# Brinks Co: Form 10-Q for the period ended Sep 30, 2020

- Company: [Brinks Co](/companies/bco.md) (CIK 78890)
- Form: 10-Q
- Filed: 2020-10-29
- Accepted by EDGAR: Oct 29, 2020, 19:46 ET
- Period: 2020-09-30
- Accession: 0000078890-20-000087
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/78890/000007889020000087/bco-20200930.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/78890/000007889020000087/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2020-09-30.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2020-07-01 to 2020-09-30 | $970.5m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Revenue | 9 months, 2020-01-01 to 2020-09-30 | $2.67bn | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Cost of revenue | 3 months, 2020-07-01 to 2020-09-30 | $742.9m | us-gaap:CostOfRevenue |
| Cost of revenue | 9 months, 2020-01-01 to 2020-09-30 | $2.12bn | us-gaap:CostOfRevenue |
| Operating income | 3 months, 2020-07-01 to 2020-09-30 | $76.4m | us-gaap:OperatingIncomeLoss |
| Operating income | 9 months, 2020-01-01 to 2020-09-30 | $101.6m | us-gaap:OperatingIncomeLoss |
| Interest expense | 3 months, 2020-07-01 to 2020-09-30 | $27.1m | us-gaap:InterestExpense |
| Interest expense | 9 months, 2020-01-01 to 2020-09-30 | $70.3m | us-gaap:InterestExpense |
| Income tax | 3 months, 2020-07-01 to 2020-09-30 | $58.9m | us-gaap:IncomeTaxExpenseBenefit |
| Income tax | 9 months, 2020-01-01 to 2020-09-30 | $3.5m | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2020-07-01 to 2020-09-30 | −$23.9m | us-gaap:NetIncomeLoss |
| Net income | 9 months, 2020-01-01 to 2020-09-30 | −$9.2m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2020-07-01 to 2020-09-30 | −$0.48 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 9 months, 2020-01-01 to 2020-09-30 | −$0.18 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2020-07-01 to 2020-09-30 | −$0.48 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 9 months, 2020-01-01 to 2020-09-30 | −$0.18 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2020-07-01 to 2020-09-30 | 50,400,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 9 months, 2020-01-01 to 2020-09-30 | 50,600,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 9 months, 2020-01-01 to 2020-09-30 | $87.4m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 9 months, 2020-01-01 to 2020-09-30 | $79.1m | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Dividends paid | 9 months, 2020-01-01 to 2020-09-30 | $22.7m | us-gaap:PaymentsOfDividendsCommonStock |
| Cash and equivalents | at 2020-09-30 | $592.4m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2020-09-30 | $1.70bn | us-gaap:AssetsCurrent |
| Total assets | at 2020-09-30 | $4.90bn | us-gaap:Assets |
| Current liabilities | at 2020-09-30 | $1.17bn | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2020-09-30 | $4.73bn | us-gaap:Liabilities |
| Long-term debt | at 2020-09-30 | $2.41bn | us-gaap:LongTermDebtNoncurrent |
| Current portion of debt | at 2020-09-30 | $107.3m | us-gaap:LongTermDebtCurrent |
| Short-term borrowings | at 2020-09-30 | $13.3m | us-gaap:ShortTermBorrowings |
| Shareholders' equity | at 2020-09-30 | $90.0m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 82,304 characters.

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

We identify our operating segments based on how our chief operating decision maker (“CODM”) allocates resources, assesses performance and makes decisions. Our CODM is our President and Chief Executive Officer. Our CODM evaluates performance and allocates resources to each operating segment based on an operating profit or loss measure, excluding income and expenses not allocated to segments.

We have three operating segments:

- North America
- South America
- Rest of World

### RESULTS OF OPERATIONS

### COVID-19 Pandemic Impact

We are closely monitoring developments related to the ongoing coronavirus (COVID-19) pandemic, which has created global volatility, uncertainty and economic disruption. We have taken and continue to take steps to mitigate the potential risks to our employees, our customers and our business around the world. We are focused on three priorities:

- Protecting our people and providing essential services to our customers;
- Preserving cash and optimizing profitability; and
- Positioning Brink’s to be stronger on the other side of the crisis.

The COVID-19 pandemic began to have a material adverse impact on our results of operations in the quarter ended March 31, 2020. It first affected our operations in Asia, and then beginning in early March moved sequentially through Europe, North America and South America. Government-imposed mandatory closures and other restrictions across our key global markets have contributed to a reduction in global commerce, reducing the demand for our services and lowering volumes. As a result, we have experienced reduced revenues as some of our customers canceled or suspended service. Consequently, we have aligned our cost structure to the reduced demand for our services, including through employee lay-offs, furloughs, freezing merit increases and temporary benefit reductions across our global operations.

As of the date of this filing, uncertainty remains with respect to the continued impact and duration of the COVID-19 pandemic. However, we expect that the COVID-19 pandemic will continue to impact each of our businesses and segments differently. We expect a negative impact on volumes, revenues and operating results while the COVID-19 pandemic continues. To address this negative impact, during the quarter ended March 31, 2020, we began taking steps to reduce expenses including reducing headcount, managing overtime, reducing salaries and benefits, limiting non-safety-related fleet maintenance, eliminating non-essential travel and other expenses, as well as pursuing government assistance (where available). The extent of the impact will depend on future developments, including the duration and spread of the pandemic and related government restrictions, all of which are uncertain and cannot be predicted.

In addition, we cannot predict whether future developments associated with the COVID-19 pandemic will have a materially adverse effect on our long-term liquidity position. During the quarter ended March 31, 2020, in addition to the steps we began taking to reduce expenses, we also began taking steps to reduce capital expenditures, including suspending our fleet replacement program, and optimizing our working capital to conserve our liquidity. We believe we continue to have sufficient liquidity to meet our current obligations. This is, however, an evolving situation, and we cannot predict the extent or duration of the ongoing COVID-19 pandemic, the effects of it on the global, national or local economy, including the impacts on our ability to access capital, or its effects on our business, financial position, results of operations, and cash flows.

We will continue to monitor developments affecting our employees, customers and operations and take additional steps to address the spread of COVID-19 and its impacts, as necessary.

Refer to the “Liquidity and Capital Resources” section below, as well as Part II. Item 1A, “Risk Factors” for further discussion.

### Consolidated Review

#### 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 they 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 these items from period-to-period in terms of size, nature and significance. The non-GAAP adjustments used to reconcile our GAAP results are described on pages 45–46 and are reconciled to comparable GAAP measures on pages 51–53.

#### 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 43.

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

| GAAP | Three Months Ended September 30,% 2020 | 2019 | Change | Nine Months Ended September 30,% 2020 | 2019 | Change |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Revenues | $970.5 | 928.4 | 5 | 2,669.3 | 2,747.4 | (3) |
| Cost of revenues | 742.9 | 714.4 | 4 | 2,120.2 | 2,125.6 | — |
| Selling, general and administrative expenses | 141.4 | 155.0 | (9) | 429.1 | 451.3 | (5) |
| Operating profit (loss) | 76.4 | 52.5 | 46 | 101.6 | 163.5 | (38) |
| Income from continuing operations(a) | (23.8) | 5.8 | unfav | (8.3) | 32.1 | unfav |
| Diluted EPS from continuing operations(a) | $(0.47) | 0.11 | unfav | (0.17) | 0.63 | unfav |
| Non-GAAP(b) |  |  |  |  |  |  |
| Non-GAAP revenues | $970.5 | 924.6 | 5 | 2,669.3 | 2,743.9 | (3) |
| Non-GAAP operating profit | 99.9 | 102.4 | (2) | 236.2 | 276.0 | (14) |
| Non-GAAP income from continuing operations(a) | 43.4 | 53.6 | (19) | 104.3 | 138.5 | (25) |
| Non-GAAP diluted EPS from continuing operations(a) | $0.86 | 1.05 | (18) | 2.05 | 2.72 | (25) |

(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 51–53.

### GAAP Basis

### Analysis of Consolidated Results: Third Quarter 2020 versus Third Quarter 2019

***Consolidated Revenues*** Revenues increased $42.1 million due to the favorable impact of acquisitions and dispositions ($181.1 million), partially offset by organic decreases in North America ($32.7 million), Rest of World ($30.9 million), and South America ($15.7 million) and the unfavorable impact of currency exchange rates ($55.7 million). The unfavorable currency impact was driven by the Brazilian real, Argentine peso and Mexican peso. Revenues decreased 9% on an organic basis primarily due to the impact of the COVID-19 pandemic. See above for our definition of “organic.”

***Consolidated Costs and Expenses*** Cost of revenues increased 4% to $742.9 million primarily due to the impact of acquisitions, partially offset by organic decreases in labor and other operational costs, including cost saving actions related to COVID-19, and changes in currency exchange rates. Selling, general and administrative costs decreased 9% to $141.4 million due to lower charges incurred related to an internal loss in the U.S. global services operations, organic decreases in labor and other operational costs, including cost saving actions related to COVID-19, and changes in currency exchange rates, partially offset by the impact of acquisitions.

***Consolidated Operating Profit*** Operating profit increased $23.9 million due mainly to:

- the favorable operating impact of business acquisitions and dispositions ($20.8 million), excluding intangible amortization and acquisition-related charges,
- the following items included in “Other items not allocated to segments”:
- lower charges incurred, primarily bad debt expense, related to an internal loss in the U.S. global services operations ($12.2 million),
- lower costs related to business acquisitions and dispositions ($6.8 million), including the impact of acquisition-related charges and intangible asset amortization in the third quarter of 2020,
- lower corporate expenses on an organic basis ($5.3 million), and
- an organic increase in Rest of World ($2.2 million),

partially offset by:

- unfavorable changes in currency exchange rates ($18.6 million) driven by the Argentine peso and Brazilian real and higher foreign currency transaction losses, including a loss of $10.4 million converting Argentine pesos into U.S. dollars during the third quarter of 2020, partially offset by lower costs related to the impact of highly inflationary accounting in Argentina, and
- organic decreases in South America ($8.3 million) and North America ($0.1 million).

***Consolidated Income from Continuing Operations Attributable to Brink’s and Related Per Share Amounts*** Income from continuing operations attributable to Brink’s shareholders decreased $29.6 million to negative $23.8 million due to higher income tax expense ($44.2 million), higher interest and other non-operating expense ($5.0 million), higher interest expense ($4.2 million), and higher non-controlling interest ($0.1 million), partially offset by the increase in operating profit mentioned above. Earnings per share from continuing operations was negative $0.47, down from $0.11 in the third quarter of 2019.

### Analysis of Consolidated Results: Nine Months 2020 versus Nine Months 2019

***Consolidated Revenues*** Revenues decreased $78.1 million due to organic decreases in North America ($106.3 million), Rest of World ($91.7 million) and South America ($15.4 million), and the unfavorable impact of currency exchange rates ($200.9 million), partially offset by the favorable impact of acquisitions and dispositions ($340.2 million). The unfavorable currency impact was driven by the Brazilian real, Argentine peso, and Mexican peso. Revenues decreased 8% on an organic basis primarily due to the impact of the COVID-19 pandemic in the second and third quarter of 2020. See above for our definition of “organic.”

***Consolidated Costs and Expenses*** Cost of revenues decreased slightly ($5.4 million) to $2,120.2 million primarily due to changes in currency exchange rates and organic decreases in labor and other operational costs, including cost saving actions related to COVID-19, partially offset by the impact of acquisitions, and higher costs related to restructuring actions in the second quarter of 2020. Selling, general and administrative costs decreased 5% to $429.1 million due to organic decreases in labor and other operational costs, including cost saving actions related to COVID-19, and changes in currency exchange rates, partially offset by the impact of acquisitions, including integration costs.

***Consolidated Operating Profit*** Operating profit decreased $61.9 million due mainly to:

- unfavorable changes in currency exchange rates ($46.9 million) driven by the Argentine peso and Brazilian real and higher foreign currency transaction losses, including a loss of $10.4 million converting Argentine pesos into U.S. dollars during the third quarter of 2020, partially offset by lower costs related to the impact of highly inflationary accounting in Argentina,
- organic decreases in North America ($37.6 million) and Rest of World ($15.9 million),
- the following items included in “Other items not allocated to segments”:
- higher charges incurred related to an increase in reorganization and restructuring charges ($29.2 million),
- higher costs related to business acquisitions and dispositions ($4.4 million), including the impact of acquisition-related charges and intangible asset amortization in the first nine months of 2020,

partially offset by:

- the favorable operating impact of business acquisitions and dispositions ($40.1 million), excluding intangible amortization and acquisition-related charges,
- lower corporate expenses on an organic basis ($28.6 million), and
- an organic increase in South America ($3.6 million).

***Consolidated Income from Continuing Operations Attributable to Brink’s and Related Per Share Amounts*** Income from continuing operations attributable to Brink’s shareholders decreased $40.4 million to negative $8.3 million primarily due to the operating profit decrease mentioned above, higher interest and other non-operating expense ($9.3 million), higher interest expense ($1.7 million), and higher non-controlling interest ($1.1 million), partially offset by lower income tax expense ($33.6 million). Earnings per share from continuing operations was negative $0.17, down from $0.63 in the first nine months of 2019.

### Non-GAAP Basis

### Analysis of Consolidated Results: Third Quarter 2020 versus Third Quarter 2019

***Non-GAAP Consolidated Revenues*** Non-GAAP revenues increased $45.9 million due to the favorable impact of acquisitions and dispositions ($180.9 million), partially offset by organic decreases in North America ($32.7 million), Rest of World ($30.9 million), and South America ($15.7 million) and the unfavorable impact of currency exchange rates ($55.7 million). The unfavorable currency impact was driven by the Brazilian real, Argentine peso and Mexican peso. Revenues decreased 9% on an organic basis primarily due to the impact of the COVID-19 pandemic. See above for our definition of “organic.”

***Non-GAAP Consolidated Operating Profit*** Non-GAAP operating profit decreased $2.5 million due mainly to:

- the favorable operating impact of business acquisitions and dispositions ($20.8 million), excluding intangible amortization and acquisition-related charges,
- lower corporate expenses on an organic basis ($5.3 million),
- an organic increase in Rest of World ($2.2 million),

partially offset by:

- unfavorable changes in currency exchange rates ($22.4 million) driven by the Argentine peso and Brazilian real and higher foreign currency transaction losses, including a loss of $10.4 million converting Argentine pesos into U.S. dollars during the third quarter of 2020, and
- organic decreases in South America ($8.3 million) and North America ($0.1 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 decreased $10.2 million to $43.4 million due to higher interest expense ($5.2 million), the operating profit decrease mentioned above, higher interest and other non-operating expense ($2.2 million), and higher non-controlling interest ($1.5 million), partially offset by lower income tax expense ($1.2 million). Earnings per share from continuing operations was $0.86, down from $1.05 in the third quarter of 2019.

### Analysis of Consolidated Results: Nine Months 2020 versus Nine Months 2019

***Non-GAAP Consolidated Revenues*** Non-GAAP revenues decreased $74.6 million due to organic decreases in North America ($106.3 million), Rest of World ($91.7 million) and South America ($15.4 million), and the unfavorable impact of currency exchange rates ($200.9 million), partially offset by the favorable impact of acquisitions and dispositions ($339.7 million). The unfavorable currency impact was driven by the Brazilian real, Argentine peso, and Mexican peso. Revenues decreased 8% on an organic basis primarily due to the impact of the COVID-19 pandemic in the second and third quarter of 2020. See above for our definition of “organic.”

***Non-GAAP Consolidated Operating Profit*** Non-GAAP operating profit decreased $39.8 million due mainly to:

- unfavorable changes in currency exchange rates ($58.6 million) driven by the Argentine peso and Brazilian real and higher foreign currency transaction losses, including a loss of $10.4 million converting Argentine pesos into U.S. dollars during the third quarter of 2020,
- organic decreases in North America ($37.6 million) and Rest of World ($15.9 million),

partially offset by:

- the favorable operating impact of business acquisitions and dispositions ($40.1 million), excluding intangible amortization and acquisition-related charges,
- lower corporate expenses on an organic basis ($28.6 million), and
- an organic increase in South America ($3.6 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 decreased $34.2 million to $104.3 million due to the operating profit decrease mentioned above, higher interest expense ($4.7 million), and higher non-controlling interest ($0.7 million), partially offset by lower income tax expense ($8.8 million) and lower interest and other non-operating expense ($2.2 million). Earnings per share from continuing operations was $2.05, down from $2.72 in the first nine months of 2019.

### Revenues and Operating Profit by Segment: Third Quarter 2020 versus Third Quarter 2019

*(In millions)*

| Revenues: | 3Q'19 | Organic Change | Acquisitions / Dispositions(a) | Currency(b) | 3Q'20 | % Change Total | Organic |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| North America | $446.7 | (32.7) | 2.3 | (12.2) | **404.1** | (10) | (7) |
| South America | 229.0 | (15.7) | 10.8 | (52.1) | **172.0** | (25) | (7) |
| Rest of World | 248.9 | (30.9) | 167.8 | 8.6 | **394.4** | 58 | (12) |
| **Segment revenues(e)** | 924.6 | (79.3) | 180.9 | (55.7) | **970.5** | 5 | (9) |
| Other items not allocated to segments(d) | 3.8 | (4.0) | 0.2 | — | **—** | (100) | unfav |
| **Revenues - GAAP** | $928.4 | (83.3) | 181.1 | (55.7) | **970.5** | 5 | (9) |
| **Operating profit:** |  |  |  |  |  |  |  |
| North America | $38.7 | (0.1) | 0.1 | (1.8) | **36.9** | (5) | — |
| South America | 59.4 | (8.3) | 1.2 | (13.4) | **38.9** | (35) | (14) |
| Rest of World | 32.2 | 2.2 | 19.5 | 0.4 | **54.3** | 69 | 7 |
| **Segment operating profit** | 130.3 | (6.2) | 20.8 | (14.8) | **130.1** | — | (5) |
| Corporate(c) | (27.9) | 5.3 | — | (7.6) | **(30.2)** | 8 | (19) |
| **Operating profit - non-GAAP** | 102.4 | (0.9) | 20.8 | (22.4) | **99.9** | (2) | (1) |
| Other items not allocated to segments(d) | (49.9) | 15.8 | 6.8 | 3.8 | **(23.5)** | (53) | (32) |
| **Operating profit - GAAP** | $52.5 | 14.9 | 27.6 | (18.6) | **76.4** | 46 | 28 |

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 Argentina devaluations under highly inflationary accounting 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 45–46 for more information.

(e) Segment revenues equal our total reported non-GAAP revenues.

### Analysis of Segment Results: Third Quarter 2020 versus Third Quarter 2019

### North America

Revenues decreased 10% ($42.6 million) primarily due to a 7% organic decrease ($32.7 million) and the unfavorable impact of currency exchange rates ($12.2 million) mostly from the Mexican peso, partially offset by the favorable impact of acquisitions ($2.3 million). Organic revenue decreased primarily from lower volumes due to the COVID-19 pandemic in the U.S., Canada and Mexico. Operating profit decreased 5% ($1.8 million) driven by the unfavorable impact of currency exchange rates ($1.8 million). Operating profit decreased on an organic basis by $0.1 million. Mexico and Canada had organic decreases driven by revenue declines, partially offset by labor and other operational cost management and saving actions. The U.S. improved, with labor and other operational cost management and saving actions more than offsetting the impact of lower revenue.

### South America

Revenues decreased 25% ($57.0 million) primarily due to the unfavorable impact of currency exchange rates ($52.1 million) primarily from the Brazilian real and Argentine peso, and a 7% organic decrease ($15.7 million), partially offset by the favorable impact of acquisitions ($10.8 million). Organic revenue decreased across the region due to lower volumes due to the COVID-19 pandemic. Operating profit was down 35% ($20.5 million) primarily due to unfavorable currency ($13.4 million) and a 14% organic decrease ($8.3 million), partially offset by the favorable impact of acquisitions and dispositions ($1.2 million). The organic decrease was driven by the impact of lower revenue throughout the segment due to the COVID-19 pandemic.

### Rest of World

Revenues increased 58% ($145.5 million) due to the favorable impact of acquisitions and dispositions ($167.8 million) and currency exchange rates ($8.6 million), partially offset by a 12% organic decrease ($30.9 million). The organic decrease was primarily due to lower volumes throughout the region driven by the impact of the COVID-19 pandemic. Operating profit increased 69% ($22.1 million) primarily due to the favorable impact of acquisitions and dispositions ($19.5 million) and an organic increase of 7% ($2.2 million). The organic increase was primarily due to increased global services volume and the impact of labor and other operational cost saving actions helping to offset the impact of the COVID-19 pandemic. Results were also helped by government COVID-19 assistance in several countries that offset the impact of revenue declines and delays in executing cost reduction actions.

### Revenues and Operating Profit by Segment: Nine Months 2020 versus Nine Months 2019

*(In millions)*

| Revenues: | YTD '19 | Organic Change | Acquisitions / Dispositions(a) | Currency(b) | YTD '20 | % Change Total | Organic |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| North America | $1,323.7 | (106.3) | 13.3 | (33.2) | **1,197.5** | (10) | (8) |
| South America | 684.5 | (15.4) | 18.0 | (158.3) | **528.8** | (23) | (2) |
| Rest of World | 735.7 | (91.7) | 308.4 | (9.4) | **943.0** | 28 | (12) |
| **Segment revenues(e)** | 2,743.9 | (213.4) | 339.7 | (200.9) | **2,669.3** | (3) | (8) |
| Other items not allocated to segments(d) | 3.5 | (4.0) | 0.5 | — | **—** | (100) | unfav |
| **Revenues - GAAP** | $2,747.4 | (217.4) | 340.2 | (200.9) | **2,669.3** | (3) | (8) |
| **Operating profit:** |  |  |  |  |  |  |  |
| North America | $129.1 | (37.6) | 0.7 | (4.4) | **87.8** | (32) | (29) |
| South America | 147.4 | 3.6 | 2.8 | (40.2) | **113.6** | (23) | 2 |
| Rest of World | 82.2 | (15.9) | 36.6 | (2.2) | **100.7** | 23 | (19) |
| **Segment operating profit** | 358.7 | (49.9) | 40.1 | (46.8) | **302.1** | (16) | (14) |
| Corporate(c) | (82.7) | 28.6 | — | (11.8) | **(65.9)** | (20) | (35) |
| **Operating profit - non-GAAP** | 276.0 | (21.3) | 40.1 | (58.6) | **236.2** | (14) | (8) |
| Other items not allocated to segments(d) | (112.5) | (29.4) | (4.4) | 11.7 | **(134.6)** | 20 | 26 |
| **Operating profit - GAAP** | $163.5 | (50.7) | 35.7 | (46.9) | **101.6** | (38) | (31) |

Amounts may not add due to rounding.

See page 43 for footnote explanations.

### Analysis of Segment Results: Nine Months 2020 versus Nine Months 2019

### North America

Revenues decreased 10% ($126.2 million) primarily due to an 8% organic decrease ($106.3 million) and the unfavorable impact of currency exchange rates ($33.2 million) mostly from the Mexican peso, partially offset by the favorable impact of acquisitions ($13.3 million). Organic revenue decreased primarily from lower volumes due to the second and third quarter impact of the COVID-19 pandemic in the U.S., Canada and Mexico. Operating profit decreased 32% ($41.3 million) driven by an organic decrease ($37.6 million) and unfavorable currency ($4.4 million), partially offset by the favorable impact of acquisitions ($0.7 million). The organic decrease was due to the impact of the COVID-19 pandemic, partially offset by labor and other operational cost saving actions throughout the segment and government COVID-19 assistance in Canada.

### South America

Revenues decreased 23% ($155.7 million) primarily due to the unfavorable impact of currency exchange rates ($158.3 million) primarily from the Brazilian real and Argentine peso and an organic decrease of 2% ($15.4 million), partially offset by the favorable impact of acquisitions and dispositions ($18.0 million). The organic decrease was due to lower volumes across the region due to the COVID-19 pandemic, partially offset by organic growth in Argentina driven by inflation-based price increases. Operating profit was down 23% ($33.8 million) primarily due to unfavorable currency ($40.2 million), partially offset by 2% organic growth ($3.6 million), including the benefit of labor and other operational cost saving actions, and the favorable impact of acquisitions and dispositions ($2.8 million). The organic growth was driven by Argentina and Brazil, partially offset by an organic decrease in Chile.

### Rest of World

Revenues increased 28% ($207.3 million) due to the favorable impact of acquisitions and dispositions ($308.4 million), partially offset by a 12% organic decrease ($91.7 million) and the unfavorable impact of currency exchange rates ($9.4 million). The organic decrease was primarily due to lower volumes throughout the region, especially in France, driven by the impact of the COVID-19 pandemic. Operating profit increased 23% ($18.5 million) due to favorable impact of acquisitions and dispositions ($36.6 million), offset by an organic decrease ($15.9 million) and the unfavorable impact of currency exchange rates ($2.2 million). The organic decrease was primarily due to the impact of the COVID-19 pandemic, partially offset by labor and other operational cost saving actions. Results were also helped by government COVID-19 assistance in several countries in the second and third quarter, which offset the impact of revenue declines and delays in executing cost reduction actions.

### Income and Expense Not Allocated to Segments

### Corporate Expenses

*(In millions)*

|  | Three Months Ended September 30,% 2020 | 2019 | change | Nine Months Ended September 30,% 2020 | 2019 | change |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| General, administrative and other expenses | $(26.6) | (26.2) | 2 | $(78.5) | (85.8) | (9) |
| Foreign currency transaction gains (losses) | (7.9) | (0.4) | unfav | (11.5) | 0.2 | unfav |
| Reconciliation of segment policies to GAAP | 4.3 | (1.3) | fav | 24.1 | 2.9 | fav |
| Corporate expenses | $(30.2) | (27.9) | 8 | $(65.9) | (82.7) | (20) |

Corporate expenses for the first nine months of 2020 decreased $16.8 million versus the prior year period primarily driven by a reduction in bad debt expense as part of the reconciliation of segment accounting policies to U.S. GAAP, cost savings initiated as a result of the COVID crisis, including lower IT expenses, and lower stock compensation expense. The bad debt expense decrease excludes the impact of the internal loss in our U.S. global services operations described on the next page. These factors were partially offset by higher foreign currency transaction losses in the current year period, including a loss of $10.4 million converting Argentine pesos into U.S. dollars. Corporate expenses include former non-segment and regional management costs, currency transaction gains and losses, costs related to global initiatives and adjustments to reconcile segment accounting policies to U.S. GAAP.

### Other Items Not Allocated to Segments

*(In millions)*

| Revenues: | Three Months Ended September 30,% 2020 | 2019 | change | Nine Months Ended September 30,% 2020 | 2019 | change |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Acquisitions and dispositions | $— | (0.2) | (100) | $— | (0.5) | (100) |
| Internal loss | — | 4.0 | (100) | — | 4.0 | (100) |
| Revenues | $— | 3.8 | (100) | $— | 3.5 | (100) |
| Operating profit: |  |  |  |  |  |  |
| Reorganization and Restructuring | $(5.1) | (6.4) | (20) | $(49.7) | (20.5) | unfav |
| Acquisitions and dispositions | (16.2) | (24.0) | (33) | (66.2) | (63.8) | 4 |
| Argentina highly inflationary impact | (3.2) | (7.9) | (59) | (8.4) | (12.3) | (32) |
| Internal loss | 0.9 | (11.3) | fav | (9.9) | (13.9) | (29) |
| Reporting compliance | 0.1 | (0.3) | fav | (0.4) | (2.0) | (80) |
| Operating profit | $(23.5) | (49.9) | (53) | $(134.6) | (112.5) | 20 |

The impact of other items not allocated to segments was a loss of $23.5 million in the third quarter of 2020 versus the prior year period loss of $49.9 million. The change was primarily due to a reduction in charges related to an internal loss in the U.S. global services operations, lower costs related to acquisitions and dispositions and a decrease in the impact of highly inflationary accounting in Argentina.

The impact of other items not allocated to segments was a loss of $134.6 million in the first nine months of 2020 versus the prior year period loss of $112.5 million. The change was primarily due to higher reorganization and restructuring expenses and an increase in costs related to acquisitions and dispositions. These unfavorable changes were partially offset by a reduction in net charges recognized in the current year period related to an internal loss in the U.S. global services operations and a decrease in the impact of highly inflationary accounting in Argentina.

### Reorganization and Restructuring

#### Other Restructurings

Management periodically implements restructuring actions in targeted sections of our business. As a result of these actions, we recognized charges of $20.5 million in the first nine months of 2019 primarily severance costs and charges related to the modification of share-based compensation awards. We recognized $49.7 million net costs in operating profit and $0.6 million costs in interest and other nonoperating income (expense) in the first nine months of 2020, primarily severance costs. When completed, the current restructuring actions will reduce our workforce by 1,100 to 1,300 positions and result in annualized cost savings of $20 million to $25 million. For the restructuring actions that have not yet been completed, we expect to incur additional costs between $9 million and $11 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: | Three Months Ended September 30,% 2020 | 2019 | change | Nine Months Ended September 30,% 2020 | 2019 | change |
| --- | ---: | ---: | ---: | ---: | ---: | --- |
| North America | $(1.6) | — | unfav | $(13.1) | (1.5) | unfav |
| South America | 0.8 | (4.4) | fav | (16.2) | (5.3) | unfav |
| Rest of World | (4.3) | (1.8) | unfav | (19.7) | (5.1) | unfav |
| Total reportable segments | (5.1) | (6.2) | (18) | (49.0) | (11.9) | unfav |
| Corporate items | — | (0.2) | (100) | (0.7) | (8.6) | (92) |
| Total | $(5.1) | (6.4) | (20) | $(49.7) | (20.5) | unfav |

**Acquisitions and dispositions** Certain acquisition and disposition items that are not considered part of the ongoing activities of the business and are special in nature are consistently excluded from segment and non-GAAP results. These items are described below:

#### 2020 Acquisitions and Dispositions

- Transaction costs related to business acquisitions were $17.7 million in the first nine months of 2020.
- Amortization expense for acquisition-related intangible assets was $25.2 million in the first nine months of 2020.
- We incurred $18.9 million in integration costs, primarily related to Dunbar and G4S, in the first nine months of 2020.
- Restructuring costs related to acquisitions were $4.1 million in the first nine months of 2020.

#### 2019 Acquisitions and Dispositions

- We incurred $27.8 million in integration costs related to Dunbar in the first nine months of 2019.
- Amortization expense for acquisition-related intangible assets was $20.7 million in the first nine months of 2019.
- Restructuring costs related to our Dunbar and Rodoban acquisitions were $5.7 million in the first nine months of 2019.
- Transaction costs related to business acquisitions were $5.6 million in the first nine months of 2019.
- Compensation expense related to the retention of key Dunbar employees was $1.6 million in the first nine months of 2019.
- In the first nine months of 2019, we recognized $2.1 million in net charges, primarily asset impairment and severance costs, related to the exit from our top-up prepaid mobile phone business in Brazil.

**Argentina highly inflationary impact** Beginning in the third quarter of 2018, we designated Argentina's economy as highly inflationary for accounting purposes. As a result, Argentine peso-denominated monetary assets and liabilities are now remeasured at each balance sheet date to the currency exchange rate then in effect, with currency remeasurement gains and losses recognized in earnings. In addition, nonmonetary assets retain a higher historical basis when the currency is devalued. The higher historical basis results in incremental expense being recognized when the nonmonetary assets are consumed. In the first nine months of 2020, we recognized $8.4 million in pretax charges related to highly inflationary accounting, including currency remeasurement losses of $5.3 million. In the first nine months of 2019, we recognized $12.3 million in pretax charges related to highly inflationary accounting, including currency remeasurement losses of $10.4 million. These amounts are excluded from segment and non-GAAP results.

**Internal loss** A former non-management employee in our U.S. global services operations embezzled funds from Brink's in prior years. Except for a small deductible amount, the amount of the internal loss related to the embezzlement was covered by our insurance. In an effort to cover up the embezzlement, the former employee intentionally misstated the underlying accounts receivable subledger data. In 2019, we incurred $4.5 million in costs (primarily third party expenses) to reconstruct the accounts receivables subledger. In the first nine months of 2020, we incurred an additional $0.3 million in costs related to this activity.

In the third quarter of 2019, we were able to identify $4.0 million of revenues billed and collected in prior periods which had never been recorded in the general ledger. We also identified and recorded $0.3 million in bank fees, which had been incurred in prior periods. The rebuild of the subledger was substantially completed during the third quarter of 2019. Based on the reconstructed subledger, we were able to analyze and quantify the uncollected receivables from prior periods. Although we plan to attempt to collect these receivables, we estimated an increase to bad debt expense of $13.7 million in the third quarter of 2019.

The estimate of the allowance for doubtful accounts was adjusted in the fourth quarter of 2019 for an additional $6.4 million and again in the first nine months of 2020 for an additional $9.6 million. This estimate will be adjusted in future periods, if needed, as assumptions related to the collectability of these accounts receivable change. At September 30, 2020, we have recorded an $18.2 million allowance on $18.8 million of accounts receivable, or 97%. We have defined accounts receivable impacted by the embezzlement as accounts receivable recorded as of and prior to the third quarter of 2019. Due to the unusual nature of this internal loss and the related errors in the subledger data, along with the fact that management has excluded these amounts when evaluating internal performance, we have excluded these net charges from segment and non-GAAP results.

**Reporting compliance** Certain compliance costs (primarily third party expenses) are excluded from segment and non-GAAP results. These costs relate to the implementation and January 1, 2019 adoption of the new lease accounting standard ($0.4 million in the first nine months of 2020 and $1.7 million in the first nine months of 2019). We also incurred $0.3 million in costs related to mitigation of material weaknesses in the first nine months of 2019. We did not incur any such costs in the first nine months of 2020.

### Foreign Operations

We currently serve customers in more than 100 countries, including 52 countries where we operate subsidiaries.

We are subject to risks customarily associated with doing business in foreign countries, including labor and economic conditions, the imposition of international sanctions, including by the U.S. government, 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. In April 2019, the U.S. government sanctioned the Venezuela central bank and, as a result, the Company has ceased support of the Venezuela business.

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 U.S. dollar revenues and operating profit and may continue in 2020.

At September 30, 2020, Argentina's economy remains highly inflationary for accounting purposes. At September 30, 2020, we had net monetary assets denominated in Argentine pesos of $19.6 million (including cash of $9.3 million) and net nonmonetary assets of $147.0 million (including $99.8 million of goodwill). At September 30, 2020, we had no equity securities denominated in Argentine pesos.

During September 2019, the Argentine government announced currency controls on both companies and individuals. Under the exchange procedures implemented by the central bank, approval is required for many transactions, including dividend repatriation abroad.

During the third quarter of 2020, we elected to use other market mechanisms to convert Argentine pesos into U.S. dollars. Conversions under these other market mechanisms generally settle at rates that are less favorable than the rates at which we remeasure the financial statements of Brink’s Argentina. As a result, in the three months ended September 30, 2020, we recognized $10.4 million of such conversion losses when we converted Argentine pesos into U.S. dollars at rates that were approximately 100% less favorable than the rates at which we remeasured the financial statements of Brink’s Argentina. These conversion losses are classified in the condensed consolidated statements of operations as other operating income (expense).

Although the Argentine government has implemented currency controls, Brink’s management continues to provide guidance and strategic oversight, including budgeting and forecasting for Brink’s Argentina. We continue to control our Argentina business for purposes of consolidation of our financial statements and continue to monitor the situation in Argentina.

Changes in exchange rates may also affect transactions that are denominated in currencies other than the functional currency. From time to time, we use short term foreign currency forward and swap contracts to hedge transactional risks associated with foreign currencies. At September 30, 2020, the notional value of our short term outstanding foreign currency forward and swap contracts was $282 million with average contract maturities of approximately one month. These short term foreign currency forward and swap contracts primarily offset exposures in the euro and the British pound. Additionally, these short term contracts are not designated as hedges for accounting purposes, and accordingly, changes in their fair value are recorded immediately in earnings. At September 30, 2020, the fair value of our short term foreign currency contracts was a net liability of approximately $0.7 million, of which $0.2 million was included in prepaid expenses and other and $0.9 million was included in accrued liabilities on the condensed consolidated balance sheet. At December 31, 2019, the fair value of these foreign currency contracts was a net asset of approximately $0.6 million, of which $0.8 million was included in prepaid expenses and other and $0.2 million was included in accrued liabilities on the condensed consolidated balance sheet.

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

*(In millions)*

|  | Three Months Ended September 30, 2020 | 2019 | Nine Months Ended September 30, 2020 | 2019 |
| --- | ---: | ---: | ---: | ---: |
| Derivative instrument gains (losses) included in other operating income (expense) | $(3.4) | 5.8 | $0.5 | 8.3 |
| Derivative instrument losses included in other nonoperating income (expense)(a) | (0.5) | — | (8.6) | — |

(a) Represents loss on foreign currency forward contracts related to 2020 acquisition of business operations from G4S.

We also have a long term cross currency swap contract to hedge exposure in Brazilian real, which is designated as a cash flow hedge for accounting purposes. At September 30, 2020, the notional value of this long term contract was $104 million with a weighted-average maturity of approximately 2.0 years. At September 30, 2020, the fair value of the long term cross currency swap contract was a $30.9 million net asset, of which $4.6 million is included in prepaid expenses and other and $26.3 million is included in other assets on the condensed consolidated balance sheet. At December 31, 2019, the fair value of the long term cross currency swap contract was a $2.1 million net asset, of which a $4.9 million asset is included in other assets and a $2.8 million liability is included in accrued liabilities on the condensed consolidated balance sheet.

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

*(In millions)*

|  | Three Months Ended September 30, 2020 | 2019 | Nine Months Ended September 30, 2020 | 2019 |
| --- | ---: | ---: | ---: | ---: |
| Derivative instrument gains included in other operating income (expense) | $0.8 | 8.9 | $30.6 | 10.3 |
| Offsetting transaction losses | (0.8) | (8.9) | (30.6) | (10.3) |
| Derivative instrument losses included in interest expense | (0.5) | (1.3) | (1.5) | (4.0) |
| Net derivative instrument gains | 0.3 | 7.6 | 29.1 | 6.3 |

See Note 1 to the condensed consolidated financial statements for a description of how we account for currency remeasurement for Argentine subsidiaries, beginning July 1, 2018 under the heading, "Argentina".

### Other Operating Income (Expense)

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

*(In millions)*

| Foreign currency items: | Three Months Ended September 30,% 2020 | 2019 | change | Nine Months Ended September 30,% 2020 | 2019 | change |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Transaction gains (losses) | $(6.4) | (13.3) | (52) | $(17.3) | (18.5) | (6) |
| Derivative instrument gains (losses) | (3.4) | 5.8 | unfav | 0.5 | 8.3 | (94) |
| Gains (losses) on sale of property and other assets | 0.6 | 0.4 | 50 | 0.4 | 1.6 | (75) |
| Impairment losses | (3.4) | (1.7) | unfav | (8.3) | (3.3) | unfav |
| Share in earnings of equity affiliates | 0.4 | 0.2 | 100 | 0.6 | 0.7 | (14) |
| Royalty income | 1.2 | 1.4 | (14) | 3.5 | 3.9 | (10) |
| Other gains (losses) | 1.2 | 0.7 | 71 | 2.2 | 0.3 | fav |
| Other operating income (expense) | $(9.8) | (6.5) | 51 | $(18.4) | (7.0) | unfav |

Other operating income (expense) was a $9.8 million expense in the third quarter of 2020 versus a $6.5 million expense in the prior year period. The change from the prior year quarter was primarily due to higher derivative losses in the third quarter of 2020 which was partially offset by lower foreign currency losses in the current year period

Other operating income (expense) was a $18.4 million expense in the first nine months of 2020 versus a $7.0 million expense in the prior year period. The change from the prior year period was primarily due to higher impairment losses in the first nine months of 2020 and lower derivative gains in the current period.

### Nonoperating Income and Expense

### Interest expense

*(In millions)*

|  | Three Months Ended September 30,% 2020 | 2019 | change | Nine Months Ended September 30,% 2020 | 2019 | change |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Interest expense | $27.1 | 22.9 | 18 | $70.3 | 68.6 | 2 |

Interest expense was higher in the third quarter of 2020 compared to the prior year period primarily due to higher borrowing levels due to business acquisitions.

Interest expense was higher in the first nine months of 2020 compared to the prior year period primarily due higher borrowing levels due to business acquisitions.

### Interest and other nonoperating income (expense)

*(In millions)*

|  | Three Months Ended September 30,% 2020 | 2019 | change | Nine Months Ended September 30,% 2020 | 2019 | change |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Interest income | $2.3 | 2.0 | 15 | $5.0 | 4.3 | 16 |
| Gain (loss) on equity securities | (1.1) | — | unfav | 2.3 | — | fav |
| Foreign currency transaction gains (losses) | — | — | — | (0.1) | — | unfav |
| Derivative instrument losses(a) | (0.5) | — | unfav | (8.6) | — | unfav |
| Retirement benefit cost other than service cost | (10.3) | (7.9) | 30 | (28.6) | (25.4) | 13 |
| Non-income taxes on intercompany billings(b) | (1.9) | (0.1) | unfav | (3.5) | (1.9) | 84 |
| Venezuela operations(c) | — | — | — | — | (0.9) | (100) |
| Gain on lease termination(d) | — | — | — | — | 5.2 | (100) |
| Gain on disposition of subsidiary(e) | — | — | — | 4.7 | — | fav |
| Other | (1.3) | (1.8) | (28) | (2.6) | (3.4) | (24) |
| Interest and other nonoperating income (expense) | $(12.8) | (7.8) | 64 | $(31.4) | (22.1) | 42 |

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

(b) Certain of our Latin American subsidiaries incur non-income taxes related to the billing of intercompany charges. These intercompany charges do not impact South American segment results and are eliminated in our consolidation.

(c) Charges incurred for providing financial support to Brink's Venezuelan subsidiaries after the June 30, 2018 deconsolidation. We do not expect any future funding of the Venezuela business, as long as current U.S. sanctions remain in effect.

(d) Gain on termination of a mining lease obligation related to former coal operations. We have no remaining mining leases.

(e) Gain on the sale of our former French security services subsidiary in the first quarter of 2020.

### Income Taxes

| Continuing operations | Three Months Ended September 30, 2020 | 2019 | Nine Months Ended September 30, 2020 | 2019 |
| --- | ---: | ---: | ---: | ---: |
| Provision for income taxes (in millions) | $58.9 | 14.7 | $3.5 | 37.1 |
| Effective tax rate | 161.4% | 67.4% | (3,500.0%) | 51.0% |

#### Effective Tax Rate

Our effective tax rate may fluctuate materially from these estimates due to changes in pre-tax earnings, permanent book-tax differences, changes in the expected amount and geographical mix of earnings, changes in current or deferred taxes due to legislative changes, changes in valuation allowances or accruals for contingencies, changes in distributions of share-based payments, changes in U.S. taxable income, changes in guidance and additional legislative changes related to the Tax Reform Act, and other factors.

### Noncontrolling Interests

*(In millions)*

|  | Three Months Ended September 30,% 2020 | 2019 | change | Nine Months Ended September 30,% 2020 | 2019 | change |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Net income attributable to noncontrolling interests | $1.4 | 1.3 | 8 | $4.7 | 3.6 | 31 |

The change in net income attributable to noncontrolling interests in the three months and nine months ended September 30, 2020 from prior periods is primarily attributable to the G4S acquisitions that closed in the second quarter of 2020.

### 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 45–46, and are reconciled to comparable GAAP measures below.

Non-GAAP results adjust the quarterly non-GAAP tax rates so that the non-GAAP tax rate in each of the quarters is equal to the full-year estimated non-GAAP tax rate. The full-year non-GAAP tax rate in both years 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 they 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.

*(In millions, except for percentages)*

| Effective Income Tax Rate(a) | YTD '20 Pre-tax | Tax | Effective tax rate | YTD '19 Pre-tax | Tax | Effective tax rate |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| GAAP | $(0.1) | 3.5 | (3,500.0)% | $72.8 | 37.1 | 51.0% |
| Retirement plans(d) | 24.5 | 5.8 |  | 21.5 | 5.1 |  |
| Venezuela operations(e) | — | — |  | 0.9 | — |  |
| Reorganization and Restructuring(b) | 50.2 | 11.6 |  | 20.5 | 5.6 |  |
| Acquisitions and dispositions(b) | 71.6 | 9.7 |  | 68.5 | 3.7 |  |
| Argentina highly inflationary impact(b) | 8.4 | (0.7) |  | 12.3 | (1.4) |  |
| Internal loss(b) | 9.9 | 2.3 |  | 13.9 | 2.5 |  |
| Reporting compliance(b) | 0.4 | — |  | 2.0 | — |  |
| Gain on lease termination(f) | — | — |  | (5.2) | (1.2) |  |
| Income tax rate adjustment(c) | — | 24.1 |  | — | 13.7 |  |
| Non-GAAP | $164.9 | 56.3 | 34.1% | $207.2 | 65.1 | 31.4% |

Amounts may not add due to rounding.

(a) From continuing operations.

(b) See “Other Items Not Allocated To Segments” on pages 45–46 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) Non-GAAP income from continuing operations and non-GAAP EPS have been adjusted to reflect an effective income tax rate in each interim period equal to the full-year non-GAAP effective income tax rate. The full-year non-GAAP effective tax rate is estimated at 34.1% for 2020 and was 31.4% for 2019.

(d) 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.

(e) Post-deconsolidation funding of ongoing costs related to our Venezuelan operations was $0.9 million in 2019 and was expensed as incurred and reported in interest and other nonoperating income (expense). We do not expect any future funding of the Venezuela business, as long as current U.S. sanctions remain in effect.

(f) Gain on settlement of a mining lease obligation related to former coal operations. We have no remaining mining leases.

(g) Because we reported a loss from continuing operations on a GAAP basis in the third quarter of 2020 and the nine months ended September 30, 2020, GAAP EPS was calculated using basic shares. However, as we reported income from continuing operations on a non-GAAP basis in the third quarter of 2020 and the nine months ended September 30, 2020, non-GAAP EPS was calculated using diluted shares.

### Non-GAAP Results Reconciled to GAAP

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

| Revenues: | Three Months Ended September 30, 2020 | 2019 | Nine Months Ended September 30, 2020 | 2019 |
| --- | ---: | ---: | ---: | ---: |
| GAAP | $970.5 | 928.4 | $2,669.3 | 2,747.4 |
| Acquisitions and dispositions(b) | — | 0.2 | — | 0.5 |
| Internal loss(b) | — | (4.0) | — | (4.0) |
| Non-GAAP | $970.5 | 924.6 | $2,669.3 | 2,743.9 |
| Operating profit: |  |  |  |  |
| GAAP | $76.4 | 52.5 | $101.6 | 163.5 |
| Reorganization and Restructuring(b) | 5.1 | 6.4 | 49.7 | 20.5 |
| Acquisitions and dispositions(b) | 16.2 | 24.0 | 66.2 | 63.8 |
| Argentina highly inflationary impact(b) | 3.2 | 7.9 | 8.4 | 12.3 |
| Internal loss(b) | (0.9) | 11.3 | 9.9 | 13.9 |
| Reporting compliance(b) | (0.1) | 0.3 | 0.4 | 2.0 |
| Non-GAAP | $99.9 | 102.4 | $236.2 | 276.0 |
| Operating margin: |  |  |  |  |
| GAAP margin | 7.9% | 5.7% | 3.8% | 6.0% |
| Non-GAAP margin | 10.3% | 11.1% | 8.8% | 10.1% |
| Interest expense: |  |  |  |  |
| GAAP | $(27.1) | (22.9) | $(70.3) | (68.6) |
| Acquisitions and dispositions(b) | 0.5 | 1.5 | 1.5 | 4.5 |
| Non-GAAP | $(26.6) | (21.4) | $(68.8) | (64.1) |
| Interest and other nonoperating income (expense): |  |  |  |  |
| GAAP | $(12.8) | (7.8) | $(31.4) | (22.1) |
| Retirement plans(d) | 8.7 | 6.6 | 24.5 | 21.5 |
| Venezuela operations(e) | — | — | — | 0.9 |
| Reorganization and Restructuring(b) | 0.5 | — | 0.5 | — |
| Acquisitions and dispositions(b) | 0.4 | 0.2 | 3.9 | 0.2 |
| Gain on lease termination(f) | — | — | — | (5.2) |
| Non-GAAP | $(3.2) | (1.0) | $(2.5) | (4.7) |
| Provision for income taxes: |  |  |  |  |
| GAAP | $58.9 | 14.7 | $3.5 | 37.1 |
| Retirement plans(d) | 2.1 | 1.6 | 5.8 | 5.1 |
| Reorganization and Restructuring(b) | 1.3 | 2.0 | 11.6 | 5.6 |
| Acquisitions and dispositions(b) | 4.0 | 0.9 | 9.7 | 3.7 |
| Argentina highly inflationary impact(b) | (0.2) | (1.4) | (0.7) | (1.4) |
| Internal loss(b) | (0.2) | 2.4 | 2.3 | 2.5 |
| Gain on lease termination(f) | — | (1.2) | — | (1.2) |
| Income tax rate adjustment(c) | (42.0) | 6.1 | 24.1 | 13.7 |
| Non-GAAP | $23.9 | 25.1 | $56.3 | 65.1 |

Amounts may not add due to rounding.

See page 51 for footnote explanations.

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

| Net income (loss) attributable to noncontrolling interests: | Three Months Ended September 30, 2020 | 2019 | Nine Months Ended September 30, 2020 | 2019 |
| --- | ---: | ---: | ---: | ---: |
| GAAP | $1.4 | 1.3 | $4.7 | 3.6 |
| Reorganization and Restructuring(b) | 0.2 | — | 0.3 | — |
| Acquisitions and dispositions(b) | 0.2 | — | 0.3 | — |
| Income tax rate adjustment(c) | 1.0 | — | (1.0) | — |
| Non-GAAP | $2.8 | 1.3 | $4.3 | 3.6 |
| Income (loss) from continuing operations attributable to Brink's: |  |  |  |  |
| GAAP | $(23.8) | 5.8 | $(8.3) | 32.1 |
| Retirement plans(d) | 6.6 | 5.0 | 18.7 | 16.4 |
| Venezuela operations(e) | — | — | — | 0.9 |
| Reorganization and Restructuring(b) | 4.1 | 4.4 | 38.3 | 14.9 |
| Acquisitions and dispositions(b) | 12.9 | 24.8 | 61.6 | 64.8 |
| Argentina highly inflationary impact(b) | 3.4 | 9.3 | 9.1 | 13.7 |
| Internal loss(b) | (0.7) | 8.9 | 7.6 | 11.4 |
| Reporting compliance(b) | (0.1) | 0.3 | 0.4 | 2.0 |
| Gain on lease termination(f) | — | 1.2 | — | (4.0) |
| Income tax rate adjustment(c) | 41.0 | (6.1) | (23.1) | (13.7) |
| Non-GAAP | $43.4 | 53.6 | $104.3 | 138.5 |
| Diluted EPS: |  |  |  |  |
| GAAP | $(0.47) | 0.11 | $(0.17) | 0.63 |
| Retirement plans(d) | 0.13 | 0.10 | 0.37 | 0.32 |
| Venezuela operations(e) | — | — | — | 0.02 |
| Reorganization and Restructuring(b) | 0.08 | 0.09 | 0.75 | 0.29 |
| Acquisitions and dispositions(b) | 0.26 | 0.49 | 1.21 | 1.27 |
| Argentina highly inflationary impact(b) | 0.07 | 0.18 | 0.18 | 0.27 |
| Internal loss(b) | (0.01) | 0.17 | 0.15 | 0.22 |
| Reporting compliance(b) | — | 0.01 | 0.01 | 0.04 |
| Gain on lease termination(f) | — | 0.02 | — | (0.08) |
| Income tax rate adjustment(c) | 0.81 | (0.12) | (0.45) | (0.27) |
| Share adjustment(g) | — | — | — | — |
| Non-GAAP | $0.86 | 1.05 | $2.05 | 2.72 |

Amounts may not add due to rounding.

See page 51 for footnote explanations.

### LIQUIDITY AND CAPITAL RESOURCES

### Overview

Cash flows from operating activities decreased by $64.4 million in the first nine months of 2020 as compared to the first nine months of 2019. Cash used for investing activities increased by $212.0 million in the first nine months of 2020 compared to the first nine months of 2019. We financed our liquidity needs in the first nine months of 2020 with cash flows from long-term debt.

### Operating Activities

*(In millions)*

| Cash flows from operating activities | Nine Months Ended September 30, 2020 | 2019 | $ change |
| --- | ---: | ---: | ---: |
| Operating activities - GAAP | $87.4 | 151.8 | (64.4) |
| (Increase) decrease in restricted cash held for customers | (37.3) | 41.8 | (79.1) |
| (Increase) decrease in certain customer obligations(a) | 0.7 | (15.4) | 16.1 |
| Operating activities - non-GAAP | $50.8 | 178.2 | (127.4) |

(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 restricted cash held for customers and the impact of cash received and processed in certain of our secure cash management services 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 condensed consolidated statements of cash flows.

### GAAP

Cash flows from operating activities decreased by $64.4 million in the first nine months of 2020 compared to the same period in 2019. The decrease was attributed to the decrease in operating profit, changes in working capital, and changes in customer obligations related to certain of our secure cash management services operations (certain customer obligations decreased by $0.7 million in 2020 compared to an increase of $15.4 million in 2019), offset by the $79.1 million increase in restricted cash held for customers.

### Non-GAAP

Non-GAAP cash flows from operating activities decreased by $127.4 million in the first nine months of 2020 as compared to the same period in 2019. The decrease was attributed to the decrease in operating profit and changes in working capital.

### Investing Activities

*(In millions)*

| Cash flows from investing activities | Nine Months Ended September 30, 2020 | 2019 | $ change |
| --- | ---: | ---: | ---: |
| Capital expenditures | $(79.1) | (116.0) | 36.9 |
| Acquisitions, net of cash acquired | (427.1) | (183.9) | (243.2) |
| Dispositions, net of cash disposed | (3.1) | — | (3.1) |
| Marketable securities: |  |  |  |
| Purchases | (1.5) | (2.6) | 1.1 |
| Sales | 1.7 | 1.1 | 0.6 |
| Proceeds from sale of property and equipment | 2.3 | 3.0 | (0.7) |
| Acquisition of customer contracts | (6.7) | (3.1) | (3.6) |
| Investing activities | $(513.5) | (301.5) | (212.0) |

Cash used by investing activities increased by $212.0 million in the first nine months of 2020 versus the first nine months of 2019. The increase was primarily due to the G4S acquisition in 2020.

Capital expenditures and depreciation and amortization were as follows:

*(In millions)*

| Property and equipment acquired during the period Capital expenditures:(a) | Nine Months Ended September 30, 2020 | 2019 | $Full Year change | 2019 |
| --- | ---: | ---: | ---: | ---: |
| North America | $28.5 | 52.2 | (23.7) | 76.6 |
| South America | 15.0 | 32.0 | (17.0) | 44.4 |
| Rest of World | 31.3 | 23.8 | 7.5 | 33.5 |
| Corporate | 4.3 | 8.0 | (3.7) | 10.3 |
| Capital expenditures - GAAP and non-GAAP | $79.1 | 116.0 | (36.9) | 164.8 |
| Financing leases:(b) |  |  |  |  |
| North America | $23.0 | 39.3 | (16.3) | 51.8 |
| South America | 0.8 | 3.0 | (2.2) | 3.7 |
| Rest of World | 0.5 | 3.9 | (3.4) | 4.2 |
| Financing leases - GAAP and non-GAAP | $24.3 | 46.2 | (21.9) | 59.7 |
| Total: |  |  |  |  |
| North America | $51.5 | 91.5 | (40.0) | 128.4 |
| South America | 15.8 | 35.0 | (19.2) | 48.1 |
| Rest of World | 31.8 | 27.7 | 4.1 | 37.7 |
| Corporate | 4.3 | 8.0 | (3.7) | 10.3 |
| Total property and equipment acquired | $103.4 | 162.2 | (58.8) | 224.5 |
| **Depreciation and amortization(a)** |  |  |  |  |
| North America | $60.4 | 60.7 | (0.3) | 81.1 |
| South America | 19.3 | 21.0 | (1.7) | 27.9 |
| Rest of World | 36.7 | 24.9 | 11.8 | 32.3 |
| Corporate | 6.8 | 8.2 | (1.4) | 10.8 |
| Depreciation and amortization - non-GAAP | $123.2 | 114.8 | 8.4 | 152.1 |
| Argentina highly inflationary impact | 2.2 | 0.8 | 1.4 | 1.8 |
| Reorganization and Restructuring | 0.9 | 0.1 | 0.8 | 0.2 |
| Acquisitions and dispositions | 0.7 | 3.1 | (2.4) | 3.1 |
| Amortization of intangible assets | 25.2 | 20.7 | 4.5 | 27.8 |
| Depreciation and amortization - GAAP | $152.2 | 139.5 | 12.7 | 185.0 |

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

(b) Represents the amount of property and equipment acquired using financing leases. Because the assets are acquired without using cash, the acquisitions are not reflected in the condensed 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 incremental depreciation related to highly inflationary accounting in Argentina, accelerated depreciation from restructuring and acquisition-related integration 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 condensed consolidated statements of cash flows.

Our reinvestment ratio, which we define as the annual amount of property and equipment acquired during the period divided by the annual amount of depreciation, was 1.0 for the twelve months ending September 30, 2020 compared to 1.5 for the twelve months ending September 30, 2019.

Capital expenditures in the first nine months of 2020 were primarily for machinery and equipment, information technology and armored vehicles.

### Financing Activities

*(In millions)*

| Cash flows from financing activities Borrowings and repayments: | Nine Months Ended September 30, 2020 | 2019 | $ change |
| --- | ---: | ---: | ---: |
| Short-term borrowings | $(3.3) | (13.1) | 9.8 |
| Cash supply chain customer debt | (10.5) | — | (10.5) |
| Long-term revolving credit facilities, net | (51.3) | (122.2) | 70.9 |
| Other long-term debt, net | 924.4 | 291.2 | 633.2 |
| Borrowings (repayments) | 859.3 | 155.9 | 703.4 |
| Debt financing costs | (13.1) | (4.0) | (9.1) |
| Repurchase shares of Brink's common stock | (50.0) | — | (50.0) |
| Dividends to: |  |  |  |
| Shareholders of Brink’s | (22.7) | (22.4) | (0.3) |
| Noncontrolling interests in subsidiaries | (8.9) | (1.4) | (7.5) |
| Payment of acquisition-related obligation | (6.8) | (4.1) | (2.7) |
| Tax withholdings associated with share-based compensation | (10.3) | (8.4) | (1.9) |
| Other | 1.7 | (2.9) | 4.6 |
| Financing activities | $749.2 | 112.7 | 636.5 |

### Debt borrowings and repayments

Cash flows from financing activities increased by $636.5 million in the first nine months of 2020 compared to the first nine months of 2019 as net borrowings increased compared to the prior nine month period, partially offset by cash used to purchase Brink's common stock.

### Dividends

We paid dividends to Brink’s shareholders of $0.45 per share or $22.7 million in the first nine months of 2020 compared to $0.45 per share or $22.4 million in the first nine months of 2019. 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.

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

*(In millions)*

| Debt: | September 30, 2020 | December 31, 2019 |
| --- | ---: | ---: |
| Short-term borrowings | $13.3 | 14.3 |
| Long-term debt | 2,514.3 | 1,629.3 |
| Total Debt | 2,527.6 | 1,643.6 |
| Restricted cash borrowings(a) | — | (10.3) |
| Total Debt without restricted cash borrowings | 2,527.6 | 1,633.3 |
| Less: |  |  |
| Cash and cash equivalents | 592.4 | 311.0 |
| Amounts held by Cash Management Services operations(b) | (22.7) | (26.3) |
| Cash and cash equivalents available for general corporate purposes | 569.7 | 284.7 |
| Net Debt(c) | $1,957.9 | 1,348.6 |

(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. Due to the change of contractual arrangements with banks in the third quarter of 2020, these funds no longer fall under the definition of restricted cash borrowings.

(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.

(c) Included within Net Debt is net cash from our Argentina operations of $20 million at September 30, 2020 and $17 million at December 31, 2019 (see Note 1 to the condensed consolidated financial statements for a discussion of currency controls in Argentina).

Net Debt is a supplemental non-GAAP financial measure that is not required by, or presented in accordance with GAAP. 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 condensed consolidated balance sheets. Set forth above is a reconciliation of Net Debt, a non-GAAP financial measure, to Debt, which is the most directly comparable financial measure calculated and reported in accordance with GAAP, as of September 30, 2020, and December 31, 2019.

Net Debt increased by $609 million primarily to fund business acquisitions and other working capital needs including insurance and bonus payments.

### Liquidity Needs

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

Our liquidity needs are typically financed by cash from operations, short-term debt and the available borrowing capacity under our Revolving Credit Facility (our debt facilities are described in more detail in Note 9 to the condensed consolidated financial statements, including certain limitations and considerations related to the cash and borrowing capacity). As of September 30, 2020, $938 million was available under the Revolving Credit Facility. Based on our current cash on hand, cash generated from operations, and amounts available under our credit facilities, we believe that we will be able to meet our liquidity needs for the next twelve months.

*Limitations on dividends from foreign subsidiaries.* A significant portion of our operations are outside the U.S. which may make it difficult or costly to repatriate cash for use in the U.S. See “Risk Factors” in Item 1A of our annual report on Form 10-K for the year ended December 31, 2019, for more information on the risks associated with having businesses outside the U.S.

Our conclusion that we will be able to fund our cash requirements for the next 12 months by using existing capital resources, cash on hand, and cash generated from operations does not take into account any potential material worsening of economic conditions as a result of the ongoing COVID-19 pandemic that would adversely affect our business. The anticipated cash needs of our business could change significantly if we pursue and complete additional business acquisitions, if our business plans change, if events, including economic disruptions, arising from the ongoing COVID-19 pandemic worsen, or if other economic conditions change from those currently prevailing or from those now anticipated, or if other unexpected circumstances arise that may have a material effect on the cash flow or profitability of our business, including material negative changes in the health and welfare of our employees or changes in the condition of our customers or suppliers, and the operating performance or financial results of our business. Any of these events or circumstances, including any new business opportunities, could involve significant additional funding needs in excess of the identified currently available sources and could require us to raise additional debt or equity funding to meet those needs. Our ability to raise additional capital, if necessary, is subject to a variety of factors that we cannot predict with certainty, including:

- our future profitability;
- the quality of our accounts receivable;
- our relative levels of debt and equity;
- the volatility and overall condition of the capital markets; and
- the market prices of our securities.

### Equity

On February 6, 2020, our board of directors authorized a $250 million share repurchase authorization that expires on December 31, 2021. The authorization replaces our previous $200 million repurchase program, authorized by the board of directors in May 2017, which expired December 31, 2019. Under the $200 million repurchase program, we repurchased 1.3 million shares for approximately $94 million, or an average cost of $69.35 per share. There was approximately $106 million remaining available under the $200 million repurchase program when it expired. Under the $250 million repurchase program, we are not obligated to repurchase any specific dollar amount or number of shares. The timing and volume of share repurchases may be executed at the discretion of management on an opportunistic basis, or pursuant to trading plans or other arrangements. Share repurchases under this program may be made in the open market, in privately negotiated transactions, or otherwise.

In August 2020, we entered into an accelerated share repurchase arrangement ("ASR") with a financial institution. In exchange for a $50 million up-front payment at the beginning of the purchase period, the financial institution delivered to us 849,978 shares of our common stock for an average repurchase price of $58.83 per share. The shares received were retired in the period they were delivered to us, and the up-front payment was accounted for as a reduction to shareholders' equity in the condensed consolidated balance sheet. For purposes of calculating earnings per share, we reported the ASR as a repurchase of our common stock in August 2020 and as a forward contract indexed to our common stock. The ASR met all of the applicable criteria for equity classification, and, as a result, was not accounted for as a derivative instrument. In September 2020, the ASR purchase period was subsequently terminated early and we received and retired an additional 246,676 shares under the ASR, resulting in an overall average repurchase price of $45.59 per share.

### U.S. Retirement Liabilities

### Assumptions for U.S. Retirement Obligations

The amounts in the tables below are based on a variety of estimates, including actuarial assumptions as of the most recent measurement date. The assumptions used to estimate our U.S. retirement obligations can be found in our Annual Report on Form 10-K for the year ended December 31, 2019. 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 and will be updated at December 31, 2020.

Our most significant actuarial 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

*Funded Status of U.S. Retirement Plans*

*(In millions)*

| Primary U.S. pension plan | Actual 2019 | Actual Nine Months 2020 | Projected 4th Quarter 2020 | 2021 | 2022 | 2023 | 2024 |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Beginning funded status | $(106.8) | (118.3) | (103.4) | (97.4) | (75.6) | (38.6) | 4.0 |
| Net periodic pension credit(a) | 16.9 | 14.9 | 4.9 | 21.0 | 22.4 | 24.0 | 27.1 |
| Payment from Brink’s | — | — | — | — | 14.1 | 17.6 | 16.3 |
| Benefit plan experience gain (loss) | (28.4) | — | 1.1 | 0.8 | 0.5 | 1.0 | — |
| Ending funded status | $(118.3) | (103.4) | (97.4) | (75.6) | (38.6) | 4.0 | 47.4 |
| **UMWA plans** |  |  |  |  |  |  |  |
| Beginning funded status | $(297.4) | (246.7) | (237.5) | (237.3) | (238.2) | (240.0) | (242.8) |
| Net periodic postretirement cost(a) | (4.0) | 0.2 | 0.2 | (0.9) | (1.8) | (2.8) | (3.9) |
| Benefit plan experience gain (loss) | 55.1 | — | — | — | — | — | — |
| Other(b) | (0.4) | 9.0 | — | — | — | — | — |
| Ending funded status | $(246.7) | (237.5) | (237.3) | (238.2) | (240.0) | (242.8) | (246.7) |
| **Black lung plans** |  |  |  |  |  |  |  |
| Beginning funded status | $(67.9) | (99.2) | (95.8) | (91.5) | (84.0) | (77.1) | (70.6) |
| Net periodic postretirement cost(a) | (3.0) | (2.3) | (0.8) | (2.6) | (2.5) | (2.2) | (2.1) |
| Payment from Brink’s | 8.4 | 5.7 | 5.1 | 10.1 | 9.4 | 8.7 | 8.1 |
| Benefit plan experience gain (loss) | (36.7) | — | — | — | — | — | — |
| Ending funded status | $(99.2) | (95.8) | (91.5) | (84.0) | (77.1) | (70.6) | (64.6) |

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

(b) In the third quarter of 2020, we decided it was more economically beneficial to use available company funds to make UMWA benefit payments. We continue to monitor the situation and the related assessment of the best use of available funds.

### Primary U.S. Pension Plan

Pension benefits provided to eligible U.S. employees were frozen on December 31, 2005, and are not provided to employees hired after 2005 or to those covered by a collective bargaining agreement. We did not make cash contributions to the primary U.S. pension plan in 2019 or the first nine months of 2020. There are approximately 11,200 beneficiaries in the plan.

We do not expect to make contributions until 2022.

### 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 were approximately 3,000 beneficiaries in the UMWA plans as of December 31, 2019. The Company does not need to make additional contributions to these plans until 2028 based on actuarial assumptions.

### Black Lung

Under the Federal Black Lung Benefits Act of 1972, Brink’s is responsible for paying lifetime black lung benefits to miners and their dependents for claims filed and approved after June 30, 1973. There were approximately 800 black lung beneficiaries as of December 31, 2019.

### Summary of Expenses Related to All U.S. Retirement Liabilities through 2024

This table summarizes actual and projected expense related to U.S. retirement liabilities.

*(In millions)*

|  | Actual 2019 | Actual Nine Months 2020 | Projected 4th Quarter 2020 | FY2020 | 2021 | 2022 | 2023 | 2024 |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Primary U.S. pension plan | $21.8 | 6.4 | 2.3 | 8.7 | 3.1 | (1.3) | (4.4) | (11.3) |
| UMWA plans | 15.9 | 8.6 | 2.9 | 11.5 | 11.4 | 11.6 | 11.9 | 12.3 |
| Black lung plans | 7.4 | 8.3 | 2.8 | 11.1 | 9.8 | 9.1 | 8.5 | 7.9 |
| Total | $45.1 | 23.3 | 8.0 | 31.3 | 24.3 | 19.4 | 16.0 | 8.9 |

### Summary of Payments from Brink’s to U.S. Plans and Payments from U.S. Plans to Participants through 2024

This table summarizes actual and projected payments:

- from Brink’s to U.S. retirement plans, and
- from the plans to participants.

*(In millions)*

| Payments from Brink’s to U.S. Plans | Actual 2019 | Actual Nine Months 2020 | Projected 4th Quarter 2020 | FY2020 | 2021 | 2022 | 2023 | 2024 |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Primary U.S. pension plan | $— | — | — | — | — | 14.1 | 17.6 | 16.3 |
| Black lung plans | 8.4 | 5.7 | 5.1 | 10.8 | 10.1 | 9.4 | 8.7 | 8.1 |
| Total | $8.4 | 5.7 | 5.1 | 10.8 | 10.1 | 23.5 | 26.3 | 24.4 |
| **Payments from U.S. Plans to participants** |  |  |  |  |  |  |  |  |
| Primary U.S. pension plan | $48.5 | 32.3 | 14.7 | 47.0 | 47.0 | 47.0 | 47.0 | 46.9 |
| UMWA plans | 29.3 | 19.4 | 10.8 | 30.2 | 30.2 | 29.7 | 29.3 | 28.7 |
| Black lung plans | 8.4 | 5.7 | 5.1 | 10.8 | 10.1 | 9.4 | 8.7 | 8.1 |
| Total | $86.2 | 57.4 | 30.6 | 88.0 | 87.3 | 86.1 | 85.0 | 83.7 |

### Contingent Matters

See Note 14 to the condensed consolidated financial statements for information about contingent matters at September 30, 2020.

## Market risk

As filed, 788 characters.

We serve customers in more than 100 countries, including 52 countries where we operate subsidiaries. These operations expose us to a variety of market risks, including the effects of changes in interest rates and foreign currency exchange rates. In addition, we consume various commodities in the normal course of business, exposing us to the effects of changes in the prices of such commodities. These financial and commodity exposures are monitored and managed by us as an integral part of our overall risk management program. Our risk management program seeks to reduce the potentially adverse effects that the volatility of certain markets may have on our operating results. We have not had any material change in our market risk exposures in the nine months ended September 30, 2020.

## Controls and procedures

As filed, 6,685 characters.

Pursuant to Rule 13a-15(b) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer (“CEO”), who is our principal executive officer, and our Executive Vice President and Chief Financial Officer (“CFO”), who is our principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined under Rule 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report. Based upon that evaluation, as of the end of the period covered by this report, our CEO and CFO concluded that our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act, 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 our CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure.

#### Changes in internal control over financial reporting.

There has been no change in our internal control over financial reporting during the quarter ended September 30, 2020 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

### Forward-looking information

This document contains both historical and forward-looking information. Words such as “anticipates,” “assumes,” “estimates,” “expects,” “projects,” “predicts,” “intends,” “plans,” “potential,” “believes,” “could,” “may,” “should” and similar expressions may identify forward looking information. Forward-looking information in this document includes, but is not limited to, statements concerning: the impact of the ongoing COVID-19 pandemic on our business, employees, customers, operating results and financial position; difficulty in repatriating cash; continued strengthening of the U.S. dollar; anticipated costs of our Reorganization and Restructuring activities; collection of receivables related to the internal loss in the U.S. global services operations; support for the Company's Venezuela business; our effective tax rate; the ability to meet liquidity needs; expenses and payouts for the U.S. retirement plans and the funded status of the primary pension plan; expected liability for and future contributions to the UMWA plans; liability for black lung obligations; and the effect of pending legal matters. 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 improvements and efficiencies in our core businesses;
- our ability to improve service levels and quality in our core businesses;
- market volatility and commodity price fluctuations;
- 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 (including the imposition of international sanctions, including by the U.S. government), currency restrictions and devaluations, restrictions on and cost of repatriating earnings and capital, impact on the Company's financial results as a result of jurisdictions determined to be highly inflationary, and restrictive government actions, including nationalization;
- labor issues, including negotiations with organized labor and work stoppages;
- pandemics (including the ongoing COVID-19 pandemic and related impacts and restrictions on the actions of businesses and consumers, including suppliers and customers), acts of terrorism, strikes or other extraordinary events that negatively affect global or regional cash commerce;
- anticipated cash needs in light of our current liquidity position and the impact of COVID-19 on our liquidity;
- the strength of the U.S. dollar relative to foreign currencies and foreign currency exchange rates;
- our ability to identify, evaluate and complete acquisitions and other strategic transactions and to successfully integrate acquired companies;
- costs related to dispositions and product or market exits;
- our ability to obtain appropriate insurance coverage, positions taken by insurers relative to claims and the financial condition of insurers;
- safety and security performance and loss experience;
- employee, environmental and other liabilities in connection with former coal operations, including black lung claims;
- the impact of the 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 our critical accounting policies; and
- the promulgation and adoption of new accounting standards, new government regulations and interpretation of existing standards and regulations.

This list of risks, uncertainties and contingencies is not intended to be exhaustive. Additional factors that could cause our results to differ materially from those described in the forward-looking statements can be found under “Risk Factors” in Item 1A of our Annual Report on Form 10-K for the period ended December 31, 2019 and in our other public filings with the Securities and Exchange Commission. The forward looking 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.

## Risk factors

As filed, 5,018 characters.

The following risk factors are in addition to the risk factors set forth in our Annual Report on Form 10-K for the year ended December 31, 2019, filed with the Securities and Exchange Commission (the “SEC”) on February 28, 2020. We may disclose changes to risk factors or disclose additional factors from time to time in our future filings with the SEC.

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

While cash remains the most popular form of consumer payment in the world, the growth of other payment options, the increase of on-line transactions, and the influence of governments to increase tracking of payments could reduce the need for services related to cash, thereby affecting our financial results. We are developing new services that offer current and prospective customers opportunities to streamline their cash processing costs, making cash more competitive with other forms of payment. 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.

***The ongoing COVID-19 pandemic is expected to adversely affect our business, financial condition and results of operations, the extent of which is not now known or predictable.***

The ongoing COVID-19 pandemic has created volatility, uncertainty and economic disruption for Brink’s, our customers and vendors, and the markets in which we do business. Beginning in the first quarter of 2020, health and economic conditions in the vast majority of the countries in which we operate rapidly worsened. As a result, government and customer actions and related events have impacted, and we expect will continue to impact, how we do business and the services that we provide, for a sustained period. It continues to be too early to assess the full impact that the COVID-19 pandemic, and the actions taken in response to it, will have on our employees, our businesses and segments, our customers and vendors, the industries that we serve, our financial condition and/or our results of operations as well as those of the businesses we are acquiring as part of the acquisition of the cash management operations of U.K.-based G4S plc. The full impact depends on many factors that are uncertain or not yet identifiable, and in many cases are out of our control. Those factors could include, among other things, (i) the duration of the COVID-19 pandemic and the types and magnitude of adverse impacts on regional economies, individually, and the global economy, as a whole; (ii) the health and welfare of our employees and that of our customers, vendors and suppliers; (iii) business and government actions in response to the pandemic, including moratoriums by governments and regulators on rule making and regulatory and legal proceedings, limitations on employee actions by regulators and unions, and stay at home, social distancing measures and travel bans; (iv) the impact on the development and implementation of strategic initiatives and the integration of acquired businesses, including those acquired from G4S; (v) the response of our customers or prospective customers to the pandemic, including suspensions or terminations of existing contracts; (vi) the varying demand for the types of services we offer in the countries in which we offer them; (vii) our ability to continue to effectively market our services; (viii) our ability to resume services as needed; (ix) the type, size, profitability and geographic locations of our operations; (x) the ability of our customers to pay, to make timely payments or to pay in full; and (xi) the timing of finding effective treatments or a cure. Such events would result in reduced revenues and operating profit. Any of these events and others we have not yet identified could cause or contribute to the risks and uncertainties facing the Company and our customers and could materially adversely affect our business or portions thereof, and our financial condition, results of operations and/or stock price.

***The ongoing COVID-19 pandemic could adversely impact the health and welfare of our employees, including our executive officers , which could have a material adverse effect on our ability to serve our customers and our results of operations.***

Our customer-facing employees are necessary to conduct many of our services. If the health and welfare of customer-facing employees or employees providing critical corporate functions (including our executive officers) deteriorates, the number of employees so afflicted becomes significant, or an employee with skills and knowledge that cannot be replicated in our organization is impaired due to the COVID-19 pandemic, our ability to win business and provide services, as well as employee morale, customer relationships, business prospects, and results of operations of one or more of our segments, or the Company as a whole, could be materially adversely affected.

Filed Oct 29, 2020.
Source: SEC EDGAR, the filing index for accession 0000078890-20-000087. Last ingested by Listed: Nov 4, 2026, 07:32 ET. No prices; not investment advice.