What changed in this filing

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Item 1A. Risk Factors

2023-03-01 compared with 2022-02-28 · 62 added, 50 removed, 244 unchanged (31% of the section changed)

1 unchanged sentence

Our strategy may not be successful.

Our strategy has three pillars:

accelerate profitable growth, deliver operational excellence and introduce digital solutions.

We may not be successful in growing revenue in high-margin lines of business, increasing our market share with existing customers or winning new business with smaller financial institutions and the retail market.

We also may not be successful in strengthening and leveraging our IT capabilities to introduce digital solutions.

Our strategy is to grow Brink's by providing a superior customer experience and driving continuous improvement.

We may not be successful in growing revenue in our traditional and emerging services lines or in improving the cost to serve our customers through process improvements.

We also may not be successful in strengthening and leveraging our IT capabilities to deliver tech-enabled services.

If we are unable to achieve our strategic objectives and anticipated operating profit improvements, our results of operations and cash flows may be adversely affected.

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Decreased use of cash could have a negative impact on our business.

While cash remains one of the most popular form of consumer payment in the U.S.

While cash remains one of the most popular forms of consumer payment in the U.S.

and globally, the growth of payment options other than cash could reduce the need for services related to cash, thereby affecting our financial results.

We are developing new services that offer current and prospective customers with opportunities to streamline their cash processing costs, making cash more competitive with other forms of payment .

T here is a risk that these initiatives may not offset the risks associated with our traditional cash-based business and that our business, financial condition, results of operations and cash flows could be negatively impacted.

We are developing new services that offer current and prospective customers with opportunities to streamline their cash processing, making cash more competitive with other forms of payment .

T here is a risk that these initiatives may not offset the risks associated with a decline in the overall share of cash payments and that our business, financial condition, results of operations and cash flows could be negatively impacted.

We may not be successful in pursuing strategic investments or acquisitions or realize the expected benefits of those transactions because of integration difficulties and other challenges.

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Our ability to realize the anticipated benefits from acquisitions will depend, in part, on successfully integrating each business with our company as well as improving operating performance and profitability through our management efforts and capital investments.

The risks to a successful integration and improvement of operating performance and profitability include, among others, failure to implement our business plan, unanticipated issues in integrating operations with ours, unanticipated changes in laws and regulations, labor unrest resulting from union operations, regulatory, environmental and permitting issues, unfavorable customer reactions, the effect on our internal controls and compliance with the regulatory requirements under the Sarbanes-Oxley Act of 2002, and difficulties in fully identifying and evaluating potential liabilities, risks and operating issues.

unrest resulting from union operations, regulatory, environmental and permitting issues, unfavorable customer reactions, the effect on our internal controls and compliance with the regulatory requirements under the Sarbanes-Oxley Act of 2002, and difficulties in fully identifying and evaluating potential liabilities, risks and operating issues.

In order to finance such acquisitions, we may need to obtain additional funds either through public or private financings, including bank and other secured and unsecured borrowings and the issuance of debt or equity securities.

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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.

While the immediate impacts of the COVID-19 pandemic have been assessed, the long-term magnitude and

duration of the disruption remains uncertain.

While the immediate impacts of the COVID-19 pandemic have been assessed, the long-term magnitude and duration of the disruption remains uncertain.

We expect these factors will continue to impact our financial condition and our results of operations for a duration that is currently unknown.

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(iv) business and government actions in response to the pandemic, including moratoriums by governments and regulators on rule making and regulatory and legal proceedings, limitations on employee actions by regulators and unions, and stay at home, social distancing measures and travel bans;

(v) the impact on the development and implementation of strategic initiatives and the integration of acquired businesses, including those acquired from G4S;

(v) the impact on the development and implementation of strategic initiatives and the integration of acquired businesses;

(vi) the response of our customers or prospective customers to the pandemic, including suspensions or terminations of existing contracts;

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Any of these events, and others we have not yet identified, could cause or contribute to the risks and uncertainties facing the Company and our customers and could materially adversely affect our business or portions thereof, and our financial condition, results of operations and/or stock price.

The ongoing COVID-19 pandemic could adversely impact the health and welfare of our employees, including our executive officers, which could have a material adverse effect on our ability to serve our customers and our results of operations.

The impacts of the COVID-19 pandemic could adversely impact the health and welfare of our employees, including our executive officers, which could have a material adverse effect on our ability to serve our customers and our results of operations.

Our customer-facing employees are necessary to conduct many of our services.

If the health and welfare of customer-facing employees or employees providing critical corporate functions (including our executive officers) deteriorates, the number of employees so afflicted becomes significant, or an employee with skills and knowledge that cannot be replicated in our organization is impaired due to the COVID-19 pandemic, our ability to win business and provide services, as well as employee morale, customer relationships, business prospects, and results of operations of one or more of our segments, or the Company as a whole, could be materially adversely affected.

If the health and welfare of customer-facing employees or employees providing critical corporate functions (including our executive officers) deteriorates, the number of employees so afflicted becomes significant, or an employee with skills and knowledge that cannot be replicated in our organization is impaired due to the COVID-19 (including against emerging variant strains) or the outbreak of other viruses or diseases, our ability to win business and provide services, as well as employee morale, customer relationships, business prospects, and results of operations of one or more of our segments, or the Company as a whole, could be materially adversely affected.

We have certain environmental and other exposures related to our former coal operations.

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Growing concerns about climate change may result in the imposition of additional environmental regulations to which we are subject.

Some form of federal regulation may be forthcoming with respect to greenhouse gas emissions (including carbon dioxide) and/or "cap and trade" legislation.

The outcome of this legislation may result in new regulation, additional charges to fund energy efficiency activities or other regulatory actions.

Compliance with these actions could result in the creation of additional costs to us, including, among other things, increased fuel prices or additional taxes or emission allowances.

We may not be able to recover the cost of compliance with new or more stringent environmental laws and regulations from our customers, which could adversely affect our business.

federal government, certain U.S.

states and certain other countries and regions have adopted or are considering legislation or regulation imposing overall caps or taxes on greenhouse gas emissions (including carbon dioxide) from certain sectors or facility categories.

Such new laws or regulations, or stricter enforcement of existing laws and regulations, could increase the costs of operating our businesses, including, among other things, increased fuel prices or additional taxes or emission allowances, and reduce the demand for our products and services, any or all of which could adversely affect our operations.

Additionally, we may not be able to recover the cost of compliance with new or more stringent environmental laws and regulations from our customers, which could adversely affect our business.

Furthermore, the potential effects of climate change and related regulation on our customers are highly uncertain and may adversely affect our operations.

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We currently serve customers in more than 100 countries, including 53 countries where we operate subsidiaries.

Seventy percent (70%) of our revenues in 2021 came from operations outside the U.S.

Sixty-eight percent (68%) of our revenues in 2022 came from operations outside the U.S.

We expect revenues outside the U.S.

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• inflation levels exceeding that of the U.S;

• inability to collect for services provided to government entities.

• the inability to collect for services provided to government entities.

We are exposed to certain risks when we operate in countries that have high levels of inflation, including the risk that:

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Labor shortages and increased labor costs could have a material adverse effect on our operations.

Labor costs in the United States are rising, and our industry is experiencing a shortage of workers.

While we have historically experienced some level of ordinary course turnover of employees, the impact of the COVID-19 pandemic and resulting actions have exacerbated labor shortages and increased turnover.

As a result, labor costs in the United States are rising.

Labor is our largest operating cost.

If we face labor shortages and increased labor costs as a result of increased competition for employees, higher employee turnover rates, or other employee benefits costs, our operating expenses could increase and our growth and results of operations could be adversely impacted.

If we face labor shortages and increased labor costs as a result of increased competition for employees, higher employee turnover rates, inflationary pressures on employee wages and salaries or other employee benefits costs, our operating expenses could increase and our growth and results of operations could be adversely impacted.

We may be unable to increase prices in order to pass future increased labor costs onto our customers, in which case our margins would be negatively affected.

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pension plan was approximately 96% as of December 31, 2022.

Based on our actuarial assumptions at the end of 2021, no cash payments to the plan are needed in the foreseeable future.

Based on our actuarial assumptions at the end of 2022, we do not expect to make contributions until 2026.

A change in assumptions could result in funding obligations that could adversely affect our liquidity and our ability to use our resources to make acquisitions and to otherwise grow our business.

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These losses will be recognized in earnings in future periods to the extent they are not offset by future actuarial gains.

projections of future cash requirements and expenses for these plans could be adversely affected if our retirement plans have additional actuarial losses.

Our projections of future cash requirements and expenses for these plans could be adversely affected if our retirement plans have additional actuarial losses.

We have significant deferred tax assets in the United States that may not be realized.

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There can be no assurance that the outcomes from these examinations will not have a material adverse effect on our business.

It is possible that we will incur restructuring charges in the future.

It is possible that we will take restructuring actions, including in connection with acquisitions, in one or more of our markets in the future to reduce expenses.

It is possible that our restructuring plans may not achieve their intended results and that we will incur restructuring charges in the future.

It is possible that the global restructuring plan implemented in the third quarter of 2022, as well as other restructuring actions taken, may not achieve their intended results and may have other consequences, such as attrition beyond our planned reduction in workforce or our ability to attract highly skilled employees.

As a result, our restructuring plans may affect our revenue and other operating results in the future.

In addition, it is possible we will take additional restructuring actions, including in connection with acquisitions, in one or more of our markets in the future to reduce expenses.

These actions could result in significant restructuring charges at these subsidiaries, including recognizing impairment charges to write down assets and recording accruals for employee severance.

Our restructuring activities may subject us to litigation risks and expenses.

These charges, if required, could significantly and materially affect results of operations and cash flows.

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Risks associated with information technology can expose Brink’s to business disruptions, cybersecurity breaches and regulatory violations.

We rely on our information technology ("IT") infrastructure.

If there were to be significant problems with our infrastructure, such as IT datacenter or system failure, or failure to develop new technology platforms to support new initiatives and product and service offerings, it could halt or delay our ability to service our customers, hinder our ability to conduct and expand our business and require significant remediation costs.

We rely on our information technology ("IT") infrastructure, including the Brink's Global Information Security ("GIS") Program, which is designed to reduce risk by ensuring that computer systems are secure through protecting networks, systems, hardware, and data to mitigate digital attacks.

If there were to be significant problems with our infrastructure, such as IT data center or system failure, failure to develop new technology platforms to support new initiatives and product and service offerings, or a failure of our GIS Program, it could halt or delay our ability to service our customers, hinder our ability to conduct and expand our business and require significant remediation costs.

Our data security risks will increase as we expand services and employ emerging technologies, mobile applications, third-party service providers and cloud-based services.

Hacking, phishing attacks, ransomware, insider threats, physical breaches or other actions may cause confidential information belonging to Brink’s, its employees or customers to be misused.

If any of these risks were to materialize in a system, application or data center that houses sensitive and confidential data, including, but not limited to, personally identifiable information and business sensitive information, it could have a material adverse effect on our business, financial condition, results of operations and cash flows.

Additionally, if these risks were materialize, we may incur significant challenges and costs related to coordination with third-party service providers in order to resolve related issues.

We have experienced cybersecurity incidents in the past, but none of these incidents, individually or in the aggregate, have had a material adverse effect on our business or results of operations.

A significant cybersecurity incident that impacts system, application or data center that houses sensitive and confidential data, including, but not limited to, personally identifiable information and business sensitive information, could have a material adverse effect on our business, financial condition, results of operations and cash flows.

Additionally, such an incident may result in significant challenges and costs related to coordination with third-party service providers in order to resolve related issues.

If our third-party providers do not respond in a timely manner to our needs, disaster recovery, business continuity and crisis management activities could be negatively impacted.

We have programs in place that are intended to detect, contain and respond to cybersecurity breaches and that provide employee awareness training regarding cyber risks;

however, due to evolving and advanced sophisticated attack vectors, cyber attacks remain increasingly difficult to detect and we may not be able to successfully defend against them.

Any significant cybersecurity incident, involving Brink's or by third-party service providers, could damage our reputation, expose us to the risks of litigation and liability, disrupt our business or otherwise have a material adverse effect on our business, financial condition, results of operations and cash flows.

We have robust programs in place that are intended to identify, protect, detect, respond, and recover from cybersecurity breaches and that provides employee awareness training regarding cyber risks;

however, due to evolving and advanced sophisticated attackers, cyber attacks remain increasingly difficult to detect and we may need to allocate additional resources to continue to enhance our information security measures and/or to investigate and remediate any security vulnerabilities.

Any significant cybersecurity incident, involving Brink's or its third-party service providers, could damage our reputation, expose us to the risks of litigation and liability, disrupt our business or otherwise have a material adverse effect on our business, financial condition, results of operations and cash flows.

Although the Company maintains cybersecurity insurance, the Company's insurance may not be adequate to cover all losses that may be incurred in the event of a significant disruption or failure of its information technology systems.

As a global company we must adhere to applicable laws and regulations in numerous regions regarding data privacy, data protection, and data security.

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The European Union’s General Data Protection Regulation (“GDPR”) greatly increases the jurisdictional reach of European Union law and became effective in May 2018.

GDPR and other privacy and data protection laws impose requirements related to the handling of personal data, mandates public disclosure of certain data breaches, and provides for substantial penalties for non-compliance.

Since that date, more countries in which we operate have enacted laws similar to GDPR, including several countries in Asia.

GDPR and these other privacy and data protection laws impose requirements related to the handling of personal data, mandates public disclosure of certain data breaches, and provides for substantial penalties for non-compliance.

Our efforts to comply with GDPR and other privacy and data protection laws may impose significant costs that are likely to increase over time, and we could incur substantial penalties or be subject to litigation related to violation of existing or future data privacy laws, which could have a material adverse effect on our business, financial condition, results of operations and cash flows.

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Share repurchases could also increase the volatility of the price of our common stock and could diminish our cash reserves.

On October 27, 2021, the Board authorized a new share repurchase program.

On October 27, 2021, the Board of Directors authorized a new share repurchase program.

Under the new program, we are authorized to repurchase shares of common stock for an aggregate purchase price not to exceed $250 million, excluding fees, commissions and other ancillary expenses.

The new authorization replaced the prior $250 million program, which was fully utilized.

Although the Board has authorized the share repurchase program, the share repurchase program does not obligate the Company to repurchase any specific dollar amount or to acquire any specific number of shares.

The new authorization replaced the prior $250 million program, which was fully utilized, and will expire on December 31, 2023.

Although the Board of Directors has authorized the share repurchase program, the share repurchase program does not obligate the Company to repurchase any specific dollar amount or to acquire any specific number of shares.

The timing and amount of repurchases, if any, will depend upon several factors, including market and business conditions, the trading price of the Company’s common stock and the nature of other investment opportunities.

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General Risks

The Company could be negatively affected as a result of the actions of activist or hostile stockholders.

We have identified a material weakness in our internal control over financial reporting which could, if not remediated, adversely affect our ability to report our financial condition and results of operations in a timely and accurate manner, investor confidence in our company, and the value of our common stock.

Pursuant to the Sarbanes-Oxley Act of 2002, we are required to document and test our internal control procedures and to provide a report by management on internal control over financial reporting, including management’s assessment of the effectiveness of such control.

The Company had a material weakness in its internal control over financial reporting identified during 2022 and can give no assurances that material weaknesses will not arise in the future.

Although we will work to remediate the material weakness, there can be no assurance as to when the remediation plan will be fully developed or implemented.

Deficiencies, including any material weakness, in our internal control over financial reporting that have not been remediated or that may occur in the future could result in misstatements of our results of operations, restatements of our financial statements, a decline in our stock price, or otherwise materially adversely affect our business, reputation, results of operations, financial condition, or liquidity.

The Company could be negatively affected as a result of the actions of activist or hostile shareholders.

Shareholder activism , which could take many forms and arise in a variety of situations, has been increasing among publicly traded companies.

Shareholder activism , including potential proxy contests, requires significant time and attention by management and the Board, potentially hindering the Company’s ability to execute its strategic plan and negatively affecting the trading value of our common stock.

Additionally,

shareholder activism could give rise to perceived uncertainties as to the Company’s future direction, adversely affect its relationships with key executives, customers and other business partners, or make it more difficult to attract and retain qualified personnel.

Shareholder activism , including potential proxy contests, requires significant time and attention by management and the Board of Directors, potentially hindering the Company’s ability to execute its strategic plan and negatively affecting the trading value of our common stock.

Additionally, shareholder activism could give rise to perceived uncertainties as to the Company’s future direction, adversely affect its relationships with key executives, customers and other business partners, or make it more difficult to attract and retain qualified personnel.

Also, the Company has been, and may in the future be, required to incur significant legal fees and other expenses related to activist shareholder matters.

Any of these impacts could materially and adversely affect the Company and operating results.

Negative publicity to our name or brand could lead to a loss of revenues or profitability.

Negative public perception of our reputation or brand could lead to a loss of revenues or profitability.

We are in the payments and security business and our success and longevity are based to a large extent on our reputation for trust and integrity.

Our reputation or brand, particularly the trust placed in us by our customers, could be negatively impacted in the event of perceived or actual breaches in our ability to conduct our business ethically, securely and responsibly.

In addition, we have licensing arrangements that permit certain entities to use Brink’s name and/or other intellectual property in connection with their businesses.

In addition, we have licensing arrangements that

permit certain entities to use Brink’s name and/or other intellectual property in connection with their businesses.

If any of these entities experienced an actual or perceived breach in its ability to conduct its business ethically, securely or responsibly, it could have a negative effect on our name and/or brand.

Any damage to our brand could have a material adverse effect on our business, financial condition, results of operations and cash flows.

Any damage to our reputation or brand could have a material adverse effect on our business, financial condition, results of operations and cash flows.

Our business success depends on retaining our leadership team and attracting and retaining qualified personnel.

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the impact of the ongoing COVID-19 pandemic on our business, employees, customers, operating results and financial position;

the ability to remediate the material weakness in our internal control over financial reporting;

difficulty in repatriating cash;

continued strengthening of the U.S.

anticipated costs of our reorganization and restructuring activities;

anticipated costs of our reorganization and restructuring activities, including the global restructuring activities implemented in the third quarter of 2022;

our ability to consummate acquisitions and integrate their operations successfully, collection of receivables related to the internal loss in the U.S.

Global Services business;

global services operations;

support for our Venezuela business;

changes in allowance calculation methods;

the impact of cross currency swaps;

the impact of foreign currency forward and swap contracts;

our effective tax rate;

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expenses and payouts for the U.S.

retirement plans and the funded status of the primary U.S.

pension plan and the impact of the American Rescue Plan Act on our primary U.S.

pension plan's estimated future funding requirements;

retirement plans and the funded status of the primary pension plan;

expected liability for and future contributions to the UMWA plans;

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• market volatility and commodity price fluctuations;

• general economic issues, including supply chain disruptions, fuel price increases, inflation and changes in interests rates

• seasonality, pricing and other competitive industry factors;

• investment in information technology and its impact on revenue and profit growth;

• our ability to maintain an effective IT infrastructure and safeguard confidential information;

• our ability to maintain an effective IT infrastructure and safeguard confidential information, including from a cybersecurity incident;

• our ability to effectively develop and implement solutions for our customers;

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• the impact of foreign tax credit regulations;

• the outcome of pending and future claims, litigation, and administrative proceedings;

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors