What changed in this filing

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Item 2. Management’s Discussion and Analysis

2023-05-10 compared with 2022-10-26 · 189 added, 420 removed, 519 unchanged (54% of the section changed)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The Brink’s Company (along with its subsidiaries, “Brink’s”, the “Company”, “we”, “us” or “our”) offers transportation and logistics management services for cash and valuables throughout the world.

The Brink’s Company (along with its subsidiaries, “Brink’s”, the “Company”, “we”, “us” or “our”) is a leading global provider of cash and valuables management, digital retail solutions, and ATM managed services throughout the world.

These services include:

• Cash-in-transit (“CIT”) services – armored vehicle transportation of valuables

• Basic ATM services – replenishing and maintaining customers' automated teller machines;

providing network infrastructure services

• Global services – secure international transportation of valuables

• Cash management services

◦ Money processing (e.g., counting, sorting, wrapping, checking condition of bills) and other cash management services

◦ Digital cash payment services that provide advance credit for cash deposited in Brink's-provided tech-enabled safe devices and other services related to deploying and servicing "intelligent" safes and safe control devices (including our patented CompuSafe ® service)

◦ Check imaging services

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

• ATM managed services – services for ATM management, including cash replenishment, replenishment forecasting, cash optimization, ATM remote monitoring, service call dispatching, transaction processing, installation services, and first and second line maintenance

• Payment services – bill payment and processing services on behalf of utility companies and other service providers at any of our Brink’s or Brink’s-operated payment locations in Latin America and Brink’s Money™ general purpose reloadable prepaid cards and corporate debit cards in the U.S.

• Commercial security systems services – design and installation of security systems in designated markets in Europe

• Guarding services – protection of airports, offices, and certain other locations in Europe, Rest of World and Latin America with or without electronic surveillance, access control, fire prevention and highly trained patrolling personnel

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")

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

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

We identify our operating segments based on how our chief operating decision maker (“CODM”) allocates resources, assesses performance and makes decisions.

5 unchanged sentences

• Latin America – operations in Latin American countries where we have an ownership interest, including the BGS line of business,

This segment includes operations in Mexico, which was previously reported in the North America segment,

• Europe – total operations in European countries that primarily provide services outside of the BGS line of business, and

2 unchanged sentences

RESULTS OF OPERATIONS

COVID-19 Pandemic Impact

We continue to monitor developments related to the ongoing coronavirus (COVID-19) pandemic, which has created global volatility, uncertainty and economic disruption for Brink's, our customers and vendors, and the markets in which we do business.

We have taken and continue to take steps to mitigate the potential risks to our employees, our customers and our business around the world.

We are focused on three priorities:

• Protecting our people and providing essential services to our customers;

• Preserving cash and optimizing profitability;

• Positioning Brink’s to be stronger on the other side of the crisis.

The COVID-19 pandemic began to have a material adverse impact on our results of operations in the quarter ended March 31, 2020.

During 2020, 2021 and continuing into 2022, health conditions and economic activity in the countries in which we operate have been significantly impacted by government, customer and consumer actions in response to the pandemic.

These actions have led to reduced customer volumes, changes to our operating procedures, labor shortages and increases to our costs to provide services.

We have taken and continue to take actions to adjust the way we operate and reduce our costs through restructuring activities and operational changes to address these impacts and align to future anticipated revenue levels.

We are continually assessing the impact that the COVID-19 pandemic, and the actions taken in response to it, will have on our employees, businesses and segments, customers and vendors and the industries that we serve.

The full impact depends on many factors that are uncertain or not yet identifiable.

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

In addition, we cannot predict whether future developments associated with the COVID-19 pandemic will have a materially adverse effect on our long-term liquidity position.

We believe we continue to have sufficient liquidity to meet our current obligations.

The COVID-19 pandemic continues, however, to be an evolving situation, and we cannot predict the extent or duration of the ongoing COVID-19 pandemic, the effects of it on the global, national or local economy, including the impacts on our ability to access capital, or its effects on our business, financial position, results of operations, and cash flows.

We will continue to monitor developments affecting our employees, customers and operations and take additional steps to address the business impact of the COVID-19 pandemic, as necessary.

Refer to the “Liquidity and Capital Resources” section below for further discussion.

Consolidated Review

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See definitions on page 35.

Ended September 30, % Nine Months

Ended September 30, %

(In millions, except for per share amounts) 2022 2021 Change 2022 2021 Change

Ended March 31, %

(In millions, except for per share amounts) 2023 2022 Change

Revenues 1,185.4 1,074.0 10

3 unchanged sentences

Income from continuing operations (a)

19.2 19.0 1 125.8 55.7 fav

14.3 71.4 (80)

Diluted EPS from continuing operations (a)

$ 0.41 0.38 8 2.63 1.11 fav

0.30 1.48 (80)

Non-GAAP revenues 1,185.4 1,074.0 10

7 unchanged sentences

Analysis of Consolidated Results:

Third Quarter 2022 versus Third Quarter 2021

Consolidated Revenues Revenues increased $61.2 million due to organic increases in Rest of World ($45.4 million), Latin America ($40.6 million), North America ($38.4 million), and Europe ($18.4 million) and the favorable impact of acquisitions ($3.5 million), partially offset by the unfavorable impact of currency exchange rates ($85.1 million).

The unfavorable currency impact was driven primarily by the euro and the Argentine peso.

Revenues increased 13% on an organic basis primarily due to higher volume and inflation-based price increases.

See above for our definition of “organic growth.”

Consolidated Costs and Expenses Cost of revenues increased 5% to $ 880.7 million primarily due to higher labor and other operational costs, driven by volume and wage increases, and the impact of acquisitions, partially offset by the impact of currency exchange rates.

Selling, general and administrative costs increased 12% to $ 180.8 million primarily due to organic increases in labor and other administrative costs and increased restructuring costs, partially offset a charge in the third quarter of 2021 related to a potential fine for a Chile antitrust matter and the impact of currency exchange rates.

Consolidated Operating Profit Operating profit decreased $14.7 million due mainly to:

• higher corporate expenses on an organic basis ($21.0 million),

• higher costs related to business acquisitions and dispositions ($19.7 million), including the impact of acquisition-related charges and intangible asset amortization in 2022, included in "Other items not allocated to segments",

• unfavorable changes in currency exchange rates ($22.8 million), driven by the Argentine peso and the euro, and

• higher costs incurred related to reorganization and restructuring ($5.6 million) included in "Other items not allocated to segments,"

partially offset by:

• organic increases in Rest of World ($20.3 million), North America ($12.7 million), Latin America ($11.9 million), and Europe ($2.1 million),

• lower costs related to the estimated loss of a potential fine for a Chile antitrust matter ($9.2 million) included in "Other items not allocated to segments", and

• the favorable operating impact of business acquisitions ($0.6 million), excluding intangible amortization and acquisition-related charges.

Consolidated Income from Continuing Operations Attributable to Brink’s and Related Per Share Amounts Income from continuing operations attributable to Brink’s shareholders increased $0.2 million to $19.2 million due to lower income tax expense ($14.4 million), higher interest and other non-operating income ($7.0 million), and lower non-controlling interest ($0.6 million), mostly offset by the decrease in operating profit mentioned above and higher interest expense ($7.1 million).

Earnings per share from continuing operations was $0.41, up from $0.38 in the third quarter of 2021.

Analysis of Consolidated Results:

Nine Months 2022 versus Nine Months 2021

Consolidated Revenues Revenues increased $242.6 million due to organic increases in Latin America ($117.2 million), North America ($100.4 million), Rest of World ($81.6 million), and Europe ($65.5 million) and the favorable impact of acquisitions ($50.3 million), partially offset by the unfavorable impact of currency exchange rates ($172.4 million).

The unfavorable currency impact was driven primarily by the euro and the Argentine peso.

First Quarter 2023 versus First Quarter 2022

Consolidated Revenues Revenues increased $111.4 million due to organic increases in Latin America ($56.1 million), North America ($33.8 million), Europe ($24.8 million), and Rest of World ($20.6 million), and the favorable impact of acquisitions ($36.0 million), partially offset by the unfavorable impact of currency exchange rates ($59.9 million).

The unfavorable currency impact was driven primarily by the Argentine peso and the euro.

Revenues increased 13% on an organic basis primarily due to higher volume and inflation-based price increases.

See above for our definition of “organic growth.”

Consolidated Costs and Expenses Cost of revenues increased 7% to $ 2,587.9 million primarily due to higher labor and other operational costs, driven by volume and wage increases, and the impact of acquisitions, partially offset by the impact of currency exchange rates.

Selling, general and administrative costs increased 10% to $ 519.9 million primarily due to organic increases in labor and other administrative costs, the unfavorable impact of a change in allowance estimate ($16.7 million) recorded in the first-quarter 2022 due to a modification in our methodology to estimate the allowance for doubtful accounts, and increased restructuring costs, partially offset by the impact of currency exchange rates.

Consolidated Costs and Expenses Cost of revenues increased 10% to $920.3 million primarily due to higher labor and other operational costs, driven by cost inflation and volume, and the impact of acquisitions, partially offset by the impact of currency exchange rates.

Selling, general and administrative costs increased 3% to $177.0 million primarily due to organic increases in labor and other administrative costs, partially offset by the first-quarter 2022 unfavorable impact of a change in allowance estimate ($16.7 million) due to a modification in our methodology to estimate the allowance for doubtful accounts.

Consolidated Operating Profit Operating profit increased $17.4 million due mainly to:

• organic increases in Rest of World ($32.7 million), Latin America ($32.6 million), and Europe ($13.6 million),

• lower costs related to the estimated loss of a potential fine for a Chile antitrust matter ($8.4 million) included in "Other items not allocated to segments", and

• favorable operating impact of business acquisitions ($8.3 million), excluding intangible amortization and acquisition-related charges,

• organic increases in Latin America ($15.5 million), North America ($13.9 million), Rest of World ($6.0 million), and Europe ($5.8 million),

• lower costs related to the 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

• the favorable operating impact of business acquisitions ($3.0 million), excluding intangible amortization and acquisition-related charges.

partially offset by:

• unfavorable changes in currency exchange rates ($40.7 million), driven by the Argentine peso and the euro,

• the unfavorable impact of a change in allowance estimate ($16.7 million) recorded in the first-quarter 2022 due to a modification in our methodology to estimate the allowance for doubtful accounts included in "Other items not allocated to segments,"

• higher costs related to business acquisitions and dispositions ($11.3 million), including the impact of acquisition-related charges and intangible asset amortization in 2022, included in "Other items not allocated to segments",

• an organic decrease in North America ($8.5 million), and

• higher corporate expenses on an organic basis ($16.9 million),

Consolidated Income from Continuing Operations Attributable to Brink’s and Related Per Share Amounts Income from continuing operations attributable to Brink’s shareholders increased $70.1 million to $125.8 million due to lower income tax expense ($62.5 million), higher interest and other non-operating income ($10.0 million), the increase in operating profit mentioned above, and lower non-controlling interest ($0.4 million), partially offset by higher interest expense ($12.0 million).

Earnings per share from continuing operations was $2.63, up from $1.11 in the first nine months of 2021.

• unfavorable changes in currency exchange rates ($16.3 million), driven by the Argentine peso and the euro, and

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

◦ higher costs related to business acquisitions and dispositions ($7.3 million), including the impact of acquisition-related charges and intangible asset amortization in 2023, and

◦ higher costs incurred related to reorganization and restructuring ($2.5 million).

Consolidated Income from Continuing Operations Attributable to Brink’s and Related Per Share Amounts Income from continuing operations attributable to Brink’s shareholders decreased $57.1 million to $14.3 million due to higher income tax expense ($61.4 million), higher interest expense ($18.7 million), and higher non-controlling interest ($0.4 million), partially offset by the increase in operating profit mentioned above and higher interest and other non-operating income ($6.0 million).

Earnings per share from continuing operations was $0.30, down from $1.48 in the first quarter of 2022.

Non-GAAP Basis

Analysis of Consolidated Results:

Third Quarter 2022 versus Third Quarter 2021

Non-GAAP Consolidated Revenues Non-GAAP revenues increased $61.2 million due to organic increases in Rest of World ($45.4 million) Latin America ($40.6 million), North America ($38.4 million), and Europe ($18.4 million), and the favorable impact of acquisitions ($3.5 million), partially offset by the unfavorable impact of currency exchange rates ($85.1 million).

The unfavorable currency impact was driven primarily by the euro and the Argentine peso.

Revenues increased 13% on an organic basis primarily due to higher volume and inflation-based price increases.

See above for our definition of “organic growth.”

First Quarter 2023 versus First Quarter 2022

Non-GAAP Consolidated Revenues There is no difference between GAAP and Non-GAAP revenue amounts for the periods presented.

See page 33 for details.

Non-GAAP Consolidated Operating Profit Non-GAAP operating profit increased $15.3 million due mainly to:

• organic increases in Rest of World ($20.3 million), North America ($12.7 million), Latin America ($11.9 million), and Europe ($2.1 million) and

• organic increases in Latin America ($15.5 million), North America ($13.9 million), Rest of World ($6.0 million), and Europe ($5.8 million) and

• the favorable operating impact of business acquisitions ($3.0 million), excluding intangible amortization and acquisition-related charges,

2 unchanged sentences

• unfavorable changes in currency exchange rates ($12.0 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 $6.7 million to $63.8 million due to the operating profit increase mentioned above, higher interest and other non-operating income ($3.3 million), and lower non-controlling interest ($0.5 million), partially offset by higher interest expense ($7.1 million) and higher income tax expense ($0.9 million).

Earnings per share from continuing operations was $1.34, up from $1.14 in the third quarter of 2021.

Analysis of Consolidated Results:

Nine Months 2022 versus Nine Months 2021

Non-GAAP Consolidated Revenues Non-GAAP revenues increased $242.6 million due to organic increases in Latin America ($117.2 million), North America ($100.4 million), Rest of World ($81.6 million), and Europe ($65.5 million) and the favorable impact of acquisitions ($50.3 million), partially offset by the unfavorable impact of currency exchange rates ($172.4 million).

The unfavorable currency impact was driven primarily by the euro and the Argentine peso.

Revenues increased 12% on an organic basis primarily due to higher volume and inflation-based price increases.

See above for our definition of “organic growth.”

Non-GAAP Consolidated Operating Profit Non-GAAP operating profit increased $46.3 million due mainly to:

• organic increases in Rest of World ($32.7 million), Latin America ($32.6 million), and Europe ($13.6 million) and

• the favorable operating impact of business acquisitions ($8.3 million), excluding intangible amortization and acquisition-related charges,

partially offset by:

• unfavorable changes in currency exchange rates ($25.8 million), driven primarily by the Argentine peso and the euro,

• an organic decrease in North America ($8.5 million), and

• higher corporate expenses on an organic basis ($6.6 million).

Non-GAAP Consolidated Income from Continuing Operations Attributable to Brink’s and Related Per Share Amounts Non-GAAP income from continuing operations attributable to Brink’s shareholders increased $26.5 million to $181.8 million due to the operating profit increase mentioned above and lower non-controlling interest ($0.8 million), partially offset by higher interest expense ($12.1 million), higher income tax expense ($6.7 million), and lower interest and other non-operating income ($1.8 million).

Earnings per share from continuing operations was $3.80, up from $3.08 in the first nine months of 2021.

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 decreased $2.4 million to $55.0 million due to higher interest expense ($18.9 million) and higher non-controlling interest ($0.4 million), mostly offset by the operating profit increase mentioned above and higher interest and other non-operating income ($1.6 million).

Earnings per share from continuing operations was $1.16, down from $1.19 in the first quarter of 2022.

Revenues and Operating Profit by Segment:

Third Quarter 2022 versus Third Quarter 2021

First Quarter 2023 versus First Quarter 2022

Organic Acquisitions / % Change

29 unchanged sentences

(e) See pages 37–38 for more information

(f) In the first quarter of 2021, North America operating profit benefited $12.3 million from a change in our method to calculate the allowance for doubtful accounts, with an offsetting higher expense at Corporate.

There was no net impact on consolidated operating profit.

See further discussion below in Analysis of Segment Results.

Analysis of Segment Results:

Third Quarter 2022 versus Third Quarter 2021

First Quarter 2023 versus First Quarter 2022

North America

Revenues increased 11% ($39.9 million) primarily due to a 11% organic increase ($38.4 million) and the favorable impact of acquisitions ($2.6 million).

Revenues increased 9% ($33.1 million) primarily due to a 9% organic increase ($33.8 million) and the favorable impact of acquisitions ($1.3 million), partially offset by the unfavorable impact of currency exchange rates ($2.0 million) from the Canadian dollar.

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

Operating profit increased $14.2 million, primarily due to a 57% organic increase ($13.9 million) and the favorable impact of acquisitions ($0.2 million).

The organic increase resulted primarily from price increases, which outpaced the impact of labor and other cost increases, and lower losses.

The increase was partially offset by several adjustments related to legal settlements and various insurance-related costs in the U.S.

The organic increase resulted primarily from higher revenue outpacing the impact of labor and other cost increases, and the impact of cost savings related to restructuring primarily in the U.S.

The increase was partially offset by higher security losses and bad debt expense in the U.S.

Latin America

Revenues increased 4% ($11.8 million) primarily due to a 14% organic increase ($40.6 million) and the favorable impact of acquisitions ($0.6 million), partially offset by the unfavorable impact of currency exchange rates ($29.4 million), primarily from the Argentine, Colombian, and Chilean peso.

The organic increase was primarily driven by inflation-based price increases in Argentina and Mexico.

Revenues increased 8% ($24.2 million) primarily due to a 19% organic increase ($56.1 million) and the favorable impact of acquisitions ($0.8 million), partially offset by the unfavorable impact of currency exchange rates ($32.7 million), primarily from the Argentine and Colombian peso.

The organic increase was primarily driven by inflation-based price increases across the segment with a majority of the impact from Argentina, Mexico, and Brazil.

Operating profit was up 6% ($3.6 million) primarily due to a 25% organic increase ($15.5 million) and the favorable impact of acquisitions ($0.3 million), partially offset by the unfavorable impact of currency exchange rates ($12.2 million).

The organic profit increase was driven by inflation-based price increases in Argentina and the benefit of labor and other operational cost saving actions throughout the segment.

The increase was partially offset by the impact of a $4.5 million non-income tax credit experienced by Brazil in the third quarter of 2021.

Our Brazil operations received a favorable court decision related to non-income taxes paid in prior years and will be able to recover the overpayments, plus interest, by reducing payments on future tax obligations.

Revenues decreased 8% ($18.0 million) due to the unfavorable impact of currency exchange rates ($36.7 million), partially offset by a 8% organic increase ($18.4 million) and the favorable impact of acquisitions ($0.3 million).

The unfavorable currency impact was driven by the euro.

The organic increase was primarily due to organic volume growth in France, including the impact of the partial implementation of an ATM managed services contract for a large customer and price increases across the segment.

Operating profit decreased $2.2 million to $25.9 million primarily due to the unfavorable impact of currency exchange rates ($4.3 million), partially offset by a 7% organic increase ($2.1 million).

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

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

The organic increase was driven by inflation-based price increases which outpaced the impact of labor and other cost increases as well as the benefit of labor and other operational cost saving actions throughout the segment.

Revenues increased 21% ($46.6 million) due to the favorable impact of the NoteMachine acquisition ($35.6 million) and a 11% organic increase ($24.8 million), partially offset by the unfavorable impact of currency exchange rates ($13.8 million) driven by the euro.

The organic increase was primarily due to price increases throughout the segment and the impact of the full implementation of an ATM managed services contract for a large customer in France.

Operating profit increased $7.2 million, primarily due to a 39% organic increase ($5.8 million) and the favorable impact of the NoteMachine acquisitions ($2.3 million), partially offset by the unfavorable impact of currency exchange rates ($0.9 million).

The organic increase was primarily driven by price increases which outpaced the impact of labor and other cost increases across the segment, and the impact of an accounting adjustment in France.

Rest of World

Revenues increased 15% ($27.5 million) due to a 24% organic increase ($45.4 million), partially offset by the unfavorable impact of currency exchange rates ($17.9 million).

Revenues increased 4% ($7.5 million) due to a 11% organic increase ($20.6 million), partially offset by the unfavorable impact of currency exchange rates ($11.4 million) and dispositions ($1.7 million).

The organic increase was primarily due to global services growth.

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

Operating profit increased $16.4 million due to a 64% organic increase ($20.3 million), partially offset by the unfavorable impact of currency exchange rates ($3.9 million).

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

Revenues and Operating Profit by Segment:

Nine Months 2022 versus Nine Months 2021

Organic Acquisitions / % Change

(In millions) YTD '21 Change Dispositions (a)

YTD '22 Total Organic

North America $ 1,034.6 100.4 38.4 (2.4) 1,171.0 13 10

Latin America 831.8 117.2 2.7 (53.0) 898.7 8 14

Europe 683.2 65.5 2.9 (82.8) 668.8 (2) 10

Rest of World 552.4 81.6 6.3 (34.2) 606.1 10 15

Segment revenues (c)

3,102.0 364.7 50.3 (172.4) 3,344.6 8 12

Revenues - GAAP $ 3,102.0 364.7 50.3 (172.4) 3,344.6 8 12

Operating profit:

North America (f)

$ 98.4 (8.5) 6.8 — 96.7 (2) (9)

Latin America 180.4 32.6 0.3 (19.1) 194.2 8 18

Europe 57.4 13.6 0.4 (8.3) 63.1 10 24

Rest of World 94.2 32.7 0.8 (6.8) 120.9 28 35

Segment operating profit 430.4 70.4 8.3 (34.2) 474.9 10 16

Corporate (d)(f)

(113.8) (6.6) — 8.4 (112.0) (2) 6

Operating profit - non-GAAP 316.6 63.8 8.3 (25.8) 362.9 15 20

Other items not allocated to segments (e)

(107.4) (10.9) (11.3) (14.9) (144.5) 35 10

Operating profit - GAAP $ 209.2 52.9 (3.0) (40.7) 218.4 4 25

Amounts may not add due to rounding.

See page 40 for footnote explanations.

Analysis of Segment Results:

Nine Months 2022 versus Nine Months 2021

North America

Revenues increased 13% ($136.4 million) primarily due to a 10% organic increase ($100.4 million) and the favorable impact of acquisitions ($38.4 million), partially offset by the unfavorable impact of currency exchange rates ($2.4 million) from the Canadian dollar.

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

Operating profit decreased $1.7 million, primarily due to a 9% organic decrease ($8.5 million) partially offset by the favorable impact of acquisitions ($6.8 million).

The organic decrease resulted primarily from several adjustments related to various insurance-related costs, legal settlements, and bad-debt reversals in the U.S., and lower government COVID-19 assistance in Canada.

The decrease was partially offset by price increases which outpaced the impact of labor and other cost increases.

The change in bad debt expense was driven by a first quarter of 2021 change to the allowance for doubtful accounts calculation method for the segment’s U.S.

business, which resulted in a $12.3 million operating profit increase, and which was offset by a $12.3 million increase to Corporate expense, resulting in no impact to consolidated operating profit for the first quarter.

Historically, all Brink’s business units followed an internal Company policy for determining an allowance for doubtful accounts and the allowances were then reconciled to the required U.S.

GAAP estimated consolidated allowance, with any differences reported as part of Corporate expense.

Other than for the U.S.

business, the reconciling differences were not significant.

We changed the U.S.

calculation of the allowance in order to more closely align it with the U.S.

GAAP consolidated calculation and to minimize reconciling differences, resulting in the offsetting $12.3 million adjustments to align the methods.

A change in estimation methodology resulted in a $16.7 million incremental bad debt expense recorded in the first quarter of 2022 that was associated with U.S.

aged receivables.

In the second quarter and in the third quarter of 2022, the additional allowance was reduced by $0.7 million as a result of collections.

However, as discussed in Note 1 this amount was recorded as part of "Other items not allocated to segments" and is not included in the North America segment results.

Latin America

Revenues increased 8% ($66.9 million) primarily due to a 14% organic increase ($117.2 million) and the favorable impact of acquisitions ($2.7 million), partially offset by the unfavorable impact of currency exchange rates ($53.0 million), primarily from the Argentine, Colombian, and Chilean peso and partially offset by the Brazilian real.

The organic increase was driven by inflation-based price increases and volume growth in Argentina and Mexico.

Operating profit was up 8% ($13.8 million) primarily due to a 18% organic increase ($32.6 million) and the favorable impact of acquisitions ($0.3 million), partially offset by unfavorable currency ($19.1 million).

The organic increase was driven by inflation-based price increases which outpaced the impact of labor and other cost increases in Argentina and Mexico, as well as the benefit of labor and other operational cost saving actions throughout the segment.

Revenues decreased 2% ($14.4 million) due to the unfavorable impact of currency exchange rates ($82.8 million), partially offset by a 10% organic increase ($65.5 million) and the favorable impact of acquisitions ($2.9 million).

The unfavorable currency impact was driven by the euro.

The organic increase was primarily due to organic growth in France, including the impact of the partial implementation of an ATM managed services contract for a large customer, and throughout most of the segment.

Operating profit increased $5.7 million primarily due to an organic increase ($13.6 million) and the favorable impact of acquisitions ($0.4 million), partially offset by the unfavorable impact of currency exchange rates ($8.3 million).

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

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

Rest of World

Revenues increased 10% ($53.7 million) due to a 15% organic increase ($81.6 million) and the favorable impact of acquisitions ($6.3 million), partially offset by the unfavorable impact of currency exchange rates ($34.2 million).

The organic increase was primarily due to global services growth.

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

Operating profit increased $26.7 million primarily due to a 35% organic increase ($32.7 million) and the favorable impact of acquisitions ($0.8 million), partially offset by the unfavorable impact of currency exchange rates ($6.8 million), driven by most currencies throughout the segment.

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

Operating profit increased $4.2 million due to a 18% organic increase ($6.0 million) and the favorable impact of dispositions ($0.2 million), partially offset by the unfavorable impact of currency exchange rates ($2.0 million).

The organic increase was primarily due to the impact of labor and other operational cost saving actions throughout the segment, and global services growth.

Income and Expense Not Allocated to Segments

Corporate Expenses

Ended September 30, % Nine Months

Ended September 30, %

(In millions) 2022 2021 change 2022 2021 change

Ended March 31, %

(In millions) 2023 2022 change

General, administrative and other expenses $ (42.6) (28.5) 49

Foreign currency transaction gains (losses) 3.6 1.4 fav 9.4 1.4 fav

Reconciliation of segment policies to GAAP 1.3 (0.3) fav 4.0 (11.8) fav

Foreign currency transaction gains 5.1 2.4 fav

Reconciliation of segment policies to GAAP 0.4 2.9 (86)

Corporate expenses $ (37.1) (23.2) 60

Corporate expenses include corporate headquarters costs, regional management costs, currency transaction gains and losses, costs related to global initiatives and adjustments to reconcile segment accounting policies to U.S.

Corporate expenses for the first nine months of 2022 decreased $1.8 million versus the prior year period primarily driven by lower bad debt expense ($15.0 million) included in Corporate expense as part of the reconciliation of segment accounting policies to U.S.

GAAP (see further discussion of bad debt expense in the next paragraph below).

In addition, there were higher foreign currency transaction gains in the current year period ($8.0 million) and reduced expenses related to developing new service offerings ($2.7 million).

These lower costs were offset by an increase in incentive compensation, including share-based and bonus accruals ($23.3 million) as well as higher net charges related to insurance and security losses ($7.8 million).

Prior to the first quarter of 2021, all Brink’s business units followed an internal accounting policy for determining an allowance for doubtful accounts.

The allowances were then reconciled to the required U.S.

GAAP estimated consolidated allowance, with any differences reported as part of Corporate expense.

In the first nine months of 2021, the Corporate reconciling adjustment was an increase of Corporate expense of $13.1 million.

The 2021 adjustment was primarily from a change in the first quarter of 2021 to the allowance calculation method of the North America segment’s U.S.

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.

Corporate expenses for the first three months of 2023 increased $13.9 million versus the prior year period primarily driven by increased charges related to insurance and security losses ($6.5 million) and higher net compensation costs, including share-based and bonus accruals ($4.5 million).

Other Items Not Allocated to Segments

Ended September 30, % Nine Months

Ended September 30, %

(In millions) 2022 2021 change 2022 2021 change

Ended March 31, %

(In millions) 2023 2022 change

Operating profit:

Reorganization and Restructuring $ (14.2) (11.7) 21

Acquisitions and dispositions (35.7) (16.6) unfav (66.3) (55.8) 19

Argentina highly inflationary impact (12.0) (2.3) unfav (27.1) (8.8) unfav

Change in allowance estimate 0.3 — fav (16.0) — unfav

Acquisitions and dispositions (22.0) (15.2) 45

Argentina highly inflationary impact (11.2) (6.1) 84

Change in allowance estimate — (16.7) (100)

Chile antitrust matter

(0.3) (9.5) (97) (1.1) (9.5) (88)

Internal loss — 0.7 (100) — 2.4 (100)

(0.2) — unfav

Operating profit $ (47.6) (49.7) (4)

1 unchanged sentence

2022 Global Restructuring Plan

In the third quarter of 2022, management began a restructuring program across our global business operations.

In the first quarter of 2023, management completed the review and approval of remaining actions included in the previously announced restructuring program across our global business operations.

The actions were taken to enable growth, reduce costs and related infrastructure, and to mitigate the potential impact of external economic conditions.

As a result of actions taken in the quarter, we recognized $17.5 million in the third quarter of 2022 under this restructuring, primarily severance costs.

When completed, the current restructuring actions are expected to reduce our workforce by 2,000 to 2,400 positions and result in annualized cost savings of $35 million to $45 million.For the restructuring actions that were approved as of September 30, 2022, we expect to incur additional costs between $6 million and $10 million in future periods, primarily severance costs.

Additional restructuring actions are expected to occur as part of this program as management continues to evaluate and identify improvement opportunities.

In total, we have recognized $32.6 million in charges under this program, including $10.4 million in the first three months of 2023.

We expect total expenses from the program to be between $42 million and $48 million.

When completed, the current restructuring actions are expected to reduce our workforce by 3,300 to 3,500 positions and result in annualized cost savings of approximately $60 million.

Other Restructurings

Management periodically implements restructuring actions in targeted sections of our business.

As a result of these actions, we recognized net costs of $35.7 million in the first nine months of 2021, primarily severance costs.

We recognized $16.5 million net costs in the first nine months of 2022, primarily severance costs.

The majority of the costs from 2022 restructuring plans result from the exit of a line of business in a specific geography with most of the remaining costs due to management initiatives to address the COVID-19 pandemic.

When completed, the current restructuring actions are expected to reduce our workforce by 1,200 to 1,400 positions and result in annualized cost savings of $15 million to $20 million.

For the restructuring actions that have not yet been completed, we expect to incur additional costs between $4 million and $6 million in future periods.

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

As a result of these actions, we recognized net costs of $11.7 million in the first three months of 2022, primarily severance costs.

We recognized $3.8 million net costs in the first three months of 2023, primarily severance costs.

The majority of the costs in both the 2023 and 2022 periods 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.

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

Charges related to the employees, assets, leases and contracts impacted by these restructuring actions were excluded from the segments and corporate expenses as shown in the table below.

Three Months Ended September 30, % Nine Months

Ended September 30, %

(In millions) 2022 2021 change 2022 2021 change

Ended March 31, %

(In millions) 2023 2022 change

Reportable Segments:

North America $ (5.1) 0.4 unfav $ (12.6) 0.1 unfav

Latin America (8.2) (3.3) unfav (13.5) (6.7) unfav

Europe (5.3) (10.8) (51) (7.5) (26.5) (72)

Rest of World (1.0) (0.7) 43 (1.1) (3.0) (63)

North America $ (3.6) (7.4) (51)

Latin America (3.6) (2.9) 24

Europe (4.4) (1.4) unfav

Rest of World (1.3) — unfav

Total reportable segments (12.9) (11.7) 10

Corporate items — 0.4 (100) 0.7 0.4 75

Corporate items (1.3) — unfav

Total $ (14.2) (11.7) 21

2 unchanged sentences

2023 Acquisitions and Dispositions

• Amortization expense for acquisition-related intangible assets was $37.4 million in the first nine months of 2022.

• We recognized $12.4 million in charges in Argentina in the first nine months of 2022 for expected payments to union workers of the Maco Transportadora and Maco Litoral businesses (together "Maco").

• Amortization expense for acquisition-related intangible assets was $14.0 million in the first three months of 2023.

• We recognized $3.3 million in charges in Argentina in the first three months of 2023 for an inflation-adjusted labor increase to 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.

We recognized $12.5 million in related costs in 2022.

• Net charges of $0.5 million for post-acquisition adjustments to indemnification assets related to previous business acquisitions.

• We incurred $2.9 million in integration costs, primarily related to PAI and G4S, in the first nine months of 2022.

• Transaction costs related to business acquisitions were $2.7 million in the first nine months of 2022.

• Restructuring costs related to acquisitions were $0.2 million in the first nine months of 2022.

• Compensation expense related to the retention of key PAI employees was $2.6 million in the first nine months of 2022.

• We incurred $0.4 million in integration costs, primarily related to PAI, in the first three months of 2023.

• Transaction costs related to business acquisitions were $0.5 million in the first three months of 2023.

• We recognized a $2.0 million loss on the disposition of Russia-based operations in the first three months of 2023.

• Compensation expense related to the retention of key PAI employees was $0.6 million in the first three months of 2023.

2022 Acquisitions and Dispositions

• Amortization expense for acquisition-related intangible assets was $35.3 million in the first nine months of 2021.

• We incurred $8.8 million in integration costs, primarily related to G4S, in the first nine months of 2021.

• Transaction costs related to business acquisitions were $5.4 million in the first nine months of 2021.

• Restructuring costs related to acquisitions were $5.1 million in the first nine months of 2021.

• Compensation expense related to the retention of key PAI employees was $1.2 million in the first nine months of 2021.

• Amortization expense for acquisition-related intangible assets was $12.6 million in the first three months of 2022.

• We incurred $0.9 million in integration costs, primarily related to PAI and G4S, in the first three months of 2022.

• Transaction costs related to business acquisitions were $0.4 million in the first three months of 2022.

• Restructuring costs related to acquisitions were $0.1 million in the first three months of 2022.

• Compensation expense related to the retention of key PAI employees was $1.0 million in the first three months of 2022.

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

2 unchanged sentences

The higher historical basis results in incremental expense being recognized when the nonmonetary assets are consumed.

In the first nine months of 2022, we recognized $27.1 million in pretax charges related to highly inflationary accounting, including currency remeasurement losses of $24.4 million.

In the first nine months of 2021, we recognized $8.8 million in pretax charges related to highly inflationary accounting, including currency remeasurement losses of $6.6 million.

In the first three months of 2023, we recognized $11.2 million in pretax charges related to highly inflationary accounting, including currency remeasurement losses of $9.8 million.

In the first three months of 2022, we recognized $6.1 million in pretax charges related to highly inflationary accounting, including currency remeasurement losses of $4.9 million.

These amounts are excluded from segment and non-GAAP results.

5 unchanged sentences

As part of the analysis under the updated estimation methodology, we noted an increase in accounts receivable significantly past due, particularly in the U.S., and we recorded an additional allowance of $16.7 million.

In the second quarter and third quarter of 2022, the additional allowance was reduced by $0.7 million as a result of collections.

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

Chile antitrust matter In the first nine months of 2022, we recognized an additional $1.1 million adjustment to our estimated loss related to a potential fine as a result of a change in currency rates.

Due to the special nature of this matter, this charge has not been allocated to segment results and is excluded from non-GAAP results.

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 and, in the first three months of 2023, we recognized an additional $0.2 million adjustment to our estimated loss.

The adjustments result from a change in currency rates.

Due to the special natures of this matter, this charge has not been allocated to segment results and is excluded from non-GAAP results.

See Note 14 for details.

Internal loss A former non-management employee in our U.S.

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

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

As a result, we estimated an increase to bad debt expense of $26.7 million through the end of 2020.

In the first nine months of 2021, we recognized a decrease in bad debt expense of $3.5 million, primarily related to collection of these receivables.

We also recognized $1.1 million of legal

charges in the first nine months of 2021 as we attempted to collect additional insurance recoveries related to these receivable losses.

In the first nine months of 2022, we did not incur any charges related to the internal loss.

Due to the unusual nature of this internal loss and the related errors in the subledger data, along with the fact that management has excluded these amounts when evaluating internal performance, we have excluded these net charges from segment and non-GAAP results.

Foreign Operations

12 unchanged sentences

dollar revenues and operating profit and may continue through the end of 2023.

At September 30, 2022, Argentina's economy remains highly inflationary for accounting purposes.

At September 30, 2022, we had net monetary assets denominated in Argentine pesos of $62.0 million (including cash of $66.4 million) and net nonmonetary assets of $162.8 million (including $99.8 million of goodwill, $1.7 million in equity securities denominated in Argentine pesos and $21.0 million in debt securities denominated in Argentine pesos).

At March 31, 2023, Argentina's economy remains highly inflationary for accounting purposes.

At March 31, 2023, we had net monetary assets denominated in Argentine pesos of $66.0 million (including cash of $58.9 million) and net nonmonetary assets of $168.6 million (including $99.8 million of goodwill, $1.7 million in equity securities denominated in Argentine pesos and $28.2 million in debt securities denominated in Argentine pesos).

During September 2019, the Argentine government announced currency controls on both companies and individuals.

2 unchanged sentences

Conversions under these other market mechanisms generally settle at rates that are less favorable than the rates at which we remeasure the financial statements of Brink’s Argentina.

We did not have any such conversion losses in the nine months ended September 30, 2022 or September 30, 2021.

We did not have any such conversion losses in the three months ended March 31, 2023 or March 31, 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.

2 unchanged sentences

From time to time, we use short term foreign currency forward and swap contracts to hedge transactional risks associated with foreign currencies.

At September 30, 2022, the notional value of our short term outstanding foreign currency forward and swap contracts was $460 million with average contract maturities of approximately one month.

These short term foreign currency forward and swap contracts primarily offset exposures in the euro, the Mexican peso and the Chilean peso.

At March 31, 2023, the notional value of our short term outstanding foreign currency forward and swap contracts was $479 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 September 30, 2022, the fair value of our short term foreign currency contracts was a net asset of approximately $8.2 million, of which $10.7 million was included in prepaid expenses and other and $2.5 million was included in accrued liabilities on the condensed consolidated balance sheet.

At December 31, 2021, the fair value of these foreign currency contracts was a net asset of approximately $1.9 million, of which $3.4 million was included in prepaid expenses and other and $1.5 million was included in accrued liabilities on the condensed consolidated balance sheet.

At March 31, 2023, the fair value of our short term foreign currency contracts was a net asset of approximately $0.3 million of which $4.0 million was included in prepaid expenses and other and $3.7 million was included in accrued liabilities on the condensed consolidated balance sheet.

At December 31, 2022, the fair value of these 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 condensed consolidated balance sheet.

Amounts under these contracts were recognized in other operating income (expense) as follows:

Ended September 30, Nine Months

Ended September 30,

Ended March 31,

(In millions) 2023 2022

Derivative instrument gains (losses) included in other operating income (expense) $ 25.4 6.3 $ 58.4 14.5

Derivative instrument gains included in other operating income (expense) $ 8.2 18.9

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.

3 unchanged sentences

dollar denominated intercompany loan and a Brazilian real denominated intercompany loan.

At September 30, 2022, the notional value of this long term contract was $59 million with a weighted-average maturity of approximately 0.8 years.

At September 30, 2022, the fair value of the long term cross currency swap contract was a $16.7 million net asset, of which $7.2

million is included in prepaid expenses and other and $9.5 million is included in other assets on the condensed consolidated balance sheet.

At December 31, 2021, the fair value of the long term cross currency swap contract was a $26.3 million net asset, of which a $5.8 million asset is included in prepaid expenses and other and a $20.5 million asset is included in other assets on the condensed consolidated balance sheet.

At March 31, 2023, the notional value of this long term contract was $47 million with a weighted-average maturity of approximately 0.4 years.

At March 31, 2023, the fair value of the long term cross currency swap contract was an asset of $11.6 million and was included in prepaid expenses and other on the condensed consolidated balance sheet.

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

Amounts under this contract were recognized in other operating income (expense) to offset transaction gains or losses and in interest expense as follows:

Ended September 30, Nine Months

Ended September 30,

Ended March 31,

(In millions) 2023 2022

Derivative instrument gains (losses) included in other operating income (expense) $ 0.3 5.7 $ (6.2) 0.1

Offsetting transaction gains ( losses) (0.3) (5.7) 6.2 (0.1)

Derivative instrument losses included in other operating income (expense) $ (3.4) (11.8)

Offsetting transaction gains 3.4 11.8

Derivative instrument losses included in interest expense (0.3) (0.4)

Net derivative instrument gains (losses) — 5.4 (7.2) (1.0)

Net derivative instrument losses (3.7) (12.2)

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.

6 unchanged sentences

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

At September 30, 2022, the notional value of these cross currency swap contracts was $400 million with a remaining weighted average maturity of 2.4 years for the cross currency swaps maturing in May 2026 and a remaining weighted average maturity of 6.1 years for the cross currency swaps with maturity in April 2031.

At September 30, 2022, the fair value of these currency swaps was a net asset of $11.3 million, of which $5.6 million was included in prepaid expenses and other and $5.7 million was included in other assets on the condensed consolidated balance sheet.

At March 31, 2023, the notional value of these cross currency swap contracts was $400 million with a remaining weighted average maturity of 2.6 years for the cross currency swaps maturing in May 2026 and a remaining weighted average maturity of 6.5 years for the cross currency swaps with maturity in April 2031.

At March 31, 2023, the fair value of these currency swaps was a net liability of $14.9 million of which $5.6 million was included in prepaid expenses and other and $20.5 million was included in other liabilities on the condensed consolidated balance sheet.

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 condensed consolidated balance sheet.

The effect of the amortization of the spot-forward difference on the net investment hedges cross currency swaps is included in interest expense as follows:

Ended September 30, Nine Months

Ended September 30,

Ended March 31,

(In millions) 2023 2022

3 unchanged sentences

Other operating income (expense) includes amounts included in segment results as well as income and expense not allocated to segments.

Ended September 30, % Nine Months

Ended September 30, %

(In millions) 2022 2021 change 2022 2021 change

Ended March 31, %

(In millions) 2023 2022 change

Foreign currency items:

Transaction losses $ (32.7) (6.5) unfav $ (73.4) (19.8) unfav

Derivative instrument gains 25.4 6.3 fav 58.4 14.5 fav

Gains (losses) on sale of property and other assets (0.1) — unfav 1.4 (1.4) fav

Transaction losses $ (12.9) (21.4) (40)

Derivative instrument gains 8.2 18.9 (57)

Gains (losses) on sale of property and other assets (1.9) 0.4 unfav

Impairment losses (3.7) (2.1) 76

Indemnification asset adjustments (7.8) — unfav (7.8) — unfav

Indemnification asset adjustments (0.5) — unfav

Share in earnings of equity affiliates 0.6 0.5 20

1 unchanged sentence

Other gains — 0.2 (100)

Other operating income (expense) $ (15.7) (1.8) unfav $ (18.4) (5.2) unfav

Other operating income (expense) was a $15.7 million expense in the third quarter of 2022 versus a $1.8 million expense in the prior year period.

The change from the prior year period was primarily due to acquisition-related indemnification asset adjustments and higher net losses from foreign currency items in the current period.

Other operating income (expense) was a $18.4 million expense in the first nine months of 2022 versus a $5.2 million expense in the prior year period.

The change from the prior year period was primarily due to acquisition-related indemnification asset adjustments and higher net losses from foreign currency items in the current period.

Other operating income (expense) $ (8.3) (0.3) unfav

Nonoperating Income and Expense

Interest expense

Ended September 30, % Nine Months

Ended September 30, %

Ended March 31, %

(In millions)

2022 2021 change 2022 2021 change

2023 2022 change

Interest expense $ 46.6 27.9 67

Interest expense was higher in the third quarter and first nine months of 2022 primarily due to higher borrowing levels to fund general corporate initiatives including the $200 million in share repurchases completed over the prior twelve months and other working capital needs.

Interest expense was higher in the first three months of 2023 primarily due to higher interest rates on corporate debt.

Borrowings were used to fund general corporate initiatives and other working capital needs.

Interest and other nonoperating income (expense)

Ended September 30, % Nine Months

Ended September 30, %

(In millions) 2022 2021 change 2022 2021 change

Interest income $ 8.1 3.3 fav $ 17.0 8.0 fav

Gain (loss) on equity securities 0.3 2.1 (86) (0.2) 16.3 unfav

Foreign currency transaction gains (losses) 1.6 0.6 fav 3.9 0.5 fav

Ended March 31, %

(In millions) 2023 2022 change

Interest income $ 6.5 3.4 91

Gain (loss) on equity securities (0.1) (0.3) (67)

Foreign currency transaction gains (losses) (0.4) 0.7 unfav

Retirement benefit cost other than service cost — (4.8) (100)

Acquisition-related gains — 0.4 (100) — 0.4 (100)

Penalties and interest on non-income taxes (a)

— — — — (1.7) (100)

Non-income taxes on intercompany billings (b)

(0.6) (2.0) (70) (1.8) (3.3) (45)

Interest on non-income tax credits (c)

— 1.2 (100) — 1.2 (100)

Earn-out liability adjustment (d)

Argentina turnover tax (0.5) — unfav

Non-income taxes on intercompany billings (a)

(0.7) (0.8) (13)

Other — 3.0 (100) 0.6 3.3 (82)

Interest and other nonoperating income (expense) $ 6.3 (0.7) fav $ 8.4 (1.6) fav

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

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

Other (0.1) 0.5 unfav

Interest and other nonoperating income (expense) $ 4.7 (1.3) fav

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

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

In the third quarter of 2021, our Brazil operations received a favorable court decision related to non-income taxes paid in prior years and will be able to recover the overpayments, plus interest, by reducing payments on future tax obligations.

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

Ended September 30, Nine Months

Ended September 30,

2022 2021 2022 2021

Ended March 31,

(in millions) 2023 2022

Continuing operations

12 unchanged sentences

Accordingly, we reversed a substantial amount of our valuation allowance on our net U.S.

deferred tax assets, resulting in a $52.8 million benefit in our provision for income taxes for the nine months ended September 30, 2022.

deferred tax assets, resulting in a $58.3 million benefit in our provision for income taxes for the three months ended March 31, 2022.

Due to the novel approach that the final regulations impose, it is possible that further developments in foreign country or U.S.

4 unchanged sentences

Noncontrolling Interests

Ended September 30, % Nine Months

Ended September 30, %

(In millions) 2022 2021 change 2022 2021 change

Ended March 31, %

(In millions) 2023 2022 change

Net income attributable to noncontrolling interests $ 3.3 2.9 14

The decrease in net income attributable to noncontrolling interests in the three months ended September 30, 2022, is primarily attributable to lower third quarter 2022 operating results reported by certain subsidiaries that are not wholly-owned.

The net income attributable to noncontrolling interests in the nine months ended September 30, 2022 is consistent with the net income attributable to noncontrolling interests in the nine months ended September 30, 2021.

The increase in net income attributable to noncontrolling interests in the three months ended March 31, 2023 in comparison to the three months ended March 31, 2022 is primarily attributable to higher first quarter 2023 operating results reported by certain subsidiaries that are not wholly-owned.

Non-GAAP Results Reconciled to GAAP

25 unchanged sentences

Valuation allowance on tax credits (e)

Chile antitrust matter (b)

— (2.6) — 58.3

Internal loss (b)

— — (2.4) (0.8)

Chile antitrust matter (b)

Income tax rate adjustment (c)

13 unchanged sentences

(e) In the first quarter of 2022, we released a portion of our valuation allowance on certain U.S.

deferred tax assets primarily related to foreign tax credit carryforward attributes.

deferred tax assets primarily related to foreign tax credit carryforward attributes with such amount being further adjusted in the first quarter of 2023.

The valuation allowance release was due to new foreign tax credit regulations published by the U.S.

1 unchanged sentence

Non-GAAP Results Reconciled to GAAP

Ended September 30, Nine Months

Ended September 30,

Ended March 31,

(In millions, except for percentages and per share amounts) 2023 2022

4 unchanged sentences

Reorganization and restructuring (b)

19.6 14.0 34.0 35.7

Acquisitions and dispositions (b)

35.7 16.6 66.3 55.8

Argentina highly inflationary impact (b)

12.0 2.3 27.1 8.8

Change in allowance estimate (b)

(0.3) — 16.0 —

Chile antitrust matter (b)

0.3 9.5 1.1 9.5

Internal loss (b)

— (0.7) — (2.4)

Non-GAAP $ 127.4 112.1

5 unchanged sentences

Acquisitions and dispositions (b)

0.3 0.3 1.0 1.1

Non-GAAP $ (46.4) (27.5)

2 unchanged sentences

Retirement plans (d)

1.6 7.2 6.5 20.3

Acquisitions and dispositions (b)

(1.8) (3.3) (4.2) (4.3)

Argentina highly inflationary impact (b)

3 unchanged sentences

Retirement plans (d)

0.7 1.2 2.1 4.9

Reorganization and restructuring (b)

3.8 3.9 6.1 9.2

Acquisitions and dispositions (b)

12.7 1.2 14.5 3.4

Argentina highly inflationary impact (b)

— (0.3) (0.5) (0.9)

Change in allowance estimate (b)

(0.1) — 3.8 —

Valuation allowance on tax credits (e)

(2.2) — 52.8 —

Chile antitrust matter (b)

Internal loss (b)

— (0.1) — (0.8)

Income tax rate adjustment (c)

8.2 2.0 14.5 8.6

Non-GAAP $ 26.1 26.1

1 unchanged sentence

GAAP $ 3.3 2.9

Retirement plans (d)

Reorganization and restructuring (b)

Acquisitions and dispositions (b)

0.3 0.2 0.8 0.6

Income tax rate adjustment (c)

(0.3) (0.3) (0.8) (0.6)

Non-GAAP $ 3.2 2.8

1 unchanged sentence

See page 43 for footnote explanations.

Ended September 30, Nine Months

Ended September 30,

Ended March 31,

(In millions, except for percentages and per share amounts) 2023 2022

2 unchanged sentences

Retirement plans (d)

0.9 6.0 4.3 15.4

Reorganization and restructuring (b)

15.8 10.1 27.9 26.0

Acquisitions and dispositions (b)

21.2 12.2 47.8 48.6

Argentina highly inflationary impact (b)

12.4 2.6 29.5 9.7

Change in allowance estimate (b)

(0.2) — 12.2 —

Valuation allowance on tax credits (e)

2.2 — (52.8) —

Chile antitrust matter (b)

0.2 9.5 0.8 9.5

Internal loss (b)

— (0.6) — (1.6)

Income tax rate adjustment (c)

(7.9) (1.7) (13.7) (8.0)

Non-GAAP $ 55.0 57.4

1 unchanged sentence

Retirement plans (d)

0.02 0.12 0.09 0.31

Reorganization and restructuring (b)

0.33 0.20 0.58 0.52

Acquisitions and dispositions (b)

0.45 0.24 1.00 0.96

Argentina highly inflationary impact (b)

0.26 0.05 0.62 0.19

Change in allowance estimate (b)

Valuation allowance on tax credits (e)

0.05 — (1.10) —

Chile antitrust matter (b)

— 0.19 0.02 0.19

Internal loss (b)

— (0.01) — (0.03)

Income tax rate adjustment (c)

4 unchanged sentences

LIQUIDITY AND CAPITAL RESOURCES

Cash flows from operating activities decreased by $73.1 million in the first nine months of 2022 as compared to the first nine months of 2021.

Cash used for investing activities decreased by $278.2 million in the first nine months of 2022 compared to the first nine months of 2021.

We financed our liquidity needs in the first nine months of 2022 with existing cash and cash flows from long-term debt.

Cash flows from operating activities improved $31.2 million in the first three months of 2023 as compared to the first three months of 2022.

Cash used for investing activities increased by $5.6 million in the first three months of 2023 compared to the first three months of 2022.

We financed our liquidity needs in the first three months of 2023 with existing cash from operations.

Operating Activities

Ended September 30, $

Ended March 31, $

(In millions) 2023 2022 change

1 unchanged sentence

Operating activities - GAAP $ (45.1) (76.3) 31.2

(Increase) decrease in restricted cash held for customers 4.4 (12.7) 17.1

(Increase) decrease in certain customer obligations (a)

(4.0) (10.0) 6.0

G4S intercompany payments — 2.6 (2.6)

Decrease in restricted cash held for customers 43.7 52.5 (8.8)

Decrease in certain customer obligations (a)

Operating activities - non-GAAP $ 8.2 (23.7) 31.9

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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.

The purpose of this non-GAAP measure is to report financial information excluding cash flows from restricted cash held for customers and the impact of cash received and processed in certain of our secure cash management services operations.

We believe this measure is helpful in assessing cash flows from operations, enables period-to-period comparability and is useful in predicting future operating cash flows.

This non-GAAP measure should not be considered as an alternative to cash flows from operating activities determined in accordance with GAAP and should be read in conjunction with our condensed consolidated statements of cash flows.

Cash flows from operating activities decreased by $73.1 million in the first nine months of 2022 compared to the same period in 2021.

The decrease was attributed to working capital changes, higher amounts paid for income taxes (we had $101.6 million in cash payments for taxes in 2022 as compared to $55.9 million in 2021), changes in customer obligations related to certain of our secure cash management services operations (certain customer obligations increased by $4.0 million in 2022 compared to an increase of $10.0 million in 2021), and restricted cash held for customers (restricted cash held for customers decreased by $4.4 million in 2022 compared to a increase of $12.7 million in 2021), offset by higher operating profit.

Non-GAAP cash flows from operating activities decreased by $52.6 million in the first nine months of 2022 as compared to the same period in 2021.

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

Cash flows from operating activities improved $31.2 million in the first three months of 2023 compared to the same period in 2022.

The increase was attributed to higher operating profit, restricted cash held for customers (restricted cash held for customers decreased by $43.7 million in 2023 compared to a decrease of $52.5 million in 2022), and working capital changes, partially offset by higher amounts paid for interest (we had $59.1 million in cash payments for interest in 2023 as compared to $25.4 million in 2022) and changes in customer obligations related to certain of our secure cash management services operations (certain customer obligations decreased by $9.6 million in 2023 compared to a decrease of $0.1 million in 2022).

Non-GAAP cash flows from operating activities improved $31.9 million in the first three months of 2023 as compared to the same period in 2022.

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

Investing Activities

Ended September 30, $

Ended March 31, $

(In millions) 2023 2022 change

2 unchanged sentences

Acquisitions, net of cash acquired — (11.4) 11.4

Dispositions, net of cash disposed 1.1 — 1.1

Marketable securities:

2 unchanged sentences

Proceeds from sale of property and equipment 0.3 1.2 (0.9)

Proceeds from settlement of cross currency swap 64.3 — 64.3

Acquisition of customer contracts — (0.8) 0.8

Net change in loans held for investment (10.5) (4.8) (5.7)

1 unchanged sentence

Investing activities $ (57.6) (52.0) (5.6)

Cash used by investing activities decreased by $278.2 million in the first nine months of 2022 versus the first nine months of 2021.

The decrease was primarily due to decreased payments related to the G4S and PAI acquisitions in 2021 and proceeds from the settlement of the euro cross currency swaps, as discussed in Note 8, offset by increases in cash used for the net purchase and sales of marketable securities and net change in loans held for investment, as discussed in Note 13.

Cash used in investing activities increased by $5.6 million in the first three months of 2023 versus the first three months of 2022.

The increase was primarily due to increases in cash paid for capital expenditures and net change in loans held for investment, as discussed in Note 13, partially offset by decreased payments for acquisitions.

Capital expenditures and depreciation and amortization were as follows:

Ended September 30, $ Full Year

Ended March 31, $ Full Year

(In millions) 2023 2022 change 2022

39 unchanged sentences

These non-GAAP measures should not be considered as alternatives to capital expenditures and depreciation and amortization determined in accordance with GAAP and should be read in conjunction with our condensed consolidated statements of cash flows.

Our reinvestment ratio, which we define as the annual amount of property and equipment acquired during the period divided by the annual amount of depreciation, was 1.4 for the 12 months ending September 30, 2022 compared to 1.2 for the 12 months ending September 30, 2021.

Capital expenditures in the first nine months of 2022 were primarily for cash devices, information technology, armored vehicles and machinery and equipment.

Our reinvestment ratio, which we define as the annual amount of property and equipment acquired during the period divided by the annual amount of depreciation, was 1.4 for the 12 months ending March 31, 2023 compared to 1.4 for the 12 months ending March 31, 2022.

Capital expenditures in the first three months of 2023 were primarily for cash devices, information technology, armored vehicles and machinery and equipment.

Financing Activities

Ended September 30, $

Ended March 31, $

(In millions) 2023 2022 change

5 unchanged sentences

Borrowings (repayments) (60.8) 112.4 (173.2)

Acquisition of noncontrolling interest (7.8) — (7.8)

Debt financing costs (5.5) (0.4) (5.1)

Repurchase shares of Brink's common stock (16.0) — (16.0)

3 unchanged sentences

Acquisition-related financing activities:

Settlement of acquisition related contingencies — 6.3 (6.3)

Payment of acquisition-related obligation (5.1) — (5.1)

Proceeds from exercise of stock options — 2.3 (2.3)

Tax withholdings associated with share-based compensation (6.6) (3.8) (2.8)

2 unchanged sentences

Debt borrowings and repayments

Cash flows from financing activities increased by $57.3 million in the first nine months of 2022 compared to the first nine months of 2021 as net borrowings increased compared to the prior nine month period.

We paid dividends to Brink’s shareholders of $0.60 per share or $28.3 million in the first nine months of 2022 compared to $0.55 per share or $27.3 million in the first nine months of 2021.

Cash flows from financing activities decreased by $195.9 million year over year as we had net cash used in financing activities of $97.1 million in the first three months of 2023 compared to net cash provided by financing activities of $98.8 million in the first three months of 2022.

The change was driven primarily by a decrease in net borrowings compared to the prior three month period.

Additionally, we used $16 million to repurchase shares of common stock in 2023.

We paid dividends to Brink’s shareholders of $0.20 per share or $9.3 million in the first three months of 2023 compared to $0.20 per share or $9.5 million in the first three months of 2022.

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.

1 unchanged sentence

GAAP Measures

September 30, December 31,

March 31, December 31,

(In millions) 2023 2022

9 unchanged sentences

The cash is generally credited to customers’ accounts the following day and we do not consider it as available for general corporate purposes in the management of our liquidity and capital resources and in our computation of Net Debt.

(b) Included within Net Debt is net cash from our Argentina operations of $67 million at September 30, 2022 and $54 million at December 31, 2021 (see Note 1 to the condensed consolidated financial statements for a discussion of currency controls in Argentina).

(b) Included within Net Debt is net cash from our Argentina operations of $59 million at March 31, 2023 and $58 million at December 31, 2022 (see Note 1 to the condensed consolidated financial statements for a discussion of currency controls in Argentina).

Net Debt is a supplemental non-GAAP financial measure that is not required by or presented in accordance with GAAP.

2 unchanged sentences

Net Debt should not be considered as an alternative to Debt determined in accordance with GAAP and should be reviewed in conjunction with our condensed consolidated balance sheets.

Set forth above is a reconciliation of Net Debt, a non-GAAP financial measure, to Debt, which is the most directly comparable financial measure calculated and reported in accordance with GAAP, as of September 30, 2022, and December 31, 2021.

Net Debt increased by $100 million primarily to fund general corporate initiatives including the $200 million in share repurchases completed over the prior twelve months and other working capital needs.

Net Debt increased by $122 million primarily to fund general corporate purposes and other working capital needs.

Liquidity Needs

1 unchanged sentence

Our liquidity needs are typically financed by cash from operations, short-term debt and the available borrowing capacity under our Revolving Credit Facility (our debt facilities are described in more detail in Note 9 to the condensed consolidated financial statements, including certain limitations and considerations related to the cash and borrowing capacity).

As of September 30, 2022, $320 million was available under the Revolving Credit Facility.

As of March 31, 2023, $398 million was available under the Revolving Credit Facility.

Based on our current cash on hand, cash generated from operations, and amounts available under our credit facilities, we believe that we will be able to meet our liquidity needs for the next 12 months.

3 unchanged sentences

See “Risk Factors” in Item 1A of our annual report on Form 10-K for the year ended December 31, 2022, 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.

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, 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, 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.

10 unchanged sentences

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

During the third quarter ended September 30, 2022, we used $27.3 million to repurchase, in the open market, 501,560 shares at an average repurchase price of $54.36 per share.

During the first quarter ended March 31, 2023, we repurchased a total of 247,422 shares of our common stock for an aggregate of $16.0 million and an average price of $64.79 per share.

These shares were retired upon repurchase.

At September 30, 2022, $223 million remained available under the 2021 Repurchase Program.

At March 31, 2023, $182 million remained available under the 2021 Repurchase Program.

Under the 2020 Repurchase Program, we entered into an accelerated share repurchase arrangement ("ASR") in the fourth quarter of 2021 and repurchased 1,742,160 shares in November 2021 in exchange for a $150 million upfront payment to a financial institution.

Under this ASR, the purchase period had a scheduled termination date of June 1, 2022.

In April 2022, the financial institution elected to early terminate this ASR and we repurchased an additional 546,993 shares.

In April 2022, the financial institution elected to early terminate this ASR and an additional 546,993 shares were repurchased.

In total, 2,289,153 shares were repurchased under this ASR at an average repurchase price of $65.53.

16 unchanged sentences

Actual Actual Projected

(In millions) 2021 Nine Months 2022 4th Quarter 2022 2023 2024 2025 2026

(In millions) 2022 1Q 2023 2Q-4Q 2023 2024 2025 2026 2027

Beginning funded status $ (65.8) (24.0) (20.3) (25.0) (24.8) (22.6) (8.6)

1 unchanged sentence

26.0 3.7 11.3 14.0 12.1 10.0 8.3

Payment from Brink’s — — — — — 11.7 11.5

Benefit plan experience gain (loss) 15.8 — (16.0) (13.8) (9.9) (7.7) (5.0)

4 unchanged sentences

Benefit plan experience gain 58.5 — — — — — —

Prior service credit (b)

66.7 — — — — — —

Other (3.6) 5.7 (5.7) — — — —

5 unchanged sentences

Payment from Brink’s 8.8 1.7 7.6 8.7 8.1 7.5 6.9

Benefit plan experience loss (1.9) — — — — — —

Benefit plan experience gain 19.3 — — — — — —

Ending funded status $ (75.8) (75.1) (70.3) (65.2) (60.4) (56.0) (51.9)

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

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

Pension benefits provided to eligible U.S.

1 unchanged sentence

We did not make cash contributions to the primary U.S.

pension plan in 2021 or the first nine months of 2022.

pension plan in 2022 or the first three months of 2023.

There are approximately 10,700 beneficiaries in the plan.

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

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

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

8 unchanged sentences

Actual Actual Projected

(In millions) 2021 Nine Months 4th Quarter 2022 FY2022 2023 2024 2025 2026

(In millions) 2022 1Q 2023 2-4Q 2023 FY2023 2024 2025 2026 2027

pension plan $ (1.9) (3.3) (9.9) (13.2) (8.7) (2.0) 5.0 11.1

8 unchanged sentences

Actual Actual Projected

(In millions) 2021 Nine Months 2022 4th Quarter 2022 FY2022 2023 2024 2025 2026

(In millions) 2022 1Q 2023 2-4Q 2023 FY2023 2024 2025 2026 2027

Payments from Brink’s to U.S.

pension plan $ — — — — — — 11.7 11.5

Black lung plans 8.8 1.7 7.6 9.3 8.7 8.1 7.5 6.9

7 unchanged sentences

Contingent Matters

See Note 14 to the condensed consolidated financial statements for information about contingent matters at September 30, 2022.

See Note 14 to the condensed consolidated financial statements for information about contingent matters at March 31, 2023.

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis