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What changed in BRINKS CO's 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of BRINKS CO's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+336 added−351 removedSource: 10-K (2024-02-29) vs 10-K (2023-03-01)

Top changes in BRINKS CO's 2023 10-K

336 paragraphs added · 351 removed · 281 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeAs a result of these actions, we recognized $66.6 million net costs in operating profit and $0.6 million costs in interest and other nonoperating income (expense) in 2020, primarily severance costs. We recognized $43.6 million net costs in 2021 and $16.6 million net costs in 2022, primarily severance costs.
Biggest changeOther Restructurings Management periodically implements restructuring actions in targeted sections of our business. As a result of these actions, we recognized $43.6 million net costs in 2021, primarily severance costs. We recognized $16.6 million net costs in 2022, primarily severance costs. We recognized $6.6 million net costs in 2023.
See Note 24 to the consolidated financial statements for more detailed information on reorganization and restructuring activities. 6 Available Information and Corporate Governance Documents The following items are available free of charge on our website ( www.brinks.com ) as soon as reasonably possible after filing or furnishing them with the Securities and Exchange Commission (the “SEC”): • Annual reports on Form 10-K • Quarterly reports on Form 10-Q • Current reports on Form 8-K, and amendments to those reports The following documents are also available free of charge on our website: • Corporate Governance Guidelines • Code of Ethics • The charters of the following committees of our Board of Directors (the “Board”): Audit and Ethics, Compensation and Human Capital, Corporate Governance and Nominating, and Finance and Business Development Printed versions of these items will be mailed free of charge to shareholders upon request.
See Note 24 to the consolidated financial statements for more detailed information on reorganization and restructuring activities. 7 Available Information and Corporate Governance Documents The following items are available free of charge on our website ( www.brinks.com ) as soon as reasonably possible after filing or furnishing them with the Securities and Exchange Commission (the “SEC”): • Annual reports on Form 10-K • Quarterly reports on Form 10-Q • Current reports on Form 8-K, and amendments to those reports The following documents are also available free of charge on our website: • Corporate Governance Guidelines • Code of Ethics • The charters of the following committees of our Board of Directors (the “Board”): Audit and Ethics, Compensation and Human Capital, Corporate Governance and Nominating, and Finance and Business Development Printed versions of these items will be mailed free of charge to shareholders upon request.
Basic ATM services – We provide customers who own and operate ATMs a variety of service options. Basic ATM management services include cash replenishment, treasury management and first and second line maintenance.
Basic ATM services – We provide customers who own and operate ATMs a variety of service options. Basic ATM management services include cash replenishment, treasury management and first line maintenance.
We own patents for safes, cash devices and related processes, including Brink’s Complete TM , CompuSafe ® , iDeposit, and Daily Credit. Brink's patents will expire between 2023 and 2040. These patents provide us with important advantages. However, we are not dependent on the existence of these patents.
We own patents for safes, cash devices and related processes, including Brink’s Complete TM , CompuSafe ® , iDeposit, and Daily Credit. Brink's patents will expire between 2028 and 2040. These patents provide us with important advantages. However, we are not dependent on the existence of these patents.
To execute our objectives, we manage the business with multi-year plans. In our current strategic plan, we are focusing on the implementation of the strategic pillars across our traditional (cash and valuables management) and emerging (Digital Retail Solutions and ATM Managed Services) service lines.
To execute our objectives, we manage the business with multi-year plans. In our current strategic plan, we are focusing on the implementation of the strategic pillars across our service lines: Cash and Valuables Management, Digital Retail Solutions and ATM Managed Services.
Cash and valuables management services generated approximately $3.8 billion of revenues in 2022 ($3.7 billion in 2021 and $3.3 billion in 2020). Cash-in-transit services – Serving customers since 1859, our success in cash-in-transit ("CIT") is driven by a combination of rigorous security practices, high-quality customer service, risk management and logistics expertise.
Cash and valuables management services generated approximately $3.9 billion of revenues in 2023 ($3.8 billion in 2022 and $3.7 billion in 2021). Cash-in-transit services – Serving customers since 1859, our success in cash-in-transit ("CIT") is driven by a combination of rigorous security practices, high-quality customer service, risk management and logistics expertise.
DRS and AMS services generated approximately $0.7 billion of revenues in 2022 ($0.5 billion in 2021 and $0.4 billion in 2020). Digital Retail Solutions – DRS includes services that facilitate faster access to cash deposits leveraging Brink’s tech-enabled sales and software platforms and enable enhanced customer analytics and visibility.
DRS and AMS services generated approximately $1.0 billion of revenues in 2023 ($0.7 billion in 2022 and $0.5 billion in 2021). Digital Retail Solutions – DRS includes services that facilitate faster access to cash deposits leveraging Brink’s tech-enabled sales and software platforms and enable enhanced customer analytics and visibility.
Other Services – Guarding services, commercial security systems services, and payment services. Digital Retail Solutions ("DRS"), and ATM Managed Services ("AMS") (16% of total revenues in 2022) DRS and AMS are technology enabled services provided to customers throughout the world. Revenues are typically contractually recurring with multi-year terms.
Other Services – Guarding services, commercial security systems services, and payment services. Digital Retail Solutions ("DRS"), and ATM Managed Services ("AMS") (21% of total revenues in 2023) DRS and AMS are technology enabled services provided to customers throughout the world. Revenues are typically contractually recurring with multi-year terms.
Following are descriptions of our service offerings: Cash and Valuables Management (84% of total revenues in 2022) Cash and valuables management services are provided to customers throughout the world. Revenues are affected by the level of economic activity in various markets as well as the volume of business for specific customers.
Following are descriptions of our service offerings: Cash and Valuables Management (79% of total revenues in 2023) Cash and valuables management services are provided to customers throughout the world. Revenues are affected by the level of economic activity in various markets as well as the volume of business for specific customers.
We have controlling ownership interests in companies in 53 countries and agency relationships with companies in additional countries. We employ approximately 72,200 people and our operations include approximately 1,300 facilities and 16,400 vehicles.
We have controlling ownership interests in companies in 52 countries and agency relationships with companies in additional countries. We employ approximately 68,200 people and our operations include approximately 1,300 facilities and 16,400 vehicles.
We will achieve Operational Excellence by driving a continuous improvement culture focused on customer experience and by building scale by sharing activities, infrastructure and knowledge. We will develop our Talent by attracting, developing, and empowering the best people, by strengthening core competencies across the company and by fostering an inclusive culture that inspires excellence.
We will achieve Operational Excellence by leveraging the Brink's Business System to drive a continuous improvement culture focused on customer experience and by building scale by sharing activities, infrastructure and knowledge. We will develop our Talent by attracting, developing, and empowering the best people, by strengthening core competencies across the company and by fostering an inclusive culture that inspires excellence.
We also offer our employees a wide array of benefits such as life and health (medical, dental and vision) insurance, mental and emotional health resources, paid time off, retirement benefits, family leave and family care resources. Diversity and Inclusion We are committed to providing a diverse and inclusive workplace and culture.
We also offer our employees a wide array of market-competitive benefits specific to the markets in which we operate, including life and health (medical, dental and vision) insurance, mental and emotional health resources, paid time off, retirement benefits, family leave and family care resources. Diversity and Inclusion We are committed to providing a diverse and inclusive workplace and culture.
The majority of the costs from 2022 restructuring plans resulted 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.
The majority of the costs in both the 2023 and 2022 periods result from the exit of a line of business in a specific geography with most of the remaining costs due to management initiatives to address the COVID-19 pandemic.
See Note 7 to the consolidated financial statements for more detailed information on the acquired assets and liabilities from these acquisitions. Reorganization and Restructuring 2022 Global Restructuring Plan In the third quarter of 2022, management began a restructuring program across our global business operations.
See Note 7 to the consolidated financial statements for more detailed information on the acquired assets and liabilities from these acquisitions. Reorganization and Restructuring 2022 Global Restructuring Plan In the first quarter of 2023, management completed the review and approval of remaining actions included in the previously disclosed restructuring plan across our global business operations.
We continue to use employee opinion surveys to take the pulse of employees in the U.S., Brazil, Canada and Mexico. Globally, we are sharing our vision of a winning culture with our leadership through country communication plans, and using global leadership training and performance assessments to reinforce our values and critical success factors throughout the organization.
Globally, we are sharing our vision of a winning culture with our leadership through country communication plans and using global leadership training and performance assessments to reinforce our values and critical success factors throughout the organization.
NoteMachine is based in the United Kingdom and manages a portfolio of ATMs. NoteMachine generated approximately $150 million in revenues in the twelve month period prior to the acquisition.
Business Acquisitions On October 3, 2022, we acquired 100% of the capital stock of NoteMachine for approximately $194 million. NoteMachine is based in the United Kingdom and manages a portfolio of ATMs. NoteMachine generated approximately $150 million in revenues in the twelve month period prior to the acquisition.
Specifically, we enhanced workforce planning, updated job 4 descriptions, identified critical role high potential employees and enhanced our brand attractiveness by establishing Brink’s as a company that is relevant, digital, inclusive and growing. We took actions in a number of markets to maintain the competitiveness of our compensation and benefits programs to assist with talent attraction and retention.
Specifically, we maintained focus on enhancing workforce planning, talent planning for critical roles, identifying high potential employees and enhancing our brand attractiveness by further establishing Brink’s as a company that is relevant, digital, inclusive and growing. We also continued to evaluate, and sought to maintain, the competitiveness of our compensation and benefits programs to assist with talent attraction and retention.
The Brink’s Company, along with its subsidiaries, is referred to as “we,” “our,”, “us,” “Brink’s,” or “the Company” throughout this Annual Report on Form 10-K for the period ended December 31, 2022 ("this Form 10-K"). 1 Strategy Over the past several years, our business has evolved significantly. We have a much larger footprint and new digital capabilities.
The Brink’s Company, along with its subsidiaries, is referred to as “we,” “our,”, “us,” “Brink’s,” or “the Company” throughout this Annual Report on Form 10-K for the period ended December 31, 2023 ("this Form 10-K"). 1 Strategy Our strategy is to grow Brink’s by providing a superior customer experience and driving continuous improvement.
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.
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 $33.2 million in charges under the program, including $11.0 million in 2023. We expect total expenses from the program to be between $38 million and $42 million, primarily severance costs.
We believe that the ERGs play an essential role in fostering an inclusive culture within Brink’s and providing support. Brink’s is committed to supporting the formation and success of our ERGs and to continuing to promote diversity and inclusion within our global enterprise.
We firmly believe that ERGs and affinity groups play a pivotal role in cultivating an inclusive culture within Brink's and providing crucial support. We remain steadfast in our commitment to supporting the formation and success of ERGs and affinity groups and continuing to champion D&I across our global enterprise.
Labor Relations As of December 31, 2022, approximately 30,600 of our employees in various countries in which we operate, or approximately 42% of our total workforce, were represented by trade union organizations and/or covered by collective bargaining agreements, which have various expiration dates from 2023 to 2026.
Labor Relations As of December 31, 2023, approximately 29,000 of our employees in various countries in which we operate, or approximately 43% of our total workforce, were represented by trade union organizations and/or covered by collective bargaining agreements, which have various expiration dates from 2024 to 2028. 5 We are an equal opportunity employer and prohibit discrimination in employment decisions based upon any category protected by applicable federal, state, or local law.
Our ERGs promote acceptance and inclusion and provide resources to raise awareness. In the U.S., we have groups for women, Black, Asian and Pacific Islander, Latinx and military veteran employees. In Brazil and Argentina, we have groups for women, LGBTQ+ employees and for people with disabilities. Brazil also has a group for Black employees.
In the United States, we have dedicated ERGs for women, Black, Asian Pacific Islander and Latinx employees, as well as military veterans. In Brazil, Argentina, and Europe, we have affinity groups focusing on women, LGBTQ+ employees, and individuals with disabilities. Brazil specifically has a dedicated affinity group for Black employees.
At December 31, 2022, our company had approximately 69,500 full-time and 2,700 part-time employees. Approximately 87% or 62,600 of our employees are outside the United States. Of our approximately 9,600 employees in the United States, approximately 300 were classified as part-time employees. Certain employees in the United States provide corporate services for the various regions in which we operate.
At December 31, 2023, our company had approximately 66,000 full-time and 2,200 part-time employees. Approximately 88% or 60,100 of our employees are outside the United States. Of our approximately 8,100 employees in the United States, approximately 200 were classified as part-time employees.
Diversity and Inclusion Council (“D&I Council”) made up of the Company’s senior leaders in various functions, and the executive sponsors and chairs of our employee resource groups (“ERGs”) to support the development of our D&I initiatives. The D&I Council was expanded to Europe in 2022, and we expect to expand the D&I Council to Asia in 2023.
We have a Diversity and Inclusion Council in each of the U.S., Europe, Asia and Latin America, made up of the Company’s senior leaders in various functions, and the executive sponsors and chairs of our employee resource groups (“ERGs”) (generally known as "affinity groups" outside of the U.S.) to promote a diverse and inclusive workplace and culture.
We believe in supporting our employees’ health and well being. We have implemented a flexible work program that allows certain employees to work remotely as approved by their managers and is intended to help our employees maintain a reasonable professional/personal life balance as we continue to invest in and protect our strong Company culture.
We continue to maintain a flexible work program that allows certain employees to work remotely as approved by their managers.
In 2022, we launched the Employee Experience Project, an onboarding training program for employees designed to represent our culture and values, focus on retention, increase employee engagement and reduce employee turnover. Strategic acquisitions continue to be a part of our broader strategic plan.
In 2023, we continued our focus on onboarding and other training programs for employees which are designed to represent our culture and values, focus on retention, increase employee engagement, reduce employee turnover and ensure that employees act in accordance with applicable law and industry best practices.
Accordingly, we continue to identify opportunities to execute on our commitment to Diversity and Inclusion (“D&I”) to our stakeholders. Our Sustainability Program, including environmental, social and governance ("ESG") matters, is overseen by our Board of Directors.
Accordingly, we continue to identify opportunities to execute on our commitment to diversity and inclusion (“D&I”). For instance, we continue to improve upon our aspiration to increase the representation of women in leadership, regularly reporting our progress to senior leadership and the Board.
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This means we have the opportunity to simplify cash and valuables management for our customers with tech-enabled services and to optimize our operations and leverage the benefits of scale across our expanded footprint. Our strategy is to grow Brink’s by providing a superior customer experience and driving continuous improvement.
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Certain employees in the United States provide corporate services for the various regions in which we operate. 4 During 2023, we continued to take steps to develop a deep talent pool to meet the ever-changing needs of our business.
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Since 2020, the negative impact from the COVID-19 pandemic has affected the stability of our workforce. During 2022, we continued to take steps to develop a talent pool deep enough to absorb employee departures.
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We continue to use employee opinion surveys to take the pulse of our employees on a global basis. In 2023, we conducted a global engagement survey and achieved our goal for employee participation.
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On October 3, 2022, the Company completed its acquisition of NoteMachine Limited and Testlink Services Limited and the three subsidiaries they directly owned as of the acquisition date (collectively, "NoteMachine"), one of the leading ATM networks in the United Kingdom, including 599 employees. It is expected that these employees will be added to our compensation and benefit programs in 2023.
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The results of this survey have helped us to better understand the thoughts and perspectives of our employees around the world, validate our existing strengths, and gain valuable insights for continuous improvement. We believe meaningful actions based on employee feedback gleaned in the survey will result in ongoing high engagement with our employees.
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All management employees who came to us from acquisitions are expected to complete an orientation program to ensure that they are aligned with the Company’s compensation, performance management, talent management and compliance policies. Employee Safety and Wellness Employee safety is of paramount importance as we strive to bring every employee home safe every night.
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Employee Safety and Wellness Employee safety is of paramount importance as we strive to bring every employee home safely every night. In this respect, we maintain our commitment to providing a safe workplace that protects against and limits personal injury and other types of harm for our employees and the communities in which we operate.
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In response to the COVID-19 pandemic, we implemented significant changes that we determined were in the best interests of our employees, as well as the communities in which we operate. The changes comply with government regulations and include implementing additional safety measures, such as additional personal protective equipment and enhanced cleaning protocols for employees continuing critical on-site work.
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We also follow international standards and regulations for employee safety and evaluate risks using both government-required procedures and best practices to ensure that we understand residual risk and appropriately protect our employees. We believe in supporting our employees’ health and well-being.
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In July 2022, we published our inaugural Sustainability Update, which outlined our ESG priorities and our commitment to five of the United Nations (“UN”) Sustainable Development Goals. In the Sustainability Update, we announced a target to increase the number of women in leadership roles (defined as salary grade 18 and above) by at least 50% by the end of 2026.
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For instance, in the U.S., we recently implemented a hybrid return to work policy referred to as “Flex and Connect,” which is intended to help our corporate employees maintain a reasonable professional/personal life balance as we continue to invest in and protect our strong Company culture and foster in-person creativity, collaboration, connection, and celebration.
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In 2022, the Company also launched its Diverse Recruiting Guidelines, designed to ensure that we cultivate a pool of candidates with a wide range of qualities and perspectives and help prevent recruitment bias.
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In Canada, Mexico, and Chile, affinity groups are in place to support women. In 2023, we expanded our affinity groups further by introducing two new affinity groups in Asia—one dedicated to India's women and another for Asia Diversity. In Latin America, a new ERG was formed in Chile focusing on cultural transformation.
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Additionally, through the collaborative efforts of our Vice President of Diversity and our Head of Talent Management, the Company has integrated D&I strategies into our talent management review meetings, which we believe has allowed us to identify and increase the representation of diverse candidates in our succession planning and leadership development initiatives.
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Talent To maintain a competitive workforce, we continually evolve and enhance how we train, identify and promote key talent. We also regularly evaluate and improve our employee review process – encouraging regular performance reviews and feedback that set clear expectations, motivate employees and reinforce the connection between pay and performance.
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As part of our Sustainability Program, we signed the UN Global Compact, affirming our commitment to meet fundamental responsibilities in the areas of human rights, labor and the environment. We also joined the CEO Action for Diversity & Inclusion. More information on our ESG priorities can be found on our Sustainability page on our website.
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We are committed to accelerating the development of our leaders through various programs such as our “Future Leaders” program, which is designed to build capable and confident leaders that can lead and inspire a diverse workforce in an ever-changing environment. Future Leaders is an intense and immersive 10-month leadership development program for our emerging leaders.
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In 2022, we implemented global D&I training, including unconscious bias training, both in-person and virtually, for management-level employees, with the goal of educating and empowering the Company's leaders to foster an inclusive culture within their teams. In 2021, we established a U.S.
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In 2024, we will have a cohort of leaders in our Europe, Middle East, Africa and Asia regions as well as in the Americas.
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In Canada, Mexico and Chile, we have groups for women. In 2022, we expanded our ERGs and added two new groups in Europe – one for women and one for LGBTQ+ employees. Our ERGs are supported with an executive sponsor and chair who also sit on the D&I Council to liaise with leadership and employees.
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It is also our policy to provide employment opportunities without regard to race, color, age, sex, sexual orientation, religious creed, national origin or any other status protected by law. We believe our employee relations are satisfactory.
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We believe our employee relations are satisfactory. 5 Business Divestitures Below is a summary of the significant businesses we exited in the last three years. These divestitures did not meet the criteria for classification as discontinued operations. Operating results for these businesses are included in continuing operations for all periods presented, as applicable.
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For more information on our Sustainability Program, including our environmental, social and governance priorities, please refer to the 2022 Sustainability Report, which can be found on our Sustainability page on our website. 6 Business Divestitures We exited our Russia-based operations in 2023 and recognized a $2.0 million loss on disposal.
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We continue to operate our global services business in each of these countries. • In the first quarter of 2020, we sold 100% of our ownership interest in a French security services company. Business Acquisitions On October 3, 2022, we acquired 100% of the capital stock of NoteMachine for approximately $194 million.
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On February 26, 2020, we announced that we agreed to acquire the majority of the cash management operations of G4S, with closings planned in multiple phases.
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In 2020, we acquired multiple businesses providing secure international transportation of valuables as well as cash management operations located in the Netherlands, Belgium, Ireland, Hong Kong, Cyprus, Romania, the Czech Republic, Malaysia, the Dominican Republic, the Philippines, Indonesia, Estonia, Latvia and Lithuania.
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In the first quarter of 2021, we acquired operations in Macau, Luxembourg and Kuwait, which completed the remaining planned G4S transactions. In the aggregate, the purchase consideration for the G4S acquisitions was $826 million. The G4S businesses acquired generated approximately $800 million in revenues in 2019.
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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. Other Restructurings Management periodically implements restructuring actions in targeted sections of our business.
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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.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThese risks, uncertainties and contingencies, many of which are beyond our control, include, but are not limited to: • our ability to improve profitability and execute further cost and operational improvements and efficiencies in our core businesses; • our ability to improve service levels and quality in our core businesses; • market volatility and commodity price fluctuations; • general economic issues, including supply chain disruptions, fuel price increases, inflation and changes in interests rates • seasonality, pricing and other competitive industry factors; • investment in information technology and its impact on revenue and profit growth; • our ability to maintain an effective IT infrastructure and safeguard confidential information, including from a cybersecurity incident; • our ability to effectively develop and implement solutions for our customers; • risks associated with operating in foreign countries, including changing political, labor and economic conditions (including political conflict or unrest), regulatory issues (including the imposition of international sanctions, including by the U.S. government), currency restrictions and devaluations, restrictions on and cost of repatriating earnings and capital, impact on the Company's financial results as a result of jurisdictions' higher-than-expected inflation and those determined to be highly inflationary, and restrictive government actions, including nationalization; • labor issues, including labor shortages, negotiations with organized labor and work stoppages; • pandemics (including the ongoing COVID-19 pandemic and related impacts and restrictions on the actions of businesses and consumers, including suppliers and customers), acts of terrorism, strikes or other extraordinary events that negatively affect global or regional cash commerce; • anticipated cash needs in light of our current liquidity position and the impact of COVID-19 on our liquidity; • the strength of the U.S. dollar relative to foreign currencies and foreign currency exchange rates; • our ability to identify, evaluate and complete acquisitions and other strategic transactions and to successfully integrate acquired companies; • costs related to dispositions and product or market exits; • our ability to obtain appropriate insurance coverage, positions taken by insurers relative to claims and the financial condition of insurers; • safety and security performance and loss experience; • employee, environmental and other liabilities in connection with former coal operations, including black lung claims; • the impact of the American Rescue Plan Act and Patient Protection and Affordable Care Act on legacy liabilities and ongoing operations; • funding requirements, accounting treatment, and investment performance of our pension plans, the VEBA and other employee benefits; • changes to estimated liabilities and assets in actuarial assumptions; • the nature of hedging relationships and counterparty risk; • access to the capital and credit markets; • our ability to realize deferred tax assets; • the impact of foreign tax credit regulations; • the impact of foreign tax credit regulations; • the outcome of pending and future claims, litigation, and administrative proceedings; • public perception of our business, reputation and brand; • changes in estimates and assumptions underlying our critical accounting policies; and • the promulgation and adoption of new accounting standards, new government regulations and interpretation of existing standards and regulations.
Biggest changeThese risks, uncertainties and contingencies, many of which are beyond our control, include, but are not limited to: • our ability to improve profitability and execute further cost and operational improvements and efficiencies in our core businesses; • our ability to improve service levels and quality in our core businesses; • market volatility and commodity price fluctuations; • general economic issues, including supply chain disruptions, fuel price increases, inflation and changes in interests rates • seasonality, pricing and other competitive industry factors; • investment in information technology and its impact on revenue and profit growth; • our ability to maintain an effective IT infrastructure and safeguard confidential information, including from a cybersecurity incident; • our ability to effectively develop and implement solutions for our customers; • risks associated with operating in foreign countries, including changing political, labor and economic conditions (including political conflict or unrest), regulatory issues (including the imposition of international sanctions, including by the U.S. government), military conflicts (including but not limited to the conflict in Israel and surrounding areas, as well as the possible expansion of such conflicts and potential geopolitical consequences), currency restrictions and devaluations, restrictions on and cost of repatriating earnings and capital, impact on the Company's financial results as a result of jurisdictions' higher-than-expected inflation and those determined to be highly inflationary, and restrictive government actions, including nationalization; • labor issues, including labor shortages, negotiations with organized labor and work stoppages; • pandemics, acts of terrorism, strikes or other extraordinary events that negatively affect global or regional cash commerce; • the strength of the U.S. dollar relative to foreign currencies and foreign currency exchange rates; • our ability to identify, evaluate and complete acquisitions and other strategic transactions and to successfully integrate acquired companies; • costs related to dispositions and product or market exits; • our ability to obtain appropriate insurance coverage, positions taken by insurers relative to claims and the financial condition of insurers; • safety and security performance and loss experience; • employee, environmental and other liabilities in connection with former coal operations, including black lung claims; • the impact of the American Rescue Plan Act and Patient Protection and Affordable Care Act on legacy liabilities and ongoing operations; • funding requirements, accounting treatment, and investment performance of our pension plans, the VEBA and other employee benefits; • changes to estimated liabilities and assets in actuarial assumptions; • the nature of hedging relationships and counterparty risk; • access to the capital and credit markets; • our ability to realize deferred tax assets; • the impact of foreign tax credit regulations; • the impact of foreign tax credit regulations; • the outcome of pending and future claims, litigation, and administrative proceedings; • public perception of our business, reputation and brand; • changes in estimates and assumptions underlying our critical accounting policies; and • the promulgation and adoption of new accounting standards, new government regulations and interpretation of existing standards and regulations.
Federal registrations subject us to, among other things, having an effective anti-money laundering (AML) compliance program, record-keeping requirements and reporting requirements, and examination by state and federal regulatory agencies, and these and our other regulatory obligations may significantly increase our costs or impact our operations.
These Registrations subject us to, among other things, having an effective anti-money laundering (AML) compliance program, record-keeping requirements and reporting requirements, and examination by state and federal regulatory agencies, and these and our other regulatory obligations may significantly increase our costs or impact our operations.
Our senior secured credit facility, senior unsecured notes, letter of credit facilities and bank guarantee facilities contain various financial and other covenants. The financial covenants include a limit on the ratio of net debt to earnings before interest, taxes, depreciation and amortization and a limit on the ratio of earnings before interest, taxes, depreciation and amortization to interest expense.
Our senior secured credit facility, senior unsecured notes, letter of credit facilities and bank guarantee facilities contain various financial and other covenants. The financial covenants include a limit on the ratio of net secured debt to earnings before interest, taxes, depreciation and amortization and a limit on the ratio of earnings before interest, taxes, depreciation and amortization to interest expense.
If our losses increase, or if we are unable to obtain adequate insurance coverage at reasonable rates, our financial condition, results of operations and cash flows could be materially and adversely affected. Information Technology Risks Risks associated with information technology can expose Brink’s to business disruptions, cybersecurity breaches and regulatory violations.
If our losses increase, or if we are unable to obtain adequate insurance coverage at reasonable rates, our financial condition, results of operations and cash flows could be materially and adversely affected. Cybersecurity and Information Technology Risks Risks associated with cybersecurity and information technology can expose Brink’s to business disruptions, cybersecurity breaches and regulatory violations.
A significant cybersecurity incident that impacts system, application or data center that houses sensitive and confidential data, including, but not limited to, personally identifiable information and business sensitive information, could have a material adverse effect on our business, financial condition, results of operations and cash flows.
A significant cybersecurity incident that impacts our system, application or data center that houses sensitive and confidential data, including, but not limited to, personally identifiable information and business sensitive information, could have a material adverse effect on our business, financial condition, results of operations and cash flows.
Our reputation or brand, particularly the trust placed in us by our customers, could be negatively impacted in the event of perceived or actual breaches in our ability to conduct our business ethically, securely and responsibly. In addition, we have licensing arrangements that 12 permit certain entities to use Brink’s name and/or other intellectual property in connection with their businesses.
Our reputation or brand, particularly the trust placed in us by our customers, could be negatively impacted in the event of perceived or actual breaches in our ability to conduct our business ethically, securely and responsibly. In addition, we have licensing arrangements that permit certain entities to use Brink’s name and/or other intellectual property in connection with their businesses.
Although the Company maintains cybersecurity insurance, the Company's insurance may not be adequate to cover all losses that may be incurred in the event of a significant disruption or failure of its information technology systems. 11 As a global company we must adhere to applicable laws and regulations in numerous regions regarding data privacy, data protection, and data security.
Although the Company maintains cybersecurity insurance, the Company's insurance may not be adequate to cover all losses that may be incurred in the event of a significant disruption or failure of its information technology systems. As a global company we must adhere to applicable laws and regulations in numerous regions regarding data privacy, data protection, and data security.
In addition, our effective income tax rate is significantly affected by the ability to realize deferred tax assets, including those associated with net operating losses. Changes in income tax laws, income apportionment, or estimates of the ability to realize deferred tax assets, could significantly affect our effective income tax rate, financial position and results of operations.
In addition, our effective income tax rate is significantly affected by the ability to realize deferred tax assets, including those 10 associated with net operating losses. Changes in income tax laws, income apportionment, or estimates of the ability to realize deferred tax assets, could significantly affect our effective income tax rate, financial position and results of operations.
We operate in regulated industries. Our U.S. operations are subject to regulation by the U.S. Department of Transportation with respect to safety of operations and equipment and financial responsibility. Intrastate operations in the U.S. are subject to regulation by state regulatory authorities and interprovincial operations in Canada are subject to regulation by Canadian and provincial regulatory authorities.
We operate in regulated industries. Our U.S. operations are subject to regulation by the U.S. Department of Transportation with respect to safety of operations and equipment and financial responsibility. Intrastate operations in the U.S. are subject to regulation by state regulatory authorities and interprovincial operations 9 in Canada are subject to regulation by Canadian and provincial regulatory authorities.
The risks to a successful integration and improvement of operating performance and profitability include, among others, failure to implement our business plan, unanticipated issues in integrating operations with ours, unanticipated changes in laws and regulations, labor 7 unrest resulting from union operations, regulatory, environmental and permitting issues, unfavorable customer reactions, the effect on our internal controls and compliance with the regulatory requirements under the Sarbanes-Oxley Act of 2002, and difficulties in fully identifying and evaluating potential liabilities, risks and operating issues.
The risks to a successful integration and improvement of operating performance and profitability include, among others, failure to implement our business plan, unanticipated issues in integrating operations with ours, unanticipated changes in laws and regulations, labor unrest resulting from union operations, regulatory, environmental and permitting issues, unfavorable customer reactions, the effect on our 8 internal controls and compliance with the regulatory requirements under the Sarbanes-Oxley Act of 2002, and difficulties in fully identifying and evaluating potential liabilities, risks and operating issues.
We have robust programs in place that are intended to identify, protect, detect, respond, and recover from cybersecurity breaches and that provides employee awareness training regarding cyber risks; however, due to evolving and advanced sophisticated attackers, cyber attacks remain increasingly difficult to detect and we may need to allocate additional resources to continue to enhance our information security measures and/or to investigate and remediate any security vulnerabilities.
We have programs in place that are intended to identify, protect, detect, respond, and recover from cybersecurity incidents and breaches and that provides employee awareness training regarding cyber risks; however, due to evolving and advanced sophisticated attackers, cyber attacks remain increasingly difficult to detect and we may need to allocate additional resources to continue to enhance our information security measures and/or to investigate and remediate any security vulnerabilities.
ITEM 1A. RISK FACTORS Business Risks Our strategy may not be successful. Our strategy is to grow Brink's by providing a superior customer experience and driving continuous improvement. We may not be successful in growing revenue in our traditional and emerging services lines or in improving the cost to serve our customers through process improvements.
ITEM 1A. RISK FACTORS Business Risks Our strategy may not be successful. Our strategy is to grow Brink's by providing a superior customer experience and driving continuous improvement. We may not be successful in growing revenue in our services lines or in improving the cost to serve our customers through process improvements.
We have certain environmental and other exposures related to our former coal operations. We may incur future environmental and other liabilities in connection with our former coal operations, which could materially and adversely affect our financial condition, results of operations and cash flows. We may be exposed to certain regulatory and financial risks related to climate change.
We may incur future environmental and other liabilities in connection with our former coal operations, which could materially and adversely affect our financial condition, results of operations and cash flows. We may be exposed to certain regulatory and financial risks related to climate change.
Turnover in key leadership positions within the Company may adversely affect our ability to manage the company efficiently and effectively, could be disruptive and distracting to management and may lead to additional departures of current personnel, any of which could have a material adverse effect on our business and results of operations. 13 Forward-Looking Statements This document contains both historical and forward-looking information.
Unplanned turnover in key leadership positions within the Company may adversely affect our ability to manage the company efficiently and effectively, could be disruptive and distracting to management and may lead to additional departures of current personnel, any of which could have a material adverse effect on our business and overall results. 13 Forward-Looking Statements This document contains both historical and forward-looking information.
We operate subsidiaries in 53 countries, all of which have different income tax laws and associated income tax rates. Our effective income tax rate can be significantly affected by changes in the mix of pretax earnings by country and the related income tax rates in those countries.
We operate subsidiaries in 52 countries, all of which have different income tax laws and associated income tax rates. Our effective income tax rate can be significantly affected by changes in the mix of pretax earnings by country and the related income tax rates in those countries.
If there were to be significant problems with our infrastructure, such as IT data center or system failure, failure to develop new technology platforms to support new initiatives and product and service offerings, or a failure of our GIS Program, it could halt or delay our ability to service our customers, hinder our ability to conduct and expand our business and require significant remediation costs.
If there were to be significant problems with our IT infrastructure, such as IT data center or system failures or unplanned system disruptions, failure to develop new technology platforms to support new initiatives and product and service offerings, or a failure of our GIS Program, it could halt or delay our ability to service our customers, hinder our ability to conduct and expand our business and require significant remediation costs.
The amount of these obligations is significantly affected by factors that are not in our control, including interest rates used to determine the present value of future payment streams, investment returns, medical inflation rates, participation rates and changes in laws and regulations. The funded status of the primary U.S. pension plan was approximately 96% as of December 31, 2022.
The amount of these obligations is significantly affected by factors that are not in our control, including interest rates used to determine the present value of future payment streams, investment returns, medical inflation rates, participation rates and changes in laws and regulations. The funded status of the primary U.S. pension plan was approximately 98% as of December 31, 2023.
Deferred tax assets are future tax deductions that result primarily from the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial statement and income tax purposes. At December 31, 2022, we had $188 million of U.S. deferred tax assets, net of valuation allowances, primarily related to our retirement plan obligations.
Deferred tax assets are future tax deductions that result primarily from the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial statement and income tax purposes. At December 31, 2023, we had $170 million of U.S. deferred tax assets, net of valuation allowances, primarily related to our retirement plan obligations.
Deficiencies, including any material weakness, in our internal control over financial reporting that have not been remediated or that may occur in the future could result in misstatements of our results of operations, restatements of our financial statements, a decline in our stock price, or otherwise materially adversely affect our business, reputation, results of operations, financial condition, or liquidity.
Deficiencies, including any material weakness, in our internal control over financial reporting that may occur in the future could result in misstatements of our results of operations, restatements of our financial statements, a decline in our stock price, or otherwise materially adversely affect our business, reputation, results of operations, financial condition, or liquidity.
Based on our actuarial assumptions at the end of 2022, we do not expect to make contributions until 2026. A change in assumptions could result in funding obligations that could adversely affect our liquidity and our ability to use our resources to make acquisitions and to otherwise grow our business.
Based on our actuarial assumptions at the end of 2023, we do not expect to make contributions until 2027. A change in assumptions could result in funding obligations that could adversely affect our liquidity and our ability to use our resources to make acquisitions and to otherwise grow our business.
Privacy and data protection laws vary between countries and are subject to interpretation, which may create inconsistent or conflicting requirements. The European Union’s General Data Protection Regulation (“GDPR”) greatly increases the jurisdictional reach of European Union law and became effective in May 2018.
Privacy and data protection laws vary between countries and are subject to interpretation, which may create inconsistent or conflicting requirements. For example, the European Union’s General Data Protection Regulation (“GDPR”), which became effective in May 2018, greatly increased the jurisdictional reach of European Union law.
Department of Treasury’s Financial Crimes Enforcement Network and may in the future be registered and/or licensed as a “money transmitter” or similar designation with various other state or local jurisdictions in the U.S. related to delivering future products and services.
Department of Treasury’s Financial Crimes Enforcement Network and is currently registered and/or licensed in some, and may in the future be registered and/or licensed as a “money transmitter” or similar designation with various state or local jurisdictions in the U.S. related to delivering future products and services.
We have $345 million of actuarial losses recorded in accumulated other comprehensive income (loss) at the end of 2022. These losses relate to changes in actuarial assumptions that have increased the net liability for benefit plans. These losses have not been recognized in earnings.
We have $348 million of actuarial losses recorded in accumulated other comprehensive income (loss) at the end of 2023. These losses relate to changes in actuarial assumptions that have increased the net liability for benefit plans. These losses have not been recognized in earnings.
We rely on our information technology ("IT") infrastructure, including the Brink's Global Information Security ("GIS") Program, which is designed to reduce risk by ensuring that computer systems are secure through protecting networks, systems, hardware, and data to mitigate digital attacks.
We rely on our information technology ("IT") infrastructure, including the Brink's Global Information Security ("GIS") Program, which is designed to reduce risk by ensuring that computer systems are secure through protecting networks, systems, hardware, and data to mitigate cybersecurity risk and efficiently run our business.
Our business success depends on retaining our leadership team and attracting and retaining qualified personnel. Our future success depends, in part, on the continuing services and contributions of our leadership team to execute on our strategic plan and to identify and pursue new opportunities.
Our business success depends on retaining our leadership team and attracting and retaining qualified personnel. Talent is a key enabler of our strategy. Our future success depends, in part, on the continuing services and contributions of our leadership team to execute on our strategic plan and to identify and pursue new opportunities.
Forward-looking information in this document includes, but is not limited to, statements regarding future performance of The Brink’s Company and its global operations, including: the impact of the ongoing COVID-19 pandemic on our business, employees, customers, operating results and financial position; the ability to remediate the material weakness in our internal control over financial reporting; difficulty in repatriating cash; continued strengthening of the U.S. dollar; anticipated costs of our reorganization and restructuring activities, including the global restructuring activities implemented in the third quarter of 2022; our ability to consummate acquisitions and integrate their operations successfully, collection of receivables related to the internal loss in the U.S. global services operations; support for our Venezuela business; changes in allowance calculation methods; the impact of foreign currency forward and swap contracts; our effective tax rate; realization of deferred tax assets; the ability to meet liquidity needs; expenses and payouts for the U.S. retirement plans and the funded status of the primary pension plan; expected liability for and future contributions to the UMWA plans; liability for black lung obligations; the effect of pending legal matters, including the Chile antitrust matter; the impacts of the operating environment in Argentina; and expected future payments under contractual obligations.
Forward-looking information in this document includes, but is not limited to, statements regarding future performance of The Brink’s Company and its global operations, including: the impact of the Company's ongoing transformation initiatives; costs associated with labor rate increases related to future payments to the Maco unions; difficulty in repatriating cash; continued strengthening of the U.S. dollar; anticipated costs of our reorganization and restructuring activities, including the global restructuring activities implemented in the third quarter of 2022; our ability to consummate acquisitions and integrate their operations successfully, collection of receivables related to the internal loss in the U.S. global services operations; support for our Venezuela business; changes in allowance calculation methods; the impact of foreign currency forward and swap contracts; our effective tax rate, including the impact of Pillar Two rules; realization of deferred tax assets; the ability to meet liquidity needs; expenses and payouts for the U.S. retirement plans and the funded status of the primary pension plan; expected liability for and future contributions to the UMWA plans; liability for black lung obligations; the effect of pending legal matters, including the Chile antitrust matter; the impacts of the operating environment in Argentina; and expected future payments under contractual obligations.
These actions could result in significant restructuring charges at these subsidiaries, including recognizing impairment charges to write down assets and recording accruals for employee severance. Our restructuring activities may subject us to litigation risks and expenses.
These actions could result in significant restructuring charges at these subsidiaries, including recognizing impairment charges to write down assets and recording accruals for employee severance. Our restructuring activities may subject us to litigation risks and expenses. These charges, if required, could significantly and materially affect results of operations and cash flows.
The new authorization replaced the prior $250 million program, which was fully utilized, and will expire on December 31, 2023. Although the Board of Directors has authorized the share repurchase program, the share repurchase program does not obligate the Company to repurchase any specific dollar amount or to acquire any specific number of shares.
The new authorization replaced the prior $250 million program, which expired on December 31, 2023 with $28 million remaining available. Although the Board of Directors has authorized the share repurchase program, the share repurchase program does not obligate the Company to repurchase any specific dollar amount or to acquire any specific number of shares.
The occurrence of any of these events may adversely affect our expected benefits of any acquisitions and may have a material adverse effect on our financial condition, results of operations or cash flows.
The occurrence of any of these events may adversely affect our expected benefits of any acquisitions and may have a material adverse effect on our financial condition, results of operations or cash flows. We have certain environmental and other exposures related to our former coal operations.
These charges, if required, could significantly and materially affect results of operations and cash flows. 10 Our inability to access capital or significant increases in our cost of capital could adversely affect our business . Our ability to obtain adequate and cost-effective financing depends on our credit quality as well as the liquidity of financial markets.
Our inability to access capital or significant increases in our cost of capital could adversely affect our business . Our ability to obtain adequate and cost-effective financing depends on our credit quality as well as the liquidity of financial markets.
Also, the Company has been, and may in the future be, required to incur significant legal fees and other expenses related to activist shareholder matters. Any of these impacts could materially and adversely affect the Company and operating results. Negative public perception of our reputation or brand could lead to a loss of revenues or profitability.
If the Company is targeted by an activist shareholder, it could incur significant legal fees and other expenses related to activist shareholder matters. Any of these impacts could materially and adversely affect the Company and operating results. Negative public perception of our reputation or brand could lead to a loss of revenues or profitability.
Additionally, we may not be able to recover the cost of compliance with new or more stringent environmental laws and regulations from our customers, which could adversely affect our business.
Additionally, we may not be able to recover the cost of compliance with new or more stringent environmental laws and regulations from our customers, which could adversely affect our business. Furthermore, the potential effects of climate change and related regulation on our customers are highly uncertain and may adversely affect our operations.
On October 27, 2021, the Board of Directors authorized a new share repurchase program. Under the new program, we are authorized to repurchase shares of common stock for an aggregate purchase price not to exceed $250 million, excluding fees, commissions and other ancillary expenses.
On November 2, 2023, the Board of Directors authorized a new share repurchase program that will expire on December 31, 2025. Under the new program, we are authorized to repurchase shares of common stock for an aggregate purchase price not to exceed $500 million, excluding fees, commissions and other ancillary expenses.
In addition, if we are unable to achieve, or have any unexpected delays in achieving additional cost savings, our results of operations and cash flows may be adversely affected.
In addition, if we are unable to achieve, or have any unexpected delays in achieving additional cost savings, our results of operations and cash flows may be adversely affected. Even if we meet our goals as a result of these initiatives, we may not receive the expected financial benefits of these initiatives.
It is possible that the global restructuring plan implemented in the third quarter of 2022, as well as other restructuring actions taken, may not achieve their intended results and may have other consequences, such as attrition beyond our planned reduction in workforce or our ability to attract highly skilled employees.
It is possible that our restructuring plans may not achieve their intended results and that we will incur restructuring charges in the future. It is possible that our restructuring plans may not achieve their intended results and may have other consequences, such as attrition beyond our planned reduction in workforce or our ability to attract highly skilled employees.
While we have historically experienced some level of ordinary course turnover of employees, the impact of the COVID-19 pandemic and resulting actions have exacerbated labor shortages and increased turnover. As a result, labor costs in the United States are rising. Labor is our largest operating cost.
Labor shortages and increased labor costs could have a material adverse effect on our operations. While we have historically experienced some level of ordinary course turnover of employees, labor shortages and turnover continue to be a widespread problem in the United States, resulting in higher labor costs. Labor is our largest operating cost.
We have experienced cybersecurity incidents in the past, but none of these incidents, individually or in the aggregate, have had a material adverse effect on our business or results of operations.
We may be unable to anticipate these emerging techniques, react in a timely manner, or implement adequate preventative measures. We have experienced cybersecurity incidents and unplanned system disruptions in the past, but none of these incidents or disruptions, individually or in the aggregate, have had a material adverse effect on our business, financial condition or results of operations.
Our efforts to comply with GDPR and other privacy and data protection laws may impose significant costs that are likely to increase over time, and we could incur substantial penalties or be subject to litigation related to violation of existing or future data privacy laws, which could have a material adverse effect on our business, financial condition, results of operations and cash flows.
We could incur substantial penalties or be subject to litigation related to violation of existing or future data privacy laws, including representative actions and other class action-type litigation, which could amount to significant compensation or damages liabilities, as well as associated costs, diversion of internal resources, and reputational harm, all of which may have a material adverse effect on our business, financial condition, results of operations and cash flows.
General Risks We have identified a material weakness in our internal control over financial reporting which could, if not remediated, adversely affect our ability to report our financial condition and results of operations in a timely and accurate manner, investor confidence in our company, and the value of our common stock.
Although our share repurchase program is intended to enhance long-term stockholder value, there is no assurance that it will do so and short-term stock price fluctuations could reduce the program’s effectiveness. 12 General Risks The identification of a material weakness in our internal control over financial reporting in the future could, if not remediated, adversely affect our ability to report our financial condition and results of operations in a timely and accurate manner, investor confidence in our company, and the value of our common stock.
The Company had a material weakness in its internal control over financial reporting identified during 2022 and can give no assurances that material weaknesses will not arise in the future. Although we will work to remediate the material weakness, there can be no assurance as to when the remediation plan will be fully developed or implemented.
The Company had a material weakness in its internal control over financial reporting identified during 2022, which was fully remediated by December 31, 2023; however, there can be no assurances that a material weakness will not occur in the future.
Since that date, more countries in which we operate have enacted laws similar to GDPR, including several countries in Asia. GDPR and these other privacy and data protection laws impose requirements related to the handling of personal data, mandates public disclosure of certain data breaches, and provides for substantial penalties for non-compliance.
Additionally, the California Privacy Rights Act, which became effective on January 1, 2023, significantly modified the CCPA and has resulted in further uncertainty. The GDPR and these other privacy and data protection laws impose requirements related to the handling of personal data, mandates public disclosure of certain data breaches, and provides for substantial penalties for non-compliance.
Sixty-eight percent (68%) of our revenues in 2022 came from operations outside the U.S. We expect revenues outside the U.S. to continue to represent a significant portion of total revenues.
Operational Risks We have significant operations outside the United States. We currently serve customers in more than 100 countries, including 52 countries where we operate subsidiaries. Seventy percent (70%) of our revenues in 2023 came from operations outside the U.S. We expect revenues outside the U.S. to continue to represent a significant portion of total revenues.
We are in the payments and security business and our success and longevity are based to a large extent on our reputation for trust and integrity.
We are a leading global provider of cash and valuables management, digital retail solutions and ATM managed services, and our success and longevity are based to a large extent on our reputation for trust, reliability and integrity.
Our future success also depends, in part, on our continued ability to attract and retain highly skilled and qualified personnel. Any turnover in senior management or inability to attract and retain qualified personnel could have a negative effect on our results of operations.
Any unplanned turnover in senior management or inability to attract and retain a workforce with the skills and in the locations we need to operate and grow our business could have a negative effect on our results.
Our data security risks will increase as we expand services and employ emerging technologies, mobile applications, third-party service providers and cloud-based services. Hacking, phishing attacks, ransomware, insider threats, physical breaches or other actions may cause confidential information belonging to Brink’s, its employees or customers to be misused.
Hacking, phishing attacks, ransomware, insider threats, physical breaches or other actions may cause confidential information belonging to Brink’s, its employees or customers to be misused. Moreover, the techniques used to obtain unauthorized access to networks or to sabotage systems change frequently and generally are not recognized until launched against a target.
Removed
The ongoing COVID-19 pandemic has adversely affected our business, financial condition and results of operations, the extent of which depends on many factors that are uncertain or not yet identifiable. The ongoing COVID-19 pandemic continues to create volatility, uncertainty and economic disruption for Brink’s, our customers and vendors, and the markets in which we do business.
Added
Remote work by our personnel and remote access to our systems have also increased significantly, which could increase our cybersecurity risk profile. We believe our cybersecurity risks will further increase as we expand services, complete mergers & acquisitions, and employ emerging technologies, mobile applications, third-party service providers and 11 cloud-based services.
Removed
Since 2020, our operational performance and economic activity in the countries in which we operate have been significantly impacted by pandemic-related health conditions and the associated government, customer and consumer actions. These actions have led to reduced customer volumes, changes to our operating procedures and increases to our costs to provide services.
Added
Cyber attacks and security breaches may also persist undetected over extended periods of time and may not be mitigated in a timely manner to minimize the impact of a cyber attacks or security breach.
Removed
We have taken and continue to take actions to adjust the way we operate and reduce our costs through restructuring activities and operational changes to address these impacts and align to future anticipated revenue levels.
Added
Since its inception, more geographies in which we operate have enacted laws similar to GDPR, including several countries in Asia and states in the U.S.
Removed
We are continually assessing the impact that the COVID-19 pandemic, and the actions taken in response to it, will have on our employees, businesses and segments, customers and vendors and the industries that we serve. While the immediate impacts of the COVID-19 pandemic have been assessed, the long-term magnitude and duration of the disruption remains uncertain.
Added
For example, the California Consumer Privacy Act (the “CCPA”), which became effective on January 1, 2020, imposes stringent data privacy and data protection requirements regarding the personal information of California residents, and provides for penalties for noncompliance, as well as a private right of action from individuals for certain security breaches.
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We expect these factors will continue to impact our financial condition and our results of operations for a duration that is currently unknown.
Added
Our efforts to comply with GDPR and other privacy and data protection laws may impose significant costs that are likely to increase over time.
Removed
The factors that have affected us and may continue to affect us could include, among other things, (i) the duration of the COVID-19 pandemic and the types and magnitude of adverse impacts on regional economies, individually, and the global economy, as a whole; (ii) the emergence and spread of new variants of the virus; (iii) the health and welfare of our employees and that of our customers, vendors and suppliers; (iv) business and government actions in response to the pandemic, including moratoriums by governments and regulators on rule making and regulatory and legal proceedings, limitations on employee actions by regulators and unions, and stay at home, social distancing measures and travel bans; (v) the impact on the development and implementation of strategic initiatives and the integration of acquired businesses; (vi) the response of our customers or prospective customers to the pandemic, including suspensions or terminations of existing contracts; (vii) the varying demand for the types of services we offer in the countries in which we offer them; (viii) our ability to continue to effectively market our services; (ix) our ability to resume services as needed; (x) the type, size, profitability and geographic locations of our operations; (xi) the ability of our customers to pay, to make timely payments or to pay in full; (xii) labor shortages; and (xii) the development and availability of effective vaccines or treatment, the speed at which vaccines are administered, the efficacy of vaccines against the virus and evolving strains or variants of the virus.
Added
A breach of the GDPR or other such data protection regulations could result in regulatory investigations, reputational damages, fines and sanctions, orders to cease or change our processing of our data, enforcement notices, or assessment notices (for a compulsory audit).
Removed
Any of these events, and others we have not yet identified, could cause or contribute to the risks and uncertainties facing the Company and our customers and could materially adversely affect our business or portions thereof, and our financial condition, results of operations and/or stock price.
Added
Our future success also depends, in part, on our continued ability to attract and retain the skills and capabilities in the many countries we operate.
Removed
The impacts of the COVID-19 pandemic could adversely impact the health and welfare of our employees, including our executive officers, which could have a material adverse effect on our ability to serve our customers and our results of operations. Our customer-facing employees are necessary to conduct many of our services.
Removed
If the health and welfare of customer-facing employees or employees providing critical corporate functions (including our executive officers) deteriorates, the number of employees so afflicted becomes significant, or an employee with skills and knowledge that cannot be replicated in our organization is impaired due to the COVID-19 (including against emerging variant strains) or the outbreak of other viruses or diseases, our ability to win business and provide services, as well as employee morale, customer relationships, business prospects, and results of operations of one or more of our segments, or the Company as a whole, could be materially adversely affected.
Removed
Furthermore, the potential effects of climate change and related regulation on our customers are highly uncertain and may adversely affect our operations. 8 Operational Risks We have significant operations outside the United States. We currently serve customers in more than 100 countries, including 53 countries where we operate subsidiaries.
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Even if we meet our goals as a result of these initiatives, we may not receive the expected financial benefits of these initiatives. 9 Labor shortages and increased labor costs could have a material adverse effect on our operations.
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It is possible that our restructuring plans may not achieve their intended results and that we will incur restructuring charges in the future.
Removed
Although our share repurchase program is intended to enhance long-term stockholder value, there is no assurance that it will do so and short-term stock price fluctuations could reduce the program’s effectiveness.

Item 2. Properties

Properties — owned and leased real estate

1 edited+1 added−1 removed1 unchanged
Biggest changeWe own or lease armored vehicles, panel trucks and other vehicles that are primarily service vehicles. Our armored vehicles are of bullet-resistant construction and are specially designed and equipped to provide security for the crew and cargo. The following table discloses leased and owned facilities and vehicles for Brink’s most significant operations as of December 31, 2022.
Biggest changeWe own or lease armored vehicles, panel trucks and other vehicles that are primarily service vehicles. Our armored vehicles are of bullet-resistant construction and are specially designed and equipped to provide security for the crew and cargo. The following table discloses leased and owned facilities and vehicles for Brink’s most significant operations as of December 31, 2023.
Removed
Facilities Vehicles Segments Leased Owned Total Leased Owned Total North America 241 41 282 2,770 1,131 3,901 Latin America 337 84 421 845 4,541 5,386 Europe 158 35 193 2,495 1,908 4,403 Rest of World 404 12 416 770 1,950 2,720 Corporate Items 3 — 3 — — — Total 1,143 172 1,315 6,880 9,530 16,410
Added
Facilities Vehicles Segments Leased Owned Total Leased Owned Total North America 234 35 269 3,309 944 4,253 Latin America 333 83 416 834 4,216 5,050 Europe 155 36 191 2,656 1,758 4,414 Rest of World 414 9 423 867 1,801 2,668 Corporate Items 5 — 5 — — — Total 1,141 163 1,304 7,666 8,719 16,385

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

11 edited+1 added−5 removed3 unchanged
Biggest changeParks was appointed as Executive Vice President and President of Europe in September 2021. Prior to that, Mr. Parks served as Senior Vice President from December 2020 to September 2021. He has oversight responsibility for the Company's operations in Europe. From January to December 2020 Mr. Parks was Senior Vice President, Strategy Deployment & Execution.
Biggest changeParks was appointed as Executive Vice President and President, Europe, Middle East, Africa and Asia in May 2023. Prior to that, he served as Executive Vice President and President of Europe from September 2021 to May 2023 and, before that, as Senior Vice President from December 2020 to September 2021. He has oversight responsibility for the Company's operations in Europe.
Previously, he served as president of Cree Lighting from 2016 until 2017, and, between 2001 and 2015, he held positions at Cooper Industries and Cooper Lighting in various roles of increasing responsibility. 16 PART II
Previously, he served as president of Cree Lighting from 2016 until 2017, and, between 2001 and 2015, he held positions at Cooper Industries and Cooper Lighting in various roles of increasing responsibility. 18 PART II
("JELD-WEN"), one of the world's largest building products manufacturers, from 2020 to May 2022. Mr. Castillo joined JELD-WEN in February in 2018 as Senior Vice President, North America - Doors.
Castillo served as the Executive Vice President, North America at JELD-WEN, Inc. ("JELD-WEN"), one of the world's largest building products manufacturers, from 2020 to May 2022. Mr. Castillo joined JELD-WEN in February in 2018 as Senior Vice President, North America - Doors.
ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 15 Information about Our Executive Officers The following is a list as of March 1, 2023, of the names and ages of the executive officers of the Company indicating the principal positions and offices held by each. There are no family relationships among any of the officers named.
ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 17 Information about Our Executive Officers The following is a list as of February 29, 2024, of the names and ages of the executive officers of the Company indicating the principal positions and offices held by each. There are no family relationships among any of the officers named.
From 2018 to January 2020, he was Senior Vice President, Integration. From 2015 to 2018 he served as the President and General Manager of Brink’s Canada. Mr. Castillo was appointed as Executive Vice President and President, North America in June 2022. Prior to that, Mr. Castillo served as the Executive Vice President, North America at JELD-WEN, Inc.
From January to December 2020 Mr. Parks was Senior Vice President, Strategy Deployment & Execution. From 2018 to January 2020, he was Senior Vice President, Integration. From 2015 to 2018 he served as the President and General Manager of Brink’s Canada. Mr. Castillo was appointed as Executive Vice President and President, North America in June 2022. Prior to that, Mr.
Pertz served as a partner with Bolder Capital, LLC (a private equity firm) from 2011 to 2013. Mr. Eubanks was appointed President and Chief Executive Officer, effective May 2022. Prior to that, he served as Executive Vice President and Chief Operating Officer of the Company from September 2021 to May 2022. Before joining Brink’s, Mr.
Eubanks was appointed President and Chief Executive Officer, effective May 2022. Prior to that, he served as Executive Vice President and Chief Operating Officer of the Company from September 2021 to May 2022. Before joining Brink’s, Mr.
From 2014 to 2019, he led the Brink’s Global Services business in the Americas and the Company’s cash-in-transit business in South America (with the exception of Mexico and Brazil). Mr. Davis was appointed as the Company’s Executive Vice President and Chief Human Resources Officer in September 2021.
Prior to that, he served as Senior Vice President from July 2019 until September 2021. From 2014 to 2019, he led the Brink’s Global Services business in the Americas and the Company’s cash-in-transit business in South America (with the exception of Mexico and Brazil). Ms.
Parks 54 Executive Vice President and President of Europe 2020 Daniel J. Castillo 54 Executive Vice President and President, North America 2022 Executive and other officers of the Company are elected annually and serve at the pleasure of the Board of Directors. Mr. Pertz was appointed Executive Chairman, effective May 2022.
Blackwood 47 Executive Vice President, General Counsel and Corporate Secretary 2021 James K. Parks 55 Executive Vice President and President, Europe, Middle East, Africa and Asia 2023 Daniel J. Castillo 55 Executive Vice President and President, North America 2022 Executive and other officers of the Company are elected annually and serve at the pleasure of the Board of Directors. Mr.
McMaken served in Audit & Business Advisory Services at PricewaterhouseCoopers LLP from 1992 to 1999. Mr. Beech was appointed Executive Vice President of the Company in December 2014. Since 2019, he has had oversight responsibility for the Company's Latin America segment (including Mexico) and has led the Company's global safety and security since 2016.
McMaken served in Audit & Business Advisory Services at PricewaterhouseCoopers LLP from 1992 to 1999. Mr. Bossart was appointed as Executive Vice President and President, Latin America and Brink's Global Services in May 2023. Prior to that, he served as Executive Vice President and President MEA, Asia and Brink’s Global Services from September 2021 to May 2023.
Name Age Positions and Offices Held Held Since Douglas A. Pertz 68 Executive Chairman 2022 Mark Eubanks 50 President and Chief Executive Officer 2022 Kurt B. McMaken 53 Executive Vice President and Chief Financial Officer 2022 Michael F.
Name Age Positions and Offices Held Held Since Mark Eubanks 51 President and Chief Executive Officer 2022 Kurt B. McMaken 54 Executive Vice President and Chief Financial Officer 2022 Dominik Bossart 49 Executive Vice President and President, Latin America and Brink's Global Services 2023 Elizabeth A. Galloway 46 Executive Vice President and Chief Human Resources Officer 2023 Lindsay K.
Davis served as Chief Human Resources Officer for Johnson Controls International, a diversified technology company, from 2015 to October 2017. Ms. Blackwood was appointed as the Company's Executive Vice President and General Counsel and Corporate Secretary in November 2021. Ms.
("At Home") from 2018 to 2019. Before At Home, Ms. Galloway also served in human resources leadership roles at PepsiCo, Inc., Owens Corning, and Marathon Petroleum Corporation. Ms. Blackwood was appointed as the Company's Executive Vice President and General Counsel and Corporate Secretary in November 2021. Ms.
Removed
Beech 61 Executive Vice President and President LATAM and Global Security 2014 Dominik Bossart 48 Executive Vice President and President MEA, Asia and Brink's Global 2019 Simon J. Davis 58 Executive Vice President and Chief Human Resources Officer 2019 Lindsay K. Blackwood 46 Executive Vice President, General Counsel and Corporate Secretary 2021 James K.
Added
Galloway was appointed as the Company’s Executive Vice President and Chief Human Resources Officer in May 2023. Prior to that, she served as Executive Vice President and Chief Human Resources Officer at Invitation Homes, Inc. from 2019 to May 2023. Prior to that, she served as Chief Human Resources Officer at At Home Group Inc.
Removed
Prior to that, he served as President and Chief Executive Officer of the Company from June 2016 to May 2022. Before joining the Company, Mr. Pertz served as President and CEO of Recall Holdings Limited ("Recall"), a global provider of digital and physical information management and security services, from 2013 until 2016. Prior to joining Recall, Mr.
Removed
From 2016 to 2019, he had oversight responsibility for the Company's operations in Brazil and Mexico. From December 2014 to July 2016, Mr. Beech had oversight responsibility for the operations in the countries that composed the Company's former Largest 5 Markets segment. Mr.
Removed
Bossart was appointed as Executive Vice President and President MEA, Asia and Brink’s Global Services in September 2021. Prior to that, he served as Senior Vice President from July 2019 until September 2021. He has oversight responsibility for the Company's operations in the countries that comprise the Company's Rest of World segment and its Brink's Global Services business.
Removed
Prior to that, he serve as Senior Vice President and Chief Human Resources from January 2019 to September 2021. From July 2018 to January 2019, he served as Senior Vice President of Human Resources for the Brink’s U.S. business. Prior to joining Brink’s, Mr.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

15 edited+0 added−2 removed3 unchanged
Biggest changePeriod (a) Total Number of Shares Purchased 1 (b) Average Price Paid per Share (c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (d) Maximum Number (or Approximate Dollar Value) of Shares that May Yet be Purchased Under the Plans or Programs October 1 through October 31, 2022 404,585 $55.74 404,585 $ 200,186,659 November 1 through November 30, 2022 — — 404,585 200,186,659 December 1 through December 31, 2022 42,250 $55.90 446,835 197,824,740 (1) In the fourth quarter of 2021, we entered into a $250 million share repurchase program that expires on December 31, 2023.
Biggest changePeriod (a) Total Number of Shares Purchased (b) Average Price Paid per Share (c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) (d) Maximum Number (or Approximate Dollar Value) of Shares that May Yet be Purchased Under the Plans or Programs (1) October 1 through October 31, 2023 306,508 $70.71 306,508 $ 70,449,787 November 1 through November 30, 2023 298,380 $74.09 604,888 48,343,349 December 1 through December 31, 2023 239,494 $85.08 844,382 27,967,551 (1) On October 27, 2021, the Company's Board of Directors approved a $250 million share repurchase program that expired on December 31, 2023, with approximately $28 million remaining under the program. 20 The following graph compares the cumulative 5-year total return provided to shareholders of The Brink’s Company’s common stock compared to the cumulative total returns of the S&P Midcap 400 index and the common stocks of a selected peer group of companies.
The performance of The Brink’s Company’s common stock assumes that the shareholder reinvested all dividends received during the period. *$100 invested on 12/31/17 in stock or index, including reinvestment of dividends Fiscal Year ending December 31. Source: Zacks Investment Research, Inc.
The performance of The Brink’s Company’s common stock assumes that the shareholder reinvested all dividends received during the period. *$100 invested on 12/31/18 in stock or index, including reinvestment of dividends Fiscal Year ending December 31. Source: Zacks Investment Research, Inc.
We chose the S&P Midcap 400 Index and our custom peer group as we are included in the S&P Midcap 400 Index, and we believe the custom peer group has more similar characteristics to our company for the factors noted above. 19
We chose the S&P Midcap 400 Index and our custom peer group as we are included in the S&P Midcap 400 Index, and we believe the custom peer group has more similar characteristics to our company for the factors noted above. 21
In April 2022, the financial institution early terminated this ASR and we received additional 546,993 shares. 17 The following table provides information about common stock repurchases by the Company during the quarter then ended December 31, 2022.
In April 2022, the financial institution early terminated this ASR and we received additional 546,993 shares. 19 The following table provides information about common stock repurchases by the Company during the quarter then ended December 31, 2023.
The companies included in the peer group are Cintas Corporation, Iron Mountain, Inc., Euronet Worldwide, Inc., Stericycle, Inc., UniFirst Corporation and Waste Management, Inc. The graph tracks the performance of a $100 investment in our common stock and in each index from December 31, 2017, through December 31, 2022.
The companies included in the peer group are Cintas Corporation, Iron Mountain, Inc., Euronet Worldwide, Inc., Stericycle, Inc., UniFirst Corporation and Waste Management, Inc. The graph tracks the performance of a $100 investment in our common stock and in each index from December 31, 2018, through December 31, 2023.
The cumulative return for each index is measured on an annual basis for the periods from December 31, 2017, through December 31, 2022, with the value of each index set to $100 on December 31, 2017. Total return assumes reinvestment of dividends.
The cumulative return for each index is measured on an annual basis for the periods from December 31, 2018, through December 31, 2023, with the value of each index set to $100 on December 31, 2018. Total return assumes reinvestment of dividends.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our common stock trades on the New York Stock Exchange under the symbol “BCO.” As of February 24, 2023, there were 1,047 shareholders of record of common stock.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our common stock trades on the New York Stock Exchange under the symbol “BCO.” As of February 26, 2024, there were 1,004 shareholders of record of common stock.
The number of record holders does not include beneficial owners of our securities whose shares are held in the names of various security brokers, dealers and registered clearing agencies. 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").
The number of record holders does not include beneficial owners of our securities whose shares are held in the names of various security brokers, dealers and registered clearing agencies. Share Repurchase Program 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”).
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. These shares were retired upon repurchase. At December 31, 2022, $198 million remained available under 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. 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.
The shares received were retired in the period they were delivered to us, and the upfront payment was accounted for as a reduction to shareholders' equity in the consolidated balance sheet. For purposes of calculating earnings per share, we reported each ASR as a repurchase of our common stock and as a forward contract indexed to our common stock.
In each case, in exchange for an upfront payment at the beginning of each purchase period, the financial institution delivered to us shares of our common stock. The shares received were retired in the period they were delivered to us, and the upfront payment was accounted for as a reduction to shareholders' equity in the consolidated balance sheet.
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.
Under the 2023 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.
Each ASR met the applicable criteria for equity classification, and, as a result, none were accounted for as a derivative instrument.
For purposes of calculating earnings per share, we reported each ASR as a repurchase of our common stock and as a forward contract indexed to our common stock. Each ASR met the applicable criteria for equity classification, and, as a result, none were accounted for as a derivative instrument.
Comparison of Five-Year Cumulative Total Return (a) Years Ended December 31, 2017 2018 2019 2020 2021 2022 The Brink's Company $ 100.00 82.82 117.00 94.09 86.56 71.85 S&P MidCap 400 Index 100.00 88.92 112.21 127.54 159.12 138.34 Peer Group 100.00 100.59 139.44 155.40 205.90 199.91 (a) For the line designated as “The Brink’s Company” the graph depicts the cumulative return on $100 invested in The Brink’s Company’s common stock at December 31, 2017.
Comparison of Five-Year Cumulative Total Return (a) Years Ended December 31, 2018 2019 2020 2021 2022 2023 The Brink's Company $ 100.00 141.27 113.61 104.52 86.75 143.83 S&P MidCap 400 Index 100.00 126.20 143.44 178.95 155.58 181.15 Peer Group 100.00 138.62 154.49 204.70 198.74 246.80 (a) For the line designated as “The Brink’s Company” the graph depicts the cumulative return on $100 invested in The Brink’s Company’s common stock at December 31, 2018.
Shares repurchases under this program may be made in the open market, in privately negotiated transactions, or otherwise. In July 2022, the Company entered into an agreement to repurchase shares of common stock in the open market.
Share repurchases under the 2023 Repurchase Program may be made in the open market, in privately negotiated transactions, or otherwise. In October 2021, we announced that our Board of Directors authorized a $250 million share repurchase program (the "2021 Repurchase Program").
Under the 2020 Repurchase Program, we entered into three accelerated share repurchase arrangements (each, an "ASR") with a financial institution. In each case, in exchange for an upfront payment at the beginning of each purchase period, the financial institution delivered to us shares of our common stock.
These shares were retired upon repurchase. 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 (each, an "ASR") with a financial institution.
Removed
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. Under the 2021 Repurchase Program, we are not obligated to repurchase any specific dollar amount or number of shares.
Removed
In the fourth quarter of 2022, a total of 446,835 shares of common stock was repurchased for an aggregate of $24.9 million and an average price of $55.75 per share. 18 The following graph compares the cumulative 5-year total return provided to shareholders of The Brink’s Company’s common stock compared to the cumulative total returns of the S&P Midcap 400 index and the common stocks of a selected peer group of companies.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

171 edited+34 added−28 removed107 unchanged
Biggest change(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. 33 Non-GAAP reconciled to GAAP Years Ended December 31, (In millions) 2022 2021 2020 Revenues: GAAP $ 4,535.5 4,200.2 3,690.9 Non-GAAP $ 4,535.5 4,200.2 3,690.9 Operating profit: GAAP $ 361.3 354.7 213.5 Reorganization and Restructuring (b) 38.8 43.6 66.6 Acquisitions and dispositions (b) 86.6 71.9 83.1 Argentina highly inflationary impact (b) 41.7 11.9 10.7 Change in allowance estimate (b) 15.6 — — Ship loss matter (b) 4.9 — — Chile antitrust matter (b) 1.4 9.5 — Internal loss (b) — (21.1) 6.9 Reporting compliance (b) — — 0.5 Non-GAAP $ 550.3 470.5 381.3 Interest expense: GAAP $ (138.8) (112.2) (96.5) Acquisitions and dispositions (b)(f) 1.2 1.3 1.9 Non-GAAP $ (137.6) (110.9) (94.6) Interest and other nonoperating income (expense): GAAP $ 3.7 (7.0) (37.7) Retirement plans (c) 11.1 29.8 33.8 Reorganization and Restructuring (b) — — 0.5 Acquisitions and dispositions (b)(g) (2.6) (4.4) 6.5 Argentina highly inflationary impact (b) 3.9 0.4 (0.1) Non-GAAP $ 16.1 18.8 3.0 Non-GAAP margin 12.1 % 11.2 % 10.3 % Provision for income taxes: GAAP $ 41.4 120.3 56.6 Retirement plans (c) 2.9 7.7 7.9 Reorganization and Restructuring (b) 8.2 11.7 15.8 Acquisitions and dispositions (b)(f)(g) 20.7 2.5 11.6 Argentina highly inflationary impact (b) (2.0) (1.1) (1.3) Change in allowance estimate (b) 3.7 — — Valuation allowance on tax credits (d) 53.2 — — Ship loss matter (b) 1.3 — — Chile antitrust matter (b) 0.5 — — Internal loss (b) — (1.3) 1.6 Reporting compliance (b) — — — Deferred tax valuation allowance (e) — (12.8) — Non-GAAP $ 129.9 127.0 92.2 Net income (loss) attributable to noncontrolling interests: GAAP $ 11.3 12.1 5.9 Retirement plans (c) 0.1 — — Reorganization and Restructuring (b) 0.1 0.5 0.3 Acquisitions and dispositions (b) 1.0 0.9 0.5 Non-GAAP $ 12.5 13.5 6.7 Amounts may not add due to rounding.
Biggest change(f) Amounts include interest incurred on a cross currency swap hedging foreign currency risk on the intercompany financing of the Rodoban acquisition. 35 Non-GAAP reconciled to GAAP Years Ended December 31, (In millions) 2023 2022 2021 Revenues: GAAP $ 4,874.6 4,535.5 4,200.2 Non-GAAP $ 4,874.6 4,535.5 4,200.2 Operating profit: GAAP $ 425.2 361.3 354.7 Reorganization and Restructuring (b) 17.6 38.8 43.6 Acquisitions and dispositions (b) 70.6 86.6 71.9 Argentina highly inflationary impact (b) 86.8 41.7 11.9 Transformation initiatives (b) 5.5 — — Non-routine auto loss matter (b) 8.0 — — Change in allowance estimate (b) — 15.6 — Ship loss matter (b) — 4.9 — Chile antitrust matter (b) 0.5 1.4 9.5 Internal loss (b) — — (21.1) Reporting compliance (b) 0.8 — — Non-GAAP $ 615.0 550.3 470.5 Non-GAAP operating profit margin 12.6 % 12.1 % 11.2 % Interest expense: GAAP $ (203.8) (138.8) (112.2) Acquisitions and dispositions (b)(f) 0.8 1.2 1.3 Non-GAAP $ (203.0) (137.6) (110.9) Interest and other nonoperating income (expense): GAAP $ 14.4 3.7 (7.0) Retirement plans (c) (9.0) 11.1 29.8 Acquisitions and dispositions (b)(g) 1.2 (2.6) (4.4) Argentina highly inflationary impact (b) 55.2 3.9 0.4 Non-GAAP $ 61.8 16.1 18.8 Provision for income taxes: GAAP $ 139.2 41.4 120.3 Retirement plans (c) (2.0) 2.9 7.7 Reorganization and Restructuring (b) 3.4 8.2 11.7 Acquisitions and dispositions (b)(f) 8.9 20.7 2.5 Argentina highly inflationary impact (b) (4.5) (2.0) (1.1) Transformation initiatives (b) 0.1 — — Non-routine auto loss matter (b) 0.2 — — Change in allowance estimate (b) — 3.7 — Valuation allowance on tax credits (d) (27.8) 53.2 — Ship loss matter (b) — 1.3 — Chile antitrust matter (b) 0.1 0.5 — Internal loss (b) — — (1.3) Reporting compliance (b) — — — Deferred tax valuation allowance (e) — — (12.8) Non-GAAP $ 117.6 129.9 127.0 Amounts may not add due to rounding.
At December 31, 2022, we had net monetary assets denominated in Argentine pesos of $66.2 million (including cash of $57.7 million) and nonmonetary net assets of $168.2 million (including $99.8 million of goodwill, $1.9 million in equity securities denominated in Argentine pesos and $27.4 million in debt securities denominated in pesos).
At December 31, 2022, we had net monetary assets denominated in Argentine pesos of $66.2 million (including cash of $57.7 million) and net nonmonetary assets of $168.2 million (including $99.8 million of goodwill, $1.9 million in equity securities denominated in Argentine pesos and $27.4 million in debt securities denominated in Argentine pesos).
Each ASR met the applicable criteria for equity classification, and, as a result, none were accounted for as a derivative instrument. 43 Below is a summary of each ASR entered into under the 2020 Repurchase Program: Upfront Payment Shares Received Average Repurchase Price August 2020 $ 50,000,000 849,978 $ 58.83 September 2020 — 246,676 — $ 50,000,000 1,096,654 $ 45.59 August 2021 $ 50,000,000 524,315 $ 95.36 September 2021 — 131,384 — $ 50,000,000 655,699 $ 76.25 November 2021 $ 150,000,000 1,742,160 $ 86.10 April 2022 (a) — 546,993 — $ 150,000,000 2,289,153 $ 65.53 $ 250,000,000 4,041,506 $ 61.86 (a) We received 1,742,160 shares in early November 2021.
Each ASR met the applicable criteria for equity classification, and, as a result, none were accounted for as a derivative instrument. 45 Below is a summary of each ASR entered into under the 2020 Repurchase Program: Upfront Payment Shares Received Average Repurchase Price August 2020 $ 50,000,000 849,978 $ 58.83 September 2020 — 246,676 — $ 50,000,000 1,096,654 $ 45.59 August 2021 $ 50,000,000 524,315 $ 95.36 September 2021 — 131,384 — $ 50,000,000 655,699 $ 76.25 November 2021 $ 150,000,000 1,742,160 $ 86.10 April 2022 (a) — 546,993 — $ 150,000,000 2,289,153 $ 65.53 $ 250,000,000 4,041,506 $ 61.86 (a) We received 1,742,160 shares in early November 2021.
Overview Our effective tax rate has varied in the past three years from the statutory U.S. federal rate due to various factors, including • changes in judgment about the need for valuation allowances, • changes in the geographical mix of earnings, • changes in laws in the U.S., France, Mexico, and Argentina, • timing of benefit recognition for uncertain tax positions, • state income taxes, and • tax benefit for distributions of share-based payments.
Overview Our effective tax rate has varied in the past three years from the statutory U.S. federal rate due to various factors, including • changes in judgment about the need for valuation allowances, • changes in the geographical mix of earnings, • changes in laws in the U.S., France, Mexico, Brazil and Argentina, • timing of benefit recognition for uncertain tax positions, • state income taxes, and • tax benefit for distributions of share-based payments.
These included • projected revenues and operating income for our U.S. entities, • projected royalties and management fees paid to U.S. entities from subsidiaries outside the U.S., • projected Global Intangible Low-Taxed Income ("GILTI") inclusion in our U.S. taxable income, • estimated required contributions to our U.S. retirement plans, • the estimated impact of U.S. tax reform and other U.S. tax legislation, and • interest rates on projected U.S. borrowings.
These included • projected revenues and operating income for our U.S. entities, • projected royalties and management fees paid to U.S. entities from subsidiaries outside the U.S., • projected Global Intangible Low-Taxed Income ("GILTI") inclusion in our U.S. taxable income, • estimated required contributions to our U.S. retirement plans, 50 • the estimated impact of U.S. tax reform and other U.S. tax legislation, and • interest rates on projected U.S. borrowings.
Statutory Rate The effective income tax rate on continuing operations in 2022 was less than the 21% U.S. statutory tax rate primarily due to the release of valuation allowances on U.S. tax credits deemed realizable as a result of the issuance of U.S. final foreign tax credit regulations, offset by 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 U.S. 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 2022 was less than the 21% U.S. statutory tax rate primarily due to the release of valuation allowances on U.S. tax credits deemed realizable as a result of the issuance of U.S. final foreign tax credit regulations, offset by 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 U.S. taxable income limitations, and the characterization of a French business tax as an income tax.
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. 21 RESULTS OF OPERATIONS Analysis of Results Consolidated Results GAAP and Non-GAAP Financial Measures We provide an analysis of our operations below on both a generally accepted accounting principles (“GAAP”) and non-GAAP basis.
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. 23 RESULTS OF OPERATIONS Analysis of Results Consolidated Results GAAP and Non-GAAP Financial Measures We provide an analysis of our operations below on both a generally accepted accounting principles (“GAAP”) and non-GAAP basis.
See Note 4 to the consolidated financial statements for information about these non-U.S. plans' benefit obligation and estimated future benefit payments over the next 10 years. 45 Summary of Total Expenses Related to All U.S. Retirement Liabilities This table summarizes actual and projected expense (income) related to U.S. retirement liabilities. These expenses are not allocated to segment results.
See Note 4 to the consolidated financial statements for information about these non-U.S. plans' benefit obligation and estimated future benefit payments over the next 10 years. 47 Summary of Total Expenses Related to All U.S. Retirement Liabilities This table summarizes actual and projected expense (income) related to U.S. retirement liabilities. These expenses are not allocated to segment results.
The estimated amounts will change in the future to reflect payments made, investment returns, actuarial revaluations, and other changes in estimates. Actual amounts could differ materially from the estimated amounts. 46 Contingent Matters In August 2020, the Company received a subpoena issued in connection with an investigation being conducted by the U.S. Department of Justice (the “DOJ”).
The estimated amounts will change in the future to reflect payments made, investment returns, actuarial revaluations, and other changes in estimates. Actual amounts could differ materially from the estimated amounts. 48 Contingent Matters In August 2020, the Company received a subpoena issued in connection with an investigation being conducted by the U.S. Department of Justice (the “DOJ”).
Our projections assumed continued growth of our revenues and operating profit both in the U.S. and outside the U.S. Our conclusions regarding asset impairment may have been different if we had used different assumptions. 50 Retirement and Post employment Benefit Obligations We provide benefits through defined benefit pension plans and retiree medical benefit plans and under statutory requirements.
Our projections assumed continued growth of our revenues and operating profit both in the U.S. and outside the U.S. Our conclusions regarding asset impairment may have been different if we had used different assumptions. 52 Retirement and Post employment Benefit Obligations We provide benefits through defined benefit pension plans and retiree medical benefit plans and under statutory requirements.
Management's Discussion and Analysis of Financial Conditions and Results of Operations of our Annual Report on Form 10-K for the year ended December 31, 2021 ("2021 10-K"), starting on page 22. 20 OPERATIONS The Brink’s Company is a leading global provider of cash and valuables management, digital retail solutions, and ATM managed services throughout the world.
Management's Discussion and Analysis of Financial Conditions and Results of Operations of our Annual Report on Form 10-K for the year ended December 31, 2022 ("2022 10-K"), starting on page 20. 22 OPERATIONS The Brink’s Company is a leading global provider of cash and valuables management, digital retail solutions, and ATM managed services throughout the world.
The qualitative assessment can be performed in order to determine whether facts and circumstances support a determination that reporting unit fair values are greater than their carrying values. We performed a goodwill impairment test on these reporting units as of October 1, 2022 and elected to forego the optional qualitative assessment and performed a quantitative goodwill impairment assessment instead.
The qualitative assessment can be performed in order to determine whether facts and circumstances support a determination that reporting unit fair values are greater than their carrying values. We performed a goodwill impairment test on these reporting units as of October 1, 2023 and elected to forego the optional qualitative assessment and performed a quantitative goodwill impairment assessment instead.
The company does not expect to make contributions to these plans until 2033, based on our actuarial assumptions. Black Lung 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.
The company does not expect to make contributions to these plans until 2036, based on our actuarial assumptions. Black Lung 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.
Plan UMWA Plans Black Lung 2022 2021 2020 2022 2021 2020 2022 2021 2020 Discount rate: Retirement cost 2.8 % 2.4 % 3.3 % 2.8 % 2.3 % 3.2 % 2.7 % 2.2 % 3.1 % Benefit obligation at year end 5.4 % 2.8 % 2.4 % 5.4 % 2.8 % 2.3 % 5.4 % 2.7 % 2.2 % Sensitivity Analysis The discount rate we select at year end materially affects the valuations of plan obligations at year end and the calculations of net periodic expenses for the following year.
Plan UMWA Plans Black Lung 2023 2022 2021 2023 2022 2021 2023 2022 2021 Discount rate: Retirement cost 5.4 % 2.8 % 2.4 % 5.4 % 2.8 % 2.3 % 5.4 % 2.7 % 2.2 % Benefit obligation at year end 5.1 % 5.4 % 2.8 % 5.1 % 5.4 % 2.8 % 5.1 % 5.4 % 2.7 % Sensitivity Analysis The discount rate we select at year end materially affects the valuations of plan obligations at year end and the calculations of net periodic expenses for the following year.
Off Balance Sheet Arrangements We have certain operating leases that are considered short term and are not capitalized to the balance sheet. We use operating leases both on and off balance sheet to lower our cost of financings. We believe that operating leases are an important component of our capital structure. 44 U.S. Retirement Liabilities Assumptions for U.S.
Off Balance Sheet Arrangements We have certain operating leases that are considered short term and are not capitalized to the balance sheet. We use operating leases both on and off balance sheet to lower our cost of financings. We believe that operating leases are an important component of our capital structure. 46 U.S. Retirement Liabilities Assumptions for U.S.
Because the U.S. pension plan has been frozen, the number of its participants will also decline over time. 54 Foreign Currency Translation The majority of our subsidiaries outside the U.S. conduct business in their local currencies. Our financial results are reported in U.S. dollars, which include the results of these subsidiaries.
Because the U.S. pension plan has been frozen, the number of its participants will also decline over time. 56 Foreign Currency Translation The majority of our subsidiaries outside the U.S. conduct business in their local currencies. Our financial results are reported in U.S. dollars, which include the results of these subsidiaries.
(a) From continuing operations. (b) See “Other Items Not Allocated To Segments” on pages 26–28 for details. 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.
(a) From continuing operations. (b) See “Other Items Not Allocated To Segments” on pages 28 – 30 for details. 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.
See also Note 1 to the consolidated financial statements for a description of how we account for currency remeasurement for our Argentine subsidiaries, beginning July 1, 2018 under the heading, "Argentina". At December 31, 2022, Argentina's economy remains highly inflationary for accounting purposes.
See also Note 1 to the consolidated financial statements for a description of how we account for currency remeasurement for our Argentine subsidiaries, beginning July 1, 2018 under the heading, "Argentina". At December 31, 2023, Argentina's economy remains highly inflationary for accounting purposes.
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 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.
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.
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 and 2023, we did not incur any charges related to the internal loss.
Because our financial results are reported in U.S. dollars, they are affected by changes in the value of various local currencies in relation to the U.S. dollar. Recent strengthening of the U.S. dollar relative to certain currencies has reduced our reported dollar revenues and operating profit, which may continue in 2023.
Because our financial results are reported in U.S. dollars, they are affected by changes in the value of various local currencies in relation to the U.S. dollar. Recent strengthening of the U.S. dollar relative to certain currencies has reduced our reported dollar revenues and operating profit, which may continue in 2024.
GAAP consolidated calculation and to minimize reconciling differences. Other than for the U.S. business, the reconciling differences were not significant. The bad debt expense increase excludes the impact of the internal loss in our U.S. global services operations described on the next page.
GAAP consolidated calculation and to minimize reconciling differences. Other than for the U.S. business, the reconciling differences were not significant. The bad debt expense increase excludes the impact of the internal loss in our U.S. global services operations described on the page 30 .
The tables below compare hypothetical plan obligation valuations for our largest plans as of December 31, 2022, actual expenses for 2022 and projected expenses for 2023 assuming we had used discount rates that were one percentage point lower or higher.
The tables below compare hypothetical plan obligation valuations for our largest plans as of December 31, 2023, actual expenses for 2023 and projected expenses for 2024 assuming we had used discount rates that were one percentage point lower or higher.
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).
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 (e.g., attacks and robberies).
Definition of Organic Growth Organic growth represents the change in revenues or operating profit between the current and prior period excluding the effect of acquisitions and dispositions for one year after the transaction and changes in currency exchange rates. See definitions on page 24.
Definition of Organic Growth Organic growth represents the change in revenues or operating profit between the current and prior period excluding the effect of acquisitions and dispositions for one year after the transaction and changes in currency exchange rates. See definitions on page 26 .
Our funded status at December 31, 2023, and our 2024 expense will be different from currently projected amounts if our projected 2023 returns are better or worse than the returns we have assumed for each plan.
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.
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 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 the third quarter of 2022, we terminated these cross currency swap contracts and received $67 million in cash as settlement.
We selected 7.00% as the expected-return-on-assets assumption for our primary U.S. pension plan and 8.00% for our UMWA retiree medical plans for actual 2022 expense. We selected 7.00% as the expected-return-on-assets assumption for our primary U.S. pension plan and 8.00% for our UMWA retiree medical plans for projected 2023 expense.
We selected 7.00% as the expected-return-on-assets assumption for our primary U.S. pension plan and 8.00% for our UMWA retiree medical plans for actual 2023 expense. We selected 7.00% as the expected-return-on-assets assumption for our primary U.S. pension plan and 8.00% for our UMWA retiree medical plans for projected 2024 expense.
The number of participants by major plan in the past five years is as follows: Number of participants Plan 2022 2021 2020 2019 2018 UMWA plans 2,500 2,700 2,900 3,000 3,200 Black Lung 800 800 700 800 800 U.S. pension 10,700 10,800 11,000 11,200 14,000 Because we are no longer operating in the coal industry, we anticipate that the number of participants in the UMWA retirement medical plan will decline over time due to mortality.
The number of participants by major plan in the past five years is as follows: Number of participants Plan 2023 2022 2021 2020 2019 UMWA plans 2,400 2,500 2,700 2,900 3,000 Black Lung 700 800 800 700 800 U.S. pension 10,500 10,700 10,800 11,000 11,200 Because we are no longer operating in the coal industry, we anticipate that the number of participants in the UMWA retirement medical plan will decline over time due to mortality.
Changes in exchange rates may also affect transactions which are denominated in currencies other than the functional currency of a given foreign entity. From time to time, we use short term foreign currency forward and swap contracts to hedge transactional risks associated with foreign currencies, as discussed in Item 7A on pages 57-58.
Changes in exchange rates may also affect transactions which are denominated in currencies other than the functional currency of a given foreign entity. From time to time, we use short term foreign currency forward and swap contracts to hedge transactional risks associated with foreign currencies, as discussed in Item 7A on pages 59 - 60 .
Plans to Participants This table summarizes actual and estimated payments from the plans to participants. Actual Projected (In millions) 2022 2023 2024 2025 2026 2027 Payments from U.S.
Plans to Participants This table summarizes actual and estimated payments from the plans to participants. Actual Projected (In millions) 2023 2024 2025 2026 2027 2028 Payments from U.S.
Our liability for future payments for workers’ compensation claims is evaluated annually with the assistance of an actuary. 53 Numbers of Participants Mortality tables.
Our liability for future payments for workers’ compensation claims is evaluated annually with the assistance of an actuary. 55 Numbers of Participants Mortality tables.
As of December 31, 2022, $353 million was available under the Revolving Credit Facility. Based on our current cash on hand, amounts available under our credit facilities and current projections of cash flows from operations, we believe that we will be able to meet our liquidity needs for more than the next twelve months.
As of December 31, 2023, $458 million was available under the Revolving Credit Facility. Based on our current cash on hand, amounts available under our credit facilities and current projections of cash flows from operations, we believe that we will be able to meet our liquidity needs for more than the next twelve months.
Based on our current assumptions, we do not expect to make contributions until 2026. UMWA Plan Retirement benefits related to former coal operations include medical benefits provided by the Pittston Coal Group Companies Employee Benefit Plan for UMWA Represented Employees. There are approximately 2,500 beneficiaries in the UMWA plans.
Based on our current assumptions, we do not expect to make contributions until 2027. UMWA Plan Retirement benefits related to former coal operations include medical benefits provided by the Pittston Coal Group Companies Employee Benefit Plan for UMWA Represented Employees. There are approximately 2,400 beneficiaries in the UMWA plans.
Pension Plan Pension benefits provided to eligible U.S. 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. There are approximately 10,700 beneficiaries in the plan.
Primary U.S. Pension Plan Pension benefits provided to eligible U.S. 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 2023. There are approximately 10,500 beneficiaries in the plan.
The twenty to thirty year compound annual return of our primary U.S. pension plan has averaged from 6.3% to 7.7%. Sensitivity Analysis Effect of using different expected-rate-of-return assumptions. Our 2022 and projected 2023 expense would have been different if we had used different expected-rate-of-return assumptions.
The twenty to thirty year compound annual return of our primary U.S. pension plan has averaged from 6.2% to 7.6%. Sensitivity Analysis Effect of using different expected-rate-of-return assumptions. Our 2023 and projected 2024 expense would have been different if we had used different expected-rate-of-return assumptions.
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. 47 APPLICATION OF CRITICAL ACCOUNTING POLICIES The application of accounting principles requires the use of assumptions, estimates and judgments.
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. 49 APPLICATION OF CRITICAL ACCOUNTING POLICIES The application of accounting principles requires the use of assumptions, estimates and judgments.
Actual Projected (In millions) 2022 2023 2024 2025 2026 2027 Primary U.S. pension plan $ (1.9) (13.2) (8.7) (2.0) 5.0 11.1 UMWA plans 2.5 (2.5) (2.5) (2.5) 2.3 2.5 Black Lung plans 9.8 8.4 7.8 7.3 6.8 6.3 Total $ 10.4 (7.3) (3.4) 2.8 14.1 19.9 Summary of Total Payments from U.S.
Actual Projected (In millions) 2023 2024 2025 2026 2027 2028 Primary U.S. pension plan $ (13.6) (9.9) (5.0) 0.6 6.2 3.1 UMWA plans (5.1) (5.6) (5.6) (0.9) (0.8) (0.7) Black Lung plans 8.5 8.0 7.5 6.9 6.4 5.9 Total $ (10.2) (7.5) (3.1) 6.6 11.8 8.3 Summary of Total Payments from U.S.
We continue to control our Argentina business for purposes of consolidation of our financial statements and continue to monitor the situation in Argentina. 56
We continue to control our Argentina business for purposes of consolidation of our financial statements and continue to monitor the situation in Argentina. 58
In 2022, we recognized an additional $1.4 million adjustment to our estimated loss as a result of a change in currency rates. Due to the special nature of this matter, this charge has not been allocated to segment results and is excluded from non-GAAP results. See Note 23 for details.
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. See Note 23 for details.
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, 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.
At December 31, 2022, the notional value of our short term outstanding foreign currency forward and swap contracts was $575 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.
At December 31, 2023, the notional value of our short term outstanding foreign currency forward and swap contracts was $678 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.
See Application of Critical Accounting Policies—Foreign Currency Translation on pages 55–56 for a description of our accounting methods and assumptions used to include our Argentina operations in our consolidated financial statements, and a description of the accounting for subsidiaries operating in highly inflationary economies.
See Application of Critical Accounting Policies—Foreign Currency Translation on pages 57 –58 for a description of our accounting methods and assumptions used to include our Argentina operations in our consolidated financial statements, and a description of the accounting for subsidiaries operating in highly inflationary economies.
(b) Included within Net Debt is net cash from our Argentina operations of $58 million at December 31, 2022 and $54 million at December 31, 2021 (see Note 1 to the consolidated financial statements for a discussion of currency controls in Argentina).
(b) Included within Net Debt is net cash from our Argentina operations of $63 million at December 31, 2023 and $58 million at December 31, 2022 (see Note 1 to the consolidated financial statements for a discussion of currency controls in Argentina).
In 2021, we recognized a tax expense of $9 million through income from continuing operations from a change in judgment about the need for valuation allowances for deferred tax assets in certain non-U.S. jurisdictions. 48 Business Acquisitions Accounting Policy In the three years ended December 31, 2022, we have completed multiple business acquisitions.
In 2022, we recognized a tax expense of $1 million through income from continuing operations from a change in judgment about the need for valuation allowances for deferred tax assets in certain non-U.S. jurisdictions. Business Acquisitions Accounting Policy In the three years ended December 31, 2023, we have completed multiple business acquisitions.
Our reinvestment ratio, which we define as the annual amount of property and equipment acquired during the year divided by the annual amount of depreciation, was 1.3 in 2022, 1.3 in 2021, and 0.9 in 2020. Capital expenditures in 2022 for our operating units 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 year divided by the annual amount of depreciation, was 1.4 in 2023, 1.3 in 2022, and 1.3 in 2021. Capital expenditures in 2023 for our operating units were primarily for cash devices, information technology, armored vehicles, and machinery and equipment.
For every hypothetical change of one percentage point in the assumed long-term rate of return on plan assets (and holding other assumptions constant), our actual 2022 and projected 2023 expense would be as follows: (In millions, except for percentages) Hypothetical sensitivity analysis for expected-return-on asset assumption Hypothetical sensitivity analysis for expected-return-on asset assumption Actual 1% lower 1% higher Projected 1% lower 1% higher Years Ending December 31, 2022 2022 2022 2023 2023 2023 Expected-return-on-asset assumption Primary U.S. pension plan 7.00 % 6.00 % 8.00 % 7.00 % 6.00 % 8.00 % UMWA plans 8.00 % 7.00 % 9.00 % 8.00 % 7.00 % 9.00 % Primary U.S. pension plan $ (1.9) 5.1 (8.9) $ (13.2) (6.5) (19.9) UMWA plans 2.5 4.2 0.9 (2.5) (1.2) (3.8) 52 Effect of improving or deteriorating actual future market returns.
For every hypothetical change of one percentage point in the assumed long-term rate of return on plan assets (and holding other assumptions constant), our actual 2023 and projected 2024 expense would be as follows: (In millions, except for percentages) Hypothetical sensitivity analysis for expected-return-on asset assumption Hypothetical sensitivity analysis for expected-return-on asset assumption Actual 1% lower 1% higher Projected 1% lower 1% higher Years Ending December 31, 2023 2023 2023 2024 2024 2024 Expected-return-on-asset assumption Primary U.S. pension plan 7.00 % 6.00 % 8.00 % 7.00 % 6.00 % 8.00 % UMWA plans 8.00 % 7.00 % 9.00 % 8.00 % 7.00 % 9.00 % Primary U.S. pension plan $ (13.6) (6.9) (20.3) $ (9.9) (3.3) (16.5) UMWA plans (5.1) (3.8) (6.4) (5.6) (4.3) (6.9) 54 Effect of improving or deteriorating actual future market returns.
There are approximately 800 black lung beneficiaries as of December 31, 2022. Non-U.S. defined-benefit pension plans. We have various defined-benefit pension plans covering eligible current and former employees of some of our international operations.
There are approximately 700 black lung beneficiaries as of December 31, 2023. Non-U.S. defined-benefit pension plans. We have various defined-benefit pension plans covering eligible current and former employees of some of our international operations.
During September 2019, the Argentine government announced currency controls on both companies and individuals. 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. dollars.
During September 2019, the Argentine government announced currency controls on both companies and individuals. Under the exchange procedures implemented by the central bank, approval is required for many transactions, including dividend repatriation abroad. We have previously elected to use other market mechanisms to convert Argentine pesos into U.S. dollars.
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.
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.
Deferred Tax Assets In 2022, we recognized a tax expense of $1 million through income from continuing operations from a change in judgment about the need for valuation allowances for deferred tax assets in certain non-U.S. jurisdictions.
Deferred Tax Assets In 2023, we recognized a tax expense of $2 million through income from continuing operations from a change in judgment about the need for valuation allowances for deferred tax assets in certain non-U.S. jurisdictions.
Application of Accounting Policy Argentina 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.
Application of Accounting Policy Argentina 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 years ended December 31, 2023, 2022, and 2021.
At December 31, 2022, the notional value of these cross currency swap contracts was $400 million with a remaining weighted average maturity of 2.7 years for the cross currency swaps maturing in May 2026 and a remaining weighted average maturity of 6.6 years for the cross currency swaps with maturity in April 2031.
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.
(In millions) Based on market-related value of assets Hypothetical (a) Actual Projected Projected Years Ending December 31, 2022 2023 2024 2022 2023 2024 Primary U.S. pension plan expense $ (1.9) (13.2) (8.7) $ (10.7) 8.0 10.5 (a) Assumes that our accounting policy was to use the fair market value of assets instead of the market-related value of assets to determine our expense related to our primary U.S. pension plan.
(In millions) Based on market-related value of assets Hypothetical (a) Actual Projected Projected Years Ending December 31, 2023 2024 2025 2023 2024 2025 Primary U.S. pension plan expense $ (13.6) (9.9) (5.0) $ 7.7 3.0 3.8 (a) Assumes that our accounting policy was to use the fair market value of assets instead of the market-related value of assets to determine our expense related to our primary U.S. pension plan.
(b) Non-GAAP results are reconciled to the applicable GAAP results on pages 33–35.
(b) Non-GAAP results are reconciled to the applicable GAAP results on pages 35 – 37 .
Refer to Note 4 for further explanation. 30 Income Taxes Summary Rate Reconciliation – GAAP (In percentages) 2022 2021 2020 U.S. federal tax rate 21.0 % 21.0 % 21.0 % Increases (reductions) in taxes due to: Foreign rate differential 7.5 7.6 12.9 Taxes on cross border income, net of credits 6.9 4.6 11.0 Adjustments to valuation allowances (21.1) 6.7 6.6 Foreign income taxes (0.7) 6.1 10.6 French business tax 0.8 0.7 3.7 State income taxes, net 0.7 0.9 (1.6) Share-based compensation 1.3 0.2 (3.1) Acquisition costs — 0.5 6.0 Other 1.9 2.8 4.3 Income tax rate on continuing operations 18.3 % 51.1 % 71.4 % Summary Rate Reconciliation – Non-GAAP (a) (In percentages) 2022 2021 2020 U.S. federal tax rate 21.0 % 21.0 % 21.0 % Increases (reductions) in taxes due to: Foreign rate differential 5.4 6.1 5.2 Adjustments to valuation allowances 2.4 1.4 (0.2) French business tax 0.4 0.4 1.0 Other 1.1 4.7 4.8 Income tax rate on Non-GAAP continuing operations 30.3 % 33.6 % 31.8 % (a) See pages 33–35 for a reconciliation of non-GAAP results to GAAP.
Refer to Note 4 for further explanation. 32 Income Taxes Summary Rate Reconciliation – GAAP (In percentages) 2023 2022 2021 U.S. federal tax rate 21.0 % 21.0 % 21.0 % Increases (reductions) in taxes due to: Foreign rate differential 4.7 7.5 7.6 Taxes on cross border income, net of credits 7.9 6.9 4.6 Adjustments to valuation allowances 18.5 (21.1) 6.7 Foreign income taxes 6.0 (0.7) 6.1 French business tax 0.4 0.8 0.7 State income taxes, net 0.6 0.7 0.9 Share-based compensation 1.8 1.3 0.2 Acquisition costs 0.2 — 0.5 Other (2.1) 1.9 2.8 Income tax rate on continuing operations 59.0 % 18.3 % 51.1 % Summary Rate Reconciliation – Non-GAAP (a) (In percentages) 2023 2022 2021 U.S. federal tax rate 21.0 % 21.0 % 21.0 % Increases (reductions) in taxes due to: Foreign rate differential 7.0 5.4 6.1 Adjustments to valuation allowances 4.2 2.4 1.4 French business tax 0.2 0.4 0.4 Other (7.6) 1.1 4.7 Income tax rate on Non-GAAP continuing operations 24.8 % 30.3 % 33.6 % (a) See pages 35 – 37 for a reconciliation of non-GAAP results to GAAP.
In addition, we are involved in various other lawsuits and claims in the ordinary course of business. We are not able to estimate the loss or range of losses for some of these matters. We have recorded accruals for losses that are considered probable and reasonably estimable.
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. We are not able to estimate the loss or range of losses for some of these matters. We have recorded accruals for losses that are considered probable and reasonably estimable.
Our assumption is based on recent plan experience and industry trends. For the UMWA plans, our largest retiree medical plans, we have assumed a medical inflation rate of 7.0% for 2023, and we project this rate to decline to 5% in 2031 and hold at 5% thereafter.
Our assumption is based on recent plan experience and industry trends. 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 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.
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.
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 consolidated statements of cash flows. 2022 versus 2021 GAAP Cash flows from operating activities increased by $1.9 million in 2022 compared to 2021.
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 consolidated statements of cash flows. 2023 versus 2022 GAAP Cash flows from operating activities increased by $222.5 million in 2023 compared to 2022.
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: Twelve Months Ended December 31, (In millions) 2022 2021 2020 Net derivative instrument gains included in interest expense $ (5.8) (4.1) — 37 LIQUIDITY AND CAPITAL RESOURCES Overview The discussion of liquidity and capital resources comparing 2021 versus 2020 can be found in Item 7.
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, (In millions) 2023 2022 2021 Net derivative instrument gains included in interest expense $ (5.2) (5.8) (4.1) 39 LIQUIDITY AND CAPITAL RESOURCES Overview The discussion of liquidity and capital resources comparing 2022 versus 2021 can be found in Item 7.
The non-GAAP adjustments used to reconcile our GAAP results are described in detail on pages 26-28 and are reconciled to comparable GAAP measures on pages 33-35.
The non-GAAP adjustments used to reconcile our GAAP results are described in detail on pages 28 - 30 and are reconciled to comparable GAAP measures on pages 35 - 37 .
See page 33 for footnote explanations. 35 Foreign Operations We currently serve customers in more than 100 countries, including 53 countries where we operate subsidiaries.
See page 35 for footnote explanations. 37 Foreign Operations We currently serve customers in more than 100 countries, including 52 countries where we operate subsidiaries.
Years Ended December 31, % change (In millions) 2022 2021 2020 2022 2021 Reportable Segments: North America $ (11.8) 0.1 (13.7) unfav fav Latin America (15.7) (13.0) (20.4) 21 (36) Europe (9.7) (27.6) (23.6) (65) 17 Rest of World (1.2) (3.2) (7.1) (63) (55) Total reportable segments (38.4) (43.7) (64.8) (12) (33) Corporate items (0.4) 0.1 (1.8) unfav fav Total $ (38.8) (43.6) (66.6) (11) (35) Acquisitions and dispositions Certain acquisition and disposition items that are not considered part of the ongoing activities of the business and are special in nature are consistently excluded from segment and non-GAAP results.
Years Ended December 31, % change (In millions) 2023 2022 2021 2023 2022 Reportable Segments: North America $ (4.2) (11.8) 0.1 (64) unfav Latin America (4.9) (15.7) (13.0) (69) 21 Europe (6.1) (9.7) (27.6) (37) (65) Rest of World (1.2) (1.2) (3.2) — (63) Total reportable segments (16.4) (38.4) (43.7) (57) (12) Corporate items (1.2) (0.4) 0.1 unfav unfav Total $ (17.6) (38.8) (43.6) (55) (11) Acquisitions and dispositions Certain acquisition and disposition items that are not considered part of the ongoing activities of the business and are special in nature are consistently excluded from segment and non-GAAP results.
The Company intends to vigorously defend itself against the FNE's complaint. 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.
The Company intends to vigorously defend itself against the FNE's complaint. 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 and, in 2023, we recognized an additional $0.5 million adjustment to our estimated loss.
Years Ended December 31, % change (In millions) 2022 2021 2020 2022 2021 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 Royalty income 9.1 5.6 4.8 63 17 Impairment losses (9.0) (9.5) (11.6) (5) (18) Indemnification asset adjustments (7.8) — — unfav — Gains on sale of property and other assets 2.7 — 0.9 fav (100) Share in earnings of equity method affiliates 2.1 1.1 0.8 91 38 Insurance recoveries - Internal Loss — 18.8 — (100) fav Gains related to litigation — 4.4 — (100) fav Indemnity for forced relocation — 1.7 — (100) fav Other 4.3 4.2 3.7 2 14 Other operating income (expense) $ (25.3) 20.0 (15.6) unfav fav 2022 versus 2021 We reported other operating expense of $25.3 million in 2022 versus other operating income of $20.0 million in the prior year.
Years Ended December 31, % change (In millions) 2023 2022 2021 2023 2022 Foreign currency items: 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 Impairment losses (10.3) (9.0) (9.5) 14 (5) 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) 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) $ (54.2) (25.3) 20.0 unfav unfav 2023 versus 2022 We reported other operating expense of $54.2 million in 2023 versus other operating expense of $25.3 million in the prior year.
Treasury published in the Federal Register on January 4, 2022. 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 our U.S. operations will no longer annually be generating new foreign tax credits in excess of its annual foreign tax credit utilization limit.
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 our U.S. operations will no longer annually be generating new foreign tax credits in excess of its annual foreign tax credit utilization limit.
In addition, nonmonetary assets retain a higher historical basis when the currency is devalued. The higher historical basis results in incremental expense being recognized when the nonmonetary assets are consumed. In 2020, we recognized $10.7 million in pretax charges related to highly inflationary accounting, including currency remeasurement losses of $7.7 million.
In addition, nonmonetary assets retain a higher historical basis when the currency is devalued. The higher historical basis results in incremental expense being recognized when the nonmonetary assets are consumed. In 2021, we recognized $11.9 million in pretax charges related to highly inflationary accounting, including currency remeasurement losses of $9.0 million.
Plan Obligations at December 31, 2022 (In millions) Hypothetical 1% lower Actual Hypothetical 1% higher Primary U.S. pension plan $ 684.3 620.3 566.3 UMWA plans 255.2 233.9 215.5 51 Actual 2022 and Projected 2023 Expense (Income) (In millions, except for percentages) Hypothetical sensitivity analysis for discount rate assumption Hypothetical sensitivity analysis for discount rate assumption Actual 1% lower 1% higher Projected 1% lower 1% higher Years Ending December 31, 2022 2022 2022 2023 2023 2023 Primary U.S. pension plan Discount rate assumption 2.8 % 1.8 % 3.8 % 5.4 % 4.4 % 6.4 % Retirement cost $ (1.9) 5.2 (7.0) $ (13.2) (8.3) (12.5) UMWA plans Discount rate assumption 2.8 % 1.8 % 3.8 % 5.4 % 4.4 % 6.4 % Retirement cost $ 2.5 3.2 1.8 $ (2.5) (2.0) (3.1) Expected-Return-on-Assets Assumption Our expected-return-on-assets assumption, which materially affects our net periodic benefit cost, reflects the long-term average rate of return we expect the plan assets to earn.
Plan Obligations at December 31, 2023 (In millions) Hypothetical 1% lower Actual Hypothetical 1% higher Primary U.S. pension plan $ 686.7 622.5 568.2 UMWA plans 233.3 214.0 197.4 53 Actual 2023 and Projected 2024 Expense (Income) (In millions, except for percentages) Hypothetical sensitivity analysis for discount rate assumption Hypothetical sensitivity analysis for discount rate assumption Actual 1% lower 1% higher Projected 1% lower 1% higher Years Ending December 31, 2023 2023 2023 2024 2024 2024 Primary U.S. pension plan Discount rate assumption 5.4 % 4.4 % 6.4 % 5.1 % 4.1 % 6.1 % Retirement cost $ (13.6) (8.3) (12.6) $ (9.9) (4.9) (13.0) UMWA plans Discount rate assumption 5.4 % 4.4 % 6.4 % 5.1 % 4.1 % 6.1 % Retirement cost $ (5.1) (4.7) (5.6) $ (5.6) (5.1) (6.0) Expected-Return-on-Assets Assumption Our expected-return-on-assets assumption, which materially affects our net periodic benefit cost, reflects the long-term average rate of return we expect the plan assets to earn.
Equity Common Stock At December 31, 2022, we had 100 million shares of common stock authorized and 46.3 million shares issued and outstanding. Preferred Stock At December 31, 2022, we had the authority to issue up to 2 million shares of preferred stock, par value $10 per share.
Equity Common Stock At December 31, 2023, we had 100 million shares of common stock authorized and 44.5 million shares issued and outstanding. Preferred Stock At December 31, 2023, we had the authority to issue up to 2 million shares of preferred stock, par value $10 per share.
Higher borrowing levels were used to fund general corporate initiatives and other working capital needs. See Note 15 for further information.
Borrowings were used to fund general corporate initiatives and other working capital needs. See Note 15 for further information.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS THE BRINK’S COMPANY MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS AS OF DECEMBER 31, 2022 AND 2021 AND FOR EACH OF THE YEARS IN THE THREE-YEAR PERIOD ENDED DECEMBER 31, 2022 TABLE OF CONTENTS Page OPERATIONS 21 RESULTS OF OPERATIONS Analysis of Results 22 Income and Expense Not Allocated to Segments 26 Other Operating Income and Expense 29 Nonoperating Income and Expense 30 Income Taxes 31 Noncontrolling Interests 32 Non-GAAP Results Reconciled to GAAP 33 Foreign Operations 36 LIQUIDITY AND CAPITAL RESOURCES Overview 38 Operating Activities 38 Investing Activities 39 Financing Activities 41 Effect of Exchange Rate Changes on Cash and Cash Equivalents 41 Capitalization 42 Off Balance Sheet Arrangements 44 U.S Retirement Liabilities 45 Contingent Matters 47 APPLICATION OF CRITICAL ACCOUNTING POLICIES Deferred Tax Asset Valuation Allowance 48 Business Acquisitions 49 Goodwill, Other Intangible Assets and Property and Equipment Valuations 50 Retirement and Postemployment Benefit Obligations 51 Foreign Currency Translation 55 The discussion of operating results and financial condition comparing 2021 versus 2020 can be found in Item 7.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS THE BRINK’S COMPANY MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS AS OF DECEMBER 31, 2023 AND 2022 AND FOR EACH OF THE YEARS IN THE THREE-YEAR PERIOD ENDED DECEMBER 31, 2023 TABLE OF CONTENTS Page OPERATIONS 23 RESULTS OF OPERATIONS Analysis of Results 24 Income and Expense Not Allocated to Segments 28 Other Operating Income and Expense 31 Nonoperating Income and Expense 32 Income Taxes 33 Noncontrolling Interests 34 Non-GAAP Results Reconciled to GAAP 35 Foreign Operations 38 LIQUIDITY AND CAPITAL RESOURCES Overview 40 Operating Activities 40 Investing Activities 41 Financing Activities 43 Effect of Exchange Rate Changes on Cash and Cash Equivalents 43 Capitalization 44 Off Balance Sheet Arrangements 46 U.S Retirement Liabilities 47 Contingent Matters 49 APPLICATION OF CRITICAL ACCOUNTING POLICIES Deferred Tax Asset Valuation Allowance 50 Business Acquisitions 51 Goodwill, Other Intangible Assets and Property and Equipment Valuations 52 Retirement and Postemployment Benefit Obligations 53 Foreign Currency Translation 57 The discussion of operating results and financial condition comparing 2022 versus 2021 can be found in Item 7.
For the year ended December 31, 2021, the Argentine peso declined by approximately 19% (from 84.0 to 103.1 pesos to the U.S. dollar). For the year ended December 31, 2022, the Argentine peso declined approximately 42% (from 103.1 to 178.6 pesos to the U.S. dollar). Beginning July 1, 2018, we designated Argentina's economy as highly inflationary for accounting purposes.
For the year ended December 31, 2022, the Argentine peso declined by approximately 42% (from 103.1 to 178.6 pesos to the U.S. dollar). For the year ended December 31, 2023, the Argentine peso declined approximately 79% (from 178.6 to 833.3 pesos to the U.S. dollar). Beginning July 1, 2018, we designated Argentina's economy as highly inflationary for accounting purposes.
The operating environment in Argentina continues to present business challenges, including ongoing devaluation of the Argentine peso and significant inflation. For the year ended December 31, 2020, the Argentine peso declined by approximately 29% (from 59.9 to 84.0 pesos to the U.S. dollar).
The operating environment in Argentina continues to present business challenges, including ongoing devaluation of the Argentine peso and significant inflation. For the year ended December 31, 2021, the Argentine peso declined by approximately 19% (from 84.0 to 103.1 pesos to the U.S. dollar).
Plans to participants Primary U.S. pension plan $ 44.4 48.1 48.0 48.0 48.0 47.7 UMWA plans 20.3 20.0 19.9 19.8 19.6 19.5 Black Lung plans 8.8 9.3 8.7 8.1 7.5 6.9 Total $ 73.5 77.4 76.6 75.9 75.1 74.1 Summary of Projected Payments from Brink’s to U.S. Plans This table summarizes estimated payments from Brink’s to U.S. retirement plans.
Plans to participants Primary U.S. pension plan $ 44.5 48.1 48.0 47.9 47.6 47.1 UMWA plans 19.8 18.5 18.3 18.1 18.0 17.9 Black Lung plans 7.7 9.3 8.6 7.9 7.2 6.7 Total $ 72.0 75.9 74.9 73.9 72.8 71.7 Summary of Projected Payments from Brink’s to U.S. Plans This table summarizes estimated payments from Brink’s to U.S. retirement plans.
The foreign currency items above do not include business acquisition-related currency items which are reported in interest and other nonoperating income (expense). 29 Nonoperating Income and Expense Interest Expense Years Ended December 31, % change (In millions) 2022 2021 2020 2022 2021 Interest expense $ 138.8 112.2 96.5 24 16 Interest expense was higher in 2022 primarily due to higher interest rates on corporate borrowings.
The foreign currency items above do not include business acquisition-related currency items which are reported in interest and other nonoperating income (expense). 31 Nonoperating Income and Expense Interest Expense Years Ended December 31, % change (In millions) 2023 2022 2021 2023 2022 Interest expense $ 203.8 138.8 112.2 47 24 Interest expense was higher in 2023 primarily due to higher interest rates on corporate debt.
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. Continuing Operations 2022 Compared to U.S.
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.
Monthly currency changes represent the accumulation throughout the year of the impact on current period results of changes in foreign currency rates from the prior year period. (c) Segment revenues equal our total reported non-GAAP revenues.
Monthly currency changes represent the accumulation throughout the year of the impact on current period results of changes in foreign currency rates from the prior year period. (c) Segment revenues equal our total reported non-GAAP revenues. (d) Corporate expenses are not allocated to segment results.
Non-GAAP financial measures may not be comparable to Non-GAAP financial measures presented by other companies. 2022 2021 2020 (In millions, except for percentages) Pre-tax income Income tax Effective tax rate Pre-tax income Income tax Effective tax rate Pre-tax income Income tax Effective tax rate Effective Income Tax Rate (a) GAAP $ 226.2 41.4 18.3 % $ 235.5 120.3 51.1 % $ 79.3 56.6 71.4 % Retirement plans (c) 11.1 2.9 29.8 7.7 33.8 7.9 Reorganization and Restructuring (b) 38.8 8.2 43.6 11.7 67.1 15.8 Acquisitions and dispositions (b) 85.2 20.7 68.8 2.5 91.5 11.6 Argentina highly inflationary impact (b) 45.6 (2.0) 12.3 (1.1) 10.6 (1.3) Change in allowance estimate (b) 15.6 3.7 — — — — Valuation allowance on tax credits (d) — 53.2 — — — — Ship loss matter (b) 4.9 1.3 — — — — Chile antitrust matter (b) 1.4 0.5 9.5 — — — Internal loss (b) — — (21.1) (1.3) 6.9 1.6 Reporting compliance (b) — — — — 0.5 — Deferred tax valuation allowance (e) — — — (12.8) — — Non-GAAP $ 428.8 129.9 30.3 % $ 378.4 127.0 33.6 % $ 289.7 92.2 31.8 % Amounts may not add due to rounding.
Non-GAAP financial measures may not be comparable to Non-GAAP financial measures presented by other companies. 2023 2022 2021 (In millions, except for percentages) Pre-tax income Income tax Effective tax rate Pre-tax income Income tax Effective tax rate Pre-tax income Income tax Effective tax rate Effective Income Tax Rate (a) GAAP $ 235.8 139.2 59.0 % $ 226.2 41.4 18.3 % $ 235.5 120.3 51.1 % Retirement plans (c) (9.0) (2.0) 11.1 2.9 29.8 7.7 Reorganization and Restructuring (b) 17.6 3.4 38.8 8.2 43.6 11.7 Acquisitions and dispositions (b) 72.6 8.9 85.2 20.7 68.8 2.5 Argentina highly inflationary impact (b) 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) — — 15.6 3.7 — — Valuation allowance on tax credits (d) — (27.8) — 53.2 — — Ship loss matter (b) — — 4.9 1.3 — — Chile antitrust matter (b) 0.5 0.1 1.4 0.5 9.5 — Internal loss (b) — — — — (21.1) (1.3) Reporting compliance (b) 0.8 — — — — — Deferred tax valuation allowance (e) — — — — — (12.8) Non-GAAP $ 473.8 117.6 24.8 % $ 428.8 129.9 30.3 % $ 378.4 127.0 33.6 % Amounts may not add due to rounding.
We did not have any such conversion losses in 2021 and 2022. Although the Argentine government has implemented currency controls, Brink’s management continues to provide guidance and strategic oversight, including budgeting and forecasting for Brink’s Argentina. We continue to control our Argentina business for purposes of consolidation of our financial statements and continue to monitor the situation in Argentina.
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. We continue to control our Argentina business for purposes of consolidation of our financial statements and continue to monitor the situation in Argentina.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

11 edited+0 added−3 removed7 unchanged
Biggest changeSee Note 1 to the consolidated financial statements. (b) Net of outstanding foreign currency swap and forward contracts. The hypothetical foreign currency effects above detail the consolidated effect attributable to Brink’s of a simultaneous change in the value of a large number of foreign currencies relative to the U. S. dollar.
Biggest changeThe hypothetical foreign currency effects above detail the consolidated effect attributable to Brink’s of a simultaneous change in the value of a large number of foreign currencies relative to the U. S. dollar. The foreign currency exposure effect related to a change in an individual currency could be significantly different. 60
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK We currently serve customers in more than 100 countries, including 53 countries where we operate subsidiaries. These operations expose us to a variety of market risks, including the effects of changes in interest rates and foreign currency exchange rates.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK We currently serve customers in more than 100 countries, including 52 countries where we operate subsidiaries. These operations expose us to a variety of market risks, including the effects of changes in interest rates and foreign currency exchange rates.
We do not use derivative financial instruments for purposes other than hedging underlying financial exposures. The sensitivity analyses discussed below for the market risk exposures were based on the facts and circumstances in effect at December 31, 2022.
We do not use derivative financial instruments for purposes other than hedging underlying financial exposures. The sensitivity analyses discussed below for the market risk exposures were based on the facts and circumstances in effect at December 31, 2023.
At December 31, 2022, the notional value of our shorter outstanding foreign currency forward and swap contracts was $575.0 million with average contract maturities of approximately one month. These contracts primarily offset exposures in the euro and the Mexican peso.
At December 31, 2023, the notional value of our shorter outstanding foreign currency forward and swap contracts was $678.0 million with average contract maturities of approximately one month. These contracts primarily offset exposures in the euro and the Mexican peso.
Our floating rate debt typically is based on an underlying floating rate component as well as a fixed rate margin component. Based on the contractual interest rates on our floating rate debt at December 31, 2022, a hypothetical 10% increase in rates would increase cash outflows by approximately $5.9 million over a twelve-month period.
Our floating rate debt typically is based on an underlying floating rate component as well as a fixed rate margin component. Based on the contractual interest rates on our floating rate debt at December 31, 2023, a hypothetical 10% increase in rates would increase cash outflows by approximately $7.6 million over a twelve-month period.
The effect on the fair values of our $600 million and $400 million unsecured senior notes of a hypothetical 10% decrease in the yield curve from year-end 2022 levels would result in a $26.0 million increase in the fair value of our unsecured senior notes.
The effect on the fair values of our $600 million and $400 million unsecured senior notes of a hypothetical 10% decrease in the yield curve from year-end 2023 levels would result in a $19.4 million increase in the fair value of our unsecured senior notes.
At December 31, 2022, the notional value of these cross currency swaps contracts was $400 million with a weighted-average remaining maturity of 2.7 years for the cross currency swaps maturing in May 2026 and a remaining weighted average maturity of 6.6 years for the cross currency swaps maturing in April 3031.
At December 31, 2023, the notional value of these cross currency swaps contracts was $400 million with a weighted-average remaining 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 maturing in April 2031.
In other words, the weighted-average interest rate on our floating rate instruments (including any fixed rate margin component) was 6.37% per annum at December 31, 2022. If the underlying floating rate component were to increase by 10%, our average rate on this debt would increase by 0.41 percentage points to 6.78%.
In other words, the weighted-average interest rate on our floating rate instruments (including any fixed rate margin component) was 7.46% per annum at December 31, 2023. If the underlying floating rate component were to increase by 10%, our average rate on this debt would increase by 0.51 percentage points to 7.97%.
The effect on the fair value of these cross currency swaps of a hypothetical 10% appreciation in the forward May 2026 euro exchange rate and a hypothetical 10% appreciation in the forward April 2031 euro exchange rate from year-end 2022 levels would result in a $36.7 million change in fair values, changing the December 31, 2022 net liability of $11.7 million to a net liability of $48.4 million. 57 The effects of a hypothetical simultaneous 10% appreciation in the U.S. dollar from the 2022 levels against all other currencies of countries in which we have continuing operations are as follows: (In millions) Hypothetical Effects Increase/ (decrease) Effect on Earnings: Translation of 2022 earnings into U.S. dollars (a) $ (40.4) Transaction gains (losses) (b) (4.4) Effect on Other Comprehensive Income (Loss): Translation of net assets of foreign subsidiaries (b) (153.2) (a) Excludes our Venezuela operations which we deconsolidated effective June 30, 2018.
The effect on the fair value of these cross currency swaps of a hypothetical 10% appreciation in the forward May 2026 euro exchange rate and a hypothetical 10% appreciation in the forward April 2031 euro exchange rate from year-end 2023 levels would result in a $39.8 million change in fair values, changing the December 31, 2023 net liability of $34.6 million to a net liability of $74.4 million. 59 The effects of a hypothetical simultaneous 10% appreciation in the U.S. dollar from the 2023 levels against all other currencies of countries in which we have continuing operations are as follows: (In millions) Hypothetical Effects Increase/ (decrease) Effect on Earnings: Translation of 2023 earnings into U.S. dollars $ (52.1) Transaction gains (losses) (a) (8.5) Effect on Other Comprehensive Income (Loss): Translation of net assets of foreign subsidiaries (a) (174.1) (a) Net of outstanding foreign currency swap and forward contracts.
Additionally, these contracts are not designated as hedges for accounting purposes, and accordingly, changes in their fair value are recorded immediately in earnings. In the first quarter of 2019, we entered into a long term cross currency swap contract to hedge exposure in Brazilian real, which is designated as a cash flow hedge for accounting purposes.
Additionally, these contracts are not designated as hedges for accounting purposes, and accordingly, changes in their fair value are recorded immediately in earnings. In the second quarter of 2021, we entered into ten cross currency swap contracts to hedge a portion of our net investments in certain of our subsidiaries with euro functional currencies.
In the second quarter of 2021, we entered into ten cross currency swap contracts to hedge a portion of our net investments in certain of our subsidiaries with euro functional currencies. In July 2022, we terminated these cross currency swap contracts and received $67 million in cash for the fair value of the derivative assets at the settlement date.
In July 2022, we terminated these cross currency swap contracts and received $67 million in cash for the fair value of the derivative assets at the settlement date.
Removed
At December 31, 2022, the notional value of this long term contract was $53 million with a weighted-average remaining maturity of 0.6 years.
Removed
The effect on the fair value of these cross currency swaps of a hypothetical 10% appreciation in the forward Brazilian real exchange rates from year-end 2022 levels would result in a $5.1 million change in fair values, changing the December 31, 2022 net asset of $14.6 million to a net asset of $9.5 million.
Removed
The foreign currency exposure effect related to a change in an individual currency could be significantly different. 58

Other BCO 10-K year-over-year comparisons