Financial Analysis

"ACQUISITIONS 2026 On March 2, 2026, the Company, through its subsidiaries, acquired 100% of Door Components, Inc. (DCI), a manufacturer of custom, quick ship hollow metal doors and frames for industrial, commercial and institutional markets based in the United States. DCI is reported in the Companys Allegion Americas segment. The purchase consideration, net of cash acquired, was approximately $69.9 million. This acquisition was accounted for as a business combination and was funded with available cash on hand and borrowings under the Revolving Facility. 2025 The following acquisitions were made during the six months ended June 30, 2025: Next Door On February 4, 2025, the Company, through its subsidiaries, acquired Next Door Company (Next Door), a global provider of security products and solutions based in the United States. Next Door is reported in the Companys Allegion Americas segment. Lemaar On March 1, 2025, the Company, through its subsidiaries, acquired Lemaar Pty Ltd (Lemaar), a global provider of security products and solutions based in Australia. Lemaar is reported in the Companys Allegion International segment. Trimco On April 2, 2025, the Company, through its subsidiaries, acquired 100% of Trimco Hardware (""Trimco""), a manufacturer of high-performance and custom-designed architectural hardware primarily sold for commercial and institutional markets based in the United States. Trimco is reported in the Company's Allegion Americas segment. Novas On June 2, 2025, t …

BusinessCombinationDisclosureTextBlock · excerpt; the full note is in the filing

COMMITMENTS AND CONTINGENCIES The Company is involved in various litigation, claims and administrative proceedings, including those related to environmental and product warranty matters, and the Company also has certain contractual obligations requiring minimum purchases. Amounts recorded for identified contingent liabilities are estimates, which are reviewed periodically and adjusted to reflect additional information when it becomes available. Subject to the uncertainties inherent in estimating future costs for contingent liabilities, except as expressly set forth in this note, management believes that any liability which may result from these legal matters would not have a material adverse effect on the financial condition, results of operations, liquidity or cash flows of the Company. Environmental Matters As of June 30, 2026 and December 31, 2025, the Company had reserves for environmental matters of $21.9 million and $22.7 million, respectively. The total reserve at June 30, 2026 and December 31, 2025, included $9.1 million and $9.3 million, respectively, related to remediation of sites previously disposed by the Company. Environmental reserves are classified as Accrued expenses and other current liabilities or Other noncurrent liabilities within the Condensed and Consolidated Balance Sheets based on the timing of their expected future payment. The Companys total current environmental reserve at June 30, 2026 and December 31, 2025, was $5.7 million and $6.0 million, resp …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

NOTE 7 - DEBT AND CREDIT FACILITIES Long-term debt and other borrowings consisted of the following: In millions June 30, 2026 December 31, 2025 Revolving Facility $ 240.6 $ 190.6 3.550% Senior Notes due 2027 400.0 400.0 3.500% Senior Notes due 2029 400.0 400.0 5.411% Senior Notes due 2032 600.0 600.0 5.600% Senior Notes due 2034 400.0 400.0 Other debt 0.2 0.2 Total borrowings outstanding 2,040.8 1,990.8 Discounts and debt issuance costs, net (9.7) (10.7) Total debt 2,031.1 1,980.1 Less current portion of long-term debt 0.2 0.2 Total long-term debt $ 2,030.9 $ 1,979.9 Unsecured Credit Facilities The Company has an unsecured revolving credit facility (the Revolving Facility) that matures on May 20, 2030, and provides aggregate commitments of up to $1.0 billion, which includes up to $100.0 million for the issuance of letters of credit. As of June 30, 2026, the Company had outstanding borrowings of $240.6 million and letters of credit of $25.3 million. The Revolving Facility is unconditionally guaranteed jointly and severally on an unsecured basis by Allegion plc, Allegion US Holding Company Inc. (Allegion US Hold Co), the Companys wholly-owned subsidiary, and Allegion (Ireland) Finance Designated Activity Company (Allegion Ireland DAC), the Companys wholly-owned subsidiary. Borrowings under the Revolving Facility are due upon its maturity but may be repaid at any time without premium or penalty, and amounts repaid may be reborrowed. The Company pays certain fees with respect to …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

The following tables show the Companys Net revenues related to both tangible product sales and services and software for the three and six months ended June 30, 2026 and 2025, respectively, disaggregated by business segment: Three months ended June 30, 2026 Six months ended June 30, 2026 In millions Allegion Americas Allegion International Total Allegion Americas Allegion International Total Net revenues Products $ 870.6 $ 210.0 $ 1,080.6 $ 1,630.2 $ 412.0 $ 2,042.2 Services and software 48.0 22.9 70.9 98.3 44.6 142.9 Total Net revenues $ 918.6 $ 232.9 $ 1,151.5 $ 1,728.5 $ 456.6 $ 2,185.1 Three months ended June 30, 2025 Six months ended June 30, 2025 In millions Allegion Americas Allegion International Total Allegion Americas Allegion International Total Net revenues Products $ 783.3 $ 175.6 $ 958.9 $ 1,498.0 $ 340.4 $ 1,838.4 Services and software 38.2 24.9 63.1 81.3 44.2 125.5 Total Net revenues $ 821.5 $ 200.5 $ 1,022.0 $ 1,579.3 $ 384.6 $ 1,963.9 …

DisaggregationOfRevenueTableTextBlock · excerpt; the full note is in the filing

SHARE-BASED COMPENSATION The Companys share-based compensation plans include programs for stock options, restricted stock units (RSUs) and performance stock units (PSUs). Share-based compensation expense is included in Cost of goods sold and Selling and administrative expenses within the Condensed and Consolidated Statements of Comprehensive Income. The following table summarizes the share-based compensation expense recognized for the three and six months ended June 30: Three months ended Six months ended In millions 2026 2025 2026 2025 Stock options $ 1.1 $ 1.1 $ 3.4 $ 3.4 RSUs 3.5 3.1 10.0 8.6 PSUs 2.1 2.5 4.1 4.8 Pre-tax expense 6.7 6.7 17.5 16.8 Tax benefit (0.5) (0.6) (1.8) (2.0) After-tax expense $ 6.2 $ 6.1 $ 15.7 $ 14.8 Stock Options / RSUs Eligible participants may receive (i) stock options, (ii) RSUs or (iii) a combination of both stock options and RSUs. Grants issued during the six months ended June 30 were as follows: 2026 2025 Number granted Weighted- average fair value per award Number granted Weighted- average fair value per award Stock options 108,951 $ 42.88 138,538 $ 37.72 RSUs 91,632 $ 158.88 92,232 $ 127.81 The weighted-average fair value of the stock options granted is determined using the Black-Scholes option-pricing model. The following weighted-average assumptions were used during the six months ended June 30: 2026 2025 Dividend yield 1.35 % 1.61 % Volatility 25.89 % 29.89 % Risk-free rate of return 3.65 % 4.31 % Expected life (years) 5.3 5.4 Volatilit …

DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock · excerpt; the full note is in the filing

FAIR VALUE MEASUREMENTS Fair value is defined as the exchange price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Fair value measurements are based on a framework that utilizes the inputs market participants use to determine the fair value of an asset or liability and establishes a fair value hierarchy to prioritize those inputs. The fair value hierarchy is comprised of three levels that are described below: Level 1 Inputs based on quoted prices in active markets for identical assets or liabilities. Level 2 Inputs other than Level 1 quoted prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the asset or liability. Level 3 Unobservable inputs based on little or no market activity and that are significant to the fair value of the assets and liabilities. The fair value hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Observable inputs are obtained from independent sources and can be validated by a third party, whereas unobservable inputs reflect assumptions regarding what a third party would use in pricing an asset or liabi …

FairValueDisclosuresTextBlock · excerpt; the full note is in the filing

INCOME TAXES The effective income tax rates for the three months ended June 30, 2026 and 2025, were 19.0% and 20.3%, respectively. The decrease in the effective income tax rate compared to 2025 is primarily due to unfavorable discrete charges in the prior year and favorable discrete adjustments in the current year. The effective income tax rates for the six months ended June 30, 2026 and 2025, were 19.2% and 18.0%, respectively. The increase in the effective income tax rate compared to 2025 is primarily due to unfavorable year over year changes in the amounts recognized for uncertain tax positions and the unfavorable mix of income earned in higher tax rate jurisdictions.

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LEASES Total rental expense for the six months ended June 30, 2026 and 2025, was $37.5 million and $33.2 million, respectively, and is classified within Cost of goods sold and Selling and administrative expenses within the Condensed and Consolidated Statements of Comprehensive Income. Rental expense related to short-term leases, variable lease payments or other leases or lease components not included within the right of use (ROU) asset or lease liability totaled $7.4 million and $7.5 million for the six months ended June 30, 2026 and 2025. No material lease costs have been capitalized on the Condensed and Consolidated Balance Sheets as of June 30, 2026 or December 31, 2025. The Company assesses the specific terms and conditions of each lease to determine the appropriate classification as either an operating or finance lease and the lease term. Substantially all of the Companys leases for which the Company is a lessee are classified as operating leases. As a lessee, the Company categorizes its leases into two general categories: real estate leases and equipment leases. Amounts included within the Condensed and Consolidated Balance Sheets related to the Companys ROU asset and lease liability for both real estate and equipment leases were as follows: June 30, 2026 December 31, 2025 In millions Balance Sheet classification Real estate Equipment Total Real estate Equipment Total ROU asset Other noncurrent assets $ 127.8 $ 59.2 $ 187.0 $ 116.5 $ 49.9 $ 166.4 Lease liability - curre …

LesseeOperatingLeasesTextBlock · excerpt; the full note is in the filing

NOTE 2 - RECENT ACCOUNTING PRONOUNCEMENTS Recently Issued Accounting Pronouncements In November 2024, the FASB issued ASU No. 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which requires disaggregated disclosures of certain categories of expenses that are included in expense line items on the face of the consolidated statements of comprehensive income. This guidance will be effective for annual periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. This ASU is to be applied prospectively, but retrospective application is permitted. This ASU will result in additional required disclosures in the Companys Consolidated Financial Statements once adopted. …

NewAccountingPronouncementsPolicyPolicyTextBlock · excerpt; the full note is in the filing

DEFINED BENEFIT PLANS The Company sponsors several U.S. and non-U.S. defined benefit pension plans for eligible employees and retirees and also maintains other supplemental plans for officers and other key employees. On May 31, 2026, the Company transferred obligations of $19.7 million from a U.S. defined benefit pension plan to a third-party insurance company by purchasing a group annuity contract using an equivalent amount of plan assets. The transaction did not have a material impact on the funded status of the pension plan. As a result of the transaction, the Company recorded a $3.7 million settlement charge during the three months ended June 30, 2026, which was reflected as a component of Other income, net. The plans assets and liabilities were remeasured as of the settlement date, resulting in a remaining projected benefit obligation of $195.9 million, and fair value of plan assets of $207.1 million. The discount rate used to determine the projected benefit obligation at the settlement date was 5.55%, compared to 5.37% as of December 31, 2025. The expected long-term return on plan assets remained 6.50%. The components of the Companys Net periodic pension benefit cost (income) for the three and six months ended June 30 were as follows: U.S. Three months ended Six months ended In millions 2026 2025 2026 2025 Service cost $ 0.2 $ 0.2 $ 0.4 $ 0.4 Interest cost 2.6 2.9 5.3 5.7 Expected return on plan assets (3.5) (3.8) (7.0) (7.6) Settlement charge 3.7 3.7 Administrative cos …

PensionAndOtherPostretirementBenefitsDisclosureTextBlock · excerpt; the full note is in the filing

NOTE 14 - RESTRUCTURING ACTIVITIES During the six months ended June 30, 2026, the Company recorded $8.5 million of expenses associated with restructuring activities, which are included within Cost of goods sold and Selling and administrative expenses within the Condensed and Consolidated Statements of Comprehensive Income. The Company anticipates additional future restructuring charges related to certain of the restructuring actions initiated during the six months ended June 30, 2026. These restructuring activities primarily relate to workforce reductions intended to optimize and simplify operations and cost structure in the Allegion International and Allegion Americas segments. The changes in the restructuring reserve during the six months ended June 30, 2026, were as follows: In millions Total December 31, 2025 $ 1.9 Additions, net of reversals 8.5 Cash payments (6.2) June 30, 2026 $ 4.2 The restructuring reserve is included in Accrued expenses and other current liabilities within the Condensed and Consolidated Balance Sheets. The majority of the costs accrued as of June 30, 2026, are expected to be paid within one year. The Company also incurred, and expects to incur, other non-qualified restructuring charges related to these restructuring actions initiated, which represent costs that are directly attributable to restructuring activities but that do not fall into the severance, exit or disposal category. These costs were not material during the six months ended June 30, 20 …

RestructuringAndRelatedActivitiesDisclosureTextBlock · excerpt; the full note is in the filing

NET REVENUES The following tables show the Companys Net revenues related to both tangible product sales and services and software for the three and six months ended June 30, 2026 and 2025, respectively, disaggregated by business segment: Three months ended June 30, 2026 Six months ended June 30, 2026 In millions Allegion Americas Allegion International Total Allegion Americas Allegion International Total Net revenues Products $ 870.6 $ 210.0 $ 1,080.6 $ 1,630.2 $ 412.0 $ 2,042.2 Services and software 48.0 22.9 70.9 98.3 44.6 142.9 Total Net revenues $ 918.6 $ 232.9 $ 1,151.5 $ 1,728.5 $ 456.6 $ 2,185.1 Three months ended June 30, 2025 Six months ended June 30, 2025 In millions Allegion Americas Allegion International Total Allegion Americas Allegion International Total Net revenues Products $ 783.3 $ 175.6 $ 958.9 $ 1,498.0 $ 340.4 $ 1,838.4 Services and software 38.2 24.9 63.1 81.3 44.2 125.5 Total Net revenues $ 821.5 $ 200.5 $ 1,022.0 $ 1,579.3 $ 384.6 $ 1,963.9 Net revenues are shown by tangible product sales and services and software, as contract terms, conditions and economic factors affecting the nature, amount, timing and uncertainty around revenue recognition and cash flows are substantially similar within each of these two principal revenue streams. As of June 30, 2026 and December 31, 2025, contract assets related to the Companys right to consideration for work completed but not billed were not material. The Company does not have any material costs to obtain or ful …

RevenueFromContractWithCustomerTextBlock · excerpt; the full note is in the filing

BUSINESS SEGMENT INFORMATION The Company classifies its business into the following two reportable segments based on industry and market focus: Allegion Americas and Allegion International. The Company largely evaluates performance based on Segment operating income and Segment operating margins. The Companys chief operating decision maker (the CODM) is its chief executive officer, who uses segment operating income as the measure of profit and loss to evaluate the financial performance of the business and as the basis for resource allocation, performance reviews and compensation. For these reasons, the Company believes that Segment operating income represents the most relevant measure of segment profit and loss. The Companys CODM may exclude certain charges or gains, such as corporate charges and other special charges, from Operating income to arrive at a Segment operating income that is a more meaningful measure of profit and loss upon which to base operating decisions. A summary of operations by reportable segment for the three and six months ended June 30 was as follows: Three months ended Six months ended In millions 2026 2025 2026 2025 Allegion Americas Net revenues $ 918.6 $ 821.5 $ 1,728.5 $ 1,579.3 Cost of goods sold 498.4 440.7 946.7 853.2 Selling and administrative expenses 153.4 144.2 299.9 278.1 Segment operating income $ 266.8 $ 236.6 $ 481.9 $ 448.0 Depreciation and amortization $ 20.5 $ 19.9 $ 40.8 $ 38.8 Allegion International Net revenues $ 232.9 $ 200.5 $ 456 …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing

EQUITY The changes in the components of Equity for the six months ended June 30, 2026, were as follows: Allegion plc shareholders equity Ordinary shares In millions, except per share amounts Total equity Amount Shares Capital in excess of par value Retained earnings Accumulated other comprehensive loss Balance at December 31, 2025 $ 2,067.6 $ 0.9 86.1 $ 34.2 $ 2,238.1 $ (205.6) Net earnings 138.1 138.1 Other comprehensive loss, net (21.9) (21.9) Repurchase of ordinary shares (40.6) (0.3) (39.6) (1.0) Share-based compensation activity 5.4 0.1 5.4 Dividends to ordinary shareholders ($0.55 per share) (47.4) (47.4) Balance at March 31, 2026 2,101.2 0.9 85.9 2,327.8 (227.5) Net earnings 184.6 184.6 Other comprehensive loss, net (6.7) (6.7) Repurchase of ordinary shares (120.0) (0.9) (6.3) (113.7) Share-based compensation activity 6.3 0.1 6.3 Dividends to ordinary shareholders ($0.55 per share) (46.8) (46.8) Balance at June 30, 2026 $ 2,118.6 $ 0.9 85.1 $ $ 2,351.9 $ (234.2) The changes in the components of Equity for the six months ended June 30, 2025, were as follows: Allegion plc shareholders equity Ordinary shares In millions, except per share amounts Total equity Amount Shares Capital in excess of par value Retained earnings Accumulated other comprehensive loss Balance at December 31, 2024 $ 1,500.7 $ 0.9 86.3 $ $ 1,831.4 $ (331.6) Net earnings 148.2 148.2 Other comprehensive income, net 36.6 36.6 Repurchase of ordinary shares (40.0) (0.3) (5.4) (34.6) Share-based compensation …

StockholdersEquityNoteDisclosureTextBlock · excerpt; the full note is in the filing