc9343d5aac81ea1e75f9719_7)

*Luis J.

Mr. Orbegoso previously served as President and Chief Operating Officer at American Residential Services (ARS, a residential HVAC and plumbing company) from 2017 to 2020 and as President, ADT Business at ADT Corporation (currently ADT Inc., a leading provider of security, automation and smart home solutions) from 2013-2016.

[Table of](#id905981cbc9343d5aac81ea1e75f9719_7) [Contents](#id905981cbc9343d5aac81ea1e75f9719_7)

*Chris E.

*Jeffrey M.

Wood*, age 49, has served as our Senior Vice President - Asia Pacific since 2017.

As of February [removed: 13, 2020,] [added: 11, 2021,] the number of record holders of ordinary shares was [removed: 2,430.][added: 2,301.]

Our Board of Directors declared dividends of [removed: $0.27] [added: $0.32] per ordinary share on February 6, [removed: 2019,] [added: 2020,] April [removed: 4, 2019,] [added: 8, 2020,] September [removed: 5, 2019] [added: 1, 2020] and December [removed: 5, 2019.][added: 2, 2020.]

On February [removed: 6, 2020,] [added: 5, 2021,] our Board of Directors declared a dividend of [removed: $0.32] [added: $0.36] per ordinary share payable March 31, [removed: 2020.][added: 2021.]

We paid a total of [removed: $100.6] [added: $117.3] million in cash for dividends to ordinary shareholders during the year ended December 31, [removed: 2019.][added: 2020.]

Distributable reserves, broadly, means the accumulated realized profits of Allegion plc [removed: (ALLE-Ireland).][added: (ALLE-Ireland) and are unrelated to any U.S. GAAP reporting amount (e.g. retained earnings).]

| Period | | [added: | | | |] Total number of shares purchased (000s) | | | [added: | | |] Average price paid per share | | | | [added: | |] Total number of shares purchased as part of the [removed: 2017 Share Repurchase] Authorization (000s) | | | [added: | | |] Approximate dollar value of shares still available to be purchased under the [removed: 2017] [added: 2020] Share Repurchase Authorization (000s) | | |

In February 2017, our Board of Directors approved a [removed: share] [added: stock] repurchase authorization of up to $500 million of the [removed: Company's] [added: Company’s] ordinary shares (the "2017 Share Repurchase Authorization").

On February 6, 2020, [removed: the Company's] [added: our] Board of Directors approved a new share repurchase authorization of up to, and including, $800 million of the [removed: Company's] [added: Company’s] ordinary shares (the "2020 Share Repurchase Authorization"), replacing the existing 2017 Share Repurchase Authorization.

The annual changes for the five-year period shown below are based on the assumption that $100 had been invested in Allegion plc ordinary shares, the Standard & Poor’s 500 Stock Index ("S&P 500") and the Standard & Poor's 400 Capital Goods Index ("S&P 400 Capital Goods") on December 31, [removed: 2014,] [added: 2015,] and that all quarterly dividends were reinvested.

The total cumulative dollar returns shown on the graph represent the value that such investments would have had on December 31, [removed: 2019.][added: 2020.]

| | | [removed: December 31, 2014] | | [added: | |] December 31, 2015 | | [added: | | | |] December 31, 2016 | | [added: | | | |] December 31, 2017 | | [added: | | | |] December 31, 2018 | | [added: | | | |] December 31, 2019 | [added: | | | | | December 31, 2020 | | | | | | | | |]

As of December 31, 2020, we had distributable reserves of $3.8 billion.

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| October 1 - October 31 | | | | | | 382 | | | | | | $ | 102.51 | | | | | 382 | | | | | | $ | 689,782 | |

| November 1 - November 30 | | | | | | 313 | | | | | | 108.09 | | | | | | 313 | | | | | | 655,907 | | |

| December 1 - December 31 | | | | | | 370 | | | | | | 112.81 | | | | | | 370 | | | | | | 614,192 | | |

| Total | | | | | | 1,065 | | | | | | $ | 107.73 | | | | | 1,065 | | | | | | $ | 614,192 | |

[Table of](#id905981cbc9343d5aac81ea1e75f9719_7) [Contents](#id905981cbc9343d5aac81ea1e75f9719_7)

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| Allegion plc | | | | | | 100.00 | | | | | | 97.80 | | | | | | 122.55 | | | | | | 124.00 | | | | | | 195.77 | | | | | | 185.22 | | | | | | | | |

| S&P 500 | | | | | | 100.00 | | | | | | 111.96 | | | | | | 136.40 | | | | | | 130.42 | | | | | | 171.49 | | | | | | 203.04 | | | | | | | | |

| S&P 400 Capital Goods | | | | | | 100.00 | | | | | | 131.93 | | | | | | 164.51 | | | | | | 141.46 | | | | | | 187.79 | | | | | | 225.05 | | | | | | | | |

[Table of](#id905981cbc9343d5aac81ea1e75f9719_7) [Contents](#id905981cbc9343d5aac81ea1e75f9719_7)

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| October 1 - October 31 | | 154 | | | $ | 104.52 | | | 154 | | | $ | 176,916 | |

| November 1 - November 30 | | 117 | | | 117.36 | | | | 117 | | | 163,143 | | |

| December 1 - December 31 | | 133 | | | 123.08 | | | | 133 | | | 146,746 | | |

| Total | | 404 | | | $ | 114.37 | | | 404 | | | $ | 146,746 | |


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| Allegion plc | | 100.00 | | 119.64 | | 117.00 | | 146.62 | | 148.35 | | 234.22 |

| S&P 500 | | 100.00 | | 101.38 | | 113.51 | | 138.29 | | 132.23 | | 173.86 |

| S&P 400 Capital Goods | | 100.00 | | 94.49 | | 124.67 | | 155.45 | | 133.67 | | 177.45 |

| As of and for the years ended December 31, | | [added: | | | | 2020 | | | | | |] 2019 | | | | [added: | |] 2018 | | | | [added: | |] 2017 | | | | [removed: 2016] | | [added: 2016] | | [removed: 2015] | | | |

| Net revenues | | [added: | | | |] $ | [added: 2,719.9 | | | | | $ |] 2,854.0 | | | [added: | |] $ | 2,731.7 | | | [added: | |] $ | 2,408.2 | | | [removed: $] | [removed: 2,238.0] | [added: $] | [added: 2,238.0] | [removed: $] | [removed: 2,068.1] | | |

| [removed: Net earnings (loss)] [added: Earnings per share] attributable to Allegion plc ordinary shareholders: | | | | | | | | | | | | | | | | | | | | | | [added: | | | | | | | | | | | | | |]

| Total assets | | [added: | | | | 3,069.4 | | | | | |] 2,967.2 | | | | [added: | |] 2,810.2 | | | | [added: | |] 2,542.0 | | | | [removed: 2,247.4] | | [added: 2,247.4] | | [removed: 2,263.0] | | | |

| Total debt | | [added: | | | | 1,429.6 | | | | | |] 1,427.7 | | | | [added: | |] 1,444.8 | | | | [added: | |] 1,477.3 | | | | [removed: 1,463.8] | | [added: 1,463.8] | | [removed: 1,523.1] | | | |

| Total Allegion plc shareholders’ equity | | [added: | | | | 829.4 | | | | | |] 757.4 | | | | [added: | |] 651.0 | | | | [added: | |] 401.6 | | | | [removed: 113.3] | | [added: 113.3] | | [removed: 25.6] | | | |

| [removed: Earnings (loss) per share] [added: Net earnings] attributable to Allegion plc ordinary [removed: shareholders:] [added: shareholders] | | | | | | [added: 314.3] | | | [added: (a)] | | | [added: 401.8] | | | [added: (b)] | | | [added: 434.9] | | | [added: (c)] | [added: | | 273.3 | | | (d) | | | 229.1 | | | (e) | | |]

| [removed: Continuing operations] [added: Basic:] | | [added: | | | |] $ | [added: 3.41 | | | | | $ |] 4.29 | | | [added: | |] $ | 4.58 | | | [added: | |] $ | 2.87 | | | [removed: $] | [removed: 2.39] | [added: $] | [added: 2.39] | [removed: $] | [removed: 1.61] | | |

| [removed: Continuing operations] [added: Diluted:] | | [added: | | | |] $ | [added: 3.39 | | | | | $ |] 4.26 | | | [added: | |] $ | 4.54 | | | [added: | |] $ | 2.85 | | | [removed: $] | [removed: 2.36] | [added: $] | [added: 2.36] | [removed: $] | [removed: 1.59] | | |

| Dividends declared per ordinary share | | [added: | | | |] $ | [added: 1.28 | | | | | $ |] 1.08 | | | [added: | |] $ | 0.84 | | | [added: | |] $ | 0.64 | | | [removed: $] | [removed: 0.48] | [added: $] | [added: 0.48] | [removed: $] | [removed: 0.40] | | |

[removed: | (a) | Net] [added: (b)Net] earnings for the year ended December 31, 2019, includes a $31.4 million (net of tax) loss related to the divestitures of our business operations in Colombia and Turkey. [removed: |]

[removed: | (b) | Net] [added: (c)Net] earnings for the year ended December 31, 2018, includes a $21.9 million tax benefit related to an adjustment to the provisional amounts previously recognized related to the enactment of the [added: 2017 U.S.] Tax [added: Cuts and Jobs Act (the "Tax] Reform [removed: Act. |][added: Act").]

[removed: | (c) | Net] [added: (d)Net] earnings for the year ended December 31, 2017, includes $44.7 million of costs related to the refinancing of our credit facilities and senior notes and a net tax charge of $53.5 million related to the Tax Reform Act. [removed: |]

[removed: | (d) | Net] [added: (e)Net] earnings for the year ended December 31, 2016, includes $84.4 million of losses related to our previously divested Systems Integration business. [removed: |]

(1) The Company has not restated [removed: 2015] [added: 2016] - 2017 for the impact of the adoption of ASC Topic 606, "Revenue from Contracts with Customers" ("ASC 606") as of January 1, 2018, nor [removed: 2015] [added: has the Company restated the Total assets] for [added: 2016 - 2018 for] the impact of the adoption of [removed: ASU 2016-09, "Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting" in the fourth quarter] [added: ASC Topic 842, "Leases" as] of [removed: 2016.][added: January 1, 2019.]

The impact of excluding [removed: the above] [added: these] standards in prior period presentation is not material.

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(a)Net earnings for the year ended December 31, 2020, includes goodwill and intangible asset impairment charges of $99.0 million (net of tax), predominantly related to the economic challenges stemming from the ongoing COVID-19 pandemic and the expected impacts on the future cash flows in our EMEA and Asia Pacific segments, as well as a $37.9 million loss on assets held for sale at December 31, 2020 related to our Qatar Metal Industries ("QMI") business.

[Table of](#id905981cbc9343d5aac81ea1e75f9719_7) [Contents](#id905981cbc9343d5aac81ea1e75f9719_7)

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| Continuing operations | | 401.8 | | | (a) | 434.9 | | | (b) | 273.3 | | | (c) | 229.1 | | | (d) | 154.3 | | | (e) |

| Discontinued operations | | — | | | | — | | | | — | | | | — | | | | (0.4 | | ) | |

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| Discontinued operations | | — | | | | — | | | | — | | | | — | | | | (0.01 | | ) | |

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| Discontinued operations | | — | | | | — | | | | — | | | | — | | | | — | | | |

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| (e) | Net earnings from continuing operations for the year ended December 31, 2015, includes $104.2 million of losses related to the divestitures of our Venezuelan operations and our majority stake in our Systems Integration business. |

The Company has also not restated the Total assets for 2015 - 2018 for the impact of the adoption of ASC Topic 842, "Leases" as of January 1, 2019.

[removed: | (a) | The] [added: (a)The] following Consolidated Financial Statements and Financial Statement Schedule and the report thereon of PricewaterhouseCoopers LLP dated February [removed: 18, 2020,] [added: 16, 2021,] are presented following Item 16 of this Annual Report on Form 10-K. [removed: |]

Consolidated Statements of Comprehensive Income for the years ended December 31, [removed: 2019, 2018] [added: 2020, 2019] and [removed: 2017][added: 2018]

Consolidated Balance Sheets at December 31, [removed: 2019] [added: 2020] and [removed: 2018][added: 2019]

For the years ended December 31, [removed: 2019, 2018] [added: 2020, 2019] and [removed: 2017:][added: 2018:]

Schedule II – Valuation and Qualifying Accounts for the years ended December 31, [removed: 2019, 2018] [added: 2020, 2019] and [removed: 2017][added: 2018]

[removed: | (b) | The] [added: (b)The] unaudited selected quarterly financial data for the two years ended December 31, is as follows: [removed: |]

| In millions, except per share amounts | | [removed: 2019] | | | | [added: 2020] | | | | | | | | | | | [added: | | | | | | | | | |]

| | | [removed: First Quarter] | | | | [removed: Second Quarter] [added: First Quarter] | | | | [removed: Third Quarter] | | [added: Second Quarter] | | [removed: Fourth Quarter] | | | [added: | Third Quarter | | | | | | Fourth Quarter | | |]

| Net revenues | | [added: | | | |] $ | 655.0 | | | [added: | |] $ | 731.2 | | | [added: | |] $ | 748.3 | | | [added: | |] $ | 719.5 | |

| Cost of goods sold | | [added: | | | |] 378.1 | | | | [added: | |] 410.5 | | | | [added: | |] 412.8 | | | | [added: | |] 400.3 | | |

| Operating income | | [added: | | | |] 108.0 | | | | [added: | |] 145.7 | | | | [added: | |] 168.1 | | | | [added: | |] 143.3 | | |

| Net earnings | | [added: | | | |] 80.3 | | | | [added: | |] 109.4 | | | | [added: | |] 131.7 | | | | [added: | |] 80.7 | | |

| Net earnings attributable to Allegion plc | | [added: | | | |] 80.2 | | | | [added: | |] 109.3 | | | | [added: | |] 131.6 | | | | [added: | |] 80.7 | | |

| Earnings per share attributable to Allegion plc ordinary shareholders: | | | | | | | | | | | | | | | | | [added: | | | | | | | | | |]

| Basic | | [added: | | | |] $ | 0.85 | | | [added: | |] $ | 1.17 | | | [added: | |] $ | 1.41 | | | [added: | |] $ | 0.87 | |

| Diluted | | [added: | | | |] $ | 0.84 | | | [added: | |] $ | 1.16 | | | [added: | |] $ | 1.40 | | | [added: | |] $ | 0.86 | |

| | | [removed: First Quarter] | | | | [removed: Second Quarter] [added: First Quarter] | | | | [removed: Third Quarter] | | [added: Second Quarter] | | [removed: Fourth Quarter] | | | [added: | Third Quarter | | | | | | Fourth Quarter | | |]

| Earnings per share attributable to Allegion plc ordinary shareholders: | | | | | | | | | | | | | | | | | [added: | | | | | | | | | |]

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| Net revenues | | | | | | $ | 674.7 | | | | | $ | 589.5 | | | | | $ | 728.4 | | | | | $ | 727.3 | |

| Cost of goods sold | | | | | | 381.6 | | | | | | 342.9 | | | | | | 409.2 | | | | | | 407.4 | | |

| Operating income | | | | | | 28.9 | | | | | | 96.5 | | | | | | 160.4 | | | | | | 117.7 | | |

| Net earnings | | | | | | 0.5 | | | | | | 73.7 | | | | | | 146.9 | | | | | | 93.4 | | |

| Net earnings attributable to Allegion plc | | | | | | 0.4 | | | | | | 73.7 | | | | | | 146.9 | | | | | | 93.3 | | |

| Basic | | | | | | $ | — | | | | | $ | 0.80 | | | | | $ | 1.59 | | | | | $ | 1.02 | |

| Diluted | | | | | | $ | — | | | | | $ | 0.80 | | | | | $ | 1.58 | | | | | $ | 1.01 | |

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Net earnings from the first quarter of 2020 includes a goodwill and intangible asset impairment charge of $94.3 million (net of tax).

Net earnings from the fourth quarter of 2020 includes a $37.9 million loss on assets held for sale at December 31, 2020, related to our QMI business.

[Table of](#id905981cbc9343d5aac81ea1e75f9719_7) [Contents](#id905981cbc9343d5aac81ea1e75f9719_7)

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| Net revenues | | $ | 613.1 | | | $ | 704.7 | | | $ | 711.5 | | | $ | 702.4 | |

| Cost of goods sold | | 355.3 | | | | 399.1 | | | | 402.1 | | | | 401.9 | | |

| Operating income | | 98.7 | | | | 143.4 | | | | 142.3 | | | | 141.4 | | |

| Net earnings | | 72.4 | | | | 114.0 | | | | 116.1 | | | | 132.9 | | |

| Net earnings attributable to Allegion plc | | 72.2 | | | | 113.9 | | | | 116.0 | | | | 132.8 | | |

| Basic | | $ | 0.76 | | | $ | 1.20 | | | $ | 1.22 | | | $ | 1.40 | |

| Diluted | | $ | 0.75 | | | $ | 1.19 | | | $ | 1.21 | | | $ | 1.39 | |

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Net earnings from the fourth quarter of 2018 includes a net tax benefit of $18.6 million related to an adjustment to the provisional accounting related to the Tax Reform Act.

| (a) | [added: | |] Evaluation of Disclosure Controls and Procedures | [added: | |]

Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded as of December 31, [removed: 2019,] [added: 2020,] that the Company's disclosure controls and procedures were effective in ensuring that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act has been recorded, processed, summarized and reported, within the time periods specified in the Commission's rules and forms, and that such information has been accumulated and communicated to the Company's management including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

| (b) | [added: | |] Management's Report on Internal Control Over Financial Reporting | [added: | |]

[removed: | • |] [added: -] pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the Company’s assets; [removed: |]

[removed: | • |] [added: -] provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that the Company’s receipts and expenditures are being made only in accordance with authorizations of the Company’s management and directors; and [removed: |]

[removed: | • |] [added: -] provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements. [removed: |]

Management assessed the effectiveness of our internal control over financial reporting as of December 31, [removed: 2019.][added: 2020.]

We concluded that our internal control over financial reporting was effective as of December 31, [removed: 2019.][added: 2020.]

| (c) | [added: | |] Changes in Internal Control Over Financial Reporting | [added: | |]

There were no changes in the Company's internal control over financial reporting that occurred during the quarter ended December 31, [removed: 2019] [added: 2020] that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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The Company did implement changes to internal controls due to the adoption of ASC 842 effective January 1, 2019.

These changes include implementing a new lease accounting system and processes to evaluate and account for contracts under the new accounting standard.

There were no significant changes to the Company's internal control over financial reporting due to the adoption of this new standard.

[Table of](#id905981cbc9343d5aac81ea1e75f9719_7) [Contents](#id905981cbc9343d5aac81ea1e75f9719_7)

The [removed: other] information required by this item is incorporated herein by reference to the information contained under the headings "Compensation Discussion and Analysis", "Executive Compensation" and "Compensation Committee Report" in our Proxy Statement.

The [removed: other] information required by this item is incorporated herein by reference to the information contained under the headings "Security Ownership of Certain Beneficial Owners and Management" and "Equity Compensation Plan Information" of our Proxy Statement.

The [removed: other] information required by this item is incorporated herein by reference to the information contained under the headings "Corporate Governance" and "Certain Relationships and Related Person Transactions" of our Proxy Statement.

[Table of](#id905981cbc9343d5aac81ea1e75f9719_7) [Contents](#id905981cbc9343d5aac81ea1e75f9719_7)

| (a) 1. and 2. | [added: | |] Financial statements and financial statement schedule See Item 8. | [added: | |]

| 3. | [added: | |] Exhibits | [added: | |]

| | [added: | |] The exhibits listed on the accompanying index to exhibits are filed as part of this Annual Report on Form 10-K. | [added: | |]

| [removed: Exhibit Number] [added: Exhibit Number] | | [added: | | | |] Exhibit Description | | [added: | | | |] Method of Filing | [added: | |]

| [2.1](http://www.sec.gov/Archives/edgar/data/1579241/000157924113000031/exhibit21sda.htm) | | [added: | | | |] Separation and Distribution Agreement between Ingersoll-Rand plc and Allegion plc, dated November 29, 2013. | | [added: | | | |] Incorporated by reference to Exhibit 2.1 of the Company’s Form 8-K filed with the SEC on December 2, 2013 (File No. 001-35971). | [added: | |]

| [3.1](http://www.sec.gov/Archives/edgar/data/1579241/000157924116000072/amendedandrestatedmemorand.htm) | | [added: | | | |] Amended and Restated Memorandum and Articles of Association of Allegion plc. | | [added: | | | |] Incorporated by reference to Exhibit 3.1 of the Company’s Form 8-K filed with the SEC on June 13, 2016 (File No. 001-35971). | [added: | |]

| [4.1](http://www.sec.gov/Archives/edgar/data/1579241/000119312517300970/d461934dex41.htm) | | [added: | | | |] Indenture, dated as of October 2, 2017, among Allegion US Holding Company Inc., Allegion plc and Wells Fargo Bank, National Association. | | [added: | | | |] Incorporated by reference to Exhibit 4.1 of the Company's Form 8-K filed October 2, [removed: 2017.] [added: 2017 (File No. 001-35971).] | [added: | |]

| [4.2](http://www.sec.gov/Archives/edgar/data/1579241/000119312517300970/d461934dex42.htm) | | [added: | | | |] First Supplemental Indenture, dated as of October 2, 2017, among Allegion US Holding Company Inc., Allegion plc and Wells Fargo Bank, National Association. | | [added: | | | |] Incorporated by reference to Exhibit 4.2 of the Company's Form 8-K filed October 2, [removed: 2017.] [added: 2017 (File No. 001-35971).] | [added: | |]

| [4.3](http://www.sec.gov/Archives/edgar/data/1579241/000119312517300970/d461934dex42.htm) | | [added: | | | |] Form of Global Note representing the 3.200% Senior Notes due 2024. | | [added: | | | |] Incorporated by reference to Exhibit 4.3 of the Company's Form 8-K filed October 2, 2017 (included in Exhibit [removed: 4.2).] [added: 4.2) (File No. 001-35971).] | [added: | |]

| [4.4](http://www.sec.gov/Archives/edgar/data/1579241/000119312517300970/d461934dex44.htm) | | [added: | | | |] Second Supplemental Indenture, dated as of October 2, 2017, among Allegion US Holding Company Inc., Allegion plc and Wells Fargo Bank, National Association. | | [added: | | | |] Incorporated by reference to Exhibit 4.4 of the Company's Form 8-K filed October 2, [removed: 2017.] [added: 2017 (File No. 001-35971).] | [added: | |]

| [4.5](http://www.sec.gov/Archives/edgar/data/1579241/000119312517300970/d461934dex44.htm) | | [added: | | | |] Form of Global Note representing the 3.550% Senior Notes due 2027. | | [added: | | | |] Incorporated by reference to Exhibit 4.5 of the Company's Form 8-K filed October 2, 2017 (included in Exhibit [removed: 4.4).] [added: 4.4) (File No. 001-35971).] | [added: | |]