# Brinks Co: Form 10-K for the period ended Dec 31, 2017

- Company: [Brinks Co](/companies/bco.md) (CIK 78890)
- Form: 10-K
- Filed: 2018-03-01
- Accepted by EDGAR: Mar 1, 2018, 18:30 ET
- Period: 2017-12-31
- Accession: 0000078890-18-000009
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/78890/000007889018000009/bco1231201710-k.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/78890/000007889018000009/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2017-12-31.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Cost of revenue | 12 months, 2017-01-01 to 2017-12-31 | $2.61bn | us-gaap:CostOfRevenue |
| Operating income | 3 months, 2017-10-01 to 2017-12-31 | $88.3m | us-gaap:OperatingIncomeLoss |
| Operating income | 12 months, 2017-01-01 to 2017-12-31 | $273.9m | us-gaap:OperatingIncomeLoss |
| Interest expense | 12 months, 2017-01-01 to 2017-12-31 | $32.2m | us-gaap:InterestExpense |
| Income tax | 12 months, 2017-01-01 to 2017-12-31 | $157.7m | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2017-10-01 to 2017-12-31 | −$52.1m | us-gaap:NetIncomeLoss |
| Net income | 12 months, 2017-01-01 to 2017-12-31 | $16.7m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2017-10-01 to 2017-12-31 | −$1.03 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 12 months, 2017-01-01 to 2017-12-31 | $0.32 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2017-10-01 to 2017-12-31 | −$1.03 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 12 months, 2017-01-01 to 2017-12-31 | $0.33 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 12 months, 2017-01-01 to 2017-12-31 | 51,800,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 12 months, 2017-01-01 to 2017-12-31 | $252.1m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 3 months, 2017-10-01 to 2017-12-31 | $57.1m | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Capital expenditure | 12 months, 2017-01-01 to 2017-12-31 | $174.5m | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Dividends paid | 12 months, 2017-01-01 to 2017-12-31 | $27.7m | us-gaap:PaymentsOfDividendsCommonStock |
| Cash and equivalents | at 2017-12-31 | $614.3m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2017-12-31 | $1.49bn | us-gaap:AssetsCurrent |
| Total assets | at 2017-12-31 | $3.06bn | us-gaap:Assets |
| Current liabilities | at 2017-12-31 | $834.9m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2017-12-31 | $2.72bn | us-gaap:Liabilities |
| Long-term debt | at 2017-12-31 | $1.14bn | us-gaap:LongTermDebtNoncurrent |
| Current portion of debt | at 2017-12-31 | $51.9m | us-gaap:LongTermDebtCurrent |
| Short-term borrowings | at 2017-12-31 | $45.2m | us-gaap:ShortTermBorrowings |
| Shareholders' equity | at 2017-12-31 | $317.4m | us-gaap:StockholdersEquity |

## Business

As filed, 24,422 characters.

### Overview

The Brink’s Company is the global leader in secure logistics, cash management(a) and security solutions including cash-in-transit, ATM replenishment and maintenance, cash management services, including vault outsourcing, money processing, and intelligent safe services, international transportation of valuables, and payment services. Our customers include financial institutions, retailers, government agencies (including central banks), mints, jewelers and other commercial operations around the world. Our global network serves customers in more than 100 countries. We have ownership interests in companies in 41 countries and agency relationships with companies in additional countries. We employ approximately 62,300 people and our operations include approximately 1,100 facilities and 12,600 vehicles.

Brink’s was founded in 1859 and The Brink’s Company was first incorporated in 1930 under the laws of the State of Delaware (at that time, the Company was named The Pittston Company). It succeeded to the business of a Virginia corporation in 1986 and was renamed The Brink’s Company in 2003. Our headquarters are located in Richmond, Virginia. The Brink’s Company, along with its subsidiaries, is referred to as “we,” “our,”, “us,” “Brink’s,” or “the Company” throughout this Form 10-K.

Brink’s operations are located throughout the world with 77% of our revenues earned outside the U.S. during 2017. Revenues earned in the U.S., Brazil, France, Mexico, Argentina, Venezuela and Canada represent 75% of consolidated revenues. The following table presents a summary of revenues by segment in 2015, 2016 and 2017.

*(In millions)*

| Revenues by segment: | 2017 | % total | % change | 2016 | % total | % change | 2015 | % total |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| North America | **$1,254.2** | **37** | **4** | $1,210.3 | 40 | (1) | $1,224.0 | 40 |
| South America | **924.6** | **28** | **29** | 718.7 | 24 | — | 719.3 | 23 |
| Rest of World | **1,014.1** | **30** | **4** | 979.4 | 32 | (5) | 1,033.6 | 34 |
| Total reportable segments | **3,192.9** | **95** | **10** | 2,908.4 | 96 | (2) | 2,976.9 | 97 |
| Other items not allocated to segments | **154.1** | **5** | **37** | 112.2 | 4 | 33 | 84.5 | 3 |
| Total Revenues | **$3,347.0** | **100** | **11** | $3,020.6 | 100 | (1) | $3,061.4 | 100 |

Amounts may not add due to rounding.

Geographic financial information related to revenues and long-lived assets is included in the consolidated financial statements on page 76.

(a) Based on publicly available company data for cash services businesses.

### Vision, Mission and Strategy

#### Our Vision

We provide a motivated, high performance team environment that drives customer focus and industry success. We are the global leader in cash management and security services.

#### Our Strategy

Our strategy is to:

- Accelerate profitable growth ("APG")
- Close the gap with operational excellence ("CTG")
- Introduce differentiated services ("IDS")

#### Accelerate profitable growth through:

- growing High-Value Services
- growing account share with existing customers
- increasing focus on smaller financial institutions
- penetrating large, unvended retail market
- exploring core and adjacent acquisitions

We have opportunities to grow revenue in higher-margin lines of business such as money processing outsourcing, CompuSafe® services and recyclers, and Brink’s Global Services. Our plan calls for growing revenue with both large and small financial institutions, and increasing penetration of the large and underserved retail market. We also have the financial flexibility to pursue accretive acquisitions in both core and adjacent markets.

#### Close the gap with operational excellence by:

- leading our industry in safety and security
- exceeding customer expectations
- increasing operational productivity
- achieving industry-leading margins

We have already begun an aggressive drive to improve internal productivity, optimize cost and achieve industry-leading margins.

#### Introduce differentiated services through:

- leveraging uniform, best-in-class global technology base for logistics and operating systems
- offering end-to-end cash supply chain managed services
- launching a customer portal and value-added, fee-based services

The third component of our strategy is to introduce differentiated services to our customers by strengthening and leveraging our IT capabilities. Our IT strategy and systems will also drive improved service levels and operational efficiencies.

### Services

We design customized services to meet the cash and valuables supply chain needs of our customers. We enter into contracts with our customers to establish pricing and other terms. Cash-in-Transit and ATM contracts usually cover an initial term of at least one year and in many cases one to three years, and generally remain in effect thereafter until canceled by either party. Contracts for Cash Management Services are typically longer. Following are descriptions of our service offerings:

#### Core Services (51% of total revenues in 2017)

Cash-in-transit and ATM Services are core services we provide to customers throughout the world. We charge customers per service performed or based on the value of goods transported. Revenues are affected by the level of economic activity in various markets as well as the volume of business for specific customers. Core Services generated approximately $1.7 billion of revenues in 2017 ($1.6 billion in 2016 and 2015).

*Cash-in-Transit Services –* Serving customers since 1859, our success in Cash-in-Transit is driven by a combination of rigorous security practices, high-quality customer service, risk management and logistics expertise. Cash-in-Transit Services generally include the secure transportation of:

- cash between businesses and financial institutions, such as banks and credit unions
- cash, securities and other valuables between commercial banks, central banks and investment banking and brokerage firms
- new currency, coins, bullion and precious metals for central banks and other customers

*ATM Services –* We manage 98,200 ATMs worldwide. We provide customers who own and operate ATMs a variety of service options. Basic ATM management services include cash replenishment and first and second line maintenance. We also provide comprehensive services for ATM management including cash replenishment, replenishment forecasting, cash optimization, ATM remote monitoring, service call dispatching, transaction processing, installation services, and first and second line maintenance.

#### High-Value Services (42% of total revenues in 2017)

Our Core Services, combined with our brand and global infrastructure, provide a broad platform from which we offer additional high-value services, which generated approximately $1.4 billion of revenues in 2017 ($1.2 billion in 2016 and 2015).

*Global Services -* Brink’s Global Services ("BGS") is the leading global provider of secure transport of highly-valued commodities including diamonds, jewelry, precious metals, securities, currency, high-tech devices, electronics and pharmaceuticals. Our specialized diamond and jewelry operations have offices in the world’s major diamond and jewelry centers. Serving customers in more than 100 countries, BGS provides secure transportation services including pick-up, packaging, customs clearance, secure vault storage and inventory management. BGS uses a combination of armored vehicles and secure air and sea transportation.

*Cash Management Services* - We offer a variety of cash management services, depending on customers’ unique needs. These include:

- money processing (e.g., counting, sorting, wrapping, checking condition of bills, etc.) and other cash management services
- services related to deploying and servicing “intelligent” safes and safe control devices, including our patented CompuSafe® service
- check imaging services

Other cash management services include cashier balancing, counterfeit detection, account consolidation and electronic reporting. Retail and bank customers use Brink’s to count and reconcile coins and currency, prepare bank deposit information and replenish coins and currency in specific denominations.

Brink's offers a fully integrated approach to managing customers' supply chain of cash. These services include logistical support from point-of-sale through transport, vaulting, bank deposit and related credit reporting. We also offer a variety of technology applications including online cash tracking, cash inventory management, check imaging for real-time deposit processing, and a variety of other web-based tools that enable banks and other customers to reduce costs while improving service to their customers. We believe the quality and scope of our money processing and information systems differentiate our Cash Management Services from competitive offerings.

*Brink’s CompuSafe® Service.* Brink’s CompuSafe® service provides an integrated, closed-loop system for preventing theft and managing cash. We market CompuSafe® services to a variety of cash-intensive customers including convenience stores, gas stations, restaurants, retail chains and entertainment venues. In a majority of instances, once the specialized safe is installed, the customer’s employees deposit currency into the safe’s cassettes, which can only be removed by Brink’s personnel. Upon removal, the cassettes are securely transported to a vault for processing where contents are verified and transferred for deposit. Our CompuSafe® service features currency-recognition and counterfeit-detection technology, multi-language touch screens and an electronic interface between the point-of-sale, back-office systems and external banks. Our electronic reporting interface with external banks enables customers to receive same-day credit on their cash balances, even if the cash remains on the customer’s premises. Recently, some customers have requested specialized safes permitting customer employees to remove money in a secure manner that was previously deposited in the safe cassettes to meet a current need. We have also implemented this capability.

*Vaulting Services.* Vaulting services combine Cash-in-Transit Services, Cash Management Services, vaulting and electronic reporting technologies to help banks expand into new markets while minimizing investment in vaults and branch facilities. In addition to providing secure storage, we process deposits, provide check imaging and reconciliation services, perform currency inventory management, process ATM replenishment orders and electronically transmit banking transactions.

*Payment Services –* We provide convenient payment services, including bill payment processing, mobile phone top-up, and Brink’s Money™ prepaid cards.

Bill payment processing services include bill payment acceptance and processing services on behalf of utility companies and other billers. Consumers can pay bills, top-up prepaid mobile phones and manage accounts at retail agent locations that we operate on behalf of utility companies, banks and a small number of leased payment locations. This service is offered at over 32,000 locations in Brazil, Colombia, Panama and Mexico.

We offer Brink’s Money™ general purpose reloadable prepaid cards and payroll cards to consumers and employers in the U.S. Our general purpose reloadable cards are sold to consumers through our direct-to-consumer marketing efforts while our payroll cards are sold to employers who use them to pay employees electronically. Brink’s Money™ cards can be used at stores, restaurants, online retailers, and at ATMs worldwide. This product is targeted to the millions of unbanked and under-banked Americans looking for alternative financial products.

*Commercial Security Systems –* We provide commercial security system services in designated markets in Europe. Our security system design and installation services include alarms, motion detectors, closed-circuit televisions, digital video recorders, and access control systems, including card and biometric readers, electronic locks, and turnstiles. We may also provide monitoring services after systems have been installed.

#### Other Security Services (7% of total revenues in 2017)

*Guarding –* We protect airports, offices, warehouses, stores, and public venues with or without electronic surveillance, access control, fire prevention and trained patrolling personnel. Other security services generated approximately $0.2 billion of revenues in 2017 ($0.2 billion in 2016 and 2015).

We offer security and guarding services in France, Luxembourg, Greece and Brazil. A portion of this business involves long-term contracts related primarily to security services at airports and embassies. Generally, guarding contracts are for a one-year period, and the majority of contracts are extended.

### Industry and Competition

Brink’s competes with large multinational, regional and smaller companies throughout the world. Our largest multinational competitors are G4S plc (U.K.); Loomis AB (Sweden); Prosegur, Compania de Seguridad, S.A. (Spain); and Garda World Security Corporation (Canada).

We believe the primary factors in attracting and retaining customers are security expertise, service quality, and price. Our competitive advantages include:

- brand name recognition
- reputation for a high level of service and security
- risk management and logistics expertise
- global network and customer base
- proven operational excellence, and
- high-quality insurance coverage and financial strength

Although we face competitive pricing pressure in many markets, we resist competing on price alone. We believe our high levels of service, security expertise and value-added solutions differentiate us from competitors.

### Insurance Coverage

The availability of high-quality and reliable insurance coverage is an important factor in our ability to attract and retain customers and manage the risks inherent in our business. We purchase insurance coverage for losses in excess of what we consider to be prudent levels of self-insurance. Our insurance policies cover losses from most causes, with the exception of war, nuclear risk and certain other exclusions typical in such policies.

Insurance for security is provided by different groups of underwriters at negotiated rates and terms. Premiums fluctuate depending on market conditions. The security loss experience of Brink’s and, to a limited extent, other armored carriers affects our premium rates.

### Service Mark and Patents

BRINKS is a registered service mark in the U.S. and certain foreign countries. The BRINKS mark, name and related marks are of material significance to our business. We own patents for safes and related services, iDeposit and Daily Credit processes, including our integrated CompuSafe® service, which expire between 2018 and 2032. These patents provide us with important advantages; however, we are not dependent on the existence of these patents.

We have licensed the Brink’s name to a limited number of companies, including a company that provides residential smart home and home security services and a distributor of security products (padlocks, door hardware, etc.) to customers through major retail chains.

### Government Regulation

Our U.S. operations are subject to regulation by the U.S. Department of Transportation with respect to safety of operations, equipment and financial responsibility. Intrastate operations in the U.S. are subject to state regulation. Operations outside of the United States are regulated to varying degrees by the countries in which we operate.

### Employee Relations

At December 31, 2017, our company had approximately 62,300 full-time and contract employees, including approximately 7,000 employees in the United States (of whom approximately 300 were classified as part-time employees) and approximately 55,300 employees outside the United States. At December 31, 2017, Brink’s was a party to eleven collective bargaining agreements in the United States and Canada with various local unions covering approximately 1,400 employees. The agreements have various expiration dates from 2018 to 2021. Outside of the United States and Canada, approximately 61% of employees are represented by trade union organizations. We believe our employee relations are satisfactory.

### 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 the current and prior periods. We continue to operate our Global Services business in each of these countries.

- We sold our 70% ownership interest in a Russian cash management business in November 2015 and recognized a $5.9 million loss on the disposition. A significant part of the loss ($5.0 million) represented the reclassification of foreign currency translation adjustments from accumulated other comprehensive income (loss) into earnings.
- We sold an Irish guarding operation in November 2015.
- In September 2016, we shut down the remaining operations in the Republic of Ireland and Northern Ireland. During 2016, we incurred approximately $16 million in losses as we exited these operations. These losses included $5 million in severance costs and $2 million in property impairment charges. During 2017, additional losses incurred related to the Ireland operations were not significant.
- We sold a German guarding operation in October 2016.

### Business Acquisitions

In 2017, we acquired six business operations in five countries for an aggregate purchase price of approximately $365 million. See Note 6 to the consolidated financial statements for more detailed information on the acquired assets and liabilities from these acquisitions. Below is a brief description of each of the six business acquisitions:

- In March 2017, we acquired 100% of the capital stock of American Armored Transport, Inc. ("AATI"). AATI provides secured trucking transportation of high-value cargo within the continental United States.
- We acquired 100% of the capital stock of Muitofacil Holding Ltda., a Brazil-based holding company, and its subsidiary, Muitofacil Arrecadacao e Recebimento Ltda. (together "Pag Facil") in April 2017. Pag Facil offers bank correspondent services, bill payment processing and mobile phone top-up services in Brazil.
- In June 2017, we acquired 100% of the capital stock of Global Security S.A. (“LGS”). LGS is a Chilean security company specializing

in CIT and ATM services.

- We acquired 100% of the shares of Maco Transportadora de Caudales S.A. ("Maco Transportadora") in July 2017. Maco Transportadora is a CIT and Money Processing business based in Argentina.
- In August 2017, we acquired 100% of the capital stock of Maco Litoral, S.A., an Argentina-based company which provides CIT and ATM services.
- We acquired 100% of the shares of Temis S.A.S. and its wholly-owned subsidiaries, Les Goelands S.A.S. and Temis Conseil et Formation S.A.R.L (together "Temis") in October 2017. Temis provides CIT and Money Processing services in France.

In January 2018, we announced an agreement to purchase Rodoban Transportes Aereos e Terrestres Ltda., Rodoban Servicos e Sistemas de Seguranca Ltda., and Rodoban Seguranca e Transporte de Valores Ltda. (together "Rodoban"). Rodoban provides CIT, Money Processing and ATM services primarily in southeastern Brazil.

### Reorganization and Restructuring

In the fourth quarter of 2016, management implemented restructuring actions across our global business operations and our corporate functions. As a result of these actions, we recognized $18.1 million in related 2016 costs. We recognized an additional $17.3 million in 2017 under this restructuring for additional costs related to severance, a benefit program termination, asset-related adjustments, and lease terminations. Severance actions are expected to reduce our global workforce by 800 to 900 positions and result in annualized cost savings of $20 million when this restructuring is finalized. We expect to incur additional costs between $10 and $12 million in the aggregate in future periods, primarily severance costs.

Management initiated a global restructuring of our business in the third quarter of 2015 (“2015 Reorganization and Restructuring”), which included the recognition in 2015 of $11.6 million in costs related to employee severance, contract terminations and lease terminations. We recognized an additional $6.5 million in charges in 2016 related to this restructuring. The 2015 Reorganization and Restructuring reduced the global workforce by approximately 1,100 positions and resulted in approximately $20 million in 2016 cost savings. The actions under this program were substantially completed by the end of 2016, with cumulative pretax charges of approximately $18 million.

In the fourth quarter of 2014, we announced a reorganization and restructuring of Brink’s global organization (“2014 Reorganization and Restructuring”) to provide for a more streamlined and centralized organization. As part of this program, we reduced our total workforce by approximately 1,700 positions. Severance costs of $21.8 million associated with these actions were recognized in 2014, with an additional $1.9 million in restructuring charges recognized in 2015. The restructuring saved annual direct costs of approximately $50 million in 2015 compared to 2014, excluding severance, lease termination and accelerated depreciation. The actions under this program were substantially completed by the end of 2015.

#### Executive Leadership and Board of Directors Restructuring

In January 2016, Brink’s entered into an agreement (the "Starboard Agreement") with Starboard Value LP and its affiliates ("Starboard"). As a result, our former Chief Executive Officer ("CEO"), Thomas C. Schievelbein, stepped down in May 2016, and two of the Company’s directors (including the Company’s independent lead director at that time) retired from the Board. Pursuant to the Starboard Agreement, among other things, the Board appointed three new independent directors and delegated to the Board’s Corporate Governance and Nominating Committee the responsibility to oversee the Board's process to search for a new CEO. In June 2016, the Board appointed Douglas A. Pertz as the Company’s president and CEO and as a member of the Board. In July 2016, Ronald J. Domanico replaced Joseph W. Dziedzic as Chief Financial Officer. In the fourth quarter of 2015, we recognized $1.8 million in costs related to the Executive Leadership and Board of Directors restructuring. We recognized an additional $4.3 million in charges, primarily severance costs, in 2016.

#### Other Restructurings

Management routinely implements restructuring actions in targeted sections of our business. As a result of these actions, we recognized related severance costs of $4.6 million in 2017. The majority of these restructuring actions were completed in 2017. The completed restructuring actions reduced our workforce by approximately 300 positions, which will result in $4 million in annualized cost savings. For the remaining restructuring actions, we expect to incur additional costs less than $1 million in future periods. These estimates will be updated as management targets additional sections of our business.

### 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 Policies
- Code of Ethics
- The charters of the following committees of our Board of Directors (the “Board”): Audit and Ethics, Compensation and Benefits, Corporate Governance and Nominating, and Finance and Strategy

Printed versions of these items will be mailed free of charge to shareholders upon request. Such requests can be made by contacting the Corporate Secretary at 1801 Bayberry Court, P. O. Box 18100, Richmond, Virginia 23226-8100.

## Risk factors

As filed, 31,461 characters.

### We operate in highly competitive industries.

We compete in industries that are subject to significant competition and pricing pressures in most markets. In addition, our business model requires significant fixed costs associated with offering many of our services including costs to operate a fleet of armored vehicles and a network of secure branches. Because we believe we have competitive advantages such as brand name recognition and a reputation for a high level of service and security, we resist competing on price alone. However, continued pricing pressure from competitors or failure to achieve pricing based on the competitive advantages identified above could result in lost volume of business and have an adverse effect on our business, financial condition, results of operations and cash flows. In addition, given the highly competitive nature of our industries, it is important to develop new solutions and product and service offerings to help retain and expand our customer base. Failure to develop, sell and execute new solutions and offerings in a timely and efficient manner could also negatively affect our ability to retain our existing customer base or pricing structure and have an adverse effect on our business, financial condition, results of operations and cash flows.

### Decreased use of cash could have a negative impact on our business.

The proliferation of payment options other than cash, including credit cards, debit cards, stored-value cards, mobile payments and on-line purchase activity, could result in a reduced need for cash in the marketplace and a decline in the need for physical bank branches and retail stores. To mitigate this risk, we are developing new lines of business and investing in adjacent security-related markets, but there is a risk that these initiatives may not offset the risks associated with our traditional cash-based business and that our business, financial condition, results of operations and cash flows could be negatively impacted.

### Our strategy may not be successful.

Our strategy has three pillars: accelerate profitable growth, close the gap with competitors and introduce differentiated services. We may not be successful in growing revenue in high-margin lines of business, increasing our market share with existing customers or winning new business with smaller financial institutions and the retail market. Although we have already begun a drive to improve productivity and optimize costs, we may not be able to achieve industry-leading margins. We also may not be successful in strengthening and leveraging our IT capabilities to improve service levels and drive efficiencies. If we are unable to achieve our strategic objectives and anticipated operating profit improvements, our results of operations and cash flows may be adversely affected.

### We have significant operations outside the United States.

We currently serve customers in more than 100 countries, including 41 countries where we operate subsidiaries. Seventy-seven percent (77%) of our revenues in 2017 came from operations outside the U.S. We expect revenues outside the U.S. to continue to represent a significant portion of total revenues. Business operations outside the U.S. are subject to political, economic and other risks inherent in operating in foreign countries, such as:

- the difficulty of enforcing agreements, collecting receivables and protecting assets through foreign legal systems;
- trade protection measures and import or export licensing requirements;
- difficulty in staffing and managing widespread operations;
- required compliance with a variety of foreign laws and regulations;
- enforcement of our global compliance program in foreign countries with a variety of laws, cultures and customs;
- varying permitting and licensing requirements in different jurisdictions;
- foreign ownership laws;
- changes in the general political and economic conditions in the countries where we operate, particularly in emerging markets;
- threat of nationalization and expropriation;
- higher costs and risks of doing business in a number of foreign jurisdictions;
- laws or other requirements and restrictions associated with organized labor;
- limitations on the repatriation of earnings;
- fluctuations in equity, revenues and profits due to changes in foreign currency exchange rates, including measures taken by governments to devalue official currency exchange rates;
- inflation levels exceeding that of the U.S; and
- inability to collect for services provided to government entities.

We are exposed to certain risks when we operate in countries that have high levels of inflation, including the risk that:

- the rate of price increases for services will not keep pace with the cost of inflation;
- adverse economic conditions may discourage business growth which could affect demand for our services;
- the devaluation of the currency may exceed the rate of inflation and reported U.S. dollar revenues and profits may decline; and
- these countries may be deemed “highly inflationary” for U.S. generally accepted accounting principles (“GAAP”) purposes.

We manage these risks by monitoring current and anticipated political and economic developments, monitoring adherence to our global compliance program and adjusting operations as appropriate. Changes in the political or economic environments of the countries in which we operate could have a material adverse effect on our business, financial condition, results of operations and cash flows.

***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 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. 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.

***We may be unable to achieve, or may be delayed in achieving, our initiatives to drive efficiency and control costs.***

We have launched a number of initiatives, including the reorganization and restructuring actions described on page 6, to improve efficiencies and reduce operating costs. Although we have achieved annual cost savings associated with these initiatives, we may be unable to sustain the cost savings that we have achieved. In addition, if we are unable to achieve, or have any unexpected delays in achieving additional cost savings, our results of operations and cash flow 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.

***We may not be successful in pursuing strategic investments or acquisitions or realize the expected benefits of those transactions because of integration difficulties and other challenges.***

While we may identify opportunities for acquisitions and investments to support our growth strategy, as well as divestiture opportunities, our due diligence examinations and positions that we may take with respect to appropriate valuations for acquisitions and divestitures and other transaction terms and conditions may hinder our ability to successfully complete business transactions to achieve our strategic goals. Our ability to realize the anticipated benefits from acquisitions will depend, in part, on successfully integrating each business with our company as well as improving operating performance and profitability through our management efforts and capital investments. 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, 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 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 significant deferred tax assets in the United States that may not be realized.***

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, 2017, we had $173 million of U.S. deferred tax assets, net of valuation allowances, primarily related to our retirement plan obligations. These future tax deductions may not be realized if tax rules change in the future, if forecasted U.S. operational results are not realized or if any other U.S. projected future taxable income is insufficient. Consequently, not realizing our U.S. deferred tax assets may significantly and materially affect our financial condition, results of operations and cash flows.

On December 22, 2017, the Tax Cuts and Jobs Act of 2017 (“Tax Reform Act”) was enacted into law. The Tax Reform Act reduced the federal tax rate for corporations from 35% to 21%, beginning January 1, 2018 and the Company recorded a provisional one-time non-cash charge in 2017 for the new rate and other legislative changes. We expect the recently enacted U.S. tax reform to have an unfavorable impact related to the broadening of the Company’s U.S. tax base that will more than offset the favorable impact of the new 21% rate. We will continue to analyze the full impact of enacted legislation as additional guidance is provided which could result in a change to our estimated non-cash charge and future results of operations.

### It is possible that we will incur restructuring charges in the future.

It is possible that we will take restructuring actions in one or more of our markets in the future to reduce 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 and the termination of operating leases. These charges, if required, could significantly and materially affect results of operations and cash flows.

***We have significant retirement obligations. Poor investment performance of retirement plan holdings and / or lower interest rates used to discount the obligations could unfavorably affect our liquidity and results of operations.***

We have substantial pension and retiree medical obligations, a portion of which have been funded. 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 88% as of December 31, 2017. Based on actuarial assumptions at the end of 2017, we do not expect to make any future contributions. 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.

We have $745 million of actuarial losses recorded in accumulated other comprehensive income (loss) at the end of 2017. 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. These losses will be recognized in earnings in future periods to the extent they are not offset by future actuarial gains. Our projections of future cash requirements and expenses for these plans could be adversely affected if our retirement plans have additional actuarial losses.

***Our earnings and cash flow could be materially affected by increased losses of customer valuables.***

We purchase insurance coverage for losses of customer valuables for amounts in excess of what we consider prudent deductibles and/or retentions. Insurance is provided by different groups of underwriters at negotiated rates and terms. Coverage is available to us in major insurance markets, although premiums charged are subject to fluctuations depending on market conditions. Our loss experience and that of other companies in our industry affects premium rates. We are not insured for losses below our coverage limits and recognize expense up to these limits for actual losses. Our insurance policies cover losses from most causes, with the exception of war, nuclear risk and various other exclusions typical for such policies. The availability of high-quality and reliable insurance coverage is an important factor in obtaining and retaining customers and managing the risks of our business. 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.

***Currency restrictions in Venezuela limit our ability to use earnings and cash flows outside of Venezuela and may negatively affect ongoing operations in Venezuela.***

Because most of our past requests to convert bolivars to dollars have not been approved and certain past processes to obtain dollars are no longer available, we do not expect to be able to repatriate cash from Venezuela for the foreseeable future. Therefore, we do not expect to be able to use cash held in Venezuela for any purpose outside of that country, including reducing our U.S. debt, funding growth or business acquisitions or returning cash to shareholders.

We believe that currency exchange restrictions in Venezuela may disrupt the operation of our business in Venezuela because we may be unable to pay for goods and services that are required to be paid in dollars. This could reduce our ability to provide services to our customers in Venezuela, or could increase the cost of delivering the services, which would negatively affect our earnings and cash flows, and could result in a loss of control, deconsolidation, shutdown or loss of the business in Venezuela.

### We have risks associated with confidential information.

In the normal course of business, we collect, process and retain sensitive and confidential information, including information about individuals. Despite the security measures we have in place, our facilities and systems, and those of third-party service providers and business partners, could be vulnerable to security breaches (including cybersecurity breaches), acts of vandalism, computer viruses, misplaced or lost data, programming or human errors or other similar events. Any security breach involving the misappropriation, loss or other unauthorized disclosure of confidential information, whether by us or by third-party service providers, could damage our reputation, expose us to the risks of litigation and liability, disrupt our business or otherwise have a material adverse effect on our business, financial condition, results of operations and cash flows.

***Negative publicity to our name or brand could lead to a loss of revenues or profitability.***

We are in the security business and our success and longevity are based to a large extent on our reputation for trust and integrity. 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. If any of these entities experienced an actual or perceived breach in its ability to conduct its business ethically, securely or responsibly, it could have a negative effect on our name and/or brand. Any damage to our brand could have a material adverse effect on our business, financial condition, results of operations and cash flows.

### Failures of our IT system could have a material adverse effect on our business.

We are heavily dependent on our information technology ("IT") infrastructure. Significant problems with our infrastructure, such as telephone or IT system failure, cybersecurity breaches, or failure to develop new technology platforms to support new initiatives and product and service offerings, could halt or delay our ability to service our customers, hinder our ability to conduct and expand our business and require significant remediation costs. In addition, we continue to evaluate and implement upgrades to our IT systems. We are aware of inherent risks associated with replacing these systems, including accurately capturing data and system disruptions, and believe we are taking appropriate action to mitigate these risks through testing, training, and staging implementation. However, there can be no assurances that we will successfully launch these systems as planned or that they will occur without disruptions to our operations. Any of these events could have a material adverse effect on our business, financial condition, results of operations and cash flows.

### 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. Our other international operations are regulated to varying degrees by the countries in which we operate. Many countries have permit requirements for security services and prohibit foreign companies from providing different types of security services.

Changes in laws or regulations could require a change in the way we operate, which could increase costs or otherwise disrupt operations. In addition, failure to comply with any applicable laws or regulations could result in substantial fines or revocation of our operating permits and licenses. If laws and regulations were to change or we failed to comply, our business, financial condition, results of operations and cash flows could be materially and adversely affected.

***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. A negative change in our ratings outlook or any downgrade in our credit ratings by the rating agencies could adversely affect our cost and/or access to sources of liquidity and capital. Additionally, such a downgrade could increase the costs of borrowing under available credit lines. Disruptions in the capital and credit markets could adversely affect our ability to access short-term and long-term capital. Our access to funds under current credit facilities is dependent on the ability of the participating banks to meet their funding commitments. Those banks may not be able to meet their funding commitments if they experience shortages of capital and liquidity. Longer disruptions in the capital and credit markets as a result of uncertainty, changing or increased regulation, reduced alternatives, or failures of significant financial institutions could adversely affect our access to capital needed for our business.

### We are subject to covenants for our credit facilities and our unsecured notes.

Our senior secured credit facility, the senior notes, the unsecured multi-currency bank credit facility and our letter of credit 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. Other covenants, among other things, limit our ability to provide liens, restrict fundamental changes, limit transactions with affiliates and unrestricted subsidiaries, restrict changes to our fiscal year and to organization documents, limit asset dispositions, limit the use of proceeds from asset sales, limit sale and leaseback transactions, limit investments, limit the ability to incur debt, restrict certain payments to shareholders, limit negative pledges and limit the ability to change the nature of our business. Although we believe none of these covenants are presently restrictive to operations, the ability to meet financial and other covenants can be affected by changes in our results of operations or financial condition. We cannot provide assurance that we will meet these covenants. A breach of these covenants could result in a default under existing credit facilities. Upon the occurrence of an event of default under any of our credit facilities, the lenders could cause amounts outstanding to be immediately payable and terminate all commitments to extend further credit. The occurrence of these events would have a significant effect on our liquidity and cash flows.

### Our effective income tax rate could change.

We operate subsidiaries in 41 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. 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. We are subject to the regular examination of our income tax returns by various tax authorities. We regularly assess the likelihood of adverse outcomes resulting from these examinations to determine the adequacy of our provision for income taxes. There can be no assurance that the outcomes from these examinations will not have a material adverse effect on our business.

***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.***

Growing concerns about climate change may result in the imposition of additional environmental regulations to which we are subject. Some form of federal regulation may be forthcoming with respect to greenhouse gas emissions (including carbon dioxide) and/or "cap and trade" legislation. The outcome of this legislation may result in new regulation, additional charges to fund energy efficiency activities or other regulatory actions. Compliance with these actions could result in the creation of additional costs to us, including, among other things, increased fuel prices or additional taxes or emission allowances. 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.

***The Company could be negatively affected as a result of the actions of activist or hostile stockholders.***

Shareholder activism, which could take many forms and arise in a variety of situations, has been increasing among publicly traded companies. Shareholder activism, including potential proxy contests, requires significant time and attention by management and the Board of Directors, potentially hindering the Company’s ability to execute its strategic plan and negatively affecting the trading value of our common stock. Additionally, shareholder activism could give rise to perceived uncertainties as to the Company’s future direction, adversely affect its relationships with key executives, customers and other business partners, or make it more difficult to attract and retain qualified personnel. 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.

***We have identified material weaknesses 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.***

Pursuant to the Sarbanes-Oxley Act of 2002, we are required to document and test our internal control procedures and to provide a report by management on internal control over financial reporting, including management’s assessment of the effectiveness of such control. The Company had material weaknesses in its internal control over financial reporting identified during 2017 and can give no assurances that materials weaknesses will not arise in the future. Although we are working to remedy the material weaknesses identified in 2017, there can be no assurance as to when the remediation plan will be fully developed or implemented. 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.

### Forward-Looking Statements

This document contains both historical and forward-looking information. Words such as “anticipates,” “assumes,” “estimates,” “expects,” “projects,” “predicts,” “intends,” “plans,” “potential,” “believes,” “may,” “should” and similar expressions may identify forward-looking information. 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: anticipated savings from reorganization and restructuring activities; the impact of U.S. tax reform and future tax liability ; the repatriation of cash from operations outside the U.S.; restrictions on foreign currency conversion, the anticipated financial effect of pending litigation; the ability to meet liquidity needs; expenses and payouts for the U.S. retirement plans and the non-U.S. pension and benefit plans and the expected long-term rate of return and funded status of the primary U.S. pension plan; compensation cost related to certain equity awards; expected liability for and future contributions to the UMWA plans, liability for black lung obligations; the projected impact of future excise tax on the UMWA plans; use of proceeds from financing activity; our ability to obtain U.S. dollars to operate our business in Venezuela and ; expected future payments under contractual obligations, and the impact of recent accounting pronouncements. Forward-looking information in this document is subject to known and unknown risks, uncertainties, and contingencies, which are difficult to quantify and which could cause actual results, performance or achievements to differ materially from those that are anticipated.

These 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 improvement and efficiencies in our core businesses;
- our ability to improve service levels and quality in our core businesses;
- market volatility and commodity price fluctuations;
- 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;
- 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, regulatory issues, 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 determined to be highly inflationary, and restrictive government actions, including nationalization;
- labor issues, including negotiations with organized labor and work stoppages;
- 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 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 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 outcome of pending and future claims, litigation, and administrative proceedings;
- public perception of our business, reputation and brand;
- changes in estimates and assumptions underlying critical accounting policies;
- the promulgation and adoption of new accounting standards, new government regulations and interpretation of existing standards and regulations.

The information included in this document is representative only as of the date of this document, and The Brink’s Company undertakes no obligation to update any information contained in this document.

## Properties

As filed, 1,151 characters.

We have property and equipment in locations throughout the world. Branch facilities generally have office space to support operations, a vault to securely process and store valuables and a garage to house armored vehicles and serve as a vehicle terminal. Many branches have additional space to repair and maintain vehicles.

We 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, 2017.

|  | Facilities Leased | Owned | Total | Vehicles Leased | Owned | Total |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| North America | 236 | 98 | 334 | 2,921 | 2,107 | 5,028 |
| South America | 225 | 32 | 257 | 523 | 2,304 | 2,827 |
| Rest of World | 396 | 37 | 433 | 1,646 | 2,058 | 3,704 |
| Corporate Items | 5 | — | 5 | — | — | — |
| Venezuela | 36 | 28 | 64 | — | 995 | 995 |
| Total | 898 | 195 | 1,093 | 5,090 | 7,464 | 12,554 |

## Legal proceedings

As filed, 164 characters.

For a discussion of legal proceedings, see Note 22 to the consolidated financial statements, “Other Commitments and Contingencies,” in Part II, Item 8 of this 10-K.

## Management's discussion and analysis

As filed, 148,550 characters.

### MANAGEMENT’S DISCUSSION AND ANALYSIS OF

### FINANCIAL CONDITION AND RESULTS OF OPERATIONS

### AS OF DECEMBER 31, 2017 AND 2016

### AND FOR EACH OF THE YEARS IN THE THREE-YEAR PERIOD ENDED DECEMBER 31, 2017

|  | Page |
| --- | ---: |
| **OPERATIONS** | 21 |
| **RESULTS OF OPERATIONS** |  |
| Analysis of Results: 2017 versus 2016 | 22 |
| Analysis of Results: 2016 versus 2015 | 25 |
| 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 | 39 |
| Operating Activities | 39 |
| Investing Activities | 40 |
| Financing Activities | 42 |
| Effect of Exchange Rate Changes on Cash and Cash Equivalents | 42 |
| Capitalization | 43 |
| Off Balance Sheet Arrangements | 46 |
| Contractual Obligations | 47 |
| Contingent Matters | 49 |
| **APPLICATION OF CRITICAL ACCOUNTING POLICIES** |  |
| Deferred Tax Asset Valuation Allowance | 50 |
| Goodwill, Other Intangible Assets and Property and Equipment Valuations | 51 |
| Retirement and Postemployment Benefit Obligations | 52 |
| Foreign Currency Translation | 56 |
| **RECENT ACCOUNTING PRONOUCEMENTS** | 57 |

20

### OPERATIONS

The Brink’s Company offers transportation and logistics management services for cash and valuables throughout the world. These services include:

- Cash-in-Transit (“CIT”) Services – armored vehicle transportation of valuables
- ATM Services – replenishing and maintaining customers’ automated teller machines; providing network infrastructure services
- Global Services – secure international transportation of valuables
- Cash Management Services
- Currency and coin counting and sorting; deposit preparation and reconciliations; other cash management services
- Safe and safe control device installation and servicing (including our patented CompuSafe® service)
- Vaulting services
- Check imaging services
- Payment Services – bill payment and processing services on behalf of utility companies and other billers at any of our Brink’s or Brink’s – operated payment locations in Brazil, Colombia, Panama and Mexico and Brink’s Money™ general purpose reloadable prepaid cards and payroll cards in the U.S.
- Commercial Security Systems Services – design and installation of security systems in designated markets in Europe
- Guarding Services – protection of airports, offices, and certain other locations in Europe and Brazil with or without electronic surveillance, access control, fire prevention and highly trained patrolling personnel

During the first quarter of 2017, we implemented changes to our organizational and management structure that resulted in changes to our operating segments for financial reporting purposes. Through the fiscal year ended December 31, 2016, our business was reported in nine operating segments: U.S., France, Mexico, Brazil, Canada, Latin America, EMEA, Asia and Payment Services. Changes in our management reporting structure during the first quarter of 2017 required us to conduct an assessment in accordance with ASC Topic 280, *Segment Reporting*, to determine our operating segments.

As a result of this assessment, we now have the following operating segments:

- North America
- South America
- Rest of World.

Prior period information has been revised to reflect our current segment structure.

We believe that Brink’s has significant competitive advantages including:

- track record of refining our business portfolio to deliver shareholder value
- medium-term growth drivers from high-value services
- global footprint in a world with increasing security needs
- brand name recognition
- reputation for a high level of service and security
- risk management and logistics expertise
- value-based solutions expertise
- operational excellence
- high-quality insurance coverage and financial strength

We focus our time and resources on service quality, protecting and strengthening our brand, and addressing our risks. Our marketing and sales efforts are enhanced by the “Brink’s” brand, so we seek to protect and build its value. Because our services focus on handling, transporting, protecting and managing valuables, we strive to understand and manage risk.

In order to earn an adequate return on capital, we focus on the effective and efficient use of resources in addition to our pricing discipline. We attempt to maximize the amount of business that flows through our branches, vehicles and systems in order to obtain the lowest costs possible without compromising safety, security or service.

Operating results may vary from period to period. Because revenues are generated from charges per service performed or based on the value of goods transported, they can be affected by both the level of economic activity and the volume of business for specific customers. We also periodically incur costs to change the scale of our operations when volumes increase or decrease. 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).

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.

### RESULTS OF OPERATIONS

### Analysis of Results: 2017 versus 2016

### 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. The purpose of the non-GAAP information is to report our operating profit, income from continuing operations and earnings per share without certain income and expense items that do not reflect the regular earnings of our operations. The non-GAAP financial measures are intended to provide investors with a supplemental comparison of our operating results and trends for the periods presented. Our management believes these measures are also useful to investors as such measures allow investors to evaluate our performance using the same metrics that our management uses to evaluate past performance and prospects for future performance. We do not consider these items to be reflective of our core operating performance due to the variability of such items from period-to-period in terms of size, nature and significance. 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.

***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 and changes in currency exchange rates. See definitions on page 24.

*(In millions, except for per share amounts)*

| Years Ended December 31, GAAP | 2017 | 2016 | % Change |
| --- | ---: | ---: | ---: |
| Revenues | **$3,347.0** | 3,020.6 | **11** |
| Cost of revenues | **2,608.2** | 2,391.7 | **9** |
| Selling, general and administrative expenses | **468.2** | 424.3 | **10** |
| Operating profit | **273.9** | 184.5 | **48** |
| Income from continuing operations(a) | **16.9** | 36.2 | **(53)** |
| Diluted EPS from continuing operations(a) | **$0.33** | 0.72 | **(54)** |
| Non-GAAP(b) |  |  |  |
| Non-GAAP revenues | **$3,192.9** | 2,908.4 | **10** |
| Non-GAAP operating profit | **281.4** | 215.8 | **30** |
| Non-GAAP income from continuing operations(a) | **157.2** | 115.6 | **36** |
| Non-GAAP diluted EPS from continuing operations(a) | **$3.03** | 2.28 | **33** |

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

(b) Non-GAAP results are reconciled to the applicable GAAP results on pages 35–37.

### GAAP Basis

### Analysis of Consolidated Results: 2017 versus 2016

***Consolidated Revenues*** Revenues increased $326.4 million as organic growth in Venezuela ($445.5 million), South America ($134.7 million), North America ($33.2 million), and Rest of World ($18.1 million), and the favorable impact of acquisitions and dispositions ($67.6 million) was partially offset by unfavorable changes in currency exchange rates ($372.7 million). A significant portion of the reduction in revenues from currency exchange rates relates to the devaluation of the Venezuela bolivar ($400.8 million). Revenues increased 21% on an organic basis due mainly to higher average selling prices in Venezuela and Argentina (including the effects of inflation) and organic revenue growth in Brazil and Mexico driven by volume growth and price increases. See above for our definition of “organic.”

***Consolidated Costs and Expenses*** Cost of revenues increased 9% to $2,608.2 million due the impact of acquisitions and inflation-based increases on labor and other operational costs, partially offset by productivity improvements. Selling, general and administrative costs increased 10% to $468.2 million due primarily to the impact of acquisitions and higher compensation costs driven by incentive-based compensation, partially offset by changes in currency exchange rates.

***Consolidated Operating Profit*** Operating profit increased $89.4 million due mainly to:

- organic increases in Venezuela ($115.8 million), South America ($52.6 million) and North America ($31.3 million), and
- the favorable impact of acquisitions and dispositions ($21.0 million),
- lower organic impact of costs from reorganization and restructuring actions and acquisition and disposition activities ($18.8 million) included in "Other items not allocated to segments",

partially offset by:

- unfavorable changes in currency exchange rates ($122.2 million), including the effects of Venezuela devaluations, and
- higher corporate expenses ($27.6 million on an organic basis) due to higher incentive-based compensation and security losses

***Consolidated Income from Continuing Operations Attributable to Brink’s and Related Per Share Amounts*** Income from continuing operations attributable to Brink’s shareholders in 2017 decreased $19.3 million to $16.9 million primarily due to higher income tax expense ($79.2 million) driven by U.S. tax reform, higher interest expense ($11.8 million), and higher interest and other income (expense) ($21.1 million). These items were partially offset by the operating profit increase mentioned above. Earnings per share from continuing operations was $0.33, down from $0.72 in 2016.

### Non-GAAP Basis

### Analysis of Consolidated Results: 2017 versus 2016

***Non-GAAP Consolidated Revenues*** Non-GAAP revenues increased $284.5 million primarily due to organic growth in South America ($134.7 million), North America ($33.2 million), and Rest of World ($18.1 million), as well as the favorable impact of acquisitions and dispositions ($70.4 million) and currency exchange rates ($28.1 million). The favorable currency impact was driven by the Brazilian real and the euro, which was partially offset by the unfavorable impact of the Argentine peso. Non-GAAP revenues increased 6% on an organic basis due mainly to higher average selling prices in Argentina (including the effects of inflation) and organic revenue growth in Brazil and Mexico driven by volume growth and price increases. See page 22 for our definition of “organic.”

***Non-GAAP Consolidated Operating Profit*** Non-GAAP operating profit increased $65.6 million due mainly to:

- organic increases in South America ($52.6 million) and North America ($31.3 million), and
- the favorable impact of acquisitions and dispositions ($19.9 million),

partially offset by:

- higher corporate expenses ($27.6 million on an organic basis) due to higher incentive-based compensation and security losses, and
- unfavorable changes in currency exchange rates ($10.3 million).

***Non-GAAP Consolidated Income from Continuing Operations Attributable to Brink’s and Related Per Share Amounts*** Non-GAAP income from continuing operations attributable to Brink’s shareholders in 2017 increased $41.6 million to $157.2 million primarily due to the non-GAAP operating profit increase mentioned above, partially offset by the corresponding higher non-GAAP income tax expense ($14.6 million) and higher interest expense ($10.7 million). Non-GAAP earnings per share from continuing operations was $3.03, up from $2.28 in 2016.

### Revenues and Operating Profit by Segment: 2017 versus 2016

*(In millions)*

| Revenues: | 2016 | Organic Change | Acquisitions / Dispositions(a) | Currency(b) | 2017 | % Change Total | Organic |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| North America | $1,210.3 | 33.2 | 10.7 | — | **1,254.2** | 4 | 3 |
| South America | 718.7 | 134.7 | 63.7 | 7.5 | **924.6** | 29 | 19 |
| Rest of World | 979.4 | 18.1 | (4.0) | 20.6 | **1,014.1** | 4 | 2 |
| **Revenues - non-GAAP** | 2,908.4 | 186.0 | 70.4 | 28.1 | **3,192.9** | 10 | 6 |
| Other items not allocated to segments(d) | 112.2 | 445.5 | (2.8) | (400.8) | **154.1** | 37 | fav |
| **Revenues - GAAP** | $3,020.6 | 631.5 | 67.6 | (372.7) | **3,347.0** | 11 | 21 |
| **Operating profit:** |  |  |  |  |  |  |  |
| North America | $40.1 | 31.3 | 1.9 | 0.7 | **74.0** | 85 | 78 |
| South America | 122.6 | 52.6 | 16.0 | (8.4) | **182.8** | 49 | 43 |
| Rest of World | 111.3 | (0.3) | 2.0 | 2.2 | **115.2** | 4 | — |
| **Segment operating profit** | 274.0 | 83.6 | 19.9 | (5.5) | **372.0** | 36 | 31 |
| Corporate expenses(c) | (58.2) | (27.6) | — | (4.8) | **(90.6)** | 56 | 47 |
| **Operating profit - non-GAAP** | 215.8 | 56.0 | 19.9 | (10.3) | **281.4** | 30 | 26 |
| Other items not allocated to segments(d) | (31.3) | 134.6 | 1.1 | (111.9) | **(7.5)** | (76) | fav |
| **Operating profit (loss) - GAAP** | $184.5 | 190.6 | 21.0 | (122.2) | **273.9** | 48 | fav |

Amounts may not add due to rounding.

(a) Non-GAAP amounts include the impact of prior year comparable period results for acquired and disposed businesses. GAAP results also include the impact of acquisition-related intangible amortization, restructuring and other charges, and disposition related gains/losses.

(b) The amounts in the “Currency” column consist of the effects of Venezuela devaluations and the sum of monthly currency changes. 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) Corporate expenses are not allocated to segment results. Corporate expenses include salaries and other costs to manage the global business and to perform activities required by public companies.

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

### Analysis of Segment Results: 2017 versus 2016

### North America

Revenues increased 4% ($43.9 million) driven by organic growth of 3% ($33.2 million) and the favorable impact of acquisitions ($10.7 million). Organic revenue growth was primarily driven by price and volume growth in Mexico. Operating profit increased $33.9 million primarily due to organic growth in the U.S. and Mexico. Organic profit growth in the U.S. was driven by lower vehicle costs, labor and other productivity improvements, and lower security losses. Organic profit growth in Mexico was driven by productivity improvements.

### South America

Revenues increased 29% ($205.9 million) primarily due to 19% organic growth ($134.7 million), the favorable impact of acquisitions ($63.7 million) and currency exchange rates ($7.5 million) mostly from the Brazilian real, partially offset by a decline in the Argentine peso. The organic growth was driven by inflation-based price increases in Argentina and increased volume growth and price increases in Brazil. Operating profit increased 49% ($60.2 million) driven by organic growth in Argentina and Brazil and the favorable impact of acquisitions ($16.0 million), partially offset by unfavorable currency ($8.4 million) driven by the Argentine peso.

### Rest of World

Revenues increased 4% ($34.7 million) due to the favorable impact of currency exchange rates ($20.6 million), primarily from the euro, and 2% organic growth ($18.1 million). The organic revenue growth was driven by Greece and Asia, partially offset by a decrease in France due to pricing pressure. Operating profit increased 4% ($3.9 million) due to the favorable impact of currency ($2.2 million) and acquisitions and dispositions ($2.0 million). Organic growth was down slightly ($0.3 million) due to a decrease in France related to pricing pressure which was partially offset by growth in Asia.

### Analysis of Results: 2016 versus 2015

### Consolidated Results

*(In millions, except for per share amounts)*

| Years Ended December 31, GAAP | 2016 | 2015 | % Change |
| --- | ---: | ---: | ---: |
| Revenues | **$3,020.6** | 3,061.4 | **(1)** |
| Cost of revenues | **2,391.7** | 2,443.7 | **(2)** |
| Selling, general and administrative expenses | **424.3** | 451.9 | **(6)** |
| Operating profit | **184.5** | 96.4 | **91** |
| Income (loss) from continuing operations(a) | **36.2** | (9.1) | **fav** |
| Diluted EPS from continuing operations(a) | **$0.72** | (0.19) | **fav** |
| Non-GAAP(b) |  |  |  |
| Non-GAAP revenues | **$2,908.4** | 2,976.9 | **(2)** |
| Non-GAAP operating profit | **215.8** | 167.5 | **29** |
| Non-GAAP income from continuing operations(a) | **115.6** | 87.1 | **33** |
| Non-GAAP diluted EPS from continuing operations(a) | **$2.28** | 1.75 | **30** |

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

(b) Non-GAAP results are reconciled to the applicable GAAP results on pages 35–37.

### GAAP Basis

### Analysis of Consolidated Results: 2016 versus 2015

***Consolidated Revenues*** Revenues decreased $40.8 million or 1% due to unfavorable changes in currency exchange rates ($399.6 million), the impact of dispositions ($34.3 million), and an organic decrease in Rest of World ($3.4 million), partially offset by organic growth in Venezuela ($226.4 million), South America ($124.7 million), and North America ($45.4 million). A significant portion of the reduction in revenues from currency exchange rates relates to a devaluation of the Venezuelan bolivar after February 2016. The U.S. dollar also strengthened against the Mexican peso and most currencies in South America. Revenues increased 13% on an organic basis due mainly to higher average selling prices in Venezuela and South America (including the effects of inflation). See page 22 for our definition of “organic.”

***Consolidated Costs and Expenses*** Cost of revenues decreased 2% to $2,391.7 million as changes in currency rates more than offset higher labor costs from inflation-based increases. Selling, general and administrative costs decreased 6% to $424.3 million due primarily to changes in currency exchange rates.

***Consolidated Operating Profit*** Operating profit increased $88.1 million due mainly to:

- a $35.3 million charge in 2015 related to impairment of fixed assets in Venezuela, which did not reoccur in 2016,
- organic increases in Venezuela ($84.8 million), South America ($49.3 million), and Rest of World ($5.5 million), and
- lower corporate expenses ($13.4 million on an organic basis),

partially offset by:

- unfavorable changes in currency exchange rates ($76.1 million), including the effects of Venezuela devaluations,
- higher reorganization and restructuring costs in 2016 ($15.0 million),
- negative impact of exiting operations in Ireland ($10.0 million), and
- organic decreases in North America ($1.1 million).

***Consolidated Income from Continuing Operations Attributable to Brink’s and Related Per Share Amounts*** Income from continuing operations attributable to Brink’s shareholders in 2016 increased $45.3 million from the prior year primarily due to the operating profit increase mentioned above, partially offset by higher income attributable to noncontrolling interests ($26.6 million) and higher income tax expense ($12.0 million). Earnings per share from continuing operations was $0.72, up from negative $0.19 in 2015.

### Non-GAAP Basis

### Analysis of Consolidated Results: 2016 versus 2015

***Non-GAAP Consolidated Revenues*** Non-GAAP revenues decreased $68.5 million or 2% due to unfavorable changes in currency exchange rates ($198.1 million), the impact of dispositions ($37.1 million), and an organic decrease in Rest of World ($3.4 million), partially offset by organic growth in South America ($124.7 million), and North America ($45.4 million). The reduction in Non-GAAP revenues from currency exchange rates relates to a strengthening of the U.S. dollar against the Mexican peso, and most currencies in South America. Non-GAAP revenues increased 6% on an organic basis due mainly to higher average selling prices in South America (including the effects of inflation). See page 22 for our definition of “organic.”

***Non-GAAP Consolidated Operating Profit*** Non-GAAP operating profit increased $48.3 million due mainly to:

- organic increases in South America ($49.3 million) and Rest of World ($5.5 million), and
- lower corporate expenses ($13.4 million on an organic basis),

partially offset by:

- unfavorable changes in currency exchange rates ($23.0 million), and
- organic decreases in North America ($1.1 million).

***Non-GAAP Consolidated Income from Continuing Operations Attributable to Brink’s and Related Per Share Amounts*** Non-GAAP income from continuing operations attributable to Brink’s shareholders in 2016 increased $28.5 million to $115.6 million primarily due to the non-GAAP operating profit increase mentioned above, partially offset by corresponding higher non-GAAP income tax expense ($16.6 million). Non-GAAP earnings per share from continuing operations was $2.28, up from $1.75 in 2015.

### Revenues and Operating Profit by Segment: 2016 versus 2015

*(In millions)*

| Revenues: | 2015 | Organic Change | Acquisitions / Dispositions(a) | Currency(b) | 2016 | % Change Total | Organic |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| North America | $1,224.0 | 45.4 | — | (59.1) | **1,210.3** | (1) | 4 |
| South America | 719.3 | 124.7 | — | (125.3) | **718.7** | — | 17 |
| Rest of World | 1,033.6 | (3.4) | (37.1) | (13.7) | **979.4** | (5) | — |
| **Revenues - non-GAAP** | 2,976.9 | 166.7 | (37.1) | (198.1) | **2,908.4** | (2) | 6 |
| Other items not allocated to segments(d) | 84.5 | 226.4 | 2.8 | (201.5) | **112.2** | 33 | fav |
| **Revenues - GAAP** | $3,061.4 | 393.1 | (34.3) | (399.6) | **3,020.6** | (1) | 13 |
| **Operating profit:** |  |  |  |  |  |  |  |
| North America | $45.6 | (1.1) | — | (4.4) | **40.1** | (12) | (2) |
| South America | 104.6 | 49.3 | — | (31.3) | **122.6** | 17 | 47 |
| Rest of World | 102.5 | 5.5 | 4.2 | (0.9) | **111.3** | 9 | 5 |
| **Segment operating profit** | 252.7 | 53.7 | 4.2 | (36.6) | **274.0** | 8 | 21 |
| Corporate expenses(c) | (85.2) | 13.4 | — | 13.6 | **(58.2)** | (32) | (16) |
| **Operating profit - non-GAAP** | 167.5 | 67.1 | 4.2 | (23.0) | **215.8** | 29 | 40 |
| Other items not allocated to segments(d) | (71.1) | 100.3 | (7.4) | (53.1) | **(31.3)** | (56) | fav |
| **Operating profit (loss) - GAAP** | $96.4 | 167.4 | (3.2) | (76.1) | **184.5** | 91 | fav |

Amounts may not add due to rounding.

See page 24 for footnotes.

### Analysis of Segment Results: 2016 versus 2015

### North America

Revenues decreased 1% ($13.7 million) due to the unfavorable impact of currency exchange rates ($59.1 million) primarily from the Mexican peso, partially offset by organic growth of 4% ($45.4 million). Organic growth was driven by volume increases in the U.S. and price and volume increases in Mexico, with U.S. volume growth driven by the increased sales of cash recyclers to a large retailer. Operating profit decreased $5.5 million due to unfavorable currency ($4.4 million) primarily from the Mexican peso and organic decreases in the U.S. and Canada. The U.S. organic decline was due to higher fleet and insurance costs and the Canada decline was due to inflationary cost increases and lower organic revenue growth. These declines were partially offset by organic growth in the U.S. Payments business driven by revenue growth and lower marketing expenditures related to increasing cardholders.

### South America

Revenues decreased $0.6 million as the unfavorable impact of currency exchange rates ($125.3 million) was mostly offset by 17% organic growth ($124.7 million) driven by inflation-based revenue increases in Argentina and price increases in Brazil. Operating profit increased 17% ($18.0 million) primarily due to organic growth in Argentina, Chile, and Brazil, partially offset by unfavorable currency ($31.3 million). The organic growth in Brazil was driven by a favorable tax ruling and productivity improvements.

### Rest of World

Revenues decreased 5% ($54.2 million) due to the impact of dispositions ($37.1 million), unfavorable currency ($13.7 million), and organic decreases ($3.4 million). Organic revenue decreases were driven by lower BGS volumes, and lower revenue in France due to volume and pricing pressure and the loss of an airport guarding contract, partially offset by organic growth in Asia driven by Hong Kong and Singapore. Operating profit increased 9% ($8.8 million) due to organic growth ($5.5 million) and the favorable impact of dispositions ($4.2 million). The organic growth was driven by higher organic results in France due to growth in cash management services and a benefit recognized related to social charges, as well as organic growth in Asia due to revenue growth.

### Income and Expense Not Allocated to Segments

### Corporate Expenses

Corporate expenses include former non-segment and regional management costs, currency transaction gains and losses, and costs related to global initiatives.

*(In millions)*

|  | Years Ended December 31, 2017 | 2016 | 2015 | % change 2017 | 2016 |
| --- | ---: | ---: | ---: | ---: | ---: |
| General, administrative and other expenses | **$(84.3)** | (59.8) | (81.0) | **41** | (26) |
| Foreign currency transaction gains (losses) | **(1.1)** | 3.8 | (8.8) | **unfav** | fav |
| Reconciliation of segment policies to GAAP | **(5.2)** | (2.2) | 4.6 | **unfav** | unfav |
| Corporate items | **$(90.6)** | (58.2) | (85.2) | **56** | (32) |

Corporate expenses in 2017 were $32.4 million higher than the prior year primarily due to higher incentive compensation expense and security losses recognized in corporate expenses. Corporate expenses include costs to manage the global business and to perform activities required of public companies, as well as currency transaction gains and losses.

Corporate expenses in 2016 were $27.0 million lower than the prior year due to lower compensation-related expenses, along with the recognition of foreign currency transaction gains in 2016 compared to foreign currency transaction losses in 2015.

### Other Items Not Allocated to Segments

*(In millions)*

| Revenues: | Years Ended December 31, 2017 | 2016 | 2015 | % change 2017 | 2016 |
| --- | ---: | ---: | ---: | ---: | ---: |
| Venezuela operations | **$154.1** | 109.4 | 84.5 | **41** | 29 |
| Acquisitions and dispositions | **—** | 2.8 | — | **(100)** | fav |
| Revenues | **$154.1** | 112.2 | 84.5 | **37** | 33 |
| Operating profit: |  |  |  |  |  |
| Venezuela operations | **$20.4** | 18.5 | (45.6) | **10** | fav |
| Reorganization and Restructuring | **(22.6)** | (30.3) | (15.3) | **(25)** | 98 |
| Acquisitions and dispositions | **(5.3)** | (19.5) | (10.2) | **(73)** | 91 |
| Operating profit | **$(7.5)** | (31.3) | (71.1) | **(76)** | (56) |

#### 2017 versus 2016

The impact of other items not allocated to segments on operating profit was a smaller loss ($7.5 million in 2017 versus $31.3 million in the prior year). The change was primarily due to lower charges from acquisitions and dispositions in 2017 as the prior year included losses from Ireland operations exited in 2016 as well as a loss on the sale of corporate assets. In addition, the current year includes a gain on the sale of real estate in Mexico. These favorable items were partially offset by higher amortization expense for acquisition-related intangible assets, severance costs related to recent business acquisitions in Argentina and Brazil and transaction costs related to 2017 business acquisitions. Charges from reorganization and restructuring activities were lower in the current year and profit from Venezuela operations was higher in 2017.

#### 2016 versus 2015

The impact of other items not allocated to segments on operating profit was a smaller loss ($31.3 million in 2016 versus $71.1 million in the prior year period). The reduction was primarily due to the $35.3 million of Venezuela impairment charges recognized in the prior year period as well as lower losses related to currency devaluation in Venezuela in the current year period. The Venezuela-related items were partially offset by charges related to the shutdown of operations in Ireland, a loss on the sale of corporate assets and higher reorganization and restructuring costs in 2016.

**Venezuela operations** We have excluded from our segment results all of our Venezuela operating results, including remeasurement losses on net monetary assets related to currency devaluations ($9.1 million in 2017, $4.8 million in 2016 and $18.1 million in 2015) and charges related to the impairment of property and equipment ($35.3 million in 2015), due to the Venezuelan government's restrictions that have prevented us from repatriating funds. In light of these unique circumstances, our operations in Venezuela are largely independent of the rest of our global operations. As a result, the Chief Executive Officer, the Company's Chief Operating Decision maker ("CODM"), assesses segment performance and makes resource decisions by segment excluding Venezuela operating results. Additionally, management believes excluding Venezuela from segment results makes it possible to more effectively evaluate the company’s performance between periods.

Factors considered by management in excluding Venezuela results include:

- Continued inability to repatriate cash to redeploy to other operations or dividend to shareholders
- Highly inflationary environment
- Fixed exchange rate policy
- Continued currency devaluations and
- Difficulty raising prices and controlling costs

### Reorganization and Restructuring

#### 2016 Restructuring

In the fourth quarter of 2016, management implemented restructuring actions across our global business operations and our corporate functions. As a result of these actions, we recognized $18.1 million in related 2016 costs. We recognized an additional $17.3 million in 2017 under this restructuring for additional costs related to severance, asset-related adjustments, a benefit program termination and lease terminations. Severance actions are expected to reduce our global workforce by 800 to 900 positions and result in approximately $20 million in annualized cost savings when this restructuring is finalized. We expect to incur additional costs between $10 and $12 million in future periods, primarily severance costs.

#### Executive Leadership and Board of Directors

In 2015, we recognized $1.8 million in charges related to Executive Leadership and Board of Directors restructuring actions, which were announced in January 2016. We recognized $4.3 million in charges in 2016 related to the Executive Leadership and Board of Directors restructuring actions.

#### 2015 Restructuring

Brink's initiated a global restructuring of its business in the third quarter of 2015. We recognized $11.6 million in 2015 costs related to employee severance, contract terminations, and property impairment. We recognized an additional $6.5 million in 2016 related to this restructuring for additional severance costs, contract terminations and lease terminations. The 2015 Reorganization and Restructuring reduced the global workforce by approximately 1,100 positions and resulted in approximately $20 million in 2016 savings. The actions under this program were substantially completed by the end of 2016, with cumulative pretax charges of approximately $18 million.

#### 2014 Restructuring

Brink’s reorganized and restructured its business in December 2014, eliminating the management roles and structures in its former Latin America and EMEA regions and implementing a plan to reduce the cost structure of various country operations by eliminating approximately 1,700 positions across its global workforce. Severance costs of $21.8 million associated with these actions were recognized in 2014. An additional $1.9 million in costs were recognized in 2015 related to the 2014 restructuring. The restructuring saved annual direct costs of approximately $50 million in 2015 compared to 2014, excluding charges for severance, lease termination and accelerated depreciation.

#### Other Restructurings

Management routinely implements restructuring actions in targeted sections of our business. As a result of these actions, we recognized related severance costs of $4.6 million in 2017. The majority of these restructuring actions were completed in 2017. The completed restructuring actions reduced our workforce by approximately 300 positions, which will result in $4 million in annualized cost savings. For the remaining restructuring actions, we expect to incur additional costs less than $1 million in future periods. These estimates will be updated as management targets additional sections of our business.

Due to the unique circumstances around these charges, they have not been allocated to segment results and are excluded from non-GAAP results. Charges related to the employees, assets, leases and contracts impacted by these restructuring actions were excluded from the segments and corporate expenses as shown in the table below.

*(In millions)*

| Reportable Segments: | Years Ended December 31, 2017 | 2016 | 2015 | % change 2017 | 2016 |
| --- | ---: | ---: | ---: | ---: | ---: |
| North America | **$(5.3)** | (6.0) | (1.7) | **(12)** | unfav |
| South America | **(4.6)** | (4.6) | (1.2) | **—** | unfav |
| Rest of World | **(10.1)** | (13.2) | (6.7) | **(23)** | 97 |
| Total reportable segments | **(20.0)** | (23.8) | (9.6) | **(16)** | unfav |
| Corporate items | **(2.6)** | (6.5) | (5.7) | **(60)** | 14 |
| Total | **$(22.6)** | (30.3) | (15.3) | **(25)** | 98 |

29

**Acquisitions and dispositions** Part of our strategy is the pursuit of accretive business acquisitions. We completed six acquisitions in 2017 for a combined purchase price of approximately $365 million. In January 2018, we announced an agreement to acquire another business in Brazil for approximately $145 million. 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 non-GAAP results. These items are described below:

#### 2017 Acquisitions and Dispositions

- Amortization expense for acquisition-related intangible assets was $8.4 million in 2017.
- Fourth quarter 2017 net gain related to the sale of real estate in Mexico ($7.8 million, net of statutory employee benefit).
- Severance costs of $4.0 million related to our recent acquisitions in Argentina and Brazil.
- Transaction costs of $2.6 million related to acquisitions of new businesses in 2017.
- Currency transaction gains of $1.8 million related to acquisition activity.

#### 2016 Acquisitions and Dispositions

- Due to management's decision in the first quarter of 2016 to exit the Republic of Ireland, the prospective impacts of shutting down this operation were included in items not allocated to segments and were excluded from the operating segments effective March 1, 2016. This activity is also excluded from the consolidated non-GAAP results. Beginning May 1, 2016, due to management's decision to also exit Northern Ireland, the results of shutting down these operations were treated similarly to the Republic of Ireland. 2015 revenues from both Ireland operations were approximately $20 million. Charges included in our full-year 2016 GAAP results include $4.9 million in severance costs, $1.8 million in property impairment charges, lease restructuring charges of $0.5 million and an additional $7.0 million in operating and other exit costs. These costs have been excluded from our segment and our consolidated non-GAAP results. International shipments to and from Ireland will continue to be provided through BGS.
- Amortization expense for acquisition-related intangible assets was $3.6 million in 2016.
- Brink's recognized a $2.0 million loss related to the sale of corporate assets in the second quarter of 2016.

#### 2015 Acquisitions and Dispositions

- These items related primarily to Brink's sale of its 70% interest in a cash management business in Russia in the fourth quarter of 2015 from which we recognized a $5.9 million loss on the sale.
- Amortization expense for acquisition-related intangible assets of $4.2 million in 2015.

### Other Operating Income and Expense

Amounts below represent consolidated other operating income and expense.

*(In millions)*

| Foreign currency items: | Years Ended December 31, 2017 | 2016 | 2015 | % change 2017 | 2016 |
| --- | ---: | ---: | ---: | --- | ---: |
| Transaction gains (losses) | **$(9.2)** | 1.4 | (26.8) | **unfav** | fav |
| Foreign currency derivative instrument gains (losses) | **0.8** | (2.4) | 2.9 | **fav** | unfav |
| Gains (losses) on sale of property | **9.2** | (1.3) | 0.9 | **fav** | unfav |
| Argentina conversion losses | **—** | (0.1) | (7.1) | **(100)** | (99) |
| Impairment losses | **(3.4)** | (20.6) | (37.2) | **(83)** | (45) |
| Share in earnings (losses) of equity affiliates | **0.4** | (1.5) | 0.5 | **fav** | unfav |
| Royalty income | **1.9** | 2.6 | 2.1 | **(27)** | 24 |
| Gains (losses) on business acquisitions and dispositions | **0.6** | 0.1 | (6.3) | **fav** | fav |
| Other | **3.0** | 1.7 | 1.6 | **76** | 6 |
| Other operating income (expense) | **$3.3** | (20.1) | (69.4) | **fav** | (71) |

#### 2017 versus 2016

We reported other operating income of $3.3 million in 2017 versus other operating expense of $20.1 million in the prior year. The change was primarily due to lower property impairment losses as the prior year included impairment charges resulting from the 2016 restructuring actions. In addition, we recognized an $8.4 million gain in 2017 related to the sale of real estate in Mexico. These positive factors were partially offset by higher foreign currency transaction losses in 2017, primarily from remeasurement losses associated with Venezuela currency devaluation ($9.1 million in 2017 versus $4.8 million in 2016) .

#### 2016 versus 2015

Other operating expense decreased in 2016 primarily due to lower losses from foreign currency items, property impairments, Argentina currency conversions and business dispositions. The reduction in foreign currency transaction losses mainly resulted from lower remeasurement losses associated with Venezuelan currency devaluation ($4.8 million in 2016 versus $18.1 million in 2015). Impairment charges declined in 2016 as the 2015 Venezuela property impairment of $35.3 million exceeded current year impairment losses, primarily from 2016 restructuring actions. After the December 2015 devaluation of the Argentine peso, we did not incur significant losses from converting Argentina pesos to U.S. dollars ($0.1 million in 2016 versus $7.1 million in 2015). In 2015, we recognized a $5.9 million loss on the sale of a Russian cash management business.

### Nonoperating Income and Expense

### Interest Expense

*(In millions)*

|  | Years Ended December 31, 2017 | 2016 | 2015 | % change 2017 | 2016 |
| --- | ---: | ---: | ---: | ---: | ---: |
| Interest expense | **$32.2** | 20.4 | 18.9 | **58** | 8 |

Interest expense was higher in 2017 due to higher borrowing levels used to finance 2017 and future business acquisitions.

Interest expense was higher in 2016 due to interest recognized on a non-recourse financing liability in Mexico (see Note 19) and the impact of higher weighted-average interest rates in 2016 versus the prior year.

### Interest and Other Income (Expense)

*(In millions)*

|  | Years Ended December 31, 2017 | 2016 | 2015 | % change 2017 | 2016 |
| --- | ---: | ---: | ---: | --- | ---: |
| Interest income | **$4.1** | 2.6 | 3.3 | **58** | (21) |
| Gain on available-for-sale securities | **1.5** | 0.5 | 1.1 | **fav** | (55) |
| Foreign currency transaction losses | **(7.6)** | — | — | **unfav** | — |
| Derivative instruments | **1.1** | (0.6) | (0.5) | **fav** | 20 |
| Retirement benefit cost other than service cost | **(47.8)** | (40.3) | (39.8) | **19** | 1 |
| Prepayment penalties(a) | **(8.3)** | — | — | **unfav** | — |
| Interest on Brazil tax claim(b) | **(1.6)** | — | — | **unfav** | — |
| Other | **(1.6)** | (1.3) | (0.5) | **23** | unfav |
| Interest and other income (expense) | **$(60.2)** | (39.1) | (36.4) | **54** | 7 |

(a) Penalties upon prepayment of Private Placement notes in September 2017 and a term loan in October 2017.

(b) Related to an unfavorable court ruling in 2017 on a non-income tax claim in Brazil. The court ruled that Brink's must pay interest accruing from the initial claim filing in 1994 to the current date. The principal amount of the claim was approximately $1 million and was recognized in selling, general and administrative expenses in 2017.

Interest and other income (expense) was a higher expense in 2017 compared to 2016 primarily due to prepayment penalties, currency transaction losses related to 2017 business acquisitions, higher retirement benefit costs and interest on a Brazil tax claim.

Interest and other income (expense) was a higher expense in 2016 compared to 2015 primarily due to lower interest income and a decrease in gains on available-for-sale securities.

### Income Taxes

On December 22, 2017, the Tax Cuts and Jobs Act of 2017 (“Tax Reform Act”) was enacted into law. The Tax Reform Act includes a reduction in the federal tax rate for corporations from 35% to 21% as of January 1, 2018, a one-time transition tax on the cumulative undistributed earnings of foreign subsidiaries as of December 31, 2017, a repeal of the corporate alternative minimum tax, and more extensive limitations on deductibility of performance-based compensation for named executive officers. Other provisions effective as of January 1, 2018, which could materially impact the Company in the near-term, include the creation of a new U.S. minimum tax on foreign earnings called the Global Intangible Low-Taxed Income (“GILTI”) and limitations on the deductibility of interest expense.

Due to the timing of the enactment and the complexity involved in applying the provisions of the Tax Reform Act, the Company has recorded provisional amounts as of December 31, 2017, in accordance with Staff Accounting Bulletin No. 118 (“SAB 118”). We recorded a provisional one-time non-cash charge of $92 million in the fourth quarter of 2017 to remeasure the deferred tax assets for the new rate and for other legislative changes. We do not expect a U.S. federal current tax liability for the transition tax due to our high-tax foreign income, but we have recorded a provisional $31.1 million foreign tax credit offset with a full valuation allowance related to the transition tax. We did not record a current state tax liability related to the transition tax in accordance with the interpretation of existing state laws and the provisional estimates. The Company has not yet adopted an accounting policy related to the provision of deferred taxes related to GILTI. We did not change our assertion on the determination of which subsidiaries that we consider to be permanently invested and for which we do not expect to repatriate to the U.S. as a result of the Tax Reform Act. We will continue to collect and analyze data, including the undistributed earnings of foreign subsidiaries and related taxes, interpret the Tax Reform Act and apply the additional guidance and legislative changes to be issued by the U.S. federal and state authorities and may be required to make adjustments to these provisional amounts. The accounting for the Tax Reform Act will be completed by the end of 2018 in accordance with SAB 118.

### Summary Rate Reconciliation – GAAP

| (In percentages) | 2017 | 2016 | 2015 |
| --- | ---: | ---: | ---: |
| U.S. federal tax rate | **35.0%** | 35.0% | 35.0% |
| Increases (reductions) in taxes due to: |  |  |  |
| Venezuela devaluation | **—** | 2.9 | 61.3 |
| Tax on accelerated U.S. income(a) | **(0.2)** | — | 57.3 |
| Adjustments to valuation allowances | **3.4** | 18.2 | 18.9 |
| Foreign income taxes | **1.8** | 4.2 | (18.2) |
| Tax reform | **47.4** | — | — |
| French business tax | **2.0** | 3.0 | 8.9 |
| Taxes on undistributed earnings of foreign affiliates | **0.9** | 0.7 | (1.2) |
| State income taxes, net | **(1.3)** | (1.0) | (4.1) |
| Share-based compensation | **(3.5)** | (1.4) | — |
| Other | **1.4** | 1.2 | 3.9 |
| Income tax rate on continuing operations | **86.9%** | 62.8% | 161.8% |

(a) In the fourth quarter of 2015, we recognized a $23.5 million increase to current tax expense related to a transaction that accelerated U.S. taxable income. In 2017, we recognized a $0.4 million decrease to non-U.S. tax expense related to the 2015 transaction.

### Summary Rate Reconciliation – Non-GAAP(a)

| (In percentages) | 2017 | 2016 | 2015 |
| --- | ---: | ---: | ---: |
| U.S. federal tax rate | **35.0%** | 35.0% | 35.0% |
| Increases (reductions) in taxes due to: |  |  |  |
| Adjustments to valuation allowances | **1.2** | 1.2 | 1.9 |
| French business tax | **1.5** | 2.0 | 2.5 |
| Other | **(3.5)** | (1.4) | (2.6) |
| Income tax rate on Non-GAAP continuing operations | **34.2%** | 36.8% | 36.8% |

(a) See pages 35–37 for a reconciliation of non-GAAP results to GAAP.

### 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
- nontaxable acquisition gains and losses
- changes in laws in the U.S., France, Mexico, and Argentina
- U.S. tax on accelerated taxable income
- changes in the foreign currency rate used to measure Venezuela’s tax results
- timing of benefit recognition for uncertain tax positions
- state income taxes
- tax benefit for distributions of share-based payments

We establish or reverse valuation allowances for deferred tax assets depending on all available information including historical and expected future operating performance of our subsidiaries. Changes in judgment about the future realization of deferred tax assets can result in significant adjustments to the valuation allowances. 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

#### 2017 Compared to U.S. Statutory Rate

The effective income tax rate on continuing operations in 2017 was greater than the 35% U.S. statutory tax rate primarily due to the one-time non-cash tax charge for the remeasurement of the deferred tax assets as a result of U.S. tax reform. The other items that cause the rate to be higher than the U.S. statutory rate include book losses for which no tax benefit can be recorded, nondeductible expenses in Mexico, taxes on cross border payments and the characterization of a French business tax as an income tax, partially offset by the geographical mix of earnings, significant tax benefits related to the distribution of share-based payments and a French income tax credit.

#### 2016 Compared to U.S. Statutory Rate

The effective income tax rate on continuing operations in 2016 was greater than the 35% U.S. statutory tax rate primarily due to the significant losses related to operations in the Republic of Ireland, for which no tax benefit can be recorded, a change in judgment resulting in a valuation allowance against certain U.S. tax attributes with a limited statutory carryforward period that are no longer more-likely-than-not to be realized, and the non-deductible expenses resulting from the currency devaluation in Venezuela. The other items that cause the rate to be higher than the U.S. statutory rate include book losses for which no tax benefit can be recorded, non-deductible expenses in Mexico, taxes on undistributed earnings and the characterization of a French business tax as an income tax, partially offset by the geographical mix of earnings and a French income tax credit.

#### 2015 Compared to U.S. Statutory Rate

The effective income tax rate on continuing operations in 2015 was higher than the 35% U.S. statutory tax rate primarily due to a significant Venezuela currency remeasurement loss and impairment loss, which were largely non-deductible, and U.S. tax on accelerated taxable income. Excluding these items, the effective income tax rate was higher than the 35% U.S. statutory tax rate due to $3.7 million of tax expense due to the characterization of a French business tax as an income tax.

### Noncontrolling Interests

*(In millions)*

|  | Years Ended December 31, 2017 | 2016 | 2015 | % change 2017 | 2016 |
| --- | ---: | ---: | ---: | ---: | --- |
| Net income (loss) attributable to noncontrolling interests | **$6.9** | 10.3 | (16.3) | **(33)** | fav |

The decrease in net income attributable to noncontrolling interests to $6.9 million in 2017 was primarily due to higher currency remeasurement charges from the devaluation of Venezuelan currency.

The change from a $16.3 million net loss attributable to noncontrolling interests in 2015 to $10.3 million net income attributable to noncontrolling interests in 2016 was primarily due to improved results in our Venezuelan subsidiaries and lower currency remeasurement charges from the devaluation of Venezuelan currency. The net loss attributable to noncontrolling interests in 2015 was primarily due to a $35.3 million impairment charge related to Venezuelan property and equipment and $18.1 million in currency remeasurement charges from the devaluation of Venezuelan currency.

See Note 1 to the consolidated financial statements for more information about the currency remeasurement charges of our Venezuelan subsidiaries and the Venezuela impairment charge that occurred in 2015.

### Non-GAAP Results Reconciled to GAAP

Non-GAAP results described in this filing are financial measures that are not required by or presented in accordance with GAAP. The purpose of the Non-GAAP results is to report financial information from the primary operations of our business by excluding the effects of certain income and expenses that do not reflect the ordinary earnings of our operations. The specific items excluded have not been allocated to segments, are described in detail on pages 28–30, and are reconciled to comparable GAAP measures below.

The full-year Non-GAAP tax rate in each year excludes certain pretax and income tax amounts. Amounts reported for prior periods have been updated in this report to present information consistently for all periods presented.

The Non-GAAP financial measures are intended to provide investors with a supplemental comparison of our operating results and trends for the periods presented. Our management believes these measures are also useful to investors as such measures allow investors to evaluate our performance using the same metrics that our management uses to evaluate past performance and prospects for future performance. We do not consider these items to be reflective of our core operating performance due to the variability of such items from period-to-period in terms of size, nature and significance. Additionally, non-GAAP results are utilized as performance measures in certain management incentive compensation plans.

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

| Effective Income Tax Rate(a) | 2017 Pre-tax | Tax | Effective tax rate | 2016 Pre-tax | Tax | Effective tax rate |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| GAAP | $181.5 | 157.7 | 86.9% | $125.0 | 78.5 | 62.8% |
| Retirement plans(e) | 34.9 | 12.6 |  | 31.5 | 11.3 |  |
| Venezuela operations(b) | (13.5) | (12.7) |  | (15.9) | (14.1) |  |
| Reorganization and Restructuring(b) | 22.6 | 7.6 |  | 30.3 | 7.4 |  |
| Acquisitions and dispositions(b) | 12.7 | 4.5 |  | 20.0 | 1.8 |  |
| Prepayment penalties(f) | 8.3 | 0.2 |  | — | — |  |
| Deferred tax valuation allowance(c) | — | — |  | — | (14.7) |  |
| Interest on Brazil tax claim(g) | 1.6 | 0.5 |  | — | — |  |
| Tax reform(h) | — | (86.0) |  | — | — |  |
| Tax on accelerated income(d) | — | 0.4 |  | — | — |  |
| Non-GAAP | $248.1 | 84.8 | 34.2% | $190.9 | 70.2 | 36.8% |
|  |  |  |  | **2015** |  |  |
|  |  |  |  | **Pre-tax** | **Tax** | **Effective tax rate** |
| Effective Income Tax Rate(a) |  |  |  |  |  |  |
| GAAP |  |  |  | $41.1 | 66.5 | 161.8% |
| Retirement plans(e) |  |  |  | 31.2 | 10.8 |  |
| Venezuela operations(b) |  |  |  | 47.8 | (5.5) |  |
| Reorganization and Restructuring(b) |  |  |  | 15.3 | 3.9 |  |
| Acquisitions and dispositions(b) |  |  |  | 10.2 | 1.4 |  |
| Tax on accelerated income(d) |  |  |  | — | (23.5) |  |
| Non-GAAP |  |  |  | $145.6 | 53.6 | 36.8% |

Amounts may not add due to rounding.

(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 core operating performance due to the variability of such items from period-to-period in terms of size, nature and significance.

(c) There was a change in judgment resulting in a valuation allowance against certain tax attributes with a limited statutory carryforward period that are no longer more-likely-than-not to be realized due to lower than expected U.S. operating results, certain non-GAAP pre-tax items, and the timing of tax deductions related to executive leadership transition.

(d) The non-GAAP tax rate excludes the 2017 foreign tax benefit that resulted from the transaction that accelerated U.S. tax in 2015.

(e) Our U.S. retirement plans are frozen and costs related to these plans are excluded from non-GAAP results. Certain non-U.S. operations also have retirement plans. Settlement charges related to these non-U.S. plans are also excluded from non-GAAP results.

(f) Penalties upon prepayment of Private Placement notes in September 2017 and a term loan in October 2017.

(g) Related to an unfavorable court ruling in the third quarter of 2017 on a non-income tax claim in Brazil. The court ruled that Brink's must pay interest accruing from the initial claim filing in 1994 to the current date. The principal amount of the claim was approximately $1 million and was recognized in selling, general and administrative expenses in the third quarter of 2017.

(h) Represents the estimated impact of tax legislation enacted into law in the fourth quarter of 2017. This primarily relates to the U.S. Tax Reform expense from the remeasurement of our net deferred tax assets.

### Non-GAAP reconciled to GAAP

*(In millions)*

| Revenues: | Years Ended December 31, 2017 | 2016 | 2015 |
| --- | ---: | ---: | ---: |
| GAAP | **$3,347.0** | 3,020.6 | 3,061.4 |
| Venezuela operations(b) | **(154.1)** | (109.4) | (84.5) |
| Acquisitions and dispositions(b) | **—** | (2.8) | — |
| Non-GAAP | **$3,192.9** | 2,908.4 | 2,976.9 |
| **Operating profit:** |  |  |  |
| GAAP | **$273.9** | 184.5 | 96.4 |
| Venezuela operations(b) | **(20.4)** | (18.5) | 45.6 |
| Reorganization and Restructuring(b) | **22.6** | 30.3 | 15.3 |
| Acquisitions and dispositions(b) | **5.3** | 19.5 | 10.2 |
| Non-GAAP | **$281.4** | 215.8 | 167.5 |
| **Interest expense:** |  |  |  |
| GAAP | **$(32.2)** | (20.4) | (18.9) |
| Venezuela operations(b) | **0.1** | 0.1 | — |
| Acquisitions and dispositions(b) | **1.1** | — | — |
| Non-GAAP | **$(31.0)** | (20.3) | (18.9) |
| **Interest and other income (expense):** |  |  |  |
| GAAP | **$(60.2)** | (39.1) | (36.4) |
| Retirement plans(e) | **34.9** | 31.5 | 31.2 |
| Venezuela operations(b) | **6.8** | 2.5 | 2.2 |
| Acquisitions and dispositions(b) | **6.3** | 0.5 | — |
| Prepayment penalties(f) | **8.3** | — | — |
| Interest on Brazil tax claim(g) | **1.6** | — | — |
| Non-GAAP | **$(2.3)** | (4.6) | (3.0) |
| **Provision for income taxes:** |  |  |  |
| GAAP | **$157.7** | 78.5 | 66.5 |
| Retirement plans(e) | **12.6** | 11.3 | 10.8 |
| Venezuela operations(b) | **(12.7)** | (14.1) | (5.5) |
| Reorganization and Restructuring(b) | **7.6** | 7.4 | 3.9 |
| Acquisitions and dispositions(b) | **4.5** | 1.8 | 1.4 |
| Prepayment penalties(f) | **0.2** | — | — |
| Deferred tax valuation allowance(c) | **—** | (14.7) | — |
| Interest on Brazil tax claim(g) | **0.5** | — | — |
| Tax reform(h) | **(86.0)** | — | — |
| Tax on accelerated income(d) | **0.4** | — | (23.5) |
| Non-GAAP | **$84.8** | 70.2 | 53.6 |
| **Net income (loss) attributable to noncontrolling interests:** |  |  |  |
| GAAP | **$6.9** | 10.3 | (16.3) |
| Venezuela operations(b) | **(1.6)** | (4.4) | 21.2 |
| Reorganization and Restructuring(b) | **0.8** | (0.8) | — |
| Non-GAAP | **$6.1** | 5.1 | 4.9 |
| Non-GAAP margin | **8.8%** | 7.4% | 5.6% |

Amounts may not add due to rounding.

See page 35 for footnote explanations.

*(In millions, except for per share amounts)*

| Income (loss) from continuing operations attributable to Brink's: | Years Ended December 31, 2017 | 2016 | 2015 |
| --- | ---: | ---: | ---: |
| GAAP | **$16.9** | 36.2 | (9.1) |
| Retirement plans(e) | **22.3** | 20.2 | 20.4 |
| Venezuela operations(b) | **0.8** | 2.6 | 32.1 |
| Reorganization and Restructuring(b) | **14.2** | 23.7 | 11.4 |
| Acquisitions and dispositions(b) | **8.2** | 18.2 | 8.8 |
| Prepayment penalties(f) | **8.1** | — | — |
| Deferred tax valuation allowance(c) | **—** | 14.7 | — |
| Interest on Brazil tax claim(g) | **1.1** | — | — |
| Tax reform(h) | **86.0** | — | — |
| Tax on accelerated income(d) | **(0.4)** | — | 23.5 |
| Non-GAAP | **$157.2** | 115.6 | 87.1 |
| **Diluted EPS** |  |  |  |
| GAAP | **$0.33** | 0.72 | (0.19) |
| Retirement plans(e) | **0.43** | 0.39 | 0.41 |
| Venezuela operations(b) | **0.02** | 0.05 | 0.64 |
| Reorganization and Restructuring(b) | **0.27** | 0.47 | 0.23 |
| Acquisitions and dispositions(b) | **0.16** | 0.37 | 0.18 |
| Prepayment penalties(f) | **0.16** | — | — |
| Deferred tax valuation allowance(c) | **—** | 0.29 | — |
| Interest on Brazil tax claim(g) | **0.02** | — | — |
| Tax reform(h) | **1.66** | — | — |
| Tax on accelerated income(d) | **(0.01)** | — | 0.47 |
| Non-GAAP | **$3.03** | 2.28 | 1.75 |

Amounts may not add due to rounding.

See page 35 for footnote explanations.

### Foreign Operations

We currently serve customers in more than 100 countries, including 41 countries where we operate subsidiaries.

We are subject to risks customarily associated with doing business in foreign countries, including labor and economic conditions, political instability, controls on repatriation of earnings and capital, nationalization, expropriation and other forms of restrictive action by local governments. Changes in the political or economic environments in the countries in which we operate could have a material adverse effect on our business, financial condition and results of operations. The future effects, if any, of these risks are unknown.

Our international operations conduct a majority of their business in local currencies. 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 has reduced our reported dollar revenues and operating profit, which may continue in 2018. Our operations in Venezuela are subject to local laws and regulatory interpretations that determine the exchange rate at which repatriating dividends may be converted. See Application of Critical Accounting Policies—Foreign Currency Translation on pages 56–57 for a description of our accounting methods and assumptions used to include our Venezuelan operations in our consolidated financial statements, and a description of the accounting for subsidiaries operating in highly inflationary economies.

Changes in exchange rates may also affect transactions which are denominated in currencies other than the functional currency. From time to time, we use foreign currency forward and swap contracts to hedge transactional risks associated with foreign currencies, as discussed in Item 7A on page 59. At December 31, 2017, the notional value of our shorter term outstanding foreign currency forward and swap contracts was $145.5 million with average contract maturities of approximately one month. These shorter term foreign currency forward and swap contracts primarily offset exposures in the euro, British pound and the Mexican peso. Additionally, these shorter term contracts are not designated as hedges for accounting purposes, and accordingly, changes in their fair value are recorded immediately in earnings. We recognized gains of $0.8 million on these contracts in 2017. At December 31, 2017, the fair value of these outstanding foreign currency forward and swap contracts was not significant.

We also have a longer term cross currency swap contract to hedge exposure in Brazilian real which is designated as a cash flow hedge for accounting purposes. At December 31, 2017, the notional value of this longer term contract was $1.6 million with a weighted-average maturity of 0.1 years. We recognized net losses of $0.2 million on this contract, of which losses of $0.1 million were included in other operating income (expense) to offset transaction gains of $0.1 million and expenses of $0.1 million were included in interest and other income (expense) in 2017. At December 31, 2017 the fair value of the longer term cross currency swap contract was $0.6 million, which is included in prepaid expenses and other on the consolidated balance sheet.

See Note 1 to the consolidated financial statements for a description of government currency processes and restrictions in Venezuela and Argentina, their effect on our operations, and how we account for currency remeasurement for our Venezuelan subsidiaries.

### LIQUIDITY AND CAPITAL RESOURCES

### Overview

Over the last three years, we used cash generated from our operations and borrowings to

- invest in the infrastructure of our business (new facilities, cash sorting and other equipment for our Cash Management Services operations, armored trucks, CompuSafe® units, and information technology) ($388 million),
- acquire new business operations ($317 million), and
- pay dividends to Brink’s shareholders ($67 million).

Cash flows from operating activities increased by $84.6 million in 2017 as compared to the prior year primarily due to higher operating profit. Cash used for investing activities increased by $286.0 million in 2017 due to business acquisitions and higher capital expenditures. Cash also decreased $12.2 million in 2017 as a result of the strengthening of the U.S. dollar, primarily against currencies in Latin America including the Venezuelan bolivar and the Argentine peso. We financed our liquidity needs in 2017 with debt and cash flows from operations.

Cash flows from operating activities decreased by $28.4 million in 2016 as compared to the prior year primarily due to higher amounts paid for income taxes. Cash used for investing activities increased by $5.2 million in 2016 as higher capital expenditures and lower net cash inflows from marketable securities in 2016 were partially offset by a reduction in cash outflows related to business divestitures. Cash also decreased $12.1 million in 2016 as a result of the strengthening of the U.S. dollar, primarily against currencies in Latin America including the Venezuelan bolivar and the Argentine peso. We financed our liquidity needs in 2016 with cash flows from operations supplemented by short-term borrowings.

### Operating Activities

*(In millions)*

| Cash flows from operating activities | Years Ended December 31, 2017 | 2016 | 2015 | $ change 2017 | 2016 |
| --- | ---: | ---: | ---: | ---: | ---: |
| Operating activities - GAAP | **$252.1** | 167.5 | 195.9 | **$84.6** | (28.4) |
| Venezuela operations | **(17.3)** | (16.4) | (2.3) | **(0.9)** | (14.1) |
| (Increase) decrease in certain customer obligations(a) | **(6.1)** | 13.2 | (12.5) | **(19.3)** | 25.7 |
| Discontinued operations | **—** | — | 2.0 | **—** | (2.0) |
| Operating activities - non-GAAP | **$228.7** | 164.3 | 183.1 | **$64.4** | (18.8) |

(a) To adjust for the change in the balance of customer obligations related to cash received and processed in certain of our secure Cash Management Services operations. The title to this cash transfers to us for a short period of time. The cash is generally credited to customers’ accounts the following day and we do not consider it as available for general corporate purposes in the management of our liquidity and capital resources.

Non-GAAP cash flows from operating activities is a supplemental financial measure that is not required by, or presented in accordance with GAAP. The purpose of this non-GAAP measure is to report financial information excluding cash flows from Venezuela operations, the impact of cash received and processed in certain of our Cash Management Services operations and without cash flows from discontinued operations. We believe this measure is helpful in assessing cash flows from operations, enables period-to-period comparability and is useful in predicting future operating cash flows. 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.

### 2017 versus 2016

### GAAP

Operating cash flows increased by $84.6 million in 2017 compared to 2016. The increase was primarily due to higher operating profit and changes in customer obligations of certain of our secure Cash Management Services operations (cash held for customers increased by $6.1 million in 2017 compared to a decrease of $13.2 million in 2016), partially offset by changes in working capital and increases in cash paid for income taxes in the current year.

### Non-GAAP

Non-GAAP cash flows from operating activities increased by $64.4 million in 2017 as compared to 2016. The increase was primarily due to higher operating profit, partially offset by changes in working capital and increases in cash paid for income taxes in the current year.

### 2016 versus 2015

### GAAP

Operating cash flows decreased by $28.4 million in 2016 compared to 2015. The decrease was primarily due to changes in customer obligations of certain of our secure Cash Management Services operations (cash held for customers decreased by $13.2 million in 2016 compared to an increase of $12.5 million in 2015), increases in cash paid for income taxes in the current year, and increases in cash used for working capital, partially offset by an increase in operating profit and an increase in operating cash provided by Venezuela operations of $14.1 million.

### Non-GAAP

Non-GAAP cash flows from operating activities decreased by $18.8 million in 2016 as compared to 2015. The decrease was primarily due to increases in cash paid for income taxes in the current year and increases in cash used for working capital, partially offset by an increase in operating profit.

### Investing Activities

*(In millions)*

| Cash flows from investing activities | Years Ended December 31, 2017 | 2016 | 2015 | $ change 2017 | 2016 |
| --- | ---: | ---: | ---: | ---: | ---: |
| Capital expenditures | **$(174.5)** | (112.2) | (101.1) | **$(62.3)** | (11.1) |
| Acquisitions, net of cash acquired | **(225.1)** | (0.7) | — | **(224.4)** | (0.7) |
| Dispositions, net of cash disposed | **1.4** | (0.6) | (14.6) | **2.0** | 14.0 |
| Marketable securities: |  |  |  |  |  |
| Purchases | **(38.0)** | (9.2) | (27.3) | **(28.8)** | 18.1 |
| Sales | **38.3** | 9.1 | 33.9 | **29.2** | (24.8) |
| Proceeds from sale of property, equipment and investments | **1.9** | 4.7 | 1.9 | **(2.8)** | 2.8 |
| Other | **1.1** | — | 3.5 | **1.1** | (3.5) |
| Investing activities | **$(394.9)** | (108.9) | (103.7) | **$(286.0)** | (5.2) |

Cash used by investing activities increased by $286.0 million in 2017 versus 2016. The increase was primarily due to business acquisitions in Argentina, France, Brazil, Chile and the U.S. The aggregate purchase price paid, net of cash acquired and excluding payments of acquisition-related obligations reported as financing activities, was $225.1 million in 2017. Capital expenditures also increased $62.3 million.

Cash used by investing activities increased by $5.2 million in 2016 versus 2015. The increase was due to higher capital expenditures of $11.1 million and lower net cash inflows from purchases and sales of marketable securities. These amounts were partially offset by a reduction in cash outflows related to business divestitures.

Capital expenditures and depreciation and amortization were as follows:

*(In millions)*

| Property and Equipment Acquired during the year Capital expenditures(a): | Years Ended December 31, 2017 | 2016 | 2015 | $ change 2017 | 2016 |
| --- | ---: | ---: | ---: | ---: | ---: |
| North America | **$86.3** | 42.0 | 37.1 | **$44.3** | 4.9 |
| South America | **39.2** | 24.0 | 21.4 | **15.2** | 2.6 |
| Rest of World | **35.9** | 32.2 | 31.3 | **3.7** | 0.9 |
| Corporate items | **8.9** | 9.0 | 7.0 | **(0.1)** | 2.0 |
| Capital expenditures - non-GAAP | **170.3** | 107.2 | 96.8 | **63.1** | 10.4 |
| Venezuela | **4.2** | 5.0 | 4.3 | **(0.8)** | 0.7 |
| Capital expenditures - GAAP | **$174.5** | 112.2 | 101.1 | **$62.3** | 11.1 |
| Capital leases(b): |  |  |  |  |  |
| North America | **$47.3** | 23.2 | 16.3 | **$24.1** | 6.9 |
| South America | **4.4** | 6.2 | 2.6 | **(1.8)** | 3.6 |
| Capital leases - GAAP and non-GAAP | **$51.7** | 29.4 | 18.9 | **$22.3** | 10.5 |
| Total: |  |  |  |  |  |
| North America | **$133.6** | 65.2 | 53.4 | **$68.4** | 11.8 |
| South America | **43.6** | 30.2 | 24.0 | **13.4** | 6.2 |
| Rest of World | **35.9** | 32.2 | 31.3 | **3.7** | 0.9 |
| Corporate items | **8.9** | 9.0 | 7.0 | **(0.1)** | 2.0 |
| Total property and equipment acquired excluding Venezuela | **222.0** | 136.6 | 115.7 | **85.4** | 20.9 |
| Venezuela | **4.2** | 5.0 | 4.3 | **(0.8)** | 0.7 |
| Total property and equipment acquired | **$226.2** | 141.6 | 120.0 | **$84.6** | 21.6 |
| **Depreciation and amortization(a)** |  |  |  |  |  |
| North America | **$68.4** | 66.8 | 70.1 | **$1.6** | (3.3) |
| South America | **23.5** | 19.0 | 19.5 | **4.5** | (0.5) |
| Rest of World | **30.4** | 29.8 | 30.9 | **0.6** | (1.1) |
| Corporate items | **12.0** | 10.9 | 11.3 | **1.1** | (0.4) |
| Depreciation and amortization - non-GAAP | **134.3** | 126.5 | 131.8 | **7.8** | (5.3) |
| Venezuela | **1.7** | 0.7 | 3.9 | **1.0** | (3.2) |
| Reorganization and Restructuring | **2.2** | 0.8 | — | **1.4** | 0.8 |
| Amortization of intangible assets | **8.4** | 3.6 | 4.2 | **4.8** | (0.6) |
| Depreciation and amortization - GAAP | **$146.6** | 131.6 | 139.9 | **$15.0** | (8.3) |

(a) Capital expenditures as well as depreciation and amortization related to Venezuela have been excluded from South America and accelerated depreciation related to 2016 Restructuring activities has been excluded from non-GAAP amounts. Amortization of acquisition-related intangible assets has also been excluded from non-GAAP amounts.

(b) Represents the amount of property and equipment acquired using capital leases. Because the assets are acquired without using cash, the acquisitions are not reflected in the consolidated cash flow statement. Amounts are provided here to assist in the comparison of assets acquired in the current year versus prior years.

Non-GAAP capital expenditures and non-GAAP depreciation and amortization are supplemental financial measures that are not required by, or presented in accordance with GAAP. The purpose of these non-GAAP measures is to report financial information excluding capital expenditures and depreciation and amortization from our Venezuela operations, accelerated depreciation from restructuring activities and amortization of acquisition-related intangible assets. We believe these measures are helpful in assessing capital expenditures and depreciation and amortization, enable period-to-period comparability and are useful in predicting future investing cash flows. These non-GAAP measures should not be considered as alternatives to capital expenditures and depreciation and amortization determined in accordance with GAAP and should be read in conjunction with our consolidated statements of cash flows.

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 1.7 in 2017, 1.1 in 2016, and 0.9 in 2015.

Capital expenditures in 2017 for our operating units were primarily for machinery and equipment, armored vehicles, and information technology. Capital expenditures in 2017 were $62.3 million higher compared to 2016. Total property and equipment acquired in 2017 was $84.6 million higher than the prior year.

Capital expenditures in 2016 for our operating units were primarily for machinery and equipment, armored vehicles, and information technology. Capital expenditures in 2016 were $11.1 million higher compared to 2015. Total property and equipment acquired in 2016 was $21.6 million higher than the prior year.

Corporate capital expenditures in the last three years were primarily for implementing a new finance shared service center and investing in information technology.

### Financing Activities

*(In millions)*

| Cash flows from financing activities Borrowings and repayments: | Years Ended December 31, 2017 | 2016 | 2015 | $ change 2017 | 2016 |
| --- | ---: | ---: | ---: | ---: | ---: |
| Short-term borrowings | **$(125.2)** | 115.0 | (22.7) | **$(240.2)** | 137.7 |
| Long-term revolving credit facilities, net | **(58.1)** | (112.2) | (64.4) | **54.1** | (47.8) |
| Other long-term debt, net | **922.5** | (34.2) | 44.1 | **956.7** | (78.3) |
| Borrowings (repayments) | **739.2** | (31.4) | (43.0) | **770.6** | 11.6 |
| Debt financing costs | **(16.3)** | — | (2.0) | **(16.3)** | 2.0 |
| Payment of acquisition-related obligation | **(90.9)** | — | — | **(90.9)** | — |
| Nonrecourse financing of real estate transaction | **—** | — | 14.5 | **—** | (14.5) |
| Prepayment penalties | **(8.3)** | — | — | **(8.3)** | — |
| Common stock issued | **—** | 3.0 | — | **(3.0)** | 3.0 |
| Dividends to: |  |  |  |  |  |
| Shareholders of Brink’s | **(27.7)** | (19.8) | (19.5) | **(7.9)** | (0.3) |
| Noncontrolling interests in subsidiaries | **(4.6)** | (4.6) | (5.3) | **—** | 0.7 |
| Proceeds from exercise of stock options | **2.7** | 12.2 | 3.8 | **(9.5)** | 8.4 |
| Other | **(8.3)** | (4.3) | (1.0) | **(4.0)** | (3.3) |
| Financing activities | **$585.8** | (44.9) | (52.5) | **$630.7** | 7.6 |

### 2017 versus 2016

Cash provided by financing activities increased by $630.7 million in 2017 compared to 2016 due to increased borrowing under our new senior secured credit facility and our senior unsecured notes, which were issued in October 2017. The increased borrowings were used to fund acquisition activity in Argentina, France, Brazil, Chile and the U.S. during the year. The increase in borrowings was partially offset by repayments of short-term borrowings.

### 2016 versus 2015

Cash used by financing activities decreased by $7.6 million in 2016 compared to 2015 due to higher short-term borrowings and increased proceeds from stock option exercises. These financing cash inflow increases were partially offset by higher net repayments of our revolving credit facilities and other long-term debt as well as cash receipts in 2015 from a Mexico real estate transaction which did not reoccur in 2016.

### Common stock issued

We received $3.0 million in 2016 when our CEO and CFO purchased a combined 100,440 shares of our common stock.

### Dividends

We paid dividends to Brink’s shareholders of $0.15 per share in each of the last three quarters. In each of the nine previous quarters, we paid dividends of $0.10 per share to Brink's shareholders. Future dividends are dependent on our earnings, financial condition, shareholders’ equity levels, our cash flow and business requirements, as determined by the Board of Directors.

### Effect of Exchange Rate Changes on Cash and Cash Equivalents

Changes in currency exchange rates reduced the amount of cash and cash equivalents by $12.2 million during 2017, compared to a reduction of $12.1 million in 2016 and $34.0 million in 2015. The decrease in 2017 was due to the strengthening of the U.S. dollar, primarily against the Venezuelan bolivar and Argentine peso. The decrease in 2016 was caused by strengthening of the U.S. dollar, primarily against currencies in Latin America including the Venezuelan bolivar and the Argentine peso. The decrease in 2015 was caused by the strengthening of the U.S. dollar, primarily against most currencies in Latin America including the Venezuelan bolivar, Argentine peso and Brazilian real. See Note 1 to the consolidated financial statements for more information.

### Capitalization

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

As of December 31, 2017, debt as a percentage of capitalization (defined as total debt and equity) was 79% compared to 56% at December 31, 2016. The ratio increased in 2017 because our debt increased and our equity decreased versus the prior year. Our debt in 2017 increased primarily from the borrowings under the senior secured credit facility and senior unsecured notes. These debt proceeds were used in part to repay the Revolving Facility, the Term Loan, certain other indebtedness and certain fees and expenses from closing the transactions. Our equity decreased in 2017 primarily due to other comprehensive losses.

### Summary of Debt, Equity and Other Liquidity Information

*(In millions)*

| Debt: Short-term borrowings | Amount available under credit facilities December 31, 2017 | Outstanding balance December 31, 2017 | 2016 | $ change(a) |
| --- | ---: | ---: | ---: | ---: |
| Uncommitted credit facilities | **$—** | **$—** | 108.3 | (108.3) |
| Restricted cash borrowings(b) | **—** | **27.0** | 22.3 | 4.7 |
| Other | **—** | **18.2** | 32.2 | (14.0) |
| Total Short-term borrowings | **$—** | **$45.2** | 162.8 | (117.6) |
| Long-term debt |  |  |  |  |
| Revolving Facility | **$—** | **$—** | 55.8 | $(55.8) |
| Private Placement Notes | **—** | **—** | 85.6 | (85.6) |
| Term Loan | **—** | **—** | 65.6 | (65.6) |
| Multi-currency revolving facilities | — | — | 3.6 | (3.6) |
| Senior Secured - Revolving Facility | **1,000.0** | **—** | — | — |
| Senior Secured - Term Loan A | **—** | **491.4** | — | 491.4 |
| Senior Unsecured Notes | — | **591.2** | — | 591.2 |
| Letter of Credit Facilities | **37.6** | **—** | — | — |
| Other | **—** | **12.0** | 2.8 | 9.2 |
| Capital leases | **—** | **96.9** | 67.0 | 29.9 |
| Total Long-term debt | **$1,037.6** | **$1,191.5** | 280.4 | $911.1 |
| Total Debt | **$1,037.6** | **$1,236.7** | 443.2 | $793.5 |
| Total equity |  | **$338.2** | 354.8 | $(16.6) |

(a) In addition to cash borrowings and repayments, the change in the debt balance also includes changes in currency exchange rates.

(b) These 2017 and 2016 amounts are for short-term borrowings related to cash borrowed under lending arrangements used in the process of managing customer cash supply chains, which is currently classified as restricted cash and not available for general corporate purposes. See Note 19 for more details.

### Reconciliation of Net Debt to U.S. GAAP Measures

*(In millions)*

| Debt: | December 31, 2017 | 2016 | $ change |
| --- | ---: | ---: | ---: |
| Short-term borrowings | **$45.2** | 162.8 | $(117.6) |
| Long-term debt | **1,191.5** | 280.4 | 911.1 |
| Total Debt | **1,236.7** | 443.2 | 793.5 |
| Restricted cash borrowings(a) | **(27.0)** | (22.3) | (4.7) |
| Total Debt without restricted cash borrowings | **1,209.7** | 420.9 | 788.8 |
| Less: |  |  |  |
| Cash and cash equivalents | **614.3** | 183.5 | 430.8 |
| Amounts held by Cash Management Services operations(b) | **(16.1)** | (9.8) | (6.3) |
| Cash and cash equivalents available for general corporate purposes | **598.2** | 173.7 | 424.5 |
| Net Debt | **$611.5** | 247.2 | $364.3 |

(a) Restricted cash borrowings are related to cash borrowed under lending arrangements used in the process of managing customer cash supply chains, which is currently classified as restricted cash and not available for general corporate purposes.

(b) Title to cash received and processed in certain of our secure Cash Management Services operations transfers to us for a short period of time. The cash is generally credited to customers’ accounts the following day and we do not consider it as available for general corporate purposes in the management of our liquidity and capital resources and in our computation of Net Debt.

Net Debt is a supplemental non-GAAP financial measure that is not required by, or presented in accordance with GAAP. We use Net Debt as a measure of our financial leverage. We believe that investors also may find Net Debt to be helpful in evaluating our financial leverage. Net Debt should not be considered as an alternative to Debt determined in accordance with GAAP and should be reviewed in conjunction with our consolidated balance sheets. Set forth above is a reconciliation of Net Debt, a non-GAAP financial measure, to Debt, which is the most directly comparable financial measure calculated and reported in accordance with GAAP, as of December 31, 2017, and December 31, 2016. Net Debt excluding cash and debt in Venezuelan operations was $615 million at December 31, 2017, and $255 million at December 31, 2016.

Net Debt at the end of 2017 increased by $364 million when compared to Net Debt at the end of 2016 primarily due to the funding of business acquisitions.

### Liquidity Needs

Our operating liquidity needs are typically financed by cash from operations, short-term borrowings and the Revolving Credit Facility (our debt facilities are described below). We have certain limitations and considerations related to the cash and borrowing capacity that are reported in our consolidated financial statements. 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.

*Limitations on dividends from foreign subsidiaries.* A significant portion of our operations are outside the U.S. which may make it difficult to repatriate additional cash for use in the U.S. See Item 1A., *Risk Factors*, for more information on the risks associated with having businesses outside the U.S.

#### Venezuela

We have $3.4 million of cash and cash equivalents denominated in Venezuelan bolivars (as remeasured at the published DICOM rate of 3,345 bolivars to the U.S. dollar) at December 31, 2017. We believe that the DICOM process to convert bolivars (as described in Note 1 to the consolidated financial statements) is the only method for which we could receive U.S. dollars that we need to operate our business and to repatriate earnings. The Venezuelan government has restricted conversions of bolivars into U.S. dollars in the past and may do so in the future. We did not repatriate any U.S. dollars from Venezuela in 2017 or 2016.

In Note 3, we are required to present projected benefit payments of our Venezuela benefit plan for the next 10 years. Because the economy in Venezuela has had significant inflation in the last several years, we applied highly inflationary assumptions when calculating the projected benefit payments. Due to the uncertainties associated with the significant inflation in Venezuela, there can be no assurances that these assumptions provide an accurate reflection of future payments. We assumed an inflation rate of 900% in 2018 with a gradual decline to 4% in 2033, as we expect the economy of Venezuela over time to return to inflation rates more typical for the region. When these undiscounted bolivar-denominated projected benefit payments are translated into U.S. dollars at the December 31, 2017 DICOM exchange rate, the calculation results in projected benefit payments of $38.7 trillion over the next 10 years. If we applied the same inflation rate assumption to the December 31, 2017 DICOM exchange rate over the next 10 years, the projected benefit payments would be less than our December 31, 2017 liability of $4.3 million. In 2017, we made payments in bolivars related to this benefit plan which translated to approximately $1.4 million. In future years, we expect to continue to make these payments in bolivars with cash generated from our Venezuelan operations.

*Argentina.* At December 31, 2017, we had cash denominated in Argentine pesos of $33.2 million. The government in Argentina had previously imposed limits on the exchange of Argentine pesos into U.S. dollars. As a result, we elected in the past and may continue in the future to repatriate cash from Argentina using different markets to convert Argentine pesos into U.S. dollars if U.S. dollars are not readily available. Prior to the December 2015 devaluation of the Argentine peso, we converted Argentine pesos into U.S. dollars at rates less favorable than the rates at which we translated the financial statements of our subsidiary in Argentina. However, after the December 2015 devaluation of the Argentine peso, the market rates used to convert Argentine pesos into U.S. dollars have been similar to the rates at which we translate the financial statements of our subsidiary in Argentina.

### Cash and Cash Equivalents

At December 31, 2017, we had $614.3 million in cash and cash equivalents, compared to $183.5 million at December 31, 2016. The $430.8 million increase in cash and cash equivalents is primarily attributable to the proceeds received from our new senior secured credit facility and our senior unsecured notes, net of repayments of short-term borrowings and other long-term debt. We plan to use the incremental cash and cash equivalents for working capital needs, capital expenditures, acquisitions and other general corporate purposes. At December 31, 2017, the incremental cash and cash equivalents were invested in money market accounts.

### Debt

#### Short-Term Borrowings

#### Uncommitted Credit Facilities

In October 2016, we entered into a $100 million uncommitted credit facility. Borrowings under this facility had a maximum maturity of not more than thirty days. Interest on this facility was generally based on LIBOR plus a margin of 1.00%. In September 2017, we paid off the outstanding balance and the facility was terminated.

In February 2016, we entered into a $24 million uncommitted credit facility with an initial expiration date in February 2017. The facility was amended in February 2017, which extended the expiration date to February 2018. Interest on this facility was based on LIBOR plus a margin of 1.00%. In October 2017, we paid off the outstanding balance and the facility was terminated.

#### Unsecured Term Loan Facility

In August 2017, we entered into a 364-day senior unsecured delayed draw term loan facility in an aggregate principal amount of up to $100 million. Interest on this facility was based on LIBOR plus a margin which ranges from 1.000% to 1.875% depending on either our credit rating or leverage ratio as defined within this facility. In October 2017, we paid off the outstanding balance of $85 million and the facility was terminated.

#### Long-Term Debt

#### Senior Secured Credit Facility

In October 2017, we entered into a new senior secured credit facility (the “Senior Secured Credit Facility”) with Wells Fargo Bank, National Association, as administrative agent, consisting of a $1 billion Revolving Credit Facility and a $500 million Term Loan Facility. Loans under the Revolving Credit Facility mature five years after the closing date (October 17, 2022) and loans under the Term Loan Facility amortize five percent annually and mature five years after the closing date. Interest rates for the Senior Secured Credit Facility are based on LIBOR plus a margin or an alternate base rate plus a margin. The Revolving Credit Facility allows us to borrow money or issue letters of credit (or otherwise satisfy credit needs) on a revolving basis over the term of the facility. As of December 31, 2017, $1 billion was available under the Revolving Credit Facility. The obligations under the Senior Secured Credit Facility are secured by a first-priority lien on all or substantially all of the assets of the Company and certain of its domestic subsidiaries, including a first-priority lien on equity interests of certain of the Company’s direct and indirect subsidiaries. The Company and certain of its domestic subsidiaries also guarantee the obligations under the Senior Secured Credit Facility.

The margin on both LIBOR and alternate base rate borrowings under the Senior Secured Credit Facility is based on the Company’s consolidated net leverage ratio. The margin on LIBOR borrowings, which can range from 1.25% to 2.50%, was 1.75% at December 31, 2017. The margin on alternate base rate borrowings, which can range from 0.25% to 1.50%, was 0.75% as of December 31, 2017. We also pay an annual commitment fee on the unused portion the Revolving Credit Facility based on the Company’s consolidated net leverage ratio. The commitment fee, which can range from 0.15% to 0.40%, was 0.25% as of December 31, 2017.

#### Senior Unsecured Notes

In October 2017, we issued at par ten-year senior unsecured notes (the "Senior Notes") in the aggregate principal amount of $600 million. The Senior Notes will mature on October 15, 2027, bearing an annual interest rate of 4.625%. The Senior Notes are general unsecured obligations guaranteed by certain of the Company’s existing and future U.S. subsidiaries, which are also guarantors under the Senior Secured Credit Facility.

The Senior Notes have not been and will not be registered under the Securities Act of 1933 (the “Securities Act”) or the securities laws of any other jurisdiction and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. The notes were offered in the United States only to persons reasonably believed to be qualified institutional buyers in reliance on the exception from registration set forth in Rule 144A under the Securities Act and outside the United States to non-U.S. persons pursuant to Regulation S under the Securities Act.

The aggregate proceeds from the Senior Secured Credit Facility and the Senior Notes were used in part to repay the prior Revolving Facility (described below), the prior term loan, certain other indebtedness and certain fees and expenses related to the closing of the transactions. Remaining net proceeds are expected to be used for working capital needs, capital expenditures, acquisitions and other general corporate purposes.

#### Revolving Facility

We had a $525 million unsecured multi-currency revolving bank credit facility (the “Revolving Facility”) that was scheduled to mature in March 2020. The Revolving Facility’s interest rate was based on LIBOR plus a margin or an alternate base rate plus a margin. The Revolving Facility allowed us to borrow loans or issue letters of credit (or otherwise satisfy credit needs) on a revolving basis over the term of the facility. In October 2017, we paid off the outstanding balance and the facility was terminated.

#### Private Placement Notes

In September 2017, we paid off our private placement notes for $86 million, which included $7 million in prepayment penalties.

#### Term Loan

We entered into a $75 million unsecured term loan in March 2015. Interest on this loan was based on LIBOR plus a margin of 1.75%. In October 2017, we paid off the term loan for $64 million, which included $2 million in prepayment penalties.

#### Other Facilities

Various foreign subsidiaries maintain other lines of credit and overdraft facilities with a number of banks.

#### Letter of Credit Facilities

We have one $10 million unsecured multi-currency revolving bank credit facility, which can be used solely for the issuance of letters of credit and bank guarantees. As of December 31, 2017, we had undrawn letters of credit and guarantees of $5 million issued under this facility. This $10 million facility expires in March 2019.

We have a $40 million uncommitted letter of credit facility that expires in May 2018. As of December 31, 2017, $11 million was utilized.

We have two unsecured letter of credit facilities totaling $94 million, of which approximately $38 million was available at December 31, 2017. At December 31, 2017, we had undrawn letters of credit and guarantees of $56 million issued under these letter of credit facilities. A $40 million facility expires in December 2018 and a $54 million facility expires in December 2019. The Senior Secured Credit Facility is also available for issuance of letters of credit and bank guarantees.

The Senior Secured Credit facility, Senior Notes, the unsecured multi-currency revolving bank credit facility, and the letter of credit facilities contain various financial and other covenants. The financial covenants, among other things, limit our ability to provide liens, restrict fundamental changes, limit transactions with affiliates and unrestricted subsidiaries, restrict changes to our fiscal year and to organizational documents, limit asset dispositions, limit the use of proceeds from asset sales, limit sale and leaseback transactions, limit investments, limit the ability to incur debt, restrict certain payments to shareholders, limit negative pledges, limit the ability to change the nature of our business, provide for a maximum consolidated net leverage ratio and provide for minimum coverage of interest costs. If we were not to comply with the terms of our various financing agreements, the repayment terms could be accelerated and the commitments could be withdrawn. An acceleration of the repayment terms under one agreement could trigger the acceleration of the repayment terms under the other financing agreements. We were in compliance with all financial covenants at December 31, 2017.

### Equity

#### Common Stock

At December 31, 2017, we had 100 million shares of common stock authorized and 50.5 million shares issued and outstanding.

#### Preferred Stock

At December 31, 2017, we had the authority to issue up to 2 million shares of preferred stock, par value $10 per share.

#### Share Repurchase Program

In May 2017, our board of directors authorized a $200 million share repurchase program which will expire on December 31, 2019. We are not obligated to repurchase any specific dollar amount or number of shares and, at December 31, 2017, $200 million remains available under this program. 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 the program may be made in the open market, in privately negotiated transactions, or otherwise.

### Off Balance Sheet Arrangements

We have operating leases that are described in the notes to the consolidated financial statements. We use operating leases to lower our cost of financings. We believe that operating leases are an important component of our capital structure.

### Contractual Obligations

The following table reflects our contractual obligations as of December 31, 2017.

*(In millions)*

| Contractual obligations: | Estimated Payments Due by Period 2018 | 2019 | 2020 | 2021 | 2022 | Later Years | Total |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Long-term debt obligations | $29.3 | 27.7 | 26.5 | 25.2 | 393.9 | 603.1 | 1,105.7 |
| Interest payments on long-term debt(a) | 41.5 | 43.0 | 42.2 | 41.3 | 37.4 | 132.9 | 338.3 |
| Capital lease obligations | 22.6 | 18.4 | 16.7 | 15.0 | 12.8 | 11.4 | 96.9 |
| Operating lease obligations | 91.8 | 84.8 | 69.8 | 44.8 | 36.7 | 93.5 | 421.4 |
| Acquisition-related payments(b) | 18.4 | 18.8 | — | — | — | — | 37.2 |
| Purchase obligations | 19.3 | 2.6 | 2.0 | 2.0 | 2.0 | 1.3 | 29.2 |
| Other long-term liabilities reflected on the |  |  |  |  |  |  |  |
| Company’s balance sheet under GAAP: |  |  |  |  |  |  |  |
| Primary U.S. pension plan | — | — | — | — | — | — | — |
| Other retirement obligations: |  |  |  |  |  |  |  |
| UMWA plans | — | — | — | — | — | 501.9 | 501.9 |
| Black lung and other plans | 8.0 | 8.2 | 7.3 | 6.7 | 6.3 | 73.8 | 110.3 |
| Workers compensation and other claims | 16.8 | 13.3 | 8.6 | 5.7 | 4.6 | 25.5 | 74.5 |
| Uncertain tax positions | 1.4 | — | — | — | — | — | 1.4 |
| Other | 1.8 | 0.8 | 0.8 | 0.8 | 0.8 | 7.1 | 12.1 |
| Total | $250.9 | 217.6 | 173.9 | 141.5 | 494.5 | 1,450.5 | 2,728.9 |

(a) Estimated future interest payments on our long term debt are based on the outstanding borrowings as of December 31, 2017, the respective maturity dates of the debt agreements and the interest rates in effect at December 31, 2017.

(b) Remaining undiscounted amounts due under the contract, assuming no reduction for any potential seller's indemnified losses.

*U.S. primary 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 2017. There are approximately 14,200 beneficiaries in the plans.

Based on current assumptions, we do not expect to make additional contributions.

*UMWA plans.* 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 3,300 beneficiaries in the UMWA plans. The company does not expect to make additional contributions to these plans until 2027, based on actuarial assumptions.

*Black Lung plans.* 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. There are approximately 760 black lung beneficiaries.

*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. See Note 3 for information about these non-U.S. plans' benefit obligation and estimated future benefit payments over the next 10 years.

### Assumptions for U.S. Retirement Obligations

We have made various assumptions to estimate the amount of payments to be made in the future. The most significant assumptions include:

- Changing discount rates and other assumptions in effect at measurement dates (normally December 31)
- Investment returns of plan assets
- Addition of new participants (historically immaterial due to freezing of pension benefits and exit from coal business)
- Mortality rates
- Change in laws

The Contractual Obligations table above represents payments projected to be paid with our corporate funds and does not represent payments projected to be made to beneficiaries with retirement plan assets.

### Funded Status of U.S. Retirement Plans

*(In millions)*

| Primary U.S. pension plan | Actual 2017 | Projected 2018 | 2019 | 2020 | 2021 | 2022 |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Beginning funded status | $(107.8) | (102.3) | (79.3) | (55.4) | (30.5) | (4.5) |
| Net periodic pension credit(a) | 18.5 | 22.0 | 22.9 | 23.5 | 25.4 | 27.2 |
| Payment from Brink’s | — | — | — | — | — | — |
| Benefit plan actuarial gain (loss) | (13.0) | 1.0 | 1.0 | 1.4 | 0.6 | — |
| Ending funded status | $(102.3) | (79.3) | (55.4) | (30.5) | (4.5) | 22.7 |
| **UMWA plans** |  |  |  |  |  |  |
| Beginning funded status | $(226.6) | (294.3) | (295.5) | (297.6) | (300.6) | (304.6) |
| Net periodic postretirement cost(a) | (1.9) | (1.2) | (2.1) | (3.0) | (4.0) | (5.2) |
| Benefit plan actuarial gain (loss) | (66.3) | — | — | — | — | — |
| Other | 0.5 | — | — | — | — | — |
| Ending funded status | $(294.3) | (295.5) | (297.6) | (300.6) | (304.6) | (309.8) |
| **Black lung plans** |  |  |  |  |  |  |
| Beginning funded status | $(57.2) | (67.0) | (62.1) | (57.5) | (53.2) | (49.2) |
| Net periodic postretirement cost(a) | (2.4) | (2.2) | (2.0) | (1.9) | (1.8) | (1.6) |
| Payment from Brink’s | 7.3 | 7.1 | 6.6 | 6.2 | 5.8 | 5.4 |
| Benefit plan actuarial gain (loss) | (14.7) | — | — | — | — | — |
| Ending funded status | $(67.0) | (62.1) | (57.5) | (53.2) | (49.2) | (45.4) |

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

### 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.

*(In millions)*

|  | Actual 2017 | Projected 2018 | 2019 | 2020 | 2021 | 2022 |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Primary U.S. pension plan | $7.7 | 6.3 | 2.6 | (0.3) | (5.9) | (10.9) |
| UMWA plans | 16.8 | 18.6 | 18.3 | 18.3 | 18.4 | 18.6 |
| Black lung plans | 8.4 | 8.4 | 6.2 | 5.8 | 5.4 | 4.9 |
| Total | $32.9 | 33.3 | 27.1 | 23.8 | 17.9 | 12.6 |

### Summary of Total Payments from U.S. Plans to Participants

This table summarizes actual and estimated payments from the plans to participants.

*(In millions)*

| Payments from U.S. Plans to participants | Actual 2017 | Projected 2018 | 2019 | 2020 | 2021 | 2022 |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Primary U.S. pension plan | $49.1 | 50.3 | 50.6 | 50.8 | 50.9 | 50.8 |
| UMWA plans | 33.5 | 34.2 | 34.0 | 34.4 | 34.3 | 33.6 |
| Black lung plans | 7.3 | 7.1 | 6.6 | 6.2 | 5.8 | 5.4 |
| Total | $89.9 | 91.6 | 91.2 | 91.4 | 91.0 | 89.8 |

48

### Summary of Projected Payments from Brink’s to U.S. Plans

This table summarizes estimated payments from Brink’s to U.S. retirement plans.

*(In millions)*

| Projected payments | Projected Payments to Plans from Brink's Primary U.S. Pension Plan | UMWA Plans | Black Lung Plans | Total |
| --- | ---: | ---: | ---: | ---: |
| 2018 | $— | — | 7.1 | 7.1 |
| 2019 | — | — | 6.6 | 6.6 |
| 2020 | — | — | 6.2 | 6.2 |
| 2021 | — | — | 5.8 | 5.8 |
| 2022 | — | — | 5.4 | 5.4 |
| 2023 | — | — | 5.0 | 5.0 |
| 2024 | — | — | 4.6 | 4.6 |
| 2025 | — | — | 4.2 | 4.2 |
| 2026 | — | — | 3.9 | 3.9 |
| 2027 | — | 18.9 | 3.7 | 22.6 |
| 2028 | — | 28.9 | 3.4 | 32.3 |
| 2029 | — | 28.1 | 3.2 | 31.3 |
| 2030 | — | 27.3 | 3.0 | 30.3 |
| 2031 | — | 26.4 | 2.8 | 29.2 |
| 2032 and thereafter | — | 372.3 | 27.8 | 400.1 |
| Total projected payments | $— | 501.9 | 92.7 | 594.6 |

The amounts in the tables above are based on a variety of estimates, including actuarial assumptions as of December 31, 2017. 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.

### Contingent Matters

During the fourth quarter of 2015, we became aware of an investigation initiated by COFECE (the Mexican antitrust agency) related to potential anti-competitive practices among competitors in the cash logistics industry in Mexico (the industry in which Brink’s Mexican subsidiary, SERPAPROSA, is active). The investigation was completed during the fourth quarter of 2017 and we no longer believe that an administrative claim or proceeding arising from this investigation could result in a material loss to the Company.

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. 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.

### APPLICATION OF CRITICAL ACCOUNTING POLICIES

The application of accounting principles requires the use of assumptions, estimates and judgments. We make assumptions, estimates and judgments based on, among other things, knowledge of operations, markets, historical trends and likely future changes, similarly situated businesses and, when appropriate, the opinions of advisors with relevant knowledge and experience. Reported results could have been materially different had we used a different set of assumptions, estimates and judgments.

### Deferred Tax Asset Valuation Allowance

Deferred tax assets result primarily from net operating losses, tax credit carryforwards, and the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial statement and income tax purposes, as determined under enacted tax laws and rates. The new U.S. tax reform law had a significant impact on the deferred tax asset.

### Accounting Policy

We establish valuation allowances, in accordance with the Financial Accounting Standards Board ("FASB") ASC Topic 740, *Income Taxes*, when we estimate it is not more likely than not that a deferred tax asset will be realized. We decide to record valuation allowances primarily based on an assessment of positive and negative evidence including historical earnings and future taxable income that incorporates prudent, feasible tax-planning strategies. We assess deferred tax assets on an individual jurisdiction basis. Changes in tax statutes, the timing of deductibility of expenses or expectations for future performance could result in material adjustments to our valuation allowances, which would increase or decrease tax expense. Our valuation allowances are as follows.

### Valuation Allowances

*(In millions)*

|  | December 31, 2017 | 2016 |
| --- | ---: | ---: |
| U.S. | **$80.0** | 38.1 |
| Non-U.S. | **18.9** | 24.7 |
| Total | **$98.9** | 62.8 |

### Application of Accounting Policy

#### U.S. Deferred Tax Assets

We had $201 million of net deferred tax assets at December 31, 2017, of which $173 million related to U.S. jurisdictions. The Tax Reform Act reduced the federal tax rate for corporations from 35% to 21%, beginning January 1, 2018. As a result, we remeasured our deferred tax assets considering the new rate and recognized a provisional $88 million reduction to net deferred tax assets through income from continuing operations in the fourth quarter of 2017. We recorded an estimated $31 million foreign tax credit carryforward related to the transition tax included in the Tax Reform Act, which was offset by a full valuation allowance. Excluding the effects of the Tax Reform Act, we also concluded that we were not more-likely-than-not to realize assets related to certain attributes with a limited statutory carryforward and recorded a $7 million valuation allowance through income from continuing operations.

In 2016, we changed our judgment about the need for valuation allowances for certain U.S. tax attributes with a limited statutory carryforward period that were no longer more-likely-than-not to be realized due to lower than expected U.S. operating results, certain pre-tax items, and other timing of tax deductions related to executive leadership transition. As a result, we recognized a $14.7 million valuation allowance in 2016 through income from continuing operations.

We used various estimates and assumptions to evaluate the need for the valuation allowance in the U.S. 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.,
- estimated required contributions to our U.S. retirement plans,
- the estimated impact of U.S. tax reform, and
- interest rates on projected U.S. borrowings.

Our projections assumed continued growth of our revenues and operating profit both in the U.S. and outside the U.S. Had we used different assumptions, we might have made different conclusions about the need for valuation allowances. For example, using different assumptions we might have concluded that we require a full valuation allowance offsetting our U.S. deferred tax assets.

#### Non-U.S. Deferred Tax Assets

In 2017, we changed our judgment about the need for valuation allowances for deferred tax assets in certain non-U.S. jurisdictions as a result of changes in operating results and the outlook about the future operating performance in those jurisdictions. As a result, we recognized a tax benefit of $1.8 million in 2017 through income from continuing operations.

### Goodwill, Other Intangible Assets and Property and Equipment Valuations

### Accounting Policy

At December 31, 2017, we had property and equipment of $640.9 million, goodwill of $453.7 million and other intangible assets of $105.7 million, net of accumulated depreciation and amortization. We review these assets for possible impairment using the guidance in FASB ASC Topic 350, *Intangibles - Goodwill and Other*, for goodwill and other intangible assets and FASB ASC Topic 360, *Property, Plant and Equipment*, for property and equipment. Our review for impairment requires the use of significant judgments about the future performance of our operating subsidiaries. Due to the many variables inherent in the estimates of the fair value of these assets, differences in assumptions could have a material effect on the impairment analyses.

### Application of Accounting Policy

#### Goodwill

We review goodwill for impairment annually and whenever events or circumstances make it more likely than not that impairment may have occurred. Application of the goodwill impairment test requires judgment, including the identification of reporting units, assignment of assets and liabilities to reporting units, assignment of goodwill to reporting units, and determination of the fair value of each reporting unit.

Under U.S. GAAP, the annual impairment test may be either a quantitative test or a qualitative assessment. 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.

For 2017, we elected to forego the optional qualitative assessment and we performed a quantitative goodwill impairment test instead. We estimated the fair value of each reporting unit using projections of cash flows and compared to its carrying value. We completed the annual goodwill impairment test as of October 1, 2017 and concluded that the fair value of each reporting unit substantially exceeded its carrying value by a range of 22% to 278%.

#### Finite-lived Intangible Assets and Property and Equipment

We review finite-lived intangible assets and property and equipment for impairment whenever events or changes in circumstances indicate that the related carrying amounts may not be recoverable. For purposes of assessing impairment, assets are grouped at the lowest levels for which there are identifiable cash flows that are largely independent of the cash flows of other groups of assets. To determine whether impairment has occurred, we compare estimates of the future undiscounted net cash flows of groups of assets to their carrying value.

#### Estimates of Future Cash Flows

We made significant assumptions when preparing financial projections of cash flow used in our impairment analyses, including assumptions of future results of operations, capital requirements, income taxes, long-term growth rates for determining terminal value, and discount rates. 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.

### Retirement and Postemployment Benefit Obligations

We provide benefits through defined benefit pension plans and retiree medical benefit plans and under statutory requirements.

### Accounting Policy

We account for pension and other retirement benefit obligations under FASB Accounting Standards Update (“ASU”) Topic 715, *Compensation – Retirement Benefits.* We account for postemployment benefit obligations, including workers’ compensation obligations, under FASB ASC Topic 712, *Compensation – Nonretirement Postemployment Benefits.*

To account for these benefits, we make assumptions of expected return on assets, discount rates, inflation, demographic factors and changes in the laws and regulations covering the benefit obligations. Because of the inherent volatility of these items and because the obligations are significant, changes in the assumptions could have a material effect on our liabilities and expenses related to these benefits.

Our most significant retirement plans include our primary U.S. pension plan and the retiree medical plans of our former coal business that were collectively bargained with the United Mine Workers of America (the “UMWA”). The critical accounting estimates that determine the carrying values of liabilities and the resulting annual expense are discussed below.

### Application of Accounting Policy

### Discount Rate Assumptions

For plans accounted under FASB ASC Topic 715, we discount estimated future payments using discount rates based on market conditions at the end of the year. In general, our liability changes in an inverse relationship to interest rates. That is, the lower the discount rate, the higher the associated plan obligation.

#### U.S. Plans

For our largest retirement plans, including the primary U.S. pension and UMWA plans and black lung obligations, we derive the discount rates used to measure the present value of benefit obligations using the cash flow matching method. Under this method, we compare the plan’s projected payment obligations by year with the corresponding yields on a Mercer yield curve. Each year’s projected cash flows are then discounted back to their present value at the measurement date and an overall discount rate is determined. The overall discount rate is then rounded to the nearest tenth of a percentage point.

We used Mercer’s Above-Mean Curve to determine the discount rates for retirement cost and the year-end benefit obligation. To derive the Above-Mean Curve, Mercer uses only those bonds with a yield higher than the mean yield of the same portfolio of high quality bonds. The Above-Mean Curve reflects the way an active investment manager would select high-quality bonds to match the cash flows of the plan.

#### Non-U.S. Plans

We use the same cash flow matching method to derive the discount rates for our major non-U.S. retirement plans. Where the cash flow matching method is not possible, rates of local high-quality long-term government bonds are used to estimate the discount rate.

The discount rates for the primary U.S. pension plan, UMWA retiree medical plans and black lung obligations were:

| Discount rate: | Primary U.S. Plan 2017 | 2016 | 2015 | UMWA Plans 2017 | 2016 | 2015 | Black Lung 2017 | 2016 | 2015 |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Retirement cost | **4.3%** | 4.5% | 4.1% | **4.1%** | 4.4% | 4.0% | **3.9%** | 4.2% | 3.7% |
| Benefit obligation at year end | **3.7%** | 4.3% | 4.5% | **3.6%** | 4.1% | 4.4% | **3.5%** | 3.9% | 4.2% |

#### 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. The tables below compare hypothetical plan obligation valuations for our largest plans as of December 31, 2017, actual expenses for 2017 and projected expenses for 2018 assuming we had used discount rates that were one percentage point lower or higher.

#### Plan Obligations at December 31, 2017

*(In millions)*

|  | Hypothetical 1% lower | Actual | Hypothetical 1% higher |
| --- | ---: | ---: | ---: |
| Primary U.S. pension plan | $996.2 | **879.5** | 784.3 |
| UMWA plans | 575.0 | **513.5** | 462.6 |

#### Actual 2017 and Projected 2018 Expense (Income)

*(In millions, except for percentages)*

| Years Ending December 31, Primary U.S. pension plan | Actual 2017 | Hypothetical sensitivity analysis for discount rate assumption 1% lower 2017 | 1% higher 2017 | Projected 2018 | Hypothetical sensitivity analysis for discount rate assumption 1% lower 2018 | 1% higher 2018 |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Discount rate assumption | 4.3% | 3.3% | 5.3% | 3.7% | 2.7% | 4.7% |
| Retirement cost | $7.7 | 16.1 | 0.4 | $6.3 | 13.8 | (0.2) |
| UMWA plans |  |  |  |  |  |  |
| Discount rate assumption | 4.1% | 3.1% | 5.1% | 3.6% | 2.6% | 4.6% |
| Retirement cost | $16.8 | 17.9 | 15.7 | $18.6 | 19.9 | 17.3 |

### 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. We select the expected-return-on-assets assumption using advice from our investment advisor considering each plan’s asset allocation targets and expected overall investment manager performance and a review of the most recent long-term historical average compounded rates of return, as applicable. We selected 7.25% as the expected-return-on-assets assumption for our primary U.S. plan and 8.25% for our UMWA retiree medical plans for actual 2017 and 2018 expense.

The twenty to thirty year compound annual return of our primary U.S. pension plan has averaged from 7.0% to 9.2%.

#### Sensitivity Analysis

*Effect of using different expected-rate-of-return assumptions.* Our 2017 and projected 2018 expense would have been different if we had used different expected-rate-of-return assumptions. 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 2017 and projected 2018 expense would be as follows:

*(In millions, except for percentages)*

| Years Ending December 31, Expected-return-on-asset assumption | Actual 2017 | Hypothetical sensitivity analysis for expected-return-on asset assumption 1% lower 2017 | 1% higher 2017 | Projected 2018 | Hypothetical sensitivity analysis for expected-return-on asset assumption 1% lower 2018 | 1% higher 2018 |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Primary U.S. pension plan | 7.25% | 6.25% | 8.25% | 7.25% | 6.25% | 8.25% |
| UMWA plans | 8.25% | 7.25% | 9.25% | 8.25% | 7.25% | 9.25% |
| Primary U.S. pension plan | $7.7 | 15.1 | 0.5 | $6.3 | 13.7 | (1.1) |
| UMWA plans | 16.8 | 18.8 | 14.8 | 18.6 | 20.6 | 16.6 |

53

*Effect of improving or deteriorating actual future market returns.* Our funded status at December 31, 2018, and our 2019 expense will be different from currently projected amounts if our projected 2018 returns are better or worse than the returns we have assumed for each plan.

*(In millions, except for percentages)*

| Years Ending December 31, Return on investments in 2018 | Projected | Hypothetical sensitivity analysis of 2018 asset return better or worse than expected Better return | Worse return |
| --- | ---: | ---: | ---: |
| Primary U.S. pension plan | 7.25% | 14.50% | —% |
| UMWA plans | 8.25% | 16.50% | —% |
| Projected Funded Status at December 31, 2018 |  |  |  |
| Primary U.S. pension plan | $(79) | (25) | (134) |
| UMWA plans | (295) | (280) | (312) |
| 2019 Expense(a) |  |  |  |
| Primary U.S. pension plan | $3 | — | 5 |
| UMWA plans | 18 | 16 | 21 |

(a) Actual future returns on investments will not affect our earnings until 2019 since the earnings in 2018 will be based on the "expected return on assets" assumption.

*Effect of using fair market value of assets to determine expense.* For our defined-benefit pension plans, we calculate expected investment returns by applying the expected long-term rate of return to the market-related value of plan assets. In addition, our plan asset actuarial gains and losses that are subject to amortization are based on the market-related value.

The market-related value of the plan assets is different from the actual or fair market value of the assets. The actual or fair market value is, at a point in time, the value of the assets that is available to make payments to pensioners and to cover any transaction costs. The market-related value recognizes changes in fair value from the expected value on a straight-line basis over five years. This recognition method spreads the effects of year-over-year volatility in the financial markets over several years.

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

*(In millions)*

| Years Ending December 31, | Based on market-related value of assets Actual 2017 | Projected 2018 | Projected 2019 | Hypothetical(a) 2017 | 2018 | 2019 |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Primary U.S. pension plan expense | $7.7 | 6.3 | 2.6 | $13.7 | 3.1 | (0.5) |

(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.

For our UMWA plans, we calculate expected investment returns by applying the expected long-term rate of return to the fair market value of the assets at the beginning of the year. This method is likely to cause the expected return on assets, which is recorded in earnings, to fluctuate more than had we used the accounting methodology of our defined-benefit pension plans.

### Medical Inflation Assumption

We estimate the trend in healthcare cost inflation to predict future cash flows related to our retiree medical plans. 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 6.5% for 2018, and we project this rate to decline to 5% in 2024 and hold at 5% thereafter. Our overall medical inflation rate assumption, including the assumption that medical inflation rates will gradually decline over the next seven years and hold at 5%, is based on macroeconomic assumptions of gross domestic growth rates, the excess of national health expenditures over other goods and services, and population growth. Our assumption of a medical inflation rate of 6.5% for 2018 is based on our recent actual experience. The average annual medical inflation rate of the Company over the last five to eleven years ranged from 5.8% to 6.3%.

If we had assumed that medical inflation rates were one percentage point higher in each future year, the plan obligation for these plans at December 31, 2017, would have been approximately $76.0 million higher and the expense for 2017 would have been $2.0 million higher. If we had assumed that the medical inflation rates were one percentage point lower, the plan obligation at December 31, 2017, would have been approximately $64.2 million lower and the related 2017 expenses would have been $1.7 million lower.

If we had projected medical inflation rates to decline from 6.6% to 4.5% by 2028, instead of our projected decline from 6.5% to 5% by 2024, the plan obligation for the UMWA retiree medical benefit plan would have been $4.6 million lower for 2017 and our expense would be $0.5 million lower for 2018.

### Excise Tax on Administrators by Patient Protection and Affordable Care Act

A 40% excise tax is expected to be imposed on high-cost health plans (“Cadillac plans”). The new Tax Reform Act delayed the effective date of the excise tax on Cadillac plans to 2022. The tax will apply to plan costs that exceed a certain threshold level for individuals and for families, which will be indexed to inflation. Even though the tax is not assessed directly to an employer but rather to the benefits plan administrator, the cost is expected to be passed through to plan sponsors as higher premiums or higher claims administration fees, increasing the plan sponsor’s obligations. Our plan obligations at December 31, 2017, include $34.5 million related to this tax. We are currently unable to reduce the benefit levels of our UMWA medical plans to avoid this excise tax because these benefit levels are required by the Coal Industry Retiree Health Benefit Act of 1992.

### Workers’ Compensation

Besides the effects of changes in medical costs, worker’s compensation costs are affected by the severity and types of injuries, changes in state and federal regulations and their application and the quality of programs which assist an employee’s return to work. Our liability for future payments for workers’ compensation claims is evaluated annually with the assistance of an actuary.

### Numbers of Participants

*Mortality tables.* We use the Mercer modified RP-2014 base table and the Mercer modified MP-2016 projection scale, with a Blue Collar adjustment factor for the majority of our U.S. retirement plans and a White Collar adjustment factor for our nonqualified U.S. pension plan.

*Lump sum offer to participants in 2014.* In August 2014, we offered approximately 9,000 terminated participants that had not yet retired the option of receiving the value of their pension benefit in a lump-sum payment, or as a reduced annuity that would begin earlier. The lump-sum elections were accepted by approximately 4,300 terminated participants resulting in payments by the plan of about $150 million. This action helped reduce the premiums paid to the Pension Benefit Guaranty Corporation (“PBGC”) as a portion of the premiums is based on the number of participants in the plan. We recognized a settlement loss in the fourth quarter of 2014 related to the lump-sum payment of $56 million.

*Number of participants.* The number of participants by major plan in the past five years is as follows:

| Plan | Number of participants 2017 | 2016 | 2015 | 2014 | 2013 |
| --- | ---: | ---: | ---: | ---: | ---: |
| UMWA plans | **3,300** | 3,600 | 3,700 | 3,900 | 4,100 |
| Black Lung | **760** | 750 | 700 | 700 | 710 |
| U.S. pension | **14,200** | 14,800 | 15,000 | 15,200 | 19,800 |

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. Because the U.S. pension plan has been frozen, the number of its participants will also decline over time.

### Venezuela - Projected Benefit Payments of Our Venezuela Benefit Plan Impacted by Currency Devaluation

Our non-U.S. net pension liability includes projected benefit obligations related to Venezuela of $4.3 million, $5.6 million, and $4.1 million at December 31, 2017, 2016 and 2015, respectively. The net periodic pension cost related to these benefit obligations was $7.5 million, $2.9 million, and $2.5 million in 2017, 2016 and 2015, respectively.

As discussed in Note 1, the economy in Venezuela has had significant inflation in the last several years and we consolidate our Venezuelan results using highly inflationary accounting rules. In determining the projected benefit obligation and net periodic pension cost, we project our bolivar-denominated expected cash outflows using expected salary increases and discount the expected cash outflows to present value. The discount rate and salary scale are adjusted for expected inflation.

The assumption for inflation in Venezuela was made considering the current economic situation in Venezuela and an analysis of regional economic performances during hyperinflationary cycles. Over the long term, we expect the economy of Venezuela will return to inflation rates more typical for the region. Based on these considerations, we assumed an inflation rate of 900% in 2018 with a gradual decline to 4% in 2033. For 2017, this inflation adjustment has been excluded from the non-U.S. assumptions table in Note 3.

As the projected salary increases and discount rate are both adjusted for inflation, there is not a significant impact to our current year projected benefit obligation as a result of increasing expected inflation. Our real net discount rate for Venezuela was 4% and was determined using government bonds within the region. There are no salary increases expected other than inflationary increases.

The inflation adjustment for Venezuela results in significant expected bolivar-denominated cash outflows in the next 10 years as these amounts are increased for inflationary growth but are not discounted back to present value. As we expect to make these benefit payments in bolivars with cash generated from our Venezuelan operations, these amounts have been excluded from the estimated future non-U.S. projected benefit payments table in Note 3.

When these undiscounted bolivar-denominated cash outflows are translated into U.S. dollars at the December 31, 2017 DICOM exchange rate of approximately 3,345 bolivars to the dollar, for purposes of U.S. GAAP reporting, the results are projected cash outflows of $38.7 trillion. In addition to being undiscounted, these U.S. dollar translated projected cash outflows also do not reflect future inflation-driven devaluation of the Venezuelan currency. The devaluation of the Venezuelan bolivar has been significant over the last three years. The exchange rate was 674 bolivars to the dollar at December 31, 2016, which is a 70% decline from the December 31, 2015 rate of 199 bolivars to the dollar. Further, the December 31, 2017 DICOM exchange rate of approximately 3,345 bolivars to the dollar reflects an additional 80% decline from the end of 2016.

### 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.

### Accounting Policy

Our accounting policy for foreign currency translation is different depending on whether the economy in which our foreign subsidiary operates has been designated as highly inflationary. Economies with a three-year cumulative inflation rate of more than 100% are considered highly inflationary. Subsequent reductions in cumulative inflation rates below 100% do not change the method of translation unless the reduction is deemed to be other than temporary.

#### Non-Highly Inflationary Economies

Assets and liabilities of foreign subsidiaries in non-highly inflationary economies are translated into U.S. dollars using rates of exchange at the balance sheet date. Translation adjustments are recorded in other comprehensive income (loss). Revenues and expenses are translated at rates of exchange in effect during the year. Transaction gains and losses are recorded in net income (loss).

#### Highly Inflationary Economies

Foreign subsidiaries that operate in highly inflationary countries must use the reporting currency (the U.S. dollar) as the functional currency. Local-currency monetary assets and liabilities are remeasured into dollars each balance sheet date, with remeasurement adjustments and other transaction gains and losses recognized in earnings. Nonmonetary assets and liabilities do not fluctuate with changes in local currency exchange rates to the dollar.

### Application of Accounting Policy

#### Venezuela

The economy in Venezuela has had significant inflation in the last several years. We consolidate our Venezuelan results using our accounting policy for subsidiaries operating in highly inflationary economies.

We control our Venezuela business for purposes of consolidation of financial statements. Specifically, while the Venezuela government has imposed restrictions that prevent the repatriation of funds, management continues to provide guidance and strategic oversight, including budgeting and forecasting for the Venezuela business. In addition, in this highly inflationary economy, the Venezuela business has negotiated price increases with certain customers to help offset cost inflation. We will continue to monitor the situation in Venezuela and the impact that the economic and political environment in that country has on our ability to control our Venezuela operations.

Since 2003, the Venezuelan government has controlled the exchange of local currency into other currencies, including the U.S. dollar, and has required that currency exchanges be made at official rates established by the government instead of allowing open markets to determine currency rates. Different official rates exist for different industries and purposes and the government does not approve all requests to convert bolivars to other currencies.

As a result of the restrictions on currency exchange, we have in the past been unable to obtain sufficient U.S. dollars to purchase certain imported supplies and fixed assets. Consequently, our Venezuela operations have occasionally purchased more expensive, bolivar-denominated supplies and fixed assets. There is a risk that official currency exchange mechanisms will be discontinued or will not be accessible when needed in the future, which may prevent us from repatriating dividends or obtaining dollars to operate our Venezuelan operations.

Due to the Venezuelan government's restrictions that have prevented us from repatriating funds, results from our Venezuelan operations are included in items not allocated to segments and are excluded from the operating segments.

***Remeasurement rates during 2015***. In 2014, the Venezuelan government initiated an exchange mechanism known as SICAD II. Through February 11, 2015, we used rates from an exchange mechanism known as SICAD II to remeasure our bolivar-denominated monetary assets and liabilities into U.S. dollars and to translate our revenue and expenses. Effective February 12, 2015, the SICAD II exchange mechanism was disbanded and we began to use the rate under the new exchange mechanism, known as SIMADI, to remeasure bolivar-denominated monetary assets and liabilities and to translate our revenue and expenses. The SIMADI rate ranged from 170 to 200 bolivars to the dollar since it was first published through the end of 2015. At December 31, 2015, it was 199 bolivars to the dollar. We recognized an $18.1 million net remeasurement loss in 2015. The after-tax effect of this loss attributable to noncontrolling interests was $5.6 million. We received minimal U.S. dollars using the SIMADI process.

***Remeasurement rates during 2016.*** In the first quarter of 2016, the Venezuelan government announced that it would replace the SIMADI exchange mechanism with the DICOM exchange mechanism and would allow the DICOM exchange mechanism rate to float freely. At March 31, 2016, the DICOM rate was approximately 273 bolivars to the dollar. From March 31, 2016 through the end of 2016, the rate declined 59% to close at approximately 674 bolivars to the dollar at December 31, 2016. We recognized a $4.8 million pretax remeasurement loss in 2016. However, the after-tax effect in the current period attributable to noncontrolling interest was income of $2.7 million.

***Remeasurement rates during 2017.*** Since the end of 2016, the DICOM rate has declined 80% to close at approximately 3,345 bolivars to the dollar at December 31, 2017. We have received only minimal U.S. dollars through this exchange mechanism. In 2017, we recognized a $9.1 million pretax remeasurement loss. The after-tax effect of this loss attributable to noncontrolling interest was $1.0 million.

Items related to our Venezuelan operations are as follows:

- Our investment in our Venezuelan operations on an equity-method basis was $23.1 million at December 31, 2017, and $19.2 million at December 31, 2016.
- Our Venezuelan operations had net payables to other Brink's affiliates of $2.7 million at December 31, 2017 and $6.1 million at December 31, 2016.
- Our Venezuelan operations had net nonmonetary assets of $23.0 million at December 31, 2017, and $17.6 million at December 31, 2016.
- Our bolivar-denominated net monetary net liabilities were $2.3 million (including $3.4 million of cash and cash equivalents) at December 31, 2017, and $1.4 million net monetary assets (including $6.8 million of cash and cash equivalents) at December 31, 2016.
- Accumulated other comprehensive losses attributable to Brink’s shareholders related to our operations in Venezuela were approximately $114.9 million at December 31, 2017 and $114.7 million at December 31, 2016.

#### Argentina

We operate in Argentina through wholly owned subsidiaries and a smaller controlled subsidiary ("Brink's Argentina"). Revenues from Brink's Argentina represented approximately 7% of our consolidated revenues for the year ended December 31, 2017 and 5% of our consolidated revenues for the years ended December 31, 2016 and 2015. The operating environment in Argentina continues to present business challenges, including continuing devaluation of the Argentine peso and high inflation.

During 2015, the exchange rate ranged from 8.5 to 9.8 local pesos to the U.S. dollar until December 17, 2015 when the currency was devalued. For years ended December 31, 2017 and December 31, 2016, the value of the Argentine peso declined by approximately 15% and 19% respectively. At December 31, 2017, the exchange rate was 18.6 Argentine pesos to the U.S. dollar.

The government in Argentina had previously imposed limits on the exchange of Argentine pesos into U.S. dollars. As a result, we elected in the past and may continue in the future to repatriate cash from Argentina using different markets to convert Argentine pesos into U.S. dollars if U.S. dollars are not readily available. Conversions prior to the December 17, 2015 devaluation had settled at rates approximately 30% to 40% less favorable than the rates at which we translated the financial statements of our subsidiary in Argentina. After the December 2015 devaluation of the Argentine peso, the market rates used to convert Argentine pesos into U.S. dollars have been similar to the rates at which we translate the financial statements of our subsidiary in Argentina. See Note 19 for more information.

We recognized losses from converting Argentine pesos into U.S. dollars of $0.1 million in 2016 and $7.1 million in 2015. These conversion losses are classified in the consolidated statements of operations as other operating income (expense). At December 31, 2017, we had cash denominated in Argentine pesos of $33.2 million.

Although Argentina is not currently designated as a highly inflationary economy for accounting purposes, sustained volatility in inflation rates as well as continued deterioration in the exchange rate could have an adverse impact on Brink's Argentina's revenues, net earnings and net monetary asset position. We continue to closely monitor the situation in Argentina to determine whether we should consolidate Brink's Argentina results using our accounting policy for subsidiaries operating in highly inflationary economies.

### RECENT ACCOUNTING PRONOUNCEMENTS

In February 2016, the FASB issued ASU 2016-02, *Leases (Topic 842)*, which will require the recognition of assets and liabilities by lessees for certain leases classified as operating leases under current accounting guidance and also requires expanded disclosures regarding leasing activities. ASU 2016-02 will be effective January 1, 2019 and we are required to use the modified retrospective method to adopt the new standard. We are assessing the potential impact of the standard on financial reporting.

In March 2016, the FASB issued ASU 2016-09, *Improvements to Employee Share-Based Payment Accounting*, which simplifies how certain features related to share-based payments are accounted for and presented in the financial statements. We elected to early adopt this ASU in the fourth quarter of 2016 and, per the requirements of the pronouncement, we applied the amendments to the beginning of 2016. Under ASU 2016-09, accounting changes adopted using the modified retrospective method must be calculated as of the beginning of 2016 and reported as a cumulative-effect adjustment. As a result, we recognized a $0.2 million cumulative-effect adjustment to January 1, 2016 retained earnings for previously unrecognized excess tax benefits. We have elected to continue our previous accounting policy of estimating forfeitures and, therefore, we did not recognize any cumulative-effect adjustment related to forfeitures. ASU 2016-09 requires that accounting changes adopted using the prospective method should be reported in the applicable interim periods of 2016. We did not have any material changes to previously reported interim financial information in 2016 as it relates to the recognition of excess tax benefits in the statement of operations or the classification of excess tax benefits in the statement of cash flows. In 2017, the accounting under this ASU resulted in the recognition of $6.7 million in excess tax benefits.

In June 2016, the FASB issued ASU 2016-13, *Measurement of Credit Losses on Financial Instruments*, which significantly changes the way entities recognize impairment of many financial assets by requiring immediate recognition of estimated credit losses expected to occur over their remaining life. ASU 2016-13 is effective January 1, 2020, with early adoption permitted January 1, 2019. We are assessing the potential impact of this new standard on financial reporting.

In November 2016, the FASB issued ASU 2016-18, *Statement of Cash Flows: Restricted Cash*, which requires entities to include restricted cash and restricted cash equivalent balances with cash and cash equivalent balances in the statement of cash flows. We will adopt ASU 2016-18 in the first quarter of 2018 using the retrospective transition method. The adoption of this ASU effective January 1, 2018 will result in a change to previously reported amounts in the consolidated statements of cash flows. Net cash provided by operating activities will increase $44.3 million, net cash provided by financing activities will increase $1.5 million and the negative effect of exchange rate changes on cash will decrease $11.3 million as compared to previously reported 2017 amounts. For 2016, net cash provided by operating activities will increase $22.8 million, net cash used by financing activities will decrease $19.9 million and the negative effect of exchange rate changes on cash will increase $3.6 million.

In May 2014, the FASB issued ASU 2014-09, *Revenue From Contracts with Customers*, a new standard related to revenue recognition, which requires an entity to recognize an amount of revenue to which it expects to be entitled for the transfer of promised goods and services to customers. The new standard will replace most of the existing revenue recognition standards in U.S. GAAP. In August 2015, the FASB issued ASU 2015-14, which defers the effective date of this new standard to January 1, 2018. Subsequently, the FASB has continued to refine the standard and has issued several amendments. The significant effects of the new standard for us will be associated with variable consideration and capitalization of costs to obtain contracts, such as sales commissions. Currently, we recognize the impact of pricing changes in the period they become fixed and determinable and we expense sales commissions and other costs to obtain contracts as they are incurred. We do not expect a material impact on our future consolidated statements of operations or consolidated balance sheets. However, the new guidance will result in expanded disclosures regarding our various performance obligations, revenue disaggregation and contractual rights. We intend to use the modified retrospective method to adopt the new standard. We expect to recognize a cumulative-effect adjustment to January 1, 2018 retained earnings of approximately $2 million, primarily from the capitalization of costs to obtain contracts.

In January 2017, the FASB issued ASU 2017-04, *Intangibles-Goodwill and Other: Simplifying the Test for Goodwill Impairment*, which requires an entity to no longer perform a hypothetical purchase price allocation to measure goodwill impairment. Instead, impairment will be measured using the difference between the carrying amount and the fair value of the reporting unit. The guidance is effective January 1, 2020 with early adoption permitted. We are currently evaluating the impact of this guidance, including transition elections and required disclosures, on our financial statements and the timing of adoption.

In March 2017, the FASB issued ASU 2017-07, *Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost*, which requires an entity to report the service cost component in the same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period. The other components of net benefit cost are required to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations. We elected to early adopt this ASU in the first quarter of 2017 using the retrospective transition method for the periods presented. As a result, the consolidated statements of operations have been updated to reflect this guidance.

The adoption of this ASU resulted in a change in certain previously reported amounts in the consolidated statements of operations. Cost of revenues decreased $33.1 million, selling, general and administrative expenses decreased $7.2 million and operating profit as well as interest and other income (expense) increased $40.3 million compared to previously reported 2016 amounts. In 2015, cost of revenues decreased $27.9 million, selling, general and administrative expenses decreased $11.9 million and operating profit as well as interest and other income (expense) increased $39.8 million compared to previously reported amounts. The early adoption of this ASU had no impact on the previously reported income from continuing operations or net income for the prior year periods.

In August 2017, the FASB issued ASU 2017-12, *Derivatives and Hedging: Targeted Improvements to Accounting for Hedging Activities*, which amends and simplifies the application of hedge accounting guidance to better portray the economic results of risk management activities in the financial statements. The guidance expands the ability to hedge nonfinancial and financial risk components, reduces complexity in fair value hedges of interest rate risk, eliminates the requirement to separately measure and report hedge ineffectiveness, and eases certain hedge effectiveness assessment requirements. The guidance is effective January 1, 2019 with early adoption permitted. We are currently evaluating the impact of this guidance, including transition elections and required disclosures, on our financial statements and the timing of adoption.

## Market risk

As filed, 5,081 characters.

We currently serve customers in more than 100 countries, including 41 countries where we operate subsidiaries. These operations expose us to a variety of market risks, including the effects of changes in interest rates, foreign currency exchange rates and commodity prices. These financial and commodity exposures are monitored and managed by us as an integral part of our overall risk management program.

We may periodically use various derivative and non-derivative financial instruments, as discussed below, to hedge our interest rate, foreign currency and commodity prices exposures when appropriate. The risk that counterparties to these instruments may be unable to perform is minimized by limiting the counterparties used to major financial institutions with investment grade credit ratings. We do not expect to incur a loss from the failure of any counterparty to perform under the agreements. We do not use derivative financial instruments for purposes other than hedging underlying financial or commercial exposures.

The sensitivity analyses discussed below for the market risk exposures were based on the facts and circumstances in effect at December 31, 2017. Actual results will be determined by a number of factors that are not under management’s control and could vary materially from those disclosed.

### Interest Rate Risk

We use both fixed and floating rate debt and leases to finance our operations. Floating rate obligations, including the term loan facility under our senior secured credit facility, expose us to fluctuations in cash flows due to changes in the general level of interest rates. Fixed rate obligations, including our senior unsecured notes, are subject to fluctuations in fair values as a result of changes in interest rates.

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, 2017, a hypothetical 10% increase in rates would increase cash outflows by approximately $1.0 million over a twelve-month period. In other words, the weighted-average interest rate on our floating rate instruments (including any fixed rate margin component) was 3.5% per annum at December 31, 2017. If the underlying floating rate component were to increase by 10%, our average rate on this debt would increase by 0.2 percentage points to 3.7%. The effect on the fair values on our unsecured senior notes for a hypothetical 10% decrease in the yield curve from year-end 2017 levels would result in a $23.0 million increase in the fair value of our unsecured senior notes.

### Foreign Currency Risk

We have exposure to the effects of foreign currency exchange rate fluctuations on the results of all of our foreign operations. Our foreign operations generally use local currencies to conduct business, but their results are reported in U.S. dollars.

We are also exposed periodically to the foreign currency rate fluctuations that affect transactions not denominated in the functional currency of our domestic and foreign operations. To mitigate these exposures, we enter into foreign currency forward and swap contracts from time to time. At December 31, 2017, the notional value of our shorter term outstanding foreign currency forward and swap contracts was $145.5 million with average contract maturities of approximately one month. These shorter term contracts primarily offset exposures in the euro, the British pound and the Mexican peso. Additionally, these shorter term contracts are not designated as hedges for accounting purposes, and accordingly, changes in their fair value are recorded immediately in earnings. We also have a longer term cross currency swap contract to hedge exposure in the Brazilian real which is designated as a cash flow hedge for accounting purposes. At December 31, 2017, the notional value of this longer term contract, which matures in January 2018, was $1.6 million with a weighted-average maturity of 0.1 years. We do not use derivative financial instruments to hedge investments in foreign subsidiaries since such investments are long-term in nature.

The effects of a hypothetical simultaneous 10% appreciation in the U.S. dollar from the 2017 levels against all other currencies of countries in which we have continuing operations are as follows:

*(In millions)*

| Effect on Earnings: | Hypothetical Effects Increase/ (decrease) |
| --- | ---: |
| Translation of 2017 earnings into U.S. dollars | $(21.3) |
| Transaction gains (losses)(a) | (3.6) |
| Effect on Other Comprehensive Income (Loss): |  |
| Translation of net assets of foreign subsidiaries | (101.4) |

(a) 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. The foreign currency exposure effect related to a change in an individual currency could be significantly different.

## Controls and procedures

As filed, 18,629 characters.

#### (a) Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), that are intended to ensure that information that would be required to be disclosed in Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including the Chief Executive Officer and the Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

We carried out an evaluation, under the supervision, and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of December 31, 2017 based upon the criteria established in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“the COSO framework”). Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of December 31, 2017 due to the material weaknesses in internal control over financial reporting, as described below.

Notwithstanding the material weaknesses in our internal control over financial reporting, we have concluded that the consolidated financial statements included in this Annual Report on Form 10-K fairly present, in all material respects, our financial position, results of operations and cash flows for the periods presented in conformity with accounting principles generally accepted in the United States of America. Additionally, the material weaknesses did not result in any restatements of our consolidated financial statements or disclosures for any prior period.

#### (b) Management's Report on Internal Control over Financial Reporting

Management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) promulgated under the Exchange Act as a process, designed by, or under the supervision of the Company’s principal executive and principal financial officers and effected by the Company’s Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America. Internal control over financial reporting includes maintaining records that in reasonable detail accurately and fairly reflect our transactions and disposition of assets; providing reasonable assurance that transactions are recorded as necessary for preparation of our financial statements; providing reasonable assurance that receipts and expenditures are made only in accordance with management and Board authorizations; and providing reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our financial statements.

Because of its inherent limitations, internal control over financial reporting is not intended to provide absolute assurance that a misstatement of our financial statements would be prevented or detected. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with policies or procedures may deteriorate.

Management, with the participation of the Company’s principal executive and principal financial officers, conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2017 based on the framework and criteria established in *Internal Control - Integrated Framework (2013)* issued by the Committee of Sponsoring Organizations of the Treadway Commission. This evaluation included review of the documentation of controls, evaluation of the design effectiveness of controls, testing of the operating effectiveness of controls and a conclusion on this evaluation. Based on the foregoing, management concluded that the Company’s internal control over financial reporting was not effective as of December 31, 2017 due to the material weaknesses described below.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that a reasonable possibility exists that a material misstatement of our annual or interim financial statements would not be prevented or detected on a timely basis.

### Discussion of Material Weaknesses

Management has identified material weaknesses in its internal control over financial reporting related to the areas described below.

### Control Activities

We have identified design and operating effectiveness deficiencies in the principles associated with the control activities component of the COSO framework in our U.S. business operations unit. Specifically, these control deficiencies constitute a material weakness in the aggregate, relating to: (i) deploying control activities through policies that establish what is expected and procedures that put policies into action and (ii) selecting and developing control activities and information technology that contribute to the mitigation of risks and support achievement of objectives. The U.S. business operations unit’s internal controls over information technology systems were not adequately designed and did not operate effectively. Specifically: (i) user access controls did not restrict users’ access privileges commensurate with their assigned authority and responsibility and (ii) terminated employees’ access privileges were not removed in a timely manner. As a result of these deficiencies, the related process-level manual and automated application controls that rely on information from the affected information technology systems were also ineffective.

### Monitoring Activities

We have identified design and operating effectiveness deficiencies in the principles associated with the monitoring component of the COSO framework. Specifically, these control deficiencies constitute a material weakness relating to selecting, developing, and performing ongoing evaluation to ascertain whether the components of internal controls are present and functioning.

Our internal control over financial reporting as of December 31, 2017, has been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report, which follows below.

#### (c) Changes in Internal Controls over Financial Reporting

Except for the identification of the material weaknesses described above, there were no changes during the quarter ended December 31, 2017 in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

#### (d) Remediation Activities

Our remediation efforts are ongoing and we will continue our initiatives to implement and document policies, procedures, and internal controls. Remediation of the identified material weaknesses and strengthening our internal control environment will require a substantial effort throughout 2018 and beyond, as necessary. We will test the ongoing operating effectiveness of the new and existing controls in future periods. The material weaknesses cannot be considered completely remediated until the applicable controls have operated for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively.

As we remediate the material weaknesses and continue to monitor the effectiveness of our internal control over financial reporting in the affected areas, we have and will continue to perform additional procedures prescribed by management, including the use of manual mitigating control procedures and employing any additional tools and resources deemed necessary, to ensure that our consolidated financial statements are fairly stated in all material respects. The following remediation activities highlight our commitment to remediating our identified material weaknesses.

### Control Activities

The U.S. business operations unit has identified and begun to implement several enhancements to its internal controls including (i) identification of each deficiency and related remediation actions to ensure that only properly approved common access permissions are documented and granted; (ii) elimination of application segregation of duty deficiencies; (iii) development of documented procedures for managers to use in the periodic review of their employees access permissions; and (iv) evaluation of the common process for timely notification of terminated employees for access removal. U.S. business operations unit management will also redesign controls related to analytics to emphasize document precision and retention. This is an incremental improvement to other remediation activity related to internal controls over information technology systems. In addition, the U.S. business operations unit management will redesign the reconciliation control of data between the originating application and the updated application.

### Monitoring Activities

We are in the process of hiring a manager whose primary responsibility will be to design and test controls for the U.S. business operation unit. In addition, the manager of each control owner will be trained on the specific performance requirements of the control and will monitor each control owner’s performance.

Management believes that these efforts will effectively remediate the material weaknesses identified in the 2017 audit. However, the material weaknesses in our internal control over financial reporting will not be considered remediated until the new controls are fully implemented, in operation for a sufficient period of time, and tested and concluded by management to be designed and operating effectively. In addition, as the Company continues to evaluate and work to improve its internal control over financial reporting within the area of general information technology controls, management may take additional measures to address control deficiencies or modify the remediation plan described above. Management will test, evaluate, and audit the implementation of these new processes and internal controls during 2018 to determine whether they are designed and operating effectively to provide reasonable assurance that they will prevent or detect a material error in the Company’s financial statements. The management team will perform validation procedures similar to those performed at year end to obtain assurance that the financial statement balances are accurate and complete.

Management is working towards having these remediation efforts completed by the time we issue our December 31, 2018 financial statements. Management is committed to continuous improvement of our internal control over financial reporting and will continue to diligently review our financial reporting controls and procedures to ensure that our financial position, results of operations and cash flows continue to be accurately stated.

The management team was able to obtain assurance that the financial statement balances were accurate and complete through validation procedures. As a result of these procedures, we believe that the consolidated financial statements included in this Annual Report on Form 10-K for the year ended December 31, 2017 fairly present, in all material respects, our financial position, results of operations and cash flows for the periods presented in conformity with GAAP. Additionally, these material weaknesses did not result in any adjustments or restatements of the Company's audited and unaudited consolidated financial statements or disclosures for any prior period previously reported by the Company.

### REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of The Brink’s Company

### Opinion on Internal Control over Financial Reporting

We have audited the internal control over financial reporting of The Brink’s Company and subsidiaries (the “Company”) as of December 31, 2017, based on criteria established in *Internal Control - Integrated Framework (2013)* issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, because of the effect of the material weaknesses identified below on the achievement of the objectives of the control criteria, the Company has not maintained effective internal control over financial reporting as of December 31, 2017, based on criteria established in *Internal Control - Integrated Framework (2013)* issued by COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, 2017, of the Company and our report dated March 1, 2018, expressed an unqualified opinion on those financial statements.

### Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

### Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

### Material Weaknesses

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis. The following material weaknesses have been identified and included in management's assessment:

*Control activities*: design and operating effectiveness control deficiencies constituting a material weaknesses in the aggregate, relating to: (i) deploying control activities through policies that establish what is expected and procedures that put policies into action and (ii) selecting and developing control activities and information technology that contribute to the mitigation of risks and support achievement of objectives. The U.S. business operations unit’s internal controls over information technology systems were not adequately designed and did not operate effectively. Specifically: (i) user access controls did not restrict users’ access privileges commensurate with their assigned authority and responsibility and (ii) terminated employees’ access privileges were not removed in a timely manner. As a result of these deficiencies, the related process-level manual and automated application controls that rely on information from the affected information technology systems were also ineffective. These deficiencies also affected the corporate accounts and Canadian business operations unit as they share a common enterprise performance management software platform with the U.S. business operations unit.

*Monitoring activities*: design and operating effectiveness control deficiencies constituting a material weakness in the aggregate, relating to selecting, developing, and performing ongoing evaluation to ascertain whether the components of internal controls are present and functioning.

These material weaknesses were considered in determining the nature, timing, and extent of audit tests applied in our audit of the consolidated financial statements as of and for the year ended December 31, 2017, of the Company, and this report does not affect our report on such financial statements.

#### /s/ DELOITTE & TOUCHE LLP

Richmond, Virginia

March 1, 2018

Filed Mar 1, 2018.
Source: SEC EDGAR, the filing index for accession 0000078890-18-000009. Last ingested by Listed: Nov 4, 2026, 07:32 ET. No prices; not investment advice.