What changed in this filing

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Item 7. Management’s Discussion and Analysis

2024-02-29 compared with 2023-03-01 · 261 added, 244 removed, 1077 unchanged (32% of the section changed)

70 unchanged sentences

Incremental costs incurred usually relate to increasing or decreasing the number of employees and increasing or decreasing branches or administrative facilities.

In addition, security costs can vary depending on performance, the cost of insurance coverage, and changes in crime rates (i.e., attacks and robberies).

In addition, security costs can vary depending on performance, the cost of insurance coverage, and changes in crime rates (e.g., attacks and robberies).

Brink’s revenues and related operating profit are generally higher in the second half of the year, particularly in the fourth quarter, due to generally increased economic activity associated with the holiday season.

17 unchanged sentences

Income (loss) from continuing operations (a)

173.5 103.1 16.8 68 fav

86.0 173.5 103.1 (50) 68

Diluted EPS from continuing operations (a)

$ 3.63 2.06 0.33 76 fav

$ 1.83 3.63 2.06 (50) 76

Non-GAAP revenues $ 4,874.6 4,535.5 4,200.2 7 8

8 unchanged sentences

2023 versus 2022

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

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

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

Consolidated Revenues Revenues increased $339.1 million due to organic increases in Latin America ($282.0 million), Europe ($71.4 million), Rest of World ($22.7 million), and North America ($18.3 million) and the favorable impact of acquisitions ($105.5 million), partially offset by the unfavorable impact of currency exchange rates ($160.8 million).

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

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.”

Consolidated Costs and Expenses Cost of revenues increased 7% to $3,461.9 million primarily due to higher labor and other operational costs, driven by volume and wage increases, and the impact of acquisitions, partially offset by the impact of currency exchange rates.

Selling, general and administrative costs increased 9% to $687.0 million primarily due to organic increases in labor and other administrative costs, the unfavorable impact of a change in allowance estimate ($16.7 million) recorded in the first-quarter 2022 due to a modification in our methodology to estimate the allowance for doubtful accounts, and increased restructuring costs, partially offset by the impact of currency exchange rates and lower costs related to the estimated loss of a potential fine for a Chile antitrust matter.

Consolidated Costs and Expenses Cost of revenues increased 7% to $3,707.1 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 and cost productivity.

Selling, general and administrative costs increased 0.2% to $688.1 million primarily due to organic increases in labor and other administrative costs and the impact of acquisitions partially offset by the 2022 unfavorable impact of a change in allowance estimate ($15.6 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 $63.9 million due mainly to:

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

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

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

• organic increases in Latin America ($77.4 million), North America ($25.2 million), Europe ($9.1 million), and Rest of World ($3.3 million),

• lower costs incurred related to reorganization and restructuring ($21.2 million),

• favorable operating impact of business acquisitions ($16.1 million), excluding intangible amortization and acquisition-related charges,

• lower costs related to the impact of a change in allowance estimate ($15.6 million) recorded in 2022 due to a modification in our methodology to estimate the allowance for doubtful accounts,

• lower costs related to business acquisitions and dispositions ($15.7 million), including the impact of acquisition-related charges and intangible asset amortization, included in "Other items not allocated to segments", and

• lower corporate expenses on an organic basis ($4.8 million),

partially offset by:

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

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

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

million) in 2021 that did not recur in 2022,

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

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

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

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

• unfavorable changes in currency exchange rates ($118.5 million) primarily driven by the Argentine peso.

Consolidated Income from Continuing Operations Attributable to Brink’s and Related Per Share Amounts Income from continuing operations attributable to Brink’s shareholders decreased $87.5 million to $86.0 million due to higher income tax expense ($97.8 million) and higher interest expense ($65.0 million), partially offset by the increase in operating profit mentioned above, higher interest and other nonoperating income ($10.7 million), and lower noncontrolling interest ($0.7 million).

Diluted earnings per share from continuing operations was $1.83, down from $3.63 in 2022.

Non-GAAP Basis

1 unchanged sentence

2023 versus 2022

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

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

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

See above for our definition of “organic.”

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

See page 24 for details.

Non-GAAP Consolidated Operating Profit Non-GAAP operating profit increased $64.7 million due mainly to:

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

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

• organic increases in Latin America ($77.4 million), North America ($25.2 million), Europe ($9.1 million), and Rest of World ($3.3 million),

• the favorable operating impact of business acquisitions ($16.1 million), excluding intangible amortization and acquisition-related charges, and

• lower corporate expenses on an organic basis ($4.8 million),

partially offset by:

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

Non-GAAP Consolidated Income from Continuing Operations Attributable to Brink’s and Related Per Share Amounts Non-GAAP income from continuing operations attributable to Brink’s shareholders increased $48.5 million to $286.4 million due to the operating profit increase mentioned above and lower noncontrolling interest ($1.0 million), partially offset by higher interest expense ($26.7 million), higher income tax expense ($2.9 million) and lower interest and other non-operating income ($2.7 million).

• unfavorable changes in currency exchange rates ($71.2 million), driven primarily by the Argentine peso.

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 $58.2 million to $344.6 million due to the operating profit increase mentioned above, higher interest and other nonoperating income ($45.7 million), lower income tax expense ($12.3 million), and lower noncontrolling interest ($0.9 million), partially offset by higher interest expense ($65.4 million).

Diluted earnings per share from continuing operations was $7.35, up from $5.99 in 2022.

11 unchanged sentences

Operating profit:

North America (d)

$ 148.4 3.3 7.4 — 159.1 7 2

North America $ 159.1 25.2 0.8 0.1 185.2 16 16

Latin America 277.7 77.4 0.8 (75.6) 280.3 1 28

2 unchanged sentences

Segment operating profit 699.1 115.0 16.1 (75.6) 754.6 8 16

Corporate (d)(e)

Corporate (d)

(148.8) 4.8 — 4.4 (139.6) (6) (3)

Operating profit - non-GAAP 550.3 119.8 16.1 (71.2) 615.0 12 22

Other items not allocated to segments (f)

Other items not allocated to segments (e)

(189.0) 30.8 15.7 (47.3) (189.8) — (16)

6 unchanged sentences

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

There was no net impact on consolidated operating profit.

See further discussion below in Analysis of Segment Results.

(e) Corporate expenses are not allocated to segment results.

(d) Corporate expenses are not allocated to segment results.

Corporate expenses include salaries and other costs to manage the global business and to perform activities required by public companies.

(f) See pages 26–28 for more information.

(e) See pages 28 – 30 for more information.

Analysis of Segment Results:

3 unchanged sentences

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

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

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

which outpaced the impact of labor and other cost increases.

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

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

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

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

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

Other than for the U.S.

business, the reconciling differences were not significant.

We changed the U.S.

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

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

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

Operating profit increased ($26.1 million), primarily due to a 16% organic increase ($25.2 million), the favorable impact of acquisitions ($0.8 million), and 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, the impact of cost savings related to restructuring primarily in the U.S., and cost productivity.

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

3 unchanged sentences

Latin America

Revenues increased 8% ($84.6 million) primarily due to a 15% organic increase of ($163.8 million) and the favorable impact of acquisitions ($2.9 million), partially offset by the unfavorable impact of currency exchange rates ($82.1 million), primarily from the Argentine, Colombian and Chilean peso, and partially offset by the Brazilian real.

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

Operating profit was up 8% ($20.4 million) primarily due to a 20% organic increase ($50.8 million) and the

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

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

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

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

Operating profit increased ($8.6 million) primarily due to an organic increase ($14.8 million) and the favorable impact of acquisitions ($6.2 million), partially offset by the unfavorable impact of currency exchange rates ($12.4 million).

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

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

Revenues increased 10% ($121.7 million) primarily due to a 23% organic increase of ($282.0 million) and the favorable impact of acquisitions ($2.5 million), partially offset by the unfavorable impact of currency exchange rates ($162.8 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 1% ($2.6 million) primarily due to a 28% organic increase ($77.4 million) and the favorable impact of acquisitions ($0.8 million), partially offset by unfavorable currency exchange rates ($75.6 million).

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

Revenues increased 22% ($205.4 million) due to the favorable impact of the NoteMachine acquisition ($107.0 million), a 8% organic increase ($71.4 million), and the favorable impact of currency exchange rates ($27.0 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 ($26.6 million) primarily due to the favorable impact of acquisitions ($13.5 million), an organic increase ($9.1 million), and the favorable impact of currency exchange rates ($4.0 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 8% ($59.6 million) due to a 14% organic increase ($104.5 million) and the favorable impact of acquisitions ($6.3 million), partially offset by the unfavorable impact of currency exchange rates ($51.2 million).

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

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

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

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

Revenues decreased 1% ($5.0 million) due to the unfavorable impact of currency exchange rates ($20.5 million) and dispositions ($7.2 million), partially offset by a 3% organic increase ($22.7 million).

The organic increase was primarily due to growth in AMS and DRS.

Operating profit increased $0.2 million primarily due to a 2% organic increase ($3.3 million) and the favorable impact of dispositions ($1.0 million), partially offset by the unfavorable impact of currency exchange rates ($4.1 million), driven by most currencies throughout the segment.

The disposition impact relates to the disposition of our Russian based operations.

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

3 unchanged sentences

General, administrative and other expenses $ (152.8) (161.5) (141.7) (5) 14

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

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

Foreign currency transaction gains (losses) 15.3 10.9 2.7 40 fav

Reconciliation of segment policies to GAAP (2.1) 1.8 (17.5) unfav fav

Corporate expenses $ (139.6) (148.8) (156.5) (6) (5)

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

Corporate expenses in 2022 decreased $7.7 million versus the prior year primarily driven by lower bad debt expense ($19.4 million) included in Corporate expense as part of the reconciliation of segment accounting policies to U.S.

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

In addition, there were higher foreign currency transaction gains in the current year period ($8.2 million), reduced expenses related to developing new service offerings ($8.2 million) and an increase in royalty income from third parties ($3.6 million).

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

Corporate expenses in 2023 decreased $9.2 million versus the prior year.

This was primarily driven by lower net compensation costs, including share-based compensation and bonus accruals ($24.1 million), as well as an increase in foreign currency transaction gains ($4.4 million).

These lower costs were partially offset by increased charges related to insurance and security losses ($10.8 million), higher professional fees ($5.3 million) and higher bad debt expense ($3.5 million) reported as part of the reconciliation of segment policies to U.S.

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

1 unchanged sentence

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

In 2020, the Corporate reconciling adjustment was a reduction of Corporate expense of $11.0 million, to offset business unit allowances that were higher than U.S.

GAAP required.

In 2021, the adjustment was an increase of Corporate expense of $17.5 million.

In 2021, the Corporate reconciling adjustment was an increase of Corporate expense of $17.5 million.

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

6 unchanged sentences

The bad debt expense increase excludes the impact of the internal loss in our U.S.

global services operations described on the next page.

global services operations described on the page 30 .

Other Items Not Allocated to Segments

4 unchanged sentences

Acquisitions and dispositions (70.6) (86.6) (71.9) (18) 20

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

Argentina highly inflationary impact (86.8) (41.7) (11.9) unfav unfav

Transformation initiatives

(5.5) — — unfav —

Non-routine auto loss matter

(8.0) — — unfav —

Change in allowance estimate — (15.6) — (100) unfav

Ship loss matter — (4.9) — (100) unfav

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

Internal loss — 21.1 (6.9) (100) fav

Reporting compliance — — (0.5) — (100)

Chile antitrust matter (0.5) (1.4) (9.5) (64) (85)

Internal loss — — 21.1 — (100)

Reporting compliance (0.8) — — unfav —

Operating profit $ (189.8) (189.0) (115.8) — 63

1 unchanged sentence

2022 Global Restructuring Plan

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

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

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

As a result of actions taken, we recognized $22.2 million in charges in 2022 under this restructuring, primarily severance costs.

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

For the restructuring actions that were approved as of December 31, 2022, we expect to incur additional costs between $10 million and $14 million in future periods, primarily severance costs.

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

In total, we have recognized $33.2 million in charges under this program, including $11.0 million in 2023.

We expect total expenses from the program to be between $38 million and $42 million.

When completed, the current restructuring actions are expected to reduce our workforce by 3,200 to 3,400 positions and result in annualized cost savings of approximately $60 million.

Other Restructurings

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

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

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

As a result of these actions, we recognized $43.6 million of net costs in 2021, primarily severance costs.

We recognized $16.6 million of net costs in 2022, primarily severance costs.

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

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

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

We recognized $6.6 million of net costs in 2023.

The majority of the costs in both 2023 and 2022 periods result from the exit of a line of business in a specific geography with most of the remaining costs due to management initiatives to address the COVID-19 pandemic.

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

3 unchanged sentences

Reportable Segments:

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

North America $ (4.2) (11.8) 0.1 (64) unfav

Latin America (4.9) (15.7) (13.0) (69) 21

2 unchanged sentences

Total reportable segments (16.4) (38.4) (43.7) (57) (12)

Corporate items (0.4) 0.1 (1.8) unfav fav

Corporate items (1.2) (0.4) 0.1 unfav unfav

Total $ (17.6) (38.8) (43.6) (55) (11)

4 unchanged sentences

• Amortization expense for acquisition-related intangible assets was $57.8 million in 2023.

• We recognized $12.5 million in charges in Argentina in 2022 for expected payments to union workers of the Maco Transportadora and Maco Litoral businesses (together "Maco").

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

We also derecognized a contingent consideration liability related to the Touchpoint 21 acquisition and recognized a gain of $1.4 million.

• We recognized $4.9 million in charges in Argentina in 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.

• Net charges of $7.8 million for post-acquisition adjustments to indemnification assets related to previous business acquisitions.

• We incurred $4.8 million in integration costs, primarily related to PAI and G4S, in 2022.

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

• We incurred $2.2 million in integration costs, primarily related to PAI, in 2023.

• Transaction costs related to business acquisitions were $4.2 million in 2023.

• Restructuring costs related to acquisitions were $0.2 million in 2022.

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

• Compensation expense related to the retention of key PAI employees was $1.6 million in 2023.

1 unchanged sentence

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

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

• We recognized $12.5 million in charges in Argentina in 2022 for expected payments to union workers of the Maco businesses.

• Net charges of $7.8 million were incurred for post-acquisition adjustments to indemnification assets related to previous business acquisitions.

• We incurred $4.8 million in integration costs, primarily related to PAI and G4S, in 2022.

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

3 unchanged sentences

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

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

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

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

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

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

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

4 unchanged sentences

In 2022, we recognized $41.7 million in pretax charges related to highly inflationary accounting, including currency remeasurement losses of $37.6 million.

In December 2023, the administration of the newly inaugurated President of Argentina allowed the peso to devalue by more than 50%.

In total, in 2023, the Argentine peso declined approximately 79%.

In 2023, we recognized $86.8 million in pretax charges related to highly inflationary accounting, including currency remeasurement losses of $79.1 million.

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

Transformation initiatives During 2023, we initiated a multi-year program intended to accelerate growth and drive margin expansion through transformation of our business model in the U.S., with expectations to then leverage the transformation changes and learnings

The program is designed to help us standardize our commercial and operational systems and processes, drive continuous improvement and achieve operational excellence.

Accordingly, we have incurred $5.5 million of expense in 2023.

The transformation costs primarily include third party professional services and project management charges and are excluded from segment and non-GAAP results.

Non-routine auto loss matter In 2023, a Brink’s employee was involved in a motor vehicle accident with unique circumstances that resulted in the death of a third party and, in connection with the ensuing litigation, Brink’s recognized an $8.0 million charge.

Due to the unusual nature of the contingency, we have excluded this charge from segment and non-GAAP results.

Change in allowance estimate In the first quarter of 2022, we refined our global methodology of estimating the allowance for doubtful accounts.

Our previous method to estimate currently expected credit losses in receivables (the allowance) was weighted significantly to a review of historical loss rates and specific identification of higher risk customer accounts.

It also considered current and expected economic

conditions, particularly the effects of the COVID-19 pandemic, in determining an appropriate allowance.

It also considered current and expected economic conditions in determining an appropriate allowance.

As many of our regions begin to recover from the pandemic, we have re-assessed those earlier assumptions and estimates.

10 unchanged sentences

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

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

In 2022, we recognized an additional $1.4 million adjustment and, in 2023, we recognized an additional $0.5 million adjustment to our estimated loss.

The adjustments result from a change in currency rates.

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

5 unchanged sentences

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

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

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

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

We also recognized $1.3 million of legal charges in 2021 as we attempted to collect additional insurance recoveries related to these receivables losses.

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

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

In 2022 and 2023, we did not incur any charges related to the internal loss.

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

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

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

In 2023, we incurred $0.8 million in costs related to remediation of the material weakness.

We did not incur any such costs in 2022 or 2021.

Other Operating Income and Expense

3 unchanged sentences

Foreign currency items:

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

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

Transaction losses $ (85.1) (68.7) (30.5) 24 unfav

Derivative instrument gains (losses) 21.3 42.0 24.2 (49) 74

Royalty income 7.5 9.1 5.6 (18) 63

1 unchanged sentence

Indemnification asset adjustments (3.4) (7.8) — (56) unfav

Contingent consideration liability adjustments

6.2 — — fav —

Gains on sale of property and other assets 1.9 2.7 — (30) fav

Share in earnings of equity method affiliates 2.8 2.1 1.1 33 91

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

Gains related to litigation — 4.4 — (100) fav

Indemnity for forced relocation — 1.7 — (100) fav

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

Gains related to litigation — — 4.4 — (100)

Indemnity for forced relocation — — 1.7 — (100)

Other 4.9 4.3 4.2 14 2

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

Other operating income (expense) $ (54.2) (25.3) 20.0 unfav unfav

2023 versus 2022

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

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

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

dollar when compared to 2021.

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

We reported other operating expense of $54.2 million in 2023 versus other operating expense of $25.3 million in the prior year.

The change was primarily due to higher net losses of $37.1 million from foreign currency items in 2023 driven by remeasurement losses due to the highly inflationary economy in Argentina.

The higher currency losses were partially offset by gains from contingent consideration liability adjustments in 2023 along with lower losses due to acquisition-related tax indemnification asset adjustments in the current year.

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

4 unchanged sentences

Interest expense $ 203.8 138.8 112.2 47 24

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

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

Interest expense was higher in 2023 primarily due to higher interest rates on corporate debt.

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

See Note 15 for further information.

2 unchanged sentences

(In millions) 2023 2022 2021 2023 2022

Interest income $ 23.6 12.1 5.6 95 fav

Interest income $ 36.3 23.6 12.1 54 95

Retirement benefit cost other than service cost (0.5) (16.7) (38.7) (97) (57)

Foreign currency transaction gains (losses) (a)

2.4 0.4 (3.6) fav fav

(1.1) 2.4 0.4 unfav fav

Non-income taxes on intercompany billings (b)

(2.6) (2.3) (3.9) 13 (41)

Argentina turnover tax (1.8) — — unfav —

Gain (loss) on equity securities (c)

— 16.0 10.6 (100) 51

G4S indemnification asset adjustment (d)

— 2.7 — (100) fav

Penalties and interest on non-income taxes (e)

— (1.8) — (100) unfav

Gains related to litigation (f)

— 1.7 — (100) fav

Earn-out liability adjustment (g)

— 1.3 — (100) fav

Interest on non-income tax credits (h)

— 1.2 — (100) fav

Derivative instrument losses (i)

Argentina turnover tax (c)

(6.8) (1.8) — unfav unfav

Gain (loss) on equity and debt securities (d)

(12.8) — 16.0 — (100)

Gain on a disposition of a subsidiary (j)

G4S indemnification asset adjustment (e)

— — 2.7 — (100)

Other (1.5) 2.0 (4.9) unfav fav

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

Other 1.9 (1.5) 4.4 fav unfav

Interest and other nonoperating income (expense) $ 14.4 3.7 (7.0) fav fav

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

1 unchanged sentence

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

(c) State government tax incurred by our subsidiaries in Argentina on financial income generated by investments in mutual funds and other financial instruments.

(d) In 2023, the loss is primarily related to the impact of highly inflationary accounting on investments in marketable securities held by Argentina.

In 2021, the gain was related to the market value increase of an investment in MoneyGram International, Inc.

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

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

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

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

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

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

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

The principal amount of the settlement is reported in operating income (expense).

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

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

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

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

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

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

Interest and other nonoperating income (expense) was higher in 2023 compared to 2022 primarily due to interest income on surplus cash in money market investments.

3 unchanged sentences

(In percentages)

2023 2022 2021

federal tax rate 21.0 % 21.0 % 21.0 %

12 unchanged sentences

(In percentages)

2023 2022 2021

federal tax rate 21.0 % 21.0 % 21.0 %

10 unchanged sentences

• changes in the geographical mix of earnings,

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

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

• timing of benefit recognition for uncertain tax positions,

4 unchanged sentences

Based on our historical and future expected taxable earnings, we believe it is more-likely-than-not that we will realize the benefit of the deferred tax assets, net of valuation allowances.

Numerous foreign jurisdictions have enacted or are in the process of enacting legislation to adopt a minimum effective tax rate described in the Global Anti-Base Erosion ("Pillar Two") model rules issued by the Organization for Economic Co-operation and Development.

A minimum effective tax rate of 15% would apply to multinational companies with consolidated revenue above €750 million.

Under the Pillar Two rules, a company would be required to determine a combined effective tax rate for all entities located in a jurisdiction.

If the jurisdictional effective tax rate determined under the Pillar Two rules is less than 15%, a top-up tax will be due to bring the jurisdictional effective tax rate up to 15%.

We are continuing to monitor the pending implementation of Pillar Two by individual countries and the potential effects of Pillar Two on our business.

We do not expect the provisions effective in 2024 will have a materially adverse impact on our results of operations, financial position or cash flows.

Continuing Operations

1 unchanged sentence

Statutory Rate

The effective income tax rate on continuing operations in 2023 was greater than the 21% U.S.

statutory tax rate primarily due to the geographical mix of earnings, nondeductible expenses in Mexico, taxes on cross border payments and U.S.

taxable income and credit

limitations, the increase of valuation allowances on U.S.

foreign tax credits, and Argentina nondeductible inflation net of deductible Argentina inflation adjustments.

2022 Compared to U.S.

Statutory Rate

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

3 unchanged sentences

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

2021 Compared to U.S.

Statutory Rate

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

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

Noncontrolling Interests

1 unchanged sentence

(In millions) 2023 2022 2021 2023 2022

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

Net income attributable to noncontrolling interests $ 10.6 11.3 12.1 (6) (7)

Compared to 2022, the decrease in net income attributable to noncontrolling interests to $10.6 million in 2023 is primarily due to the acquisition of noncontrolling interest in the second half of 2022.

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

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

Non-GAAP Results Reconciled to GAAP

22 unchanged sentences

142.0 (4.5) 45.6 (2.0) 12.3 (1.1)

Transformation initiatives (b)

5.5 0.1 — — — —

Non-routine auto loss matter (b)

8.0 0.2 — — — —

Change in allowance estimate (b)

23 unchanged sentences

retirement plans are also excluded from non-GAAP results.

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

(d) In 2023, we recorded a portion of our valuation allowance on certain U.S.

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

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

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

Internal Revenue Service in 2023, which provided taxpayers relief from the 2022 foreign tax credit regulations until additional guidance is issued and effective date of such guidance is provided.

In 2022, we released a portion of our valuation allowance on certain U.S.

deferred tax assets primarily due to new foreign tax credit regulations published by the U.S.

Treasury in January 2022.

1 unchanged sentence

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

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

Non-GAAP reconciled to GAAP

11 unchanged sentences

86.8 41.7 11.9

Transformation initiatives (b)

Non-routine auto loss matter (b)

Change in allowance estimate (b)

4 unchanged sentences

Non-GAAP $ 615.0 550.3 470.5

Non-GAAP operating profit margin

12.6 % 12.1 % 11.2 %

Interest expense:

6 unchanged sentences

(9.0) 11.1 29.8

Reorganization and Restructuring (b)

Acquisitions and dispositions (b)(g)

1 unchanged sentence

Argentina highly inflationary impact (b)

3.9 0.4 (0.1)

Non-GAAP $ 61.8 16.1 18.8

Non-GAAP margin 12.1 % 11.2 % 10.3 %

Provision for income taxes:

1 unchanged sentence

Retirement plans (c)

Reorganization and Restructuring (b)

(2.0) 2.9 7.7

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

20.7 2.5 11.6

Reorganization and Restructuring (b)

Acquisitions and dispositions (b)(f)

Argentina highly inflationary impact (b)

(4.5) (2.0) (1.1)

Transformation initiatives (b)

Non-routine auto loss matter (b)

Change in allowance estimate (b)

Valuation allowance on tax credits (d)

(27.8) 53.2 —

Ship loss matter (b)

4 unchanged sentences

Non-GAAP $ 117.6 129.9 127.0

Amounts may not add due to rounding.

See page 35 for footnote explanations.

Non-GAAP reconciled to GAAP

Years Ended December 31,

(In millions, except for per share amounts) 2023 2022 2021

Net income (loss) attributable to noncontrolling interests:

4 unchanged sentences

Non-GAAP $ 11.6 12.5 13.5

Amounts may not add due to rounding.

See page 33 for footnote explanations.

Non-GAAP reconciled to GAAP

Years Ended December 31,

(In millions, except for per share amounts) 2022 2021 2020

Income (loss) from continuing operations attributable to Brink's:

8 unchanged sentences

146.5 47.6 13.4

Transformation initiatives (b)

Non-routine auto loss matter (b)

Change in allowance estimate (b)

Valuation allowance on tax credits (d)

27.8 (53.2) —

Ship loss matter (b)

13 unchanged sentences

3.13 1.00 0.27

Transformation initiatives (b)

Non-routine auto loss matter (b)

Change in allowance estimate (b)

Valuation allowance on tax credits (d)

0.59 (1.11) —

Ship loss matter (b)

Chile antitrust matter (b)

Internal loss (b)

0.01 0.02 0.19

Internal loss (b)

Reporting compliance (b)

20 unchanged sentences

At December 31, 2023, we had net monetary assets denominated in Argentine pesos of $72.1 million (including cash of $62.5 million) and nonmonetary net assets of $141.9 million (including $99.8 million of goodwill, $1.1 million in equity securities denominated in Argentine pesos and $5.6 million in debt securities denominated in pesos).

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

We have previously elected to use other market mechanisms to convert Argentine pesos into U.S.

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

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

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

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

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

We did not have any such conversion losses in the last three years.

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.

5 unchanged sentences

Additionally, these short term contracts are not designated as hedges for accounting purposes, and accordingly, changes in their fair value are recorded immediately in earnings.

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

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

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

At December 31, 2023, the fair value of our short term foreign currency contracts was a net liability of $1.1 million, of which $8.7 million was included in prepaid expenses and other and $9.8 million was included in accrued liabilities on the 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 consolidated balance sheet.

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

Twelve Months Ended December 31,

1 unchanged sentence

Derivative instrument gains (losses) included in other operating income (expense) $ 21.3 42.0 24.2

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

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

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

Accordingly, changes in the fair value of the cash flow hedge are initially recorded in the gains (losses) on cash flow hedges component of accumulated other comprehensive income (loss).

We immediately reclassify from accumulated other comprehensive income (loss) to earnings an amount to offset the remeasurement recognized in earnings associated with the respective intercompany loan.

Additionally, we reclassify amounts from accumulated other comprehensive income (loss) to interest expense amounts that are associated with the interest rate differential between a U.S.

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

Accordingly, changes in the fair value of the cash flow hedge were initially recorded in the gains (losses) on cash flow hedges component of accumulated other comprehensive income (loss).

We immediately reclassified from accumulated other comprehensive income (loss) to earnings an amount to offset the remeasurement recognized in earnings associated with the respective intercompany loan.

Additionally, we reclassified amounts from accumulated other comprehensive income (loss) to interest expense amounts that were associated with the interest rate differential between a U.S.

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

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

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

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

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

This cross currency swap contract matured and was fully settled in the fourth quarter of 2023.

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

Before final settlement occurred in the fourth quarter of 2023, amounts under this contract were recognized in other operating income (expense) to offset transaction gains or losses and in interest expense as follows:

Twelve Months Ended December 31,

(In millions) 2023 2022 2021

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

Offsetting transaction gains 8.9 (0.2) (22.1)

Derivative instrument gains (losses) included in other operating income (expense)

$ (7.9) (8.9) 0.2

Offsetting transaction gains (losses)

7.9 8.9 (0.2)

Derivative instrument losses included in interest expense (0.8) (1.3) (1.3)

Net derivative instrument gains (losses) (10.2) (1.1) 20.2

Net derivative instrument losses

(8.7) (10.2) (1.1)

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.

2 unchanged sentences

We have elected to exclude the spot-forward difference from the assessment of hedge effectiveness and are amortizing this amount separately on a straight-line basis over the term of these cross currency swaps.

In July 2022, we terminated these cross currency swap contracts and received $67 million in cash as settlement.

In the third quarter of 2022, we terminated these cross currency swap contracts and received $67 million in cash as settlement.

We subsequently entered into a total of nine cross currency swaps with a total notional value of $400 million to hedge a portion of our net investment in certain of our subsidiaries with euro functional currencies.

1 unchanged sentence

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

In the third quarter of 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 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 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 December 31, 2023, the notional value of these cross currency swap contracts was $400 million with a remaining weighted average maturity of 2.0 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 with maturity in April 2031.

At December 31, 2023, the fair value of these currency swaps was a net liability of $34.6 million, of which $5.6 million was included in prepaid expenses and other and $40.2 million was included in other liabilities on the consolidated balance sheet.

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

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

At December 31, 2023, the fair value of the zero cost collar was an asset of $0.1 million included in other assets on the consolidated balance sheet.

In the fourth quarter of 2023, we entered into a foreign exchange forward swap contract to hedge a portion of our net investments in certain of our subsidiaries with Hong Kong dollar functional currencies.

As the contract is designated as a net investment hedge for accounting purposes, we will use the spot method to assess effectiveness of this derivative contract.

We will record changes in fair value attributable to changes in the Hong Kong dollar undiscounted spot rates in the foreign currency translation adjustments component of accumulated other comprehensive income (loss) with amounts remaining in accumulated comprehensive income (loss) until the hedged net investments are sold or substantially liquidated.

At December 31, 2023, the notional value of this foreign exchange forward swap contract was $55 million with a remaining weighted average maturity of 0.9 years.

At December 31, 2023, the fair value of this foreign exchange forward swap was an asset of $0.1 million which was included in prepaid expenses and other on the consolidated balance sheet.

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

Twelve Months Ended December 31,

6 unchanged sentences

• acquire new business operations ($500 million),

• invest in the infrastructure of our business (new facilities, cash sorting and other equipment for our cash management services operations, armored trucks, CompuSafe ® units, and information technology) ($469 million),

• invest in the infrastructure of our business (new facilities, cash sorting and other equipment for our cash management services operations, armored trucks, DRS devices, and information technology) ($553 million),

• repurchase shares of Brink's common stock ($422 million), and

• pay dividends to Brink’s shareholders ($114 million).

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

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

Cash flows from operating activities increased by $222.5 million in 2023 as compared to the prior year primarily due to higher operating profit, working capital changes, lower amounts paid for income taxes, changes in customer obligations related to certain of our secure cash management services operations and an increase in restricted cash held for customers, partially offset by higher amounts paid for interest.

Cash used for investing activities decreased by $151.4 million in 2023 due to lower amounts paid for business acquisitions in 2023.

Cash also decreased $42.4 million in 2023 as a result of the strengthening of the U.S.

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

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

dollar in 2023, primarily against the Argentine peso.

We financed our liquidity needs in 2023 with cash flows from operations.

Operating Activities

17 unchanged sentences

Cash flows from operating activities increased by $222.5 million in 2023 compared to 2022.

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

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

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

The increase was attributed to higher operating profit (operating profit was $425.2 million in 2023 compared to $361.3 million in 2022), lower amounts paid for income taxes (we had $96.3 million in cash payments for taxes in 2023 as compared to $127.8 million in 2022), working capital changes (we had cash received of $164.5 million in 2023 compared to cash payments of $12.1 million in 2022), changes in customer obligations related to certain of our secure cash management services operations (certain customer obligations increased by $66.0 million in 2023 compared to an increase of $50.0 million in 2022) and restricted cash held for customers (restricted cash held for customers increased by $59.5 million in 2023 compared to an increase of $50.0 million in 2022), partially offset by higher amounts paid for interest (we had $195.8 million in cash payments for interest in 2023 as compared to $117.5 million in 2022).

Non-GAAP cash flows from operating activities increased by $197.0 million in 2023 as compared to 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

10 unchanged sentences

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

Acquisition of customer contracts — — — — —

Net change in loans held for investment (11.1) (25.9) — 14.8 (25.9)

Other (0.6) (0.2) (0.8) (0.4) 0.6

Discontinued operations 0.9 — — 0.9 —

Investing activities $ (179.8) (331.2) (454.7) $ 151.4 123.5

Cash used by investing activities decreased by $151.4 million in 2023 as compared to 2022.

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

We also received proceeds from the settlement of the euro cross currency swaps in 2022, as discussed in Note 12, partially offset by increases in cash used for the net purchase and sales of marketable securities and net change in loans held for investment, as discussed in Note 20.

The decrease was primarily due to decreased payments for acquisitions in 2023 (we had $1.5 million in cash paid for acquisitions in 2023 compared to $173.9 million in 2022), increases in cash received for the net purchases and sales of marketable securities (we had $15.7 million in net cash received compared to $18.6 million in net cash paid in 2022) and a decrease in cash paid for loans held for investment (cash paid for loans held for investment increased by $11.1 million in 2023 compared to an increase of $25.9 million in 2022), as discussed in Note 20.

This was partially offset by the proceeds from the settlement of the euro cross currency swaps in 2022, as discussed in Note 12.

Capital expenditures and depreciation and amortization were as follows:

44 unchanged sentences

Capital expenditures in 2023 were $20.1 million higher compared to 2022.

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

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

Total property and equipment acquired in 2023 was $46.4 million higher than the prior year.

This increase was primarily due to an increase in investments in information technology, armored vehicles and DRS devices.

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

5 unchanged sentences

Short-term borrowings $ 98.6 37.7 (4.3) $ 60.9 42.0

Cash supply chain customer debt — — (10.5) — 10.5

Long-term revolving credit facilities, net (8.1) 226.0 548.7 (234.1) (322.7)

15 unchanged sentences

2023 versus 2022

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

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

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

Cash flows from financing activities decreased by $452.3 million in 2023 compared to 2022 as we had net cash used in financing activities of $207.1 million in 2023 compared to net cash provided by financing activities of $245.2 million in 2022.

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

Additionally, we used an additional $117.7 million to repurchase shares of common stock in the current year (we used $169.9 million in cash to repurchase shares of common stock in 2023, compared to $52.2 million in 2022).

We paid dividends to Brink’s shareholders of $0.22 per share in each of the last three quarters, paid $0.20 per share in the eight quarters prior, and $0.15 per share in the first quarter of 2021.

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

Effect of Exchange Rate Changes on Cash and Cash Equivalents

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

Changes in currency exchange rates decreased the amount of cash and cash equivalents by $42.4 million during 2023, compared to a decrease of $70.1 million in 2022 and a decrease of $50.8 million in 2021.

The decrease in 2023 was due to the strengthening of the U.S.

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

dollar in 2023, primarily against the Argentine peso, partially offset with the weakening of the U.S.

dollar against the Mexican peso and euro.

Capitalization

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

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

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

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

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

As of December 31, 2023, debt as a percentage of capitalization (defined as total debt and equity) was 87%, which increased from 86% at December 31, 2022.

Summary of Debt, Equity and Other Liquidity Information

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See Item 1A., Risk Factors , for more information on the risks associated with having businesses outside the U.S.

Our conclusion that we will be able to fund our cash requirements for the next 12 months by using existing capital resources, cash on hand, and cash generated from operations does not take into account any potential material worsening of economic conditions as a result of the ongoing COVID-19 pandemic, and material increases in inflation, that would adversely affect our business.

The anticipated cash needs of our business could change significantly if we pursue and complete additional business acquisitions, if our business plans change, if events, including economic disruptions, arising from the ongoing COVID-19 pandemic worsen, or if other economic conditions change, such as material increases in inflation, from those currently prevailing or from those now anticipated, such as higher inflation or if other unexpected circumstances arise that may have a material effect on the cash flow or profitability of our business, including material negative changes in the health and welfare of our employees or changes in the condition of our customers or suppliers, and the operating performance or financial results of our business.

Our conclusion that we will be able to fund our cash requirements for the next 12 months by using existing capital resources, cash on hand, and cash generated from operations does not take into account any potential material worsening of economic conditions or material increases in inflation that would adversely affect our business.

The anticipated cash needs of our business could change significantly if we pursue and complete additional business acquisitions, if our business plans change, or if other economic conditions change, such as material increases in inflation, from those currently prevailing or from those now anticipated, such as higher inflation or if other unexpected circumstances arise that may have a material effect on the cash flow or profitability of our business, including material negative changes in the health and welfare of our employees or changes in the condition of our customers or suppliers, and the operating performance or financial results of our business.

Any of these events or circumstances, including any new business opportunities, could involve significant additional funding needs in excess of the identified currently available sources and could require us to raise additional debt or equity funding to meet those needs.

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At December 31, 2023, we had $1,176.6 million in cash and cash equivalents, compared to $972.0 million at December 31, 2022.

We plan to use the current cash and cash equivalents for working capital needs, capital expenditures, acquisitions and other general corporate purposes.

We plan to use the current cash and cash equivalents for working capital needs, capital expenditures, acquisitions, share repurchases, and other general corporate purposes.

At December 31, 2023, we had 100 million shares of common stock authorized and 44.5 million shares issued and outstanding.

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Share Repurchase Program

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

This authorization replaces our previous $250 million repurchase program, authorized by the Board of Directors in February 2020 (the "2020 Repurchase Program"), which expired on December 31, 2021, with no amount remaining available.

In November 2023, our Board of Directors authorized a $500 million share repurchase program that expires on December 31, 2025 (the "2023 Repurchase Program").

Under the 2023 Repurchase Program, we are not obligated to repurchase any specific dollar amount or number of shares.

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

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

In October 2021, we announced that our Board of Directors authorized a $250 million share repurchase program (the "2021 Repurchase Program").

Under the 2021 Repurchase Program, in 2023, we repurchased a total of 2,297,955 shares of our common stock for an aggregate of $169.9 million and an average price of $73.92 per share.

These shares were retired upon repurchase.

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

The 2021 Repurchase Program expired on December 31, 2023 with approximately $28 million remaining available.

Our Board of Directors previously authorized a $250 million repurchase program (the "2020 Repurchase Program") in February 2020.

Under the 2020 Repurchase Program, we entered into three accelerated share repurchase arrangements ("ASR") with a financial institution.

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Payment from Brink’s — — — — 0.1 4.6

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

Benefit plan actuarial loss

(2.0) (10.3) (6.0) (4.2) (2.3) (2.3)

Ending funded status $ (10.9) (5.4) 3.1 11.7 20.3 34.2

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Benefit plan actuarial gain 15.1 — — — — —

Prior service credit (b)

66.7 — — — — —

Other 2.7 — — — — —

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Payment from Brink’s 7.7 9.3 8.6 7.9 7.2 6.7

Benefit plan actuarial gain 19.3 — — — — —

Benefit plan actuarial loss

(2.4) — — — — —

Ending funded status $ (74.4) (68.7) (63.4) (58.5) (54.1) (50.0)

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

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

Pension benefits provided to eligible U.S.

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

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

In 2022, we recognized an additional $1.4 million adjustment and, in 2023, we recognized an additional $0.5 million adjustment to our estimated loss.

The adjustments resulted from changes in currency rates.

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

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We have recorded accruals for losses that are considered probable and reasonably estimable.

Except as otherwise noted, we do not believe that it is reasonably possible the ultimate disposition of any of the lawsuits currently pending against the Company could have a material adverse effect on our liquidity, financial position or results of operations.

Except as otherwise noted, we do not believe that it is reasonably possible the ultimate disposition of any of the legal matters currently pending against the Company could have a material adverse effect on our liquidity, financial position or results of operations.

APPLICATION OF CRITICAL ACCOUNTING POLICIES

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jurisdictions.

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

In 2023, we concluded that we were not more-likely-than-not to realize assets related to certain attributes with a limited statutory carryforward, and we recorded a $33 million valuation allowance detriment through income from continuing operations and an additional $1 million valuation allowance increase through other comprehensive income (loss).

Our conclusion was based upon Internal Revenue Notices 2023-55 and 2023-80, both issued in 2023 (the "Notices"), which provide taxpayers relief in determining whether a foreign tax meets the definition of a foreign income tax as required under final foreign tax credit regulations the U.S.

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

The Notices provide relief for foreign taxes paid in any taxable year beginning on or after December 28, 2021, and ending before the date that a notice or other guidance withdrawing or modifying the temporary relief is issued (or any later date specified in such notice or other guidance).

We determined a significant amount of the post-2021 foreign withholding taxes will now be eligible for U.S.

foreign income tax credit treatment and therefore our U.S.

operations will annually be generating new foreign tax credits which should be creditable in the year generated.

As a result, we no longer expect to be able to utilize a substantial amount of our foreign tax credit carryforwards to offset future tax prior to their expiration.

Additionally, we concluded that we were more-likely-than-not to realize certain state deferred tax assets, and as a result we recorded a $4 million valuation allowance benefit through income from continuing operations.

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

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

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

We used various estimates and assumptions to evaluate the need for the valuation allowance in the U.S.

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Plan Obligations at December 31, 2023

(In millions) Hypothetical

(In millions)

1% lower Actual Hypothetical

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Our funded status at December 31, 2024, and our 2025 expense will be different from currently projected amounts if our projected 2024 returns are better or worse than the returns we have assumed for each plan.

(In millions, except for percentages) Hypothetical sensitivity analysis of 2023 asset return

(In millions, except for percentages)

Hypothetical sensitivity analysis of 2024 asset return

better or worse than expected

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pension plan would have been different if our accounting policy were to use the fair market value of plan assets instead of the market-related value to recognize investment gains and losses.

(In millions) Based on market-related value of assets Hypothetical (a)

(In millions)

Based on market-related value of assets Hypothetical (a)

Actual Projected Projected

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For the UMWA plans, our largest retiree medical plans, we have assumed a medical inflation rate of 6.8% for 2024, and we project this rate to decline to 5% in 2031 and hold at 5% thereafter.

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

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

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

Our assumption of a medical inflation rate of 6.8% for 2024 is based on the above-described factors, combined with our recent actual experience.

Workers’ Compensation

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We operate in Argentina through wholly owned subsidiaries and a smaller controlled subsidiary (together "Brink's Argentina").

Revenues from Brink's Argentina represented approximately 4% of our consolidated revenues for the year ended December 31, 2022 and 4% and 5% of our consolidated revenues for the years ended December 31, 2021 and 2020, respectively.

Revenues from Brink's Argentina represented approximately 4% of our consolidated revenues for the years ended December 31, 2023, 2022, and 2021.

The operating environment in Argentina continues to present business challenges, including ongoing devaluation of the Argentine peso and significant inflation.

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Argentine peso-denominated monetary assets and liabilities are now remeasured at each balance sheet date using the currency exchange rate then in effect, with currency remeasurement gains and losses recognized in earnings.

In 2022, we recognized $37.6 million pretax remeasurement losses.

In 2021 and in 2020, we recognized $9.0 million and $7.7 million pretax remeasurement losses, respectively.

In 2023, we recognized $79.1 million in pretax remeasurement losses.

In 2022 and in 2021, we recognized $37.6 million and $9.0 million in pretax remeasurement losses, respectively.

At December 31, 2023, Argentina's economy remained highly inflationary for accounting purposes.

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Under the exchange procedures implemented by the central bank, approval is required for many transactions, including dividend repatriation abroad.

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

We have previously elected to use other market mechanisms to convert Argentine pesos into U.S.

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

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

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

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

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

We did not have any such conversion losses in the last three years.

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

What changed 10-K

Item 7. Management’s Discussion and Analysis