BRINKS CO 10-K

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS THE BRINK’S COMPANY MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS AS OF DECEMBER 31, 2022 AND 2021 AND FOR EACH OF THE YEARS IN THE THREE-YEAR PERIOD ENDED DECEMBER 31, 2022 TABLE OF CONTENTS Page OPERATIONS 21 RESULTS OF OPERATIONS Analysis of Results 22 Income and Expense Not Allocated to Segments 26 Other Operating Income and Expense 29 Nonoperating Income and Expense 30 Income Taxes 31 Noncontrolling Interests 32 Non-GAAP Results Reconciled to GAAP 33 Foreign Operations 36 LIQUIDITY AND CAPITAL RESOURCES Overview 38 Operating Activities 38 Investing Activities 39 Financing Activities 41 Effect of Exchange Rate Changes on Cash and Cash Equivalents 41 Capitalization 42 Off Balance Sheet Arrangements 44 U.S Retirement Liabilities 45 Contingent Matters 47 APPLICATION OF CRITICAL ACCOUNTING POLICIES Deferred Tax Asset Valuation Allowance 48 Business Acquisitions 49 Goodwill, Other Intangible Assets and Property and Equipment Valuations 50 Retirement and Postemployment Benefit Obligations 51 Foreign Currency Translation 55 The discussion of operating results and financial condition comparing 2021 versus 2020 can be found in Item 7. 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. 20 OPERATIONS 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 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: • North America – operations in the U.S. and Canada, including the Brink’s Global Services ("BGS") line of business, • Latin America – operations in Latin American countries where we have an ownership interest, including the BGS line of business, • Europe – total operations in European countries that primarily provide services outside of the BGS line of business, and • Rest of World – operations in the Middle East, Africa and Asia. This segment also includes total operations in European countries that primarily provide BGS services and BGS activity in Latin American countries where we do not have an ownership interest. We believe that Brink’s has significant competitive advantages including: • brand recognition • reputation for a high level of service and security • risk management and logistics expertise • global network and customer base • 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. Our marketing and sales efforts are enhanced by the “Brink’s” brand, so we seek to protect and build its value. Because our services focus on handling, transporting, protecting, and managing valuables, we strive to understand and manage risk. 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. 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. Incremental costs incurred usually relate to increasing or decreasing the number of employees and increasing or decreasing branches or administrative facilities. In addition, security costs can vary depending on performance, the cost of insurance coverage, and changes in crime rates (i.e., attacks and robberies). Brink’s revenues and related operating profit are generally higher in the second half of the year, particularly in the fourth quarter, due to generally increased economic activity associated with the holiday season. 21 RESULTS OF OPERATIONS Analysis of Results Consolidated Results GAAP and Non-GAAP Financial Measures We provide an analysis of our operations below on both a generally accepted accounting principles (“GAAP”) and non-GAAP basis. The purpose of the non-GAAP information is to report our operating profit, income from continuing operations and earnings per share without certain income and expense items that do not reflect the regular earnings of our operations. The non-GAAP financial measures are intended to provide investors with a supplemental comparison of our operating results and trends for the periods presented. Our management believes these measures are also useful to investors as such measures allow investors to evaluate our performance using the same metrics that our management uses to evaluate past performance and prospects for future performance. We do not consider these items to be reflective of our core operating performance. The non-GAAP adjustments used to reconcile our GAAP results are described 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 and dispositions for one year after the transaction and changes in currency exchange rates. See definitions on page 24. Years Ended December 31, % change (In millions, except for per share amounts) 2022 2021 2020 2022 2021 GAAP Revenues $ 4,535.5 4,200.2 3,690.9 8 14 Cost of revenues 3,461.9 3,235.8 2,877.3 7 12 Selling, general and administrative expenses 687.0 629.7 584.5 9 8 Operating profit 361.3 354.7 213.5 2 66 Income (loss) from continuing operations (a) 173.5 103.1 16.8 68 fav Diluted EPS from continuing operations (a) $ 3.63 2.06 0.33 76 fav Non-GAAP (b) Non-GAAP revenues $ 4,535.5 4,200.2 3,690.9 8 14 Non-GAAP operating profit 550.3 470.5 381.3 17 23 Non-GAAP income from continuing operations (a) 286.4 237.9 190.8 20 25 Non-GAAP diluted EPS from continuing operations (a) $ 5.99 4.75 3.76 26 26 (a) Amounts reported in this table are attributable to the shareholders of Brink’s and exclude earnings related to noncontrolling interests. (b) Non-GAAP results are reconciled to the applicable GAAP results on pages 33–35. GAAP Basis Analysis of Consolidated Results: 2022 versus 2021 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 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 ($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: • unfavorable changes in currency exchange rates ($70.4 million) driven by the Argentine peso and the euro, 22 • 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. Non-GAAP Basis Analysis of Consolidated Results: 2022 versus 2021 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 ($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: • 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. 23 Revenues and Operating Profit by Segment Organic Acquisitions / % Change (In millions) 2021 Change Dispositions (a) Currency (b) 2022 Total Organic Revenues: North America $ 1,407.1 140.2 41.6 (4.8) 1,584.1 13 10 Latin America 1,126.0 163.8 2.9 (82.1) 1,210.6 8 15 Europe 917.3 85.1 43.1 (114.1) 931.4 2 9 Rest of World 749.8 104.5 6.3 (51.2) 809.4 8 14 Segment revenues (c) 4,200.2 493.6 93.9 (252.2) 4,535.5 8 12 Revenues - GAAP $ 4,200.2 493.6 93.9 (252.2) 4,535.5 8 12 Operating profit: North America (d) $ 148.4 3.3 7.4 — 159.1 7 2 Latin America 257.3 50.8 0.4 (30.8) 277.7 8 20 Europe 89.8 14.8 6.2 (12.4) 98.4 10 16 Rest of World 131.5 41.7 0.8 (10.1) 163.9 25 32 Segment operating profit 627.0 110.6 14.8 (53.3) 699.1 11 18 Corporate (d)(e) (156.5) (0.9) — 8.6 (148.8) (5) 1 Operating profit - non-GAAP 470.5 109.7 14.8 (44.7) 550.3 17 23 Other items not allocated to segments (f) (115.8) (31.4) (16.1) (25.7) (189.0) 63 27 Operating profit (loss) - GAAP $ 354.7 78.3 (1.3) (70.4) 361.3 2 22 Amounts may not add due to rounding. (a) Non-GAAP amounts include the impact of prior year comparable period results for acquired and disposed businesses. GAAP results also include the impact of acquisition-related intangible amortization, restructuring and other charges, and disposition related gains/losses. (b) The amounts in the “Currency” column consist of the effects of Argentina devaluations under highly inflationary accounting and the sum of monthly currency changes. Monthly currency changes represent the accumulation throughout the year of the impact on current period results of changes in foreign currency rates from the prior year period. (c) Segment revenues equal our total reported non-GAAP revenues. (d) In the first quarter of 2021, North America operating profit benefited $12.3 million from a change in our method to calculate the allowance for doubtful accounts, with an offsetting higher expense at Corporate. There was no net impact on consolidated operating profit. See further discussion below in Analysis of Segment Results. (e) Corporate expenses are not allocated to segment results. Corporate expenses include salaries and other costs to manage the global business and to perform activities required by public companies. (f) See pages 26–28 for more information. Analysis of Segment Results: 2022 versus 2021 North America 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. business, which resulted in a $12.3 million operating profit increase, and which was offset by a $12.3 million increase to Corporate expense, resulting in no impact to consolidated operating profit for the first quarter. Historically, all Brink’s business units followed an internal Company policy for determining an allowance for doubtful accounts and the allowances were then reconciled to the required U.S. GAAP estimated consolidated allowance, with any differences reported as part of Corporate expense. Other than for the U.S. business, the reconciling differences were not significant. We changed the U.S. calculation of the allowance in order to more closely align it with the U.S. GAAP consolidated calculation and to minimize reconciling differences, resulting in the offsetting $12.3 million adjustments to align the methods. A change in estimation methodology resulted in a $16.7 million incremental bad debt expense recorded in the first quarter of 2022 that was associated with U.S. aged receivables. In the 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 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 24 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. Europe 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 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 $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. 25 Income and Expense Not Allocated to Segments Corporate Expenses Years Ended December 31, % change (In millions) 2022 2021 2020 2022 2021 General, administrative and other expenses $ (161.5) (141.7) (116.3) 14 22 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. GAAP. 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. The allowances were then reconciled to the required U.S. GAAP estimated consolidated allowance, with any differences reported as part of Corporate expense. In 2020, the Corporate reconciling adjustment was a reduction of Corporate expense of $11.0 million, to offset business unit allowances that were higher than U.S. GAAP required. In 2021, the adjustment was an increase of Corporate expense of $17.5 million. The 2021 increase was primarily from a change in the first quarter of 2021 to the allowance calculation method of the North America segment’s U.S. business. This change resulted in a $12.3 million increase to Corporate expense offset by a $12.3 million operating profit increase in the North America segment, resulting in no impact to consolidated operating profit for the first quarter of 2021. We changed the U.S. calculation of the allowance in order to more closely align it with the U.S. GAAP consolidated calculation and to minimize reconciling differences. Other than for the U.S. business, the reconciling differences were not significant. The bad debt expense increase excludes the impact of the internal loss in our U.S. global services operations described on the next page. Other Items Not Allocated to Segments Years Ended December 31, % change (In millions) 2022 2021 2020 2022 2021 Operating profit: 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 (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 Internal loss — 21.1 (6.9) (100) fav Reporting compliance — — (0.5) — (100) Operating profit $ (189.0) (115.8) (167.8) 63 (31) 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. 26 Other Restructurings Management periodically implements restructuring actions in targeted sections of our business. 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. 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. Charges related to the employees, assets, leases and contracts impacted by these restructuring actions were excluded from the segments and corporate expenses as shown in the table below. Years Ended December 31, % change (In millions) 2022 2021 2020 2022 2021 Reportable Segments: 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: 2022 Acquisitions and Dispositions Items • Amortization expense for acquisition-related intangible assets was $52.0 million in 2022. • 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. • Restructuring costs related to acquisitions were $0.2 million in 2022. • Compensation expense related to the retention of key PAI employees was $3.5 million in 2022. 2021 Acquisitions and Dispositions Items • Amortization expense for acquisition-related intangible assets was $47.7 million in 2021. • 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 • 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 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. As a result, Argentine peso-denominated monetary assets and liabilities are now remeasured at each balance sheet date to the currency exchange rate then in effect, with currency remeasurement gains and losses recognized in earnings. In addition, nonmonetary assets retain a higher historical basis when the currency is devalued. The higher historical basis results in incremental expense being recognized when the nonmonetary assets are consumed. In 2020, we recognized $10.7 million in pretax charges related to highly inflationary accounting, including currency remeasurement losses of $7.7 million. In 2021, we recognized $11.9 million in pretax charges related to highly inflationary accounting, including currency remeasurement losses of $9.0 million. In 2022, we recognized $41.7 million in pretax charges related to highly inflationary accounting, including currency remeasurement losses of $37.6 million. These amounts are excluded from segment and non-GAAP results. Change in allowance estimate In the first quarter of 2022, we refined our global methodology of estimating the allowance for doubtful accounts. Our previous method to estimate currently expected credit losses in receivables (the allowance) was weighted significantly to a review of historical loss rates and specific identification of higher risk customer accounts. It also considered current and expected economic 27 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. See Note 23 for details. Internal loss A former non-management employee in our U.S. global services operations embezzled funds from Brink's in prior years. In an effort to cover up the embezzlement, the former employee intentionally misstated the underlying accounts receivable subledger data. In 2020, we incurred $0.3 million in costs (primarily third party expenses) to reconstruct the accounts receivables subledger. 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 $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. We also recognized $1.3 million of legal charges in 2021 as we attempted to collect additional insurance recoveries related to these receivables losses. In the fourth quarter of 2021, we successfully collected $18.8 million of insurance recoveries related to these internal losses. 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 ($0.5 million in 2020, amounts not significant in 2022 or 2021). 28 Other Operating Income and Expense Amounts below represent consolidated other operating income and expense. Years Ended December 31, % change (In millions) 2022 2021 2020 2022 2021 Foreign currency items: 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 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) $ (25.3) 20.0 (15.6) unfav fav 2022 versus 2021 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 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). 29 Nonoperating Income and Expense Interest Expense Years Ended December 31, % change (In millions) 2022 2021 2020 2022 2021 Interest expense $ 138.8 112.2 96.5 24 16 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. Interest and Other Nonoperating Income (Expense) Years Ended December 31, % change (In millions) 2022 2021 2020 2022 2021 Interest income $ 23.6 12.1 5.6 95 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 Penalties and interest on non-income taxes (e) — (1.8) — (100) unfav Gains related to litigation (f) — 1.7 — (100) fav Earn-out liability adjustment (g) — 1.3 — (100) fav Interest on non-income tax credits (h) — 1.2 — (100) fav 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. (c) The gain is primarily related to the market value increase of an investment in MoneyGram International, Inc. The investment was sold in 2021 and the gain was fully realized. (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) 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. The principal amount of the settlement is reported in operating income (expense). The penalties for years of non-payment are reported in interest and other nonoperating income (expense). (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. 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. (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. 30 Income Taxes Summary Rate Reconciliation – GAAP (In percentages) 2022 2021 2020 U.S. federal tax rate 21.0 % 21.0 % 21.0 % Increases (reductions) in taxes due to: Foreign rate differential 7.5 7.6 12.9 Taxes on cross border income, net of credits 6.9 4.6 11.0 Adjustments to valuation allowances (21.1) 6.7 6.6 Foreign income taxes (0.7) 6.1 10.6 French business tax 0.8 0.7 3.7 State income taxes, net 0.7 0.9 (1.6) Share-based compensation 1.3 0.2 (3.1) Acquisition costs — 0.5 6.0 Other 1.9 2.8 4.3 Income tax rate on continuing operations 18.3 % 51.1 % 71.4 % Summary Rate Reconciliation – Non-GAAP (a) (In percentages) 2022 2021 2020 U.S. federal tax rate 21.0 % 21.0 % 21.0 % Increases (reductions) in taxes due to: Foreign rate differential 5.4 6.1 5.2 Adjustments to valuation allowances 2.4 1.4 (0.2) French business tax 0.4 0.4 1.0 Other 1.1 4.7 4.8 Income tax rate on Non-GAAP continuing operations 30.3 % 33.6 % 31.8 % (a) See pages 33–35 for a reconciliation of non-GAAP results to GAAP. Overview Our effective tax rate has varied in the past three years from the statutory U.S. federal rate due to various factors, including • changes in judgment about the need for valuation allowances, • changes in the geographical mix of earnings, • changes in laws in the U.S., France, Mexico, and Argentina, • timing of benefit recognition for uncertain tax positions, • state income taxes, and • tax benefit for distributions of share-based payments. We establish or reverse valuation allowances for deferred tax assets depending on all available information including historical and expected future operating performance of our subsidiaries. Changes in judgment about the future realization of deferred tax assets can result in significant adjustments to the valuation allowances. Based on our historical and future expected taxable earnings, we believe it is more-likely-than-not that we will realize the benefit of the deferred tax assets, net of valuation allowances. Continuing Operations 2022 Compared to U.S. Statutory Rate 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. 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. 31 Noncontrolling Interests Years Ended December 31, % change (In millions) 2022 2021 2020 2022 2021 Net income attributable to noncontrolling interests $ 11.3 12.1 5.9 (7) unfav 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. 32 Non-GAAP Results Reconciled to GAAP Non-GAAP results described in this filing are financial measures that are not required by or presented in accordance with GAAP. The purpose of the Non-GAAP results is to report financial information from the primary operations of our business by excluding the effects of certain income and expenses that do not reflect the ordinary earnings of our operations. The specific items excluded have not been allocated to segments, are described in detail on pages 26–28, and are reconciled to comparable GAAP measures below. The full-year Non-GAAP tax rate in each year excludes certain pretax and income tax amounts. Amounts reported for prior periods have been updated in this report to present information consistently for all periods presented. The Non-GAAP financial measures are intended to provide investors with a supplemental comparison of our operating results and trends for the periods presented. Our management believes these measures are also useful to investors as such measures allow investors to evaluate our performance using the same metrics that our management uses to evaluate past performance and prospects for future performance. We do not consider these items to be reflective of our operating performance as they result from events and circumstances that are not a part of our core business. Additionally, non-GAAP results are utilized as performance measures in certain management incentive compensation plans. Non-GAAP results should not be considered as an alternative to revenue, income or earnings per share amounts determined in accordance with GAAP and should be read in conjunction with their GAAP counterparts. Non-GAAP financial measures may not be comparable to Non-GAAP financial measures presented by other companies. 2022 2021 2020 (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) GAAP $ 226.2 41.4 18.3 % $ 235.5 120.3 51.1 % $ 79.3 56.6 71.4 % Retirement plans (c) 11.1 2.9 29.8 7.7 33.8 7.9 Reorganization and Restructuring (b) 38.8 8.2 43.6 11.7 67.1 15.8 Acquisitions and dispositions (b) 85.2 20.7 68.8 2.5 91.5 11.6 Argentina highly inflationary impact (b) 45.6 (2.0) 12.3 (1.1) 10.6 (1.3) Change in allowance estimate (b) 15.6 3.7 — — — — 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) — — (21.1) (1.3) 6.9 1.6 Reporting compliance (b) — — — — 0.5 — Deferred tax valuation allowance (e) — — — (12.8) — — Non-GAAP $ 428.8 129.9 30.3 % $ 378.4 127.0 33.6 % $ 289.7 92.2 31.8 % Amounts may not add due to rounding. (a) From continuing operations. (b) See “Other Items Not Allocated To Segments” on pages 26–28 for details. We do not consider these items to be reflective of our operating performance as they result from events and circumstances that are not a part of our core business. (c) Our U.S. retirement plans are frozen and costs related to these plans are excluded from non-GAAP results. Certain non-U.S. operations also have retirement plans. Settlement charges and curtailment gains related to these non-U.S. plans and costs related to our frozen non-U.S. retirement plans are also excluded from non-GAAP results. (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) 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. 33 Non-GAAP reconciled to GAAP Years Ended December 31, (In millions) 2022 2021 2020 Revenues: GAAP $ 4,535.5 4,200.2 3,690.9 Non-GAAP $ 4,535.5 4,200.2 3,690.9 Operating profit: GAAP $ 361.3 354.7 213.5 Reorganization and Restructuring (b) 38.8 43.6 66.6 Acquisitions and dispositions (b) 86.6 71.9 83.1 Argentina highly inflationary impact (b) 41.7 11.9 10.7 Change in allowance estimate (b) 15.6 — — Ship loss matter (b) 4.9 — — Chile antitrust matter (b) 1.4 9.5 — Internal loss (b) — (21.1) 6.9 Reporting compliance (b) — — 0.5 Non-GAAP $ 550.3 470.5 381.3 Interest expense: GAAP $ (138.8) (112.2) (96.5) Acquisitions and dispositions (b)(f) 1.2 1.3 1.9 Non-GAAP $ (137.6) (110.9) (94.6) Interest and other nonoperating income (expense): GAAP $ 3.7 (7.0) (37.7) Retirement plans (c) 11.1 29.8 33.8 Reorganization and Restructuring (b) — — 0.5 Acquisitions and dispositions (b)(g) (2.6) (4.4) 6.5 Argentina highly inflationary impact (b) 3.9 0.4 (0.1) Non-GAAP $ 16.1 18.8 3.0 Non-GAAP margin 12.1 % 11.2 % 10.3 % Provision for income taxes: GAAP $ 41.4 120.3 56.6 Retirement plans (c) 2.9 7.7 7.9 Reorganization and Restructuring (b) 8.2 11.7 15.8 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) 3.7 — — Valuation allowance on tax credits (d) 53.2 — — Ship loss matter (b) 1.3 — — Chile antitrust matter (b) 0.5 — — Internal loss (b) — (1.3) 1.6 Reporting compliance (b) — — — Deferred tax valuation allowance (e) — (12.8) — Non-GAAP $ 129.9 127.0 92.2 Net income (loss) attributable to noncontrolling interests: GAAP $ 11.3 12.1 5.9 Retirement plans (c) 0.1 — — Reorganization and Restructuring (b) 0.1 0.5 0.3 Acquisitions and dispositions (b) 1.0 0.9 0.5 Non-GAAP $ 12.5 13.5 6.7 Amounts may not add due to rounding. See page 33 for footnote explanations. 34 Non-GAAP reconciled to GAAP Years Ended December 31, (In millions, except for per share amounts) 2022 2021 2020 Income (loss) from continuing operations attributable to Brink's: GAAP $ 173.5 103.1 16.8 Retirement plans (c) 8.1 22.1 25.9 Reorganization and Restructuring (b) 30.5 31.4 51.0 Acquisitions and dispositions (b) 63.5 65.4 79.4 Argentina highly inflationary impact (b) 47.6 13.4 11.9 Change in allowance estimate (b) 11.9 — — Valuation allowance on tax credits (d) (53.2) — — Ship loss matter (b) 3.6 — — Chile antitrust matter (b) 0.9 9.5 — Internal loss (b) — (19.8) 5.3 Reporting compliance (b) — — 0.5 Deferred tax valuation allowance (e) — 12.8 — Non-GAAP $ 286.4 237.9 190.8 Diluted EPS GAAP $ 3.63 2.06 0.33 Retirement plans (c) 0.17 0.44 0.51 Reorganization and Restructuring (b) 0.64 0.63 1.00 Acquisitions and dispositions (b) 1.33 1.31 1.56 Argentina highly inflationary impact (b) 1.00 0.27 0.23 Change in allowance estimate (b) 0.25 — — Valuation allowance on tax credits (d) (1.11) — — Ship loss matter (b) 0.08 — — Chile antitrust matter (b) 0.02 0.19 — Internal loss (b) — (0.40) 0.10 Reporting compliance (b) — — 0.01 Deferred tax valuation allowance (e) — 0.26 — Non-GAAP $ 5.99 4.75 3.76 Amounts may not add due to rounding. See page 33 for footnote explanations. 35 Foreign Operations We currently serve customers in more than 100 countries, including 53 countries where we operate subsidiaries. We are subject to risks customarily associated with doing business in foreign countries, including labor and economic conditions, the imposition of international sanctions, including by the U.S. government, political instability, controls on repatriation of earnings and capital, nationalization, expropriation and other forms of restrictive action by local governments. Changes in the political or economic environments in the countries in which we operate could have a material adverse effect on our business, financial condition and results of operations. The future effects, if any, of these risks are unknown. In April 2019, the U.S. government sanctioned the Venezuela central bank and, as a result, we have ceased support of our Venezuela business. Our international operations conduct a majority of their business in local currencies. Because our financial results are reported in U.S. dollars, they are affected by changes in the value of various local currencies in relation to the U.S. dollar. Recent strengthening of the U.S. dollar relative to certain currencies has reduced our reported dollar revenues and operating profit, which may continue in 2023. See Application of Critical Accounting Policies—Foreign Currency Translation on pages 55–56 for a description of our accounting methods and assumptions used to include our Argentina operations in our consolidated financial statements, and a description of the accounting for subsidiaries operating in highly inflationary economies. See also Note 1 to the consolidated financial statements for a description of how we account for currency remeasurement for our Argentine subsidiaries, beginning July 1, 2018 under the heading, "Argentina". At December 31, 2022, Argentina's economy remains highly inflationary for accounting purposes. 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 the third quarter of 2020, we elected to use other market mechanisms to convert Argentine pesos into U.S. dollars. Conversions under these other market mechanisms generally settle at rates that are less favorable than the rates at which we remeasure the financial statements of Brink’s Argentina. 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 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. We continue to control our Argentina business for purposes of consolidation of our financial statements and continue to monitor the situation in Argentina. Changes in exchange rates may also affect transactions which are denominated in currencies other than the functional currency of a given foreign entity. From time to time, we use short term foreign currency forward and swap contracts to hedge transactional risks associated with foreign currencies, as discussed in Item 7A on pages 57-58. 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 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, 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. Amounts under these contracts were recognized in other operating income (expense) and in interest and other nonoperating income and expense as follows: Twelve Months Ended December 31, (In millions) 2022 2021 2020 Derivative instrument gains (losses) included in other operating income (expense) $ 42.0 24.2 (3.0) Derivative instrument losses included in other nonoperating income (expense) (a) — — (7.0) (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. Additionally, we reclassify amounts from accumulated other comprehensive income (loss) to interest expense amounts that are associated with the interest rate differential between a U.S. dollar denominated intercompany loan and a Brazilian real denominated intercompany loan. 36 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, 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: Twelve Months Ended December 31, (In millions) 2022 2021 2020 Derivative instrument gains included in other operating income (expense) $ (8.9) 0.2 22.1 Offsetting transaction gains 8.9 (0.2) (22.1) Derivative instrument losses included in interest expense (1.3) (1.3) (1.9) Net derivative instrument gains (losses) (10.2) (1.1) 20.2 In the second quarter of 2021, we entered into ten cross currency swaps to hedge a portion of our net investments in certain of our subsidiaries with euro functional currencies. We elected to use the spot method to assess effectiveness for these derivatives that are designated as net investment hedges. Accordingly, changes in fair value attributable to changes in the undiscounted spot rates are recorded in the foreign currency translation adjustments component of accumulated other comprehensive income (loss) and will remain there until the hedged net investments are sold or substantially liquidated. We have elected to exclude the spot-forward difference from the assessment of hedge effectiveness and are amortizing this amount separately on a straight-line basis over the term of these cross currency swaps. In July 2022, we terminated these cross currency swap contracts and received $67 million in cash as settlement. We subsequently entered into a total of nine cross currency swaps with a total notional 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, (In millions) 2022 2021 2020 Net derivative instrument gains included in interest expense $ (5.8) (4.1) — 37 LIQUIDITY AND CAPITAL RESOURCES Overview The discussion of liquidity and capital resources comparing 2021 versus 2020 can be found in Item 7. Management's Discussion and Analysis of Financial Conditions and Results of Operations of our 2021 10-K, starting on page 40. Over the last three years, we used cash generated from our operations and borrowings to • acquire new business operations ($925 million), • invest in the infrastructure of our business (new facilities, cash sorting and other equipment for our cash management services operations, armored trucks, CompuSafe ® units, and information technology) ($469 million), • repurchase shares of Brink's common stock ($302 million), and • pay dividends to Brink’s shareholders ($105 million). 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 2022, primarily against the Argentine peso and euro. We financed our liquidity needs in 2022 with debt and cash flows from operations. Operating Activities Years Ended December 31, $ change (In millions) 2022 2021 2020 2022 2021 Cash flows from operating activities Operating activities - GAAP $ 479.9 478.0 317.7 $ 1.9 160.3 (Increase) decrease in restricted cash held for customers (50.0) (60.2) (116.3) 10.2 56.1 (Increase) decrease in certain customer obligations (a) (50.0) (15.7) 6.5 (34.3) (22.2) G4S intercompany payments — 2.6 111.1 (2.6) (108.5) Operating activities - non-GAAP $ 379.9 404.7 319.0 $ (24.8) 85.7 (a) To adjust for the change in the balance of customer obligations related to cash received and processed in certain of our secure cash management services operations. The title to this cash transfers to us for a short period of time. The cash is generally credited to customers’ accounts the following day and we do not consider it as available for general corporate purposes in the management of our liquidity and capital resources. Non-GAAP cash flows from operating activities is a supplemental financial measure that is not required by, or presented in accordance with, GAAP. The purpose of this non-GAAP measure is to report financial information excluding cash flows from restricted cash held for customers, the impact of cash received and processed in certain of our secure cash management services operations and the impact of payments made to G4S for net intercompany receivables from the acquired subsidiaries. We believe this measure is helpful in assessing cash flows from operations, enables period-to-period comparability and is useful in predicting future operating cash flows. This non-GAAP measure should not be considered as an alternative to cash flows from operating activities determined in accordance with GAAP and should be read in conjunction with our consolidated statements of cash flows. 2022 versus 2021 GAAP 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 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. 38 Investing Activities Years Ended December 31, $ change (In millions) 2022 2021 2020 2022 2021 Cash flows from investing activities Capital expenditures $ (182.6) (167.9) (118.5) $ (14.7) (49.4) Acquisitions, net of cash acquired (173.9) (313.2) (439.7) 139.3 126.5 Dispositions, net of cash disposed — — (2.6) — 2.6 Marketable securities: Purchases (30.3) (15.6) (2.9) (14.7) (12.7) Sales 11.7 35.1 2.0 (23.4) 33.1 Proceeds from sale of property, equipment and investments 5.7 7.7 5.3 (2.0) 2.4 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 Investing activities $ (331.2) (454.7) (565.4) $ 123.5 110.7 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 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. 39 Capital expenditures and depreciation and amortization were as follows: Years Ended December 31, $ change (In millions) 2022 2021 2020 2022 2021 Property and Equipment Acquired during the year Capital expenditures (a) : North America $ 41.4 40.4 27.4 $ 1.0 13.0 Latin America 50.1 45.0 35.1 5.1 9.9 Europe 50.5 50.6 33.4 (0.1) 17.2 Rest of World 34.4 26.0 16.6 8.4 9.4 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 Financing leases (b): North America $ 46.3 50.6 24.1 $ (4.3) 26.5 Latin America 10.9 14.2 3.9 (3.3) 10.3 Europe 8.1 20.6 3.3 (12.5) 17.3 Rest of World 0.4 0.5 0.1 (0.1) 0.4 Financing leases - GAAP and non-GAAP $ 65.7 85.9 31.4 $ (20.2) 54.5 Total: North America $ 87.7 91.0 51.5 $ (3.3) 39.5 Latin America 61.0 59.2 39.0 1.8 20.2 Europe 58.6 71.2 36.7 (12.6) 34.5 Rest of World 34.8 26.5 16.7 8.3 9.8 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 Depreciation and amortization (a) North America $ 69.1 68.7 62.3 $ 0.4 6.4 Latin America 49.1 46.2 44.0 2.9 2.2 Europe 39.6 41.4 32.2 (1.8) 9.2 Rest of World 23.6 23.2 20.0 0.4 3.2 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 Argentina highly inflationary impact 2.9 2.2 1.8 0.7 0.4 Reorganization and Restructuring 1.0 0.3 1.3 0.7 (1.0) Acquisitions and dispositions 0.1 0.1 1.0 — (0.9) Amortization of intangible assets 52.0 47.7 35.1 4.3 12.6 Depreciation and amortization - GAAP $ 245.8 239.5 206.8 $ 6.3 32.7 (a) Incremental depreciation related to highly inflationary accounting in Argentina, accelerated depreciation related to restructuring activities and acquisition-related integration activities, and amortization of acquisition-related intangible assets have also been excluded from non-GAAP amounts. (b) Represents the amount of property and equipment acquired using financing leases. Because the assets are acquired without using cash, the acquisitions are not reflected in the consolidated statements of cash flows. Amounts are provided here to assist in the comparison of assets acquired in the current year versus prior years. Non-GAAP capital expenditures and non-GAAP depreciation and amortization are supplemental financial measures that are not required by, or presented in accordance with GAAP. The purpose of these non-GAAP measures is to report financial information excluding incremental depreciation resulting from highly inflationary accounting in Argentina, accelerated depreciation from restructuring activities and acquisition-related integration activities, and amortization of acquisition-related intangible assets. We believe these measures are helpful in assessing capital expenditures and depreciation and amortization, enable period-to-period comparability and are useful in predicting future investing cash flows. These non-GAAP measures should not be considered as alternatives to capital expenditures and depreciation and amortization determined in accordance with GAAP and should be read in conjunction with our consolidated statements of cash flows. 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 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 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. 40 Financing Activities Years Ended December 31, $ change (In millions) 2022 2021 2020 2022 2021 Cash flows from financing activities Borrowings and repayments: Short-term borrowings $ 37.7 (4.3) (3.9) $ 42.0 (0.4) Cash supply chain customer debt — — (10.5) — 10.5 Long-term revolving credit facilities, net 226.0 548.7 (111.1) (322.7) 659.8 Other long-term debt, net 102.9 (133.0) 924.1 235.9 (1,057.1) 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 Repurchase shares of Brink's common stock (52.2) (200.0) (50.0) 147.8 (150.0) Dividends to: Shareholders of Brink’s (37.6) (37.2) (30.1) (0.4) (7.1) Noncontrolling interests in subsidiaries (7.1) (5.1) (16.8) (2.0) 11.7 Acquisition-related financing activities: Settlement of acquisition-related contingencies — 6.2 9.7 (6.2) (3.5) Payment of acquisition-related obligation (2.8) (4.0) (7.3) 1.2 3.3 Proceeds from exercise of stock options — 2.3 — (2.3) 2.3 Tax withholdings associated with share-based compensation (12.2) (5.5) (10.3) (6.7) 4.8 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 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. Dividends 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 $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 2022, primarily against the Argentine peso and euro. 41 Capitalization We use a combination of debt, leases and equity to capitalize our operations. 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 Amount available under credit facilities Outstanding balance December 31, December 31, (In millions) 2022 2022 2021 $ change (a) Debt: Short-term borrowings Other $ 74.9 $ 47.2 9.8 $ 37.4 Total Short-term borrowings $ 74.9 $ 47.2 9.8 $ 37.4 Long-term debt Revolving Facility $ 353.1 $ 646.9 495.0 151.9 Term Loan A — 1,377.4 1,224.7 152.7 Senior Unsecured Notes — 992.1 989.8 2.3 Letter of Credit Facilities 41.0 — — — Other facilities 147.0 147.0 68.9 78.1 Financing leases — 192.2 178.5 13.7 Total Long-term debt $ 541.1 $ 3,355.6 2,956.9 $ 398.7 Total Debt $ 616.0 $ 3,402.8 2,966.7 $ 436.1 Total equity $ 570.2 252.6 $ 317.6 (a) In addition to cash borrowings and repayments, the change in the debt balance also includes changes in currency exchange rates. Reconciliation of Net Debt to U.S. GAAP Measures December 31, (In millions) 2022 2021 $ change Debt: Short-term borrowings $ 47.2 9.8 $ 37.4 Long-term debt 3,355.6 2,956.9 398.7 Total Debt 3,402.8 2,966.7 436.1 Less: Cash and cash equivalents 972.0 710.3 261.7 Amounts held by cash management services operations (a) (85.2) (34.7) (50.5) Cash and cash equivalents available for general corporate purposes 886.8 675.6 211.2 Net Debt (b) $ 2,516.0 2,291.1 $ 224.9 (a) Title to cash received and processed in certain of our secure Cash Management Services operations transfers to us for a short period of time. The cash is generally credited to customers’ accounts the following day and we do not consider it as available for general corporate purposes in the management of our liquidity and capital resources and in our computation of Net Debt. (b) Included within Net Debt is net cash from our Argentina operations of $58 million at December 31, 2022 and $54 million at December 31, 2021 (see Note 1 to the consolidated financial statements for a discussion of currency controls in Argentina). Net Debt is a supplemental non-GAAP financial measure that is not required by or presented in accordance with GAAP. We use Net Debt as a measure of our financial leverage. We believe that investors also may find Net Debt to be helpful in evaluating our financial leverage. Net Debt should not be considered as an alternative to Debt determined in accordance with GAAP and should be reviewed in conjunction with our consolidated balance sheets. Set forth above is a reconciliation of Net Debt, a non-GAAP financial measure, to Debt, which is the most directly comparable financial measure calculated and reported in accordance with GAAP, as of December 31, 2022, and December 31, 2021. 42 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 $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. Based on our current cash on hand, amounts available under our credit facilities and current projections of cash flows from operations, we believe that we will be able to meet our liquidity needs for more than the next twelve months. Limitations on dividends from foreign subsidiaries . A significant portion of our operations are outside the U.S. which may make it difficult to or costly to repatriate additional cash for use in the U.S. 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, and material increases in inflation, that would adversely affect our business. The anticipated cash needs of our business could change significantly if we pursue and complete additional business acquisitions, if our business plans change, if events, including economic disruptions, arising from the ongoing COVID-19 pandemic worsen, or if other economic conditions change, such as material increases in inflation, from those currently prevailing or from those now anticipated, such as higher inflation or if other unexpected circumstances arise that may have a material effect on the cash flow or profitability of our business, including material negative changes in the health and welfare of our employees or changes in the condition of our customers or suppliers, and the operating performance or financial results of our business. Any of these events or circumstances, including any new business opportunities, could involve significant additional funding needs in excess of the identified currently available sources and could require us to raise additional debt or equity funding to meet those needs. Our ability to raise additional capital, if necessary, is subject to a variety of factors that we cannot predict with certainty, including: • our future profitability; • the quality of our accounts receivable; • our relative levels of debt and equity; • the volatility and overall condition of the capital markets; and • the market prices of our securities. Cash and Cash Equivalents At December 31, 2022, we had $972.0 million in cash and cash equivalents, compared to $710.3 million at December 31, 2021. We plan to use the current cash and cash equivalents for working capital needs, capital expenditures, acquisitions and other general corporate purposes. Equity Common Stock At December 31, 2022, we had 100 million shares of common stock authorized and 46.3 million shares issued and outstanding. Preferred Stock At December 31, 2022, we had the authority to issue up to 2 million shares of preferred stock, par value $10 per share. Share Repurchase Program 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. The timing and volume of share repurchases may be executed at the discretion of management on an opportunistic basis, or pursuant to trading plans or other arrangements. Share repurchases under this program may be made in the open market, in privately negotiated transactions, or otherwise. 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. Under the 2020 Repurchase Program, we entered into three accelerated share repurchase arrangements ("ASR") with a financial institution. In each case, in exchange for an upfront payment at the beginning of each purchase period, the financial institution delivered to us shares of our common stock. The shares received were retired in the period they were delivered to us, and the upfront payment was accounted for as a reduction to shareholders' equity in the consolidated balance sheet. For purposes of calculating earnings per share, we reported each ASR as a repurchase of our common stock and as a forward contract indexed to our common stock. Each ASR met the applicable criteria for equity classification, and, as a result, none were accounted for as a derivative instrument. 43 Below is a summary of each ASR entered into under the 2020 Repurchase Program: Upfront Payment Shares Received Average Repurchase Price August 2020 $ 50,000,000 849,978 $ 58.83 September 2020 — 246,676 — $ 50,000,000 1,096,654 $ 45.59 August 2021 $ 50,000,000 524,315 $ 95.36 September 2021 — 131,384 — $ 50,000,000 655,699 $ 76.25 November 2021 $ 150,000,000 1,742,160 $ 86.10 April 2022 (a) — 546,993 — $ 150,000,000 2,289,153 $ 65.53 $ 250,000,000 4,041,506 $ 61.86 (a) We received 1,742,160 shares in early November 2021. 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 We have certain operating leases that are considered short term and are not capitalized to the balance sheet. We use operating leases both on and off balance sheet to lower our cost of financings. We believe that operating leases are an important component of our capital structure. 44 U.S. Retirement Liabilities Assumptions for U.S. Retirement Obligations We have made various assumptions to estimate the amount of payments to be made in the future. The most significant assumptions include: • Changing discount rates and other assumptions in effect at measurement dates (normally December 31) • Investment returns on plan assets • Addition of new claimants (historically immaterial due to freezing of pension benefits and exit from coal business) • Mortality rates • Change in laws Funded Status of U.S. Retirement Plans Actual Projected (In millions) 2022 2023 2024 2025 2026 2027 Primary U.S. pension plan Beginning funded status $ (65.8) (24.0) (25.0) (24.8) (22.6) (8.6) Net periodic pension credit (a) 26.0 15.0 14.0 12.1 10.0 8.3 Payment from Brink’s — — — — 11.7 11.5 Benefit plan actuarial gain (loss) 15.8 (16.0) (13.8) (9.9) (7.7) (5.0) Ending funded status $ (24.0) (25.0) (24.8) (22.6) (8.6) 6.2 UMWA plans Beginning funded status $ (219.4) (94.9) (96.7) (98.9) (101.4) (104.4) Net periodic postretirement cost (a) 2.9 (1.8) (2.2) (2.5) (3.0) (3.4) 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) Black Lung plans Beginning funded status $ (101.3) (75.8) (70.3) (65.2) (60.4) (56.0) Net periodic postretirement cost (a) (2.6) (3.8) (3.6) (3.3) (3.1) (2.8) Payment from Brink’s 8.8 9.3 8.7 8.1 7.5 6.9 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. Primary U.S. Pension Plan Pension benefits provided to eligible U.S. employees were frozen on December 31, 2005, and benefits are not provided to employees hired after 2005 or to those covered by a collective bargaining agreement. We did not make cash contributions to the primary U.S. pension plan in 2022. There are approximately 10,700 beneficiaries in the plan. Based on our current assumptions, we do not expect to make contributions until 2026. UMWA Plan Retirement benefits related to former coal operations include medical benefits provided by the Pittston Coal Group Companies Employee Benefit Plan for UMWA Represented Employees. There are approximately 2,500 beneficiaries in the UMWA plans. The company does not expect to make contributions to these plans until 2033, based on our actuarial assumptions. Black Lung Under the Federal Black Lung Benefits Act of 1972, Brink’s is responsible for paying lifetime black lung benefits to miners and their dependents for claims filed and approved after June 30, 1973. There are approximately 800 black lung beneficiaries as of December 31, 2022. Non-U.S. defined-benefit pension plans. We have various defined-benefit pension plans covering eligible current and former employees of some of our international operations. See Note 4 to the consolidated financial statements for information about these non-U.S. plans' benefit obligation and estimated future benefit payments over the next 10 years. 45 Summary of Total Expenses Related to All U.S. Retirement Liabilities This table summarizes actual and projected expense (income) related to U.S. retirement liabilities. These expenses are not allocated to segment results. Actual Projected (In millions) 2022 2023 2024 2025 2026 2027 Primary U.S. pension plan $ (1.9) (13.2) (8.7) (2.0) 5.0 11.1 UMWA plans 2.5 (2.5) (2.5) (2.5) 2.3 2.5 Black Lung plans 9.8 8.4 7.8 7.3 6.8 6.3 Total $ 10.4 (7.3) (3.4) 2.8 14.1 19.9 Summary of Total Payments from U.S. Plans to Participants This table summarizes actual and estimated payments from the plans to participants. Actual Projected (In millions) 2022 2023 2024 2025 2026 2027 Payments from U.S. Plans to participants Primary U.S. pension plan $ 44.4 48.1 48.0 48.0 48.0 47.7 UMWA plans 20.3 20.0 19.9 19.8 19.6 19.5 Black Lung plans 8.8 9.3 8.7 8.1 7.5 6.9 Total $ 73.5 77.4 76.6 75.9 75.1 74.1 Summary of Projected Payments from Brink’s to U.S. Plans This table summarizes estimated payments from Brink’s to U.S. retirement plans. Projected Payments to Plans from Brink's (In millions) Primary U.S. Pension Plan UMWA Plans Black Lung Plans Total Projected payments 2023 $ — — 9.3 9.3 2024 — — 8.7 8.7 2025 — — 8.1 8.1 2026 11.7 — 7.5 19.2 2027 11.5 — 6.9 18.4 2028 10.4 — 6.4 16.8 2029 9.2 — 5.9 15.1 2030 7.8 — 5.5 13.3 2031 7.2 — 5.1 12.3 2032 6.3 — 4.8 11.1 2033 5.0 7.5 4.5 17.0 2034 1.6 16.3 4.2 22.1 2035 — 15.6 3.9 19.5 2036 — 14.8 3.7 18.5 2037 and thereafter — 152.6 39.8 192.4 Total projected payments $ 70.7 206.8 124.3 401.8 The amounts in the tables above are based on a variety of estimates, including actuarial assumptions as of December 31, 2022. The estimated amounts will change in the future to reflect payments made, investment returns, actuarial revaluations, and other changes in estimates. Actual amounts could differ materially from the estimated amounts. 46 Contingent Matters In August 2020, the Company received a subpoena issued in connection with an investigation being conducted by the U.S. Department of Justice (the “DOJ”). 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. Accordingly, no accruals have been made with respect to this matter. At the end of the fourth quarter of 2018, we became aware of an investigation initiated by the Chilean Fiscalía Nacional Económica (the Chilean antitrust agency) (“FNE”) related to potential anti-competitive practices among competitors in the cash logistics industry in Chile. 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 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. We are not able to estimate the loss or range of losses for some of these matters. We have recorded accruals for losses that are considered probable and reasonably estimable. Except as otherwise noted, we do not believe that it is reasonably possible the ultimate disposition of any of the lawsuits currently pending against the Company could have a material adverse effect on our liquidity, financial position or results of operations. 47 APPLICATION OF CRITICAL ACCOUNTING POLICIES The application of accounting principles requires the use of assumptions, estimates and judgments. We make assumptions, estimates and judgments based on, among other things, knowledge of operations, markets, historical trends and likely future changes, similarly situated businesses and, when appropriate, the opinions of advisors with relevant knowledge and experience. Reported results could have been materially different had we used a different set of assumptions, estimates and judgments. Deferred Tax Asset Valuation Allowance Deferred tax assets result primarily from net operating losses, tax credit carryforwards, and the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial statement and income tax purposes, as determined under enacted tax laws and rates. Accounting Policy We establish valuation allowances, in accordance with the Financial Accounting Standards Board ("FASB") ASC Topic 740, Income Taxes , when we estimate it is not more-likely-than-not that a deferred tax asset will be realized. We decide to record valuation allowances primarily based on an assessment of positive and negative evidence including historical earnings and future taxable income that incorporates prudent, feasible tax-planning strategies. We assess deferred tax assets on an individual jurisdiction basis. Changes in tax statutes, the timing of deductibility of expenses or expectations for future performance could result in material adjustments to our valuation allowances, which would increase or decrease tax expense. Our valuation allowances are as follows. Valuation Allowances December 31, (In millions) 2022 2021 U.S. $ 24.4 95.8 Non-U.S. 52.9 45.7 Total $ 77.3 141.5 Application of Accounting Policy U.S. Deferred Tax Assets 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 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. 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. We used various estimates and assumptions to evaluate the need for the valuation allowance in the U.S. These included • projected revenues and operating income for our U.S. entities, • projected royalties and management fees paid to U.S. entities from subsidiaries outside the U.S., • projected Global Intangible Low-Taxed Income ("GILTI") inclusion in our U.S. taxable income, • estimated required contributions to our U.S. retirement plans, • the estimated impact of U.S. tax reform and other U.S. tax legislation, and • interest rates on projected U.S. borrowings. Our projections assumed continued growth of our revenues and operating profit both in the U.S. and outside the U.S. Had we used different assumptions, we might have made different conclusions about the need for valuation allowances. For example, if we did not have growth in either the U.S. or non-U.S. jurisdictions with respect to the GILTI inclusions or using different assumptions, we might have concluded that we require a full valuation allowance offsetting our U.S. deferred tax assets. Non-U.S. Deferred Tax Assets 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 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 in certain non-U.S. jurisdictions. 48 Business Acquisitions Accounting Policy In the three years ended December 31, 2022, we have completed multiple business acquisitions. When we acquire a controlling interest in an entity that is determined to meet the definition of a business, we apply the acquisition method described in FASB ASC Topic 805, Business Combinations . Using the acquisition method, we allocate the total purchase price to the assets acquired and the liabilities assumed based on their estimated fair values at the acquisition date. Any excess purchase price over the fair value of the assets acquired and the liabilities assumed is recognized as goodwill. Application of Accounting Policy The purchase price allocation process requires us to make significant estimates and assumptions, primarily related to intangible assets. The allocation of the purchase consideration transferred may be subject to revision based on the final determination of fair values during the measurement period. We use all available information to make these fair value determinations and, for material business acquisitions, we engage an outside valuation specialist to assist in the fair value determination of the acquired intangible assets. We typically use an income method to estimate the fair value of intangible assets, which is based primarily on future cash flow projections. The forecasted cash flows also reflect significant assumptions related to expected customer attrition rates, revenue growth rates, market participant synergies and discount rates applied to the cash flows. Unanticipated events and circumstances may occur which may affect the accuracy or validity of such assumptions. The estimated fair values assigned to assets acquired and liabilities assumed in a purchase price allocation can have a significant effect on future results of operations. For example, a higher fair value assigned to intangible assets results in higher amortization expense, which results in lower net income. 49 Goodwill, Other Intangible Assets and Property and Equipment Valuations Accounting Policy At December 31, 2022, we had property and equipment of $935.3 million, goodwill of $1,450.9 million and other intangible assets of $535.5 million, net of accumulated depreciation and amortization. We review these assets for possible impairment using the guidance in FASB ASC Topic 350, Intangibles - Goodwill and Other , for goodwill and other intangible assets and FASB ASC Topic 360, Property, Plant and Equipment , for property and equipment. Our review for impairment requires the use of significant judgments about the future performance of our operating subsidiaries. Due to the many variables inherent in the estimates of the fair value of these assets, differences in assumptions could have a material effect on the impairment analyses. Goodwill We review goodwill for impairment annually and whenever events or circumstances make it more-likely-than-not that impairment may have occurred. Application of the goodwill impairment test requires judgment, including the identification of reporting units, assignment of assets and liabilities to reporting units, assignment of goodwill to reporting units, and determination of the fair value of each reporting unit. Under U.S. GAAP, the annual impairment test may be either a quantitative test or a qualitative assessment. The qualitative assessment can be performed in order to determine whether facts and circumstances support a determination that reporting unit fair values are greater than their carrying values. We performed a goodwill impairment test on these reporting units as of October 1, 2022 and elected to forego the optional qualitative assessment and performed a quantitative goodwill impairment assessment instead. We estimated the fair value of each reporting unit using a weighting of two valuation methodologies: the Income Approach and the Public Company Market Multiple Method, with greatest weight placed on the Income Approach. The resulting reporting unit fair values were compared to each reporting unit's carrying value. As a result of the evaluation, we concluded that goodwill was not impaired, and the fair value of each reporting unit exceeded its carrying value for all reporting units. Finite-lived Intangible Assets and Property and Equipment We review finite-lived intangible assets and property and equipment for impairment whenever events or changes in circumstances indicate that the related carrying amounts may not be recoverable. For purposes of assessing impairment, assets are grouped at the lowest levels for which there are identifiable cash flows that are largely independent of the cash flows of other groups of assets. To determine whether impairment has occurred, we compare estimates of the future undiscounted net cash flows of groups of assets to their carrying value. Estimates of Future Cash Flows We made significant assumptions when preparing financial projections of cash flow used in our impairment analyses, including assumptions of future results of operations including revenue growth rate and operating income over the forecast period, capital requirements, income taxes, long-term growth rates for determining terminal value, and discount rates. Our projections assumed continued growth of our revenues and operating profit both in the U.S. and outside the U.S. Our conclusions regarding asset impairment may have been different if we had used different assumptions. 50 Retirement and Post employment Benefit Obligations We provide benefits through defined benefit pension plans and retiree medical benefit plans and under statutory requirements. Accounting Policy We account for pension and other retirement benefit obligations under FASB ASC Topic 715, Compensation – Retirement Benefits. We account for post employment benefit obligations, including workers’ compensation obligations, under FASB ASC Topic 712, Compensation – Non retirement Post employment Benefits . To account for these benefits, we make assumptions of expected return on assets, discount rates, inflation, demographic factors and changes in the laws and regulations covering the benefit obligations. Because of the inherent volatility of these items and because the obligations are significant, changes in the assumptions could have a material effect on our liabilities and expenses related to these benefits. Our most significant retirement plans include our primary U.S. pension plan and the retiree medical plans of our former coal business that were collectively bargained with the United Mine Workers of America (the “UMWA”). The critical accounting estimates that determine the carrying values of liabilities and the resulting annual expense are discussed below. Application of Accounting Policy Discount Rate Assumptions For plans accounted under FASB ASC Topic 715, we discount estimated future payments using discount rates based on market conditions at the end of the year. In general, our liability changes in an inverse relationship to interest rates. That is, the lower the discount rate, the higher the associated plan obligation. U.S. Plans For our largest retirement plans, including the primary U.S. pension and UMWA plans and Black Lung obligations, we derive the discount rates used to measure the present value of benefit obligations using the cash flow matching method. Under this method, we compare the plan’s projected payment obligations by year with the corresponding yields on a Mercer yield curve. Each year’s projected cash flows are then discounted back to their present value at the measurement date and an overall discount rate is determined. The overall discount rate is then rounded to the nearest tenth of a percentage point. We used Mercer’s Above-Mean Curve to determine the discount rates for retirement cost and the year-end benefit obligation. To derive the Above-Mean Curve, Mercer uses only those bonds with a yield higher than the mean yield of the same portfolio of high quality bonds. The Above-Mean Curve reflects the way an active investment manager would select high-quality bonds to match the cash flows of the plan. Non-U.S. Plans We use the same cash flow matching method to derive the discount rates for our major non-U.S. retirement plans. Where the cash flow matching method is not possible, rates of local high-quality long-term government bonds are used to estimate the discount rate. The discount rates for the primary U.S. pension plan, UMWA retiree medical plans and Black Lung obligations were: Primary U.S. Plan UMWA Plans Black Lung 2022 2021 2020 2022 2021 2020 2022 2021 2020 Discount rate: Retirement cost 2.8 % 2.4 % 3.3 % 2.8 % 2.3 % 3.2 % 2.7 % 2.2 % 3.1 % Benefit obligation at year end 5.4 % 2.8 % 2.4 % 5.4 % 2.8 % 2.3 % 5.4 % 2.7 % 2.2 % Sensitivity Analysis The discount rate we select at year end materially affects the valuations of plan obligations at year end and the calculations of net periodic expenses for the following year. The tables below compare hypothetical plan obligation valuations for our largest plans as of December 31, 2022, actual expenses for 2022 and projected expenses for 2023 assuming we had used discount rates that were one percentage point lower or higher. Plan Obligations at December 31, 2022 (In millions) Hypothetical 1% lower Actual Hypothetical 1% higher Primary U.S. pension plan $ 684.3 620.3 566.3 UMWA plans 255.2 233.9 215.5 51 Actual 2022 and Projected 2023 Expense (Income) (In millions, except for percentages) Hypothetical sensitivity analysis for discount rate assumption Hypothetical sensitivity analysis for discount rate assumption Actual 1% lower 1% higher Projected 1% lower 1% higher Years Ending December 31, 2022 2022 2022 2023 2023 2023 Primary U.S. pension plan Discount rate assumption 2.8 % 1.8 % 3.8 % 5.4 % 4.4 % 6.4 % Retirement cost $ (1.9) 5.2 (7.0) $ (13.2) (8.3) (12.5) UMWA plans Discount rate assumption 2.8 % 1.8 % 3.8 % 5.4 % 4.4 % 6.4 % Retirement cost $ 2.5 3.2 1.8 $ (2.5) (2.0) (3.1) Expected-Return-on-Assets Assumption Our expected-return-on-assets assumption, which materially affects our net periodic benefit cost, reflects the long-term average rate of return we expect the plan assets to earn. We select the expected-return-on-assets assumption using advice from our investment advisor considering each plan’s asset allocation targets and expected overall investment manager performance and a review of the most recent long-term historical average compounded rates of return, as applicable. We selected 7.00% as the expected-return-on-assets assumption for our primary U.S. pension plan and 8.00% for our UMWA retiree medical plans for actual 2022 expense. We selected 7.00% as the expected-return-on-assets assumption for our primary U.S. pension plan and 8.00% for our UMWA retiree medical plans for projected 2023 expense. The twenty to thirty year compound annual return of our primary U.S. pension plan has averaged from 6.3% to 7.7%. Sensitivity Analysis Effect of using different expected-rate-of-return assumptions. Our 2022 and projected 2023 expense would have been different if we had used different expected-rate-of-return assumptions. For every hypothetical change of one percentage point in the assumed long-term rate of return on plan assets (and holding other assumptions constant), our actual 2022 and projected 2023 expense would be as follows: (In millions, except for percentages) Hypothetical sensitivity analysis for expected-return-on asset assumption Hypothetical sensitivity analysis for expected-return-on asset assumption Actual 1% lower 1% higher Projected 1% lower 1% higher Years Ending December 31, 2022 2022 2022 2023 2023 2023 Expected-return-on-asset assumption Primary U.S. pension plan 7.00 % 6.00 % 8.00 % 7.00 % 6.00 % 8.00 % UMWA plans 8.00 % 7.00 % 9.00 % 8.00 % 7.00 % 9.00 % Primary U.S. pension plan $ (1.9) 5.1 (8.9) $ (13.2) (6.5) (19.9) UMWA plans 2.5 4.2 0.9 (2.5) (1.2) (3.8) 52 Effect of improving or deteriorating actual future market returns. Our funded status at December 31, 2023, and our 2024 expense will be different from currently projected amounts if our projected 2023 returns are better or worse than the returns we have assumed for each plan. (In millions, except for percentages) Hypothetical sensitivity analysis of 2023 asset return better or worse than expected Years Ending December 31, Projected Better return Worse return Return on investments in 2023 Primary U.S. pension plan 7.00 % 14.00 % — % UMWA plans 8.00 % 16.00 % — % Projected Funded Status at December 31, 2023 Primary U.S. pension plan $ (25) 15 (65) UMWA plans (97) (86) (107) 2024 Expense (a) Primary U.S. pension plan $ (9) (10) (7) UMWA plans (3) (4) (1) (a) Actual future returns on investments will not affect our earnings until 2024 since the earnings in 2023 will be based on the "expected return on assets" assumption. Effect of using fair market value of assets to determine expense. For our defined-benefit pension plans, we calculate expected investment returns by applying the expected long-term rate of return to the market-related value of plan assets. In addition, our plan asset actuarial gains and losses that are subject to amortization are based on the market-related value. The market-related value of the plan assets is different from the actual or fair market value of the assets. The actual or fair market value is, at a point in time, the value of the assets that is available to make payments to pensioners and to cover any transaction costs. The market-related value recognizes changes in fair value from the expected value on a straight-line basis over five years. This recognition method spreads the effects of year-over-year volatility in the financial markets over several years. Our expenses related to our primary U.S. pension plan would have been different if our accounting policy were to use the fair market value of plan assets instead of the market-related value to recognize investment gains and losses. (In millions) Based on market-related value of assets Hypothetical (a) Actual Projected Projected Years Ending December 31, 2022 2023 2024 2022 2023 2024 Primary U.S. pension plan expense $ (1.9) (13.2) (8.7) $ (10.7) 8.0 10.5 (a) Assumes that our accounting policy was to use the fair market value of assets instead of the market-related value of assets to determine our expense related to our primary U.S. pension plan. For our UMWA plans, we calculate expected investment returns by applying the expected long-term rate of return to the fair market value of the assets at the beginning of the year. This method is likely to cause the expected return on assets, which is recorded in earnings, to fluctuate more than had we used the accounting methodology of our defined-benefit pension plans. Medical Inflation Assumption We estimate the trend in healthcare cost inflation to predict future cash flows related to our retiree medical plans. Our assumption is based on recent plan experience and industry trends. For the UMWA plans, our largest retiree medical plans, we have assumed a medical inflation rate of 7.0% for 2023, and we project this rate to decline to 5% in 2031 and hold at 5% thereafter. 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 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 Besides the effects of changes in medical costs, worker’s compensation costs are affected by the severity and types of injuries, changes in state and federal regulations and their application and the quality of programs which assist an employee’s return to work. Our liability for future payments for workers’ compensation claims is evaluated annually with the assistance of an actuary. 53 Numbers of Participants Mortality tables. We use the Society of Actuaries base mortality tables for private sector plans, Pri-2012, and the Mercer modified MP-2021 projection scale, with a Blue Collar adjustment factor for the majority of our U.S. retirement plans and a White Collar adjustment factor for our nonqualified U.S. pension plan. Number of participants . The number of participants by major plan in the past five years is as follows: Number of participants Plan 2022 2021 2020 2019 2018 UMWA plans 2,500 2,700 2,900 3,000 3,200 Black Lung 800 800 700 800 800 U.S. pension 10,700 10,800 11,000 11,200 14,000 Because we are no longer operating in the coal industry, we anticipate that the number of participants in the UMWA retirement medical plan will decline over time due to mortality. Because the U.S. pension plan has been frozen, the number of its participants will also decline over time. 54 Foreign Currency Translation The majority of our subsidiaries outside the U.S. conduct business in their local currencies. Our financial results are reported in U.S. dollars, which include the results of these subsidiaries. Accounting Policy Our accounting policy for foreign currency translation is different depending on whether the economy in which our foreign subsidiary operates has been designated as highly inflationary. Economies with a three-year cumulative inflation rate of more than 100% are considered highly inflationary. Subsequent reductions in cumulative inflation rates below 100% do not change the method of translation unless the reduction is deemed to be other than temporary. Non-Highly Inflationary Economies Assets and liabilities of foreign subsidiaries in non-highly inflationary economies are translated into U.S. dollars using rates of exchange at the balance sheet date. Translation adjustments are recorded in other comprehensive income (loss). Revenues and expenses are translated at rates of exchange in effect during the year. Transaction gains and losses are recorded in net income. Highly Inflationary Economies Foreign subsidiaries that operate in highly inflationary countries must use the reporting currency (the U.S. dollar) as the functional currency. Local-currency monetary assets and liabilities are remeasured into dollars each balance sheet date, with remeasurement adjustments and other transaction gains and losses recognized in earnings. Other than nonmonetary equity and available-for-sale debt securities, nonmonetary assets and liabilities do not fluctuate with changes in local currency exchange rates to the dollar. 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 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. Application of Accounting Policy Argentina We operate in Argentina through wholly owned subsidiaries and a smaller controlled subsidiary (together "Brink's Argentina"). Revenues from Brink's Argentina represented approximately 4% of our consolidated revenues for the year ended December 31, 2022 and 4% and 5% of our consolidated revenues for the years ended December 31, 2021 and 2020, respectively. The operating environment in Argentina continues to present business challenges, including ongoing devaluation of the Argentine peso and significant inflation. For the year ended December 31, 2020, the Argentine peso declined by approximately 29% (from 59.9 to 84.0 pesos to the U.S. dollar). For the year ended December 31, 2021, the Argentine peso declined by approximately 19% (from 84.0 to 103.1 pesos to the U.S. dollar). For the year ended December 31, 2022, the Argentine peso declined approximately 42% (from 103.1 to 178.6 pesos to the U.S. dollar). Beginning July 1, 2018, we designated Argentina's economy as highly inflationary for accounting purposes. As a result, we consolidated Brink's Argentina using our accounting policy for subsidiaries operating in highly inflationary economies beginning with the third quarter of 2018. Argentine peso-denominated monetary assets and liabilities are now remeasured at each balance sheet date using the currency exchange rate then in effect, with currency remeasurement gains and losses recognized in earnings. In 2022, we recognized $37.6 million pretax remeasurement losses. In 2021 and in 2020, we recognized $9.0 million and $7.7 million pretax remeasurement losses, respectively. At December 31, 2022, Argentina's economy remained highly inflationary for accounting purposes. At December 31, 2022, we had net monetary assets denominated in Argentine pesos of $66.2 million, including cash of $57.7 million. 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, 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, we elected to use other market mechanisms to convert Argentine pesos into U.S. dollars. Conversions under these other market mechanisms generally settle at rates that are less favorable than the rates at which we remeasure the financial statements of Brink’s Argentina. 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 or 2022. 55 Although the Argentine government has implemented currency controls, Brink’s management continues to provide guidance and strategic oversight, including budgeting and forecasting for Brink’s Argentina. We continue to control our Argentina business for purposes of consolidation of our financial statements and continue to monitor the situation in Argentina. 56