# Brinks Co: Form 10-Q for the period ended Sep 30, 2021

- Company: [Brinks Co](/companies/bco.md) (CIK 78890)
- Form: 10-Q
- Filed: 2021-10-29
- Accepted by EDGAR: Oct 29, 2021, 13:17 ET
- Period: 2021-09-30
- Accession: 0000078890-21-000239
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/78890/000007889021000239/bco-20210930.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/78890/000007889021000239/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2021-09-30.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2021-07-01 to 2021-09-30 | $1.08bn | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Revenue | 9 months, 2021-01-01 to 2021-09-30 | $3.10bn | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Cost of revenue | 3 months, 2021-07-01 to 2021-09-30 | $837.6m | us-gaap:CostOfRevenue |
| Cost of revenue | 9 months, 2021-01-01 to 2021-09-30 | $2.42bn | us-gaap:CostOfRevenue |
| Operating income | 3 months, 2021-07-01 to 2021-09-30 | $74.2m | us-gaap:OperatingIncomeLoss |
| Operating income | 9 months, 2021-01-01 to 2021-09-30 | $209.2m | us-gaap:OperatingIncomeLoss |
| Interest expense | 3 months, 2021-07-01 to 2021-09-30 | $27.6m | us-gaap:InterestExpense |
| Interest expense | 9 months, 2021-01-01 to 2021-09-30 | $83.0m | us-gaap:InterestExpense |
| Income tax | 3 months, 2021-07-01 to 2021-09-30 | $22.9m | us-gaap:IncomeTaxExpenseBenefit |
| Income tax | 9 months, 2021-01-01 to 2021-09-30 | $59.2m | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2021-07-01 to 2021-09-30 | $19.0m | us-gaap:NetIncomeLoss |
| Net income | 9 months, 2021-01-01 to 2021-09-30 | $55.6m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2021-07-01 to 2021-09-30 | $0.38 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 9 months, 2021-01-01 to 2021-09-30 | $1.10 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2021-07-01 to 2021-09-30 | $0.38 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 9 months, 2021-01-01 to 2021-09-30 | $1.12 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2021-07-01 to 2021-09-30 | 50,300,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 9 months, 2021-01-01 to 2021-09-30 | 50,400,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 9 months, 2021-01-01 to 2021-09-30 | $273.6m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 9 months, 2021-01-01 to 2021-09-30 | $113.7m | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Dividends paid | 9 months, 2021-01-01 to 2021-09-30 | $27.3m | us-gaap:PaymentsOfDividendsCommonStock |
| Share repurchases | 9 months, 2021-01-01 to 2021-09-30 | $50.0m | us-gaap:PaymentsForRepurchaseOfCommonStock |
| Cash and equivalents | at 2021-09-30 | $700.8m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2021-09-30 | $1.96bn | us-gaap:AssetsCurrent |
| Total assets | at 2021-09-30 | $5.55bn | us-gaap:Assets |
| Current liabilities | at 2021-09-30 | $1.40bn | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2021-09-30 | $5.30bn | us-gaap:Liabilities |
| Long-term debt | at 2021-09-30 | $2.70bn | us-gaap:LongTermDebtNoncurrent |
| Current portion of debt | at 2021-09-30 | $136.4m | us-gaap:LongTermDebtCurrent |
| Short-term borrowings | at 2021-09-30 | $8.1m | us-gaap:ShortTermBorrowings |
| Shareholders' equity | at 2021-09-30 | $121.4m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 92,181 characters.

The Brink’s Company (along with its subsidiaries, “Brink’s”, the “Company”, “we”, “us” or “our”) 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 – cash replenishment and forecasting, remote monitoring, transaction processing, installation and maintenance
- 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, Rest of World and Latin America 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.

During the fourth quarter of 2020, we implemented changes to our organizational and management structure primarily related to our acquisition of the majority of the cash operations of G4S plc ("G4S") that resulted in changes to our operating segments. Previously, our business was managed and reported in three operating segments: North America, South America and Rest of World. We now manage our business in four segments, and segment results are reported by these four segments. The four segments are as follows:

- North America – operations in the U.S. and Canada, including the Brink’s Global Services ("BGS") line of business,
- Latin America – operations in Latin American countries where we have an ownership interest, including the BGS line of business. This segment includes operations in Mexico, which was previously reported in the North America segment,
- Europe – operations in European countries that primarily provide services outside of the BGS line of business. This segment includes the BGS line of business within these country operations, and
- Rest of World – operations in European countries that primarily provide BGS services. This segment includes other lines of business within these country operations. This segment also includes operations in the Middle East, Africa and Asia as well as BGS activity in Latin American countries primarily where we do not have an ownership interest.

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

### 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. 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. During 2020 and continuing into 2021, health conditions and economic activity in the countries in which we operate have been significantly impacted by government, customer and consumer actions in response to the pandemic. These actions have led to reduced customer volumes, changes to our operating procedures and increases to our costs to provide services. We have taken and continue to take actions to adjust the way we operate and reduce our costs through restructuring activities and operational changes to address these impacts and align to future anticipated revenue levels.

We are continually assessing the impact that the COVID-19 pandemic, and the actions taken in response to it, will have on our employees, businesses and segments, customers and vendors and the industries that we serve. The full impact depends on many factors that are uncertain or not yet identifiable. We expect these factors will continue to impact our financial condition and our results of operations for a duration that is currently unknown.

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, and continued to take throughout 2020, steps to reduce 2020 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 business impact of the COVID-19 pandemic, as necessary.

Refer to the “Liquidity and Capital Resources” section below for further discussion.

### Consolidated Review

#### GAAP and Non-GAAP Financial Measures

We provide an analysis of our operations below on both a U.S. 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. The non-GAAP adjustments used to reconcile our GAAP results are described on pages 44–46 and are reconciled to comparable GAAP measures on pages 52–54.

#### 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 40.

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

| GAAP | Three Months Ended September 30,% 2021 | 2020 | Change | Nine Months Ended September 30,% 2021 | 2020 | Change |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Revenues | $1,075.5 | 970.5 | 11 | 3,102.0 | 2,669.3 | 16 |
| Cost of revenues | 837.6 | 742.9 | 13 | 2,415.6 | 2,120.2 | 14 |
| Selling, general and administrative expenses | 161.9 | 141.4 | 14 | 472.0 | 429.1 | 10 |
| Operating profit | 74.2 | 76.4 | (3) | 209.2 | 101.6 | fav |
| Income (loss) from continuing operations(a) | 19.0 | (23.8) | fav | 55.7 | (8.3) | fav |
| Diluted EPS from continuing operations(a) | $0.38 | (0.47) | fav | 1.11 | (0.17) | fav |
| Non-GAAP(b) |  |  |  |  |  |  |
| Non-GAAP revenues | $1,075.5 | 970.5 | 11 | 3,102.0 | 2,669.3 | 16 |
| Non-GAAP operating profit | 115.9 | 99.9 | 16 | 316.6 | 236.2 | 34 |
| Non-GAAP income from continuing operations(a) | 57.4 | 45.0 | 28 | 156.2 | 108.1 | 44 |
| Non-GAAP diluted EPS from continuing operations(a) | $1.14 | 0.89 | 28 | 3.10 | 2.12 | 46 |

(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 52–54.

### GAAP Basis

### Analysis of Consolidated Results: Third Quarter 2021 versus Third Quarter 2020

***Consolidated Revenues*** Revenues increased $105.0 million due to organic increases in Latin America ($35.3 million), North America ($16.9 million), and Europe ($5.0 million), the favorable impact of acquisitions ($46.0 million), and the favorable impact of currency exchange rates ($4.7 million), partially offset by an organic decrease in Rest of World ($2.9 million). The favorable currency impact was driven primarily by the Mexican peso and most other currencies globally, partially offset by the Argentine peso. Revenues increased 6% on an organic basis primarily due to volume recovery versus prior year period results which were more impacted by the COVID-19 pandemic, as well as price increases in the U.S. and Argentina. See above for our definition of “organic growth.”

***Consolidated Costs and Expenses*** Cost of revenues increased 13% to $837.6 million primarily due to higher labor and other operational costs driven by volume recovery including wage increases in the U.S., the impact of acquisitions, higher costs incurred related to restructuring actions, and currency exchange rates. Selling, general and administrative costs increased 14% to $161.9 million primarily due to higher corporate expenses and the impact of acquisitions.

***Consolidated Operating Profit*** Operating profit decreased $2.2 million due mainly to:

- higher corporate expenses on an organic basis ($12.8 million),
- organic decreases in Rest of World ($6.5 million) and North America ($3.7 million), and
- the following items included in “Other items not allocated to segments”:
- an estimated loss of $9.5 million in the third quarter of 2021 related to a potential fine for a Chile antitrust matter (see Note 14 for details),
- higher costs incurred related to reorganization and restructuring ($8.9 million),

partially offset by:

- organic increases in Latin America ($17.0 million), and Europe ($7.7 million),
- favorable changes in currency exchange rates ($8.2 million), driven by lower foreign currency transaction losses as third quarter of 2020 included a loss of $10.4 million from converting Argentine pesos into U.S. dollars, as well as a favorable impact from the Mexican peso, partially offset by the Argentine peso, and
- the favorable operating impact of business acquisitions ($7.4 million), excluding intangible amortization and acquisition-related charges.

***Consolidated Income from Continuing Operations Attributable to Brink’s and Related Per Share Amounts*** Income from continuing operations attributable to Brink’s shareholders increased $42.8 million to $19.0 million due to the increase in operating profit mentioned above, lower interest and other non-operating expense ($12.1 million), and lower income tax expense ($36.0 million), partially offset by higher non-controlling interest ($2.6 million) and higher interest expense ($0.5 million). Earnings per share from continuing operations was $0.38, up from negative $0.47 in the third quarter of 2020.

### Analysis of Consolidated Results: Nine Months 2021 versus Nine Months 2020

***Consolidated Revenues*** Revenues increased $432.7 million due to the favorable impact of acquisitions ($275.0 million), organic increases in Latin America ($73.2 million), North America ($47.1 million), and Europe ($9.3 million), and the favorable impact of currency exchange rates ($34.4 million), partially offset by an organic decrease in Rest of World ($6.3 million). The currency impact was driven primarily by the euro, the Mexican peso, and most other currencies globally, partially offset by the Argentine peso and Brazilian real. Revenues increased 5% on an organic basis primarily due to volume recovery in the second and third quarter of 2021 versus prior year period results which were more impacted by the COVID-19 pandemic, as well as price increases in the U.S. and Argentina. See above for our definition of “organic growth.”

***Consolidated Costs and Expenses*** Cost of revenues increased 14% to $2,415.6 million primarily due to the impact of acquisitions, higher labor and other operational costs from volume recovery, and currency exchange rates, partially offset by lower costs incurred related to restructuring actions. Selling, general and administrative costs increased 10% to $472.0 million due to the impact of businesses acquired and higher corporate expenses, partially offset by lower costs incurred versus the prior year period related to acquisitions (including integration) and an internal loss in the U.S. global services operations.

***Consolidated Operating Profit*** Operating profit increased $107.6 million due mainly to:

- organic increases in North America ($44.1 million), Latin America ($40.9 million), Europe ($23.6 million), and Rest of World ($3.6 million),
- the following items included in “Other items not allocated to segments”:
- lower charges related to reorganization and restructuring ($14.0 million),
- lower charges incurred, primarily bad debt expense, related to an internal loss in the U.S. global services operations ($12.3 million), and
- lower costs related to business acquisitions and dispositions ($10.4 million), including the impact of acquisition-related charges and intangible asset amortization in 2021,
- the favorable operating impact of business acquisitions ($23.9 million), excluding intangible amortization and acquisition-related charges, and
- favorable changes in currency exchange rates ($3.9 million), driven by lower foreign currency transaction losses as third quarter of 2020 included a loss of $10.4 million from converting Argentine pesos into U.S. dollars, as well as a favorable impact from the Mexican peso, euro, and most other currencies globally, partially offset by the Argentine peso and Brazilian real,

partially offset by:

- higher corporate expenses on an organic basis ($60.4 million).
- an estimated loss of $9.5 million in the third quarter of 2021 related to a potential fine for a Chile antitrust matter included in “Other items not allocated to segments”. See Note 14 for details.

***Consolidated Income from Continuing Operations Attributable to Brink’s and Related Per Share Amounts*** Income from continuing operations attributable to Brink’s shareholders increased $64.0 million to $55.7 million due to the increase in operating profit mentioned above and lower interest and other non-operating expense ($29.8 million), partially offset by higher income tax expense ($55.7 million), higher interest expense ($12.7 million), and higher non-controlling interest ($5.0 million). Earnings per share from continuing operations was $1.11, up from negative $0.17 in the first nine months of 2020.

### Non-GAAP Basis

### Analysis of Consolidated Results: Third Quarter 2021 versus Third Quarter 2020

***Non-GAAP Consolidated Revenues*** Non-GAAP revenues increased $105.0 million due to organic increases in Latin America ($35.3 million), North America ($16.9 million), and Europe ($5.0 million), the favorable impact of acquisitions ($46.0 million), and the favorable impact of currency exchange rates ($4.7 million), partially offset by an organic decrease in Rest of World ($2.9 million). The favorable currency impact was driven primarily by the Mexican peso and most other currencies globally, partially offset by the Argentine peso. Revenues increased 6% on an organic basis primarily due to volume recovery versus prior year period results which were more impacted by the COVID-19 pandemic, as well as price increases in the U.S. and Argentina. See above for our definition of “organic growth.”

***Non-GAAP Consolidated Operating Profit*** Non-GAAP operating profit increased $16.0 million due mainly to:

- organic increases in Latin America ($17.0 million) and Europe ($7.7 million),
- the favorable operating impact of business acquisitions ($7.4 million), excluding intangible amortization and acquisition-related charges, and
- favorable changes in currency exchange rates ($6.9 million), driven by lower foreign currency transaction losses as third quarter of 2020 included a loss of $10.4 million from converting Argentine pesos into U.S. dollars, as well as a favorable impact from the Mexican peso, partially offset by the Argentine peso,

partially offset by:

- higher corporate expenses on an organic basis ($12.8 million), and
- organic decreases in Rest of World ($6.5 million) and North America ($3.7 million).

***Non-GAAP Consolidated Income from Continuing Operations Attributable to Brink’s and Related Per Share Amounts*** Non-GAAP income from continuing operations attributable to Brink’s shareholders increased $12.4 million to $57.4 million due to the operating profit increase mentioned above and higher interest and other non-operating income ($6.4 million), partially offset by higher income tax expense ($8.2 million), higher non-controlling interest ($1.1 million), and higher interest expense ($0.7 million). Earnings per share from continuing operations was $1.14, up from $0.89 in the third quarter of 2020.

### Analysis of Consolidated Results: Nine Months 2021 versus Nine Months 2020

***Non-GAAP Consolidated Revenues*** Non-GAAP revenues increased $432.7 million due to the favorable impact of acquisitions ($275.0 million), organic increases in Latin America ($73.2 million), North America ($47.1 million), and Europe ($9.3 million), and the favorable impact of currency exchange rates ($34.4 million), partially offset by an organic decrease in Rest of World ($6.3 million). The currency impact was driven primarily by the euro, the Mexican peso, and most other currencies globally, partially offset by the Argentine peso and Brazilian real. Revenues increased 5% on an organic basis due to volume recovery in the second and third quarter of 2021 versus prior year period results which were more impacted by the COVID-19 pandemic, as well as price increases in the U.S. and Argentina. See above for our definition of “organic growth.”

***Non-GAAP Consolidated Operating Profit*** Non-GAAP operating profit increased $80.4 million due mainly to:

- organic increases in North America ($44.1 million), Latin America ($40.9 million), Europe ($23.6 million), and Rest of World ($3.6 million),
- the favorable operating impact of business acquisitions ($23.9 million), excluding intangible amortization and acquisition-related charges, and
- favorable changes in currency exchange rates ($4.7 million) driven by lower foreign currency transaction losses, as third quarter of 2020 included a loss of $10.4 million from converting Argentine pesos into U.S. dollars, as well as a favorable change from the Mexican peso, euro, and most other currencies globally, partially offset by the Argentine peso and Brazilian real,

partially offset by:

- higher corporate expenses on an organic basis ($60.4 million).

***Non-GAAP Consolidated Income from Continuing Operations Attributable to Brink’s and Related Per Share Amounts*** Non-GAAP income from continuing operations attributable to Brink’s shareholders increased $48.1 million to $156.2 million due to the increase in operating profit mentioned above and higher interest and other non-operating income ($16.9 million), partially offset by higher income tax expense ($30.2 million), higher interest expense ($13.1 million), and higher non-controlling interest ($5.9 million). Earnings per share from continuing operations was $3.10, up from $2.12 in the first nine months of 2020.

### Revenues and Operating Profit by Segment: Third Quarter 2021 versus Third Quarter 2020

*(In millions)*

| Revenues: | 3Q'20 | Organic Change | Acquisitions / Dispositions(a) | Currency(b) | 3Q'21 | % Change Total | Organic |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| North America | $316.8 | 16.9 | 25.2 | 1.8 | **360.7** | 14 | 5 |
| Latin America | 256.7 | 35.3 | 0.6 | (3.3) | **289.3** | 13 | 14 |
| Europe | 224.0 | 5.0 | 7.7 | 1.3 | **238.0** | 6 | 2 |
| Rest of World | 173.0 | (2.9) | 12.5 | 4.9 | **187.5** | 8 | (2) |
| **Segment revenues(c)** | 970.5 | 54.3 | 46.0 | 4.7 | **1,075.5** | 11 | 6 |
| **Revenues - GAAP** | $970.5 | 54.3 | 46.0 | 4.7 | **1,075.5** | 11 | 6 |
| **Operating profit:** |  |  |  |  |  |  |  |
| North America | $24.1 | (3.7) | 4.5 | 0.1 | **25.0** | 4 | (15) |
| Latin America | 51.1 | 17.0 | 0.1 | (3.6) | **64.6** | 26 | 33 |
| Europe | 18.8 | 7.7 | 1.4 | 0.2 | **28.1** | 49 | 41 |
| Rest of World | 36.1 | (6.5) | 1.4 | 0.9 | **31.9** | (12) | (18) |
| **Segment operating profit** | 130.1 | 14.5 | 7.4 | (2.4) | **149.6** | 15 | 11 |
| Corporate(d) | (30.2) | (12.8) | — | 9.3 | **(33.7)** | 12 | 42 |
| **Operating profit - non-GAAP** | 99.9 | 1.7 | 7.4 | 6.9 | **115.9** | 16 | 2 |
| Other items not allocated to segments(e) | (23.5) | (19.4) | (0.1) | 1.3 | **(41.7)** | 77 | 83 |
| **Operating profit - GAAP** | $76.4 | (17.7) | 7.3 | 8.2 | **74.2** | (3) | (23) |

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

(d) Corporate expenses are not allocated to segment results. Corporate expenses include salaries and other costs to manage the global business and to perform activities required by public companies.

(e) See pages 44–46 for more information.

(f) In the first quarter of 2021, North America operating profit benefited $12.3 million from a change in our method to calculate the allowance for doubtful accounts, with an offsetting higher expense at Corporate. There was no net impact on consolidated operating profit. See further discussion below in Analysis of Segment Results.

### Analysis of Segment Results: Third Quarter 2021 versus Third Quarter 2020

### North America

Revenues increased 14% ($43.9 million) primarily due to the favorable impact of the PAI acquisition ($25.2 million), a 5% organic increase ($16.9 million), and the favorable impact of currency exchange rates ($1.8 million) from the Canadian dollar. Organic revenue increased primarily due to price increases and global services volume growth in the U.S., as well as organic growth from PAI. Operating profit increased $0.9 million, primarily due to the favorable impact of the PAI acquisition ($4.5 million), partially offset by a 15% organic decrease ($3.7 million). The organic decrease was driven by higher labor costs due to wage increases and security losses in the U.S. The organic decrease was partially offset by revenue growth in the U.S., as well as the impact of bad debt expense versus the prior year period, primarily from the change in accounting methodology to reconcile the U.S. allowance for doubtful accounts and associated expense to U.S. GAAP within the North America operating segment rather than as part of Corporate expense.

### Latin America

Revenues increased 13% ($32.6 million) primarily due to a 14% organic increase ($35.3 million) and the favorable impact of acquisitions ($0.6 million), partially offset by the unfavorable impact of currency exchange rates ($3.3 million), primarily from the Argentine peso and partially offset by the Mexican peso. The organic increase was primarily driven by inflation-based price increases in Argentina, as well as organic growth in Mexico from volume growth and price increases versus prior year period results which were more impacted by the COVID-19 pandemic. Operating profit was up 26% ($13.5 million) primarily due to a 33% organic increase ($17.0 million), including the benefit of labor and other operational cost saving actions, which includes those taken in response to the COVID-19 pandemic, partially offset by the unfavorable impact of currency exchange rates. The organic profit increase was driven by growth in Argentina and Mexico, as well as a $4.5 million non-income tax credit in Brazil, partially offset by lower volumes in Brazil. Our Brazil operations received a favorable court decision related to non-income taxes paid in prior years and will be able to recover the overpayments, plus interest, by reducing payments on future tax obligations.

### Europe

Revenues increased 6% ($14.0 million) due to a 2% organic increase ($5.0 million), the favorable impact of currency exchange rates ($1.3 million), and the favorable impact of acquisitions ($7.7 million). The favorable currency impact was driven by the euro. The organic increase was primarily due to organic growth in France and Greece driven by increased volumes. Operating profit increased $9.3 million to $28.1 million primarily due to a 41% organic increase ($7.7 million), the favorable impact of acquisitions ($1.4 million), and the favorable impact of currency exchange rates ($0.2 million). The organic increase was driven by higher volumes and the impact of labor and other operational cost saving actions in France and throughout the segment, including those taken in response to the COVID-19 pandemic.

### Rest of World

Revenues increased 8% ($14.5 million) due to the favorable impact of acquisitions ($12.5 million), the favorable impact of currency exchange rates ($4.9 million), partially offset by a 2% organic decrease ($2.9 million). The favorable currency impact was driven by most currencies throughout the segment. Operating profit decreased $4.2 million due to an 18% organic decrease ($6.5 million), partially offset by the favorable impact of acquisitions ($1.4 million) and currency exchange rates ($0.9 million). The organic decline was partially driven by lower government COVID-19 assistance in several countries.

### Revenues and Operating Profit by Segment: Nine Months 2021 versus Nine Months 2020

*(In millions)*

| Revenues: | YTD '20 | Organic Change | Acquisitions / Dispositions(a) | Currency(b) | YTD '21 | % Change Total | Organic |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| North America | $932.0 | 47.1 | 47.8 | 7.7 | **1,034.6** | 11 | 5 |
| Latin America | 786.1 | 73.2 | 7.1 | (34.6) | **831.8** | 6 | 9 |
| Europe | 518.2 | 9.3 | 118.1 | 37.6 | **683.2** | 32 | 2 |
| Rest of World | 433.0 | (6.3) | 102.0 | 23.7 | **552.4** | 28 | (1) |
| **Segment revenues(c)** | 2,669.3 | 123.3 | 275.0 | 34.4 | **3,102.0** | 16 | 5 |
| **Revenues - GAAP** | $2,669.3 | 123.3 | 275.0 | 34.4 | **3,102.0** | 16 | 5 |
| **Operating profit:** |  |  |  |  |  |  |  |
| North America(f) | $45.9 | 44.1 | 8.2 | 0.2 | **98.4** | fav | 96 |
| Latin America | 153.4 | 40.9 | 0.5 | (14.4) | **180.4** | 18 | 27 |
| Europe | 22.1 | 23.6 | 9.4 | 2.3 | **57.4** | fav | fav |
| Rest of World | 80.7 | 3.6 | 5.8 | 4.1 | **94.2** | 17 | 4 |
| **Segment operating profit** | 302.1 | 112.2 | 23.9 | (7.8) | **430.4** | 42 | 37 |
| Corporate(d)(f) | (65.9) | (60.4) | — | 12.5 | **(113.8)** | 73 | 92 |
| **Operating profit - non-GAAP** | 236.2 | 51.8 | 23.9 | 4.7 | **316.6** | 34 | 22 |
| Other items not allocated to segments(e) | (134.6) | 17.6 | 10.4 | (0.8) | **(107.4)** | (20) | (13) |
| **Operating profit - GAAP** | $101.6 | 69.4 | 34.3 | 3.9 | **209.2** | fav | 68 |

Amounts may not add due to rounding.

See page 40 for footnote explanations.

### Analysis of Segment Results: Nine Months 2021 versus Nine Months 2020

### North America

Revenues increased 11% ($102.6 million) primarily due to the favorable impact of acquisitions ($47.8 million), a 5% organic increase ($47.1 million), and the favorable impact of currency exchange rates ($7.7 million) from the Canadian dollar. Organic revenue increased primarily due to volume recovery in the U.S. in the second quarter of 2021 versus prior year period results which were more impacted by the COVID-19 pandemic, as well as price increases and global services volume growth in the U.S. and organic growth from PAI. This growth was partially offset by lower volumes in the first quarter of 2021 due to the COVID-19 pandemic. Operating profit increased $52.5 million, primarily due to a 96% organic increase ($44.1 million) and the favorable impact of acquisitions ($8.2 million). The organic profit increase was driven by revenue growth in the U.S. and PAI, labor and other operational cost management and saving actions in Canada, including those taken in response to the COVID-19 pandemic, and the impact of bad debt expense versus the prior year period. The increase was partially offset by lower government assistance in Canada and higher labor costs due to wage increases and security losses in the U.S.

In the first quarter of 2021, we changed the accounting methodology used to reconcile the U.S. allowance for doubtful accounts and associated expense to U.S. GAAP within the North America operating segment rather than as part of Corporate expense. The change in allowance for doubtful accounts methodology in the first quarter of 2021 included a $12.3 million operating profit increase, which was offset by a $12.3 million increase to Corporate expense, resulting in no impact to consolidated operating profit for the first quarter. Historically, all Brink’s business units followed an internal Company policy for determining an allowance for doubtful accounts and the allowances were then reconciled to the required U.S. GAAP estimated consolidated allowance, with any differences reported as part of Corporate expense. Other than for the U.S. business, the reconciling differences were not significant. We changed the U.S. calculation of the allowance in order to more closely align it with the U.S. GAAP consolidated calculation and to minimize reconciling differences, resulting in the offsetting $12.3 million adjustments to align the methods.

### Latin America

Revenues increased 6% ($45.7 million) primarily due to a 9% organic increase ($73.2 million) and the favorable impact of acquisitions ($7.1 million), partially offset by the unfavorable impact of currency exchange rates ($34.6 million), primarily from the Argentine peso and Brazilian real and partially offset by the Mexican peso. The organic increase was due to organic growth in Argentina driven by inflation-based price increases and organic growth in Mexico from volume growth and price increases in the second and third quarter of 2021 versus prior period results which were more impacted by the COVID-19 pandemic. Operating profit was up 18% ($27.0 million) primarily due to a 27% organic increase ($40.9 million), including the benefit of labor and other operational cost saving actions, which includes those taken in response to the COVID-19 pandemic, and the favorable impact of acquisitions ($0.5 million), partially offset by unfavorable currency ($14.4 million). The organic increase was driven by Argentina and Mexico.

### Europe

Revenues increased 32% ($165.0 million) due to the favorable impact of acquisitions and dispositions ($118.1 million) and currency exchange rates ($37.6 million), and a 2% organic increase ($9.3 million). The favorable currency impact was driven by the euro. The organic increase was primarily due to organic growth in France, driven by volume growth, including recovery in the second quarter of 2021 versus prior year period results which were more impacted by the COVID-19 pandemic. Operating profit increased $35.3 million primarily due to an organic increase ($23.6 million), the favorable impact of acquisitions ($9.4 million), and the favorable impact of currency exchange rates ($2.3 million). The organic increase was primarily driven by France due to higher volumes and the impact of labor and other operational cost saving actions, including those taken in response to the COVID-19 pandemic, partially offset by lower government assistance. Results were also helped by higher government COVID-19 assistance in several other countries.

### Rest of World

Revenues increased 28% ($119.4 million) due to the favorable impact of acquisitions and dispositions ($102.0 million) and currency exchange rates ($23.7 million), partially offset by a 1% organic decrease ($6.3 million). The currency impact was driven by most currencies throughout the segment. Operating profit increased $13.5 million primarily due to a 4% organic increase ($3.6 million), the favorable impact of acquisitions and dispositions ($5.8 million), and the favorable impact of currency exchange rates ($4.1 million), driven by most currencies throughout the segment. The organic increase was primarily due to the impact of operational cost saving actions throughout the segment, including those taken in response to the COVID-19 pandemic, partially offset by lower government COVID-19 assistance in several countries.

### Income and Expense Not Allocated to Segments

### Corporate Expenses

*(In millions)*

|  | Three Months Ended September 30,% 2021 | 2020 | change | Nine Months Ended September 30,% 2021 | 2020 | change |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| General, administrative and other expenses | $(34.8) | (26.6) | 31 | $(103.4) | (78.5) | 32 |
| Foreign currency transaction gains (losses) | 1.4 | (7.9) | fav | 1.4 | (11.5) | fav |
| Reconciliation of segment policies to GAAP | (0.3) | 4.3 | unfav | (11.8) | 24.1 | unfav |
| Corporate expenses | $(33.7) | (30.2) | 12 | $(113.8) | (65.9) | 73 |

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

Corporate expenses for the first nine months of 2021 increased $47.9 million versus the prior year period primarily driven by higher bad debt expense ($34.7 million) included in Corporate expense as part of the reconciliation of segment accounting policies to U.S. GAAP, as discussed in more detail in the next paragraph below. Current year expense also increased as a result of higher costs related to development of new service offerings ($11.1 million), higher share-based and other incentive compensation ($8.8 million) and a reduced Mexico profit sharing plan adjustment in the current year period ($1.2 million) as part of the reconciliation of segment policies to U.S. GAAP. These increases were partially offset by lower foreign currency transaction losses in the current year period ($12.9 million). The prior year period included a loss of $10.4 million from converting Argentine pesos into U.S. dollars.

Historically, all Brink’s business units followed an internal accounting policy for determining an allowance for doubtful accounts. The allowances were then reconciled to the required U.S. GAAP estimated consolidated allowance, with any differences reported as part of Corporate expense. In the first nine months of 2020, the Corporate reconciling adjustment was a reduction of Corporate expense of $21.6 million, to offset business unit allowances that were higher than U.S. GAAP required. In the same period in 2021, the adjustment was an increase of Corporate expense of $13.1 million. The 2021 increase was primarily from a change in the first quarter of 2021 to the allowance calculation method of the North America segment’s U.S. business. This change resulted in a $12.3 million increase to Corporate expense offset by a $12.3 million operating profit increase in the North America segment, resulting in no impact to consolidated operating profit for the first quarter of 2021. We changed the U.S. calculation of the allowance in order to more closely align it with the U.S. GAAP consolidated calculation and to minimize reconciling differences. Other than for the U.S. business, the reconciling differences were not significant. The bad debt expense increase excludes the impact of the internal loss in our U.S. global services operations described on the next page.

### Other Items Not Allocated to Segments

*(In millions)*

| Operating profit: | Three Months Ended September 30,% 2021 | 2020 | change | Nine Months Ended September 30,% 2021 | 2020 | change |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Reorganization and Restructuring | $(14.0) | (5.1) | unfav | $(35.7) | (49.7) | (28) |
| Acquisitions and dispositions | (16.6) | (16.2) | 2 | (55.8) | (66.2) | (16) |
| Argentina highly inflationary impact | (2.3) | (3.2) | (28) | (8.8) | (8.4) | 5 |
| Chile antitrust matter | (9.5) | — | unfav | (9.5) | — | unfav |
| Internal loss | 0.7 | 0.9 | (22) | 2.4 | (9.9) | fav |
| Reporting compliance | — | 0.1 | (100) | — | (0.4) | (100) |
| Operating profit | $(41.7) | (23.5) | 77 | $(107.4) | (134.6) | (20) |

The impact of other items not allocated to segments was a loss of $41.7 million in the third quarter of 2021 versus the prior year period loss of $23.5 million. The change was primarily due to the Chile antitrust matter charge recognized in the current year period and higher reorganization and restructuring expenses which were partially offset by lower charges from highly inflationary accounting in Argentina.

The impact of other items not allocated to segments was a loss of $107.4 million in the first nine months of 2021 versus the prior year period loss of $134.6 million. The change was primarily due to lower reorganization and restructuring expenses, a reduction in net charges related to the internal loss matter and a decrease in costs related to acquisitions and dispositions. These favorable changes were partially offset by the Chile antitrust matter charge recognized in the current year period.

### 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 $49.7 million in the first nine months of 2020, primarily severance costs. We recognized $35.7 million net costs in the first nine months of 2021, primarily severance costs. Approximately $5 million of the net costs recognized in the first nine months of 2021 relate to restructuring plans approved by management in 2020. The remaining costs incurred in the first nine months of 2021 relate to restructuring plans approved by management in 2021. Substantially all of the costs from 2021 restructuring plans result from management initiatives to address the COVID-19 pandemic. When completed, the current restructuring actions are expected to reduce our workforce by 1,400 to 1,600 positions and result in annualized cost savings of $30 million to $35 million. For the restructuring actions that have not yet been completed, we expect to incur additional costs between $5 million and $7 million in future periods. These estimates are expected to 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,% 2021 | 2020 | change | Nine Months Ended September 30,% 2021 | 2020 | change |
| --- | ---: | ---: | --- | ---: | ---: | ---: |
| North America | $0.4 | (1.6) | fav | $0.1 | (13.1) | fav |
| Latin America | (3.3) | 0.8 | unfav | (6.7) | (16.2) | (59) |
| Europe | (10.8) | (3.7) | unfav | (26.5) | (13.9) | 91 |
| Rest of World | (0.7) | (0.6) | 17 | (3.0) | (5.8) | (48) |
| Total reportable segments | (14.4) | (5.1) | unfav | (36.1) | (49.0) | (26) |
| Corporate items | 0.4 | — | fav | 0.4 | (0.7) | fav |
| Total | $(14.0) | (5.1) | unfav | $(35.7) | (49.7) | (28) |

**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:

#### 2021 Acquisitions and Dispositions

- Amortization expense for acquisition-related intangible assets was $35.3 million in the first nine months of 2021.
- We incurred $8.8 million in integration costs, primarily related to G4S, in the first nine months of 2021.
- Transaction costs related to business acquisitions were $5.4 million in the first nine months of 2021.
- Restructuring costs related to acquisitions were $5.1 million in the first nine months of 2021.
- Compensation expense related to the retention of key PAI employees was $1.2 million in the first nine months of 2021.

#### 2020 Acquisitions and Dispositions

- 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.
- Transaction costs related to business acquisitions were $17.7 million in the first nine months of 2020.
- Restructuring costs related to acquisitions were $4.1 million in the first nine months of 2020.

**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 2021, we recognized $8.8 million in pretax charges related to highly inflationary accounting, including currency remeasurement losses of $6.6 million. 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. These amounts are excluded from segment and non-GAAP results.

**Chile antitrust matter** We recognized an estimated loss of $9.5 million in the third quarter of 2021 related to a potential fine. Due to the special nature of this matter, this charge has not been allocated to segment results and is excluded from non-GAAP results. See Note 14 for details.

**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 of funds 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 the first nine months of 2020, we incurred $0.3 million in costs related to activities to reconstruct the accounts receivables subledger.

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 $9.6 million in the first nine months of 2020. In the first nine months of 2021, we recognized a decrease in bad debt expense of $3.5 million, primarily related to collection of these receivables. This estimate will continue to be adjusted in future periods, if needed, as assumptions related to the collectability of these accounts receivable change. We also recognized $1.1 million of legal charges in the first nine months of 2021 as we attempt to collect additional insurance recoveries related to these receivable losses.

At September 30, 2021, we have recorded a $8.2 million allowance on $8.2 million of accounts receivable, or 100%. 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 lease accounting standard (amounts were not significant in the first nine months of 2021 and were $0.4 million in the first nine months of 2020).

### Foreign Operations

We currently serve customers in more than 100 countries, including 53 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 relative to certain currencies has reduced some of our reported U.S. dollar revenues and operating profit and may continue in 2021.

At September 30, 2021, Argentina's economy remains highly inflationary for accounting purposes. At September 30, 2021, we had net monetary assets denominated in Argentine pesos of $58.6 million (including cash of $49.1 million) and net nonmonetary assets of $143.2 million (including $99.8 million of goodwill). At September 30, 2021, we had minimal 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). We did not have any such conversion losses in the nine months ended September 30, 2021.

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, 2021, the notional value of our short term outstanding foreign currency forward and swap contracts was $544 million with average contract maturities of approximately one month. These short term foreign currency forward and swap contracts primarily offset exposures in the euro, the British pound and the Mexican peso. 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, 2021, the fair value of our short term foreign currency contracts was a net asset of approximately $2.8 million, of which $5.4 million was included in prepaid expenses and other and $2.6 million was included in accrued liabilities on the condensed consolidated balance sheet. At December 31, 2020, the fair value of these foreign currency contracts was a net asset of approximately $2.4 million, of which $3.5 million was included in prepaid expenses and other and $1.1 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, 2021 | 2020 | Nine Months Ended September 30, 2021 | 2020 |
| --- | ---: | ---: | ---: | ---: |
| Derivative instrument gains (losses) included in other operating income (expense) | $6.3 | (3.4) | $14.5 | 0.5 |
| 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. Accordingly, changes in the fair value of the cash flow hedge are initially recorded in the gains (losses) on cash flow hedges component of accumulated other comprehensive income (loss). We immediately reclassify from accumulated other comprehensive income (loss) to earnings an amount to offset the remeasurement recognized in earnings associated with the respective intercompany loan. Additionally, we reclassify amounts from accumulated other comprehensive income (loss) to interest expense amounts that are associated with the interest rate differential between a U.S. dollar denominated intercompany loan and a Brazilian real denominated intercompany loan.

At September 30, 2021, the notional value of this long term contract was $81 million with a weighted-average maturity of approximately 1.4 years. At September 30, 2021, the fair value of the long term cross currency swap contract was a $26.4 million net asset, of which $5.1 million is included in prepaid expenses and other and $21.3 million is included in other assets on the condensed consolidated balance sheet. At December 31, 2020, the fair value of the long term cross currency swap contract was a $23.6 million net asset, of which a $3.2 million asset is included in prepaid and other assets and $20.4 million asset is included in other assets 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, 2021 | 2020 | Nine Months Ended September 30, 2021 | 2020 |
| --- | ---: | ---: | ---: | ---: |
| Derivative instrument gains included in other operating income (expense) | $5.7 | 0.8 | $0.1 | 30.6 |
| Offsetting transaction losses | (5.7) | (0.8) | (0.1) | (30.6) |
| Derivative instrument losses included in interest expense | (0.3) | (0.5) | (1.1) | (1.5) |
| Net derivative instrument gains (losses) | 5.4 | 0.3 | (1.0) | 29.1 |

In the second quarter of 2021, we entered into ten cross currency swaps to hedge a portion of our net investments in certain of our subsidiaries with euro functional currencies. As net investment hedges for accounting purposes, we elected to use the spot method to assess effectiveness for these derivatives that are designated as net investment hedges. Accordingly, changes in fair value attributable to changes in the undiscounted spot rates are recorded in the foreign currency translation adjustments component of accumulated other comprehensive income (loss) and will remain there until the hedged net investments are sold or substantially liquidated. We have elected to exclude the spot-forward difference from the assessment of hedge effectiveness and are amortizing this amount separately on a straight-line basis over the term of these cross currency swaps.

At September 30, 2021, the notional value of these cross currency swap contracts was $400 million with a remaining weighted average maturity of 6.8 years. At September 30, 2021, the fair value of these currency swaps was a net asset of $18.2 million, of which $6.0 million was included in prepaid expenses and other and $12.2 million was included in other assets on the condensed consolidated balance sheet.

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

*(In millions)*

|  | Three Months Ended September 30, 2021 | 2020 | Nine Months Ended September 30, 2021 | 2020 |
| --- | ---: | ---: | ---: | ---: |
| Net derivative instrument gains included in interest expense | $(1.5) | — | (2.6) | — |

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,% 2021 | 2020 | change | Nine Months Ended September 30,% 2021 | 2020 | change |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Transaction gains (losses) | $(6.5) | (6.4) | 2 | $(19.8) | (17.3) | 14 |
| Derivative instrument gains (losses) | 6.3 | (3.4) | fav | 14.5 | 0.5 | fav |
| Gains (losses) on sale of property and other assets | — | 0.6 | (100) | (1.4) | 0.4 | unfav |
| Impairment losses | (5.0) | (3.4) | 47 | (7.5) | (8.3) | (10) |
| Share in earnings of equity affiliates | 0.3 | 0.4 | (25) | 0.7 | 0.6 | 17 |
| Royalty income | 1.5 | 1.2 | 25 | 4.0 | 3.5 | 14 |
| Other gains (losses) | 1.6 | 1.2 | 33 | 4.3 | 2.2 | 95 |
| Other operating income (expense) | $(1.8) | (9.8) | (82) | $(5.2) | (18.4) | (72) |

Other operating income (expense) was a $1.8 million expense in the third quarter of 2021 versus a $9.8 million expense in the prior year period. The change from the prior year period was primarily due to lower net losses from foreign currency items in the current period.

Other operating income (expense) was a $5.2 million expense in the first nine months of 2021 versus an $18.4 million expense in the prior year period. The change from the prior year period was primarily due to lower net losses from foreign currency items in the current period.

### Nonoperating Income and Expense

### Interest expense

*(In millions)*

|  | Three Months Ended September 30,% 2021 | 2020 | change | Nine Months Ended September 30,% 2021 | 2020 | change |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Interest expense | $27.6 | 27.1 | 2 | $83.0 | 70.3 | 18 |

Interest expense was higher in the third quarter of 2021 compared to the prior year period primarily due to an increase in interest rates.

Interest expense was higher in the first nine months of 2021 compared to the prior year period primarily due to higher borrowing levels due to business acquisitions.

### Interest and other nonoperating income (expense)

*(In millions)*

|  | Three Months Ended September 30,% 2021 | 2020 | change | Nine Months Ended September 30,% 2021 | 2020 | change |
| --- | ---: | ---: | ---: | ---: | ---: | --- |
| Interest income | $3.3 | 2.3 | 43 | $8.0 | 5.0 | 60 |
| Gain (loss) on equity securities | 2.1 | (1.1) | fav | 16.3 | 2.3 | fav |
| Foreign currency transaction gains (losses) | 0.6 | — | fav | 0.5 | (0.1) | fav |
| Derivative instrument losses(a) | — | (0.5) | fav | — | (8.6) | fav |
| Retirement benefit cost other than service cost | (9.3) | (10.3) | (10) | (27.6) | (28.6) | (3) |
| G4S indemnification asset adjustment(b) | 2.2 | — | fav | 2.7 | — | fav |
| Acquisition-related gains (losses) (c) | 0.4 | — | fav | 0.4 | — | fav |
| Penalties and interest on non-income taxes(d) | — | — | — | (1.7) | — | unfav |
| Non-income taxes on intercompany billings(e) | (2.0) | (1.9) | 5 | (3.3) | (3.5) | (6) |
| Gain on disposition of subsidiary(f) | — | — | — | — | 4.7 | unfav |
| Interest on non-income tax credits (g) | 1.2 | — | fav | 1.2 | — | fav |
| Earn-out liability adjustment (h) | — | — | — | 1.3 | — | fav |
| Other | 0.8 | (1.3) | fav | 0.6 | (2.6) | fav |
| Interest and other nonoperating income (expense) | $(0.7) | (12.8) | (95) | $(1.6) | (31.4) | (95) |

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

(b) Adjustment to indemnification asset related to business operations acquired from G4S. This adjustment was recognized outside of the measurement period for the related business operations acquired from G4S.

(c) This amount includes a gain on settlement with G4S related to business operations acquired. The gain was partially offset by losses associated with the write off of indemnification assets related to income tax contingency reversals from businesses acquired in Brazil. These adjustments were recognized outside of the measurement periods for the related business operations acquired.

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

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

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

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

(h) Adjustment to the liability for contingent consideration pertaining to the 2019 Balance Innovations business acquisition.

### Income Taxes

| Continuing operations | Three Months Ended September 30, 2021 | 2020 | Nine Months Ended September 30, 2021 | 2020 |
| --- | ---: | ---: | ---: | ---: |
| Provision for income taxes (in millions) | $22.9 | 58.9 | $59.2 | 3.5 |
| Effective tax rate | 49.9% | 161.4% | 47.5% | (3,500.0%) |

#### 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,% 2021 | 2020 | change | Nine Months Ended September 30,% 2021 | 2020 | change |
| --- | ---: | ---: | --- | ---: | ---: | --- |
| Net income attributable to noncontrolling interests | $4.0 | 1.4 | unfav | $9.7 | 4.7 | unfav |

The change in net income attributable to noncontrolling interests in the three months and nine months ended September 30, 2021 from prior periods is primarily attributable to the G4S acquisitions that closed in the third quarter of 2020 and February 2021.

### 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 44–46, 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 operating performance as they result from events and circumstances that are not a part of our core business. Additionally, non-GAAP results are utilized as performance measures in certain management incentive compensation plans.

Non-GAAP results should not be considered as an alternative to revenue, income or earnings per share amounts determined in accordance with GAAP and should be read in conjunction with their GAAP counterparts. Non-GAAP financial measures may not be comparable to non-GAAP financial measures presented by other companies.

*(In millions, except for percentages)*

| Effective Income Tax Rate(a) | YTD '21 Pre-tax income | Income taxes | Effective tax rate | YTD '20 Pre-tax income | Income taxes | Effective tax rate |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| GAAP | $124.6 | 59.2 | 47.5% | $(0.1) | 3.5 | (3,500.0)% |
| Retirement plans(d) | 20.3 | 4.9 |  | 24.5 | 5.8 |  |
| Reorganization and Restructuring(b) | 35.7 | 9.2 |  | 50.2 | 11.6 |  |
| Acquisitions and dispositions(b) | 52.6 | 3.4 |  | 71.6 | 9.7 |  |
| Argentina highly inflationary impact(b) | 8.8 | (0.9) |  | 8.4 | (0.7) |  |
| Chile antitrust matter(b) | 9.5 | — |  | — | — |  |
| Internal loss(b) | (2.4) | (0.8) |  | 9.9 | 2.3 |  |
| Reporting compliance(b) | — | — |  | 0.4 | — |  |
| Income tax rate adjustment(c) | — | 7.7 |  | — | 20.3 |  |
| Non-GAAP | $249.1 | 82.7 | 33.2% | $164.9 | 52.5 | 31.8% |

Amounts may not add due to rounding.

(a) From continuing operations.

(b) See “Other Items Not Allocated To Segments” on pages 44–46 for details. We do not consider these items to be reflective of our operating performance as they result from events and circumstances that are not a part of our core business.

(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 33.2% for 2021 and was 31.8% for 2020.

(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 and curtailment gains related to these non-U.S. plans are also excluded from non-GAAP results.

### Non-GAAP Results Reconciled to GAAP

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

| Revenues: | Three Months Ended September 30, 2021 | 2020 | Nine Months Ended September 30, 2021 | 2020 |
| --- | ---: | ---: | ---: | ---: |
| GAAP | $1,075.5 | 970.5 | $3,102.0 | 2,669.3 |
| Non-GAAP | $1,075.5 | 970.5 | $3,102.0 | 2,669.3 |
| Operating profit: |  |  |  |  |
| GAAP | $74.2 | 76.4 | $209.2 | 101.6 |
| Reorganization and Restructuring(b) | 14.0 | 5.1 | 35.7 | 49.7 |
| Acquisitions and dispositions(b) | 16.6 | 16.2 | 55.8 | 66.2 |
| Argentina highly inflationary impact(b) | 2.3 | 3.2 | 8.8 | 8.4 |
| Chile antitrust matter(b) | 9.5 | — | 9.5 | — |
| Internal loss(b) | (0.7) | (0.9) | (2.4) | 9.9 |
| Reporting compliance(b) | — | (0.1) | — | 0.4 |
| Non-GAAP | $115.9 | 99.9 | $316.6 | 236.2 |
| Operating margin: |  |  |  |  |
| GAAP margin | 6.9% | 7.9% | 6.7% | 3.8% |
| Non-GAAP margin | 10.8% | 10.3% | 10.2% | 8.8% |
| Interest expense: |  |  |  |  |
| GAAP | $(27.6) | (27.1) | $(83.0) | (70.3) |
| Acquisitions and dispositions(b) | 0.3 | 0.5 | 1.1 | 1.5 |
| Non-GAAP | $(27.3) | (26.6) | $(81.9) | (68.8) |
| Interest and other nonoperating income (expense): |  |  |  |  |
| GAAP | $(0.7) | (12.8) | $(1.6) | (31.4) |
| Retirement plans(d) | 7.2 | 8.7 | 20.3 | 24.5 |
| Reorganization and Restructuring(b) | — | 0.5 | — | 0.5 |
| Acquisitions and dispositions(b) | (3.3) | 0.4 | (4.3) | 3.9 |
| Non-GAAP | $3.2 | (3.2) | $14.4 | (2.5) |
| Provision (benefit) for income taxes: |  |  |  |  |
| GAAP | $22.9 | 58.9 | $59.2 | 3.5 |
| Retirement plans(d) | 1.2 | 2.1 | 4.9 | 5.8 |
| Reorganization and Restructuring(b) | 3.9 | 1.3 | 9.2 | 11.6 |
| Acquisitions and dispositions(b) | 1.2 | 4.0 | 3.4 | 9.7 |
| Argentina highly inflationary impact(b) | (0.3) | (0.2) | (0.9) | (0.7) |
| Internal loss(b) | (0.1) | (0.2) | (0.8) | 2.3 |
| Income tax rate adjustment(c) | 1.7 | (43.6) | 7.7 | 20.3 |
| Non-GAAP | $30.5 | 22.3 | $82.7 | 52.5 |
| Net income (loss) attributable to noncontrolling interests: |  |  |  |  |
| GAAP | $4.0 | 1.4 | $9.7 | 4.7 |
| Reorganization and Restructuring(b) | — | 0.2 | 0.5 | 0.3 |
| Acquisitions and dispositions(b) | 0.2 | 0.2 | 0.6 | 0.3 |
| Income tax rate adjustment(c) | (0.3) | 1.0 | (0.6) | (1.0) |
| Non-GAAP | $3.9 | 2.8 | $10.2 | 4.3 |

Amounts may not add due to rounding.

See page 52 for footnote explanations.

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

| Income (loss) from continuing operations attributable to Brink's: | Three Months Ended September 30, 2021 | 2020 | Nine Months Ended September 30, 2021 | 2020 |
| --- | ---: | ---: | ---: | ---: |
| GAAP | $19.0 | (23.8) | $55.7 | (8.3) |
| Retirement plans(d) | 6.0 | 6.6 | 15.4 | 18.7 |
| Reorganization and Restructuring(b) | 10.1 | 4.1 | 26.0 | 38.3 |
| Acquisitions and dispositions(b) | 12.2 | 12.9 | 48.6 | 61.6 |
| Argentina highly inflationary impact(b) | 2.6 | 3.4 | 9.7 | 9.1 |
| Chile antitrust matter(b) | 9.5 | — | 9.5 | — |
| Internal loss(b) | (0.6) | (0.7) | (1.6) | 7.6 |
| Reporting compliance(b) | — | (0.1) | — | 0.4 |
| Income tax rate adjustment(c) | (1.4) | 42.6 | (7.1) | (19.3) |
| Non-GAAP | $57.4 | 45.0 | $156.2 | 108.1 |
| Diluted EPS: |  |  |  |  |
| GAAP | $0.38 | (0.47) | $1.11 | (0.17) |
| Retirement plans(d) | 0.12 | 0.13 | 0.31 | 0.37 |
| Reorganization and Restructuring(b) | 0.20 | 0.08 | 0.52 | 0.75 |
| Acquisitions and dispositions(b) | 0.24 | 0.26 | 0.96 | 1.21 |
| Argentina highly inflationary impact(b) | 0.05 | 0.07 | 0.19 | 0.18 |
| Chile antitrust matter(b) | 0.19 | — | 0.19 | — |
| Internal loss(b) | (0.01) | (0.01) | (0.03) | 0.15 |
| Reporting compliance(b) | — | — | — | 0.01 |
| Income tax rate adjustment(c) | (0.03) | 0.84 | (0.14) | (0.38) |
| Non-GAAP | $1.14 | 0.89 | $3.10 | 2.12 |

Amounts may not add due to rounding.

See page 52 for footnote explanations.

### LIQUIDITY AND CAPITAL RESOURCES

### Overview

Cash flows from operating activities increased by $186.2 million in the first nine months of 2021 as compared to the first nine months of 2020. Cash used for investing activities decreased by $123.2 million in the first nine months of 2021 compared to the first nine months of 2020. We financed our liquidity needs in the first nine months of 2021 with existing cash and cash flows from long-term debt.

### Operating Activities

*(In millions)*

| Cash flows from operating activities | Nine Months Ended September 30, 2021 | 2020 | $ change |
| --- | ---: | ---: | ---: |
| Operating activities - GAAP | $273.6 | 87.4 | 186.2 |
| (Increase) decrease in restricted cash held for customers | (12.7) | (37.3) | 24.6 |
| (Increase) decrease in certain customer obligations(a) | (10.0) | 0.7 | (10.7) |
| G4S intercompany payments | 2.6 | 71.5 | (68.9) |
| Operating activities - non-GAAP | $253.5 | 122.3 | 131.2 |

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

Non-GAAP cash flows from operating activities is a supplemental financial measure that is not required by, or presented in accordance with, GAAP. The purpose of this non-GAAP measure is to report financial information excluding cash flows from restricted cash held for customers, the impact of cash received and processed in certain of our secure cash management services operations and the impact of payments made to G4S for net intercompany receivables from the acquired subsidiaries. We believe this measure is helpful in assessing cash flows from operations, enables period-to-period comparability and is useful in predicting future operating cash flows. This non-GAAP measure should not be considered as an alternative to cash flows from operating activities determined in accordance with GAAP and should be read in conjunction with our consolidated statements of cash flows.

### GAAP

Cash flows from operating activities increased by $186.2 million in the first nine months of 2021 compared to the same period in 2020. The increase was attributed to higher operating profit, working capital changes, lower amounts paid for G4S intercompany payments, and changes in customer obligations related to certain of our secure cash management services operations (certain customer obligations increased by $10.0 million in 2021 compared to a decrease of $0.7 million in 2020), offset by restricted cash held for customers (restricted cash held for customers increased by $12.7 million in 2021 compared to an increase of $37.3 million in 2020) and higher amounts paid for interest (we had $78.7 million in cash payments for interest in 2021 as compared to $54.1 million in 2020).

### Non-GAAP

Non-GAAP cash flows from operating activities increased by $131.2 million in the first nine months of 2021 as compared to the same period in 2020. The increase was attributed to higher operating profit and working capital changes, partially offset by higher amounts paid for interest.

### Investing Activities

*(In millions)*

| Cash flows from investing activities | Nine Months Ended September 30, 2021 | 2020 | $ change |
| --- | ---: | ---: | ---: |
| Capital expenditures | $(113.7) | (79.1) | (34.6) |
| Acquisitions, net of cash acquired | (313.6) | (427.1) | 113.5 |
| Dispositions, net of cash disposed | — | (3.1) | 3.1 |
| Marketable securities: |  |  |  |
| Purchases | (2.7) | (1.5) | (1.2) |
| Sales | 34.8 | 1.7 | 33.1 |
| Proceeds from sale of property and equipment | 5.7 | 2.3 | 3.4 |
| Acquisition of customer contracts | (0.8) | (6.7) | 5.9 |
| Investing activities | $(390.3) | (513.5) | 123.2 |

Cash used by investing activities decreased by $123.2 million in the first nine months of 2021 versus the first nine months of 2020. The decrease was primarily due to decreased payments related to the G4S acquisition in 2021 compared to 2020, offset by an increase in payments related to the PAI acquisition.

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, 2021 | 2020 | $Full Year change | 2020 |
| --- | ---: | ---: | ---: | ---: |
| North America | $27.5 | 19.7 | 7.8 | 27.4 |
| Latin America | 27.3 | 23.7 | 3.6 | 35.1 |
| Europe | 36.7 | 20.2 | 16.5 | 33.4 |
| Rest of World | 18.1 | 11.2 | 6.9 | 16.6 |
| Corporate | 4.1 | 4.3 | (0.2) | 6.0 |
| Capital expenditures - GAAP and non-GAAP | $113.7 | 79.1 | 34.6 | 118.5 |
| Financing leases:(b) |  |  |  |  |
| North America | $34.9 | 20.7 | 14.2 | 24.1 |
| Latin America | 5.7 | 3.0 | 2.7 | 3.9 |
| Europe | 17.0 | 0.6 | 16.4 | 3.3 |
| Rest of World | 0.1 | — | 0.1 | 0.1 |
| Financing leases - GAAP and non-GAAP | $57.7 | 24.3 | 33.4 | 31.4 |
| Total: |  |  |  |  |
| North America | $62.4 | 40.4 | 22.0 | 51.5 |
| Latin America | 33.0 | 26.7 | 6.3 | 39.0 |
| Europe | 53.7 | 20.8 | 32.9 | 36.7 |
| Rest of World | 18.2 | 11.2 | 7.0 | 16.7 |
| Corporate | 4.1 | 4.3 | (0.2) | 6.0 |
| Total property and equipment acquired | $171.4 | 103.4 | 68.0 | 149.9 |
| **Depreciation and amortization(a)** |  |  |  |  |
| North America | $51.0 | 47.2 | 3.8 | 62.3 |
| Latin America | 34.2 | 32.1 | 2.1 | 44.0 |
| Europe | 30.7 | 23.4 | 7.3 | 32.2 |
| Rest of World | 17.5 | 13.6 | 3.9 | 20.0 |
| Corporate | 7.2 | 6.9 | 0.3 | 9.1 |
| Depreciation and amortization - non-GAAP | $140.6 | 123.2 | 17.4 | 167.6 |
| Argentina highly inflationary impact | 1.6 | 2.2 | (0.6) | 1.8 |
| Reorganization and Restructuring | 0.5 | 0.9 | (0.4) | 1.3 |
| Acquisitions and dispositions | 0.1 | 0.7 | (0.6) | 1.0 |
| Amortization of intangible assets | 35.3 | 25.2 | 10.1 | 35.1 |
| Depreciation and amortization - GAAP | $178.1 | 152.2 | 25.9 | 206.8 |

(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 1.2 for the 12 months ending September 30, 2021 compared to 1.0 for the 12 months ending September 30, 2020.

Capital expenditures in the first nine months of 2021 were primarily for information technology, cash devices, armored vehicles and machinery and equipment.

### Financing Activities

*(In millions)*

| Cash flows from financing activities Borrowings and repayments: | Nine Months Ended September 30, 2021 | 2020 | $ change |
| --- | ---: | ---: | ---: |
| Short-term borrowings | $(5.9) | (3.3) | (2.6) |
| Cash supply chain customer debt | — | (10.5) | 10.5 |
| Long-term revolving credit facilities, net | 405.8 | (51.3) | 457.1 |
| Other long-term debt, net | (84.4) | 924.4 | (1,008.8) |
| Borrowings (repayments) | 315.5 | 859.3 | (543.8) |
| Debt financing costs | (0.4) | (13.1) | 12.7 |
| Repurchase shares of Brink's common stock | (50.0) | (50.0) | — |
| Dividends to: |  |  |  |
| Shareholders of Brink’s | (27.3) | (22.7) | (4.6) |
| Noncontrolling interests in subsidiaries | (5.0) | (8.9) | 3.9 |
| Acquisition-related financing activities: |  |  |  |
| Settlement of acquisition related contingencies | 6.3 | — | 6.3 |
| Payment of acquisition-related obligation | (3.9) | (6.8) | 2.9 |
| Proceeds from exercise of stock options | 2.3 | — | 2.3 |
| Tax withholdings associated with share-based compensation | (5.5) | (10.3) | 4.8 |
| Other | 2.6 | 1.7 | 0.9 |
| Financing activities | $234.6 | 749.2 | (514.6) |

### Debt borrowings and repayments

Cash flows from financing activities decreased by $514.6 million in the first nine months of 2021 compared to the first nine months of 2020 as net borrowings decreased compared to the prior nine month period.

### Dividends

We paid dividends to Brink’s shareholders of $0.55 per share or $27.3 million in the first nine months of 2021 compared to $0.45 per share or $22.7 million in the first nine months of 2020. Future dividends are dependent on our earnings, financial condition, shareholders’ equity levels, 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, 2021 | December 31, 2020 |
| --- | ---: | ---: |
| Short-term borrowings | $8.1 | 14.2 |
| Long-term debt | 2,837.5 | 2,471.5 |
| Total Debt | 2,845.6 | 2,485.7 |
| Less: |  |  |
| Cash and cash equivalents | 700.8 | 620.9 |
| Amounts held by Cash Management Services operations(a) | (28.9) | (19.1) |
| Cash and cash equivalents available for general corporate purposes | 671.9 | 601.8 |
| Net Debt(b) | $2,173.7 | 1,883.9 |

(a) 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.

(b) Included within Net Debt is net cash from our Argentina operations of $50 million at September 30, 2021 and $25 million at December 31, 2020 (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 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, 2021, and December 31, 2020.

Net Debt increased by $290 million primarily to fund business acquisitions and other working capital needs.

### Liquidity Needs

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

Our liquidity needs are typically financed by cash from operations, short-term debt and the available borrowing capacity under our Revolving Credit Facility (our debt facilities are described in more detail in Note 9 to the condensed consolidated financial statements, including certain limitations and considerations related to the cash and borrowing capacity). As of September 30, 2021, $618 million was available under the Revolving Credit Facility. Based on our current cash on hand, cash generated from operations, and amounts available under our credit facilities, we believe that we will be able to meet our liquidity needs for the next 12 months.

*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, 2020, 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. 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 2021, 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 524,315 shares of our common stock for an average repurchase price of $95.36 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 shareholder's 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 2021 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 2021, the ASR purchase period was subsequently terminated early and we received and retired an additional 131,384 shares under the ASR, resulting in an overall repurchase price of $76.25 per share.

At September 30, 2021, $150 million remained available under the $250 million repurchase program.

### U.S. Retirement Liabilities

### Assumptions for U.S. Retirement Obligations

#### Funding Relief

The American Rescue Plan Act ("ARPA") signed into law in March, 2021, provides funding relief for single-employer defined benefit pension plans. The ARPA provisions result in significant reduction in, and deferral of, minimum funding requirements. Because of the significant impact the ARPA provisions have on our primary U.S. pension plan's estimated future funding requirements, we have updated the assumptions used to calculate the estimated future payments from Brink's and the estimated future expenses in the tables below. Based on these revised assumptions, no cash payments to the plan are needed in the foreseeable future.

Except for the primary U.S. pension plan's estimated future payments from Brink's and estimated future expenses, all other 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, 2020. 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, 2021.

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 2020 | Actual Nine Months 2021 | Projected 4th Quarter 2021 | 2022 | 2023 | 2024 | 2025 |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Beginning funded status | $(118.3) | (151.1) | (131.3) | (126.1) | (103.9) | (81.6) | (57.3) |
| Net periodic pension credit(a) | 19.8 | 19.8 | 6.7 | 27.8 | 28.3 | 30.2 | 31.2 |
| Payment from Brink’s | — | — | — | — | — | — | — |
| Benefit plan experience gain (loss) | (52.6) | — | (1.5) | (5.6) | (6.0) | (5.9) | (4.3) |
| Ending funded status | $(151.1) | (131.3) | (126.1) | (103.9) | (81.6) | (57.3) | (30.4) |
| **UMWA plans** |  |  |  |  |  |  |  |
| Beginning funded status | $(246.7) | (272.1) | (268.6) | (269.5) | (267.9) | (267.4) | (267.9) |
| Net periodic postretirement cost(a) | 0.3 | 1.9 | 0.7 | 1.6 | 0.5 | (0.5) | (1.7) |
| Benefit plan experience gain (loss) | (27.4) | — | — | — | — | — | — |
| Other | 1.7 | 1.6 | (1.6) | — | — | — | — |
| Ending funded status | $(272.1) | (268.6) | (269.5) | (267.9) | (267.4) | (267.9) | (269.6) |
| **Black lung plans** |  |  |  |  |  |  |  |
| Beginning funded status | $(99.2) | (105.0) | (101.4) | (97.3) | (90.0) | (83.1) | (76.7) |
| Net periodic postretirement cost(a) | (3.1) | (1.7) | (0.6) | (2.1) | (1.8) | (1.7) | (1.6) |
| Payment from Brink’s | 7.3 | 5.3 | 4.7 | 9.4 | 8.7 | 8.1 | 7.5 |
| Benefit plan experience gain (loss) | (10.0) | — | — | — | — | — | — |
| Ending funded status | $(105.0) | (101.4) | (97.3) | (90.0) | (83.1) | (76.7) | (70.8) |

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

### 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 2020 or the first nine months of 2021. There are approximately 11,000 beneficiaries in the plan.

### 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 2,900 beneficiaries in the UMWA plans as of December 31, 2020. The Company does not need to make additional contributions to these plans until 2029 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 700 black lung beneficiaries as of December 31, 2020.

### Summary of Expenses Related to All U.S. Retirement Liabilities through 2025

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

*(In millions)*

|  | Actual 2020 | Actual Nine Months 2021 | Projected 4th Quarter 2021 | FY2021 | 2022 | 2023 | 2024 | 2025 |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Primary U.S. pension plan | $8.7 | 5.6 | 1.8 | 7.4 | 1.2 | (2.0) | (8.6) | (12.2) |
| UMWA plans | 11.5 | 7.9 | 2.4 | 10.3 | 12.1 | 12.1 | 12.1 | 12.3 |
| Black lung plans | 11.1 | 8.1 | 2.8 | 10.9 | 9.6 | 9.0 | 8.3 | 7.7 |
| Total | $31.3 | 21.6 | 7.0 | 28.6 | 22.9 | 19.1 | 11.8 | 7.8 |

### Summary of Payments from Brink’s to U.S. Plans and Payments from U.S. Plans to Participants through 2025

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 2020 | Actual Nine Months 2021 | Projected 4th Quarter 2021 | FY2021 | 2022 | 2023 | 2024 | 2025 |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Primary U.S. pension plan | $— | — | — | — | — | — | — | — |
| Black lung plans | 7.3 | 5.3 | 4.7 | 10.0 | 9.4 | 8.7 | 8.1 | 7.5 |
| Total | $7.3 | 5.3 | 4.7 | 10.0 | 9.4 | 8.7 | 8.1 | 7.5 |
| **Payments from U.S. Plans to participants** |  |  |  |  |  |  |  |  |
| Primary U.S. pension plan | $43.3 | 35.0 | 12.1 | 47.1 | 47.2 | 47.2 | 47.2 | 47.1 |
| UMWA plans | 25.7 | 17.2 | 12.5 | 29.7 | 29.1 | 28.8 | 28.1 | 27.5 |
| Black lung plans | 7.3 | 5.3 | 4.7 | 10.0 | 9.4 | 8.7 | 8.1 | 7.5 |
| Total | $76.3 | 57.5 | 29.3 | 86.8 | 85.7 | 84.7 | 83.4 | 82.1 |

### Contingent Matters

See Note 14 to the condensed consolidated financial statements for information about contingent matters at September 30, 2021.

## Market risk

As filed, 788 characters.

We serve customers in more than 100 countries, including 53 countries where we operate subsidiaries. These operations expose us to a variety of market risks, including the effects of changes in interest rates and foreign currency exchange rates. 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, 2021.

## Controls and procedures

As filed, 7,134 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, 2021 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; our ability to consummate acquisitions and integrate their operations successfully; collection of receivables related to the internal loss in the U.S. global services operations; support for our Venezuela business; changes in allowance calculation methods; the impact of cross currency swaps; 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 and the impact of the ARPA on our primary U.S. pension plan’s estimated future funding requirements; expected liability for and future contributions to the UMWA plans; liability for black lung obligations; the effect of pending legal matters including the Chile antitrust matter; the impacts of the operating environment in Argentina; and expected future payments under contractual obligations. Forward-looking information in this document 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 our financial results as a result of jurisdictions' higher-than-expected inflation and those determined to be highly inflationary, and restrictive government actions, including nationalization;
- labor issues, including labor shortages, negotiations with organized labor and work stoppages;
- pandemics (including the ongoing COVID-19 pandemic and related impacts and restrictions on the actions of businesses and consumers, including suppliers and customers), acts of terrorism, strikes or other extraordinary events that negatively affect global or regional cash commerce;
- anticipated cash needs in light of our current liquidity position and the impact of COVID-19 on our liquidity;
- the strength of the U.S. dollar relative to foreign currencies and foreign currency exchange rates;
- our ability to identify, evaluate and complete acquisitions and other strategic transactions and to successfully integrate acquired companies;
- costs related to dispositions and product or market exits;
- our ability to obtain appropriate insurance coverage, positions taken by insurers relative to claims and the financial condition of insurers;
- safety and security performance and loss experience;
- employee, environmental and other liabilities in connection with former coal operations, including black lung claims;
- the impact of the 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, 2020 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.

Filed Oct 29, 2021.
Source: SEC EDGAR, the filing index for accession 0000078890-21-000239. Last ingested by Listed: Nov 4, 2026, 07:32 ET. No prices; not investment advice.