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For the transition period from              to             

Securities registered pursuant to Section 12(b) of the Act:

Title of each class			Trading symbol			Name of exchange on which registered
Ordinary shares, par value $0.01 per share			ALLE			New York Stock Exchange
3.500% Senior Notes due 2029			ALLE 3 ½			New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  x   No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).     Yes  ☐   No  ☒

The number of ordinary shares outstanding of Allegion plc as of July 20, 2023 was 87,780,016.

The accompanying Condensed and Consolidated Financial Statements of Allegion plc, an Irish public limited company, and its consolidated subsidiaries ("Allegion" or "the Company"), reflect the consolidated operations of the Company and have been prepared in accordance with United States ("U.S.") Securities and Exchange Commission ("SEC") interim reporting requirements. Accordingly, the accompanying Condensed and Consolidated Financial Statements do not include all disclosures required by accounting principles generally accepted in the U.S. ("GAAP") for full financial statements and should be read in conjunction with the Consolidated Financial Statements included in the Allegion Annual Report on Form 10-K for the year ended December 31, 2022. In the opinion of management, the accompanying Condensed and Consolidated Financial Statements contain all adjustments, which include normal recurring adjustments, necessary to state fairly the consolidated unaudited results for the interim periods presented.

On January 3, 2023, the Company, through its subsidiaries, completed an acquisition of the assets of plano. group, a SaaS workforce management solution business based in Germany ("plano"), for initial cash consideration of $36.6 million. Additional consideration may be payable in future periods in the event plano achieves certain specified financial results. This acquisition was accounted for as a business combination, and plano has been incorporated into the Allegion International segment.

The preliminary allocation of the purchase price, which includes initial cash consideration and the estimated fair value of contingent consideration, to assets acquired and liabilities assumed as of the acquisition date includes approximately $3 million of net working capital, approximately $17 million of finite-lived intangible assets and approximately $22 million of goodwill. The finite-lived intangible assets have a weighted average useful life of approximately 15 years. The valuation of assets acquired and liabilities assumed had not yet been finalized as of June 30, 2023, and finalization of the valuation during the measurement period could result in a change in the amounts recorded. The completion of the valuation will occur no later than one year from the acquisition date as required by GAAP.

On July 5, 2022, the Company, through its subsidiaries, completed the acquisition of Stanley Access Technologies LLC and assets related to the automatic entrance solutions business from Stanley Black & Decker, Inc. (the "Access Technologies business") for cash consideration of $915.2 million. The Access Technologies business acquisition helps the Company create a more comprehensive portfolio of access solutions, with the addition of automated entrances. Additionally, the Access Technologies business adds an expansive service and support network throughout the U.S. and Canada, broadening the Company's solutions to national, regional and local customers and complementing the Company's existing strengths in these non-residential markets. This acquisition was accounted for as a business combination, and the Access Technologies business has been integrated into the Allegion Americas segment.

The following table summarizes the preliminary allocation of the purchase price to assets acquired and liabilities assumed as of the acquisition date:

The valuation of assets acquired and liabilities assumed is materially complete as of June 30, 2023. Intangible assets recognized as of the acquisition date were comprised of the following:

Goodwill results from several factors, including Allegion-specific synergies that were excluded from the cash flow projections used in the valuation of intangible assets and intangible assets that do not qualify for separate recognition, such as an assembled workforce. Goodwill resulting from the Access Technologies business acquisition is expected to be deductible for tax purposes.

The following unaudited pro forma financial information for the six months ended June 30, 2023 and 2022, reflects the consolidated results of operations of the Company as if the Access Technologies business acquisition had taken place on January 1, 2021:

The unaudited pro forma financial information is presented for informational purposes only and does not purport to be indicative of results of operations that would have occurred had the pro forma events taken place on the date indicated or the future consolidated results of operations of the combined company. The unaudited pro forma financial information has been calculated after applying the Company's accounting policies and adjusting the historical financial results to reflect additional items directly attributable to the acquisition that would have been incurred assuming the acquisition had occurred on January 1, 2021. Adjustments to historical financial information for the six months ended June 30, 2023 and 2022, include:

The following financial information reflects the Net revenues and Earnings before income taxes generated by the Access Technologies business included within the Company's Condensed and Consolidated Statement of Comprehensive Income for the six months ended June 30, 2023:

Intangible asset amortization of $13.7 million is included in the Earnings before income taxes amount presented above, while acquisition and integration related expenses and Interest expense related to acquisition financing are excluded from this amount.

During the six months ended June 30, 2023 and 2022, the Company incurred $6.9 million and $8.8 million, respectively, of acquisition and integration related expenses, which are included in Selling and administrative expenses in the Condensed and Consolidated Statements of Comprehensive Income.

Inventories are stated at the lower of cost and net realizable value using the first-in, first-out (FIFO) method. The major classes of inventories were as follows:

The changes in the carrying amount of goodwill for the six months ended June 30, 2023, were as follows:

In millions			Allegion Americas						Allegion International						Total
December 31, 2022 (gross)			$	1,128.1					$	858.6					$	1,986.7
Accumulated impairment			—						(573.6)						(573.6)
December 31, 2022 (net)			1,128.1						285.0						1,413.1
Acquisitions and adjustments			(3.2)						21.9						18.7
Currency translation			2.3						5.0						7.3
June 30, 2023 (net)			$	1,127.2					$	311.9					$	1,439.1

The gross amount of the Company’s intangible assets and related accumulated amortization were as follows:

						June 30, 2023																		December 31, 2022
In millions						Gross carrying amount						Accumulated amortization						Net carrying amount						Gross carrying amount						Accumulated amortization						Net carrying amount
Completed technologies/patents						$	64.2					$	(33.5)					$	30.7					$	63.0					$	(32.1)					$	30.9
Customer relationships						531.0						(170.6)						360.4						515.0						(155.8)						359.2
Trade names (finite-lived)						141.2						(71.1)						70.1						135.7						(62.6)						73.1
Other						75.1						(44.0)						31.1						71.2						(35.9)						35.3
Total finite-lived intangible assets						811.5						$	(319.2)					492.3						784.9						$	(286.4)					498.5
Trade names (indefinite-lived)						111.3												111.3						110.4												110.4
Total						$	922.8											$	603.6					$	895.3											$	608.9

Intangible asset amortization expense was $30.9 million and $16.1 million for the six months ended June 30, 2023 and 2022, respectively. Future estimated amortization expense on existing intangible assets in each of the next five years amounts to approximately $61.2 million for full year 2023, $55.6 million for 2024, $49.8 million for 2025, $46.6 million for 2026 and $39.8 million for 2027.

Long-term debt and other borrowings consisted of the following:

In millions			June 30, 2023						December 31, 2022
2021 Term Facility			$	231.3					$	237.5
2021 Revolving Facility			39.0						69.0
3.200% Senior Notes due 2024			400.0						400.0
3.550% Senior Notes due 2027			400.0						400.0
3.500% Senior Notes due 2029			400.0						400.0
5.411% Senior Notes due 2032			600.0						600.0
Other debt			0.1						0.2
Total borrowings outstanding			2,070.4						2,106.7
Discounts and debt issuance costs, net			(11.1)						(12.2)
Total debt			2,059.3						2,094.5
Less current portion of long-term debt			12.6						12.6
Total long-term debt			$	2,046.7					$	2,081.9

The Company is party to an unsecured credit agreement consisting of a $250.0 million term loan facility (the “2021 Term Facility”), of which $231.3 million was outstanding at June 30, 2023, and a $500.0 million revolving credit facility (the “2021 Revolving Facility” and, together with the 2021 Term Facility, the “2021 Credit Facilities”), of which $39.0 million was outstanding at June 30, 2023. The 2021 Credit Facilities mature on November 18, 2026, and are unconditionally guaranteed jointly and severally on an unsecured basis by Allegion plc and Allegion US Holding Company Inc. ("Allegion US Hold Co"), the Company’s wholly-owned subsidiary.

The 2021 Term Facility amortizes in quarterly installments at the following rates: 1.25% per quarter starting March 31, 2022 through March 31, 2025, 2.5% per quarter starting June 30, 2025 through September 30, 2026, with the balance due on November 18, 2026. The Company repaid $6.3 million of principal on the 2021 Term Facility during the six months ended June 30, 2023. The 2021 Revolving Facility provides aggregate commitments of up to $500.0 million, which includes up to $100.0 million for the issuance of letters of credit. The Company had $13.4 million of letters of credit outstanding at June 30, 2023. Borrowings under the 2021 Revolving Facility may be repaid at any time without premium or penalty, and amounts repaid may be reborrowed. The Company repaid the $39.0 million of outstanding borrowings under the 2021 Revolving Facility in July 2023.

Outstanding borrowings under the 2021 Credit Facilities accrue interest, at the option of the Company, equal to either: (i) a Bloomberg Short-Term Bank Yield Index ("BSBY") rate plus an applicable margin or (ii) a base rate plus the applicable margin. The applicable margin ranges from 0.875% to 1.375% depending on the Company’s credit ratings. At June 30, 2023, the Company's outstanding borrowings under the 2021 Credit Facilities accrued interest at BSBY plus a margin of 1.125%, resulting in an interest rate of 6.292%. The 2021 Credit Facilities also contain negative and affirmative covenants and events of default that, among other things, limit or restrict the Company’s ability to enter into certain transactions. In addition, the 2021 Credit Facilities require the Company to comply with a maximum leverage ratio as defined in the credit agreement. As of June 30, 2023, the Company was in compliance with all applicable covenants under the credit agreement.

As of June 30, 2023, Allegion US Hold Co had $400.0 million outstanding of its 3.200% Senior Notes due 2024 (the “3.200% Senior Notes”), $400.0 million outstanding of its 3.550% Senior Notes due 2027 (the “3.550% Senior Notes”) and $600.0 million outstanding of its 5.411% Senior Notes due 2032 (the "5.411% Senior Notes"), and Allegion plc had $400.0 million outstanding of its 3.500% Senior Notes due 2029 (the “3.500% Senior Notes”, and all four senior notes collectively, the “Senior Notes”). The 3.200% Senior Notes, 3.550% Senior Notes and 3.500% Senior Notes all require semi-annual interest payments on April 1 and October 1 of each year and will mature on October 1, 2024, October 1, 2027 and October 1, 2029, respectively. The 5.411% Senior Notes require semi-annual interest payments on January 1 and July 1 of each year, and will mature on July 1, 2032.

The 3.200% Senior Notes, 3.550% Senior Notes and 5.411% Senior Notes are senior unsecured obligations of Allegion US Hold Co and rank equally with all of Allegion US Hold Co’s existing and future senior unsecured and unsubordinated indebtedness. The guarantee of the 3.200% Senior Notes, the 3.550% Senior Notes and the 5.411% Senior Notes is the senior unsecured obligation of Allegion plc and ranks equally with all of the Company’s existing and future senior unsecured and unsubordinated indebtedness. The 3.500% Senior Notes are senior unsecured obligations of Allegion plc, are guaranteed by Allegion US Hold Co and rank equally with all of the Company’s existing and future senior unsecured indebtedness. As of June 30, 2023, the company was in compliance with all applicable covenants under the Senior Notes.

The gross notional amount of the Company’s currency derivatives was $174.1 million and $161.5 million at June 30, 2023 and December 31, 2022, respectively. Neither the fair values of currency derivatives, which are determined based on a pricing model that uses spot rates and forward prices from actively quoted currency markets that are readily observable (Level 2 inputs under the fair value hierarchy described in Note 10), nor the balances included in Accumulated other comprehensive loss were material as of June 30, 2023 or December 31, 2022. Currency derivatives designated as cash flow hedges did not have a material impact to either Net earnings or Other comprehensive income during the six months ended June 30, 2023 and 2022, nor is the amount to be reclassified into Net earnings over the next twelve months expected to be material. At June 30, 2023, the maximum term of the Company’s currency derivatives was less than one year.

The counterparties to the Company’s forward contracts consist of a number of investment grade major international financial institutions. The Company could be exposed to losses in the event of nonperformance by the counterparties. However, the credit ratings and the concentration of risk in these financial institutions are monitored on a continuous basis, and therefore, the Company believes they present no significant credit risk to the Company.

Total rental expense for the six months ended June 30, 2023 and 2022, was $31.6 million and $21.5 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 $9.9 million and $3.5 million, respectively, for the six months ended June 30, 2023 and 2022. No material lease costs have been capitalized on the Condensed and Consolidated Balance Sheets as of June 30, 2023 or December 31, 2022.

As a lessee, the Company categorizes its leases into two general categories: real estate leases and equipment leases. Amounts included within the Condensed and Consolidated Balance Sheets related to the Company’s ROU asset and lease liability for both real estate and equipment leases were as follows:

The following table summarizes additional information related to the Company’s leases for the six months ended June 30:

During the six months ended June 30, 2023, two new, long-term manufacturing and assembly facility leases commenced, which added a total ROU asset and corresponding lease liability of approximately $44 million.

Scheduled minimum lease payments required under non-cancellable operating leases for both the real estate and equipment lease portfolios for the remainder of 2023 and for each of the years thereafter as of June 30, 2023, are as follows:

The difference between the total undiscounted minimum lease payments and the combined current and noncurrent lease liabilities as of June 30, 2023, is due to imputed interest of $47.4 million.

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. The components of the Company’s Net periodic pension benefit cost (income) for the three and six months ended June 30 were as follows:

Service cost is recorded in Cost of goods sold and Selling and administrative expenses, while the remaining components of Net periodic pension benefit cost (income) are recorded in Other income, net within the Condensed and Consolidated Statements of Comprehensive Income. Employer contributions to the plans were not material during the six months ended June 30, 2023 or 2022. Employer contributions totaling approximately $12 million are expected to be made during the remainder of 2023.

Fair value is defined as the exchange price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Fair value measurements are based on a framework that utilizes the inputs market participants use to determine the fair value of an asset or liability and establishes a fair value hierarchy to prioritize those inputs. The fair value hierarchy is comprised of three levels that are described below:

•Level 1 – Inputs based on quoted prices in active markets for identical assets or liabilities.

•Level 2 – Inputs other than Level 1 quoted prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the asset or liability.

•Level 3 – Unobservable inputs based on little or no market activity and that are significant to the fair value of the assets and liabilities.

The fair value hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Observable inputs are obtained from independent sources and can be validated by a third party, whereas unobservable inputs reflect assumptions regarding what a third party would use in pricing an asset or liability based on the best information available under the circumstances. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

Assets and liabilities measured at fair value as of June 30, 2023, were as follows:

			Fair value measurements																		Total fair value
In millions			Quoted prices in active markets for identical assets (Level 1)						Significant other observable inputs (Level 2)						Significant unobservable inputs (Level 3)
Recurring fair value measurements
Assets:
Investments			$	—					$	18.7					$	—					$	18.7
Total asset recurring fair value measurements			$	—					$	18.7					$	—					$	18.7
Liabilities:
Deferred compensation and other retirement plans			$	—					$	18.8					$	—					$	18.8
Total liability recurring fair value measurements			$	—					$	18.8					$	—					$	18.8
Financial instruments not carried at fair value
Total debt			$	—					$	1,965.9					$	—					$	1,965.9
Total financial instruments not carried at fair value			$	—					$	1,965.9					$	—					$	1,965.9

Assets and liabilities measured at fair value as of December 31, 2022, were as follows:

			Fair value measurements																		Total fair value
In millions			Quoted prices in active markets for identical assets (Level 1)						Significant other observable inputs (Level 2)						Significant unobservable inputs (Level 3)
Recurring fair value measurements
Assets:
Investments			$	—					$	19.9					$	—					$	19.9
Total asset recurring fair value measurements			$	—					$	19.9					$	—					$	19.9
Liabilities:
Deferred compensation and other retirement plans			$	—					$	20.3					$	—					$	20.3
Total liability recurring fair value measurements			$	—					$	20.3					$	—					$	20.3
Financial instruments not carried at fair value
Total debt			$	—					$	1,978.4					$	—					$	1,978.4
Total financial instruments not carried at fair value			$	—					$	1,978.4					$	—					$	1,978.4

The Company determines the fair value of its financial assets and liabilities using the following methodologies:

•Investments – These instruments include equity mutual funds and corporate bond funds. The fair value is obtained based on observable market prices quoted on public exchanges for similar instruments.

•Deferred compensation and other retirement plans – These include obligations related to deferred compensation and other retirement plans adjusted for market performance. The fair value is obtained based on observable market prices quoted on public exchanges for similar instruments.

•Debt – These instruments are recorded at cost and include the 2021 Credit Facilities and Senior Notes maturing through 2032. The fair value of these debt instruments is obtained based on observable market prices quoted on public exchanges for similar instruments.

The methodologies used by the Company to determine the fair value of its financial assets and liabilities as of June 30, 2023, are the same as those used as of December 31, 2022. The carrying values of Cash and cash equivalents, Accounts and notes receivable, net, Accounts payable and Accrued expenses and other current liabilities are a reasonable estimate of their fair value due to the short-term nature of these instruments.

The Company also had investments in debt and equity securities without readily determinable fair values of $47.3 million and $46.8 million as of June 30, 2023 and December 31, 2022, respectively, which are classified as Other noncurrent assets within the Condensed and Consolidated Balance Sheets. These investments are considered to be nonrecurring fair value measurements, and thus, are not included in the fair value tables above.

The changes in the components of Equity for the six months ended June 30, 2023, were as follows:

									Allegion plc shareholders' equity
									Ordinary shares
In millions, except per share amounts			Total equity						Amount						Shares						Capital in excess of par value						Retained earnings						Accumulated other comprehensive loss						Noncontrolling interests
Balance at December 31, 2022			$	944.5					$	0.9					87.9						$	13.9					$	1,212.8					$	(285.8)					$	2.7
Net earnings			123.6						—						—						—						123.5						—						0.1
Other comprehensive income, net			10.3						—						—						—						—						10.2						0.1
Share-based compensation activity			5.7						—						—						5.7						—						—						—
Dividends to ordinary shareholders ($0.45 per share)			(39.5)						—						—						—						(39.5)						—						—
Balance at March 31, 2023			$	1,044.6					$	0.9					87.9						$	19.6					$	1,296.8					$	(275.6)					$	2.9
Net earnings			142.0						—						—						—						142.0						—						—
Other comprehensive income (loss), net			7.9						—						—						—						—						8.8						(0.9)
Repurchase of ordinary shares			(19.9)						—						(0.2)						(19.9)						—						—						—
Share-based compensation activity			5.6						—						0.1						5.6						—						—						—
Dividends to noncontrolling interests			(0.1)						—						—						—						—						—						(0.1)
Dividends to ordinary shareholders ($0.45 per share)			(39.6)						—						—						—						(39.6)						—						—
Balance at June 30, 2023			1,140.5						0.9						87.8						5.3						1,399.2						(266.8)						1.9

The changes in the components of Equity for the six months ended June 30, 2022, were as follows:

									Allegion plc shareholders' equity
									Ordinary shares
In millions, except per share amounts			Total equity						Amount						Shares						Capital in excess of par value						Retained earnings						Accumulated other comprehensive loss						Noncontrolling interests
Balance at December 31, 2021			$	762.4					$	0.9					88.2						$	—					$	952.6					$	(194.4)					$	3.3
Net earnings			93.1						—						—						—						93.0						—						0.1
Other comprehensive loss, net			(21.0)						—						—						—						—						(21.0)						—
Repurchase of ordinary shares			(61.0)						—						(0.5)						(7.5)						(53.5)						—						—
Share-based compensation activity			7.5						—						0.1						7.5						—						—						—
Dividends to ordinary shareholders ($0.41 per share)			(36.0)						—						—						—						(36.0)						—						—
Balance at March 31, 2022			$	745.0					$	0.9					87.8						$	—					$	956.1					$	(215.4)					$	3.4
Net earnings			115.2						—						—						—						115.1						—						0.1
Other comprehensive income, net			(49.8)						—						—						—						—						(49.2)						(0.6)
Share-based compensation activity			5.4						—						—						5.4						—						—						—
Dividends to noncontrolling interests			(0.1)						—						—						—						—						—						(0.1)
Dividends to ordinary shareholders ($0.41 per share)			(36.0)						—						—						—						(36.0)						—						—
Balance at June 30, 2022			779.7						0.9						87.8						5.4						1,035.2						(264.6)						2.8

In June 2023, the Company’s Board of Directors (the "Board") reauthorized the Company's existing share repurchase program and, as a result, authorized the repurchase of up to, and including, $500.0 million of the Company’s ordinary shares (the "Share Repurchase Authorization"). During the six months ended June 30, 2023 and 2022, the Company paid $19.9 million and $61.0 million, respectively, to repurchase the ordinary shares reflected above on the open market under the Share Repurchase Authorization. As of June 30, 2023, the Company had approximately $500.0 million still available to be repurchased under the Share Repurchase Authorization.

The changes in Accumulated other comprehensive loss for the six months ended June 30, 2023, were as follows:

The changes in Accumulated other comprehensive loss for the six months ended June 30, 2022, were as follows:

(a)    Amounts reclassified from Accumulated other comprehensive loss and recognized into Net earnings related to cash flow hedges are recorded in Cost of goods sold and Interest expense. Amounts reclassified from Accumulated other comprehensive loss and recognized into Net earnings related to defined benefit items are recorded in Other income, net.

The Company’s share-based compensation plans include programs for stock options, restricted stock units ("RSUs") and performance stock units ("PSUs"). Share-based compensation expense is included in Cost of goods sold and Selling and administrative expenses within the Condensed and Consolidated Statements of Comprehensive Income. The following table summarizes the share-based compensation expense recognized for the three and six months ended June 30:

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:

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:

Volatility is based on the Company’s historic volatility. The risk-free rate of return is based on the yield curve of a zero-coupon U.S. Treasury bond on the date the award is granted with a maturity equal to the expected term of the award. The expected life of the Company’s stock option awards is derived from the simplified approach based on the weighted-average time to vest and the remaining contractual term and represents the period of time that awards are expected to be outstanding.

During the six months ended June 30, 2023, the Company granted PSUs with a maximum award level of approximately 0.1 million shares. In February 2021, 2022 and 2023, the Company’s Compensation Committee granted PSUs that were earned based 50% upon a performance condition, measured at each reporting period by earnings per share ("EPS") performance in relation to pre-established targets for each performance period set by the Compensation and Human Capital Committee of the Board, and 50% upon a market condition, measured by the Company’s relative total shareholder return against the S&P 400 Capital Goods Index over a three-year performance period. The fair values of the market condition are estimated using a Monte Carlo Simulation approach in a risk-neutral framework to model future stock price movements based upon historical volatility, risk-free rates of return and correlation matrix.

During the six months ended June 30, 2023 and 2022, the Company recorded $4.5 million and $3.1 million, respectively, of expenses associated with restructuring activities, which are included within Cost of goods sold and Selling and administrative expenses within the Condensed and Consolidated Statements of Comprehensive Income.

The changes in the restructuring reserve during the six months ended June 30, 2023, were as follows:

The majority of the costs accrued as of June 30, 2023, are expected to be paid within one year.

The Company also incurred other non-qualified restructuring charges of $0.2 million and $1.4 million during the six months ended June 30, 2023 and 2022, respectively, which represent costs that are directly attributable to restructuring activities, but that do not fall into the severance, exit or disposal category. These expenses are included in Cost of goods sold and Selling and administrative expenses within the Condensed and Consolidated Statements of Comprehensive Income.

NOTE 14 - OTHER INCOME, NET

The components of Other income, net for the three and six months ended June 30 were as follows:

			Three months ended												Six months ended
In millions			2023						2022						2023						2022
Interest income			$	(1.2)					$	(0.1)					$	(1.9)					$	(0.2)
Foreign currency exchange loss			0.3						0.9						1.7						1.9
Net periodic pension and postretirement benefit cost (income), less service cost			0.1						(2.4)						0.1						(5.0)
Other			(0.8)						(1.8)						(1.8)						(2.3)
Other income, net			$	(1.6)					$	(3.4)					$	(1.9)					$	(5.6)

Basic EPS is calculated by dividing Net earnings attributable to Allegion plc by the weighted-average number of ordinary shares outstanding for the applicable period. Diluted EPS is calculated after adjusting the denominator of the basic EPS calculation for the effect of all potentially dilutive ordinary shares, which in the Company’s case includes shares issuable under share-based compensation plans.

The following table summarizes the weighted-average number of ordinary shares outstanding for basic and diluted EPS calculations for the three and six months ended June 30:

At June 30, 2023, 0.5 million stock options were excluded from the computation of weighted-average diluted shares outstanding because the effect of including these shares would have been anti-dilutive.

The following tables show the Company’s Net revenues related to both tangible product sales and services for the three and six months ended June 30, 2023 and 2022, respectively, disaggregated by business segment:

Net revenues are shown by tangible product sales and services, as contract terms, conditions and economic factors affecting the nature, amount, timing and uncertainty around revenue recognition and cash flows are substantially similar within each of these two principal revenue streams. Product sales involve contracts with a single performance obligation, the transfer of control of a product or bundle of products to a customer. Service revenue, which includes inspection, maintenance and repair, design and installation, aftermarket and locksmith services, as well as software-as-a-service offerings such as access control, IoT integration and workforce management solutions, is delayed until the service performance obligations are satisfied.

As of June 30, 2023, neither the contract assets related to the Company’s right to consideration for work completed but not billed, nor the contract liabilities associated with contract revenue were material. The Company does not have any costs to obtain or fulfill a contract that are capitalized on its Condensed and Consolidated Balance Sheets. During the three and six months ended June 30, 2023 and 2022, no adjustments related to performance obligations satisfied in previous periods were recorded.

The Company is involved in various litigation, claims and administrative proceedings, including those related to environmental and product warranty matters. Amounts recorded for identified contingent liabilities are estimates, which are reviewed periodically and adjusted to reflect additional information when it becomes available. Subject to the uncertainties inherent in estimating future costs for contingent liabilities, except as expressly set forth in this note, management believes that any liability which may result from these legal matters would not have a material adverse effect on the financial condition, results of operations, liquidity or cash flows of the Company.

As of June 30, 2023 and December 31, 2022, the Company had reserves for environmental matters of $23.0 million and $24.1 million, respectively. The total reserve at June 30, 2023 and December 31, 2022, included $13.4 million and $13.8 million, respectively, related to remediation of sites previously disposed by the Company. Environmental reserves are classified as Accrued expenses and other current liabilities or Other noncurrent liabilities within the Condensed and Consolidated Balance Sheets based on the timing of their expected future payment. The Company’s total current environmental reserve at June 30, 2023 and December 31, 2022, was $4.1 million and $3.9 million, respectively, and the remainder was classified as noncurrent. Expenses related to environmental remediation were not material during either the three or six months ended June 30, 2023, or 2022. Given the evolving nature of environmental laws, regulations and technology, the ultimate cost of future compliance is uncertain.

The changes in the standard product warranty liability for the six months ended June 30 were as follows:

Standard product warranty liabilities are classified as either Accrued expenses and other current liabilities or Other noncurrent liabilities within the Condensed and Consolidated Balance Sheets based on the timing of the expected future payments.

The Company classifies its business into the following two reportable segments based on industry and market focus: Allegion Americas and Allegion International. The Company largely evaluates performance based on Segment operating income and Segment operating margins. Segment operating income is the measure of profit and loss that the Company’s chief operating decision maker uses to evaluate the financial performance of the business and as the basis for resource allocation, performance reviews and compensation. For these reasons, the Company believes that Segment operating income represents the most relevant measure of segment profit and loss. The Company’s chief operating decision maker may exclude certain charges or gains, such as corporate charges and other special charges, from Operating income to arrive at a Segment operating income that is a more meaningful measure of profit and loss upon which to base operating decisions. The Company defines Segment operating margin as Segment operating income as a percentage of the segment’s Net revenues.

Due to a reporting change effective January 1, 2023, results for the Company's Global Portable Security brands (inclusive of the AXA, Kryptonite and Trelock businesses) are now fully reflected within the Allegion International segment. Accordingly, the prior periods' summary of operations by reportable segment below have been recast to conform with the current period presentation. The impact of this recast was to re-align approximately $5.0 million and $11.3 million of Net Revenues, and $0.3 million and $1.6 million of Segment operating income, respectively, for the three and six months ended June 30, 2022, from the Allegion Americas segment to the Allegion International segment.

A summary of operations by reportable segment for the three and six months ended June 30 was as follows: