What changed in this filing

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Item 2. Management’s Discussion and Analysis

2023-11-07 compared with 2023-08-09 · 205 added, 187 removed, 674 unchanged (37% of the section changed)

35 unchanged sentences

See definitions on page 40.

Ended June 30, % Six Months

Ended June 30, %

Ended September 30, % Nine Months

Ended September 30, %

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

2 unchanged sentences

Selling, general and administrative expenses 170.0 180.8 (6) 517.6 519.9 —

Operating profit 105.6 96.5 9 185.4 158.9 17

Operating profit 137.7 59.5 fav 323.1 218.4 48

Income from continuing operations (a)

32.2 35.2 (9) 46.5 106.6 (56)

45.7 19.2 fav 92.2 125.8 (27)

Diluted EPS from continuing operations (a)

0.68 0.73 (7) 0.98 2.22 (56)

0.97 0.41 fav 1.95 2.63 (26)

Non-GAAP revenues 1,227.4 1,136.7 8 3,629.0 3,344.6 9

7 unchanged sentences

Analysis of Consolidated Results:

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).

Third Quarter 2023 versus Third Quarter 2022

Consolidated Revenues Revenues increased $90.7 million due to organic increases in Latin America ($71.1 million) and Europe ($12.2 million) and the favorable impact of acquisitions ($34.5 million), partially offset by the unfavorable impact of currency exchange rates ($15.4 million) and organic decreases in Rest of World ($9.0 million) and North America ($2.7 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.

Revenues increased 6% on an organic basis primarily due to inflation-based price increases and growth in AMS and DRS offset by an organic decrease in BGS revenue.

See above for our definition of “organic growth.”

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 Costs and Expenses Cost of revenues increased 5% to $921.0 million primarily due to higher revenue including the impact of acquisition revenue partially offset by lower costs related to restructuring actions.

Selling, general and administrative costs decreased 6% to $170.0 million primarily due to the prior year impact of a large loss event in our BGS line of business and lower share-based compensation expense and bonus accruals and lower costs related to restructuring actions.

Consolidated Operating Profit Operating profit increased $78.2 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),

• 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

• organic increases in Latin America ($20.3 million), North America ($8.9 million), and Europe ($1.9 million),

• lower corporate expenses on an organic basis ($22.9 million), primarily from the prior year impact of a large loss event in our BGS line of business, and lower share-based compensation expense and bonus accruals.

• lower costs incurred related to reorganization and restructuring ($19.2 million),

• lower costs related to business acquisitions and dispositions ($16.6 million), including the impact of acquisition-related charges and intangible asset amortization in 2023, and

• the favorable operating impact of business acquisitions ($6.3 million), excluding intangible amortization and acquisition-related charges.

partially offset by:

• unfavorable changes in currency exchange rates ($11.5 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.

• an organic decrease in Rest of World ($5.4 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 $26.5 million to $45.7 million due to the increase in operating profit mentioned above partially offset by higher income tax expense ($28.8 million), higher interest expense ($19.1 million), lower interest and other nonoperating income ($3.4 million), and higher noncontrolling interest ($0.4 million).

Earnings per share from continuing operations was $0.97, up from $0.41 in the third quarter of 2022.

Analysis of Consolidated Results:

First Half 2023 versus First Half 2022

Nine Months 2023 versus Nine Months 2022

Consolidated Revenues Revenues increased $284.4 million due to organic increases in Latin America ($191.1 million), Europe ($54.2 million), North America ($27.6 million), Rest of World ($19.6 million) and the favorable impact of acquisitions ($107.0 million), partially offset by the unfavorable impact of currency exchange rates ($115.1 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.

Revenues increased 9% on an organic basis primarily due to inflation-based price increases and growth in AMS and DRS revenue.

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 Costs and Expenses Cost of revenues increased 8% to $2,785.1 million primarily due to higher revenue, including the impact of acquisitions, partially offset by the impact of currency exchange rates and lower costs related to restructuring actions.

Selling, general and administrative costs decreased to $517.6 million primarily due to the first nine months 2022 unfavorable impact of a change in allowance estimate ($16.0 million) due to a modification in our methodology to estimate the allowance for doubtful accounts and the impact of currency exchange rates, partially offset by organic increases in labor and other administrative costs and the impact of acquisitions.

Consolidated Operating Profit Operating profit increased $104.7 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,

• organic increases in Latin America ($51.8 million), North America ($26.0 million), Europe ($8.3 million), and Rest of World ($3.4 million),

• lower costs incurred related to reorganization and restructuring ($19.4 million),

• lower costs related to the impact of a change in allowance estimate ($16.0 million) recorded in the first nine months of 2022 due to a modification in our methodology to estimate the allowance for doubtful accounts,

• favorable operating impact of business acquisitions ($15.8 million), excluding intangible amortization and acquisition-related charges, and

• lower costs related to business acquisitions and dispositions ($9.6 million), including the impact of acquisition-related charges and intangible asset amortization, included in "Other items not allocated to segments",

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 $0.98, down from $2.22 in the first six months of 2022.

• unfavorable changes in currency exchange rates ($44.0 million), driven by the Argentine peso, and

• higher corporate expenses on an organic basis ($0.9 million).

Consolidated Income from Continuing Operations Attributable to Brink’s and Related Per Share Amounts Income from continuing operations attributable to Brink’s shareholders decreased $33.6 million to $92.2 million due to higher income tax expense ($84.3 million), higher interest expense ($56.5 million), and higher noncontrolling interest ($0.8 million), partially offset by the increase in operating profit mentioned above and higher interest and other nonoperating income ($3.3 million).

Earnings per share from continuing operations was $1.95, down from $2.63 in the first nine months of 2022.

Non-GAAP Basis

Analysis of Consolidated Results:

Second Quarter 2023 versus Second Quarter 2022

Third Quarter 2023 versus Third Quarter 2022

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

1 unchanged sentence

Non-GAAP Consolidated Operating Profit Non-GAAP operating profit increased $39.5 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), and

• organic increases in Latin America ($20.3 million), North America ($8.9 million), and Europe ($1.9 million), and

• lower corporate expenses on an organic basis ($22.9 million) primarily from the prior year impact of a large loss event in our BGS line of business, and lower share-based compensation expense and bonus accruals, and

• the favorable operating impact of business acquisitions ($6.3 million), excluding intangible amortization and acquisition-related charges,

1 unchanged sentence

• unfavorable changes in currency exchange rates ($15.4 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.

• an organic decrease in Rest of World ($5.4 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 $25.0 million to $90.5 million due to the operating profit increase mentioned above and higher interest and other nonoperating income ($16.1 million), partially offset by higher interest expense ($19.2 million), higher income tax expense ($10.6 million), and higher noncontrolling interest ($0.8 million).

Earnings per share from continuing operations was $1.92, up from $1.38 in the third quarter of 2022.

Analysis of Consolidated Results:

First Half 2023 versus First Half 2022

Nine Months 2023 versus Nine Months 2022

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

1 unchanged sentence

Non-GAAP Consolidated Operating Profit Non-GAAP operating profit increased $62.6 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

• organic increases in Latin America ($51.8 million), North America ($26.0 million), Europe ($8.3 million), and Rest of World ($3.4 million), and

• the favorable operating impact of business acquisitions ($15.8 million), excluding intangible amortization and acquisition-related charges,

1 unchanged sentence

• unfavorable changes in currency exchange rates ($41.8 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.

• higher corporate expenses on an organic basis ($0.9 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 $15.4 million to $202.2 million due to the operating profit increase mentioned above and higher interest and other nonoperating income ($16.4 million), partially offset by higher interest expense ($56.8 million), higher income tax expense ($5.8 million), and higher noncontrolling interest ($1.0 million).

Earnings per share from continuing operations was $4.27, up from $3.90 in the first nine months of 2022.

Revenues and Operating Profit by Segment:

Second Quarter 2023 versus Second Quarter 2022

Third Quarter 2023 versus Third Quarter 2022

Organic Acquisitions / % Change

19 unchanged sentences

(67.3) 18.2 16.6 3.9 (28.6) (58) (27)

Operating profit - GAAP $ 96.5 18.5 6.8 (16.2) 105.6 9 19

Operating profit - GAAP $ 59.5 66.8 22.9 (11.5) 137.7 fav fav

Amounts may not add due to rounding.

8 unchanged sentences

Analysis of Segment Results:

Second Quarter 2023 versus Second Quarter 2022

Third Quarter 2023 versus Third Quarter 2022

North America

Revenues decreased 1% ($2.5 million) primarily due to a 1% organic decrease ($2.7 million) and the unfavorable impact of currency exchange rates ($0.8 million) from the Canadian dollar, partially offset by the favorable impact of acquisitions ($1.0 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.

Organic revenue decreased primarily due to volume reductions due to the rationalization of our customer portfolio to optimize profitability and lower BGS revenue, mostly offset by price increases in the U.S.

and modest growth in AMS and DRS revenue.

Operating profit increased $9.3 million, primarily due to a 23% organic increase ($8.9 million) and the favorable impact of acquisitions ($0.4 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.

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

Latin America

Revenues increased 13% ($38.5 million) primarily due to a 24% organic increase ($71.1 million) and the favorable impact of acquisitions ($0.6 million), partially offset by the unfavorable impact of currency exchange rates ($33.2 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.

The organic increase was primarily driven by inflation-based price increases across the segment and growth in AMS and DRS revenue.

Operating profit was up 2% ($1.6 million) primarily due to a 31% organic increase ($20.3 million) and the favorable impact of acquisitions ($0.2 million), mostly offset by the unfavorable impact of currency exchange rates ($18.9 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.

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

Revenues increased 31% ($67.8 million) due to the favorable impact of the NoteMachine acquisition ($34.9 million), a 6% organic increase ($12.2 million), and the favorable impact of currency exchange rates ($20.7 million) driven by the euro.

The organic increase was primarily due to price increases and the growth of AMS and DRS revenue.

Operating profit increased $9.9 million, primarily due to the NoteMachine acquisition ($5.4 million), a 7% organic increase ($1.9 million), and the favorable impact of currency exchange rates ($2.6 million).

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

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

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 decreased ($13.1 million) due to a 4% organic decrease ($9.0 million), the unfavorable impact of currency exchange rates ($2.1 million) and dispositions ($2.0 million).

Organic growth in the segment in cash-in-transit, DRS and AMS was more than offset by a decline in BGS revenue.

Operating profit decreased $5.7 million due to a 11% organic decrease ($5.4 million) and the unfavorable impact of currency exchange rates ($0.6 million), partially offset by the favorable impact of dispositions ($0.3 million).

The organic decrease was primarily due to the impact of the decrease in higher-margin BGS revenue.

Revenues and Operating Profit by Segment:

First Half 2023 versus First Half 2022

Nine Months 2023 versus Nine Months 2022

Organic Acquisitions / % Change

23 unchanged sentences

Analysis of Segment Results:

First Half 2023 versus First Half 2022

Nine Months 2023 versus Nine Months 2022

North America

1 unchanged sentence

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

partially offset by volume reductions due to the rationalization of our customer portfolio to optimize profitability and lower BGS revenue.

Operating profit increased $26.9 million, primarily due to a 27% organic increase ($26.0 million), the favorable impact of acquisitions ($0.8 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.

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

Latin America

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.

Revenues increased 10% ($90.3 million) primarily due to a 21% organic increase ($191.1 million) and the favorable impact of acquisitions ($2.1 million), partially offset by the unfavorable impact of currency exchange rates ($102.9 million), primarily from the Argentine peso partially offset by favorable impact from the Mexican peso.

The organic increase was driven by inflation-based price increases across the segment and growth in AMS and DRS revenue.

Operating profit was up 3% ($6.4 million) primarily due to a 27% organic increase ($51.8 million) and the favorable impact of acquisitions ($0.7 million), partially offset by the unfavorable impact of currency exchange rates ($46.1 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 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 $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.

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

Revenues increased 26% ($173.6 million) due to the favorable impact of the NoteMachine acquisition ($107.0 million), an 8% organic increase ($54.2 million), and the favorable impact of currency exchange rates ($12.4 million).

The favorable currency impact was driven by the euro.

The organic increase was primarily due to price increases throughout the segment and the growth of AMS and DRS revenue.

Operating profit increased $24.0 million primarily due to the favorable impact of acquisitions ($13.5 million), an organic increase ($8.3 million, and the favorable impact of currency exchange rates ($2.2 million).

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

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 DRS and global services growth.

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

Revenues decreased 1% ($5.9 million) due to the unfavorable impact of currency exchange rates ($20.2 million) and dispositions ($5.3 million), partially offset by a 3% organic increase ($19.6 million).

The organic increase was primarily due to growth in AMS and DRS revenue partially offset by a decline in BGS revenue in the third quarter.

Operating profit increased $0.3 million primarily due to a 3% organic increase ($3.4 million) and the favorable impact of dispositions ($0.8 million), partially offset by the unfavorable impact of currency exchange rates ($3.9 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.

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

Income and Expense Not Allocated to Segments

Corporate Expenses

Ended June 30, % Six Months

Ended June 30, %

Ended September 30, % Nine Months

Ended September 30, %

(In millions) 2023 2022 change 2023 2022 change

1 unchanged sentence

Foreign currency transaction gains 5.4 3.6 50 15.3 9.4 63

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

Reconciliation of segment policies to GAAP (0.7) 1.3 unfav — 4.0 (100)

Corporate expenses $ (27.7) (52.1) (47) $ (107.0) (112.0) (4)

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 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).

Corporate expenses for the first nine months of 2023 decreased $5.0 million versus the prior year period.

This was primarily driven by lower net compensation costs, including share-based compensation and bonus accruals ($18.3 million), as well as an increase in foreign currency transaction gains ($5.9 million).

These lower costs were partially offset by increased charges related to insurance and security losses ($11.8 million), higher professional fees ($4.3 million) and higher bad debt expense ($3.1 million) reported as part of the reconciliation of segment policies to U.S.

Other Items Not Allocated to Segments

Ended June 30, % Six Months

Ended June 30, %

Ended September 30, % Nine Months

Ended September 30, %

(In millions) 2023 2022 change 2023 2022 change

6 unchanged sentences

— (0.3) (100) (0.4) (1.1) (64)

Reporting compliance (0.7) — unfav (0.7) — unfav

Operating profit $ (28.6) (67.3) (58) $ (102.4) (144.5) (29)

3 unchanged sentences

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 $32.3 million in charges under this program, including $10.1 million in the first six months of 2023.

In total, we have recognized $32.2 million in charges under this program, including $10.0 million in the first nine 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.

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 at least $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 $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.

As a result of these actions, we recognized net costs of $16.5 million in the first nine months of 2022, primarily severance costs.

We recognized $4.6 million in net costs in the first nine 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.

Three Months Ended June 30, % Six Months

Ended June 30, %

Three Months Ended September 30, % Nine Months

Ended September 30, %

(In millions) 2023 2022 change 2023 2022 change

Reportable Segments:

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

North America $ (0.3) (5.1) (94) $ (4.3) (12.6) (66)

Latin America (0.3) (8.2) (96) (4.3) (13.5) (68)

Europe 0.2 (5.3) fav (4.0) (7.5) (47)

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

Rest of World — (1.0) (100) (0.7) (1.1) (36)

Total reportable segments (0.4) (19.6) (98) (13.3) (34.7) (62)

4 unchanged sentences

2023 Acquisitions and Dispositions

• 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").

• Amortization expense for acquisition-related intangible assets was $43.2 million in the first nine months of 2023.

• We derecognized a contingent consideration liability related to the NoteMachine business acquisition and recognized a gain of $4.8 million.

• We recognized $4.7 million in charges in Argentina in the first nine 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 $2.6 million for post-acquisition adjustments to indemnification assets related to previous business acquisitions.

• 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.

• Net charges of $3.4 million were incurred for post-acquisition adjustments to indemnification assets related to previous business acquisitions.

• We incurred $2.0 million in integration costs, primarily related to PAI, in the first nine months of 2023.

• Transaction costs related to business acquisitions were $3.6 million in the first nine months of 2023.

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

• Compensation expense related to the retention of key PAI employees was $1.3 million in the first nine months of 2023.

2022 Acquisitions and Dispositions

• 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.

• 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 businesses.

• Net charges of $7.8 million were incurred 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.

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 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.

In the first nine months of 2023, we recognized $30.3 million in pretax charges related to highly inflationary accounting, including currency remeasurement losses of $23.9 million.

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.

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.

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 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 six months of 2023, we recognized an additional $0.4 million adjustment to our estimated loss.

In 2022, we recognized an additional $1.4 million adjustment and, in the first nine months of 2023, we recognized an additional $0.4 million adjustment to our estimated loss.

The adjustments result from a change in currency rates.

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See Note 14 for details.

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

In the first nine months of 2023, we incurred $0.7 million in costs related to mitigation of the material weakness.

We did not incur any such costs in 2022.

Foreign Operations

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

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).

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

At September 30, 2023, we had net monetary assets denominated in Argentine pesos of $74.1 million (including cash of $71.4 million) and net nonmonetary assets of $174.9 million (including $99.8 million of goodwill, $2.2 million in equity securities denominated in Argentine pesos and $38.6 million in debt securities denominated in Argentine pesos).

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

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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 conversions or conversion losses in the six months ended June 30, 2023 or June 30, 2022.

We did not have any such conversions or conversion losses in the nine months ended September 30, 2023 or September 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.

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

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.

At September 30, 2023, the notional value of our short term outstanding foreign currency forward and swap contracts was $574 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 September 30, 2023, the fair value of our short term foreign currency contracts was a net asset of approximately $6.3 million of which $9.2 million was included in prepaid expenses and other and $2.9 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 June 30, Six Months

Ended June 30,

Ended September 30, Nine Months

Ended September 30,

(In millions) 2023 2022 2023 2022

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

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 September 30, 2023, the notional value of this contract was $30 million with a weighted-average maturity of approximately 0.1 years.

At September 30, 2023, the fair value of the cross currency swap contract was an asset of $7.2 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 June 30, Six Months

Ended June 30,

Ended September 30, Nine Months

Ended September 30,

(In millions) 2023 2022 2023 2022

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

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.

Upon the execution of the zero cost foreign exchange collar contract, we 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 off-market value is being 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.

At September 30, 2023, the notional value of these cross currency swap contracts was $400 million with a remaining weighted average maturity of 2.1 years for the cross currency swaps maturing in May 2026 and a remaining weighted average maturity of 6.3 years for the cross currency swaps maturing in April 2031.

At September 30, 2023, the fair value of these currency swaps was a net liability of $17.3 million of which $5.6 million was included in prepaid expenses and other and $22.9 million was included in other liabilities on the condensed consolidated balance sheet.

At September 30, 2023, the fair value of the zero cost collar was an asset of $2.6 million included in other assets 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 June 30, Six Months

Ended June 30,

Ended September 30, Nine Months

Ended September 30,

(In millions) 2023 2022 2023 2022

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

Ended June 30, % Six Months

Ended June 30, %

Ended September 30, % Nine Months

Ended September 30, %

(In millions) 2023 2022 change 2023 2022 change

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Derivative instrument gains 4.3 25.4 (83) 22.9 58.4 (61)

Gains (losses) on sale of property and other assets 0.1 1.1 (91) (1.8) 1.5 unfav

Gains (losses) on sale of property and other assets 3.2 (0.1) fav 1.4 1.4 —

Impairment losses (3.0) (4.9) (39) (7.2) (7.9) (9)

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

Indemnification asset adjustments (1.4) (7.8) (82) (4.0) (7.8) (49)

Share in earnings of equity affiliates 0.7 0.5 40 1.9 1.3 46

Royalty income 1.9 2.1 (10) 5.5 7.2 (24)

Contingent consideration liability adjustment 4.8 — fav 4.8 — fav

Other gains 2.8 0.4 fav 2.8 0.6 fav

Contingent consideration liability adjustment — — — 4.8 — 100

Other gains 0.2 1.8 (89) 3.0 2.4 25

Other operating income (expense) $ 1.3 (15.7) fav $ (3.2) (18.4) (83)

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Interest expense

Ended June 30, % Six Months

Ended June 30, %

Ended September 30, % Nine Months

Ended September 30, %

(In millions)

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Interest expense $ 53.8 34.7 55 $ 151.5 95.0 59

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

Interest expense was higher in the first nine 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 June 30, % Six Months

Ended June 30, %

Ended September 30, % Nine Months

Ended September 30, %

(In millions) 2023 2022 change 2023 2022 change

Interest income $ 12.9 8.1 59 $ 26.9 17.0 58

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

Gain (loss) on marketable securities (b)

(9.0) 0.3 unfav (10.0) (0.2) unfav

Foreign currency transaction gains (losses) 0.9 1.6 (44) (0.2) 3.9 unfav

Retirement benefit cost other than service cost 0.2 (3.1) fav 1.0 (11.1) fav

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

Argentina turnover tax (2.4) — unfav (4.3) — unfav

Non-income taxes on intercompany billings (a)

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

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

Interest and other nonoperating income (expense) $ 4.1 3.4 21 $ 8.8 2.1 fav

(0.4) (0.6) (33) (1.3) (1.8) (28)

Other 0.7 — fav (0.4) 0.6 unfav

Interest and other nonoperating income (expense) $ 2.9 6.3 (54) $ 11.7 8.4 39

(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

Ended June 30, Six Months

Ended June 30,

(b) Primarily related to realized loss on sales of available-for-sale debt securities in the third quarter of 2023.

Ended September 30, Nine Months

Ended September 30,

(in millions) 2023 2022 2023 2022

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Based upon this analysis, we determined a significant amount of the post-2021 foreign withholding taxes will now be ineligible for U.S.

foreign income tax credit treatment and therefore we are forecasting that Brink’s U.S.

operations will no longer annually be generating new foreign tax credits in excess of its annual foreign tax credit utilization limit.

foreign income tax credit treatment and therefore we forecasted that Brink’s U.S.

operations would no longer annually be generating new foreign tax credits in excess of its annual foreign tax credit utilization limit.

As a result, we expect to be able to utilize a substantial amount of our foreign tax credit and general business tax credit carryforwards to offset future tax prior to their expiration.

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

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.

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

In the second quarter of 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.

As a result, we recorded a $7.0 million tax expense in our provision for income taxes for the nine month period ended September 30, 2023.

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.

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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.

The impact in our provision for income taxes for the three and nine month periods ended September 30, 2023 is less than $1.0 million of tax expense.

Effective Tax Rate

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Noncontrolling Interests

Ended June 30, % Six Months

Ended June 30, %

Ended September 30, % Nine Months

Ended September 30, %

(In millions) 2023 2022 change 2023 2022 change

Net income attributable to noncontrolling interests $ 3.8 3.4 12 $ 10.1 9.3 9

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.

The increase in net income attributable to noncontrolling interests in the three months ended September 30, 2023, and nine months ended September 30, 2023, in comparison to the three months and nine months ended September 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

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0.4 0.1 1.1 0.3

Reporting compliance (b)

Income tax rate adjustment (c)

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retirement plans are also excluded from non-GAAP results.

(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.

(e) In the first nine 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 nine months of 2023.

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

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Non-GAAP Results Reconciled to GAAP

Ended June 30, Six Months

Ended June 30,

Ended September 30, Nine Months

Ended September 30,

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

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— 0.3 0.4 1.1

Reporting compliance (b)

Non-GAAP $ 166.3 126.8 $ 425.5 362.9

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— 0.1 0.1 0.3

Reporting compliance (b)

Income tax rate adjustment (c)

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See page 50 for footnote explanations.

Ended June 30, Six Months

Ended June 30,

Ended September 30, Nine Months

Ended September 30,

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

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— 0.2 0.3 0.8

Reporting compliance (b)

Income tax rate adjustment (c)

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Change in allowance estimate (b)

— (0.01) — 0.26

Valuation allowance on tax credits (e)

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— — 0.01 0.02

Reporting compliance (b)

0.02 — 0.02 —

Income tax rate adjustment (c)

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LIQUIDITY AND CAPITAL RESOURCES

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.

Cash flows from operating activities improved $92.5 million in the first nine months of 2023 as compared to the first nine months of 2022.

Cash used for investing activities increased by $35.8 million in the first nine months of 2023 compared to the first nine months of 2022.

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

Operating Activities

Ended June 30, $

Ended September 30, $

(In millions) 2023 2022 change

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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 $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.

Cash flows from operating activities improved $92.5 million in the first nine months of 2023 compared to the same period in 2022.

The increase was attributed to higher operating profit, lower amounts paid for income taxe s (we had $74.5 million in cash payments for income taxes in 2023 as compared to $101.6 million in 2022) and working capital changes, partially offset by higher amounts paid for interest (we had $161.2 million in cash payments for interest in 2023 as compared to $88.7 million in 2022), restricted cash held for customers (restricted cash held for customers decreased by $44.9 million in 2023 compared to a decrease of $4.4 million in 2022), and changes in customer obligations related to certain of our secure cash management services operations (customer obligations decreased by $5.5 million in 2023 compared to an increase of $4.0 million in 2022).

Non-GAAP cash flows from operating activities improved $142.5 million in the first nine 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 June 30, $

Ended September 30, $

(In millions) 2023 2022 change

7 unchanged sentences

Proceeds from sale of property and equipment 5.7 3.3 2.4

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

Net change in loans held for investment (12.3) (23.3) 11.0

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Investing activities $ (147.9) (112.1) (35.8)

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.

Cash used in investing activities increased by $35.8 million in the first nine months of 2023 versus the first nine months of 2022.

The increase was primarily due to decreased proceeds from the settlement of the euro cross currency swaps, as discussed in Note 8, partially offset with net change in loans held for investment, as discussed in Note 13, and decreased payments for acquisitions.

Capital expenditures and depreciation and amortization were as follows:

Ended June 30, $ Full Year

Ended September 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 1.3 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.

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

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

Financing Activities

Ended June 30, $

Ended September 30, $

(In millions) 2023 2022 change

12 unchanged sentences

Acquisition-related financing activities:

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

Cash paid for acquisition related settlements and obligations

(10.5) (2.8) (7.7)

Tax withholdings associated with share-based compensation (7.6) (10.2) 2.6

2 unchanged sentences

Debt borrowings and repayments

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 $0.42 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.

Cash flows from financing activities decreased by $499.3 million year over year as we had net cash used in financing activities of $207.4 million in the first nine months of 2023 compared to net cash provided by financing activities of $291.9 million in the first nine months of 2022.

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

Additionally, we used $105.7 million to repurchase shares of common stock in 2023, compared to $27.3 million in 2022.

We paid dividends to Brink’s shareholders of $0.64 per share or $29.7 million in the first nine months of 2023 compared to $0.60 per share or $28.3 million in the first nine 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

June 30, December 31,

September 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 $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).

(b) Included within Net Debt is net cash from our Argentina operations of $71 million at September 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 June 30, 2023, and December 31, 2022.

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.

Net Debt increased by $63 million primarily due to borrowings to support providing increased provisional credit from growth in our DRS line of business and to fund the share repurchase program.

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 June 30, 2023, $379 million was available under the Revolving Credit Facility.

As of September 30, 2023, $437 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.

17 unchanged sentences

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

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.

During the first nine months ended September 30, 2023, we repurchased a total of 1,453,573 shares of our common stock for an aggregate of $105.7 million and an average price of $72.72 per share.

These shares were retired upon repurchase.

At June 30, 2023, $180 million remained available under the 2021 Repurchase Program.

At September 30, 2023, $92 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 First half 2023 2nd half 2023 2024 2025 2026 2027

(In millions) 2022 Nine Months 2023 4th Quarter 2023 2024 2025 2026 2027

Beginning funded status $ (65.8) (24.0) (12.7) (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 six months of 2023.

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

There are approximately 10,700 beneficiaries in the plan.

10 unchanged sentences

Actual Actual Projected

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

(In millions) 2022 Nine Months 2023 4th Quarter 2023 FY2023 2024 2025 2026 2027

pension plan $ (1.9) (10.2) (3.4) (13.6) (8.7) (2.0) 5.0 11.1

8 unchanged sentences

Actual Actual Projected

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

(In millions) 2022 Nine Months 2023 4th Quarter 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 June 30, 2023.

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