Property, plant and equipment

ALLEGION PLCNOTES TO CONDENSED AND CONSOLIDATED FINANCIAL STATEMENTS (Continued)(Unaudited)

|  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |
| In millions |  |
| Accounts receivable, net | $ | 78.2  |  |
| Inventories | 50.3  |  |
| Other current assets | 0.3  |  |
| Property, plant and equipment | 15.2  |  |
| Goodwill | 616.0  |  |
| Intangible assets | 222.5  |  |
| Other noncurrent assets | 13.7  |  |
| Accounts payable | (22.4) |  |
| Accrued expenses and other current liabilities | (43.1) |  |
| Other noncurrent liabilities | (7.6) |  |
| Total net assets acquired and liabilities assumed | $ | 923.1  |  |

The valuation of assets acquired and liabilities assumed has not yet been finalized as of September 30, 2022. Finalization of the valuation during the measurement period could result in a change in the amounts recorded for acquired tangible and intangible assets, goodwill and income tax assets and liabilities, among other items. The completion of the valuation will occur no later than one year from the acquisition date. Intangible assets recognized as of the acquisition date were comprised of the following:

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|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| In millions |  | Value (in millions) |  | Useful life (in years) |
| Completed technologies/patents |  | $ | 6.2  |  |  | 5 |
| Customer relationships |  | 137.4  |  |  | 23 |
| Trade names (finite-lived) |  | 56.8  |  |  | 5 |
| Backlog revenue |  | 22.1  |  |  | 2 |

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 this acquisition is expected to be deductible for tax purposes.The following unaudited pro forma financial information for the three and nine months ended September 30, 2022 and 2021, reflects the consolidated results of operations of the Company as if this acquisition had taken place on January 1, 2021:

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|  | Three months ended |  | Nine months ended |
| In millions | 2022 |  | 2021 |  | 2022 |  | 2021 |
| Net revenues | $ | 913.7  |  |  | $ | 802.7  |  |  | $ | 2,587.5  |  |  | $ | 2,407.6  |  |
| Net earnings attributable to Allegion plc | 135.5  |  |  | 140.7  |  |  | 340.1  |  |  | 330.2  |  |

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 three and nine months ended September 30 include:

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|  | Three months ended |  | Nine months ended |
| In millions | 2022 |  | 2021 |  | 2022 |  | 2021 |
| Intangible asset amortization expense, net of tax | $ | 1.7  |  |  | $ | (5.0) |  |  | $ | (10.1) |  |  | $ | (18.3) |  |
| Interest expense, net of tax | 1.6  |  |  | (6.2) |  |  | (10.7) |  |  | (21.4) |  |
| Acquisition and integration costs, net of tax | 13.5  |  |  | —  |  |  | 19.4  |  |  | (19.4) |  |
| Inventory fair value step-up amortization, net of tax | 4.1  |  |  | —  |  |  | 4.1  |  |  | (4.1) |  |

The following financial information reflects the Net revenues and Loss before income taxes generated by the Access Technologies business since the acquisition date included within the Company's Condensed and Consolidated Statements of Comprehensive Income:5
