Item 2. Management’s Discussion and Analysis
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The Brink’s Company (along with its subsidiaries, “Brink’s”, the “Company”, “we”, “us” or “our”) offers transportation and logistics management services for cash and valuables throughout the world. These services include:
• Cash-in-transit (“CIT”) services – armored vehicle transportation of valuables
• Basic ATM services – replenishing and maintaining customers' automated teller machines; providing network infrastructure services
• Global services – secure international transportation of valuables
• Cash management services
◦ Money processing (e.g., counting, sorting, wrapping, checking condition of bills) and other cash management services
◦ Digital cash payment services that provide advance credit for cash deposited in Brink's-provided tech-enabled safe devices and other services related to deploying and servicing "intelligent" safes and safe control devices (including our patented CompuSafe ® service)
◦ Check imaging services
• Vaulting services – combines cash-in-transit services, cash management services, vaulting and electronic reporting technologies for banks
• ATM managed services – services for ATM management, including cash replenishment, replenishment forecasting, cash optimization, ATM remote monitoring, service call dispatching, transaction processing, installation services, and first and second line maintenance
• Payment services – bill payment and processing services on behalf of utility companies and other service providers at any of our Brink’s or Brink’s-operated payment locations in Latin America and Brink’s Money™ general purpose reloadable prepaid cards and corporate debit cards in the U.S.
• Commercial security systems services – design and installation of security systems in designated markets in Europe
• Guarding services – protection of airports, offices, and certain other locations in Europe, Rest of World and Latin America with or without electronic surveillance, access control, fire prevention and highly trained patrolling personnel
We identify our operating segments based on how our chief operating decision maker (“CODM”) allocates resources, assesses performance and makes decisions. Our CODM is our President and Chief Executive Officer. Our CODM evaluates performance and allocates resources to each operating segment based on an operating profit or loss measure, excluding income and expenses not allocated to segments.
We manage our business in following four segments:
• North America – operations in the U.S. and Canada, including the Brink’s Global Services ("BGS") line of business,
• Latin America – operations in Latin American countries where we have an ownership interest, including the BGS line of business. This segment includes operations in Mexico, which was previously reported in the North America segment,
• Europe – total operations in European countries that primarily provide services outside of the BGS line of business, and
• Rest of World – operations in the Middle East, Africa and Asia. This segment also includes total operations in European countries that primarily provide BGS services and BGS activity in Latin American countries where we do not have an ownership interest.
35
RESULTS OF OPERATIONS
COVID-19 Pandemic Impact
We continue to monitor developments related to the ongoing coronavirus (COVID-19) pandemic, which has created global volatility, uncertainty and economic disruption for Brink's, our customers and vendors, and the markets in which we do business. We have taken and continue to take steps to mitigate the potential risks to our employees, our customers and our business around the world. We are focused on three priorities:
• Protecting our people and providing essential services to our customers;
• Preserving cash and optimizing profitability; and
• Positioning Brink’s to be stronger on the other side of the crisis.
The COVID-19 pandemic began to have a material adverse impact on our results of operations in the quarter ended March 31, 2020. During 2020, 2021 and continuing into 2022, health conditions and economic activity in the countries in which we operate have been significantly impacted by government, customer and consumer actions in response to the pandemic. These actions have led to reduced customer volumes, changes to our operating procedures, labor shortages and increases to our costs to provide services. We have taken and continue to take actions to adjust the way we operate and reduce our costs through restructuring activities and operational changes to address these impacts and align to future anticipated revenue levels.
We are continually assessing the impact that the COVID-19 pandemic, and the actions taken in response to it, will have on our employees, businesses and segments, customers and vendors and the industries that we serve. The full impact depends on many factors that are uncertain or not yet identifiable. We expect these factors will continue to impact our financial condition and our results of operations for a duration that is currently unknown.
In addition, we cannot predict whether future developments associated with the COVID-19 pandemic will have a materially adverse effect on our long-term liquidity position. We believe we continue to have sufficient liquidity to meet our current obligations. The COVID-19 pandemic continues, however, to be an evolving situation, and we cannot predict the extent or duration of the ongoing COVID-19 pandemic, the effects of it on the global, national or local economy, including the impacts on our ability to access capital, or its effects on our business, financial position, results of operations, and cash flows.
We will continue to monitor developments affecting our employees, customers and operations and take additional steps to address the business impact of the COVID-19 pandemic, as necessary.
Refer to the “Liquidity and Capital Resources” section below for further discussion.
36
Consolidated Review
GAAP and Non-GAAP Financial Measures
We provide an analysis of our operations below on both a U.S. generally accepted accounting principles (“GAAP”) and non-GAAP basis. The purpose of the non-GAAP information is to report our operating profit, income from continuing operations and earnings per share without certain income and expense items that do not reflect the regular earnings of our operations. The non-GAAP financial measures are intended to provide investors with a supplemental comparison of our operating results and trends for the periods presented. Our management believes these measures are also useful to investors as they allow investors to evaluate our performance using the same metrics that our management uses to evaluate past performance and prospects for future performance. We do not consider these items to be reflective of our core operating performance. The non-GAAP adjustments used to reconcile our GAAP results are described on pages 44–46 and are reconciled to comparable GAAP measures on pages 50–52.
Definition of Organic Growth
Organic growth represents the change in revenues or operating profit between the current and prior period, excluding the effect of acquisitions and dispositions and changes in currency exchange rates. See definitions on page 40.
Three Months
Ended September 30, % Nine Months
Ended September 30, %
(In millions, except for per share amounts) 2022 2021 Change 2022 2021 Change
GAAP
Revenues $ 1,136.7 1,075.5 6 3,344.6 3,102.0 8
Cost of revenues 880.7 837.6 5 2,587.9 2,415.6 7
Selling, general and administrative expenses 180.8 161.9 12 519.9 472.0 10
Operating profit 59.5 74.2 (20) 218.4 209.2 4
Income from continuing operations (a)
19.2 19.0 1 125.8 55.7 fav
Diluted EPS from continuing operations (a)
$ 0.41 0.38 8 2.63 1.11 fav
Non-GAAP (b)
Non-GAAP revenues $ 1,136.7 1,075.5 6 3,344.6 3,102.0 8
Non-GAAP operating profit 126.8 115.9 9 362.9 316.6 15
Non-GAAP income from continuing operations (a)
63.8 57.1 12 181.8 155.3 17
Non-GAAP diluted EPS from continuing operations (a)
$ 1.34 1.14 18 3.80 3.08 23
(a) Amounts reported in this table are attributable to the shareholders of Brink’s and exclude earnings related to noncontrolling interests.
(b) Non-GAAP results are reconciled to the applicable GAAP results on pages 50–52.
GAAP Basis
Analysis of Consolidated Results: Third Quarter 2022 versus Third Quarter 2021
Consolidated Revenues Revenues increased $61.2 million due to organic increases in Rest of World ($45.4 million), Latin America ($40.6 million), North America ($38.4 million), and Europe ($18.4 million) and the favorable impact of acquisitions ($3.5 million), partially offset by the unfavorable impact of currency exchange rates ($85.1 million). The unfavorable currency impact was driven primarily by the euro and the Argentine peso. Revenues increased 13% on an organic basis primarily due to higher volume and inflation-based price increases. See above for our definition of “organic growth.”
Consolidated Costs and Expenses Cost of revenues increased 5% to $ 880.7 million primarily due to higher labor and other operational costs, driven by volume and wage increases, and the impact of acquisitions, partially offset by the impact of currency exchange rates. Selling, general and administrative costs increased 12% to $ 180.8 million primarily due to organic increases in labor and other administrative costs and increased restructuring costs, partially offset a charge in the third quarter of 2021 related to a potential fine for a Chile antitrust matter and the impact of currency exchange rates.
Consolidated Operating Profit Operating profit decreased $14.7 million due mainly to:
• higher corporate expenses on an organic basis ($21.0 million),
• higher costs related to business acquisitions and dispositions ($19.7 million), including the impact of acquisition-related charges and intangible asset amortization in 2022, included in "Other items not allocated to segments",
• unfavorable changes in currency exchange rates ($22.8 million), driven by the Argentine peso and the euro, and
• higher costs incurred related to reorganization and restructuring ($5.6 million) included in "Other items not allocated to segments,"
partially offset by:
• organic increases in Rest of World ($20.3 million), North America ($12.7 million), Latin America ($11.9 million), and Europe ($2.1 million),
• lower costs related to the estimated loss of a potential fine for a Chile antitrust matter ($9.2 million) included in "Other items not allocated to segments", and
37
• the favorable operating impact of business acquisitions ($0.6 million), excluding intangible amortization and acquisition-related charges.
Consolidated Income from Continuing Operations Attributable to Brink’s and Related Per Share Amounts Income from continuing operations attributable to Brink’s shareholders increased $0.2 million to $19.2 million due to lower income tax expense ($14.4 million), higher interest and other non-operating income ($7.0 million), and lower non-controlling interest ($0.6 million), mostly offset by the decrease in operating profit mentioned above and higher interest expense ($7.1 million). Earnings per share from continuing operations was $0.41, up from $0.38 in the third quarter of 2021.
Analysis of Consolidated Results: Nine Months 2022 versus Nine Months 2021
Consolidated Revenues Revenues increased $242.6 million due to organic increases in Latin America ($117.2 million), North America ($100.4 million), Rest of World ($81.6 million), and Europe ($65.5 million) and the favorable impact of acquisitions ($50.3 million), partially offset by the unfavorable impact of currency exchange rates ($172.4 million). The unfavorable currency impact was driven primarily by the euro and the Argentine peso. Revenues increased 12% on an organic basis primarily due to higher volume and inflation-based price increases. See above for our definition of “organic growth.”
Consolidated Costs and Expenses Cost of revenues increased 7% to $ 2,587.9 million primarily due to higher labor and other operational costs, driven by volume and wage increases, and the impact of acquisitions, partially offset by the impact of currency exchange rates. Selling, general and administrative costs increased 10% to $ 519.9 million primarily due to organic increases in labor and other administrative costs, the unfavorable impact of a change in allowance estimate ($16.7 million) recorded in the first-quarter 2022 due to a modification in our methodology to estimate the allowance for doubtful accounts, and increased restructuring costs, partially offset by the impact of currency exchange rates.
Consolidated Operating Profit Operating profit increased $9.2 million due mainly to:
• organic increases in Rest of World ($32.7 million), Latin America ($32.6 million), and Europe ($13.6 million),
• lower costs related to the estimated loss of a potential fine for a Chile antitrust matter ($8.4 million) included in "Other items not allocated to segments", and
• favorable operating impact of business acquisitions ($8.3 million), excluding intangible amortization and acquisition-related charges,
partially offset by:
• unfavorable changes in currency exchange rates ($40.7 million), driven by the Argentine peso and the euro,
• the unfavorable impact of a change in allowance estimate ($16.7 million) recorded in the first-quarter 2022 due to a modification in our methodology to estimate the allowance for doubtful accounts included in "Other items not allocated to segments,"
• higher costs related to business acquisitions and dispositions ($11.3 million), including the impact of acquisition-related charges and intangible asset amortization in 2022, included in "Other items not allocated to segments",
• an organic decrease in North America ($8.5 million), and
• higher corporate expenses on an organic basis ($6.6 million).
Consolidated Income from Continuing Operations Attributable to Brink’s and Related Per Share Amounts Income from continuing operations attributable to Brink’s shareholders increased $70.1 million to $125.8 million due to lower income tax expense ($62.5 million), higher interest and other non-operating income ($10.0 million), the increase in operating profit mentioned above, and lower non-controlling interest ($0.4 million), partially offset by higher interest expense ($12.0 million). Earnings per share from continuing operations was $2.63, up from $1.11 in the first nine months of 2021.
Non-GAAP Basis
Analysis of Consolidated Results: Third Quarter 2022 versus Third Quarter 2021
Non-GAAP Consolidated Revenues Non-GAAP revenues increased $61.2 million due to organic increases in Rest of World ($45.4 million) Latin America ($40.6 million), North America ($38.4 million), and Europe ($18.4 million), and the favorable impact of acquisitions ($3.5 million), partially offset by the unfavorable impact of currency exchange rates ($85.1 million). The unfavorable currency impact was driven primarily by the euro and the Argentine peso. Revenues increased 13% on an organic basis primarily due to higher volume and inflation-based price increases. See above for our definition of “organic growth.”
Non-GAAP Consolidated Operating Profit Non-GAAP operating profit increased $10.9 million due mainly to:
• organic increases in Rest of World ($20.3 million), North America ($12.7 million), Latin America ($11.9 million), and Europe ($2.1 million) and
• the favorable operating impact of business acquisitions ($0.6 million), excluding intangible amortization and acquisition-related charges,
partially offset by:
• higher corporate expenses on an organic basis ($21.0 million) and
• unfavorable changes in currency exchange rates ($15.7 million), driven primarily by the Argentine peso and the euro.
38
Non-GAAP Consolidated Income from Continuing Operations Attributable to Brink’s and Related Per Share Amounts Non-GAAP income from continuing operations attributable to Brink’s shareholders increased $6.7 million to $63.8 million due to the operating profit increase mentioned above, higher interest and other non-operating income ($3.3 million), and lower non-controlling interest ($0.5 million), partially offset by higher interest expense ($7.1 million) and higher income tax expense ($0.9 million). Earnings per share from continuing operations was $1.34, up from $1.14 in the third quarter of 2021.
Analysis of Consolidated Results: Nine Months 2022 versus Nine Months 2021
Non-GAAP Consolidated Revenues Non-GAAP revenues increased $242.6 million due to organic increases in Latin America ($117.2 million), North America ($100.4 million), Rest of World ($81.6 million), and Europe ($65.5 million) and the favorable impact of acquisitions ($50.3 million), partially offset by the unfavorable impact of currency exchange rates ($172.4 million). The unfavorable currency impact was driven primarily by the euro and the Argentine peso. Revenues increased 12% on an organic basis primarily due to higher volume and inflation-based price increases. See above for our definition of “organic growth.”
Non-GAAP Consolidated Operating Profit Non-GAAP operating profit increased $46.3 million due mainly to:
• organic increases in Rest of World ($32.7 million), Latin America ($32.6 million), and Europe ($13.6 million) and
• the favorable operating impact of business acquisitions ($8.3 million), excluding intangible amortization and acquisition-related charges,
partially offset by:
• unfavorable changes in currency exchange rates ($25.8 million), driven primarily by the Argentine peso and the euro,
• an organic decrease in North America ($8.5 million), and
• higher corporate expenses on an organic basis ($6.6 million).
Non-GAAP Consolidated Income from Continuing Operations Attributable to Brink’s and Related Per Share Amounts Non-GAAP income from continuing operations attributable to Brink’s shareholders increased $26.5 million to $181.8 million due to the operating profit increase mentioned above and lower non-controlling interest ($0.8 million), partially offset by higher interest expense ($12.1 million), higher income tax expense ($6.7 million), and lower interest and other non-operating income ($1.8 million). Earnings per share from continuing operations was $3.80, up from $3.08 in the first nine months of 2021.
39
Revenues and Operating Profit by Segment: Third Quarter 2022 versus Third Quarter 2021
Organic Acquisitions / % Change
(In millions) 3Q'21 Change Dispositions (a)
Currency (b)
3Q'22 Total Organic
Revenues:
North America $ 360.7 38.4 2.6 (1.1) 400.6 11 11
Latin America 289.3 40.6 0.6 (29.4) 301.1 4 14
Europe 238.0 18.4 0.3 (36.7) 220.0 (8) 8
Rest of World 187.5 45.4 — (17.9) 215.0 15 24
Segment revenues (c)
1,075.5 142.8 3.5 (85.1) 1,136.7 6 13
Revenues - GAAP $ 1,075.5 142.8 3.5 (85.1) 1,136.7 6 13
Operating profit:
North America $ 25.0 12.7 0.5 — 38.2 53 51
Latin America 64.6 11.9 0.1 (10.1) 66.5 3 18
Europe 28.1 2.1 — (4.3) 25.9 (8) 7
Rest of World 31.9 20.3 — (3.9) 48.3 51 64
Segment operating profit 149.6 47.0 0.6 (18.3) 178.9 20 31
Corporate (d)
(33.7) (21.0) — 2.6 (52.1) 55 62
Operating profit - non-GAAP 115.9 26.0 0.6 (15.7) 126.8 9 22
Other items not allocated to segments (e)
(41.7) 1.2 (19.7) (7.1) (67.3) 61 (3)
Operating profit - GAAP $ 74.2 27.2 (19.1) (22.8) 59.5 (20) 37
Amounts may not add due to rounding.
(a) Non-GAAP amounts include the impact of prior year comparable period results for acquired and disposed businesses. GAAP results also include the impact of acquisition-related intangible amortization, restructuring and other charges, and disposition-related gains/losses.
(b) The amounts in the “Currency” column consist of the effects of Argentina devaluations under highly inflationary accounting and the sum of monthly currency changes. Monthly currency changes represent the accumulation throughout the year of the impact on current period results of changes in foreign currency rates from the prior year period.
(c) Segment revenues equal our total reported non-GAAP revenues.
(d) Corporate expenses are not allocated to segment results. Corporate expenses include salaries and other costs to manage the global business and to perform activities required by public companies.
(e) See pages 44–46 for more information.
(f) In the first quarter of 2021, North America operating profit benefited $12.3 million from a change in our method to calculate the allowance for doubtful accounts, with an offsetting higher expense at Corporate. There was no net impact on consolidated operating profit. See further discussion below in Analysis of Segment Results.
Analysis of Segment Results: Third Quarter 2022 versus Third Quarter 2021
North America
Revenues increased 11% ($39.9 million) primarily due to a 11% organic increase ($38.4 million) and the favorable impact of acquisitions ($2.6 million). Organic revenue increased primarily due to price increases in the U.S. Operating profit increased $13.2 million, primarily due to a 51% organic increase ($12.7 million) and the favorable impact of acquisitions ($0.5 million). The organic increase resulted primarily from price increases, which outpaced the impact of labor and other cost increases, and lower losses. The increase was partially offset by several adjustments related to legal settlements and various insurance-related costs in the U.S.
Latin America
Revenues increased 4% ($11.8 million) primarily due to a 14% organic increase ($40.6 million) and the favorable impact of acquisitions ($0.6 million), partially offset by the unfavorable impact of currency exchange rates ($29.4 million), primarily from the Argentine, Colombian, and Chilean peso. The organic increase was primarily driven by inflation-based price increases in Argentina and Mexico. Operating profit was up 3% ($1.9 million) primarily due to a 18% organic increase ($11.9 million) and the favorable impact of acquisitions ($0.1 million), partially offset by the unfavorable impact of currency exchange rates ($10.1 million). The organic profit increase was driven by inflation-based price increases in Argentina and the benefit of labor and other operational cost saving actions throughout the segment. The increase was partially offset by the impact of a $4.5 million non-income tax credit experienced by Brazil in the third quarter of 2021. Our Brazil operations received a favorable court decision related to non-income taxes paid in prior years and will be able to recover the overpayments, plus interest, by reducing payments on future tax obligations.
40
Europe
Revenues decreased 8% ($18.0 million) due to the unfavorable impact of currency exchange rates ($36.7 million), partially offset by a 8% organic increase ($18.4 million) and the favorable impact of acquisitions ($0.3 million). The unfavorable currency impact was driven by the euro. The organic increase was primarily due to organic volume growth in France, including the impact of the partial implementation of an ATM managed services contract for a large customer and price increases across the segment. Operating profit decreased $2.2 million to $25.9 million primarily due to the unfavorable impact of currency exchange rates ($4.3 million), partially offset by a 7% organic increase ($2.1 million). The organic increase was primarily driven by the impact of labor and other operational cost saving actions throughout the segment. and was partially offset by lower government COVID-19 assistance in several countries.
Rest of World
Revenues increased 15% ($27.5 million) due to a 24% organic increase ($45.4 million), partially offset by the unfavorable impact of currency exchange rates ($17.9 million). The organic increase was primarily due to global services growth. The unfavorable currency impact was driven by most currencies throughout the segment. Operating profit increased $16.4 million due to a 64% organic increase ($20.3 million), partially offset by the unfavorable impact of currency exchange rates ($3.9 million). The organic increase was primarily due to global services growth, the impact of labor and other operational cost saving actions, and higher government COVID-19 assistance in Hong Kong.
41
Revenues and Operating Profit by Segment: Nine Months 2022 versus Nine Months 2021
Organic Acquisitions / % Change
(In millions) YTD '21 Change Dispositions (a)
Currency (b)
YTD '22 Total Organic
Revenues:
North America $ 1,034.6 100.4 38.4 (2.4) 1,171.0 13 10
Latin America 831.8 117.2 2.7 (53.0) 898.7 8 14
Europe 683.2 65.5 2.9 (82.8) 668.8 (2) 10
Rest of World 552.4 81.6 6.3 (34.2) 606.1 10 15
Segment revenues (c)
3,102.0 364.7 50.3 (172.4) 3,344.6 8 12
Revenues - GAAP $ 3,102.0 364.7 50.3 (172.4) 3,344.6 8 12
Operating profit:
North America (f)
$ 98.4 (8.5) 6.8 — 96.7 (2) (9)
Latin America 180.4 32.6 0.3 (19.1) 194.2 8 18
Europe 57.4 13.6 0.4 (8.3) 63.1 10 24
Rest of World 94.2 32.7 0.8 (6.8) 120.9 28 35
Segment operating profit 430.4 70.4 8.3 (34.2) 474.9 10 16
Corporate (d)(f)
(113.8) (6.6) — 8.4 (112.0) (2) 6
Operating profit - non-GAAP 316.6 63.8 8.3 (25.8) 362.9 15 20
Other items not allocated to segments (e)
(107.4) (10.9) (11.3) (14.9) (144.5) 35 10
Operating profit - GAAP $ 209.2 52.9 (3.0) (40.7) 218.4 4 25
Amounts may not add due to rounding.
See page 40 for footnote explanations.
Analysis of Segment Results: Nine Months 2022 versus Nine Months 2021
North America
Revenues increased 13% ($136.4 million) primarily due to a 10% organic increase ($100.4 million) and the favorable impact of acquisitions ($38.4 million), partially offset by the unfavorable impact of currency exchange rates ($2.4 million) from the Canadian dollar. Organic revenue increased primarily due to price increases in the U.S. Operating profit decreased $1.7 million, primarily due to a 9% organic decrease ($8.5 million) partially offset by the favorable impact of acquisitions ($6.8 million). The organic decrease resulted primarily from several adjustments related to various insurance-related costs, legal settlements, and bad-debt reversals in the U.S., and lower government COVID-19 assistance in Canada. The decrease was partially offset by price increases which outpaced the impact of labor and other cost increases.
The change in bad debt expense was driven by a first quarter of 2021 change to the allowance for doubtful accounts calculation method for the segment’s U.S. business, which resulted in a $12.3 million operating profit increase, and which was offset by a $12.3 million increase to Corporate expense, resulting in no impact to consolidated operating profit for the first quarter. Historically, all Brink’s business units followed an internal Company policy for determining an allowance for doubtful accounts and the allowances were then reconciled to the required U.S. GAAP estimated consolidated allowance, with any differences reported as part of Corporate expense. Other than for the U.S. business, the reconciling differences were not significant. We changed the U.S. calculation of the allowance in order to more closely align it with the U.S. GAAP consolidated calculation and to minimize reconciling differences, resulting in the offsetting $12.3 million adjustments to align the methods.
A change in estimation methodology resulted in a $16.7 million incremental bad debt expense recorded in the first quarter of 2022 that was associated with U.S. aged receivables. In the second quarter and in the third quarter of 2022, the additional allowance was reduced by $0.7 million as a result of collections. However, as discussed in Note 1 this amount was recorded as part of "Other items not allocated to segments" and is not included in the North America segment results.
Latin America
Revenues increased 8% ($66.9 million) primarily due to a 14% organic increase ($117.2 million) and the favorable impact of acquisitions ($2.7 million), partially offset by the unfavorable impact of currency exchange rates ($53.0 million), primarily from the Argentine, Colombian, and Chilean peso and partially offset by the Brazilian real. The organic increase was driven by inflation-based price increases and volume growth in Argentina and Mexico. Operating profit was up 8% ($13.8 million) primarily due to a 18% organic increase ($32.6 million) and the favorable impact of acquisitions ($0.3 million), partially offset by unfavorable currency ($19.1 million). The organic increase was driven by inflation-based price increases which outpaced the impact of labor and other cost increases in Argentina and Mexico, as well as the benefit of labor and other operational cost saving actions throughout the segment.
42
Europe
Revenues decreased 2% ($14.4 million) due to the unfavorable impact of currency exchange rates ($82.8 million), partially offset by a 10% organic increase ($65.5 million) and the favorable impact of acquisitions ($2.9 million). The unfavorable currency impact was driven by the euro. The organic increase was primarily due to organic growth in France, including the impact of the partial implementation of an ATM managed services contract for a large customer, and throughout most of the segment. Operating profit increased $5.7 million primarily due to an organic increase ($13.6 million) and the favorable impact of acquisitions ($0.4 million), partially offset by the unfavorable impact of currency exchange rates ($8.3 million). The organic increase was primarily driven by volume growth and the impact of labor and other operational cost saving actions throughout the segment. This growth was partially offset by lower government COVID-19 assistance in several countries.
Rest of World
Revenues increased 10% ($53.7 million) due to a 15% organic increase ($81.6 million) and the favorable impact of acquisitions ($6.3 million), partially offset by the unfavorable impact of currency exchange rates ($34.2 million). The organic increase was primarily due to global services growth. The currency impact was driven by most currencies throughout the segment. Operating profit increased $26.7 million primarily due to a 35% organic increase ($32.7 million) and the favorable impact of acquisitions ($0.8 million), partially offset by the unfavorable impact of currency exchange rates ($6.8 million), driven by most currencies throughout the segment. The organic increase was primarily due to global services growth, the impact of labor and other operational cost saving actions and higher government COVID-19 assistance in Hong Kong.
43
Income and Expense Not Allocated to Segments
Corporate Expenses
Three Months
Ended September 30, % Nine Months
Ended September 30, %
(In millions) 2022 2021 change 2022 2021 change
General, administrative and other expenses $ (57.0) (34.8) 64 $ (125.4) (103.4) 21
Foreign currency transaction gains (losses) 3.6 1.4 fav 9.4 1.4 fav
Reconciliation of segment policies to GAAP 1.3 (0.3) fav 4.0 (11.8) fav
Corporate expenses $ (52.1) (33.7) 55 $ (112.0) (113.8) (2)
Corporate expenses include corporate headquarters costs, regional management costs, currency transaction gains and losses, costs related to global initiatives and adjustments to reconcile segment accounting policies to U.S. GAAP.
Corporate expenses for the first nine months of 2022 decreased $1.8 million versus the prior year period primarily driven by lower bad debt expense ($15.0 million) included in Corporate expense as part of the reconciliation of segment accounting policies to U.S. GAAP (see further discussion of bad debt expense in the next paragraph below). In addition, there were higher foreign currency transaction gains in the current year period ($8.0 million) and reduced expenses related to developing new service offerings ($2.7 million). These lower costs were offset by an increase in incentive compensation, including share-based and bonus accruals ($23.3 million) as well as higher net charges related to insurance and security losses ($7.8 million).
Prior to the first quarter of 2021, all Brink’s business units followed an internal accounting policy for determining an allowance for doubtful accounts. The allowances were then reconciled to the required U.S. GAAP estimated consolidated allowance, with any differences reported as part of Corporate expense. In the first nine months of 2021, the Corporate reconciling adjustment was an increase of Corporate expense of $13.1 million. The 2021 adjustment was primarily from a change in the first quarter of 2021 to the allowance calculation method of the North America segment’s U.S. business. This change resulted in a $12.3 million increase to Corporate expense offset by a $12.3 million operating profit increase in the North America segment, resulting in no impact to consolidated operating profit for the first quarter of 2021. We changed the U.S. calculation of the allowance in order to more closely align it with the U.S. GAAP consolidated calculation and to minimize reconciling differences. Other than for the U.S. business, the reconciling differences were not significant. The bad debt expense increase excludes the impact of the internal loss in our U.S. global services operations described on the next page.
Other Items Not Allocated to Segments
Three Months
Ended September 30, % Nine Months
Ended September 30, %
(In millions) 2022 2021 change 2022 2021 change
Operating profit:
Reorganization and Restructuring $ (19.6) (14.0) 40 $ (34.0) (35.7) (5)
Acquisitions and dispositions (35.7) (16.6) unfav (66.3) (55.8) 19
Argentina highly inflationary impact (12.0) (2.3) unfav (27.1) (8.8) unfav
Change in allowance estimate 0.3 — fav (16.0) — unfav
Chile antitrust matter
(0.3) (9.5) (97) (1.1) (9.5) (88)
Internal loss — 0.7 (100) — 2.4 (100)
Operating profit $ (67.3) (41.7) 61 $ (144.5) (107.4) 35
Reorganization and Restructuring
2022 Global Restructuring Plan
In the third quarter of 2022, management began a restructuring program across our global business operations. The actions were taken to enable growth, reduce costs and related infrastructure, and to mitigate the potential impact of external economic conditions. As a result of actions taken in the quarter, we recognized $17.5 million in the third quarter of 2022 under this restructuring, primarily severance costs. When completed, the current restructuring actions are expected to reduce our workforce by 2,000 to 2,400 positions and result in annualized cost savings of $35 million to $45 million.For the restructuring actions that were approved as of September 30, 2022, we expect to incur additional costs between $6 million and $10 million in future periods, primarily severance costs. Additional restructuring actions are expected to occur as part of this program as management continues to evaluate and identify improvement opportunities.
Other Restructurings
Management periodically implements restructuring actions in targeted sections of our business. As a result of these actions, we recognized net costs of $35.7 million in the first nine months of 2021, primarily severance costs. We recognized $16.5 million net costs in the first nine months of 2022, primarily severance costs. The majority of the costs from 2022 restructuring plans result from the exit of a line of business in a specific geography with most of the remaining costs due to management initiatives to address the COVID-19 pandemic. When completed, the current restructuring actions are expected to reduce our workforce by 1,200 to 1,400 positions and result in annualized cost savings of $15 million to $20 million. For the restructuring actions that have not yet been completed, we expect to incur additional costs between $4 million and $6 million in future periods. These estimates are expected to be updated as management targets additional sections of our business.
44
Due to the unique circumstances around these charges, they have not been allocated to segment results and are excluded from non-GAAP results. Charges related to the employees, assets, leases and contracts impacted by these restructuring actions were excluded from the segments and corporate expenses as shown in the table below.
Three Months Ended September 30, % Nine Months
Ended September 30, %
(In millions) 2022 2021 change 2022 2021 change
Reportable Segments:
North America $ (5.1) 0.4 unfav $ (12.6) 0.1 unfav
Latin America (8.2) (3.3) unfav (13.5) (6.7) unfav
Europe (5.3) (10.8) (51) (7.5) (26.5) (72)
Rest of World (1.0) (0.7) 43 (1.1) (3.0) (63)
Total reportable segments (19.6) (14.4) 36 (34.7) (36.1) (4)
Corporate items — 0.4 (100) 0.7 0.4 75
Total $ (19.6) (14.0) 40 $ (34.0) (35.7) (5)
Acquisitions and dispositions Certain acquisition and disposition items that are not considered part of the ongoing activities of the business and are special in nature are consistently excluded from segment and non-GAAP results. These items are described below:
2022 Acquisitions and Dispositions
• Amortization expense for acquisition-related intangible assets was $37.4 million in the first nine months of 2022.
• We recognized $12.4 million in charges in Argentina in the first nine months of 2022 for expected payments to union workers of the Maco Transportadora and Maco Litoral businesses (together "Maco"). Although the Maco operations were acquired in 2017, formal antitrust approval was obtained in 2021, which triggered negotiation and approval of the expected payments in 2022.
• Net charges of $7.8 million for post-acquisition adjustments to indemnification assets related to previous business acquisitions.
• We incurred $2.9 million in integration costs, primarily related to PAI and G4S, in the first nine months of 2022.
• Transaction costs related to business acquisitions were $2.7 million in the first nine months of 2022.
• Restructuring costs related to acquisitions were $0.2 million in the first nine months of 2022.
• Compensation expense related to the retention of key PAI employees was $2.6 million in the first nine months of 2022.
2021 Acquisitions and Dispositions
• Amortization expense for acquisition-related intangible assets was $35.3 million in the first nine months of 2021.
• We incurred $8.8 million in integration costs, primarily related to G4S, in the first nine months of 2021.
• Transaction costs related to business acquisitions were $5.4 million in the first nine months of 2021.
• Restructuring costs related to acquisitions were $5.1 million in the first nine months of 2021.
• Compensation expense related to the retention of key PAI employees was $1.2 million in the first nine months of 2021.
Argentina highly inflationary impact Beginning in the third quarter of 2018, we designated Argentina's economy as highly inflationary for accounting purposes. As a result, Argentine peso-denominated monetary assets and liabilities are now remeasured at each balance sheet date to the currency exchange rate then in effect, with currency remeasurement gains and losses recognized in earnings. In addition, nonmonetary assets retain a higher historical basis when the currency is devalued. The higher historical basis results in incremental expense being recognized when the nonmonetary assets are consumed. In the first nine months of 2022, we recognized $27.1 million in pretax charges related to highly inflationary accounting, including currency remeasurement losses of $24.4 million. In the first nine months of 2021, we recognized $8.8 million in pretax charges related to highly inflationary accounting, including currency remeasurement losses of $6.6 million. These amounts are excluded from segment and non-GAAP results.
Change in allowance estimate In the first quarter of 2022, we refined our global methodology of estimating the allowance for doubtful accounts. Our previous method to estimate currently expected credit losses in receivables (the allowance) was weighted significantly to a review of historical loss rates and specific identification of higher risk customer accounts. It also considered current and expected economic conditions, particularly the effects of the coronavirus (COVID-19) pandemic, in determining an appropriate allowance. As many of our regions begin to recover from the pandemic, we have re-assessed those earlier assumptions and estimates. Our updated method now also includes an estimated allowance for accounts receivable significantly past due in order to adjust for at-risk receivables not captured in our previous method. As part of the analysis under the updated estimation methodology, we noted an increase in accounts receivable significantly past due, particularly in the U.S., and we recorded an additional allowance of $16.7 million. In the second quarter and third quarter of 2022, the additional allowance was reduced by $0.7 million as a result of collections. Due to the fact that management has excluded these amounts when evaluating internal performance, we have excluded these amounts from segment and non-GAAP results.
Chile antitrust matter In the first nine months of 2022, we recognized an additional $1.1 million adjustment to our estimated loss related to a potential fine as a result of a change in currency rates. Due to the special nature of this matter, this charge has not been allocated to segment results and is excluded from non-GAAP results. See Note 14 for details.
Internal loss A former non-management employee in our U.S. global services operations embezzled funds from Brink's in prior years. In an effort to cover up the embezzlement, the former employee intentionally misstated the underlying accounts receivable subledger data. As a result, we estimated an increase to bad debt expense of $26.7 million through the end of 2020. In the first nine months of 2021, we recognized a decrease in bad debt expense of $3.5 million, primarily related to collection of these receivables. We also recognized $1.1 million of legal
45
charges in the first nine months of 2021 as we attempted to collect additional insurance recoveries related to these receivable losses. In the first nine months of 2022, we did not incur any charges related to the internal loss. Due to the unusual nature of this internal loss and the related errors in the subledger data, along with the fact that management has excluded these amounts when evaluating internal performance, we have excluded these net charges from segment and non-GAAP results.
Foreign Operations
We currently serve customers in more than 100 countries, including 53 countries where we operate subsidiaries.
We are subject to risks customarily associated with doing business in foreign countries, including labor and economic conditions, the imposition of international sanctions, including by the U.S. government, political instability, controls on repatriation of earnings and capital, nationalization, expropriation and other forms of restrictive action by local governments. Changes in the political or economic environments in the countries in which we operate could have a material adverse effect on our business, financial condition and results of operations. The future effects, if any, of these risks are unknown. In April 2019, the U.S. government sanctioned the Venezuela central bank and, as a result, the Company has ceased support of the Venezuela business.
Our international operations conduct a majority of their business in local currencies. Because our financial results are reported in U.S. dollars, they are affected by changes in the value of various local currencies in relation to the U.S. dollar. Recent strengthening of the U.S. dollar relative to certain currencies has reduced some of our reported U.S. dollar revenues and operating profit and may continue through the end of 2022.
At September 30, 2022, Argentina's economy remains highly inflationary for accounting purposes. At September 30, 2022, we had net monetary assets denominated in Argentine pesos of $62.0 million (including cash of $66.4 million) and net nonmonetary assets of $162.8 million (including $99.8 million of goodwill, $1.7 million in equity securities denominated in Argentine pesos and $21.0 million in debt securities denominated in Argentine pesos).
During September 2019, the Argentine government announced currency controls on both companies and individuals. Under the exchange procedures implemented by the central bank, approval is required for many transactions, including dividend repatriation abroad.
We have previously elected to use other market mechanisms to convert Argentine pesos into U.S. dollars. Conversions under these other market mechanisms generally settle at rates that are less favorable than the rates at which we remeasure the financial statements of Brink’s Argentina. We did not have any such conversion losses in the nine months ended September 30, 2022 or September 30, 2021.
Although the Argentine government has implemented currency controls, Brink’s management continues to provide guidance and strategic oversight, including budgeting and forecasting for Brink’s Argentina. We continue to control our Argentina business for purposes of consolidation of our financial statements and continue to monitor the situation in Argentina.
Changes in exchange rates may also affect transactions that are denominated in currencies other than the functional currency. From time to time, we use short term foreign currency forward and swap contracts to hedge transactional risks associated with foreign currencies. At September 30, 2022, the notional value of our short term outstanding foreign currency forward and swap contracts was $460 million with average contract maturities of approximately one month. These short term foreign currency forward and swap contracts primarily offset exposures in the euro, the Mexican peso and the Chilean peso. Additionally, these short term contracts are not designated as hedges for accounting purposes, and accordingly, changes in their fair value are recorded immediately in earnings. At September 30, 2022, the fair value of our short term foreign currency contracts was a net asset of approximately $8.2 million, of which $10.7 million was included in prepaid expenses and other and $2.5 million was included in accrued liabilities on the condensed consolidated balance sheet. At December 31, 2021, the fair value of these foreign currency contracts was a net asset of approximately $1.9 million, of which $3.4 million was included in prepaid expenses and other and $1.5 million was included in accrued liabilities on the condensed consolidated balance sheet.
Amounts under these contracts were recognized in other operating income (expense) as follows:
Three Months
Ended September 30, Nine Months
Ended September 30,
(In millions) 2022 2021 2022 2021
Derivative instrument gains (losses) included in other operating income (expense) $ 25.4 6.3 $ 58.4 14.5
We also have a long term cross currency swap contract to hedge exposure in Brazilian real, which is designated as a cash flow hedge for accounting purposes. Accordingly, changes in the fair value of the cash flow hedge are initially recorded in the gains (losses) on cash flow hedges component of accumulated other comprehensive income (loss). We immediately reclassify from accumulated other comprehensive income (loss) to earnings an amount to offset the remeasurement recognized in earnings associated with the respective intercompany loan. Additionally, we reclassify amounts from accumulated other comprehensive income (loss) to interest expense amounts that are associated with the interest rate differential between a U.S. dollar denominated intercompany loan and a Brazilian real denominated intercompany loan.
At September 30, 2022, the notional value of this long term contract was $59 million with a weighted-average maturity of approximately 0.8 years. At September 30, 2022, the fair value of the long term cross currency swap contract was a $16.7 million net asset, of which $7.2
46
million is included in prepaid expenses and other and $9.5 million is included in other assets on the condensed consolidated balance sheet. At December 31, 2021, the fair value of the long term cross currency swap contract was a $26.3 million net asset, of which a $5.8 million asset is included in prepaid expenses and other and a $20.5 million asset is included in other assets on the condensed consolidated balance sheet.
Amounts under this contract were recognized in other operating income (expense) to offset transaction gains or losses and in interest expense as follows:
Three Months
Ended September 30, Nine Months
Ended September 30,
(In millions) 2022 2021 2022 2021
Derivative instrument gains (losses) included in other operating income (expense) $ 0.3 5.7 $ (6.2) 0.1
Offsetting transaction gains ( losses) (0.3) (5.7) 6.2 (0.1)
Derivative instrument losses included in interest expense (0.3) (0.3) (1.0) (1.1)
Net derivative instrument gains (losses) — 5.4 (7.2) (1.0)
In the second quarter of 2021, we entered into ten cross currency swaps to hedge a portion of our net investments in certain of our subsidiaries with euro functional currencies. We elected to use the spot method to assess effectiveness for these derivatives that are designated as net investment hedges. Accordingly, changes in fair value attributable to changes in the undiscounted spot rates are recorded in the foreign currency translation adjustments component of accumulated other comprehensive income (loss) and will remain there until the hedged net investments are sold or substantially liquidated. We have elected to exclude the spot-forward difference from the assessment of hedge effectiveness and are amortizing this amount separately on a straight-line basis over the term of these cross currency swaps.
In July 2022, we terminated these cross currency swap contracts and received $67 million in cash as settlement. We subsequently entered into a total of nine cross currency swaps with a total notional of $400 million to hedge a portion of our net investment in certain of our subsidiaries with euro functional currencies. Swaps with a total notional of $215 million will terminate in May 2026 and swaps with a total notional of $185 million will terminate in April 2031. We have designated these swaps as net investment hedges for accounting purposes.
At September 30, 2022, the notional value of these cross currency swap contracts was $400 million with a remaining weighted average maturity of 2.4 years for the cross currency swaps maturing in May 2026 and a remaining weighted average maturity of 6.1 years for the cross currency swaps with maturity in April 2031. At September 30, 2022, the fair value of these currency swaps was a net asset of $11.3 million, of which $5.6 million was included in prepaid expenses and other and $5.7 million was included in other assets on the condensed consolidated balance sheet.
The effect of the amortization of the spot-forward difference on the net investment hedges cross currency swaps is included in interest expense as follows:
Three Months
Ended September 30, Nine Months
Ended September 30,
(In millions) 2022 2021 2022 2021
Net derivative instrument gains included in interest expense $ (1.3) (1.5) (4.4) (2.6)
See Note 1 to the condensed consolidated financial statements for a description of how we account for currency remeasurement for Argentine subsidiaries, beginning July 1, 2018 under the heading, "Argentina".
47
Other Operating Income (Expense)
Other operating income (expense) includes amounts included in segment results as well as income and expense not allocated to segments.
Three Months
Ended September 30, % Nine Months
Ended September 30, %
(In millions) 2022 2021 change 2022 2021 change
Foreign currency items:
Transaction losses $ (32.7) (6.5) unfav $ (73.4) (19.8) unfav
Derivative instrument gains 25.4 6.3 fav 58.4 14.5 fav
Gains (losses) on sale of property and other assets (0.1) — unfav 1.4 (1.4) fav
Impairment losses (4.9) (5.0) (2) (7.9) (7.5) 5
Indemnification asset adjustments (7.8) — unfav (7.8) — unfav
Share in earnings of equity affiliates 0.5 0.3 67 1.3 0.7 86
Royalty income 2.1 1.5 40 7.2 4.0 80
Other gains 1.8 1.6 13 2.4 4.3 (44)
Other operating income (expense) $ (15.7) (1.8) unfav $ (18.4) (5.2) unfav
Other operating income (expense) was a $15.7 million expense in the third quarter of 2022 versus a $1.8 million expense in the prior year period. The change from the prior year period was primarily due to acquisition-related indemnification asset adjustments and higher net losses from foreign currency items in the current period.
Other operating income (expense) was a $18.4 million expense in the first nine months of 2022 versus a $5.2 million expense in the prior year period. The change from the prior year period was primarily due to acquisition-related indemnification asset adjustments and higher net losses from foreign currency items in the current period.
Nonoperating Income and Expense
Interest expense
Three Months
Ended September 30, % Nine Months
Ended September 30, %
(In millions)
2022 2021 change 2022 2021 change
Interest expense $ 34.7 27.6 26 $ 95.0 83.0 14
Interest expense was higher in the third quarter and first nine months of 2022 primarily due to higher borrowing levels to fund general corporate initiatives including the $200 million in share repurchases completed over the prior twelve months and other working capital needs.
Interest and other nonoperating income (expense)
Three Months
Ended September 30, % Nine Months
Ended September 30, %
(In millions) 2022 2021 change 2022 2021 change
Interest income $ 8.1 3.3 fav $ 17.0 8.0 fav
Gain (loss) on equity securities 0.3 2.1 (86) (0.2) 16.3 unfav
Foreign currency transaction gains (losses) 1.6 0.6 fav 3.9 0.5 fav
Retirement benefit cost other than service cost (3.1) (9.3) (67) (11.1) (27.6) (60)
Acquisition-related gains — 0.4 (100) — 0.4 (100)
Penalties and interest on non-income taxes (a)
— — — — (1.7) (100)
Non-income taxes on intercompany billings (b)
(0.6) (2.0) (70) (1.8) (3.3) (45)
Interest on non-income tax credits (c)
— 1.2 (100) — 1.2 (100)
Earn-out liability adjustment (d)
— — — — 1.3 (100)
Other — 3.0 (100) 0.6 3.3 (82)
Interest and other nonoperating income (expense) $ 6.3 (0.7) fav $ 8.4 (1.6) fav
(a) Represents penalties and interest on non-income taxes that have not yet been paid.
(b) Certain of our Latin American subsidiaries incur non-income taxes related to the billing of intercompany charges. These intercompany charges do not impact the Latin America segment results and are eliminated in our consolidation.
(c) Represents interest on non-income tax credits related to our business operations in Brazil. In the third quarter of 2021, our Brazil operations received a favorable court decision related to non-income taxes paid in prior years and will be able to recover the overpayments, plus interest, by reducing payments on future tax obligations.
(d) Adjustment to the liability for contingent consideration pertaining to a 2019 business acquisition.
48
Income Taxes
Three Months
Ended September 30, Nine Months
Ended September 30,
2022 2021 2022 2021
Continuing operations
Provision (benefit) for income taxes (in millions) $ 8.5 22.9 $ (3.3) 59.2
Effective tax rate 27.3 % 49.9 % (2.5 %) 47.5 %
Valuation Allowance-Tax Credits
In the first quarter of 2022, we concluded that it is more likely than not that a substantial amount of the U.S. deferred tax assets for U.S. foreign tax credit and general business credit carryforwards that previously required a valuation allowance would be realized. Our conclusion was based upon an analysis of the final foreign tax credit regulations that the U.S. Treasury published in the Federal Register on January 4, 2022. Based upon this analysis, we determined a significant amount of the post-2021 foreign withholding taxes will now be ineligible for U.S. foreign income tax credit treatment and therefore we are forecasting that Brink’s U.S. operations will no longer annually be generating new foreign tax credits in excess of its annual foreign tax credit utilization limit. As a result, we expect to be able to utilize a substantial amount of our foreign tax credit and general business tax credit carryforwards to offset future tax prior to their expiration. Accordingly, we reversed a substantial amount of our valuation allowance on our net U.S. deferred tax assets, resulting in a $52.8 million benefit in our provision for income taxes for the nine months ended September 30, 2022. Due to the novel approach that the final regulations impose, it is possible that further developments in foreign country or U.S. tax laws could occur and may require us to change our assessment of the ultimate amounts we consider more-likely-than-not to be realized.
Effective Tax Rate
Our effective tax rate may fluctuate materially from these estimates due to changes in pre-tax earnings, permanent book-tax differences, changes in the expected amount and geographical mix of earnings, changes in current or deferred taxes due to legislative changes, changes in valuation allowances or accruals for contingencies, changes in distributions of share-based payments, changes in U.S. taxable income, and other factors.
Noncontrolling Interests
Three Months
Ended September 30, % Nine Months
Ended September 30, %
(In millions) 2022 2021 change 2022 2021 change
Net income attributable to noncontrolling interests $ 3.4 4.0 (15) $ 9.3 9.7 (4)
The decrease in net income attributable to noncontrolling interests in the three months ended September 30, 2022, is primarily attributable to lower third quarter 2022 operating results reported by certain subsidiaries that are not wholly-owned. The net income attributable to noncontrolling interests in the nine months ended September 30, 2022 is consistent with the net income attributable to noncontrolling interests in the nine months ended September 30, 2021.
49
Non-GAAP Results Reconciled to GAAP
Non-GAAP results described in this filing are financial measures that are not required by or presented in accordance with GAAP. The purpose of the non-GAAP results is to report financial information from the primary operations of our business by excluding the effects of certain income and expenses that do not reflect the ordinary earnings of our operations. The specific items excluded have not been allocated to segments, are described in detail on pages 44–46, and are reconciled to comparable GAAP measures below.
Non-GAAP results adjust the quarterly non-GAAP tax rates so that the non-GAAP tax rate in each of the quarters is equal to the full-year estimated non-GAAP tax rate. The full-year non-GAAP tax rate in both years excludes certain pretax and income tax amounts. Amounts reported for prior periods have been updated in this report to present information consistently for all periods presented.
The Non-GAAP financial measures are intended to provide investors with a supplemental comparison of our operating results and trends for the periods presented. Our management believes these measures are also useful to investors as they allow investors to evaluate our performance using the same metrics that our management uses to evaluate past performance and prospects for future performance. We do not consider these items to be reflective of our operating performance as they result from events and circumstances that are not a part of our core business. Additionally, non-GAAP results are utilized as performance measures in certain management incentive compensation plans.
Non-GAAP results should not be considered as an alternative to revenue, income or earnings per share amounts determined in accordance with GAAP and should be read in conjunction with their GAAP counterparts. Non-GAAP financial measures may not be comparable to non-GAAP financial measures presented by other companies.
YTD '22 YTD '21
(In millions, except for percentages) Pre-tax income Income taxes Effective tax rate Pre-tax income Income taxes Effective tax rate
Effective Income Tax Rate (a)
GAAP $ 131.8 (3.3) (2.5) % $ 124.6 59.2 47.5 %
Retirement plans (d)
6.5 2.1 20.3 4.9
Reorganization and restructuring (b)
34.0 6.1 35.7 9.2
Acquisitions and dispositions (b)
63.1 14.5 52.6 3.4
Argentina highly inflationary impact (b)
29.0 (0.5) 8.8 (0.9)
Change in allowance estimate (b)
16.0 3.8 — —
Valuation allowance on tax credits (e)
— 52.8 — —
Chile antitrust matter (b)
1.1 0.3 9.5 —
Internal loss (b)
— — (2.4) (0.8)
Income tax rate adjustment (c)
— 14.5 — 8.6
Non-GAAP $ 281.5 90.3 32.1 % $ 249.1 83.6 33.6 %
Amounts may not add due to rounding.
(a) From continuing operations.
(b) See “Other Items Not Allocated To Segments” on pages 44–46 for details. We do not consider these items to be reflective of our operating performance as they result from events and circumstances that are not a part of our core business.
(c) Non-GAAP income from continuing operations and non-GAAP EPS have been adjusted to reflect an effective income tax rate in each interim period equal to the full-year non-GAAP effective income tax rate. The full-year non-GAAP effective tax rate is estimated at 32.1% for 2022 and was 33.6% for 2021.
(d) Our U.S. retirement plans are frozen and costs related to these plans are excluded from non-GAAP results. Certain non-U.S. operations also have retirement plans. Settlement charges and curtailment gains related to these non-U.S. plans and costs related to our frozen non-U.S. retirement plans are also excluded from non-GAAP results.
(e) In the first quarter of 2022, we released a portion of our valuation allowance on certain U.S. deferred tax assets primarily related to foreign tax credit carryforward attributes. The valuation allowance release was due to new foreign tax credit regulations published by the U.S. Treasury in January 2022.
50
Non-GAAP Results Reconciled to GAAP
Three Months
Ended September 30, Nine Months
Ended September 30,
(In millions, except for percentages and per share amounts) 2022 2021 2022 2021
Revenues:
GAAP $ 1,136.7 1,075.5 $ 3,344.6 3,102.0
Non-GAAP $ 1,136.7 1,075.5 $ 3,344.6 3,102.0
Operating profit:
GAAP $ 59.5 74.2 $ 218.4 209.2
Reorganization and restructuring (b)
19.6 14.0 34.0 35.7
Acquisitions and dispositions (b)
35.7 16.6 66.3 55.8
Argentina highly inflationary impact (b)
12.0 2.3 27.1 8.8
Change in allowance estimate (b)
(0.3) — 16.0 —
Chile antitrust matter (b)
0.3 9.5 1.1 9.5
Internal loss (b)
— (0.7) — (2.4)
Non-GAAP $ 126.8 115.9 $ 362.9 316.6
Operating margin:
GAAP margin 5.2 % 6.9 % 6.5 % 6.7 %
Non-GAAP margin 11.2 % 10.8 % 10.9 % 10.2 %
Interest expense:
GAAP $ (34.7) (27.6) $ (95.0) (83.0)
Acquisitions and dispositions (b)
0.3 0.3 1.0 1.1
Non-GAAP $ (34.4) (27.3) $ (94.0) (81.9)
Interest and other nonoperating income (expense):
GAAP $ 6.3 (0.7) $ 8.4 (1.6)
Retirement plans (d)
1.6 7.2 6.5 20.3
Acquisitions and dispositions (b)
(1.8) (3.3) (4.2) (4.3)
Argentina highly inflationary impact (b)
0.4 — 1.9 —
Non-GAAP $ 6.5 3.2 $ 12.6 14.4
Provision (benefit) for income taxes:
GAAP $ 8.5 22.9 $ (3.3) 59.2
Retirement plans (d)
0.7 1.2 2.1 4.9
Reorganization and restructuring (b)
3.8 3.9 6.1 9.2
Acquisitions and dispositions (b)
12.7 1.2 14.5 3.4
Argentina highly inflationary impact (b)
— (0.3) (0.5) (0.9)
Change in allowance estimate (b)
(0.1) — 3.8 —
Valuation allowance on tax credits (e)
(2.2) — 52.8 —
Chile antitrust matter (b)
0.1 — 0.3 —
Internal loss (b)
— (0.1) — (0.8)
Income tax rate adjustment (c)
8.2 2.0 14.5 8.6
Non-GAAP $ 31.7 30.8 $ 90.3 83.6
Net income (loss) attributable to noncontrolling interests:
GAAP $ 3.4 4.0 $ 9.3 9.7
Retirement plans (d)
— — 0.1 —
Reorganization and restructuring (b)
— — — 0.5
Acquisitions and dispositions (b)
0.3 0.2 0.8 0.6
Income tax rate adjustment (c)
(0.3) (0.3) (0.8) (0.6)
Non-GAAP $ 3.4 3.9 $ 9.4 10.2
Amounts may not add due to rounding.
See page 50 for footnote explanations.
51
Three Months
Ended September 30, Nine Months
Ended September 30,
(In millions, except for percentages and per share amounts) 2022 2021 2022 2021
Income (loss) from continuing operations attributable to Brink's:
GAAP $ 19.2 19.0 $ 125.8 55.7
Retirement plans (d)
0.9 6.0 4.3 15.4
Reorganization and restructuring (b)
15.8 10.1 27.9 26.0
Acquisitions and dispositions (b)
21.2 12.2 47.8 48.6
Argentina highly inflationary impact (b)
12.4 2.6 29.5 9.7
Change in allowance estimate (b)
(0.2) — 12.2 —
Valuation allowance on tax credits (e)
2.2 — (52.8) —
Chile antitrust matter (b)
0.2 9.5 0.8 9.5
Internal loss (b)
— (0.6) — (1.6)
Income tax rate adjustment (c)
(7.9) (1.7) (13.7) (8.0)
Non-GAAP $ 63.8 57.1 $ 181.8 155.3
Diluted EPS:
GAAP $ 0.41 0.38 $ 2.63 1.11
Retirement plans (d)
0.02 0.12 0.09 0.31
Reorganization and restructuring (b)
0.33 0.20 0.58 0.52
Acquisitions and dispositions (b)
0.45 0.24 1.00 0.96
Argentina highly inflationary impact (b)
0.26 0.05 0.62 0.19
Change in allowance estimate (b)
— — 0.26 —
Valuation allowance on tax credits (e)
0.05 — (1.10) —
Chile antitrust matter (b)
— 0.19 0.02 0.19
Internal loss (b)
— (0.01) — (0.03)
Income tax rate adjustment (c)
(0.17) (0.03) (0.29) (0.16)
Non-GAAP $ 1.34 1.14 $ 3.80 3.08
Amounts may not add due to rounding.
See page 50 for footnote explanations.
52
LIQUIDITY AND CAPITAL RESOURCES
Overview
Cash flows from operating activities decreased by $73.1 million in the first nine months of 2022 as compared to the first nine months of 2021. Cash used for investing activities decreased by $278.2 million in the first nine months of 2022 compared to the first nine months of 2021. We financed our liquidity needs in the first nine months of 2022 with existing cash and cash flows from long-term debt.
Operating Activities
Nine Months
Ended September 30, $
(In millions) 2022 2021 change
Cash flows from operating activities
Operating activities - GAAP $ 200.5 273.6 (73.1)
(Increase) decrease in restricted cash held for customers 4.4 (12.7) 17.1
(Increase) decrease in certain customer obligations (a)
(4.0) (10.0) 6.0
G4S intercompany payments — 2.6 (2.6)
Operating activities - non-GAAP $ 200.9 253.5 (52.6)
(a) To adjust for the change in the balance of customer obligations related to cash received and processed in certain of our secure cash management services operations. The title to this cash transfers to us for a short period of time. The cash is generally credited to customers’ accounts the following day and we do not consider it as available for general corporate purposes in the management of our liquidity and capital resources.
Non-GAAP cash flows from operating activities is a supplemental financial measure that is not required by, or presented in accordance with, GAAP. The purpose of this non-GAAP measure is to report financial information excluding cash flows from restricted cash held for customers, the impact of cash received and processed in certain of our secure cash management services operations and the impact of payments made to G4S for net intercompany receivables from the acquired subsidiaries. We believe this measure is helpful in assessing cash flows from operations, enables period-to-period comparability and is useful in predicting future operating cash flows. This non-GAAP measure should not be considered as an alternative to cash flows from operating activities determined in accordance with GAAP and should be read in conjunction with our condensed consolidated statements of cash flows.
GAAP
Cash flows from operating activities decreased by $73.1 million in the first nine months of 2022 compared to the same period in 2021. The decrease was attributed to working capital changes, higher amounts paid for income taxes (we had $101.6 million in cash payments for taxes in 2022 as compared to $55.9 million in 2021), changes in customer obligations related to certain of our secure cash management services operations (certain customer obligations increased by $4.0 million in 2022 compared to an increase of $10.0 million in 2021), and restricted cash held for customers (restricted cash held for customers decreased by $4.4 million in 2022 compared to a increase of $12.7 million in 2021), offset by higher operating profit.
Non-GAAP
Non-GAAP cash flows from operating activities decreased by $52.6 million in the first nine months of 2022 as compared to the same period in 2021. The decrease was attributed to working capital changes and higher amounts paid for income taxes, offset by higher operating profit.
53
Investing Activities
Nine Months
Ended September 30, $
(In millions) 2022 2021 change
Cash flows from investing activities
Capital expenditures $ (131.5) (113.7) (17.8)
Acquisitions, net of cash acquired (14.2) (313.6) 299.4
Marketable securities:
Purchases (18.3) (2.7) (15.6)
Sales 7.7 34.8 (27.1)
Proceeds from sale of property and equipment 3.3 5.7 (2.4)
Proceeds from settlement of cross currency swap 64.3 — 64.3
Acquisition of customer contracts — (0.8) 0.8
Net change in loans held for investment (23.3) — (23.3)
Other (0.1) — (0.1)
Investing activities $ (112.1) (390.3) 278.2
Cash used by investing activities decreased by $278.2 million in the first nine months of 2022 versus the first nine months of 2021. The decrease was primarily due to decreased payments related to the G4S and PAI acquisitions in 2021 and proceeds from the settlement of the euro cross currency swaps, as discussed in Note 8, offset by increases in cash used for the net purchase and sales of marketable securities and net change in loans held for investment, as discussed in Note 13.
54
Capital expenditures and depreciation and amortization were as follows:
Nine Months
Ended September 30, $ Full Year
(In millions) 2022 2021 change 2021
Property and equipment acquired during the period
Capital expenditures: (a)
North America $ 29.6 27.5 2.1 40.4
Latin America 39.0 27.3 11.7 45.0
Europe 32.8 36.7 (3.9) 50.6
Rest of World 25.5 18.1 7.4 26.0
Corporate 4.6 4.1 0.5 5.9
Capital expenditures - GAAP and non-GAAP $ 131.5 113.7 17.8 167.9
Financing leases: (b)
North America $ 30.1 34.9 (4.8) 50.6
Latin America 8.8 5.7 3.1 14.2
Europe 4.7 17.0 (12.3) 20.6
Rest of World 0.1 0.1 — 0.5
Financing leases - GAAP and non-GAAP $ 43.7 57.7 (14.0) 85.9
Total:
North America $ 59.7 62.4 (2.7) 91.0
Latin America 47.8 33.0 14.8 59.2
Europe 37.5 53.7 (16.2) 71.2
Rest of World 25.6 18.2 7.4 26.5
Corporate 4.6 4.1 0.5 5.9
Total property and equipment acquired $ 175.2 171.4 3.8 253.8
Depreciation and amortization (a)
North America $ 51.6 51.0 0.6 68.7
Latin America 36.8 34.2 2.6 46.2
Europe 27.8 30.7 (2.9) 41.4
Rest of World 17.7 17.5 0.2 23.2
Corporate 6.4 7.2 (0.8) 9.7
Depreciation and amortization - non-GAAP $ 140.3 140.6 (0.3) 189.2
Argentina highly inflationary impact 2.1 1.6 0.5 2.2
Reorganization and Restructuring 0.1 0.5 (0.4) 0.3
Acquisitions and dispositions — 0.1 (0.1) 0.1
Amortization of intangible assets 37.4 35.3 2.1 47.7
Depreciation and amortization - GAAP $ 179.9 178.1 1.8 239.5
(a) Incremental depreciation related to highly inflationary accounting in Argentina, accelerated depreciation related to restructuring activities and acquisition-related integration activities, and amortization of acquisition-related intangible assets have been excluded from non-GAAP amounts.
(b) Represents the amount of property and equipment acquired using financing leases. Because the assets are acquired without using cash, the acquisitions are not reflected in the condensed consolidated statements of cash flows. Amounts are provided here to assist in the comparison of assets acquired in the current year versus prior years.
Non-GAAP capital expenditures and non-GAAP depreciation and amortization are supplemental financial measures that are not required by, or presented in accordance with GAAP. The purpose of these non-GAAP measures is to report financial information excluding incremental depreciation resulting from highly inflationary accounting in Argentina, accelerated depreciation from restructuring activities and acquisition-related integration activities, and amortization of acquisition-related intangible assets. We believe these measures are helpful in assessing capital expenditures and depreciation and amortization, enable period-to-period comparability and are useful in predicting future investing cash flows. These non-GAAP measures should not be considered as alternatives to capital expenditures and depreciation and amortization determined in accordance with GAAP and should be read in conjunction with our condensed consolidated statements of cash flows.
Our reinvestment ratio, which we define as the annual amount of property and equipment acquired during the period divided by the annual amount of depreciation, was 1.4 for the 12 months ending September 30, 2022 compared to 1.2 for the 12 months ending September 30, 2021.
Capital expenditures in the first nine months of 2022 were primarily for cash devices, information technology, armored vehicles and machinery and equipment.
55
Financing Activities
Nine Months
Ended September 30, $
(In millions) 2022 2021 change
Cash flows from financing activities
Borrowings and repayments:
Short-term borrowings $ 11.5 (5.9) 17.4
Long-term revolving credit facilities, net 217.0 405.8 (188.8)
Other long-term debt, net 149.5 (84.4) 233.9
Borrowings (repayments) 378.0 315.5 62.5
Acquisition of noncontrolling interest (7.8) — (7.8)
Debt financing costs (5.5) (0.4) (5.1)
Repurchase shares of Brink's common stock (27.3) (50.0) 22.7
Dividends to:
Shareholders of Brink’s (28.3) (27.3) (1.0)
Noncontrolling interests in subsidiaries (6.9) (5.0) (1.9)
Acquisition-related financing activities:
Settlement of acquisition related contingencies — 6.3 (6.3)
Payment of acquisition-related obligation (2.8) (3.9) 1.1
Proceeds from exercise of stock options — 2.3 (2.3)
Tax withholdings associated with share-based compensation (10.2) (5.5) (4.7)
Other 2.7 2.6 0.1
Financing activities $ 291.9 234.6 57.3
Debt borrowings and repayments
Cash flows from financing activities increased by $57.3 million in the first nine months of 2022 compared to the first nine months of 2021 as net borrowings increased compared to the prior nine month period.
Dividends
We paid dividends to Brink’s shareholders of $0.60 per share or $28.3 million in the first nine months of 2022 compared to $0.55 per share or $27.3 million in the first nine months of 2021. Future dividends are dependent on our earnings, financial condition, shareholders’ equity levels, our cash flow and business requirements, as determined by the Board of Directors.
56
Reconciliation of Net Debt to U.S. GAAP Measures
September 30, December 31,
(In millions) 2022 2021
Debt:
Short-term borrowings $ 20.7 9.8
Long-term debt 3,351.0 2,956.9
Total Debt 3,371.7 2,966.7
Less:
Cash and cash equivalents 1,019.0 710.3
Amounts held by Cash Management Services operations (a)
(38.1) (34.7)
Cash and cash equivalents available for general corporate purposes 980.9 675.6
Net Debt (b)
$ 2,390.8 2,291.1
(a) Title to cash received and processed in certain of our secure Cash Management Services operations transfers to us for a short period of time. The cash is generally credited to customers’ accounts the following day and we do not consider it as available for general corporate purposes in the management of our liquidity and capital resources and in our computation of Net Debt.
(b) Included within Net Debt is net cash from our Argentina operations of $67 million at September 30, 2022 and $54 million at December 31, 2021 (see Note 1 to the condensed consolidated financial statements for a discussion of currency controls in Argentina).
Net Debt is a supplemental non-GAAP financial measure that is not required by or presented in accordance with GAAP. We use Net Debt as a measure of our financial leverage. We believe that investors also may find Net Debt to be helpful in evaluating our financial leverage. Net Debt should not be considered as an alternative to Debt determined in accordance with GAAP and should be reviewed in conjunction with our condensed consolidated balance sheets. Set forth above is a reconciliation of Net Debt, a non-GAAP financial measure, to Debt, which is the most directly comparable financial measure calculated and reported in accordance with GAAP, as of September 30, 2022, and December 31, 2021.
Net Debt increased by $100 million primarily to fund general corporate initiatives including the $200 million in share repurchases completed over the prior twelve months and other working capital needs.
Liquidity Needs
Our liquidity needs include not only the working capital requirements of our operations but also investments in our operations, business development activities, payments on outstanding debt, dividend payments and share repurchases.
Our liquidity needs are typically financed by cash from operations, short-term debt and the available borrowing capacity under our Revolving Credit Facility (our debt facilities are described in more detail in Note 9 to the condensed consolidated financial statements, including certain limitations and considerations related to the cash and borrowing capacity). As of September 30, 2022, $320 million was available under the Revolving Credit Facility. Based on our current cash on hand, cash generated from operations, and amounts available under our credit facilities, we believe that we will be able to meet our liquidity needs for the next 12 months.
Limitations on dividends from foreign subsidiaries . A significant portion of our operations are outside the U.S. which may make it difficult or costly to repatriate cash for use in the U.S. See “Risk Factors” in Item 1A of our annual report on Form 10-K for the year ended December 31, 2021, for more information on the risks associated with having businesses outside the U.S.
Our conclusion that we will be able to fund our cash requirements for the next 12 months by using existing capital resources, cash on hand, and cash generated from operations does not take into account any potential material worsening of economic conditions as a result of the ongoing COVID-19 pandemic, and material increases in inflation, that would adversely affect our business. The anticipated cash needs of our business could change significantly if we pursue and complete additional business acquisitions, if our business plans change, if events, including economic disruptions, arising from the ongoing COVID-19 pandemic worsen, or if other economic conditions change, such as material increases in inflation, from those currently prevailing or from those now anticipated, such as higher inflation or if other unexpected circumstances arise that may have a material effect on the cash flow or profitability of our business, including material negative changes in the health and welfare of our employees or changes in the condition of our customers or suppliers, and the operating performance or financial results of our business. Any of these events or circumstances, including any new business opportunities, could involve significant additional funding needs in excess of the identified currently available sources and could require us to raise additional debt or equity funding to meet those needs. Our ability to raise additional capital, if necessary, is subject to a variety of factors that we cannot predict with certainty, including:
• our future profitability;
• the quality of our accounts receivable;
• our relative levels of debt and equity;
• the volatility and overall condition of the capital markets; and
• the market prices of our securities.
57
Equity
On October 27, 2021, we announced that the Board authorized a $250 million share repurchase program that expires on December 31, 2023 (the "2021 Repurchase Program"). This authorization replaces our previous $250 million repurchase program, authorized by the Board in February 2020 (the "2020 Repurchase Program"), which expired on December 31, 2021, with no amount remaining available.
Under the 2021 Repurchase Program, we are not obligated to repurchase any specific dollar amount or number of shares. The timing and volume of share repurchases may be executed at the discretion of management on an opportunistic basis, or pursuant to trading plans or other arrangements. Share repurchases under this program may be made in the open market, in privately negotiated transactions, or otherwise.
During the third quarter ended September 30, 2022, we used $27.3 million to repurchase, in the open market, 501,560 shares at an average repurchase price of $54.36 per share. These shares were retired upon repurchase. At September 30, 2022, $223 million remained available under the 2021 Repurchase Program.
Under the 2020 Repurchase Program, we entered into an accelerated share repurchase arrangement ("ASR") in the fourth quarter of 2021 and repurchased 1,742,160 shares in November 2021 in exchange for a $150 million upfront payment to a financial institution. Under this ASR, the purchase period had a scheduled termination date of June 1, 2022. In April 2022, the financial institution elected to early terminate this ASR and we repurchased an additional 546,993 shares. In total, 2,289,153 shares were repurchased under this ASR at an average repurchase price of $65.53.
U.S. Retirement Liabilities
Assumptions for U.S. Retirement Obligations
The amounts in the tables below are based on a variety of estimates, including actuarial assumptions as of the most recent measurement date. The assumptions used to estimate our U.S. retirement obligations can be found in our Annual Report on Form 10-K for the year ended December 31, 2021. The estimated amounts will change in the future to reflect payments made, investment returns, actuarial revaluations, and other changes in estimates. Actual amounts could differ materially from the estimated amounts and will be updated at December 31, 2022.
Our most significant actuarial assumptions include:
• Changing discount rates and other assumptions in effect at measurement dates (normally December 31)
• Investment returns of plan assets
• Addition of new participants (historically immaterial due to freezing of pension benefits and exit from coal business)
• Mortality rates
• Change in laws
Funded Status of U.S. Retirement Plans
Actual Actual Projected
(In millions) 2021 Nine Months 2022 4th Quarter 2022 2023 2024 2025 2026
Primary U.S. pension plan
Beginning funded status $ (151.1) (65.8) (46.3) (42.6) (18.2) 8.8 38.6
Net periodic pension credit (a)
26.5 19.5 6.5 27.1 29.5 31.1 32.3
Benefit plan experience gain (loss) 58.8 — (2.8) (2.7) (2.5) (1.3) (1.6)
Ending funded status $ (65.8) (46.3) (42.6) (18.2) 8.8 38.6 69.3
UMWA plans
Beginning funded status $ (272.1) (219.4) (216.3) (216.5) (214.7) (213.6) (213.3)
Net periodic postretirement cost (a)
2.5 2.1 0.8 1.8 1.1 0.3 (0.4)
Benefit plan experience gain 50.2 — — — — — —
Other — 1.0 (1.0) — — — —
Ending funded status $ (219.4) (216.3) (216.5) (214.7) (213.6) (213.3) (213.7)
Black lung plans
Beginning funded status $ (105.0) (101.3) (96.9) (94.1) (87.3) (80.9) (75.0)
Net periodic postretirement cost (a)
(2.3) (2.0) (0.7) (2.4) (2.2) (2.1) (1.9)
Payment from Brink’s 7.9 6.4 3.5 9.2 8.6 8.0 7.4
Benefit plan experience loss (1.9) — — — — — —
Ending funded status $ (101.3) (96.9) (94.1) (87.3) (80.9) (75.0) (69.5)
(a) Excludes amounts reclassified from accumulated other comprehensive income (loss).
58
Primary U.S. Pension Plan
Pension benefits provided to eligible U.S. employees were frozen on December 31, 2005, and are not provided to employees hired after 2005 or to those covered by a collective bargaining agreement. We did not make cash contributions to the primary U.S. pension plan in 2021 or the first nine months of 2022. There are approximately 10,800 beneficiaries in the plan.
Based on our current assumptions, we do not expect to make contributions in the foreseeable future.
UMWA Plans
Retirement benefits related to former coal operations include medical benefits provided by the Pittston Coal Group Companies Employee Benefit Plan for UMWA Represented Employees. There were approximately 2,700 beneficiaries in the UMWA plans as of December 31, 2021. The Company does not need to make additional contributions to these plans until 2032 based on actuarial assumptions.
Black Lung
Under the Federal Black Lung Benefits Act of 1972, Brink’s is responsible for paying lifetime black lung benefits to miners and their dependents for claims filed and approved after June 30, 1973. There were approximately 800 black lung beneficiaries as of December 31, 2021.
Summary of Expenses Related to All U.S. Retirement Liabilities through 2026
This table summarizes actual and projected expense related to U.S. retirement liabilities.
Actual Actual Projected
(In millions) 2021 Nine Months 4th Quarter 2022 FY2022 2023 2024 2025 2026
Primary U.S. pension plan $ 7.4 (1.5) (0.4) (1.9) (6.5) (13.8) (18.1) (21.1)
UMWA plans 10.3 2.1 0.4 2.5 5.1 5.2 5.4 10.4
Black lung plans 10.9 7.4 2.4 9.8 9.4 8.8 8.1 7.5
Total $ 28.6 8.0 2.4 10.4 8.0 0.2 (4.6) (3.2)
Summary of Payments from Brink’s to U.S. Plans and Payments from U.S. Plans to Participants through 2026
This table summarizes actual and projected payments from Brink’s to U.S. retirement plans and from the plans to participants.
Actual Actual Projected
(In millions) 2021 Nine Months 2022 4th Quarter 2022 FY2022 2023 2024 2025 2026
Payments from Brink’s to U.S. Plans
Black lung plans $ 7.9 6.4 3.5 9.9 9.2 8.6 8.0 7.4
Total $ 7.9 6.4 3.5 9.9 9.2 8.6 8.0 7.4
Payments from U.S. Plans to participants
Primary U.S. pension plan $ 46.3 33.3 14.1 47.4 47.4 47.3 47.2 47.2
UMWA plans 22.9 18.0 8.6 26.6 26.5 26.2 26.0 25.6
Black lung plans 7.9 6.4 3.5 9.9 9.2 8.6 8.0 7.4
Total $ 77.1 57.7 26.2 83.9 83.1 82.1 81.2 80.2
Contingent Matters
See Note 14 to the condensed consolidated financial statements for information about contingent matters at September 30, 2022.
59
Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.