What changed in this filing

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Item 2. Management’s Discussion and Analysis

2023-08-09 compared with 2023-05-10 · 297 added, 144 removed, 564 unchanged (44% of the section changed)

15 unchanged sentences

Our CODM evaluates performance and allocates resources to each operating segment based on an operating profit or loss measure, excluding income and expenses not allocated to segments.

We manage our business in following four segments:

We manage our business in the following four segments:

• North America – operations in the U.S.

17 unchanged sentences

See definitions on page 40.

Ended March 31, %

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

Ended June 30, % Six Months

Ended June 30, %

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

Revenues 1,216.2 1,133.9 7 2,401.6 2,207.9 9

15 unchanged sentences

Analysis of Consolidated Results:

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.

Second Quarter 2023 versus Second Quarter 2022

Consolidated Revenues Revenues increased $82.3 million due to organic increases in Latin America ($63.9 million), Europe ($17.2 million), and Rest of World ($8.0 million), and the favorable impact of acquisitions ($36.5 million), partially offset by the unfavorable impact of currency exchange rates ($39.8 million) and an organic decrease in North America ($3.5 million).

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

Revenues increased 8% on an organic basis primarily due to inflation-based price increases and growth in the DRS and AMS lines of business.

See above for our definition of “organic growth.”

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 Costs and Expenses Cost of revenues increased 9% to $943.8 million primarily due to higher labor and other operational costs driven by cost inflation, the impact of acquisitions, and the impact of a large loss event in our BGS line of business, partially offset by the impact of currency exchange rates and lower costs related to restructuring actions.

Selling, general and administrative costs increased 2% to $170.6 million primarily due to organic increases in labor and other administrative costs and due to the impact of acquisitions, partially offset by the impact of currency exchange rates.

Consolidated Operating Profit Operating profit increased $9.1 million due mainly to:

• organic increases in Latin America ($16.0 million), North America ($3.2 million), Rest of World ($2.8 million), and Europe ($0.6 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 ($6.5 million), excluding intangible amortization and acquisition-related charges,

• lower costs related to business acquisitions and dispositions ($0.3 million), including the impact of acquisition-related charges and intangible asset amortization in 2023, and

• lower costs incurred related to reorganization and restructuring ($2.7 million),

partially offset by:

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

• 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).

• unfavorable changes in currency exchange rates ($16.2 million), driven by the Argentine peso and

• higher corporate expenses on an organic basis ($6.9 million) due to a $12.4 million increase in security losses year-over-year, primarily from a large loss event in our BGS line of business.

Consolidated Income from Continuing Operations Attributable to Brink’s and Related Per Share Amounts Income from continuing operations attributable to Brink’s shareholders decreased $3.0 million to $32.2 million due to higher interest expense ($18.7 million), partially offset by the increase in operating profit mentioned above, lower income tax expense ($5.9 million), and higher interest and other non-operating income ($0.7 million).

Earnings per share from continuing operations was $0.68, down from $0.73 in the second quarter of 2022.

Analysis of Consolidated Results:

First Half 2023 versus First Half 2022

Consolidated Revenues Revenues increased $193.7 million due to organic increases in Latin America ($120.0 million), Europe ($42.0 million), North America ($30.3 million), Rest of World ($28.6 million) and the favorable impact of acquisitions ($72.5 million), partially offset by the unfavorable impact of currency exchange rates ($99.7 million).

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

Revenues increased 10% on an organic basis primarily due to inflation-based price increases and growth in the DRS and AMS lines of business.

See above for our definition of “organic growth.”

Consolidated Costs and Expenses Cost of revenues increased 9% to $1,864.1 million primarily due to higher labor and other operational costs, driven by cost inflation, the impact of acquisitions, and the impact of a large loss event in our BGS line of business in the second quarter, partially offset by the impact of currency exchange rates and lower costs related to restructuring actions.

Selling, general and administrative costs increased 3% to $347.6 million primarily due to organic increases in labor and other administrative costs and the impact of acquisitions, partially offset by the first half 2022 unfavorable impact of a change in allowance estimate ($16.3 million) due to a modification in our methodology to estimate the allowance for doubtful accounts and the impact of currency exchange rates.

Consolidated Operating Profit Operating profit increased $26.5 million due mainly to:

• organic increases in Latin America ($31.5 million), North America ($17.1 million), Rest of World ($8.8 million), and Europe ($6.4 million),

• lower costs related to the impact of a change in allowance estimate ($16.3 million) recorded in the first half 2022 due to a modification in our methodology to estimate the allowance for doubtful accounts, and

• favorable operating impact of business acquisitions ($9.5 million), excluding intangible amortization and acquisition-related charges,

partially offset by:

• unfavorable changes in currency exchange rates ($32.5 million), driven by the Argentine peso,

• higher corporate expenses on an organic basis ($23.8 million), including a large loss event in our BGS line of business in the second quarter, and

• higher costs related to business acquisitions and dispositions ($7.0 million), including the impact of acquisition-related charges and intangible asset amortization, 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 decreased $60.1 million to $46.5 million due to higher income tax expense ($55.5 million), higher interest expense ($37.4 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 ($6.7 million).

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

Earnings per share from continuing operations was $0.98, down from $2.22 in the first six months of 2022.

Non-GAAP Basis

Analysis of Consolidated Results:

First Quarter 2023 versus First Quarter 2022

Second Quarter 2023 versus Second Quarter 2022

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

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partially offset by:

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

• 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 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.

• unfavorable changes in currency exchange rates ($14.4 million), driven primarily by the Argentine peso and

• higher corporate expenses on an organic basis ($6.9 million) due to a $12.4 million increase in security losses year-over-year, primarily from a large loss event in our BGS line of business.

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 $8.0 million to $55.9 million due to higher interest expense ($18.7 million) and lower interest and other non-operating income ($1.3 million), partially offset by the operating profit increase mentioned above, lower income tax expense ($4.0 million), and lower non-controlling interest ($0.2 million).

Earnings per share from continuing operations was $1.18, down from $1.34 in the second quarter of 2022.

Analysis of Consolidated Results:

First Half 2023 versus First Half 2022

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

See page 38 for details.

Non-GAAP Consolidated Operating Profit Non-GAAP operating profit increased $23.1 million due mainly to:

• organic increases in Latin America ($31.5 million), North America ($17.1 million), Rest of World ($8.8 million), and Europe ($6.4 million), and

• the favorable operating impact of business acquisitions ($9.5 million), excluding intangible amortization and acquisition-related charges,

partially offset by:

• unfavorable changes in currency exchange rates ($26.4 million), driven primarily by the Argentine peso, and

• higher corporate expenses on an organic basis ($23.8 million), including a large loss event in our BGS line of business in the second quarter.

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 $9.6 million to $111.7 million due to higher interest expense ($37.6 million) and higher non-controlling interest ($0.2 million), partially offset by the operating profit increase mentioned above, lower income tax expense ($4.8 million), and higher interest and other non-operating income ($0.3 million).

Earnings per share from continuing operations was $2.36, down from $2.53 in the first six months of 2022.

Revenues and Operating Profit by Segment:

First Quarter 2023 versus First Quarter 2022

Second Quarter 2023 versus Second Quarter 2022

Organic Acquisitions / % Change

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Analysis of Segment Results:

First Quarter 2023 versus First Quarter 2022

Second Quarter 2023 versus Second Quarter 2022

North America

Revenues decreased 1% ($4.2 million) primarily due to a 1% organic decrease ($3.5 million) and the unfavorable impact of currency exchange rates ($1.6 million) from the Canadian dollar, partially offset by the favorable impact of acquisitions ($0.9 million).

Organic revenue decreased primarily due to the impact of revenue from sales-type leases recognized in the prior-year period which did not recur, and volume reduction due to the rationalization of our customer portfolio to optimize profitability, mostly offset by price increases in the U.S.

Operating profit increased $3.4 million, primarily due to a 9% organic increase ($3.2 million) and the favorable impact of acquisitions ($0.2 million).

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

Latin America

Revenues increased 9% ($27.6 million) primarily due to a 21% organic increase ($63.9 million) and the favorable impact of acquisitions ($0.7 million), partially offset by the unfavorable impact of currency exchange rates ($37.0 million), primarily from the Argentine peso partially offset by favorable impact from the Mexican peso.

The organic increase was primarily driven by inflation-based price increases across the segment.

Operating profit was up 2% ($1.2 million) primarily due to a 25% organic increase ($16.0 million) and the favorable impact of acquisitions ($0.2 million), mostly offset by the unfavorable impact of currency exchange rates ($15.0 million).

The organic increase was driven by higher revenue 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 26% ($59.2 million) due to the favorable impact of the NoteMachine acquisition ($36.5 million), an 8% organic increase ($17.2 million), and the favorable impact of currency exchange rates ($5.5 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 $6.9 million, primarily due to the NoteMachine acquisition ($5.8 million), a 3% organic increase ($0.6 million), and the favorable impact of currency exchange rates ($0.5 million).

The organic increase was primarily driven by higher revenue outpacing the impact of labor and other cost increases across the segment.

Rest of World

Revenues decreased ($0.3 million) due to the unfavorable impact of currency exchange rates ($6.7 million) and dispositions ($1.6 million), partially offset by a 4% organic increase ($8.0 million).

The unfavorable currency impact was driven by most currencies

throughout the segment.The organic increase was primarily due to DRS growth.

Operating profit increased $1.8 million due to a 7% organic increase ($2.8 million) and the favorable impact of dispositions ($0.3 million), partially offset by the unfavorable impact of currency exchange rates ($1.3 million).

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

Revenues and Operating Profit by Segment:

First Half 2023 versus First Half 2022

Organic Acquisitions / % Change

(In millions) YTD '22 Change Dispositions (a)

YTD '23 Total Organic

North America $ 770.4 30.3 2.2 (3.6) 799.3 4 4

Latin America 597.6 120.0 1.5 (69.7) 649.4 9 20

Europe 448.8 42.0 72.1 (8.3) 554.6 24 9

Rest of World 391.1 28.6 (3.3) (18.1) 398.3 2 7

Segment revenues (c)

2,207.9 220.9 72.5 (99.7) 2,401.6 9 10

Revenues - GAAP $ 2,207.9 220.9 72.5 (99.7) 2,401.6 9 10

Operating profit:

North America $ 58.5 17.1 0.4 0.1 76.1 30 29

Latin America 127.7 31.5 0.5 (27.2) 132.5 4 25

Europe 37.2 6.4 8.1 (0.4) 51.3 38 17

Rest of World 72.6 8.8 0.5 (3.3) 78.6 8 12

Segment operating profit 296.0 63.8 9.5 (30.8) 338.5 14 22

Corporate (d)

(59.9) (23.8) — 4.4 (79.3) 32 40

Operating profit - non-GAAP 236.1 40.0 9.5 (26.4) 259.2 10 17

Other items not allocated to segments (e)

(77.2) 16.5 (7.0) (6.1) (73.8) (4) (21)

Operating profit - GAAP $ 158.9 56.5 2.5 (32.5) 185.4 17 36

Amounts may not add due to rounding.

See page 40 for footnote explanations.

Analysis of Segment Results:

First Half 2023 versus First Half 2022

North America

Revenues increased 4% ($28.9 million) primarily due to a 4% organic increase ($30.3 million) and the favorable impact of acquisitions ($2.2 million), partially offset by the unfavorable impact of currency exchange rates ($3.6 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 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.

Operating profit increased $17.6 million, primarily due to a 29% organic increase ($17.1 million), the favorable impact of acquisitions ($0.4 million), and the favorable impact of currency exchange rates ($0.1 million).

The organic increase resulted primarily from higher revenue which outpaced 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 in the U.S.

Latin America

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.

Revenues increased 9% ($51.8 million) primarily due to a 20% organic increase ($120.0 million) and the favorable impact of acquisitions ($1.5 million), partially offset by the unfavorable impact of currency exchange rates ($69.7 million), primarily from the Argentine peso and Colombian peso, partially offset by favorable impact from the Mexican peso.

The organic increase was driven by inflation-based price increases across the segment.

Operating profit was up 4% ($4.8 million) primarily due to a 25% organic increase ($31.5 million) and the favorable impact of acquisitions ($0.5 million), partially offset by the unfavorable impact of currency exchange rates ($27.2 million).

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 driven by higher revenue 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 24% ($105.8 million) due to the favorable impact of the NoteMachine acquisition ($72.1 million) and a 9% organic increase ($42.0 million), partially offset by the unfavorable impact of currency exchange rates ($8.3 million).

The unfavorable currency impact was 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.

Operating profit increased $14.1 million primarily due to the favorable impact of acquisitions ($8.1 million) and an organic increase ($6.4 million), partially offset by the unfavorable impact of currency exchange rates ($0.4 million).

The organic increase was primarily driven by higher revenue which outpaced the impact of labor and other cost increases.

Rest of World

Revenues increased 2% ($7.2 million) due to a 7% organic increase ($28.6 million), partially offset by the unfavorable impact of currency exchange rates ($18.1 million) and dispositions ($3.3 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 $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.

The organic increase was primarily due to DRS and global services growth.

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

Operating profit increased $6.0 million primarily due to a 12% organic increase ($8.8 million) and the favorable impact of dispositions ($0.5 million), partially offset by the unfavorable impact of currency exchange rates ($3.3 million), driven by most currencies throughout the segment.

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

Income and Expense Not Allocated to Segments

Corporate Expenses

Ended March 31, %

(In millions) 2023 2022 change

Ended June 30, % Six Months

Ended June 30, %

(In millions) 2023 2022 change 2023 2022 change

General, administrative and other expenses $ (47.3) (39.9) 19 $ (89.9) (68.4) 31

Foreign currency transaction gains 5.1 2.4 fav

Reconciliation of segment policies to GAAP 0.4 2.9 (86)

Foreign currency transaction gains 4.8 3.4 41 9.9 5.8 71

Reconciliation of segment policies to GAAP 0.3 (0.2) fav 0.7 2.7 (74)

Corporate expenses $ (42.2) (36.7) 15 $ (79.3) (59.9) 32

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 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).

Corporate expenses for the first six months of 2023 increased $19.4 million versus the prior year period primarily driven by increased charges related to insurance and security losses including a large loss event in our BGS line of business ($20.2 million) and higher bad debt expense ($1.8 million) reported as part of the reconciliation of segment policies to U.S.

These higher costs were partially offset by an increase in foreign currency transaction gains ($4.1 million) and lower net compensation costs, including share-based and bonus accruals ($1.7 million).

Other Items Not Allocated to Segments

Ended March 31, %

(In millions) 2023 2022 change

Ended June 30, % Six Months

Ended June 30, %

(In millions) 2023 2022 change 2023 2022 change

Operating profit:

4 unchanged sentences

Chile antitrust matter

(0.2) — unfav

(0.2) (0.8) (75) (0.4) (0.8) (50)

Operating profit $ (26.2) (27.5) (5) $ (73.8) (77.2) (4)

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

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

In total, we have recognized $32.3 million in charges under this program, including $10.1 million in the first six months of 2023.

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

2 unchanged sentences

Management periodically implements restructuring actions in targeted 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.

As a result of these actions, we recognized net costs of $14.4 million in the first six months of 2022, primarily severance costs.

We recognized $4.1 million in net costs in the first six 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.

1 unchanged sentence

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.

Ended March 31, %

(In millions) 2023 2022 change

Three Months Ended June 30, % Six Months

Ended June 30, %

(In millions) 2023 2022 change 2023 2022 change

Reportable Segments:

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

North America $ (0.4) (0.1) unfav $ (4.0) (7.5) (47)

Latin America (0.4) (2.4) (83) (4.0) (5.3) (25)

Europe (4.4) (1.4) unfav

Rest of World (1.3) — unfav

Europe 0.2 (0.8) fav (4.2) (2.2) 91

Rest of World 0.6 (0.1) fav (0.7) (0.1) unfav

Total reportable segments — (3.4) (100) (12.9) (15.1) (15)

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2023 Acquisitions and Dispositions

• 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").

• Amortization expense for acquisition-related intangible assets was $28.6 million in the first six months of 2023.

• Gain of $4.8 million upon derecognition of contingent consideration liability related to the NoteMachine business acquisition.

• We recognized $3.3 million in charges in Argentina in the first six 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.

1 unchanged sentence

• Net charges of $2.6 million for post-acquisition adjustments to indemnification assets related to previous business acquisitions.

• 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.

• We incurred $1.2 million in integration costs, primarily related to PAI, in the first six months of 2023.

• Transaction costs related to business acquisitions were $2.4 million in the first six months of 2023.

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

• Compensation expense related to the retention of key PAI employees was $1.0 million in the first six months of 2023.

2022 Acquisitions and Dispositions

• 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.

• Amortization expense for acquisition-related intangible assets was $25.2 million in the first six months of 2022.

• We incurred $2.1 million in integration costs, primarily related to PAI and G4S, in the first six months of 2022.

• Transaction costs related to business acquisitions were $1.0 million in the first six months of 2022.

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

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

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

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.

In the first six months of 2023, we recognized $22.2 million in pretax charges related to highly inflationary accounting, including currency remeasurement losses of $18.2 million.

In the first six months of 2022, we recognized $15.1 million in pretax charges related to highly inflationary accounting, including currency remeasurement losses of $13.4 million.

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

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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 of 2022, the additional allowance was reduced by $0.4 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 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.

In 2022, we recognized an additional $1.4 million adjustment and, in the first six months of 2023, we recognized an additional $0.4 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.

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

See Note 14 for details.

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

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).

At June 30, 2023, Argentina's economy remains highly inflationary for accounting purposes.

At June 30, 2023, we had net monetary assets denominated in Argentine pesos of $29.5 million (including cash of $24.7 million) and net nonmonetary assets of $210.7 million (including $99.8 million of goodwill, $1.9 million in equity securities denominated in Argentine pesos and $71.6 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 three months ended March 31, 2023 or March 31, 2022.

We did not have any such conversions or conversion losses in the six months ended June 30, 2023 or June 30, 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 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 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 June 30, 2023, the notional value of our short term outstanding foreign currency forward and swap contracts was $554 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 and are not designated as hedges for accounting purposes.

Accordingly, changes in their fair value are recorded immediately in earnings.

At June 30, 2023, the fair value of our short term foreign currency contracts was a net asset of approximately $2.2 million of which $3.7 million was included in prepaid expenses and other and $1.5 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 March 31,

Ended June 30, Six Months

Ended June 30,

(In millions) 2023 2022 2023 2022

Derivative instrument gains included in other operating income (expense) $ 10.4 14.1 $ 18.6 33.0

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.

We also have a 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).

2 unchanged sentences

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

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.

At June 30, 2023, the notional value of this contract was $41 million with a weighted-average maturity of approximately 0.3 years.

At June 30, 2023, the fair value of the cross currency swap contract was an asset of $8.1 million and was included in prepaid expenses and other on the condensed consolidated balance sheet.

At December 31, 2022, the fair value of the 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 March 31,

Ended June 30, Six Months

Ended June 30,

(In millions) 2023 2022 2023 2022

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

Offsetting transaction gains 3.4 11.8

Derivative instrument gains (losses) included in other operating income (expense) $ (3.8) 5.3 $ (7.2) (6.5)

Offsetting transaction gains (losses) 3.8 (5.3) 7.2 6.5

Derivative instrument losses included in interest expense (0.2) (0.3) (0.5) (0.7)

Net derivative instrument losses (3.7) (12.2)

Net derivative instrument gains (losses) (4.0) 5.0 (7.7) (7.2)

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 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 June 30, 2023, 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 6.5 years for the cross currency swaps maturing in April 2031.

At June 30, 2023, the fair value of these currency swaps was a net liability of $23.3 million of which $5.6 million was included in prepaid expenses and other and $28.9 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.

In July 2023, we entered into a zero cost foreign exchange collar contract with a $215 million notional amount and a May 2026 expiration date.

We sold a put option with a lower strike price and bought a call option with a higher strike price to manage the foreign exchange risk related to the final settlement of the $215 million notional cross currency swaps.

Upon the execution of the zero cost foreign exchange collar contract, we have de-designated the existing $215 million notional cross currency swaps and re-designated the combined $215 million notional cross currency swaps and zero cost collar into a new hedging instrument.

At re-designation, the existing $215 million notional cross currency swaps had a non-zero fair value representing an off-market component of the participating cross currency swaps.

The off-market value will be ratably amortized into earnings through May 2026.

The combined cross currency swaps and zero cost collar has been designated as a net investment hedge for accounting purposes.

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 March 31,

Ended June 30, Six Months

Ended June 30,

(In millions) 2023 2022 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 March 31, %

(In millions) 2023 2022 change

Ended June 30, % Six Months

Ended June 30, %

(In millions) 2023 2022 change 2023 2022 change

Foreign currency items:

3 unchanged sentences

Impairment losses (0.5) (0.9) (44) (4.2) (3.0) 40

Indemnification asset adjustments (0.5) — unfav

Indemnification asset adjustments (2.1) — unfav (2.6) — unfav

Share in earnings of equity affiliates 0.6 0.3 100 1.2 0.8 50

Royalty income 1.7 1.9 (11) 3.6 5.1 (29)

Other gains — 0.2 (100)

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

Contingent consideration liability adjustment 4.8 — fav 4.8 — fav

Other gains 2.8 0.4 fav 2.8 0.6 fav

Other operating income (expense) $ 3.8 (2.4) fav $ (4.5) (2.7) 67

Nonoperating Income and Expense

Interest expense

Ended March 31, %

Ended June 30, % Six Months

Ended June 30, %

(In millions)

2023 2022 change

2023 2022 change 2023 2022 change

Interest expense $ 51.1 32.4 58 $ 97.7 60.3 62

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

Interest expense was higher in the first six 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 March 31, %

(In millions) 2023 2022 change

Ended June 30, % Six Months

Ended June 30, %

(In millions) 2023 2022 change 2023 2022 change

Interest income $ 7.5 5.5 36 $ 14.0 8.9 57

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)

Argentina turnover tax (0.5) — unfav

Gain (loss) on equity securities (0.9) (0.1) unfav (1.0) (0.4) unfav

Foreign currency transaction gains (losses) (0.7) 1.6 unfav (1.1) 2.3 unfav

Retirement benefit cost other than service cost 0.8 (3.2) fav 0.8 (8.0) fav

Argentina turnover tax (1.4) — — (1.9) — —

Non-income taxes on intercompany billings (a)

(0.7) (0.8) (13)

(0.2) 0.5 unfav (0.9) (1.3) (31)

Other (1.0) (0.9) 11 (1.1) 0.6 unfav

2 unchanged sentences

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

Ended March 31,

Ended June 30, Six Months

Ended June 30,

(in millions) 2023 2022 2023 2022

13 unchanged sentences

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

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

deferred tax assets, resulting in a $55.0 million benefit in our provision for income taxes for the period ended June 30, 2022.

For the period ending June 30, 2023, we concluded that changes in Brazilian tax law will allow Brazilian withholding taxes to be eligible for U.S.

foreign tax credit treatment.

Based on this conclusion, we expect to annually be generating more new foreign tax credits and utilizing fewer foreign tax carryforwards to offset taxes prior to their expiration.

As a result, we recorded a $7.0 million tax expense in our provision for income taxes.

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

tax laws could occur and may require us to change our assessment of the ultimate amounts we consider more-likely-than-not to be realized.

On July 21, 2023, the U.S.

Treasury issued Notice 2023-55 (the "Notice") announcing temporary relief for taxpayers in determining whether a foreign tax is eligible for a foreign tax credit under the final foreign tax credit regulations mentioned above.

The Notice will allow us to apply the pre-January 4, 2022 regulations in determining the creditability of foreign taxes for our 2022 and 2023 U.S.

income tax filings.

The associated financial impact is estimated to be immaterial and will be reported in our third quarter 2023 condensed consolidated financial statements.

Effective Tax Rate

2 unchanged sentences

Noncontrolling Interests

Ended March 31, %

(In millions) 2023 2022 change

Ended June 30, % Six Months

Ended June 30, %

(In millions) 2023 2022 change 2023 2022 change

Net income attributable to noncontrolling interests $ 3.0 3.0 — $ 6.3 5.9 7

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.

The net income attributable to noncontrolling interests in the three months ended June 30, 2023, is consistent with the net income attributable to noncontrolling interests in the three months ended June 30, 2022.

The increase in net income attributable to noncontrolling interests in the six months ended June 30, 2023, in comparison to the six months ended June 30, 2022, is primarily attributable to higher 2023 operating results reported by certain subsidiaries that are not wholly-owned.

Non-GAAP Results Reconciled to GAAP

27 unchanged sentences

Chile antitrust matter (b)

0.4 0.1 0.8 0.2

Income tax rate adjustment (c)

12 unchanged sentences

retirement plans are also excluded from non-GAAP results.

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

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

(e) In the first six months 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 with such amount being further adjusted in the first half 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 March 31,

Ended June 30, Six Months

Ended June 30,

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

4 unchanged sentences

Reorganization and restructuring (b)

— 2.7 14.2 14.4

Acquisitions and dispositions (b)

15.0 15.4 37.0 30.6

Argentina highly inflationary impact (b)

11.0 9.0 22.2 15.1

Change in allowance estimate (b)

— (0.4) — 16.3

Chile antitrust matter (b)

0.2 0.8 0.4 0.8

Non-GAAP $ 131.8 124.0 $ 259.2 236.1

5 unchanged sentences

Acquisitions and dispositions (b)

0.3 0.3 0.5 0.7

Non-GAAP $ (50.8) (32.1) $ (97.2) (59.6)

2 unchanged sentences

Retirement plans (d)

(1.9) 1.8 (4.1) 4.9

Acquisitions and dispositions (b)

0.6 (1.7) 1.1 (2.4)

Argentina highly inflationary impact (b)

0.3 0.9 0.6 1.5

Non-GAAP $ 3.1 4.4 $ 6.4 6.1

2 unchanged sentences

Retirement plans (d)

(0.1) 0.7 (0.7) 1.4

Reorganization and restructuring (b)

(0.1) 1.1 2.6 2.3

Acquisitions and dispositions (b)

2.0 1.0 4.4 1.8

Argentina highly inflationary impact (b)

(0.2) (0.3) (0.7) (0.5)

Change in allowance estimate (b)

— (0.1) — 3.9

Valuation allowance on tax credits (e)

(4.1) (3.3) (6.7) 55.0

Chile antitrust matter (b)

0.1 0.2 0.1 0.2

Income tax rate adjustment (c)

4.2 0.6 7.8 3.0

Non-GAAP $ 25.2 29.2 $ 50.5 $ 55.3

1 unchanged sentence

GAAP $ 3.0 3.0 6.3 5.9

Retirement plans (d)

Acquisitions and dispositions (b)

0.3 0.2 0.5 0.5

Income tax rate adjustment (c)

(0.3) (0.1) (0.6) (0.5)

Non-GAAP $ 3.0 3.2 $ 6.2 6.0

1 unchanged sentence

See page 50 for footnote explanations.

Ended March 31,

Ended June 30, Six Months

Ended June 30,

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

2 unchanged sentences

Retirement plans (d)

(1.8) 1.0 (3.4) 3.4

Reorganization and restructuring (b)

0.1 1.6 11.6 12.1

Acquisitions and dispositions (b)

13.6 12.8 33.7 26.6

Argentina highly inflationary impact (b)

11.5 10.2 23.5 17.1

Change in allowance estimate (b)

— (0.3) — 12.4

Valuation allowance on tax credits (e)

4.1 3.3 6.7 (55.0)

Chile antitrust matter (b)

0.1 0.6 0.3 0.6

Income tax rate adjustment (c)

(3.9) (0.5) (7.2) (2.5)

Non-GAAP $ 55.9 63.9 $ 111.7 121.3

1 unchanged sentence

Retirement plans (d)

(0.03) 0.02 (0.07) 0.07

Reorganization and restructuring (b)

0.01 0.03 0.24 0.25

Acquisitions and dispositions (b)

0.27 0.27 0.71 0.55

Argentina highly inflationary impact (b)

0.24 0.21 0.50 0.36

Change in allowance estimate (b)

— (0.01) — 0.26

Valuation allowance on tax credits (e)

0.09 0.07 0.14 (1.15)

Chile antitrust matter (b)

— 0.01 0.01 0.01

Income tax rate adjustment (c)

4 unchanged sentences

LIQUIDITY AND CAPITAL RESOURCES

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.

Cash flows from operating activities improved $64.2 million in the first six months of 2023 as compared to the first six months of 2022.

Cash used for investing activities increased by $42.1 million in the first six months of 2023 compared to the first six months of 2022.

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

Operating Activities

Ended March 31, $

Ended June 30, $

(In millions) 2023 2022 change

1 unchanged sentence

Operating activities - GAAP $ 105.3 41.1 64.2

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

Decrease in certain customer obligations (a)

(Increase) decrease in restricted cash held for customers 16.2 (3.5) 19.7

(Increase) decrease in customer obligations (a)

32.4 (5.3) 37.7

Operating activities - non-GAAP $ 153.9 32.3 121.6

6 unchanged sentences

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 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.

Cash flows from operating activities improved $64.2 million in the first six months of 2023 compared to the same period in 2022.

The increase was attributed to higher operating profit, lower amounts paid for income taxes (we had $54.7 million in cash payments for income taxes in 2023 as compared to $70.5 million in 2022) and working capital changes, partially offset by higher amounts paid for interest (we had $110.0 million in cash payments for interest in 2023 as compared to $56.8 million in 2022), restricted cash held for customers (restricted cash held for customers decreased by $16.2 million in 2023 compared to an increase of $3.5 million in 2022), and changes in customer obligations related to certain of our secure cash management services operations (customer obligations decreased by $32.4 million in 2023 compared to an increase of $5.3 million in 2022).

Non-GAAP cash flows from operating activities improved $121.6 million in the first six months of 2023 as compared to the same period in 2022.

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

Investing Activities

Ended March 31, $

Ended June 30, $

(In millions) 2023 2022 change

9 unchanged sentences

Other (0.4) — (0.4)

Discontinued operations 0.9 — 0.9

Investing activities $ (144.6) (102.5) (42.1)

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.

Cash used in investing activities increased by $42.1 million in the first six months of 2023 versus the first six months of 2022.

The increase was primarily due to increases in cash paid for marketable security purchases 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 March 31, $ Full Year

Ended June 30, $ 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 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.

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 1.3 for the 12 months ending June 30, 2023 compared to 1.4 for the 12 months ending June 30, 2022.

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

Financing Activities

Ended March 31, $

Ended June 30, $

(In millions) 2023 2022 change

5 unchanged sentences

Borrowings (repayments) 0.4 174.9 (174.5)

Acquisition of noncontrolling interest (0.6) — (0.6)

Debt financing costs — (5.5) 5.5

Repurchase shares of Brink's common stock (17.5) — (17.5)

3 unchanged sentences

Acquisition-related financing activities:

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

Cash paid for acquisition related to settlements and obligations (9.7) (2.5) (7.2)

Tax withholdings associated with share-based compensation (6.9) (10.2) 3.3

2 unchanged sentences

Debt borrowings and repayments

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.

Cash flows from financing activities decreased by $190.8 million year over year as we had net cash used in financing activities of $54.3 million in the first six months of 2023 compared to net cash provided by financing activities of $136.5 million in the first six months of 2022.

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

Additionally, we used $17.5 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.

We paid dividends to Brink’s shareholders of $0.42 per share or $19.5 million in the first six months of 2023 compared to $0.40 per share or $18.9 million in the first six 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

March 31, December 31,

June 30, 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 $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).

(b) Included within Net Debt is net cash from our Argentina operations of $25 million at June 30, 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 March 31, 2023, and December 31, 2022.

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

Net Debt increased by $126 million primarily due to increased provisional credit from growth in our DRS line of business, increased financing lease debt and the use of cash to purchase marketable securities.

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

As of June 30, 2023, $379 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.

12 unchanged sentences

• the market prices of our securities.

On October 27, 2021, we announced that the Board authorized a $250 million share repurchase program that expires on December 31, 2023 (the "2021 Repurchase Program").

On October 27, 2021, we announced that our 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 in February 2020 (the "2020 Repurchase Program"), which expired on December 31, 2021, with no amount remaining available.

2 unchanged sentences

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

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.

During the first six months ended June 30, 2023, we repurchased a total of 272,467 shares of our common stock for an aggregate of $17.5 million and an average price of $64.38 per share.

These shares were retired upon repurchase.

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

At June 30, 2023, $180 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.

19 unchanged sentences

Actual Actual Projected

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

(In millions) 2022 First half 2023 2nd half 2023 2024 2025 2026 2027

Beginning funded status $ (65.8) (24.0) (16.5) (24.9) (24.7) (22.5) (8.5)

24 unchanged sentences

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

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

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

There are approximately 10,700 beneficiaries in the plan.

10 unchanged sentences

Actual Actual Projected

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

(In millions) 2022 First half 2023 2nd half 2023 FY2023 2024 2025 2026 2027

pension plan $ (1.9) (6.7) (6.9) (13.6) (8.7) (2.0) 5.0 11.1

8 unchanged sentences

Actual Actual Projected

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

(In millions) 2022 First half 2023 2nd half 2023 FY2023 2024 2025 2026 2027

Payments from Brink’s to U.S.

9 unchanged sentences

Contingent Matters

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

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