--- ticker: ALLE company: ALLE filing_type: 10-K year_current: 2025 year_prior: 2024 risks_added: 0 risks_removed: 1 risks_modified: 5 risks_unchanged: 30 source: SEC EDGAR url: https://riskdiff.com/alle/2025-vs-2024/ markdown_url: https://riskdiff.com/alle/2025-vs-2024/index.md generated: 2026-06-01 --- # ALLE: 10-K Risk Factor Changes 2025 vs 2024 > Source: U.S. Securities and Exchange Commission (EDGAR) > Generated: 2026-06-01 > All data extracted directly from official filings. No hallucinated content. ## Summary | Status | Count | |--------|-------| | New risks added | 0 | | Risks removed | 1 | | Risks modified | 5 | | Unchanged | 30 | --- ## No Match in Current: Our business operations and performance have been, and are expected to continue to be, impacted by global macroeconomic factors. Ongoing macroeconomic challenges could adversely impact our business, results of operations, financial conditions and cash flows. *This section from the 2024 filing does not have a high-confidence textual match in 2025. It may have been removed, merged, or substantially reworded.* Macroeconomic challenges, including ongoing supply chain disruptions and delays, material, electronic component and labor shortages, cost inflation, rising interest rates and volatility in the capital markets, have impacted, and may continue to impact, our business, our customers and our suppliers. These challenges may also make it more challenging for us to manufacture and deliver products to our customers, could cause periodic production interruptions and supply constraints, impact our ability to forecast and plan for future business activities and, if not adequately managed, could have a material adverse impact on our business, results of operations, financial condition and cash flows. Further, demand for our products and solutions is impacted by the strength of institutional, commercial and residential construction and remodeling markets, which are sensitive to national, regional and local economic conditions. As a result, deterioration of these macroeconomic conditions (or weakness in these conditions existing for an extended period of time), a decline in general economic activity or recession in the U.S. or global economy could slow demand for new construction or remodeling projects and result in our customers cancelling or delaying orders, which in turn could erode average selling prices and result in declines in our revenues, profitability and cash flows. --- ## Modified: There are risks associated with our outstanding and future indebtedness. **Key changes:** - Reworded sentence: "We had approximately $2 billion of outstanding indebtedness at December 31, 2024." - Reworded sentence: "At December 31, 2024, our borrowings included a variable rate term loan facility (the "Term Facility", and together with the Revolving Facility, the "Credit Facilities")." **Prior (2024):** We had approximately $2 billion of outstanding indebtedness at December 31, 2023. In addition, we have a senior unsecured revolving credit facility (the "2021 Revolving Facility") that permits borrowings of up to $500 million. A portion of our cash flows from operations is dedicated to servicing our indebtedness and will not be available for other purposes, including our operations, capital expenditures, payment of dividends, share repurchases or future business opportunities or other strategic investments. At December 31, 2023, our borrowings included a variable rate term loan facility (the "2021 Term Facility", and together with the 2021 Revolving Facility, the "2021 Credit Facilities"). The 2021 Credit Facilities had a combined outstanding variable rate balance of $225.0 million at December 31, 2023, which exposes us to variable interest rate risk. Applicable variable interest rates have increased throughout 2023, resulting in increased Interest expense. We are also exposed to the risk of continued rising interest rates to the extent we fund our short or long-term financing needs with variable-rate borrowings under the 2021 Revolving Facility. If variable base rates under the 2021 Credit Facilities continue to increase in the future, our Interest expense could increase as well. For more details about our interest rate exposure under the 2021 Credit Facilities, please see Part II. Item 7A. Our ability to make scheduled payments or to refinance our debt obligations depends on our financial and operating performance, which is subject to prevailing economic and competitive conditions and to certain financial, business and other factors beyond our control, such as the credit ratings assigned to us by independent ratings agencies or our ability to access capital markets on acceptable terms. If our cash flows and capital resources are insufficient to fund our debt service obligations, we may be forced to reduce or delay capital expenditures, reduce or eliminate the payment of dividends, sell assets, seek additional capital or seek to restructure or refinance our indebtedness. These alternative measures may not be successful and may not permit us to meet our scheduled debt service obligations. In such event, we could face substantial liquidity problems and might be required to sell material assets or operations to attempt to meet our debt service and other obligations. If we are not able to maintain compliance with stated financial covenants or if we breach other covenants in any debt agreement, we could be in default under such agreement or trigger a cross-default of other debt instruments. Such a default would adversely affect our credit ratings, may allow our creditors to accelerate the related indebtedness, and may result in the acceleration of any other indebtedness to which a cross-acceleration or cross-default provision applies. **Current (2025):** We had approximately $2 billion of outstanding indebtedness at December 31, 2024. In addition, we have a senior unsecured revolving credit facility (the "Revolving Facility") that permits borrowings of up to $750 million. A portion of our cash flows from operations is dedicated to servicing our indebtedness and will not be available for other purposes, including our operations, capital expenditures, payment of dividends, share repurchases or future business opportunities or other strategic investments. At December 31, 2024, our borrowings included a variable rate term loan facility (the "Term Facility", and together with the Revolving Facility, the "Credit Facilities"). The Credit Facilities had a combined outstanding variable rate balance of $212.5 million at December 31, 2024, which exposes us to variable interest rate risk. We are also exposed to the risk of continued rising interest rates to the extent we fund our short or long-term financing needs with variable-rate borrowings under the Revolving Facility. If variable base rates under the Credit Facilities continue to increase in the future, our Interest expense could increase as well. For more details about our interest rate exposure under the Credit Facilities, please see Part II. Item 7A. Our ability to make scheduled payments or to refinance our debt obligations depends on our financial and operating performance, which is subject to prevailing economic and competitive conditions and to certain financial, business and other factors beyond our control, such as the credit ratings assigned to us by independent ratings agencies or our ability to access capital markets on acceptable terms. If our cash flows and capital resources are insufficient to fund our debt service obligations, we may be forced to reduce or delay capital expenditures, reduce or eliminate the payment of dividends, sell assets, seek additional capital or seek to restructure or refinance our indebtedness. These alternative measures may not be successful and may not permit us to meet our scheduled debt service obligations. In such event, we could face substantial liquidity problems and might be required to sell material assets or operations to attempt to meet our debt service and other obligations. If we are not able to maintain compliance with stated financial covenants or if we breach other covenants in any debt agreement, we could be in default under such agreement or trigger a cross-default of other debt instruments. Such a default would adversely affect our credit ratings, may allow our creditors to accelerate the related indebtedness, and may result in the acceleration of any other indebtedness to which a cross-acceleration or cross-default provision applies. --- ## Modified: The implementation of global tax reforms could negatively impact our financial results. **Key changes:** - Reworded sentence: "Over 130 countries agreed to the general framework of the GMT rules and numerous countries in which we operate have transposed those rules into national laws, including Ireland, the location of our incorporation." **Prior (2024):** In recent years, the Organization for Economic Cooperation and Development ("OECD") has led international efforts to implement various international tax reforms, including the introduction of a global minimum effective corporate tax ("GMT") rate of 15%, applied on a jurisdiction-by-jurisdiction basis. Over 130 countries agreed to the general framework of the GMT rules and approximately 25 countries have implemented the GMT rules. Further, on December 15, 2022, the European Union adopted a Council Directive which requires GMT rules to be transposed into member states' national laws starting in 2024. On December 18, 2023, Ireland, the location of our incorporation, enacted legislation which includes provisions regarding the implementation of GMT. We are currently assessing the impact of the legislation, but we expect our effective income tax rate to increase beginning in 2024. Further, we anticipate the continued and ongoing release of OECD GMT interpretive guidance. We are continuing to evaluate the potential impact of this interpretative guidance and the release of GMT-implementation legislation in other countries, and such guidance or legislation could result in a material increase in our effective tax rate. **Current (2025):** In recent years, the Organization for Economic Cooperation and Development ("OECD") has led international efforts to implement various international tax reforms, including the introduction of a global minimum effective corporate tax ("GMT") rate of 15%, applied on a jurisdiction-by-jurisdiction basis. Over 130 countries agreed to the general framework of the GMT rules and numerous countries in which we operate have transposed those rules into national laws, including Ireland, the location of our incorporation. Additional countries are in various stages of implementing the rules into their national laws. We anticipate the continued and ongoing release of OECD GMT interpretive guidance and local country GMT legislation. We are continuing to evaluate the potential impact of this interpretative guidance and the release of GMT-implementation legislation in other countries, and such guidance or legislation could result in a material increase in our effective tax rate. --- ## Modified: Increased prices, whether due to inflationary pressures or other factors, could negatively impact our margin performance and our financial results. **Key changes:** - Reworded sentence: "Higher prices for raw materials, parts and components, freight, packaging, labor and energy, whether caused by inflationary pressures or other geopolitical factors, such as new or increased tariffs, duties, or other charges as a result of changes to U.S." - Added sentence: "However, these hedging and pricing strategies may not fully protect us against cost increases caused by factors such as new or increased tariffs, changing import duties, market illiquidity and specific local regulations." - Reworded sentence: "If these costs increase beyond our ability to control for them through measures such as implementing operating efficiencies, or we are not able to increase prices to sufficiently offset the effect of various cost increases without negatively impacting customer demand, our margin performance and results of operations would be negatively impacted." **Prior (2024):** Elevated levels of inflation, including rising prices for raw materials, parts and components, freight, packaging, labor and energy, increases our costs to manufacture and distribute our products and services, and we may be unable to pass these increased costs on to our customers. We do not currently use financial derivatives to hedge against volatility in commodity prices; however, we utilize firm purchase commitments, where possible, to help mitigate risk. The pricing of some materials, parts and components we use is based on market prices. To mitigate this exposure, we may use annual price contracts to minimize the impact of inflation and to benefit from deflation. Additionally, we are exposed to fluctuations in other costs such as packaging, freight, labor and energy prices. If inflation in these costs increases beyond our ability to control for them through measures such as implementing operating efficiencies, or we are not able to increase prices to sufficiently offset the effect of various cost increases without negatively impacting customer demand, our margin performance and results of operations would be negatively impacted. **Current (2025):** Higher prices for raw materials, parts and components, freight, packaging, labor and energy, whether caused by inflationary pressures or other geopolitical factors, such as new or increased tariffs, duties, or other charges as a result of changes to U.S. or international trade policies or trade agreements, increase our costs to manufacture and distribute our products and services, and we may be unable to pass these increased costs on to our customers. We do not currently use financial derivatives to hedge against volatility in commodity prices; however, we utilize firm purchase commitments, where possible, to help mitigate risk. The pricing of some materials, parts and components we use is based on market prices. To mitigate this exposure, we may use annual price contracts to minimize the impact of inflation and to benefit from deflation. However, these hedging and pricing strategies may not fully protect us against cost increases caused by factors such as new or increased tariffs, changing import duties, market illiquidity and specific local regulations. Additionally, we are exposed to fluctuations in other costs such as packaging, freight, labor and energy prices. If these costs increase beyond our ability to control for them through measures such as implementing operating efficiencies, or we are not able to increase prices to sufficiently offset the effect of various cost increases without negatively impacting customer demand, our margin performance and results of operations would be negatively impacted. --- ## Modified: Our global operations subject us to political, economic and regulatory risks, including uncertainty related to the imposition of new or increased tariffs and the global trade environment more generally. **Key changes:** - Reworded sentence: "Additionally, we procure various product s, parts, components and services from supplier partners located throughout the world." - Reworded sentence: "Accordingly, we are subject to multiple risks that are inherent in operating and sourcing globally, including: •Changes to trade agreements, foreign trade policies, sanctions, import and export regulations, including the imposition or threatened imposition of new or increased tariffs, quotas, customs duties and similar restrictions, as well as retaliatory actions that may be imposed by other governments in response to such tariffs or other trade restrictions; •Changes in applicable tax regulations and interpretations; •Economic downturns; 15 15 15 Table of Contents Table of Contents •Social and political unrest, instability, national and international conflict, including the conflicts in the Middle East and the war between Russia and Ukraine, border closures, civil disturbances, terrorist acts and other geographical disputes and uncertainties; •Government measures to restrict business activity, for example, to prevent the spread of a communicable disease; •Changes in laws and regulations or imposition of currency restrictions and other restraints in various jurisdictions; •Limitation of ownership rights, including expropriation of assets by a local government, and limitation on the ability to repatriate earnings; •Sovereign debt crises and currency instability in developed and developing countries; •Difficulty in staffing and managing global operations; •Difficulty in enforcing agreements, collecting receivables and protecting assets through non-U.S." - Added sentence: "As an example, in February 2025, the U.S." - Added sentence: "government announced tariffs on imports from Canada, Mexico and China, countries from which we manufacture and/or export products and components." - Added sentence: "Subsequently, the tariffs on Canada and Mexico were paused." **Prior (2024):** Our businesses operate around the world in various geographic regions and product markets. Additionally, we procure various products, parts, components and services from supplier partners located throughout the world. Our global operations depend on products manufactured, purchased and sold in the U.S. and internationally, including in Australia, Canada, China, Europe, Mexico, New Zealand and the Middle East. The political, economic and regulatory environments in which we operate are becoming increasingly volatile and uncertain. Accordingly, we are subject to multiple risks that are inherent in operating and sourcing globally, including: •Changes to trade agreements, sanctions, import and export regulations, including imposition of burdensome tariffs and quotas, and customs duties; •Changes in applicable tax regulations and interpretations; •Economic downturns; •Social and political unrest, instability, national and international conflict, including the conflicts in the Middle East and the war between Russia and Ukraine, border closures, civil disturbances, terrorist acts and other geographical disputes and uncertainties; •Government measures to restrict business activity, for example, to prevent the spread of a communicable disease; •Changes in laws and regulations or imposition of currency restrictions and other restraints in various jurisdictions; 15 15 15 Table of Contents Table of Contents •Limitation of ownership rights, including expropriation of assets by a local government, and limitation on the ability to repatriate earnings; •Sovereign debt crises and currency instability in developed and developing countries; •Difficulty in staffing and managing global operations; •Difficulty in enforcing agreements, collecting receivables and protecting assets through non-U.S. legal systems; and •Difficulty in transporting materials, components and products. These risks have increased our cost of doing business in the U.S. and internationally. These risks may also increase our counterparty risk, disrupt our operations, disrupt the ability of suppliers and customers to fulfill their obligations, increase our effective tax rate, increase the cost of our products, limit our ability to sell products and services in certain markets, reduce our operating margin and cash flows and/or negatively impact our ability to compete. **Current (2025):** Our businesses operate around the world in various geographic regions and product markets. Additionally, we procure various product s, parts, components and services from supplier partners located throughout the world. Our global operations depend on products manufactured, purchased and sold in the U.S. and internationally, including in Australia, Canada, China, Europe, Mexico, New Zealand and the Middle East. The political, economic and regulatory environments in which we operate are becoming increasingly volatile and uncertain. Accordingly, we are subject to multiple risks that are inherent in operating and sourcing globally, including: •Changes to trade agreements, foreign trade policies, sanctions, import and export regulations, including the imposition or threatened imposition of new or increased tariffs, quotas, customs duties and similar restrictions, as well as retaliatory actions that may be imposed by other governments in response to such tariffs or other trade restrictions; •Changes in applicable tax regulations and interpretations; •Economic downturns; 15 15 15 Table of Contents Table of Contents •Social and political unrest, instability, national and international conflict, including the conflicts in the Middle East and the war between Russia and Ukraine, border closures, civil disturbances, terrorist acts and other geographical disputes and uncertainties; •Government measures to restrict business activity, for example, to prevent the spread of a communicable disease; •Changes in laws and regulations or imposition of currency restrictions and other restraints in various jurisdictions; •Limitation of ownership rights, including expropriation of assets by a local government, and limitation on the ability to repatriate earnings; •Sovereign debt crises and currency instability in developed and developing countries; •Difficulty in staffing and managing global operations; •Difficulty in enforcing agreements, collecting receivables and protecting assets through non-U.S. legal systems; and •Difficulty in transporting materials, components and products. These risks have increased our cost of doing business in the U.S. and internationally. These risks may also increase our counterparty risk, disrupt our operations, disrupt the ability of suppliers and customers to fulfill their obligations, increase our effective tax rate, increase the cost of our products, limit our ability to sell products and services in certain markets, reduce our operating margin and cash flows and/or negatively impact our ability to compete. As an example, in February 2025, the U.S. government announced tariffs on imports from Canada, Mexico and China, countries from which we manufacture and/or export products and components. Subsequently, the tariffs on Canada and Mexico were paused. We are evaluating the potential impact of these actions and considering what, if any, steps we take to mitigate the impact of the tariffs. We estimate we source approximately 20-25% of Cost of goods sold from Mexico and less than 5% of Cost of goods sold from China. The degree to which any new or increased tariffs would impact our business and results of operations is largely dependent on factors outside of our control, including if the tariffs are ultimately implemented, the timing, duration and magnitude of their implementation, and responses or retaliatory actions taken by other countries or regions. We can give no assurance that the impact of any tariffs will not have a material adverse effect upon our results of operations, financial condition or liquidity or that actions we may take to mitigate the impact of the tariffs will be effective. --- ## Modified: Our business performance is impacted by the strength of the institutional, commercial and residential construction and remodeling markets and global macroeconomic factors. **Key changes:** - Reworded sentence: "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 national, regional and local 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." **Prior (2024):** 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. Weakness or instability in one or more of these markets may cause current and potential customers to delay or cancel major capital projects or otherwise choose not to make purchases, which could negatively impact the demand for our products and solutions and erode average selling prices. **Current (2025):** 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 national, regional and local 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. As a result, weakness or instability in one or more of these markets could slow demand for new construction or remodeling projects and cause current and potential customers to delay or cancel capital projects or otherwise choose not to make purchases, which could negatively impact the demand for our products and solutions and result in declines in our revenues, profitability and cash flows. In the recent past, our business operations and performance were also impacted by global macroeconomic challenges, including supply chain disruptions and delays, material, electronic component and labor shortages, prolonged periods of cost inflation, and increased interest rates. Negative macroeconomic trends, future market disruptions or uncertainty related to potential changes to fiscal and monetary policy and/or trade policy, including the imposition, or threatened imposition, of tariffs and potential retaliatory trade restrictions, may make it more challenging for us to manufacture and deliver products to our customers, could cause periodic production interruptions and supply constraints, impact our ability to forecast and plan for future business activities and, if not adequately managed by us, could cause a material adverse impact on our business, results of operations, financial condition and cash flows. --- *Data sourced from SEC EDGAR. Last updated 2026-06-01.*