What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-05-08 compared with 2023-11-07 · 185 added, 371 removed, 508 unchanged (52% of the section changed)

35 unchanged sentences

See definitions on page 34 .

Ended September 30, % Nine Months

Ended September 30, %

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

Ended March 31, %

(In millions, except for per share amounts) 2024 2023 Change

Revenues 1,236.1 1,185.4 4

1 unchanged sentence

Selling, general and administrative expenses 200.6 177.0 13

Operating profit 137.7 59.5 fav 323.1 218.4 48

Operating profit 120.9 79.8 52

Income from continuing operations (a)

5 unchanged sentences

Non-GAAP income from continuing operations (a)

90.5 65.5 38 202.2 186.8 8

Non-GAAP diluted EPS from continuing operations (a)

1.92 1.38 39 4.27 3.90 9

(a) Amounts reported in this table are attributable to the shareholders of Brink’s and exclude earnings related to noncontrolling interests.

1 unchanged sentence

Analysis of Consolidated Results:

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 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 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 ($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

• 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:

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).

First Quarter 2024 versus First Quarter 2023

Consolidated Revenues Revenues increased $50.7 million due to organic increases in Latin America ($117.1 million), Europe ($17.1 million), Rest of World ($7.9 million), and North America ($3.5 million) and the favorable impact of acquisitions ($1.9 million), partially offset by the unfavorable impact of currency exchange rates ($96.8 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.

Revenues increased 12% on an organic basis primarily due to inflation-based price increases and organic growth in AMS and DRS revenue.

See above for our definition of “organic growth.”

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 Costs and Expenses Cost of revenues increased 1% to $927.2 million primarily due to higher revenue, partially offset by the impact of currency exchange rates and lower costs related to restructuring actions.

Selling, general and administrative costs increased 13% to $200.6 million primarily due to organic increases in labor costs, partially offset by lower acquisition and restructuring related costs and the impact of currency exchange rates.

Consolidated Operating Profit Operating profit increased $41.1 million due mainly to:

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

• organic increases in Latin America ($27.5 million), North America ($9.8 million), Rest of World ($4.7 million) and Europe ($3.4 million),

• lower costs incurred related to reorganization and restructuring ($12.8 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",

• lower costs incurred related to business acquisitions and dispositions ($8.4 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 ($2.4 million),

partially offset by:

• unfavorable changes in currency exchange rates ($20.3 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.

• transformation initiative costs ($4.8 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 $35.0 million to $49.3 million due to the increase in operating profit mentioned above, higher interest and other nonoperating income ($8.6 million) and lower noncontrolling interest ($0.4 million), partially offset by higher interest expense ($9.2 million) and higher income tax expense ($5.9 million).

Earnings per share from continuing operations was $1.09, up from $0.30 in the first quarter of 2023.

Non-GAAP Basis

Analysis of Consolidated Results:

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.

See page 37 for details.

Non-GAAP Consolidated Operating Profit Non-GAAP operating profit increased $39.5 million due mainly to:

• 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,

partially offset by:

• unfavorable changes in currency exchange rates ($15.4 million), driven primarily by the Argentine peso and

• 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:

Nine Months 2023 versus Nine Months 2022

First Quarter 2024 versus First Quarter 2023

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 $17.6 million due mainly to:

• 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,

• organic increases in Latin America ($27.5 million), North America ($9.8 million), Rest of World ($4.7 million) and Europe ($3.4 million), and

• lower corporate expenses on an organic basis ($2.4 million),

partially offset by:

• unfavorable changes in currency exchange rates ($41.8 million), driven primarily by the Argentine peso, and

• 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.

• unfavorable changes in currency exchange rates ($30.1 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 $8.7 million to $68.9 million due to the operating profit increase mentioned above, higher interest and other nonoperating income ($8.3 million), and lower noncontrolling interest ($0.4 million), partially offset by higher interest expense ($9.4 million) and higher income tax expense ($8.2 million).

Earnings per share from continuing operations was $1.52, up from $1.27 in the first quarter of 2023.

Revenues and Operating Profit by Segment:

Third Quarter 2023 versus Third Quarter 2022

First Quarter 2024 versus First Quarter 2023

Organic Acquisitions / % Change

19 unchanged sentences

(47.6) 5.3 8.4 9.8 (24.1) (49) (11)

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

Operating profit - GAAP $ 79.8 53.1 8.3 (20.3) 120.9 52 67

Amounts may not add due to rounding.

8 unchanged sentences

Analysis of Segment Results:

Third Quarter 2023 versus Third Quarter 2022

First Quarter 2024 versus First Quarter 2023

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 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, cost productivity, and the impact of cost savings related to restructuring primarily in the U.S.

Revenues increased 1% ($3.6 million) primarily due to a 1% organic increase ($3.5 million).

Organic revenue increased primarily due to price increases and growth in AMS and DRS revenue 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 $9.8 million due to a 25% organic increase ($9.8 million) primarily driven by cost productivity improvements in labor and other areas, including realizing benefits from transformation initiatives in the U.S., as well as lower security losses and increased revenue.

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 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).

Revenues increased 6% ($19.2 million) primarily due to a 37% organic increase ($117.1 million), partially offset by the unfavorable impact of currency exchange rates ($97.9 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 with a majority of the impact from Argentina, as well as growth in AMS and DRS revenue.

Operating profit was down 5% ($3.6 million) primarily due to the unfavorable impact of currency exchange rates ($31.1 million), mostly offset by a 41% organic increase ($27.5 million).

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.

Revenues increased 8% ($22.7 million) due to a 6% organic increase ($17.1 million), the favorable impact of currency exchange rates ($3.7 million) driven by the euro, and the favorable impact of acquisitions ($1.9 million).

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 and the revenue mix benefit of higher AMS and DRS revenue.

Rest of World

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:

Nine Months 2023 versus Nine Months 2022

Organic Acquisitions / % Change

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

YTD '23 Total Organic

North America $ 1,171.0 27.6 3.2 (4.4) 1,197.4 2 2

Latin America 898.7 191.1 2.1 (102.9) 989.0 10 21

Europe 668.8 54.2 107.0 12.4 842.4 26 8

Rest of World 606.1 19.6 (5.3) (20.2) 600.2 (1) 3

Segment revenues (c)

3,344.6 292.5 107.0 (115.1) 3,629.0 9 9

Revenues - GAAP $ 3,344.6 292.5 107.0 (115.1) 3,629.0 9 9

Operating profit:

North America $ 96.7 26.0 0.8 0.1 123.6 28 27

Latin America 194.2 51.8 0.7 (46.1) 200.6 3 27

Europe 63.1 8.3 13.5 2.2 87.1 38 13

Rest of World 120.9 3.4 0.8 (3.9) 121.2 — 3

Segment operating profit 474.9 89.5 15.8 (47.7) 532.5 12 19

Corporate (d)

(112.0) (0.9) — 5.9 (107.0) (4) 1

Operating profit - non-GAAP 362.9 88.6 15.8 (41.8) 425.5 17 24

Other items not allocated to segments (e)

(144.5) 34.7 9.6 (2.2) (102.4) (29) (24)

Operating profit - GAAP $ 218.4 123.3 25.4 (44.0) 323.1 48 56

Amounts may not add due to rounding.

See page 40 for footnote explanations.

Analysis of Segment Results:

Nine Months 2023 versus Nine Months 2022

North America

Revenues increased 2% ($26.4 million) primarily due to a 2% organic increase ($27.6 million) and the favorable impact of acquisitions ($3.2 million), partially offset by the unfavorable impact of currency exchange rates ($4.4 million) from the Canadian dollar.

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, cost productivity and the impact of cost savings related to restructuring primarily in the U.S.

Latin America

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.

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.

Operating profit increased $3.9 million, primarily due to a 15% organic increase ($3.4 million).

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

Rest of World

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 the revenue mix benefit of higher AMS and DRS revenue.

Revenues increased 3% ($5.2 million) due to a 4% organic increase ($7.9 million), partially offset by the unfavorable impact of currency exchange rates ($2.7 million).

Organic growth in the segment was primarily due to growth in BGS revenue and supplemented by continued growth in DRS and AMS revenue.

Operating profit increased $3.8 million primarily due to a 13% organic increase ($4.7 million).

The organic increase was primarily due to the impact of labor and other operational cost saving actions throughout the segment as well as the increase in higher-margin BGS revenue.

Income and Expense Not Allocated to Segments

Corporate Expenses

Ended September 30, % Nine Months

Ended September 30, %

(In millions) 2023 2022 change 2023 2022 change

Ended March 31, %

(In millions) 2024 2023 change

General, administrative and other expenses $ (41.2) (42.6) (3)

Foreign currency transaction gains 6.3 5.1 24

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

Reconciliation of segment policies to GAAP 1.5 0.4 fav

Corporate expenses $ (33.4) (37.1) (10)

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

Corporate expenses for the first nine months of 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.

Corporate expenses for the first three months of 2024 decreased $3.7 million versus the prior year period.

This was primarily driven by lower charges related to insurance and security losses ($7.4 million), partially offset by higher net compensation costs ($3.1 million) and higher professional fees ($2.2 million).

Other Items Not Allocated to Segments

Ended September 30, % Nine Months

Ended September 30, %

(In millions) 2023 2022 change 2023 2022 change

Ended March 31, %

(In millions) 2024 2023 change

Operating profit:

2 unchanged sentences

Argentina highly inflationary impact (1.6) (11.2) (86)

Change in allowance estimate — 0.3 (100) — (16.0) (100)

Transformation initiatives (4.8) — unfav

Chile antitrust matter

(0.4) (0.2) 100

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

Operating profit $ (24.1) (47.6) (49)

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 $32.2 million in charges under this program, including $10.0 million in the first nine months of 2023.

In total, we have recognized $34.2 million in charges under this program, including $1.0 million in the first three months of 2024.

We expect total expenses from the program to be between $36 million and $38 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.

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 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.

As a result of these actions, we recognized net costs of $3.8 million in the first three months of 2023, primarily severance costs.

We recognized $0.4 million in net costs in the first three months of 2024.

The majority of the costs in both the 2024 and 2023 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 September 30, % Nine Months

Ended September 30, %

(In millions) 2023 2022 change 2023 2022 change

Ended March 31, %

(In millions) 2024 2023 change

Reportable Segments:

1 unchanged sentence

Latin America (0.2) (3.6) (94)

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

Europe (0.3) (4.4) (93)

Rest of World — (1.3) (100)

Total reportable segments (1.3) (12.9) (90)

Corporate items — — — (1.3) 0.7 unfav

Corporate items (0.1) (1.3) (92)

Total $ (1.4) (14.2) (90)

2 unchanged sentences

2024 Acquisitions and Dispositions

• 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 $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.

• Amortization expense for acquisition-related intangible assets was $14.5 million in the first three months of 2024.

• We recognized $0.7 million in charges in Argentina in the first three months of 2024 for an inflation-adjusted labor increase to expected payments to union workers of the Maco businesses.

See Note 1 for details.

• We incurred $0.3 million in integration costs in the first three months of 2024.

• Transaction costs related to business acquisitions were $0.3 million in the first three months of 2024.

• Compensation expense related to the retention of key PAI employees was $0.1 million in the first three months of 2024.

2023 Acquisitions and Dispositions

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

• We recognized $12.4 million in charges in Argentina in the first nine months of 2022 for expected payments to union workers of the Maco businesses.

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

• We recognized $3.3 million in charges in Argentina in the first three months of 2024 for an inflation-adjusted labor increase to expected payments to union workers of the Maco businesses.

• Net charges of $0.5 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.

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

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

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

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

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

2 unchanged sentences

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

In the first nine months of 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.

In the first three months of 2024, we recognized $1.6 million in pretax charges related to highly inflationary accounting.

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

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

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

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

It also considered current and expected economic conditions, particularly the effects of the coronavirus (COVID-19) pandemic, in determining an appropriate allowance.

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

Our updated method now also includes an estimated allowance for accounts receivable significantly past due in order to adjust for at-risk receivables not captured in our previous method.

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

In the 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.

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 globally.

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

Accordingly, we incurred $5.5 million of expense in 2023, and an additional $4.8 million in the first three months of 2024.

The transformation costs primarily include third party professional services and project management charges and are excluded 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 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.

In the first three months of 2024, we recognized an additional $0.4 million adjustment and, in the first three months of 2023, an additional $0.2 million adjustment to our estimated loss.

The adjustments resulted primarily from changes in currency rates.

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

See Note 13 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 2024.

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).

At March 31, 2024, Argentina's economy remains highly inflationary for accounting purposes.

At March 31, 2024, we had net monetary assets denominated in Argentine pesos of $85.9 million (including cash of $74.5 million) and net nonmonetary assets of $141.4 million (including $99.8 million of goodwill, $2.7 million in equity securities denominated in Argentine pesos and $6.7 million in debt securities denominated in Argentine pesos).

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

2 unchanged sentences

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

We did not have any such conversions or conversion losses in the nine months ended September 30, 2023 or September 30, 2022.

We did not have any such conversions or conversion losses in the three months ended March 31, 2024 or March 31, 2023.

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 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.

At March 31, 2024, the notional value of our short term outstanding foreign currency forward and swap contracts was $757 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 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 March 31, 2024, the fair value of our short term foreign currency contracts was a net asset of approximately $6.0 million, of which $7.1 million was included in prepaid expenses and other and $1.1 million was included in accrued liabilities on the condensed consolidated balance sheet.

At December 31, 2023, the fair value of these foreign currency contracts was a net liability of approximately $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 condensed consolidated balance sheet.

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

Ended September 30, Nine Months

Ended September 30,

Ended March 31,

(In millions) 2024 2023

Derivative instrument gains included in other operating income (expense) $ 13.4 8.2

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

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

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 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 September 30, Nine Months

Ended September 30,

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

In the first 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:

Ended March 31,

(In millions) 2024 2023

Derivative instrument gains (losses) included in other operating income (expense) $ (0.5) 0.3 $ (7.7) (6.2)

Offsetting transaction gains (losses) 0.5 (0.3) 7.7 6.2

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

Offsetting transaction gains — 3.4

Derivative instrument losses included in interest expense — (0.3)

Net derivative instrument gains (losses) (0.7) — (8.4) (7.2)

Net derivative instrument losses — (3.7)

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.

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

Swaps with a total notional of $215 million will terminate in May 2026 and swaps with a total notional of $185 million will terminate in April 2031.

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.

Swaps with a total notional value of $215 million will terminate in May 2026 and swaps with a total notional value of $185 million will terminate in April 2031.

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

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.

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.

3 unchanged sentences

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 March 31, 2024, the notional value of these cross currency swap contracts was $400 million with a remaining weighted average maturity of 1.8 years for the cross currency swaps maturing in May 2026 and a remaining weighted average maturity of 6.1 years for the cross currency swaps maturing in April 2031.

At March 31, 2024, the fair value of these currency swaps was a net liability of $29.1 million, of which $5.6 million was included in prepaid expenses and other and $34.7 million was included in other liabilities on the condensed consolidated balance sheet.

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 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.

At March 31, 2024, the fair value of the zero cost collar was an asset of $1.0 million, which was included in other assets on the condensed consolidated balance sheet.

At December 31, 2023, the fair value of the zero cost collar was an asset of $0.1 million, which was included in other assets on the condensed 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 March 31, 2024, the notional value of this foreign exchange forward swap contract was $55 million with a remaining weighted average maturity of 0.6 years.

At March 31, 2024, the fair value of this foreign exchange forward swap was an asset of $0.2, which was included in prepaid expenses and other on the condensed consolidated balance sheet.

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 condensed consolidated balance sheet.

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

Ended September 30, Nine Months

Ended September 30,

Ended March 31,

(In millions) 2024 2023

3 unchanged sentences

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

Ended September 30, % Nine Months

Ended September 30, %

(In millions) 2023 2022 change 2023 2022 change

Ended March 31, %

(In millions) 2024 2023 change

Foreign currency items:

6 unchanged sentences

Royalty income 2.1 1.9 11

Contingent consideration liability adjustment — — — 4.8 — 100

Other gains 0.2 1.8 (89) 3.0 2.4 25

Other gains 1.5 — fav

Other operating income (expense) $ 12.6 (8.3) fav

1 unchanged sentence

Interest expense

Ended September 30, % Nine Months

Ended September 30, %

Ended March 31, %

(In millions)

2023 2022 change 2023 2022 change

2024 2023 change

Interest expense $ 55.8 46.6 20

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 expense was higher in the first three months of 2024 due to higher interest rates on corporate debt and overall higher borrowing levels.

Borrowings were primarily used to fund growth in our DRS business and other general corporate initiatives.

Interest and other nonoperating income (expense)

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 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 (2.4) — unfav (4.3) — unfav

Ended March 31, %

(In millions) 2024 2023 change

Interest income $ 15.6 6.5 fav

Gain (loss) on equity and debt securities 0.5 (0.1) fav

Foreign currency transaction gains (losses) 0.1 (0.4) fav

Retirement benefit cost other than service cost (1.1) — —

Argentina turnover tax (1.1) (0.5) unfav

Non-income taxes on intercompany billings (a)

(0.4) (0.7) (43)

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

Other (0.3) (0.1) unfav

Interest and other nonoperating income (expense) $ 13.3 4.7 fav

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

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

(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,

Ended March 31,

(in millions) 2024 2023

2 unchanged sentences

Effective tax rate 33.4 % 53.6 %

Valuation Allowance-Tax Credits

In the first quarter of 2022, we concluded that it is more-likely-than-not that a substantial amount of the U.S.

deferred tax assets for U.S.

foreign tax credit and general business credit carryforwards that previously required a valuation allowance would be realized.

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

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

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 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 $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 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.

On July 21, 2023, the U.S.

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

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

income tax filings.

The 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

2 unchanged sentences

Noncontrolling Interests

Ended September 30, % Nine Months

Ended September 30, %

(In millions) 2023 2022 change 2023 2022 change

Ended March 31, %

(In millions) 2024 2023 change

Net income attributable to noncontrolling interests $ 2.9 3.3 (12)

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.

The decrease in net income attributable to noncontrolling interests in the three months ended March 31, 2024, in comparison to the three months March 31, 2023, is primarily attributable to higher 2023 operating results reported by certain subsidiaries that are not wholly-owned.

Non-GAAP Results Reconciled to GAAP

6 unchanged sentences

The Non-GAAP financial measures are intended to provide investors with a supplemental comparison of our operating results and trends for the periods presented.

Our management believes these measures are also useful to investors as they allow investors to evaluate our performance using the same metrics that our management uses to evaluate past performance and prospects for future performance.

Our management believes these measures are also useful to investors as such measures allow investors to evaluate our performance using the same metrics that our management uses to evaluate past performance and prospects for future performance.

We do not consider these items to be reflective of our operating performance as they result from events and circumstances that are not a part of our core business.

Additionally, non-GAAP results are utilized as performance measures in certain management incentive compensation plans.

Non-GAAP results should not be considered as an alternative to revenue, income or earnings per share amounts determined in accordance with GAAP and should be read in conjunction with their GAAP counterparts.

Non-GAAP results should not be considered as an alternative to revenue, net income or earnings per share amounts determined in accordance with GAAP and should be read in conjunction with their GAAP counterparts.

Non-GAAP financial measures may not be comparable to Non-GAAP financial measures presented by other companies.

11 unchanged sentences

1.6 (0.1) 11.5 (0.5)

Change in allowance estimate (b)

Transformation initiatives (b)

Valuation allowance on tax credits (e)

— (6.7) — 52.8

Chile antitrust matter (b)

0.4 0.1 1.1 0.3

Reporting compliance (b)

Income tax rate adjustment (c)

— 1.5 — (0.8)

Non-GAAP $ 100.8 29.1 28.9 % $ 84.3 20.9 24.8 %

11 unchanged sentences

retirement plans are also excluded from non-GAAP results.

(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.

Treasury in January 2022.

(e) In the first three months of 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 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.

Non-GAAP Results Reconciled to GAAP

Ended September 30, Nine Months

Ended September 30,

Ended March 31,

(In millions, except for percentages and per share amounts) 2024 2023

4 unchanged sentences

Reorganization and restructuring (b)

0.4 19.6 14.6 34.0

Acquisitions and dispositions (b)

19.4 35.7 56.4 66.3

Argentina highly inflationary impact (b)

8.1 12.0 30.3 27.1

Change in allowance estimate (b)

— (0.3) — 16.0

Transformation initiatives (b)

Chile antitrust matter (b)

— 0.3 0.4 1.1

Reporting compliance (b)

Non-GAAP $ 145.0 127.4

5 unchanged sentences

Acquisitions and dispositions (b)

0.2 0.3 0.7 1.0

Non-GAAP $ (55.8) (46.4)

2 unchanged sentences

Retirement plans (d)

(2.1) 1.6 (6.2) 6.5

Acquisitions and dispositions (b)

(0.9) (1.8) 0.2 (4.2)

Argentina highly inflationary impact (b)

22.7 0.4 23.3 1.9

Non-GAAP $ 11.6 3.3

2 unchanged sentences

Retirement plans (d)

(0.6) 0.7 (1.3) 2.1

Reorganization and restructuring (b)

0.1 3.8 2.7 6.1

Acquisitions and dispositions (b)

3.3 12.7 7.7 14.5

Argentina highly inflationary impact (b)

(0.9) — (1.6) (0.5)

Change in allowance estimate (b)

— (0.1) — 3.8

Transformation initiatives (b)

Valuation allowance on tax credits (e)

— (2.2) (6.7) 52.8

Chile antitrust matter (b)

— 0.1 0.1 0.3

Reporting compliance (b)

Income tax rate adjustment (c)

1.4 6.5 9.2 9.5

Non-GAAP $ 29.1 $ 20.9

1 unchanged sentence

GAAP $ 2.9 3.3

Retirement plans (d)

Acquisitions and dispositions (b)

0.3 0.3 0.8 0.8

Income tax rate adjustment (c)

0.1 (0.3) (0.5) (0.8)

Non-GAAP $ 2.8 3.2

1 unchanged sentence

See page 41 for footnote explanations.

Ended September 30, Nine Months

Ended September 30,

Ended March 31,

(In millions, except for percentages and per share amounts) 2024 2023

2 unchanged sentences

Retirement plans (d)

(1.5) 0.9 (4.9) 4.3

Reorganization and restructuring (b)

0.3 15.8 11.9 27.9

Acquisitions and dispositions (b)

15.1 21.2 48.8 47.8

Argentina highly inflationary impact (b)

31.7 12.4 55.2 29.5

Change in allowance estimate (b)

— (0.2) — 12.2

Transformation initiatives (b)

Valuation allowance on tax credits (e)

— 2.2 6.7 (52.8)

Chile antitrust matter (b)

— 0.2 0.3 0.8

Reporting compliance (b)

Income tax rate adjustment (c)

(1.5) (6.2) (8.7) (8.7)

Non-GAAP $ 68.9 60.2

3 unchanged sentences

Reorganization and restructuring (b)

0.01 0.33 0.25 0.58

Acquisitions and dispositions (b)

0.31 0.45 1.02 1.00

Argentina highly inflationary impact (b)

0.67 0.26 1.17 0.62

Change in allowance estimate (b)

Transformation initiatives (b)

Valuation allowance on tax credits (e)

— 0.05 0.14 (1.10)

Chile antitrust matter (b)

— — 0.01 0.02

Reporting compliance (b)

0.02 — 0.02 —

Income tax rate adjustment (c)

(0.03) (0.13) (0.18) (0.18)

Non-GAAP $ 1.52 1.27

2 unchanged sentences

LIQUIDITY AND CAPITAL RESOURCES

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.

Cash flows from operating activities improved $109.0 million in the first three months of 2024 as compared to the first three months of 2023.

Cash used for investing activities decreased by $11.8 million in the first three months of 2024 compared to the first three months of 2023.

We financed our liquidity needs in the first three months of 2024 with existing cash from operations.

Operating Activities

Ended September 30, $

Ended March 31, $

(In millions) 2024 2023 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 $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.

Cash flows from operating activities improved $109.0 million in the first three months of 2024 compared to the same period in 2023.

The increase was attributed to higher operating profit, restricted cash held for customers (restricted cash held for customers increased by $57.3 million in 2024 compared to a decrease of $43.7 million in 2023), and changes in customer obligations related to certain of our secure cash management services operations (certain customer obligations increased by $24.0 million in 2024 compared to an decrease of $9.6 million in 2023), partially offset by working capital changes, higher amounts paid for interest (we had $68.0 million in cash payments for interest in 2024 as compared to $59.1 million in 2023), and higher amounts paid for income taxes (we had $28.2 million in cash payments for taxes in 2024 as compared to $23.3 million in 2023).

Non-GAAP cash flows from operating activities decreased $25.6 million in the first three months of 2024 as compared to the same period in 2023.

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

Investing Activities

Ended September 30, $

Ended March 31, $

(In millions) 2024 2023 change

6 unchanged sentences

Sales 0.8 0.3 0.5

Proceeds from sale of property and equipment 5.7 3.3 2.4

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

Proceeds from sale of property, equipment and investments

Net change in loans held for investment 1.8 (10.5) 12.3

Other (0.1) (0.4) 0.3

Discontinued operations 0.9 — 0.9

Investing activities $ (45.8) (57.6) 11.8

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.

Cash used by investing activities decreased by $11.8 million in the first three months of 2024 versus the first three months of 2023.

The decrease was primarily due to net change in loans held for investment (we had $1.8 million in cash received in 2023 compared to $10.5 million in cash paid in 2023), as discussed in Note 12.

Capital expenditures and depreciation and amortization were as follows:

Ended September 30, $ Full Year

Ended March 31, $ Full Year

(In millions) 2024 2023 change 2023

28 unchanged sentences

Reorganization and Restructuring — 1.1 (1.1) 1.2

Acquisitions and dispositions — — — 0.1

Amortization of intangible assets 14.5 14.0 0.5 57.8

Depreciation and amortization - GAAP $ 72.4 67.6 4.8 275.8

(a) Incremental depreciation related to highly inflationary accounting in Argentina, accelerated depreciation related to restructuring activities and acquisition-related integration activities, and amortization of acquisition-related intangible assets have been excluded from non-GAAP amounts.

(b) Represents the amount of property and equipment acquired using financing leases.

Incremental depreciation related to highly inflationary accounting in Argentina, accelerated depreciation related to restructuring activities and acquisition-related integration activities, and amortization of acquisition-related intangible assets have been excluded from non-GAAP amounts.

(a) Represents the amount of property and equipment acquired using financing leases.

Because the assets are acquired without using cash, the acquisitions are not reflected in the condensed consolidated statements of cash flows.

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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 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.

Our reinvestment ratio, which we define as the annual amount of property and equipment acquired during the period divided by the annual amount of depreciation, was 1.4 for the 12 months ending March 31, 2024 and the 12 months ending March 31, 2023.

Capital expenditures in the first three months of 2024 were primarily for cash devices, information technology, and armored vehicles.

Financing Activities

Ended September 30, $

Ended March 31, $

(In millions) 2024 2023 change

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Acquisition of noncontrolling interest (0.2) — (0.2)

Debt financing costs — (5.5) 5.5

Repurchase shares of Brink's common stock (23.0) (16.0) (7.0)

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Acquisition-related financing activities:

Cash paid for acquisition related settlements and obligations

(10.5) (2.8) (7.7)

Payment of acquisition related obligation

Tax withholdings associated with share-based compensation (16.8) (6.6) (10.2)

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Debt borrowings and repayments

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.

Cash used in financing activities decreased by $95.8 million year over year as we had net cash used in financing activities of $1.3 million in the first three months of 2024 compared to net cash used in financing activities of $97.1 million in the first three months of 2023.

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

We paid dividends to Brink’s shareholders of $0.22 per share or $9.8 million in the first three months of 2024 compared to $0.20 per share or $9.3 million in the first three months of 2023.

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.

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GAAP Measures

September 30, December 31,

March 31, December 31,

(In millions) 2024 2023

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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 $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).

(b) Included within Net Debt is net cash from our Argentina operations of $75 million at March 31, 2024 and $63 million at December 31, 2023 (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.

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

Set forth above is a reconciliation of Net Debt, a non-GAAP financial measure, to Debt, which is the most directly comparable financial measure calculated and reported in accordance with GAAP, as of September 30, 2023, and December 31, 2022.

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.

Net Debt increased by $137 million primarily to fund general corporate purposes and other working capital needs.

Liquidity Needs

Our liquidity needs include not only the working capital requirements of our operations but also investments in our operations, business development activities, payments on outstanding debt, dividend payments and share repurchases.

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

As of September 30, 2023, $437 million was available under the Revolving Credit Facility.

Our operating liquidity needs are typically financed by cash from operations, short-term borrowings and the available borrowing capacity under our Revolving Credit Facility (our debt facilities are described in more detail in Note 8 to the condensed consolidated financial statements, including certain limitations and considerations related to the cash and borrowing capacity).

As of March 31, 2024, $306 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.

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A significant portion of our operations are outside the U.S.

which may make it difficult or costly to repatriate cash for use in the U.S.

which may make it difficult to or costly to repatriate additional cash for use in the U.S.

See “Risk Factors” in Item 1A of our annual report on Form 10-K for the year ended December 31, 2023, 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, and material increases in inflation, that would adversely affect 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.

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• the market prices of our securities.

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

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

Under the 2021 Repurchase Program, we are not obligated to repurchase any specific dollar amount or number of shares.

On November 2, 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 Share Repurchase Program, we are not obligated to repurchase any specific dollar amount or number of shares.

The timing and volume of share repurchases may be executed at the discretion of management on an opportunistic basis, or pursuant to trading plans or other arrangements.

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

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.

During the first three months ended March 31, 2024, we repurchased a total of 274,680 shares of our common stock for an aggregate of $23.0 million and an average price of $83.77 per share.

These shares were retired upon repurchase.

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.

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

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

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

At March 31, 2024, $477 million remained available under the 2023 Repurchase Program.

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.

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

Retirement Liabilities

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Actual Actual Projected

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

(In millions) 2023 1Q 2024 2Q-4Q 2024 2025 2026 2027 2028

Beginning funded status $ (24.0) (10.9) (6.9) (5.4) 3.1 11.7 20.3

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Payment from Brink’s — — — — — 0.1 4.6

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

Benefit plan experience loss (2.0) — (10.3) (6.0) (4.2) (2.3) (2.3)

Ending funded status $ (10.9) (6.9) (5.4) 3.1 11.7 20.3 34.2

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Benefit plan experience gain 15.1 — — — — — —

Prior service credit (b)

66.7 — — — — — —

Other 2.7 2.8 (2.8) — — — —

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Payment from Brink’s 7.7 2.1 7.2 8.6 7.9 7.2 6.7

Benefit plan experience gain 19.3 — — — — — —

Benefit plan experience loss (2.4) — — — — — —

Ending funded status $ (74.4) (73.2) (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.

employees were frozen on December 31, 2005, and are not provided to employees hired after 2005 or to those covered by a collective bargaining agreement.

employees were frozen on December 31, 2005, and benefits are not provided to employees hired after 2005 or to those covered by a collective bargaining agreement.

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

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

pension plan in 2023 or the first three months of 2024.

There are approximately 10,500 beneficiaries in the plan.

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There were approximately 2,400 beneficiaries in the UMWA plans as of December 31, 2023.

The Company does not need to make additional contributions to these plans until 2033 based on actuarial assumptions.

The Company does not expect to make additional contributions to these plans until 2036, based on actuarial assumptions.

Under the Federal Black Lung Benefits Act of 1972, Brink’s is responsible for paying lifetime black lung benefits to miners and their dependents for claims filed and approved after June 30, 1973.

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Actual Actual Projected

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

(In millions) 2023 1Q 2024 2Q-4Q 2024 FY2024 2025 2026 2027 2028

pension plan $ (13.6) (2.5) (7.4) (9.9) (5.0) 0.6 6.2 3.1

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Actual Actual Projected

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

(In millions) 2023 1Q 2024 2Q-4Q 2024 FY2024 2025 2026 2027 2028

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 September 30, 2023.

See Note 13 to the condensed consolidated financial statements for information about contingent matters at March 31, 2024.

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