What changed in this filing

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Item 7. Management’s Discussion and Analysis

2023-03-01 compared with 2022-02-28 · 308 added, 316 removed, 1013 unchanged (38% of the section changed)

30 unchanged sentences

Management's Discussion and Analysis of Financial Conditions and Results of Operations of our Annual Report on Form 10-K for the year ended December 31, 2021 ("2021 10-K"), starting on page 22.

The Brink’s Company offers secure transportation and route-based logistics management services for cash and valuables throughout the world.

The Brink’s Company is a leading global provider of cash and valuables management, digital retail solutions, and ATM managed services throughout the world.

These services include:

• Cash-in-transit 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, etc.) 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 collection services on behalf of utility companies and other billers 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

Cash and Valuables Management

• Cash-in-transit ("CIT") services – armored vehicle transportation of cash and coin

• Basic ATM services – replenishing funds and providing basic maintenance services to our customers’ automated teller machines

• Brink's Global Services ("BGS") – secure international transportation, pick-up, packaging, customs clearance, secure vault storage, and inventory management of high-value commodities

• Cash management services – counting, sorting, wrapping, check imaging, cashier balancing, counterfeit detection, account consolidation and electronic reporting

• Vaulting services – combines cash-in-transit services, cash management, vaulting and electronic reporting technologies for banks

• Other Services – guarding, commercial security, and payment services

Digital Retail Solutions ("DRS"), and ATM Managed Services ("AMS")

• Digital Retail Solutions – services that facilitate faster access to cash deposits leveraging Brink’s tech-enabled devices and software platforms that enable enhanced customer analytics and visibility

• ATM managed services – comprehensive solutions for ATM management, including cash forecasting, cash optimization, ATM remote monitoring, service call dispatching, transaction processing, and installation services

We manage our business in the following four segments:

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We believe that Brink’s has significant competitive advantages including:

• brand name recognition

• brand recognition

• reputation for a high level of service and security

1 unchanged sentence

• global network and customer base

• proven operational excellence, and

• high-quality insurance coverage and financial strength

• proven operational excellence

• high-quality insurance coverage and financial strength, and

• innovative technology-enabled offerings

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

We will achieve this by delivering on four strategic pillars:

Growth and Customer Loyalty, Innovation, Operational Excellence, and Talent.

This framework considers our global footprint and values-driven culture.

We focus our time and resources on service quality, protecting and strengthening our brand, and addressing our risks.

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Because our services focus on handling, transporting, protecting, and managing valuables, we strive to understand and manage risk.

In order to earn an adequate return on capital, we focus on the effective and efficient use of resources in addition to our pricing discipline.

We attempt to maximize the amount of business that flows through our branches, vehicles and systems in order to obtain the lowest costs possible without compromising safety, security or service.

To earn an adequate return on capital, we focus on the effective and efficient use of resources in addition to our pricing discipline.

We attempt to optimize the business that flows through our branches, vehicles, and systems to obtain the lowest costs possible without compromising safety, security, or service.

Operating results may vary from period to period.

Because revenues are generated from charges per service performed or based on the value of goods transported, they can be affected by both the level of economic activity and the volume of business for specific customers.

Our cash and valuables management revenues are generated from charges per service performed or based on the value of goods transported, which may be affected by both the level of economic activity and the volume of business for specific customers.

We also periodically incur costs to change the scale of our operations when volumes increase or decrease.

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The non-GAAP adjustments used to reconcile our GAAP results are described in detail on pages 26-28 and are reconciled to comparable GAAP measures on pages 33-35.

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 for and dispositions for one year after the transaction and changes in currency exchange rates.

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 for one year after the transaction and changes in currency exchange rates.

See definitions on page 24.

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2022 versus 2021

Consolidated Revenues Revenues increased $509.3 million primarily due to the favorable impact of acquisitions ($315.4 million), organic increases in Latin America ($102.2 million), North America ($64.4 million), Europe ($15.4 million), and Rest of World ($8.6 million), and the favorable impact of currency exchange rates ($3.3 million).

The currency impact was driven primarily by the euro, the Mexican peso, and most other currencies globally, partially offset by the Argentine peso and Brazilian real.

Revenues increased 5% on an organic basis due to volume recovery versus prior year results which were more impacted by the COVID-19 pandemic, as well as price increases in the U.S.

and Argentina.

Consolidated Revenues Revenues increased $335.3 million due to organic increases in Latin America ($163.8 million), North America ($140.2 million), Rest of World ($104.5 million), and Europe ($85.1 million) and the favorable impact of acquisitions ($93.9 million), partially offset by the unfavorable impact of currency exchange rates ($252.2 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 inflation-based price increases and higher volume.

See above for our definition of “organic.”

Consolidated Costs and Expenses Cost of revenues increased 12% to $3,235.8 million primarily due to the impact of acquisitions, higher labor and other operational costs from volume recovery, and currency exchange rates, partially offset by lower costs incurred related to restructuring actions.

Selling, general and administrative costs increased 8% to $629.7 million due to the impact of corporate expenses and the operating impact of acquisitions, partially offset by lower costs incurred versus the prior year related to acquisitions (including integration) and on an internal loss in the U.S.

global services operations.

Consolidated Costs and Expenses Cost of revenues increased 7% to $3,461.9 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 9% to $687.0 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 and lower costs related to the estimated loss of a potential fine for a Chile antitrust matter.

Consolidated Operating Profit Operating profit increased $6.6 million due mainly to:

• organic increases in Latin America ($45.7 million), North America ($44.9 million), Europe ($28.1 million), and Rest of World ($2.5 million)

• the following items included in "Other items not allocated to segments":

◦ income and lower charges related to an internal loss in the U.S.

global services operations versus charges incurred in the prior year ($28.0 million),

◦ lower charges related to reorganization and restructuring ($23.0 million), and

◦ lower costs related to business acquisitions and dispositions ($10.6 million), including the impact of acquisition-related charges and intangible asset amortization in 2021,

• the favorable impact of business acquisitions ($29.6 million), excluding intangible amortization and acquisition-related charges,

• organic increases in Latin America ($50.8 million), Rest of World ($41.7 million), Europe ($14.8 million) and North America ($3.3 million)

• the favorable operating impact of business acquisitions ($14.8 million), excluding intangible amortization and acquisition-related charges, and

• lower costs related to the estimated loss of a potential fine for a Chile antitrust matter ($8.1 million) included in "Other items not allocated to segments",

partially offset by:

• higher corporate expenses on an organic basis ($53.0 million),

• an estimated loss of $9.5 million in the third quarter of 2021 related to a potential fine for a Chile antitrust matter included in "Other items not allocated to segments", and

• unfavorable changes in currency exchange rates ($9.1 million) driven by the Argentine peso and Brazilian real and partially offset by lower foreign currency transaction losses as 2020 included a loss of $10.4 million from converting Argentine pesos into U.S.

dollars, as well as a favorable impact from the Mexican peso, euro, and most other currencies globally.

Consolidated Income from Continuing Operations Attributable to Brink’s and Related Per Share Amounts Income from continuing operations attributable to Brink’s shareholders increased $86.3 million to $103.1 million primarily due to the operating profit increase mentioned above, lower interest and other non-operating expense ($30.7 million), partially offset by higher income tax expense ($63.7 million), higher interest expense ($15.7 million), and higher income attributable to noncontrolling interests ($6.2 million).

• unfavorable changes in currency exchange rates ($70.4 million) driven by the Argentine peso and the euro,

• lower income related to an internal loss in the U.S.

global services operation, primarily from insurance recoveries ($21.1.

million) in 2021 that did not recur in 2022,

• 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", and

• higher costs related to business acquisitions and dispositions ($16.1 million), including the impact of acquisition-related charges and intangible asset amortization in 2022, included in "Other items not allocated to segments".

Consolidated Income from Continuing Operations Attributable to Brink’s and Related Per Share Amounts Income from continuing operations attributable to Brink’s shareholders increased $70.4 million to $173.5 million due to lower income tax expense ($78.9 million), higher interest and other non-operating income ($10.7 million), the increase in operating profit mentioned above and lower noncontrolling interest ($0.8 million), partially offset by higher interest expense ($26.6 million).

Diluted earnings per share from continuing operations was $3.63, up from $2.06 in 2021.

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2022 versus 2021

Non-GAAP Consolidated Revenues Non-GAAP revenues increased $509.3 million primarily due to the favorable impact of acquisitions ($315.4 million), organic increases in Latin America ($102.2 million), North America ($64.4 million), Europe ($15.4 million), and Rest of World ($8.6 million), and the favorable impact of currency exchange rates ($3.3 million).

The currency impact was driven primarily by the euro, the Mexican peso, and most other currencies globally, partially offset by the Argentine peso and Brazilian real.

Revenues increased 5% on an organic basis due to volume recovery versus prior year results which were more impacted by the COVID-19 pandemic, as well as price increases in the U.S.

and Argentina.

Non-GAAP Consolidated Revenues Non-GAAP revenues increased $335.3 million due to organic increases in Latin America ($163.8 million), North America ($140.2 million), Rest of World ($104.5 million), and Europe ($85.1 million) and the favorable impact of acquisitions ($93.9 million), partially offset by the unfavorable impact of currency exchange rates ($252.2 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 inflation-based price increases and higher volume.

See above for our definition of “organic.”

Non-GAAP Consolidated Operating Profit Non-GAAP operating profit increased $79.8 million due mainly to:

• organic increases in Latin America ($45.7 million), North America ($44.9 million), Europe ($28.1 million), and Rest of World ($2.5 million), and

• the favorable impact of business acquisitions ($29.6 million), excluding intangible amortization and acquisition-related charges,

• organic increases in Latin America ($50.8 million), Rest of World ($41.7 million), Europe ($14.8 million) and North America ($3.3 million), and

• the favorable operating impact of business acquisitions ($14.8 million), excluding intangible amortization and acquisition-related charges,

partially offset by:

• higher corporate expenses on an organic basis ($53.0 million), and

• unfavorable changes in currency exchange rates ($8.6 million) driven by the Argentine peso and Brazilian real and partially offset by lower foreign currency transaction losses as third quarter of 2020 included a loss of $10.4 million from converting Argentine pesos into U.S.

dollars, as well as a favorable impact from the Mexican peso, euro, and most other currencies globally.

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 $47.1 million to $237.9 million due to the operating profit increase mentioned above and higher interest and other non-operating income ($15.8 million), partially offset by higher income tax expense ($34.8 million), higher interest expense ($16.3 million), and higher non-controlling interest ($6.8 million).

• unfavorable changes in currency exchange rates ($44.7 million), driven primarily by the Argentine peso and the euro.

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 $48.5 million to $286.4 million due to the operating profit increase mentioned above and lower noncontrolling interest ($1.0 million), partially offset by higher interest expense ($26.7 million), higher income tax expense ($2.9 million) and lower interest and other non-operating income ($2.7 million).

Diluted earnings per share from continuing operations was $5.99, up from $4.75 in 2021.

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North America

Revenues increased 12% ($145.7 million) primarily due to the favorable impact of acquisitions ($72.4 million), a 5% organic increase ($64.4 million), and the favorable impact of currency exchange rates ($8.9 million) from the Canadian dollar.

Organic revenue increased primarily due to price increases and global services volume growth in the U.S.

and organic growth from PAI.

Operating profit increased 62% ($56.7 million) primarily due to an organic increase ($44.9 million), the favorable impact of acquisitions ($11.6 million), and the favorable impact of currency exchange rates ($0.2 million).

The organic profit increase was driven by the impact of bad debt expense versus the prior year, productivity initiatives in the U.S.

and Canada, and revenue growth from U.S.

global services and PAI.

The increase was partially offset by higher labor costs due to wage increases in the U.S.

Revenues increased 13% ($177.0 million) primarily due to a 10% organic increase ($140.2 million) and the favorable impact of acquisitions ($41.6 million), partially offset by the unfavorable impact of currency exchange rates ($4.8 million) from the Canadian dollar.

Organic revenue increased primarily due to price increases in the U.S.

Operating profit increased ($10.7 million), primarily due to the favorable impact of acquisitions ($7.4 million) and a 2% organic increase ($3.3 million).

The organic increase resulted primarily from price increases in the U.S.

which outpaced the impact of labor and other cost increases.

The increase was partially offset by several adjustments related to various insurance-related costs, legal settlements, and bad debt expense in the U.S., higher security losses in the U.S., and lower government COVID-19 assistance in Canada.

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.

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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 subsequent quarters of 2022, the additional allowance was reduced by $1.1 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 5% ($54.1 million) primarily due to an organic increase of 10% ($102.2 million) and the favorable impact of acquisitions ($8.4 million), partially offset by the unfavorable impact of currency exchange rates ($56.5 million), primarily from the Argentine peso and Brazilian real and partially offset by the Mexican peso.

The organic increase was due to organic growth in Argentina driven by inflation-based price increases and organic growth in Mexico from volume growth and price increases versus prior year results which were more impacted by the COVID-19 pandemic.

Operating profit was up 10% ($23.7 million) primarily due to an organic increase of 20% ($45.7 million), including the benefit of labor and other operational cost saving actions, which includes those taken in response to the COVID-19 pandemic, and the favorable impact of acquisitions ($0.6 million), partially offset by unfavorable currency ($22.6 million).

The organic increase was driven by Argentina and Mexico.

Revenues increased 22% ($163.5 million) due to the favorable impact of acquisitions ($120.8 million) and currency exchange rates ($27.3 million), and a 2% organic increase ($15.4 million).

The favorable currency impact was driven by the euro.

The organic increase was primarily due to organic volume growth in France.

Operating profit increased 75% ($38.6 million) due to an organic increase ($28.1 million), the favorable impact of acquisitions ($9.7 million) and currency exchange rates ($0.8 million).

The organic increase was primarily driven by France due to higher volumes and the impact of labor and other operational cost saving actions, including those taken in response to the COVID-19 pandemic, partially offset by lower government assistance.

Results were also helped by higher government COVID-19 assistance in several other countries.

Revenues increased 8% ($84.6 million) primarily due to a 15% organic increase of ($163.8 million) and the favorable impact of acquisitions ($2.9 million), partially offset by the unfavorable impact of currency exchange rates ($82.1 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% ($20.4 million) primarily due to a 20% organic increase ($50.8 million) and the

favorable impact of acquisitions ($0.4 million), partially offset by unfavorable currency exchange rates ($30.8 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.

Revenues increased 2% ($14.1 million) due to a 9% organic increase ($85.1 million) and the favorable impact of acquisitions ($43.1 million), partially offset by the unfavorable impact of currency exchange rates ($114.1 million), 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 ($8.6 million) primarily due to an organic increase ($14.8 million) and the favorable impact of acquisitions ($6.2 million), partially offset by the unfavorable impact of currency exchange rates ($12.4 million).

The organic increase was primarily driven by the impact of labor and other operational cost saving actions and volume growth throughout the segment.

This growth was partially offset by lower government COVID-19 assistance in several countries.

Rest of World

Revenues increased 24% ($146.0 million) due to the favorable impact of acquisitions ($113.8 million), the favorable impact of currency exchange rates ($23.6 million), and a 1% organic increase ($8.6 million).

Revenues increased 8% ($59.6 million) due to a 14% organic increase ($104.5 million) and the favorable impact of acquisitions ($6.3 million), partially offset by the unfavorable impact of currency exchange rates ($51.2 million).

The organic increase was primarily due to global services volume growth.

The currency impact was driven by most currencies throughout the segment.

Operating profit increased 12% ($14.4 million) due to the favorable impact of acquisitions ($7.7 million), the favorable impact of currency exchange rates ($4.2 million), driven by most currencies throughout the segment, and an organic increase ($2.5 million).

The organic increase was primarily due to the impact of labor and other operational cost saving actions throughout the segment, including those taken in response to COVID-19, partially offset by lower government COVID-19 assistance in several countries.

Operating profit increased $32.4 million primarily due to a 32% organic increase ($41.7 million) and the favorable impact of acquisitions ($0.8 million), partially offset by the unfavorable impact of currency exchange rates ($10.1 million).

The organic increase was primarily due to global services growth, the impact of labor and other operational cost saving actions throughout the segment, and higher government COVID-19 assistance in Hong Kong.

Income and Expense Not Allocated to Segments

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General, administrative and other expenses $ (161.5) (141.7) (116.3) 14 22

Foreign currency transaction gains (losses) 2.7 (6.5) (4.8) fav 35

Reconciliation of segment policies to GAAP (17.5) 10.5 0.3 unfav fav

Corporate items (156.5) (112.3) (127.7) 39 (12)

Foreign currency transaction gains (losses) 10.9 2.7 (6.5) fav fav

Reconciliation of segment policies to GAAP 1.8 (17.5) 10.5 fav unfav

Corporate expenses (148.8) (156.5) (112.3) (5) 39

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.

Corporate expenses in 2021 were $44.2 million higher than the prior year primarily driven by higher bad debt expense ($28.5 million) included in Corporate expense as part of the reconciliation of segment policies to U.S.

GAAP, as discussed in more detail in the next paragraph below.

Current year expense also increased as a result of higher costs related to development of new service offerings ($11.2 million), an increase in employee compensation, including share-based and other incentives ($9.5 million), and higher legal fees ($4.0 million).

These increases were partially offset by lower foreign currency transaction losses in the current year period ($9.2 million).

Corporate expenses in 2022 decreased $7.7 million versus the prior year primarily driven by lower bad debt expense ($19.4 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 ($8.2 million), reduced expenses related to developing new service offerings ($8.2 million) and an increase in royalty income from third parties ($3.6 million).

These lower costs were offset by an increase in incentive compensation, including share-based and bonus accruals ($30.0 million) as well as higher net charges related to insurance and security losses ($4.4 million).

Historically, all Brink’s business units followed an internal accounting policy for determining an allowance for doubtful accounts.

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(In millions) 2022 2021 2020 2022 2021

Acquisitions and dispositions $ — — (0.5) — (100)

Internal loss — — 4.0 — (100)

Revenues $ — — 3.5 — (100)

Operating profit:

Reorganization and Restructuring $ (43.6) (66.6) (28.8) (35) unfav

Reorganization and Restructuring $ (38.8) (43.6) (66.6) (11) (35)

Acquisitions and dispositions (86.6) (71.9) (83.1) 20 (13)

Argentina highly inflationary impact (11.9) (10.7) (14.5) 11 (26)

Argentina highly inflationary impact (41.7) (11.9) (10.7) unfav 11

Change in allowance estimate (15.6) — — unfav —

Ship loss matter (4.9) — — unfav —

Chile antitrust matter (1.4) (9.5) — (85) unfav

2 unchanged sentences

Operating profit $ (189.0) (115.8) (167.8) 63 (31)

2021 versus 2020

The impact of other items not allocated to segments on operating profit was a smaller loss ($115.8 million in 2021 versus $167.8 million in the prior year).

The change was primarily due to lower reorganization and restructuring expenses, a reduction in net charges related to the internal loss matter and a decrease in costs related to acquisitions and dispositions.

These favorable changes were partially offset by the Chile antitrust matter charge recognized in the current year period.

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, we recognized $22.2 million in charges in 2022 under this restructuring, primarily severance costs.

When completed, the current restructuring actions are expected to reduce our workforce by 2,300 to 3,000 positions and result in annualized cost savings of $45 million to $55 million.

For the restructuring actions that were approved as of December 31, 2022, we expect to incur additional costs between $10 million and $14 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 $28.8 million in 2019, primarily severance costs and charges related to the modification of share-based compensations awards in 2019.

We recognized $66.6 million of net costs in operating profit and $0.6 million of costs in interest and other nonoperating income (expense) in 2020, primarily severance costs.

As a result of these actions, we recognized $66.6 million of net costs in operating profit and $0.6 million of costs in interest and other nonoperating income (expense) in 2020, primarily severance costs.

We recognized $43.6 million of net costs in 2021, primarily severance costs.

Substantially all of the costs from 2021 restructuring plans result from management initiatives to address the COVID-19 pandemic.

When completed, the current restructuring actions will reduce our workforce by 1,600 to 1,800 positions and result in in annualized cost savings of $35 million to $40 million.

For the current restructuring actions, we expect to incur additional costs between $1 million and $3 million in future periods.

We recognized $16.6 million of net costs in 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.

For the current restructuring actions that have not yet been completed, we expect to incur additional costs between $1 million and $3 million in future periods.

These estimates are expected to be updated as management targets additional sections of our business.

Due to the unique circumstances around these charges, they have not been allocated to segment results and are excluded from non-GAAP results.

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Reportable Segments:

North America $ 0.1 (13.7) (3.1) fav unfav

Latin America (13.0) (20.4) (9.5) (36) unfav

Europe (27.6) (23.6) (5.1) 17 unfav

Rest of World (3.2) (7.1) (1.9) (55) unfav

Total reportable segments (43.7) (64.8) (19.6) (33) unfav

Corporate items 0.1 (1.8) (9.2) fav (80)

Total $ (43.6) (66.6) (28.8) (35) unfav

Acquisitions and dispositions Part of our strategy is the pursuit of accretive business acquisitions.

In 2021, we acquired business operations in the U.S.

and we completed the remaining planned acquisitions from G4S.

In 2020, we acquired multiple business operations from G4S at different times during the year.

In 2019, we completed four business acquisitions in the U.S., Brazil and Colombia.

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 non-GAAP results.

North America $ (11.8) 0.1 (13.7) unfav fav

Latin America (15.7) (13.0) (20.4) 21 (36)

Europe (9.7) (27.6) (23.6) (65) 17

Rest of World (1.2) (3.2) (7.1) (63) (55)

Total reportable segments (38.4) (43.7) (64.8) (12) (33)

Corporate items (0.4) 0.1 (1.8) unfav fav

Total $ (38.8) (43.6) (66.6) (11) (35)

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:

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• Amortization expense for acquisition-related intangible assets was $52.0 million in 2022.

• We incurred $10.5 million in integration costs, primarily related to G4S, in 2021.

• We recognized $12.5 million in charges in Argentina in 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 $4.8 million in integration costs, primarily related to PAI and G4S, in 2022.

• Transaction costs related to business acquisitions were $5.6 million in 2022.

3 unchanged sentences

• Amortization expense for acquisition-related intangible assets was $47.7 million in 2021.

• We incurred $23.5 million in integration costs related primarily to Dunbar and G4S in 2020.

• We incurred $10.5 million in integration costs, primarily related to G4S, in 2021.

• Transaction costs related to business acquisitions were $6.5 million in 2021.

• Restructuring costs related to acquisitions were $5.3 million in 2021.

• Compensation expense related to the retention of key PAI employees was $1.8 million in 2021

2020 Acquisitions and Dispositions Items

• We incurred $43.1 million in integration costs related to Dunbar, Rodoban, TVS and COMEF in 2019.

• Amortization expense for acquisition-related intangible assets was $35.1 million in 2020.

• We incurred $23.5 million in integration costs related primarily to Dunbar and G4S in 2020.

• Transaction costs related to business acquisitions were $19.3 million in2020.

• Restructuring costs related to acquisitions, primarily Rodoban and Dunbar, were $5.6 million in 2019.

• In 2019, we recognized $2.2 million in net charges, primarily asset impairment and severance costs, related to the exit from our top-up prepaid mobile phone business in Brazil.

• Compensation expense related to the retention of key Dunbar employees was $1.5 million in 2019.

• Restructuring costs related to acquisitions were $4.7 million in 2020.

Argentina highly inflationary impact Beginning in the third quarter of 2018, we designated Argentina's economy as highly inflationary for accounting purposes.

6 unchanged sentences

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 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 subsequent quarters of 2022, the additional allowance was reduced by $1.1 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.

Ship loss matter In 2015, Brink’s placed cargo containing customer valuables on a ship which suffered damages and losses.

Brink’s cargo did not suffer any damage.

The ship owner declared a general average claim to recover losses to the ship and cargo from customers with undamaged cargo, including Brink’s, based on the pro rata value of ship cargo.

Brink’s continues to defend itself against the claim.

In the fourth quarter of 2022, we recognized a $4.9 million charge for our estimate of the probable loss.

Due to the unusual nature of the contingency and the fact that management has excluded these amounts when evaluating internal performance, we have excluded this charge from segment and non-GAAP results.

Chile antitrust matter We recognized an estimated loss of $9.5 million in the third quarter of 2021 related to a potential fine.

In 2022, we recognized an additional $1.4 million adjustment to our estimated loss 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.

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global services operations embezzled funds from Brink's in prior years.

Except for a small deductible amount, the amount of the internal loss related to the embezzlement of funds was covered by our insurance.

In an effort to cover up the embezzlement, the former employee intentionally misstated the underlying accounts receivable subledger data.

In 2020, we incurred $0.3 million in costs (primarily third party expenses) to reconstruct the accounts receivables subledger.

In 2020, we incurred an additional $0.3 million in costs related to this activity.

In the third quarter of 2019, we were able to identify $4.0 million of revenues billed and collected in prior periods which had never been recorded in the general ledger.

We also identified and recorded $0.3 million in bank fees, which had been incurred in prior periods.

Based on the reconstructed subledger, we were able to analyze and quantify the uncollected receivables from prior periods.

Although we planned to attempt to collect these receivables, we estimated an increase to bad debt expense of $13.7 million in the third quarter of 2019.

The estimate of the allowance for doubtful accounts was adjusted in the fourth quarter of 2019 for an additional $6.4 million and again in 2020 for an additional $6.6 million.

Although we planned to attempt to collect these receivables, we estimated an increase to bad debt expense of $6.6 million in 2020.

In 2021, we recognized a decrease in bad debt expense of $3.7 million, primarily related to collection of these receivables.

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In the fourth quarter of 2021, we successfully collected $18.8 million of insurance recoveries related to these internal losses.

We have defined accounts receivable impacted by the embezzlement as accounts receivable recorded as of and prior to the third quarter of 2019.

In the fourth quarter of 2021, we wrote off the remaining accounts receivable of $8.1 million which had previously been fully reserved.

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 amounts from segment and non-GAAP results.

In 2022, we did not incur any charges related to the internal loss.

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.

Reporting compliance Certain compliance costs (primarily third party expenses) are excluded from segment and non-GAAP results.

These costs relate to the implementation and January 1, 2019 adoption of the new lease accounting standard (amounts were not significant in 2021, $0.5 million in 2020 and $1.8 million in 2019).

We also incurred $0.3 million in 2019 in costs related to mitigation of material weaknesses.

We did not incur any such costs in 2020 or 2021.

These costs relate to the implementation and January 1, 2019 adoption of the new lease accounting standard ($0.5 million in 2020, amounts not significant in 2022 or 2021).

Other Operating Income and Expense

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Foreign currency items:

Transaction losses $ (30.5) (11.2) (22.9) unfav (51)

Derivative instrument gains (losses) 24.2 (3.0) 6.9 fav unfav

Gains on sale of property and other assets — 0.9 5.8 (100) (84)

Transaction losses $ (68.7) (30.5) (11.2) unfav unfav

Derivative instrument gains (losses) 42.0 24.2 (3.0) 74 fav

Royalty income 9.1 5.6 4.8 63 17

Impairment losses (9.0) (9.5) (11.6) (5) (18)

Indemnification asset adjustments (7.8) — — unfav —

Gains on sale of property and other assets 2.7 — 0.9 fav (100)

Share in earnings of equity method affiliates 2.1 1.1 0.8 91 38

Royalty income 5.6 4.8 5.1 17 (6)

Insurance recoveries - Internal Loss 18.8 — — 100 —

Gains related to litigation 4.4 — — 100 —

Indemnity for forced relocation 1.7 — — 100 —

Insurance recoveries - Internal Loss — 18.8 — (100) fav

Gains related to litigation — 4.4 — (100) fav

Indemnity for forced relocation — 1.7 — (100) fav

Other 4.3 4.2 3.7 2 14

Other operating income (expense) $ 20.0 (15.6) (9.4) fav 66

Other operating income (expense) $ (25.3) 20.0 (15.6) unfav fav

2022 versus 2021

We reported other operating income of $20.0 million in 2021 versus other operating expense of $15.6 million in the prior year.

We reported other operating expense of $25.3 million in 2022 versus other operating income of $20.0 million in the prior year.

The change was primarily due to $18.8 million in insurance recoveries related to the internal loss in our U.S.

global services operations.

In addition, we recognized gains related to litigation in our Romania business and lower losses from foreign currency items in 2021 as compared to 2020.

global services operations in 2021 and higher net losses of $20.4 million from foreign currency items in 2022 driven by remeasurement losses due to the highly inflationary economy in Argentina as well as significant fluctuations in the relationship between the euro and U.S.

dollar when compared to 2021.

In addition, we had losses due to acquisition-related tax indemnification asset adjustments in the current period.

The foreign currency items above do not include business acquisition-related currency items which are reported in interest and other nonoperating income (expense).

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Interest expense $ 138.8 112.2 96.5 24 16

Interest expense was higher in 2021 primarily due to higher borrowing levels due to business acquisitions.

Interest expense was higher in 2022 primarily due to higher interest rates on corporate borrowings.

Higher borrowing levels were used to fund general corporate initiatives and other working capital needs.

See Note 15 for further information.

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Interest income $ 23.6 12.1 5.6 95 fav

Gain (loss) on equity securities (a)

16.0 10.6 (2.9) 51 fav

Foreign currency transaction gains (losses) (b)

0.4 (3.6) — fav —

Derivative instrument losses (c)

— (7.0) — fav —

Retirement benefit cost other than service cost (16.7) (38.7) (37.9) (57) 2

Foreign currency transaction gains (losses) (a)

2.4 0.4 (3.6) fav fav

Non-income taxes on intercompany billings (b)

(2.3) (3.9) (4.6) (41) (15)

Argentina turnover tax (1.8) — — unfav —

Gain (loss) on equity securities (c)

— 16.0 10.6 (100) 51

G4S indemnification asset adjustment (d)

— 2.7 — (100) fav

Acquisition-related gains (losses) (e)

0.4 — — fav —

Penalties and interest on non-income taxes (f)

Penalties and interest on non-income taxes (e)

— (1.8) — (100) unfav

Interest on Colombia tax claim (g)

— — (1.1) — fav

Non-income taxes on intercompany billings (h)

(3.9) (4.6) (4.2) (15) 10

Venezuela operations (i)

— — (0.9) — fav

Gain on lease termination (j)

— — 5.2 — fav

Gain on a disposition of a subsidiary (k)

— 4.1 — unfav fav

Interest on non-income tax credits (l)

Gains related to litigation (f)

— 1.7 — (100) fav

Earn-out liability adjustment (m)

Earn-out liability adjustment (g)

— 1.3 — (100) fav

Gains related to litigation (n)

Interest on non-income tax credits (h)

— 1.2 — (100) fav

Other 1.6 (4.9) (1.7) fav unfav

Interest and other nonoperating income (expense) $ (7.0) (37.7) (52.7) (81) (28)

(a) The gain is primarily related to the market value increase of an investment in MoneyGram International, Inc.

Derivative instrument losses (i)

— — (7.0) — (100)

Gain on a disposition of a subsidiary (j)

— — 4.1 — (100)

Other (1.5) 2.0 (4.9) unfav fav

Interest and other nonoperating income (expense) $ 3.7 (7.0) (37.7) fav (81)

(a) Amounts primarily represent currency transaction gains and losses on contingent consideration payable related to G4S business acquisitions.

(b) Certain of our Latin American subsidiaries incur non-income taxes related to the billing of intercompany charges.

These intercompany charges do not impact Latin America segment results and are eliminated in our consolidation.

The investment was sold in 2021 and the gain was fully realized.

(b) Amounts in 2021 and 2020 primarily represent currency transaction gains and losses on contingent consideration payable related to G4S business acquisitions.

(d) Adjustments to indemnification asset related to business operations acquired from G4S.

This adjustment was recognized outside of the measurement period for the related business operations acquired from G4S.

(e) This amount includes a gain on settlement with G4S related to business operations acquired.

The gain was partially offset by losses associated with the write off of indemnification assets related to income tax contingency reversals from businesses acquired in Brazil.

These adjustments were recognized outside of the measurement periods for the related business operations acquired.

(f) Represents penalties and interest on non-income taxes that have not yet been paid.

(g) Related to an unfavorable court ruling in 2019 on a non-income tax claim in Colombia.

The court ruled that Brink's must pay interest accruing from 2009 to the current date.

The principal amount of the claim was less than $1 million and was recognized in selling, general and administrative expenses in 2019.

(h) Certain of our Latin American subsidiaries incur non-income taxes related to the billing of intercompany charges.

These intercompany charges do not impact Latin America segment results and are eliminated in our consolidation.

(i) Charges incurred for providing financial support to Brink's Venezuelan subsidiaries after the June 30, 2018 deconsolidation.

We do not expect any future funding of the Venezuela business, as long as current U.S.

sanctions remain in effect.

(j) Gain on termination of a mining lease obligation related to former coal operations.

We have no remaining mining leases.

(k) This gain is primarily related to the sale of our former French security services subsidiary in the first quarter of 2020.

(l) 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.

(m) Adjustment to the liability for contingent consideration pertaining to the 2019 Balance Innovations business acquisition.

(n) Related to a favorable court ruling in litigation with a customer of our Romania business.

(e) Represents penalties and interest on non-income taxes that have not yet been paid.

(f) Related to a favorable court ruling in litigation with a customer of our Romania business.

The court ruled that the customer must pay our subsidiary in Romania for services provided many years ago.

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The penalties for years of non-payment are reported in interest and other nonoperating income (expense).

Interest and other nonoperating income (expense) was higher in 2021 compared to 2020 primarily due to higher interest income and gain on equity securities.

Interest and other nonoperating income (expense) was higher in 2020 compared to 2019 primarily due to higher retirement benefit costs in 2019, mainly due to settlement charges in the U.S.

frozen pension plan.

(g) Adjustment to the liability for contingent consideration pertaining to a 2019 business acquisition.

(h) Represents interest on non-income tax credits related to our business operations in Brazil.

(i) Represents loss on foreign currency forward contracts related to acquisition of business operations from G4S.

(j) This gain is primarily related to the sale of our former French security services subsidiary in the first quarter of 2020.

Interest and other nonoperating income (expense) was higher in 2022 compared to 2021 primarily due to interest income on surplus cash in money market investments.

Further, the company experienced a reduction in retirement benefit costs attributed to lower amortization of actuarial losses from the prior year.

Refer to Note 4 for further explanation.

Summary Rate Reconciliation – GAAP

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Taxes on cross border income, net of credits 6.9 4.6 11.0

Tax on accelerated U.S.

Adjustments to valuation allowances (21.1) 6.7 6.6

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Income tax rate on continuing operations 18.3 % 51.1 % 71.4 %

(a) In 2019, we recognized a benefit of $7.3 million related to a previously recognized $23.5 million current tax expense that accelerated U.S.

taxable income in 2015.

Summary Rate Reconciliation – Non-GAAP (a)

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• changes in laws in the U.S., France, Mexico, and Argentina,

tax on accelerated taxable income,

• timing of benefit recognition for uncertain tax positions,

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Statutory Rate

The effective income tax rate on continuing operations in 2021 was greater than the 21% U.S.

statutory tax rate primarily due to the geographical mix of earnings, book losses for which no tax benefit can be recorded, nondeductible expenses in Mexico, taxes on cross border payments and the characterization of a French business tax as an income tax.

The effective income tax rate on continuing operations in 2022 was less than the 21% U.S.

statutory tax rate primarily due to the release of valuation allowances on U.S.

tax credits deemed realizable as a result of the issuance of U.S.

final foreign tax credit regulations, offset by the geographical mix of earnings, book losses for which no tax benefit can be recorded, nondeductible expenses in Mexico, taxes on cross border payments and U.S.

taxable income limitations, and the characterization of a French business tax as an income tax.

2021 Compared to U.S.

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The effective income tax rate on continuing operations in 2021 was greater than the 21% U.S.

Noncontrolling Interests

2 unchanged sentences

Net income attributable to noncontrolling interests $ 11.3 12.1 5.9 (7) unfav

Compared to 2020, the increase in net income attributable to noncontrolling interests to $12.1 million in 2021 is primarily due to the G4S acquisitions which closed in the first quarter of 2021 and higher operating results reported by some of our subsidiaries in 2021.

Compared to 2019, the increase in net income attributable to noncontrolling interests to $5.9 million in 2020 is primarily due to the G4S acquisitions that closed in the second and third quarters of 2020.

Compared to 2021, the decrease in net income attributable to noncontrolling interests to $11.3 million in 2022 is primarily due to lower 2022 operating results reported by certain less than wholly-owned subsidiaries in Asia.

Compared to 2020, the increase in net income attributable to noncontrolling interests to $12.1 million in 2021 is primarily due to the G4S acquisitions that closed in the first quarter of 2021 and higher operating results reported by some of our subsidiaries in 2021.

Non-GAAP Results Reconciled to GAAP

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2022 2021 2020

Pre-tax income Income tax Effective tax rate Pre-tax income Income tax Effective tax rate Pre-tax income Income tax Effective tax rate

(In millions, except for percentages) Pre-tax income Income tax Effective tax rate Pre-tax income Income tax Effective tax rate Pre-tax income Income tax Effective tax rate

Effective Income Tax Rate (a)

2 unchanged sentences

11.1 2.9 29.8 7.7 33.8 7.9

Venezuela operations (b)(i)

— — — — 0.9 —

Reorganization and Restructuring (b)

2 unchanged sentences

85.2 20.7 68.8 2.5 91.5 11.6

Chile antitrust matter (b)

Argentina highly inflationary impact (b)

45.6 (2.0) 12.3 (1.1) 10.6 (1.3)

Tax on accelerated income (d)

Change in allowance estimate (b)

15.6 3.7 — — — —

Argentina highly inflationary impact (b)

Valuation allowance on tax credits (d)

— 53.2 — — — —

Ship loss matter (b)

4.9 1.3 — — — —

Chile antitrust matter (b)

1.4 0.5 9.5 — — —

Internal loss (b)

4 unchanged sentences

— — — (12.8) — —

Gain on lease termination (f)

— — — — (5.2) (1.2)

Non-GAAP $ 428.8 129.9 30.3 % $ 378.4 127.0 33.6 % $ 289.7 92.2 31.8 %

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operations also have retirement plans.

Settlement charges related to these non-U.S.

plans are also excluded from non-GAAP results.

(d) The non-GAAP tax rate excludes the 2019 foreign tax benefits that resulted from the transaction that accelerated U.S.

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.

(d) 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.

(e) There was a change in judgement resulting in a valuation allowance against certain tax attributes with a limited statutory carryforward period that are no longer more-likely-than-not to be realized due to lower than expected Canada operating results.

(f) Gain on termination of a mining lease obligation related to former coal operations.

We have no remaining mining leases.

(g) Amounts in 2020 and 2019 primarily relate to interest incurred on a cross currency swap hedging foreign currency risk on the intercompany financing of the Rodoban acquisition.

(h) In addition to the items discussed in “Other Items Not Allocated To Segments” on pages 28–30, includes a $4.5 million gain on the sale of a French security services business in 2020, acquisition-related pretax currency transaction losses of $3.6 million in 2020 and acquisition-related pretax losses on foreign currency forward contracts of $7.0 million in 2020.

(i) Post-deconsolidation funding of ongoing costs related to our Venezuelan operations was $0.9 million in 2019 and was expensed as incurred and reported in interest and other nonoperating income (expense).

We do not expect any future funding of the Venezuela business, as long as current U.S.

sanctions remain in effect.

(f) Amounts include interest incurred on a cross currency swap hedging foreign currency risk on the intercompany financing of the Rodoban acquisition.

(g) In addition to the items discussed in “Other Items Not Allocated To Segments” on pages 26–28, includes a $4.5 million gain on the sale of a French security services business in 2020, acquisition-related pretax currency transaction losses of $3.6 million in 2020 and acquisition-related pretax losses on foreign currency forward contracts of $7.0 million in 2020.

Non-GAAP reconciled to GAAP

2 unchanged sentences

GAAP $ 4,535.5 4,200.2 3,690.9

Acquisitions and dispositions (b)

Internal loss (b)

Non-GAAP $ 4,535.5 4,200.2 3,690.9

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41.7 11.9 10.7

Change in allowance estimate (b)

Ship loss matter (b)

Chile antitrust matter (b)

Internal loss (b)

(21.1) 6.9 20.9

Reporting compliance (b)

2 unchanged sentences

GAAP $ (138.8) (112.2) (96.5)

Acquisitions and dispositions (b)(g)

Acquisitions and dispositions (b)(f)

Non-GAAP $ (137.6) (110.9) (94.6)

3 unchanged sentences

11.1 29.8 33.8

Venezuela operations (b)(i)

Reorganization and Restructuring (b)

Acquisitions and dispositions (b)(h)

Acquisitions and dispositions (b)(g)

(2.6) (4.4) 6.5

Argentina highly inflationary impact (b)

Gain on lease termination (f)

3.9 0.4 (0.1)

Non-GAAP $ 16.1 18.8 3.0

5 unchanged sentences

8.2 11.7 15.8

Acquisitions and dispositions (b)(g)(h)

Tax on accelerated income (d)

Acquisitions and dispositions (b)(f)(g)

20.7 2.5 11.6

Argentina highly inflationary impact (b)

(2.0) (1.1) (1.3)

Change in allowance estimate (b)

Valuation allowance on tax credits (d)

Ship loss matter (b)

Chile antitrust matter (b)

Internal loss (b)

(1.3) 1.6 4.0

Reporting compliance (b)

Deferred tax valuation allowance (e)

Gain on lease termination (f)

Non-GAAP $ 129.9 127.0 92.2

1 unchanged sentence

GAAP $ 11.3 12.1 5.9

Retirement plans (c)

Reorganization and Restructuring (b)

10 unchanged sentences

8.1 22.1 25.9

Venezuela operations (b)(i)

Reorganization and Restructuring (b)

2 unchanged sentences

63.5 65.4 79.4

Tax on accelerated income (d)

Argentina highly inflationary impact (b)

47.6 13.4 11.9

Change in allowance estimate (b)

Valuation allowance on tax credits (d)

Ship loss matter (b)

Chile antitrust matter (b)

Internal loss (b)

(19.8) 5.3 16.9

Reporting compliance (b)

Deferred tax valuation allowance (e)

Gain on lease termination (f)

Non-GAAP $ 286.4 237.9 190.8

2 unchanged sentences

0.17 0.44 0.51

Venezuela operations (b)(i)

Reorganization and Restructuring (b)

2 unchanged sentences

1.33 1.31 1.56

Tax on accelerated income (d)

Argentina highly inflationary impact (b)

1.00 0.27 0.23

Change in allowance estimate (b)

Valuation allowance on tax credits (d)

Ship loss matter (b)

Chile antitrust matter (b)

3 unchanged sentences

Deferred tax valuation allowance (e)

Gain on lease termination (f)

Non-GAAP $ 5.99 4.75 3.76

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At December 31, 2022, we had net monetary assets denominated in Argentine pesos of $66.2 million (including cash of $57.7 million) and nonmonetary net assets of $168.2 million (including $99.8 million of goodwill, $1.9 million in equity securities denominated in Argentine pesos and $27.4 million in debt securities denominated in 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.

During the third quarter of 2020 and during the fourth quarter of 2019, we elected to use other market mechanisms to convert Argentine pesos into U.S.

During the third quarter of 2020, we elected to use other market mechanisms to convert Argentine pesos into U.S.

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.

As a result, we recognized $10.4 million in 2020 and $4.7 million in 2019 of such conversion losses when we converted Argentine pesos into U.S.

dollars at rates that were approximately 100% and 25%, respectively, less favorable than the rates at which we remeasured the financial statements of Brink’s Argentina.

As a result, we recognized $10.4 million in 2020 of such conversion losses when we converted Argentine pesos into U.S.

dollars at rates that were approximately 100% less favorable than the rates at which we remeasured the financial statements of Brink’s Argentina.

These conversion losses are classified in the consolidated statements of operations as other operating income (expense).

We did not have any such conversion losses in 2021.

We did not have any such conversion losses in 2021 and 2022.

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.

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At December 31, 2022, the notional value of our short term outstanding foreign currency forward and swap contracts was $575 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 British pound and the Mexican peso.

These short term foreign currency forward and swap contracts primarily offset exposures in the euro and the Mexican 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 December 31, 2021, the fair value of our short term 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 consolidated balance sheet.

At December 31, 2022, the fair value of our short term foreign currency contracts was a net liability of approximately $7.0 million, of which $3.5 million was included in prepaid expenses and other and $10.5 million was included in accrued liabilities on the 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 consolidated balance sheet.

4 unchanged sentences

Derivative instrument losses included in other nonoperating income (expense) (a)

(a) Represents losses on foreign currency forward contracts related to acquisitions of business operations from G4S.

We also have a long term cross currency swap to hedge exposure in Brazilian real, which is designated as a cash flow hedge for accounting purposes.

(a) Represents losses on foreign currency forward contracts related to acquisitions of business operations from G4S in 2020.

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.

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.

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At December 31, 2022, the notional value of this long term contract was $53 million with a weighted-average maturity of 0.6 years.

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 assets and $20.5 million is included in other assets on the consolidated balance sheet.

At December 31, 2020, the fair value of the long term cross currency swap contract was a $23.6 million net asset, of which a $3.2 million asset is included in prepaid expenses and other assets and a $20.4 million asset is included in other assets on the consolidated balance sheet.

At December 31, 2022, the fair value of the long term cross currency swap contract was an asset of $14.6 million and was included in prepaid expenses and other on the 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 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:

2 unchanged sentences

Derivative instrument gains included in other operating income (expense) $ (8.9) 0.2 22.1

Offsetting transaction losses (0.2) (22.1) (5.8)

Offsetting transaction gains 8.9 (0.2) (22.1)

Derivative instrument losses included in interest expense (1.3) (1.3) (1.9)

1 unchanged sentence

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.

As net investment hedges for accounting purposes, we elected to use the spot method to assess effectiveness for these derivatives that are designated as net investment hedges.

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.

At December 31, 2021, the notional value of these cross currency swap contracts was $400 million with a remaining weighted average maturity of 6.2 years.

At December 31, 2021, the fair value of these currency swaps was a net asset of $28.5 million, of which $6.0 million was included in prepaid expenses and other and $22.5 million was included in other assets on the 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:

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 value 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 value of $215 million will terminate in May 2026 and swaps with a total notional value of $185 million will terminate in April 2031.

We have designated these swaps as net investment hedges for accounting purposes.

At December 31, 2022, the notional value of these cross currency swap contracts was $400 million with a remaining weighted average maturity of 2.7 years for the cross currency swaps maturing in May 2026 and a remaining weighted average maturity of 6.6 years for the cross currency swaps with maturity in April 2031.

At December 31, 2022, the fair value of these currency swaps was a net liability of $11.7 million, of which $5.6 million was included in prepaid expenses and other and $17.3 million was included in other liabilities on the 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:

Twelve Months Ended December 31,

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• pay dividends to Brink’s shareholders ($105 million).

Cash flows from operating activities increased by $160.3 million in 2021 as compared to the prior year primarily due to higher operating profit, working capital changes, lower amounts paid for G4S intercompany payments, and changes in customer obligations related to certain of our secure cash management services operations (certain customer obligations increased by $15.7 million in 2021 compared to a decrease of $6.5 million in 2020), partially offset by $56.1 million decrease in restricted cash held for customers and higher amounts paid for interest.

Cash flows from operating activities increased by $1.9 million in 2022 as compared to the prior year primarily due to higher operating profit, changes in customer obligations related to certain of our secure cash management services operations (certain customer obligations increased by $50.0 million in 2022 compared to an increase of $15.7 million in 2021) and lower amounts paid for G4S intercompany payments, offset by the $10.2 million decrease in restricted cash held for customers, higher amounts paid for income taxes and interest, and other working capital changes.

Cash used for investing activities decreased by $123.5 million in 2022 due to higher amounts paid for business acquisitions in 2021.

Cash also decreased $70.1 million in 2022 as a result of the strengthening of the U.S.

dollar in 2021, primarily against the euro.

dollar in 2022, primarily against the Argentine peso and euro.

We financed our liquidity needs in 2022 with debt and cash flows from operations.

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2022 versus 2021

Operating cash flows increased by $160.3 million in 2021 compared to 2020.

The increase was primarily due to higher operating profit, working capital changes, lower amounts paid for G4S intercompany payments, and changes in customer obligations related to certain of our secure cash management services operations (certain customer obligations increased by $15.7 million in 2021 compared to a decrease of $6.5 million in 2020), partially offset by $56.1 million decrease in restricted cash held for customers and higher amounts paid for interest (we had $107.7 million in cash payments for interest in 2021 as compared to $80.4 million in 2020).

Non-GAAP cash flows from operating activities increased by $85.7 million in 2021 as compared to 2020.

The increase was primarily due to higher operating profit and working capital changes, partially offset by higher amounts paid for interest.

Cash flows from operating activities increased by $1.9 million in 2022 compared to 2021.

The increase was attributed to higher operating profit, changes in customer obligations related to certain of our secure cash management services operations (certain customer obligations increased by $50.0 million in 2022 compared to an increase of $15.7 million in 2021) and lower amounts paid for G4S intercompany payments, offset by restricted cash held for customers (restricted cash held for customers increased by $50.0 million in 2022 compared to an increase of $60.2 million in 2021), higher amounts paid for income taxes and interest (we had $127.8 million in cash payments for taxes and $117.5 million for interest in 2022 as compared to $83.8 million for taxes and $107.7 million for interest in 2021), and other working capital changes.

Non-GAAP cash flows from operating activities decreased by $24.8 million in 2022 as compared to 2021.

The decrease was attributed to higher amounts paid for income taxes and interest in 2022 and other working capital changes, offset by higher operating profit.

Investing Activities

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Proceeds from sale of property, equipment and investments 5.7 7.7 5.3 (2.0) 2.4

Redemption of cash-surrender value of life insurance policies — — 7.8 — (7.8)

Proceeds from settlement of cross currency swap 64.3 — — 64.3 —

Acquisition of customer contracts — — — — —

Net change in loans held for investment (25.9) — — (25.9) —

Other (0.2) (0.8) (9.0) 0.6 8.2

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Cash used by investing activities decreased by $123.5 million in 2022 as compared to 2021.

The decrease was primarily due to decreased payments related to the G4S acquisition in 2021 compared to 2020, offset by an increase in payments related to the PAI acquisition.

The decrease was primarily due to decreased payments related to the G4S and PAI acquisition in 2021 offset by payments related to the NoteMachine acquisition in 2022.

We also received proceeds from the settlement of the euro cross currency swaps in 2022, as discussed in Note 12, partially 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 20.

Capital expenditures and depreciation and amortization were as follows:

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Rest of World 34.4 26.0 16.6 8.4 9.4

Corporate items 5.9 6.0 10.3 (0.1) (4.3)

Corporate 6.2 5.9 6.0 0.3 (0.1)

Capital expenditures - GAAP and non-GAAP $ 182.6 167.9 118.5 $ 14.7 49.4

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Rest of World 34.8 26.5 16.7 8.3 9.8

Corporate items 5.9 6.0 10.3 (0.1) (4.3)

Corporate 6.2 5.9 6.0 0.3 (0.1)

Total property and equipment acquired $ 248.3 253.8 149.9 $ (5.5) 103.9

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Rest of World 23.6 23.2 20.0 0.4 3.2

Corporate items 9.7 9.1 10.8 0.6 (1.7)

Corporate 8.4 9.7 9.1 (1.3) 0.6

Depreciation and amortization - non-GAAP 189.8 189.2 167.6 0.6 21.6

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Our reinvestment ratio, which we define as the annual amount of property and equipment acquired during the year divided by the annual amount of depreciation, was 1.3 in 2022, 1.3 in 2021, and 0.9 in 2020.

Capital expenditures in 2021 for our operating units were primarily for machinery and equipment, armored vehicles, buildings and information technology.

Capital expenditures in 2022 for our operating units were primarily for cash devices, information technology, armored vehicles, and machinery and equipment.

Capital expenditures in 2022 were $14.7 million higher compared to 2021.

Total property and equipment acquired in 2021 was $103.9 million higher than the prior year.

These increases were primarily due to the impacts of the G4S acquisition, investments in cash devices and lower spending in 2020 due to the COVID-19 pandemic.

Total property and equipment acquired in 2022 was $5.5 million lower than the prior year.

This decrease was primarily due to a decrease in equipment finance leases, partially offset by an increase in investments in armored vehicles, information technology and cash devices.

Corporate capital expenditures in the last three years were primarily for investing in information technology.

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Borrowings (repayments) 366.6 411.4 798.6 (44.8) (387.2)

Acquisition of noncontrolling interest (7.8) — — (7.8) —

Debt financing costs (5.6) (0.8) (13.2) (4.8) 12.4

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Tax withholdings associated with share-based compensation (12.2) (5.5) (10.3) (6.7) 4.8

Cross currency swap contract 4.0 3.1 (3.9) 0.9 7.0

Other 3.9 4.0 3.1 (0.1) 0.9

Financing activities $ 245.2 171.3 683.7 $ 73.9 (512.4)

2022 versus 2021

Cash flows from financing activities decreased by $512.4 million in 2021 compared to 2020 as net borrowings decreased compared to the prior year period.

There was also a $150 million increase in cash used to repurchase shares of our common stock in 2021, compared to the prior period.

We paid dividends to Brink’s shareholders of $0.20 per share in each of the last three quarters in 2021 and paid $0.15 per share in each of the nine quarters prior.

Future dividends are dependent on our earnings, financial condition, shareholders’ equity levels, our cash flow and business requirements, as determined by the Board.

Cash flows from financing activities increased by $73.9 million in 2022 compared to 2021 due mostly to the $147.8 million decrease in cash used to repurchase shares of our comment stock (we used $52.2 million in cash to repurchase shares of common stock in 2022, compared to $200 million in 2021).

This amount was offset by a decrease to net borrowings in 2022 compared to 2021.

We paid dividends to Brink’s shareholders of $0.20 per share in each of the last seven quarters, and paid $0.15 per share in the five quarters prior.

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.

Effect of Exchange Rate Changes on Cash and Cash Equivalents

Changes in currency exchange rates decreased the amount of cash and cash equivalents by $50.8 million during 2021, compared to an increase of $37.9 million in 2020 and a reduction of $8.1 million in 2019.

Changes in currency exchange rates decreased the amount of cash and cash equivalents by $70.1 million during 2022, compared to a decrease of $50.8 million in 2021 and an increase of $37.9 million in 2020.

The decrease in 2022 was due to the strengthening of the U.S.

dollar in 2021, primarily against the euro.

dollar in 2022, primarily against the Argentine peso and euro.

Capitalization

We use a combination of debt, leases and equity to capitalize our operations.

As of December 31, 2021, debt as a percentage of capitalization (defined as total debt and equity) was 92%, which is consistent with 92% at December 31, 2020.

Our debt in 2021 increased primarily from the borrowings under the senior secured revolving credit facility partially offset by repayment of the senior secured term loan A.

Our equity increased in 2021 primarily due to the increase in reported net income, acquired noncontrolling interest related to the G4S acquisition and stock-based compensation, partially offset by share repurchases and dividends payments to Brink's shareholders.

As of December 31, 2022, debt as a percentage of capitalization (defined as total debt and equity) was 86%, which decreased from 92% at December 31, 2021.

Although our total debt increased in 2022, the lower percentage at year-end 2022 is primarily due to the significant increase in equity from the prior year.

Our equity more than doubled in 2022 primarily resulting from higher comprehensive income and lower share repurchase activity in 2022.

Our debt in 2022 increased primarily from the borrowings under the senior secured credit facility.

Summary of Debt, Equity and Other Liquidity Information

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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 December 31, 2022, and December 31, 2021.

Net Debt at the end of 2021 increased by $407 million when compared to Net Debt at the end of 2020 primarily due to the funding of business acquisitions and other working capital needs.

Net Debt at the end of 2022 increased by $225 million when compared to Net Debt at the end of 2021 to fund corporate purposes and other working capital needs.

Liquidity Needs

Our operating liquidity needs are typically financed by cash from operations, short-term borrowings and the available borrowing capacity under our revolving credit facility (our debt facilities are described in more detail in Note 15 to the consolidated financial statements, including certain limitations and considerations related to the cash and borrowing capacity).

Our operating liquidity needs are typically financed by cash from operations, short-term borrowings and the available borrowing capacity under our $1 billion revolving credit facility ("Revolving Credit Facility") (our debt facilities are described in more detail in Note 15 to the consolidated financial statements, including certain limitations and considerations related to the cash and borrowing capacity).

As of December 31, 2022, $353 million was available under the Revolving Credit Facility.

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See Item 1A., Risk Factors , 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 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 from those currently prevailing or from those now anticipated, 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.

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.

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Share Repurchase Program

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.

On October 27, 2021, we announced that the Board of Directors 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 of Directors 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.

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Share repurchases under this program may be made in the open market, in privately negotiated transactions, or otherwise.

In 2022, we repurchased a total of 948,395 shares of our common stock for an aggregate of $52.2 million and an average price of $55.01 per share.

These shares were retired upon repurchase.

At December 31, 2022, $198 million remains available under the 2021 Repurchase Program.

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November 2021 $ 150,000,000 1,742,160 $ 86.10

April 2022 (a)

$ 150,000,000 2,289,153 $ 65.53

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(a) We received 1,742,160 shares in early November 2021.

Under this ASR, the purchase period has a scheduled termination date of June 1, 2022, although the financial institution is eligible to early terminate the ASR after January 31, 2022.

At termination, either additional shares will be delivered to us or we will need to issue new shares of our common stock to the financial institution.

Under this ASR, the purchase period had a scheduled termination date of June 1, 2022, although the financial institution was eligible to early terminate the ASR after January 31, 2022.

In April 2022, the financial institution early terminated this ASR and we received additional 546,993 shares.

Off Balance Sheet Arrangements

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Retirement Obligations

Funding Relief

The American Rescue Plan Act ("ARPA") signed into law in March, 2021, provides funding relief for single-employer defined benefit pension plans.

The ARPA provisions result in significant reduction in, and deferral of, minimum funding requirements.

Because of the significant impact the ARPA provisions have on our primary U.S.

pension plan's estimated future funding requirements, we have updated the assumptions used to calculate the estimated future payments from Brink's and the estimated future expenses in the tables below.

Based on these revised assumptions, no cash payments to the plan are needed in the foreseeable future.

We have made various assumptions to estimate the amount of payments to be made in the future.

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Benefit plan actuarial gain 58.5 — — — — —

Prior service credit (b)

66.7 — — — — —

Other (3.6) — — — — —

Ending funded status $ (94.9) (96.7) (98.9) (101.4) (104.4) (107.8)

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Payment from Brink’s 8.8 9.3 8.7 8.1 7.5 6.9

Benefit plan actuarial loss (1.9) — — — — —

Benefit plan actuarial gain 19.3 — — — — —

Ending funded status $ (75.8) (70.3) (65.2) (60.4) (56.0) (51.9)

(a) Excludes amounts reclassified from accumulated other comprehensive income (loss).

(b) The UMWA plan was updated to move to a fully insured medical program through Medicare Advantage and a prior service credit has been established.

Pension benefits provided to eligible U.S.

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There are approximately 10,700 beneficiaries in the plan.

Based on our current assumptions, we do not expect to make contributions in the foreseeable future.

Based on our current assumptions, we do not expect to make contributions until 2026.

Retirement benefits related to former coal operations include medical benefits provided by the Pittston Coal Group Companies Employee Benefit Plan for UMWA Represented Employees.

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Department of Justice (the “DOJ”).

The Company is fully cooperating with the investigation and responding to requests from the DOJ for documents and other information, primarily related to cross-border shipments of cash and things of value and anti-money laundering compliance.

The Company is fully cooperating with the investigation and has responded to requests from the DOJ for documents and other information, primarily related to cross-border shipments of cash and things of value and anti-money laundering compliance.

Given that the investigation is still ongoing and that no civil or criminal claims have been brought to date, the Company cannot predict the outcome of the investigation, the timing of the ultimate resolution of the matter, or reasonably estimate the possible range of loss, if any, that may result from this matter.

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In October 2021, the FNE filed a complaint before the Chilean antitrust court alleging that Brink’s Chile (as well as competitor companies) engaged in collusion in 2017 and 2018 and requested that the court approve a fine of $30.5 million.

The Company is seeking access to the FNE’s investigative file and the evidence supporting the allegations against it, and intends to vigorously defend itself against the FNE’s complaint.

Based on available information to date, the Company has recorded a charge of $9.5 million in connection with this matter.

The Company filed its response to the complaint in November 2022, which signaled the beginning of the evidentiary phase.

The Company intends to vigorously defend itself against the FNE's complaint.

Based on available information to date, the Company recorded a charge of $9.5 million in the third quarter of 2021 in connection with this matter.

In 2022, we recognized an additional $1.4 million adjustment to our estimated loss as a result of a change in currency rates.

In addition, we are involved in various other lawsuits and claims in the ordinary course of business.

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Deferred Tax Assets

We had $190 million of net deferred tax assets at December 31, 2021, of which $176 million related to U.S.

We had $178 million of net deferred tax assets at December 31, 2022, of which $188 million in deferred tax assets are related to U.S.

jurisdictions.

In 2021, we concluded that we were not more-likely-than-not to realize assets related to certain attributes with a limited statutory carryforward and we recorded a $1 million valuation allowance through income from continuing operations.

In 2022, we concluded that we were more-likely-than-not to realize assets related to certain attributes with a limited statutory carryforward and we recorded a $56 million valuation allowance benefit through income from continuing operations and an additional $14 million valuation allowance reduction through other comprehensive income.

Our conclusion was based upon the final foreign tax credit regulations that the U.S.

Treasury published in the Federal Register on January 4, 2022.

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 our 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.

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• the estimated impact of U.S.

tax reform, and

tax reform and other U.S.

tax legislation, and

• interest rates on projected U.S.

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Deferred Tax Assets

In 2021, we recognized a tax expense of $9 million through income from continuing operations from a change in judgment about the need for valuation allowances for deferred tax assets related mainly to Canada and in certain other non-U.S.

In 2022, we recognized a tax expense of $1 million through income from continuing operations from a change in judgment about the need for valuation allowances for deferred tax assets in certain non-U.S.

jurisdictions.

In 2020, we recognized a tax benefit of $2 million through income from continuing operations from a change in judgment about the need for valuation allowances for deferred tax assets in certain non-U.S.

jurisdictions.

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Our overall medical inflation rate assumption, including the assumption that medical inflation rates will gradually decline over the next nine years and hold at 5%, is based on macroeconomic assumptions of gross domestic growth rates, the excess of national health expenditures over other goods and services, and population growth.

Our assumption of a medical inflation rate of 5.8% for 2022 is based on our recent actual experience.

The average annual medical inflation rate of the Company over the last five to eleven years ranged from 0.3% to 4.3%.

If we had assumed that medical inflation rates were one percentage point higher in each future year, the plan obligation for these plans at December 31, 2021, would have been approximately $45.3 million higher and the expense for 2021 would have been $1.1 million higher.

If we had assumed that the medical inflation rates were one percentage point lower, the plan obligation at December 31, 2021, would have been approximately $38.8 million lower and the related 2021 expenses would have been $0.9 million lower.

Our assumption of a medical inflation rate of 7.0% for 2023 reflects the current higher inflationary market with the expectation the rate will still trend down in the long-term.

Workers’ Compensation

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pension plan.

2019 Annuity Contract Buy-out

On October 8, 2019, we purchased a single premium group annuity contract from an insurance company to provide for the payment of pension benefits to approximately 2,600 primary U.S.

pension plan participants.

We purchased the contract with $53 million of plan assets.

The insurance company took over the payments of these benefits starting January 1, 2020.

This transaction settled $54 million of our primary U.S.

pension plan obligation.

As a result, we recognized a settlement charge of $19.3 million in the fourth quarter of 2019.

Number of participants .

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For nonmonetary equity securities traded in highly inflationary economies, the fair market value of the equity securities are remeasured at the current exchange rates to determine gain or loss to be recorded in net income.

For nonmonetary available for sale debt securities traded in highly inflationary economies, the fair market value of these debt securities are remeasured at the current exchange rates, with changes recorded in the gains (losses) on marketable securities component of accumulated other comprehensive income (loss).

For nonmonetary available-for-sale debt securities traded in highly inflationary economies, the fair market value of these debt securities are remeasured at the current exchange rates, with changes recorded in the gains (losses) on available-for-sale securities component of accumulated other comprehensive income (loss).

We reclassify amounts from accumulated other comprehensive income (loss) into earnings when these debt securities are sold.

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At December 31, 2022, we had net nonmonetary assets of $168.2 million, including $99.8 million of goodwill, $1.9 million in equity securities denominated in Argentine pesos and $27.4 million in debt securities denominated in Argentine pesos.

At December 31, 2020, we had net monetary assets denominated in Argentine pesos of $31.3 million (including cash of $24.4 million) and net nonmonetary assets of $146.2 million (including $99.8 million of goodwill).

At December 31, 2020, we had minimal equity securities denominated in Argentine pesos.

At December 31, 2021, we had net monetary assets denominated in Argentine pesos of $60.1 million (including cash of $52.9 million) and net nonmonetary assets of $155.3 million (including $99.8 million of goodwill, $8.2 million in equity securities denominated in Argentine pesos and $4.3 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.

During the third quarter of 2020 and during the fourth quarter of 2019, we elected to use other market mechanisms to convert Argentine pesos into U.S.

During the third quarter of 2020, we elected to use other market mechanisms to convert Argentine pesos into U.S.

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.

As a result, we recognized $10.4 million in 2020 and $4.7 million in 2019 of such conversion losses when we converted Argentine pesos into U.S.

dollars at rates that were approximately 100% and 25% less favorable than the rates at which we remeasured the financial statements of Brink’s Argentina.

As a result, we recognized $10.4 million in 2020 of such conversion losses when we converted Argentine pesos into U.S.

dollars at rates that were approximately 100% less favorable than the rates at which we remeasured the financial statements of Brink’s Argentina.

These conversion losses are classified in the consolidated statements of operations as other operating income (expense).

We did not have any such conversion losses in 2021.

We did not have any such conversion losses in 2021 or 2022.

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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 7. Management’s Discussion and Analysis