# Brinks Co: Form 10-K for the period ended Dec 31, 2021 - Company: [Brinks Co](/companies/bco.md) (CIK 78890) - Form: 10-K - Filed: 2022-02-28 - Accepted by EDGAR: Feb 25, 2022, 21:33 ET - Period: 2021-12-31 - Accession: 0000078890-22-000077 - Inline XBRL: yes - Main document: https://www.sec.gov/Archives/edgar/data/78890/000007889022000077/bco-20211231.htm - All documents and exhibits: https://www.sec.gov/Archives/edgar/data/78890/000007889022000077/ ## Figures reported in this filing Standardized XBRL line items for the period ended 2021-12-31. | Line item | Period | Value | XBRL concept | | --- | --- | ---: | --- | | Revenue | 12 months, 2021-01-01 to 2021-12-31 | $4.20bn | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax | | Cost of revenue | 12 months, 2021-01-01 to 2021-12-31 | $3.24bn | us-gaap:CostOfRevenue | | Operating income | 12 months, 2021-01-01 to 2021-12-31 | $354.7m | us-gaap:OperatingIncomeLoss | | Interest expense | 12 months, 2021-01-01 to 2021-12-31 | $112.2m | us-gaap:InterestExpense | | Income tax | 12 months, 2021-01-01 to 2021-12-31 | $120.3m | us-gaap:IncomeTaxExpenseBenefit | | Net income | 12 months, 2021-01-01 to 2021-12-31 | $105.2m | us-gaap:NetIncomeLoss | | Diluted EPS | 12 months, 2021-01-01 to 2021-12-31 | $2.10 | us-gaap:EarningsPerShareDiluted | | Basic EPS | 12 months, 2021-01-01 to 2021-12-31 | $2.12 | us-gaap:EarningsPerShareBasic | | Diluted shares (weighted) | 12 months, 2021-01-01 to 2021-12-31 | 50,100,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding | | Operating cash flow | 12 months, 2021-01-01 to 2021-12-31 | $478.0m | us-gaap:NetCashProvidedByUsedInOperatingActivities | | Capital expenditure | 12 months, 2021-01-01 to 2021-12-31 | $167.9m | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment | | Dividends paid | 12 months, 2021-01-01 to 2021-12-31 | $37.2m | us-gaap:PaymentsOfDividendsCommonStock | | Share repurchases | 12 months, 2021-01-01 to 2021-12-31 | $200.0m | us-gaap:PaymentsForRepurchaseOfCommonStock | | Cash and equivalents | at 2021-12-31 | $710.3m | us-gaap:CashAndCashEquivalentsAtCarryingValue | | Current assets | at 2021-12-31 | $2.00bn | us-gaap:AssetsCurrent | | Total assets | at 2021-12-31 | $5.57bn | us-gaap:Assets | | Current liabilities | at 2021-12-31 | $1.43bn | us-gaap:LiabilitiesCurrent | | Total liabilities | at 2021-12-31 | $5.31bn | us-gaap:Liabilities | | Long-term debt | at 2021-12-31 | $2.84bn | us-gaap:LongTermDebtNoncurrent | | Current portion of debt | at 2021-12-31 | $115.2m | us-gaap:LongTermDebtCurrent | | Short-term borrowings | at 2021-12-31 | $9.8m | us-gaap:ShortTermBorrowings | | Shareholders' equity | at 2021-12-31 | $123.0m | us-gaap:StockholdersEquity | ## Business As filed, 32,547 characters. ### Overview The Brink’s Company is the global leader in total cash management, route-based logistics and payment solutions including cash-in-transit, ATM services, cash management services, including vault outsourcing, money processing, and intelligent safe services, and international transportation of valuables. Our customers include financial institutions, retailers, government agencies (including central banks), mints, jewelers and other commercial operations around the world. Our global network serves customers in more than 100 countries. We have controlling ownership interests in companies in 53 countries and agency relationships with companies in additional countries. We employ approximately 74,500 people and our operations include approximately 1,300 facilities and 16,300 vehicles. We manage our business in the following four segments: - 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, - Europe – total operations in European countries that primarily provide services outside of the BGS line of business, and - Rest of World – operations in the Middle East, Africa and Asia. This segment also includes total operations in European countries that primarily provide BGS services and BGS activity in Latin American countries where we do not have an ownership interest. Brink’s was founded in 1859 and The Brink’s Company was first incorporated in 1930 under the laws of the State of Delaware (at that time, the Company was named The Pittston Company). It succeeded to the business of a Virginia corporation in 1986 and was renamed The Brink’s Company in 2003. Our headquarters are located in Richmond, Virginia. The Brink’s Company, along with its subsidiaries, is referred to as “we,” “our,”, “us,” “Brink’s,” or “the Company” throughout this Annual Report on Form 10-K for the period ended December 31, 2021 ("this Form 10-K"). ### Strategy We have three long-term strategic objectives: Accelerate Profitable Growth, Deliver Operational Excellence, and Introduce Digital Solutions. We recently modified these long-term strategic objectives to reflect the evolution of our business. We will Accelerate Profitable Growth by continuing to drive organic revenue growth, expanding high-value services, growing account share with existing and new customers, pursuing accretive acquisitions, and enhancing customer experience. We will Deliver Operational Excellence by exceeding customer expectations, leading our industry in safety and security, and continuing to improve productivity in fleet, money processing and sales with the Lean Management Methodology and new approach to managing strategy deployment. Operational Excellence applies to every part of our business. We will Introduce Digital Solutions by strengthening and leveraging our IT capabilities and operating systems to offer new digital solutions that are attractive and valuable to a much larger number of retailers. These solutions are more flexible and cost effective compared to traditional CIT services. To execute our objectives, we manage the business with multi-year plans. Our current strategic plan covers 2022 – 2024 and is designed to build on our strong performance through 2019, which focused on the fundamentals to drive success. Our plan outlines how we will accelerate revenue growth and margin improvement, and position Brink’s to win across the evolving payments ecosystem, by continuing to deploy two strategies that we refer to as “Strategy 1.0” and “Strategy 2.0.” Strategy 1.0 is about a focus on organic growth and operational excellence across our business, including our core cash logistics business. Important aspects continue to include cost discipline and driving key initiatives wider and deeper into the organization. This provides a strong foundation for future growth and an excellent platform for introducing our digital solutions. Strategy 2.0 has two primary components: digital solutions and ATM managed services. They both capitalize on technology. - Our digital solution for cash payments, also known as Brink’s Complete, enables large and small retail customers to process cash payments in a way that is as easy as card and mobile payments. It positions Brink’s as a provider of payment solutions – an important evolution of our strategy. - Our ATM managed services include cash logistics, device management, transaction processing, and cash forecasting and analytics. We operate ATMs for retailers and independent ATM deployers and help financial institutions manage their ATM networks so they can focus on their core customer offerings. Our strategy is supported by: - Our proven ability to drive growth and profitability, - Cash usage and demand for our high-value logistics services remains strong throughout the world, - We are well-positioned to capitalize on the changing payments landscape, and - We have a winning culture and great people, our most valuable assets. ### Services We design customized services to meet the cash and valuables supply chain needs of our customers. We enter into contracts with our customers to establish pricing and other terms. Cash-in-transit and ATM contracts usually cover an initial term of at least one year and in many cases one to three years, and generally remain in effect thereafter until canceled by either party. Contracts for cash management services are typically longer. Following are descriptions of our service offerings: #### Core Services (50% of total revenues in 2021) Cash-in-transit ("CIT") and basic ATM services are core services we provide to customers throughout the world. We charge customers per service performed or based on the value of goods transported. Revenues are affected by the level of economic activity in various markets as well as the volume of business for specific customers. Core services generated approximately $2.1 billion of revenues in 2021 ($1.9 billion in 2020 and $2.0 billion in 2019). *Cash-in-transit services –* Serving customers since 1859, our success in CIT is driven by a combination of rigorous security practices, high-quality customer service, risk management and logistics expertise. Cash-in-transit services generally include the secure transportation of: - cash between businesses and financial institutions, such as banks and credit unions - cash, securities and other valuables between commercial banks, central banks and investment banking and brokerage firms - new currency, coins, bullion and precious metals for central banks and other customers *Basic ATM services –* We manage approximately 131,500 ATMs worldwide. We provide customers who own and operate ATMs a variety of service options. Basic ATM management services include cash replenishment, treasury management and first and second line maintenance. #### High-Value Services (45% of total revenues in 2021) Our Core Services, combined with our brand and global infrastructure, provide a broad platform from which we offer additional high-value services, which generated approximately $1.9 billion of revenues in 2021 ($1.6 billion in 2020 and $1.6 billion in 2019). *Global services -* Brink’s Global Services ("BGS") is the leading global provider of secure transport of highly-valued commodities including diamonds, jewelry, precious metals, securities, banknotes, currency, high-tech devices, electronics and pharmaceuticals. Our specialized diamond and jewelry operations have offices in the world’s major diamond and jewelry centers. Serving customers in more than 100 countries, BGS provides secure transportation services including pick-up, packaging, customs clearance, secure vault storage and inventory management. BGS uses a combination of armored vehicles and secure air and sea transportation. *Cash management services* - We offer a variety of cash management services, depending on customers’ unique needs. These include: - money processing (e.g., counting, sorting, wrapping, checking condition of bills, etc.) and other cash management services - digital cash payment services that provide advance credit for cash deposited in Brink's-provided tech-enabled safe and other services related to deploying and servicing “intelligent” safes and safe control devices, including our patented CompuSafe® service - check imaging services Other cash management services include cashier balancing, counterfeit detection, account consolidation and electronic reporting. Retail and bank customers use Brink’s to count and reconcile coins and currency, prepare bank deposit information and replenish coins and currency in specific denominations. Brink's offers a fully integrated approach to managing customers' supply chain of cash. These services include logistical support from point-of-sale through transport, vaulting, bank deposit and related credit reporting. We also offer a variety of technology applications including online cash tracking, cash inventory management, check imaging for real-time deposit processing, and a variety of other web-based tools that enable banks and other customers to reduce costs while improving service to their customers. We believe the quality and scope of our money processing and information systems differentiate our cash management services from competitive offerings. Brink’s now offers a digital cash management solution in a number of countries, which enables business customers to access their cash without visiting a bank. Brink’s provides this solution through its Brink’s Complete service offering and its BLUbeemTM by Brink’s brand. In the U.S., these solutions are offered through Brink’s Capital LLC. Customers register their cash using a mobile application, and deposit that cash into a discreet and secure in-store Brink’s device. Brink’s digitally confirms the deposit and provides the customer with advance credit to the customer’s bank account for deposit by the next day, picking up the cash at a later time that is convenient for both parties. Through partnerships with digital payment providers, the BLUbeem digital cash management solution will be offered alongside these payment providers’ offerings, providing an integrated solution for cash, card and digital payment methods. *Brink’s CompuSafe® service –*We manage approximately 47,400 installed Compusafe devices worldwide. Brink’s CompuSafe service provides an integrated, closed-loop system for minimizing theft and managing cash. We market CompuSafe services to a variety of cash-intensive customers including convenience stores, gas stations, restaurants, retail chains and entertainment venues. In a majority of instances, once the specialized safe is installed, the customer’s employees deposit currency into the safe’s cassettes, which can only be removed by Brink’s personnel or in some instances, securely by customer employees. Upon removal, the cassettes are securely transported to a vault for processing where contents are verified and transferred for deposit. Our CompuSafe service features currency-recognition and counterfeit-detection technology, multi-language touch screens and in some instances, an electronic interface between the point-of-sale, back-office systems and external banks. Our electronic reporting interface with external banks enables customers to receive same-day credit on their cash balances, even if the cash remains on the customer’s premises. *Vaulting services.* Vaulting services combine cash-in-transit services, cash management services, vaulting and electronic reporting technologies to help banks expand into new markets while minimizing investment in vaults and branch facilities. In addition to providing secure storage, we process deposits, provide check imaging and reconciliation services, perform currency inventory management, process ATM replenishment orders and electronically transmit banking transactions. *ATM managed services –* We provide comprehensive services for ATM management including cash replenishment, replenishment forecasting, cash optimization, ATM remote monitoring, service call dispatching, transaction processing, installation services, and first and second line maintenance. These services are primarily offered in the U.S. and Europe. For certain customers, we take ownership of ATM devices as part of our managed services offering. *Payment services –* We provide convenient payment services, including bill payment and collection services, and Brink’s Money™ prepaid cards and corporate debit cards. We offer Brink’s Money™ general purpose reloadable prepaid cards and corporate debit cards to consumers, employers and small and medium size businesses in the U.S. Our general purpose reloadable cards are sold to consumers through our direct-to-consumer marketing efforts, and our payroll cards are sold to employers who use them to pay employees electronically, while our business expense cards are sold to small businesses that set controls on employee spending. Brink’s Money™ cards can be used at stores, restaurants, online retailers, and at ATMs worldwide. These products are targeted toward the millions of unbanked and under-banked Americans and small businesses looking for alternative financial products. #### Other Security Services (5% of total revenues in 2021) *Guarding –* We protect airports, offices, warehouses, stores, and public venues with or without electronic surveillance, access control, fire prevention and trained patrolling personnel. Other security services generated approximately $0.2 billion of revenues in 2021 ($0.2 billion in 2020 and $0.1 billion in 2019). We offer security and guarding services in Europe, Rest of World and Latin America. A portion of this business involves long-term contracts related primarily to security services at airports and embassies. Generally, guarding contracts are for a one-year period, and the majority of contracts are extended. *Commercial security systems –* We provide commercial security system services in designated markets in Europe. Our security system design and installation services include alarms, motion detectors, closed-circuit televisions, digital video recorders, and access control systems, including card and biometric readers, electronic locks, and turnstiles. We may also provide monitoring services after systems have been installed. ### Industry and Competition Brink’s competes with large multinational, regional and smaller companies throughout the world. Our largest multinational competitors are Loomis AB (Sweden); Prosegur, Compania de Seguridad, S.A. (Spain); and Garda World Security Corporation (Canada). We believe the primary factors in attracting and retaining customers are security expertise, service quality, and price. Our competitive advantages include: - brand name recognition - reputation for a high level of service and security - risk management and logistics expertise - global network and customer base - proven operational excellence, and - high-quality insurance coverage and financial strength Although we face competitive pricing pressure in many markets, we resist competing on price alone. We believe our high levels of service, security expertise and value-added solutions differentiate us from competitors. ### Seasonality Our revenues and earnings are typically higher in the second half of the year, particularly in the fourth quarter, due to generally increased activity associated with the holiday season. ### Insurance Coverage The availability of high-quality and reliable insurance coverage is an important factor in our ability to attract and retain customers and manage the risks inherent in our business. We purchase insurance coverage for losses in excess of what we consider to be prudent levels of self-insurance. Our insurance policies cover losses from most causes, with the exception of war, nuclear risk and certain other exclusions typical in such policies. Insurance for security is provided by different groups of underwriters at negotiated rates and terms. Premiums fluctuate depending on market conditions. The security loss experience of Brink’s and, to a limited extent, other armored carriers affects our premium rates. ### Service Mark and Patents BRINKS is a registered service mark in the U.S. and certain foreign countries. Brink's name and marks are of material significance to our business. We own patents for safes and related devices and services, iDeposit and Daily Credit processes, including our integrated CompuSafe® service, which expire between 2022 and 2039. These patents provide us with important advantages. However, we are not dependent on the existence of these patents. We have licensed the Brink’s name to a limited number of companies, including a company that provides residential smart home and home security services and a distributor of security products (padlocks, door hardware, etc.) to customers through major retail chains. ### Government Regulation Aspects of our business are, and anticipated products and services may be, subject to regulation by various federal, state and foreign governmental agencies. Various federal, state and local agencies in the U.S. and other countries in which we operate regulate certain current aspects of our business, including commercial lending, safety of operations, equipment and financial responsibility. Movement of valuable shipments are generally subject to import/export regulations. We are also subject to certain firearm regulations in connection with our armored logistics operations. We must comply with licensing, permits and registration requirements imposed by various federal, state and local governmental agencies in the U.S. and other countries in which we operate. Our permits and licensing requirements vary by jurisdictions based on the scope of business conducted and applicable laws and regulations. In addition, Brink’s Capital LLC has federally registered as a Money Services Business in anticipation of offering money transmission and payment services to customers. ### Human Capital Management #### Culture and Values At Brink’s, the following values underpin our company culture: Safety, Integrity, Engagement, Continuous Improvement, Customer Focus and Diversity and Inclusion. Our values guide the way we work and are the cornerstone of our winning culture. They ensure that we work safely to protect ourselves and others, consider the customer first in all we do, display the highest standards of ethics, engage and empower employees, continually find new ways to improve the way we work, and foster a diverse and inclusive workplace. #### Workforce Demographics We have a culturally and geographically diverse workforce that serves customers in more than 100 countries. Based upon business demand, we have a need for a flexible workforce. In certain geographic regions, statutory employee protections may limit our ability to increase or decrease our workforce without significant expense. At December 31, 2021, our company had approximately 72,200 full-time and 2,300 part-time employees. Approximately 86% or 64,000 of our employees are outside the United States. Of our approximately 10,500 employees in the United States, approximately 400 were classified as part-time employees. Certain employees in the United States provide corporate services for the various regions in which we operate. The persistence of the COVID-19 pandemic has impacted the stability of our workforce. In the U.S., we have experienced labor shortages and inflationary wage pressures affecting near-term performance. Our inability to offer competitive compensation and benefits may impact our ability to attract and retain employees in certain markets. During 2021, we continued to take steps to develop a talent pool deep enough to absorb employee departures. Specifically, we enhanced workforce planning, updated job descriptions, identified critical role high potential employees and enhanced our brand attractiveness by establishing Brink’s as a company which is relevant, digital, inclusive and growing. We use employee opinion surveys to take the pulse of employees in the U.S., Brazil, Canada and Mexico. Globally, we are sharing our vision of a winning culture with our leadership through country communication plans, and using global leadership training to reinforce Brink’s Values and critical success factors throughout the organization. In 2022, we expect to launch a project that will focus on the employee experience and is designed to reduce employee turnover. Strategic acquisitions continue to be a part of our broader strategic plan. We previously announced the acquisition of the majority of the international cash operations of U.K.-based G4S plc ("G4S") which was substantially completed as of December 31, 2020. During 2021, we closed on additional G4S acquisitions in Kuwait, Macau and Luxembourg and worked to integrate approximately 2,600 full-time employees into our operations. We either continued existing contractual and statutory obligations covering these employees, or added these employees to our local compensation and benefit programs. We continue to assimilate employees in all G4S locations into our business operations. As of April 1, 2021 we had completed the acquisition of PAI Midco, Inc. and its subsidiaries (“PAI”), including approximately 200 employees across three primary U.S. locations and another twelve field locations. Until December 31, 2021, PAI employees remained under existing benefit plan programs. On January 1, 2022, PAI employees were added to our U.S. compensation and benefit programs. All management employees who came to us from these acquisitions have successfully completed an orientation program to ensure that they are aligned with the Company’s compensation, performance management, talent management and compliance policies. #### Employee Safety and Wellness Employee safety is of paramount importance as we strive to bring every employee home safe every night. In 2021, Company priorities continued to focus on mitigating the impacts of the COVID-19 pandemic by, among other things, prioritizing the health and safety of our employees, their families and our customers, while maintaining our essential services to our customers. This included investing in additional personal protective equipment, enhanced cleaning protocols, and work protocols aimed at minimizing unnecessary social contact both in our workplaces and while serving our customers. We have aligned our vaccine approach with government guidance and provided incentives in various countries to encourage employee immunization. #### Diversity and Inclusion We are committed to providing a diverse and inclusive workplace and culture. Accordingly, we continue to identify opportunities to execute on our commitment to Diversity and Inclusion (“D&I”) to our stakeholders. Sustainability, including environmental, social and governance matters, are overseen by our Board. In February 2021, we welcomed our first D&I leader who began by building programs in the U.S. and will be expanding his work globally in 2022. He developed a global D&I training program retaining PDT Global, a worldwide inclusion and diversity training consultant. The training, which will be rolled out in 2022 to management-level employees, is intended to be continuous and include both digital and live training. Additionally, D&I initiatives are being infused into talent management through unconscious bias training, diverse interviewers and the use of diverse candidate pipelines. In 2021, we established a U.S. Diversity and Inclusion Council (“D&I Council”) made up of the Company’s senior leaders in various functions, and the executive sponsors and chairs of our employee resource groups (“ERGs”). The D&I Council is being piloted in the U.S. to support the development of our D&I initiatives. We expect to expand the D&I Council globally in 2022. In 2021, the organization undertook an effort to assemble demographic data on workforce diversity, including gender, race and ethnicity. That demographic data is currently being analyzed to identify opportunities and goals, and how best to measure progress against those goals. In 2022, we expect to develop global gender diversity goals for leadership and enhance our succession planning efforts to emphasize diversity. Our ERGs promote acceptance and inclusion and provide resources to raise awareness. In 2021, we expanded the scope and programs of our ERGs. In the U.S., we now have groups for women, Black, Asian and Pacific Islander, Latin X and military veteran employees. In Brazil we have groups for women, Black and LGBTQ+ employees and for people with disabilities. In Canada and Mexico we have groups for women. In the first half of 2022, we expect to add two new groups for women and LGBTQ+ employees in Europe. Our ERGs are supported with an executive sponsor and chair who also sit on the D&I Council to liaise with leadership and employees. In early 2021, we signed the UN Global Compact, affirming our commitment to meet fundamental responsibilities in the areas of human rights, labor and the environment. More information on our environmental, social and governance priorities can be found on our Sustainability page on our website. #### Labor Relations North America – At December 31, 2021 we employed approximately 12,100 employees. We have no union employees in the U.S. At December 31, 2021, Brink’s was a party to nine collective bargaining agreements in Canada with various local unions covering approximately 1,200 employees. The agreements have various expiration dates from 2022 to 2025. Outside of North America, approximately 51% of our employees are represented by trade union organizations and/or covered by collective bargaining agreements. Latin America – At December 31, 2021, we employed approximately 30,200 employees, 71% of whom are covered by various collective bargaining agreements with expiration dates from 2022 to 2025. Europe – At December 31, 2021, we employed approximately 15,400 employees, 51% of whom are covered by various collective bargaining agreements with expiration dates from 2022 to 2023. Rest of World – At December 31, 2021, we employed approximately 16,800 employees, 17% of whom are covered by various collective bargaining agreements with expiration dates from 2022 to 2023. We believe our employee relations are satisfactory. ### Business Divestitures Below is a summary of the significant businesses we exited in the last three years. These divestitures did not meet the criteria for classification as discontinued operations. Operating results for these businesses are included in continuing operations for all periods presented, as applicable. We continue to operate our global services business in each of these countries. - In the first quarter of 2020, we sold 100% of our ownership interest in a French security services company. - In the second quarter of 2019, we exited a top-up prepaid mobile phone business in Brazil. ### Business Acquisitions On April 1, 2021, we acquired 100% of the capital stock of PAI Midco, Inc., which directly or indirectly owns 100% of the ownership interests in four additional entities (collectively, "PAI"), for approximately $216 million. PAI was the largest privately-held provider of ATM services in the U.S. and generated approximately $94 million in revenues in 2020. On February 26, 2020, we announced that we agreed to acquire the majority of the cash management operations of G4S, with closings planned in multiple phases in 2020. In March 2020, we acquired 100% of the capital stock of G4S International Logistics Group Limited, a company that directly or indirectly owns controlling interests in multiple businesses providing secure international transportation of valuables. In the second quarter of 2020, we acquired cash management operations from G4S located in the Netherlands, Belgium, Ireland, Hong Kong, Cyprus, Romania, the Czech Republic, Malaysia, the Dominican Republic and the Philippines. In the third quarter of 2020, we acquired operations in Indonesia, Estonia, Latvia and Lithuania. In the first quarter of 2021, we acquired operations in Macau, Luxembourg and Kuwait, which completed the remaining planned G4S transactions. For the majority of the acquisitions in 2020 and the first quarter of 2021, we acquired 100% of the ownership interests. In Malaysia, the Dominican Republic, the Philippines, Indonesia and Kuwait, we acquired ownership interests of less than 100%. We believe that we meet the accounting criteria for consolidating these subsidiaries. In the aggregate, the purchase consideration for the G4S acquisitions as of December 31, 2021 is $826 million. The G4S businesses acquired generated approximately $800 million in revenues in 2019. In January 2019, we acquired 100% of the capital stock of Rodoban Transportes Aereos e Terrestres Ltda., Rodoban Servicos e Sistemas de Seguranca Ltda., and Rodoban Seguranca e Transporte de Valores Ltda. (together "Rodoban") for $134 million. Rodoban provides CIT, money processing and ATM services primarily in southeastern Brazil. Also in 2019, we acquired three business operations in three countries for an aggregate purchase price of approximately $49 million. Below is a brief description of each of these additional three business acquisitions completed in 2019: - In June 2019, we acquired 100% of the capital stock of Balance Innovations, LLC and its wholly owned subsidiary, Balance Innovations Services, Inc. (together "BI"). BI develops and licenses software that provides real-time data to optimize operations for general retail and convenience store industries throughout the United States and Canada. - In June 2019, we acquired 100% of the capital stock of Comercio Eletronico Facil Ltda. ("COMEF"), a Brazil-based company. COMEF offers bank correspondent services and bill payment processing to consumers. - In September 2019, we acquired 100% of the capital stock of Transportadora de Valores del Sur Limitada and its wholly owned subsidiary, TVS Pagos, Recaudos y Procesos S.A.S. (together "TVS"). TVS provides CIT and money processing services in Colombia. See Note 7 to the consolidated financial statements for more detailed information on the acquired assets and liabilities from these acquisitions. ### Reorganization and Restructuring Management periodically implements restructuring actions in targeted sections of our business. As a result of these actions, we recognized net costs of $28.8 million in 2019, primarily severance costs and charges related to the modification of share-based compensation awards. We recognized $66.6 million net costs in operating profit and $0.6 million costs in interest and other nonoperating income (expense) in 2020, primarily severance costs. We recognized $43.6 million net costs in 2021, primarily severance costs. Substantially all of the costs from 2021 restructuring plans result from management initiatives to address the COVID-19 pandemic. For the current restructuring actions, we expect to incur additional costs between $1 million and $3 million in future periods. See Note 24 to the consolidated financial statements for more detailed information on reorganization and restructuring activities. ### Available Information and Corporate Governance Documents The following items are available free of charge on our website (www.brinks.com) as soon as reasonably possible after filing or furnishing them with the Securities and Exchange Commission (the “SEC”): - Annual reports on Form 10-K - Quarterly reports on Form 10-Q - Current reports on Form 8-K, and amendments to those reports The following documents are also available free of charge on our website: - Corporate Governance Guidelines - Code of Ethics - The charters of the following committees of our Board of Directors (the “Board”): Audit and Ethics, Compensation and Human Capital, Corporate Governance and Nominating, and Finance and Business Development Printed versions of these items will be mailed free of charge to shareholders upon request. Such requests can be made by contacting the Corporate Secretary at 1801 Bayberry Court, P. O. Box 18100, Richmond, Virginia 23226-8100. Additional information about the Company may be found elsewhere in this report and in the Company's other public filings, which are available without charge through the SEC's website at http://www.sec.gov. ## Risk factors As filed, 39,815 characters. ### Business Risks ### Our strategy may not be successful. Our strategy has three pillars: accelerate profitable growth, deliver operational excellence and introduce digital solutions. We may not be successful in growing revenue in high-margin lines of business, increasing our market share with existing customers or winning new business with smaller financial institutions and the retail market. We also may not be successful in strengthening and leveraging our IT capabilities to introduce digital solutions. If we are unable to achieve our strategic objectives and anticipated operating profit improvements, our results of operations and cash flows may be adversely affected. ### We operate in highly competitive industries. We compete in industries that are subject to significant competition and pricing pressures in most markets. In addition, our business model requires significant fixed costs associated with offering many of our services including costs to operate a fleet of armored vehicles and a network of secure branches. Because we believe we have competitive advantages such as brand name recognition and a reputation for a high level of service and security, we resist competing on price alone. However, continued pricing pressure from competitors, failure to achieve pricing based on the competitive advantages identified above and/or inability to offset inflationary cost increases through price increases could result in lost volume of business and have an adverse effect on our business, financial condition, results of operations and cash flows. In addition, given the highly competitive nature of our industries, it is important to develop new solutions and product and service offerings to help retain and expand our customer base. Failure to develop, sell and execute new solutions and offerings in a timely and efficient manner could also negatively affect our ability to retain our existing customer base or pricing structure and have an adverse effect on our business, financial condition, results of operations and cash flows. ### Decreased use of cash could have a negative impact on our business. While cash remains one of the most popular form of consumer payment in the U.S. and globally, the growth of payment options other than cash could reduce the need for services related to cash, thereby affecting our financial results. We are developing new services that offer current and prospective customers with opportunities to streamline their cash processing costs, making cash more competitive with other forms of payment. There is a risk that these initiatives may not offset the risks associated with our traditional cash-based business and that our business, financial condition, results of operations and cash flows could be negatively impacted. ***We may not be successful in pursuing strategic investments or acquisitions or realize the expected benefits of those transactions because of integration difficulties and other challenges.*** While we may identify opportunities for acquisitions and investments to support our growth strategy, our due diligence examinations and positions that we may take with respect to appropriate valuations for acquisitions and divestitures and other transaction terms and conditions may hinder our ability to successfully complete business transactions to achieve our strategic goals. We compete with others within and outside our industry for suitable acquisition candidates. This competition may increase the price for acquisitions and reduce the number of acquisition candidates available to us. As a result, our ability to acquire businesses in the future, and to acquire such businesses on favorable terms, may be limited. Our ability to realize the anticipated benefits from acquisitions will depend, in part, on successfully integrating each business with our company as well as improving operating performance and profitability through our management efforts and capital investments. The risks to a successful integration and improvement of operating performance and profitability include, among others, failure to implement our business plan, unanticipated issues in integrating operations with ours, unanticipated changes in laws and regulations, labor unrest resulting from union operations, regulatory, environmental and permitting issues, unfavorable customer reactions, the effect on our internal controls and compliance with the regulatory requirements under the Sarbanes-Oxley Act of 2002, and difficulties in fully identifying and evaluating potential liabilities, risks and operating issues. In order to finance such acquisitions, we may need to obtain additional funds either through public or private financings, including bank and other secured and unsecured borrowings and the issuance of debt or equity securities. There can be no assurance that such financings would be available to us on reasonable terms or that any future issuances of securities in connection with acquisitions will not be dilutive to our shareholders. The occurrence of any of these events may adversely affect our expected benefits of any acquisitions and may have a material adverse effect on our financial condition, results of operations or cash flows. ***The ongoing COVID-19 pandemic has adversely affected our business, financial condition and results of operations, the extent of which depends on many factors that are uncertain or not yet identifiable.*** The ongoing COVID-19 pandemic continues to create volatility, uncertainty and economic disruption for Brink’s, our customers and vendors, and the markets in which we do business. Since 2020, our operational performance and economic activity in the countries in which we operate have been significantly impacted by pandemic-related health conditions and the associated government, customer and consumer actions. These actions have led to reduced customer volumes, changes to our operating procedures and increases to our costs to provide services. 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. While the immediate impacts of the COVID-19 pandemic have been assessed, the long-term magnitude and duration of the disruption remains uncertain. We expect these factors will continue to impact our financial condition and our results of operations for a duration that is currently unknown. The factors that have affected us and may continue to affect us could include, among other things, (i) the duration of the COVID-19 pandemic and the types and magnitude of adverse impacts on regional economies, individually, and the global economy, as a whole; (ii) the emergence and spread of new variants of the virus; (iii) the health and welfare of our employees and that of our customers, vendors and suppliers; (iv) business and government actions in response to the pandemic, including moratoriums by governments and regulators on rule making and regulatory and legal proceedings, limitations on employee actions by regulators and unions, and stay at home, social distancing measures and travel bans; (v) the impact on the development and implementation of strategic initiatives and the integration of acquired businesses, including those acquired from G4S; (vi) the response of our customers or prospective customers to the pandemic, including suspensions or terminations of existing contracts; (vii) the varying demand for the types of services we offer in the countries in which we offer them; (viii) our ability to continue to effectively market our services; (ix) our ability to resume services as needed; (x) the type, size, profitability and geographic locations of our operations; (xi) the ability of our customers to pay, to make timely payments or to pay in full; (xii) labor shortages; and (xii) the development and availability of effective vaccines or treatment, the speed at which vaccines are administered, the efficacy of vaccines against the virus and evolving strains or variants of the virus. Any of these events, and others we have not yet identified, could cause or contribute to the risks and uncertainties facing the Company and our customers and could materially adversely affect our business or portions thereof, and our financial condition, results of operations and/or stock price. ***The ongoing COVID-19 pandemic could adversely impact the health and welfare of our employees, including our executive officers, which could have a material adverse effect on our ability to serve our customers and our results of operations.*** Our customer-facing employees are necessary to conduct many of our services. If the health and welfare of customer-facing employees or employees providing critical corporate functions (including our executive officers) deteriorates, the number of employees so afflicted becomes significant, or an employee with skills and knowledge that cannot be replicated in our organization is impaired due to the COVID-19 pandemic, our ability to win business and provide services, as well as employee morale, customer relationships, business prospects, and results of operations of one or more of our segments, or the Company as a whole, could be materially adversely affected. ***We have certain environmental and other exposures related to our former coal operations.*** We may incur future environmental and other liabilities in connection with our former coal operations, which could materially and adversely affect our financial condition, results of operations and cash flows. ***We may be exposed to certain regulatory and financial risks related to climate change.*** Growing concerns about climate change may result in the imposition of additional environmental regulations to which we are subject. Some form of federal regulation may be forthcoming with respect to greenhouse gas emissions (including carbon dioxide) and/or "cap and trade" legislation. The outcome of this legislation may result in new regulation, additional charges to fund energy efficiency activities or other regulatory actions. Compliance with these actions could result in the creation of additional costs to us, including, among other things, increased fuel prices or additional taxes or emission allowances. We may not be able to recover the cost of compliance with new or more stringent environmental laws and regulations from our customers, which could adversely affect our business. Furthermore, the potential effects of climate change and related regulation on our customers are highly uncertain and may adversely affect our operations. ### Operational Risks ### We have significant operations outside the United States. We currently serve customers in more than 100 countries, including 53 countries where we operate subsidiaries. Seventy percent (70%) of our revenues in 2021 came from operations outside the U.S. We expect revenues outside the U.S. to continue to represent a significant portion of total revenues. Business operations outside the U.S. are subject to political, economic and other risks inherent in operating in foreign countries, such as: - the difficulty of enforcing agreements, collecting receivables and protecting assets through foreign legal systems; - trade protection measures and import or export licensing requirements; - difficulty in staffing and managing widespread operations; - required compliance with a variety of foreign laws and regulations; - enforcement of our global compliance program in foreign countries with a variety of laws, cultures and customs; - varying permitting and licensing requirements in different jurisdictions; - foreign ownership laws; - changes in the general political and economic conditions in the countries where we operate, particularly in emerging markets; - threat of nationalization and expropriation; - higher costs and risks of doing business in a number of foreign jurisdictions; - laws or other requirements and restrictions associated with organized labor; - limitations on the repatriation of earnings; - fluctuations in equity, revenues and profits due to changes in foreign currency exchange rates, including measures taken by governments to devalue official currency exchange rates; - inflation levels exceeding that of the U.S; and - inability to collect for services provided to government entities. We are exposed to certain risks when we operate in countries that have high levels of inflation, including the risk that: - the rate of price increases for services will not keep pace with the cost of inflation; - adverse economic conditions may discourage business growth which could affect demand for our services; - the devaluation of the currency may exceed the rate of inflation and reported U.S. dollar revenues and profits may decline; and - these countries may be deemed “highly inflationary” for U.S. generally accepted accounting principles (“GAAP”) purposes. We manage these risks by monitoring current and anticipated political and economic developments, monitoring adherence to our global compliance program and adjusting operations as appropriate. Changes in the political or economic environments of the countries in which we operate could have a material adverse effect on our business, financial condition, results of operations and cash flows. ### We operate in regulated industries. Our U.S. operations are subject to regulation by the U.S. Department of Transportation with respect to safety of operations and equipment and financial responsibility. Intrastate operations in the U.S. are subject to regulation by state regulatory authorities and interprovincial operations in Canada are subject to regulation by Canadian and provincial regulatory authorities. Our other international operations are regulated to varying degrees by the countries in which we operate. Many countries have permit requirements for security services and prohibit foreign companies from providing different types of security services. Additionally, Brink’s Capital LLC, a subsidiary of the Company, is federally registered as a “Money Services Business” with the U.S. Department of Treasury’s Financial Crimes Enforcement Network and may in the future be registered and/or licensed as a “money transmitter” or similar designation with various other state or local jurisdictions in the U.S. related to delivering future products and services. Federal registrations subject us to, among other things, having an effective anti-money laundering (AML) compliance program, record-keeping requirements and reporting requirements , and examination by state and federal regulatory agencies, and these and our other regulatory obligations may significantly increase our costs or impact our operations. Changes in laws or regulations could require a change in the way we operate, which could increase costs or otherwise disrupt operations. In addition, failure to comply with any applicable laws or regulations could result in substantial fines or revocation of our operating permits and licenses. If laws and regulations were to change or we failed to comply with any applicable laws or regulations, our business, financial condition, results of operations and cash flows could be materially and adversely affected. ***We may be unable to achieve, or may be delayed in achieving, our initiatives to drive efficiency and control costs.*** We have launched a number of initiatives to improve efficiencies and reduce operating costs. Although we have achieved annual cost savings associated with these initiatives, we may be unable to sustain the cost savings that we have achieved. In addition, if we are unable to achieve, or have any unexpected delays in achieving additional cost savings, our results of operations and cash flows may be adversely affected. Even if we meet our goals as a result of these initiatives, we may not receive the expected financial benefits of these initiatives. ***Labor shortages and increased labor costs could have a material adverse effect on our operations.*** Labor costs in the United States are rising, and our industry is experiencing a shortage of workers. Labor is our largest operating cost. If we face labor shortages and increased labor costs as a result of increased competition for employees, higher employee turnover rates, or other employee benefits costs, our operating expenses could increase and our growth and results of operations could be adversely impacted. We may be unable to increase prices in order to pass future increased labor costs onto our customers, in which case our margins would be negatively affected. Additionally, if product prices are increased by us to cover increased labor costs, the higher prices could adversely affect sales volumes. ### Financial Risks ***We have significant retirement obligations. Poor investment performance of retirement plan holdings and/or lower interest rates used to discount the obligations could unfavorably affect our liquidity and results of operations.*** We have substantial pension and retiree medical obligations, a portion of which have been funded. The amount of these obligations is significantly affected by factors that are not in our control, including interest rates used to determine the present value of future payment streams, investment returns, medical inflation rates, participation rates and changes in laws and regulations. The funded status of the primary U.S. pension plan was approximately 92% as of December 31, 2021. Based on our actuarial assumptions at the end of 2021, no cash payments to the plan are needed in the foreseeable future. A change in assumptions could result in funding obligations that could adversely affect our liquidity and our ability to use our resources to make acquisitions and to otherwise grow our business. We have $524 million of actuarial losses recorded in accumulated other comprehensive income (loss) at the end of 2021. These losses relate to changes in actuarial assumptions that have increased the net liability for benefit plans. These losses have not been recognized in earnings. These losses will be recognized in earnings in future periods to the extent they are not offset by future actuarial gains. Our projections of future cash requirements and expenses for these plans could be adversely affected if our retirement plans have additional actuarial losses. ***We have significant deferred tax assets in the United States that may not be realized.*** Deferred tax assets are future tax deductions that result primarily from the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial statement and income tax purposes. At December 31, 2021, we had $176 million of U.S. deferred tax assets, net of valuation allowances, primarily related to our retirement plan obligations. These future tax deductions may not be realized if tax rules change in the future, or if forecasted U.S. operational results or any other U.S. projected future taxable income is insufficient. Consequently, not realizing our U.S. deferred tax assets may significantly and materially affect our financial condition, results of operations and cash flows. ### Our effective income tax rate could change. We operate subsidiaries in 53 countries, all of which have different income tax laws and associated income tax rates. Our effective income tax rate can be significantly affected by changes in the mix of pretax earnings by country and the related income tax rates in those countries. In addition, our effective income tax rate is significantly affected by the ability to realize deferred tax assets, including those associated with net operating losses. Changes in income tax laws, income apportionment, or estimates of the ability to realize deferred tax assets, could significantly affect our effective income tax rate, financial position and results of operations. We are subject to the regular examination of our income tax returns by various tax authorities. We regularly assess the likelihood of adverse outcomes resulting from these examinations to determine the adequacy of our provision for income taxes. There can be no assurance that the outcomes from these examinations will not have a material adverse effect on our business. ### It is possible that we will incur restructuring charges in the future. It is possible that we will take restructuring actions, including in connection with acquisitions, in one or more of our markets in the future to reduce expenses. These actions could result in significant restructuring charges at these subsidiaries, including recognizing impairment charges to write down assets and recording accruals for employee severance. These charges, if required, could significantly and materially affect results of operations and cash flows. ***Our inability to access capital or significant increases in our cost of capital could adversely affect our business.*** Our ability to obtain adequate and cost-effective financing depends on our credit quality as well as the liquidity of financial markets. A negative change in our ratings outlook or any downgrade in our credit ratings by the rating agencies could adversely affect our cost and/or access to sources of liquidity and capital. Disruptions in the capital and credit markets could adversely affect our ability to access short-term and long-term capital. Our access to funds under current credit facilities is dependent on the ability of the participating banks to meet their funding commitments. Those banks may not be able to meet their funding commitments if they experience shortages of capital and liquidity. Longer disruptions in the capital and credit markets as a result of uncertainty, changing or increased regulation, reduced alternatives, or failures of significant financial institutions could adversely affect our access to capital needed for our business. ### We are subject to covenants for our credit facilities and our unsecured notes. Our senior secured credit facility, senior unsecured notes, letter of credit facilities and bank guarantee facilities contain various financial and other covenants. The financial covenants include a limit on the ratio of net debt to earnings before interest, taxes, depreciation and amortization and a limit on the ratio of earnings before interest, taxes, depreciation and amortization to interest expense. Other covenants, among other things, limit our ability to provide liens, restrict fundamental changes, limit transactions with affiliates and unrestricted subsidiaries, restrict changes to our fiscal year and to organization documents, limit asset dispositions, limit the use of proceeds from asset sales, limit sale and leaseback transactions, limit investments, limit the ability to incur debt, restrict certain payments to shareholders, limit negative pledges and limit the ability to change the nature of our business. Although we believe none of these covenants are presently restrictive to operations, the ability to meet financial and other covenants can be affected by changes in our results of operations or financial condition. We cannot provide assurance that we will meet these covenants. A breach of these covenants could result in a default under existing credit facilities. Upon the occurrence of an event of default under any of our credit facilities, the lenders could cause amounts outstanding to be immediately payable and terminate all commitments to extend further credit. The occurrence of these events would have a significant effect on our liquidity and cash flows. ***Our earnings and cash flow could be materially affected by increased losses of customer valuables.*** We purchase insurance coverage for losses of customer valuables for amounts in excess of what we consider prudent deductibles and/or retentions. Insurance is provided by different groups of underwriters at negotiated rates and terms. Coverage is available to us in major insurance markets, although premiums charged are subject to fluctuations depending on market conditions. Our loss experience and that of other companies in our industry affects premium rates. We are not insured for losses below our coverage limits and recognize expense up to these limits for actual losses. Our insurance policies cover losses from most causes, with the exception of war, nuclear risk and various other exclusions typical for such policies. The availability of high-quality and reliable insurance coverage is an important factor in obtaining and retaining customers and managing the risks of our business. If our losses increase, or if we are unable to obtain adequate insurance coverage at reasonable rates, our financial condition, results of operations and cash flows could be materially and adversely affected. ### Information Technology Risks ***Risks associated with information technology can expose Brink’s to business disruptions, cybersecurity breaches and regulatory violations.*** We rely on our information technology ("IT") infrastructure. If there were to be significant problems with our infrastructure, such as IT datacenter or system failure, or failure to develop new technology platforms to support new initiatives and product and service offerings, it could halt or delay our ability to service our customers, hinder our ability to conduct and expand our business and require significant remediation costs. Our data security risks will increase as we expand services and employ emerging technologies, mobile applications, third-party service providers and cloud-based services. Hacking, phishing attacks, ransomware, insider threats, physical breaches or other actions may cause confidential information belonging to Brink’s, its employees or customers to be misused. If any of these risks were to materialize in a system, application or data center that houses sensitive and confidential data, including, but not limited to, personally identifiable information and business sensitive information, it could have a material adverse effect on our business, financial condition, results of operations and cash flows. Additionally, if these risks were materialize, we may incur significant challenges and costs related to coordination with third-party service providers in order to resolve related issues. If our third-party providers do not respond in a timely manner to our needs, disaster recovery, business continuity and crisis management activities could be negatively impacted. We have programs in place that are intended to detect, contain and respond to cybersecurity breaches and that provide employee awareness training regarding cyber risks; however, due to evolving and advanced sophisticated attack vectors, cyber attacks remain increasingly difficult to detect and we may not be able to successfully defend against them. Any significant cybersecurity incident, involving Brink's or by third-party service providers, could damage our reputation, expose us to the risks of litigation and liability, disrupt our business or otherwise have a material adverse effect on our business, financial condition, results of operations and cash flows. As a global company we must adhere to applicable laws and regulations in numerous regions regarding data privacy, data protection, and data security. Privacy and data protection laws vary between countries and are subject to interpretation, which may create inconsistent or conflicting requirements. The European Union’s General Data Protection Regulation (“GDPR”) greatly increases the jurisdictional reach of European Union law and became effective in May 2018. GDPR and other privacy and data protection laws impose requirements related to the handling of personal data, mandates public disclosure of certain data breaches, and provides for substantial penalties for non-compliance. Our efforts to comply with GDPR and other privacy and data protection laws may impose significant costs that are likely to increase over time, and we could incur substantial penalties or be subject to litigation related to violation of existing or future data privacy laws, which could have a material adverse effect on our business, financial condition, results of operations and cash flows. ### Risks Related to the Company’s Securities ***We cannot guarantee that we will repurchase our common stock pursuant to our share repurchase program or that our share repurchase program will enhance long-term shareholder value. Share repurchases could also increase the volatility of the price of our common stock and could diminish our cash reserves.*** On October 27, 2021, the Board authorized a new share repurchase program. Under the new program, we are authorized to repurchase shares of common stock for an aggregate purchase price not to exceed $250 million, excluding fees, commissions and other ancillary expenses. The new authorization replaced the prior $250 million program, which was fully utilized. Although the Board has authorized the share repurchase program, the share repurchase program does not obligate the Company to repurchase any specific dollar amount or to acquire any specific number of shares. The timing and amount of repurchases, if any, will depend upon several factors, including market and business conditions, the trading price of the Company’s common stock and the nature of other investment opportunities. A potential tax on share repurchases that would make share repurchases more expensive, may also impact our decision to engage in share repurchases. Also, our ability to repurchase shares of stock may be limited by restrictive covenants in our debt agreements and indentures in our Senior Notes. The repurchase program may be limited, suspended or discontinued at any time without prior notice. In addition, repurchases of our common stock pursuant to our share repurchase program could affect our stock price and increase its volatility. The existence of a share repurchase program could cause our stock price to be higher than it would be in the absence of such a program and could potentially reduce the market liquidity for our stock. Additionally, our share repurchase program could diminish our cash reserves, which may impact our ability to finance future growth and to pursue possible future strategic opportunities and acquisitions. There can be no assurance that any share repurchases will enhance stockholder value because the market price of our common stock may decline below the levels at which we repurchased shares of stock. Although our share repurchase program is intended to enhance long-term stockholder value, there is no assurance that it will do so and short-term stock price fluctuations could reduce the program’s effectiveness. ### General Risks ***The Company could be negatively affected as a result of the actions of activist or hostile stockholders.*** Shareholder activism, which could take many forms and arise in a variety of situations, has been increasing among publicly traded companies. Shareholder activism, including potential proxy contests, requires significant time and attention by management and the Board, potentially hindering the Company’s ability to execute its strategic plan and negatively affecting the trading value of our common stock. Additionally, shareholder activism could give rise to perceived uncertainties as to the Company’s future direction, adversely affect its relationships with key executives, customers and other business partners, or make it more difficult to attract and retain qualified personnel. Also, the Company has been, and may in the future be, required to incur significant legal fees and other expenses related to activist shareholder matters. Any of these impacts could materially and adversely affect the Company and operating results. ***Negative publicity to our name or brand could lead to a loss of revenues or profitability.*** We are in the payments and security business and our success and longevity are based to a large extent on our reputation for trust and integrity. Our reputation or brand, particularly the trust placed in us by our customers, could be negatively impacted in the event of perceived or actual breaches in our ability to conduct our business ethically, securely and responsibly. In addition, we have licensing arrangements that permit certain entities to use Brink’s name and/or other intellectual property in connection with their businesses. If any of these entities experienced an actual or perceived breach in its ability to conduct its business ethically, securely or responsibly, it could have a negative effect on our name and/or brand. Any damage to our brand could have a material adverse effect on our business, financial condition, results of operations and cash flows. ***Our business success depends on retaining our leadership team and attracting and retaining qualified personnel.*** Our future success depends, in part, on the continuing services and contributions of our leadership team to execute on our strategic plan and to identify and pursue new opportunities. Our future success also depends, in part, on our continued ability to attract and retain highly skilled and qualified personnel. Any turnover in senior management or inability to attract and retain qualified personnel could have a negative effect on our results of operations. Turnover in key leadership positions within the Company may adversely affect our ability to manage the company efficiently and effectively, could be disruptive and distracting to management and may lead to additional departures of current personnel, any of which could have a material adverse effect on our business and results of operations. ### Forward-Looking Statements This document contains both historical and forward-looking information. Words such as “anticipates,” “assumes,” “estimates,” “expects,” “projects,” “predicts,” “intends,” “plans,” “potential,” “believes,” "could," “may,” “should” and similar expressions may identify forward-looking information. Forward-looking information in this document includes, but is not limited to, statements regarding future performance of The Brink’s Company and its global operations, including: 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 business; support for our Venezuela business; changes in allowance calculation methods; the impact of cross currency swaps; our effective tax rate; realization of deferred tax assets; the ability to meet liquidity needs; expenses and payouts for the U.S. retirement plans and the funded status of the primary U.S. pension plan and the impact of the American Rescue Plan Act 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 (including political conflict or unrest), regulatory issues (including the imposition of international sanctions, including by the U.S. government), currency restrictions and devaluations, restrictions on and cost of repatriating earnings and capital, impact on the Company's financial results as a result of jurisdictions' higher-than-expected inflation and those determined to be highly inflationary, and restrictive government actions, including nationalization; - labor issues, including labor shortages, negotiations with organized labor and work stoppages; - pandemics (including the ongoing COVID-19 pandemic and related impacts and restrictions on the actions of businesses and consumers, including suppliers and customers), acts of terrorism, strikes or other extraordinary events that negatively affect global or regional cash commerce; - anticipated cash needs in light of our current liquidity position and the impact of COVID-19 on our liquidity; - the strength of the U.S. dollar relative to foreign currencies and foreign currency exchange rates; - our ability to identify, evaluate and complete acquisitions and other strategic transactions and to successfully integrate acquired companies; - costs related to dispositions and product or market exits; - our ability to obtain appropriate insurance coverage, positions taken by insurers relative to claims and the financial condition of insurers; - safety and security performance and loss experience; - employee, environmental and other liabilities in connection with former coal operations, including black lung claims; - the impact of the American Rescue Plan Act and Patient Protection and Affordable Care Act on legacy liabilities and ongoing operations; - funding requirements, accounting treatment, and investment performance of our pension plans, the VEBA and other employee benefits; - changes to estimated liabilities and assets in actuarial assumptions; - the nature of hedging relationships and counterparty risk; - access to the capital and credit markets; - our ability to realize deferred tax assets; - the impact of foreign tax credit regulations; - the 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 this Form 10-K and in our other public filings with the SEC. The information included in this document is representative only as of the date of this document, and The Brink’s Company undertakes no obligation to update any information contained in this document. ## Properties As filed, 1,166 characters. We have property and equipment in locations throughout the world. Branch facilities generally have office space to support operations, a vault to securely process and store valuables and a garage to house armored vehicles and serve as a vehicle terminal. Many branches have additional space to repair and maintain vehicles. We own or lease armored vehicles, panel trucks and other vehicles that are primarily service vehicles. Our armored vehicles are of bullet-resistant construction and are specially designed and equipped to provide security for the crew and cargo. The following table discloses leased and owned facilities and vehicles for Brink’s most significant operations as of December 31, 2021. | Segments | Facilities Leased | Owned | Total | Vehicles Leased | Owned | Total | | --- | ---: | ---: | ---: | ---: | ---: | ---: | | North America | 245 | 39 | 284 | 2,668 | 1,193 | 3,861 | | Latin America | 330 | 92 | 422 | 710 | 4,723 | 5,433 | | Europe | 151 | 34 | 185 | 2,272 | 1,955 | 4,227 | | Rest of World | 368 | 12 | 380 | 749 | 2,045 | 2,794 | | Corporate Items | 8 | — | 8 | — | — | — | | Total | 1,102 | 177 | 1,279 | 6,399 | 9,916 | 16,315 | ## Legal proceedings As filed, 212 characters. For a discussion of legal proceedings, see Note 23 to the consolidated financial statements, “Other Commitments and Contingencies,” in Part II, Item 8 of this Form 10-K, which is incorporated herein by reference. ## Management's discussion and analysis As filed, 125,748 characters. ### MANAGEMENT’S DISCUSSION AND ANALYSIS OF ### FINANCIAL CONDITION AND RESULTS OF OPERATIONS ### AS OF DECEMBER 31, 2021 AND 2020 ### AND FOR EACH OF THE YEARS IN THE THREE-YEAR PERIOD ENDED DECEMBER 31, 2021 | | Page | | --- | ---: | | **OPERATIONS** | 23 | | **RESULTS OF OPERATIONS** | | | Analysis of Results | 24 | | Income and Expense Not Allocated to Segments | 28 | | Other Operating Income and Expense | 31 | | Nonoperating Income and Expense | 32 | | Income Taxes | 33 | | Noncontrolling Interests | 34 | | Non-GAAP Results Reconciled to GAAP | 35 | | Foreign Operations | 38 | | **LIQUIDITY AND CAPITAL RESOURCES** | | | Overview | 40 | | Operating Activities | 40 | | Investing Activities | 41 | | Financing Activities | 43 | | Effect of Exchange Rate Changes on Cash and Cash Equivalents | 43 | | Capitalization | 44 | | Off Balance Sheet Arrangements | 46 | | U.S Retirement Liabilities | 47 | | Contingent Matters | 48 | | **APPLICATION OF CRITICAL ACCOUNTING POLICIES** | | | Deferred Tax Asset Valuation Allowance | 50 | | Business Acquisitions | 51 | | Goodwill, Other Intangible Assets and Property and Equipment Valuations | 52 | | Retirement and Postemployment Benefit Obligations | 53 | | Foreign Currency Translation | 57 | The discussion of operating results and financial condition comparing 2020 versus 2019 can be found in Item 7. Management's Discussion and Analysis of Financial Conditions and Results of Operations of our Annual Report on Form 10-K for the year ended December 31, 2020 ("2020 10-K"), starting on page 21. ### OPERATIONS The Brink’s Company offers secure transportation and route-based logistics management services for cash and valuables throughout the world. These services include: - Cash-in-transit services – armored vehicle transportation of valuables - Basic ATM services – replenishing and maintaining customers’ automated teller machines; providing network infrastructure services - Global services – secure international transportation of valuables - Cash management services - Money processing (e.g., counting, sorting, wrapping, checking condition of bills, etc.) and other cash management services - Digital cash payment services that provide advance credit for cash deposited in Brink’s-provided tech-enabled safe devices and other services related to deploying and servicing “intelligent” safes and safe control devices (including our patented CompuSafe® service) - Check imaging services - Vaulting services – combines cash-in-transit services, cash management services, vaulting and electronic reporting technologies for banks - ATM managed services – services for ATM management, including cash replenishment, replenishment forecasting, cash optimization, ATM remote monitoring, service call dispatching, transaction processing, installation services, and first and second line maintenance. - Payment services – bill payment and collection services on behalf of utility companies and other billers at any of our Brink’s or Brink’s – operated payment locations in Latin America and Brink’s Money™ general purpose reloadable prepaid cards and corporate debit 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 manage our business in the following four segments: - 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, - Europe – total operations in European countries that primarily provide services outside of the BGS line of business, and - Rest of World – operations in the Middle East, Africa and Asia. This segment also includes total operations in European countries that primarily provide BGS services and BGS activity in Latin American countries where we do not have an ownership interest. We believe that Brink’s has significant competitive advantages including: - brand name recognition - reputation for a high level of service and security - risk management and logistics expertise - global network and customer base - proven operational excellence, and - high-quality insurance coverage and financial strength We focus our time and resources on service quality, protecting and strengthening our brand, and addressing our risks. Our marketing and sales efforts are enhanced by the “Brink’s” brand, so we seek to protect and build its value. Because our services focus on handling, transporting, protecting and managing valuables, we strive to understand and manage risk. In order to earn an adequate return on capital, we focus on the effective and efficient use of resources in addition to our pricing discipline. We attempt to maximize the amount of business that flows through our branches, vehicles and systems in order to obtain the lowest costs possible without compromising safety, security or service. Operating results may vary from period to period. Because revenues are generated from charges per service performed or based on the value of goods transported, they can be affected by both the level of economic activity and the volume of business for specific customers. We also periodically incur costs to change the scale of our operations when volumes increase or decrease. Incremental costs incurred usually relate to increasing or decreasing the number of employees and increasing or decreasing branches or administrative facilities. In addition, security costs can vary depending on performance, the cost of insurance coverage, and changes in crime rates (i.e., attacks and robberies). Brink’s revenues and related operating profit are generally higher in the second half of the year, particularly in the fourth quarter, due to generally increased economic activity associated with the holiday season. ### RESULTS OF OPERATIONS ### Analysis of Results ### Consolidated Results ***GAAP and Non-GAAP Financial Measures*** We provide an analysis of our operations below on both a generally accepted accounting principles (“GAAP”) and non-GAAP basis. The purpose of the non-GAAP information is to report our operating profit, income from continuing operations and earnings per share without certain income and expense items that do not reflect the regular earnings of our operations. The non-GAAP financial measures are intended to provide investors with a supplemental comparison of our operating results and trends for the periods presented. Our management believes these measures are also useful to investors as such measures allow investors to evaluate our performance using the same metrics that our management uses to evaluate past performance and prospects for future performance. We do not consider these items to be reflective of our core operating performance. The non-GAAP adjustments used to reconcile our GAAP results are described in detail on pages 28-30 and are reconciled to comparable GAAP measures on pages 35-37. ***Definition of Organic Growth*** Organic growth represents the change in revenues or operating profit between the current and prior period excluding the effect of acquisitions for and dispositions for one year after the transaction and changes in currency exchange rates. See definitions on page 26. *(In millions, except for per share amounts)* | GAAP | Years Ended December 31, 2021 | 2020 | 2019 | % change 2021 | 2020 | | --- | ---: | ---: | ---: | ---: | ---: | | Revenues | **$4,200.2** | 3,690.9 | 3,683.2 | **14** | **—** | | Cost of revenues | **3,235.8** | 2,877.3 | 2,832.1 | **12** | **2** | | Selling, general and administrative expenses | **629.7** | 584.5 | 604.9 | **8** | **(3)** | | Operating profit | **354.7** | 213.5 | 236.8 | **66** | **(10)** | | Income (loss) from continuing operations(a) | **103.1** | 16.8 | 28.3 | **fav** | **(41)** | | Diluted EPS from continuing operations(a) | **$2.06** | 0.33 | 0.55 | **fav** | **(40)** | | Non-GAAP(b) | | | | | | | Non-GAAP revenues | **$4,200.2** | 3,690.9 | 3,679.7 | **14** | **—** | | Non-GAAP operating profit | **470.5** | 381.3 | 391.6 | **23** | **(3)** | | Non-GAAP income from continuing operations(a) | **237.9** | 190.8 | 199.0 | **25** | **(4)** | | Non-GAAP diluted EPS from continuing operations(a) | **$4.75** | 3.76 | 3.89 | **26** | **(3)** | (a) Amounts reported in this table are attributable to the shareholders of Brink’s and exclude earnings related to noncontrolling interests. (b) Non-GAAP results are reconciled to the applicable GAAP results on pages 35–37. ### GAAP Basis ### Analysis of Consolidated Results: 2021 versus 2020 ***Consolidated Revenues*** Revenues increased $509.3 million primarily due to the favorable impact of acquisitions ($315.4 million), organic increases in Latin America ($102.2 million), North America ($64.4 million), Europe ($15.4 million), and Rest of World ($8.6 million), and the favorable impact of currency exchange rates ($3.3 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 versus prior year 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.” ***Consolidated Costs and Expenses*** Cost of revenues increased 12% to $3,235.8 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 8% to $629.7 million due to the impact of corporate expenses and the operating impact of acquisitions, partially offset by lower costs incurred versus the prior year related to acquisitions (including integration) and on an internal loss in the U.S. global services operations. ***Consolidated Operating Profit*** Operating profit increased $141.2 million due mainly to: - organic increases in Latin America ($45.7 million), North America ($44.9 million), Europe ($28.1 million), and Rest of World ($2.5 million) - the following items included in "Other items not allocated to segments": - income and lower charges related to an internal loss in the U.S. global services operations versus charges incurred in the prior year ($28.0 million), - lower charges related to reorganization and restructuring ($23.0 million), and - lower costs related to business acquisitions and dispositions ($10.6 million), including the impact of acquisition-related charges and intangible asset amortization in 2021, - the favorable impact of business acquisitions ($29.6 million), excluding intangible amortization and acquisition-related charges, partially offset by: - higher corporate expenses on an organic basis ($53.0 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", and - unfavorable changes in currency exchange rates ($9.1 million) driven by the Argentine peso and Brazilian real and partially offset by lower foreign currency transaction losses as 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. ***Consolidated Income from Continuing Operations Attributable to Brink’s and Related Per Share Amounts*** Income from continuing operations attributable to Brink’s shareholders increased $86.3 million to $103.1 million primarily due to the operating profit increase mentioned above, lower interest and other non-operating expense ($30.7 million), partially offset by higher income tax expense ($63.7 million), higher interest expense ($15.7 million), and higher income attributable to noncontrolling interests ($6.2 million). Diluted earnings per share from continuing operations was $2.06, up from $0.33 in 2020. ### Non-GAAP Basis ### Analysis of Consolidated Results: 2021 versus 2020 ***Non-GAAP Consolidated Revenues*** Non-GAAP revenues increased $509.3 million primarily due to the favorable impact of acquisitions ($315.4 million), organic increases in Latin America ($102.2 million), North America ($64.4 million), Europe ($15.4 million), and Rest of World ($8.6 million), and the favorable impact of currency exchange rates ($3.3 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 versus prior year 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.” ***Non-GAAP Consolidated Operating Profit*** Non-GAAP operating profit increased $89.2 million due mainly to: - organic increases in Latin America ($45.7 million), North America ($44.9 million), Europe ($28.1 million), and Rest of World ($2.5 million), and - the favorable impact of business acquisitions ($29.6 million), excluding intangible amortization and acquisition-related charges, partially offset by: - higher corporate expenses on an organic basis ($53.0 million), and - unfavorable changes in currency exchange rates ($8.6 million) driven by the Argentine peso and Brazilian real and partially offset 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. ***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 $47.1 million to $237.9 million due to the operating profit increase mentioned above and higher interest and other non-operating income ($15.8 million), partially offset by higher income tax expense ($34.8 million), higher interest expense ($16.3 million), and higher non-controlling interest ($6.8 million). Diluted earnings per share from continuing operations was $4.75, up from $3.76 in 2020. ### Revenues and Operating Profit by Segment *(In millions)* | Revenues: | 2020 | Organic Change | Acquisitions / Dispositions(a) | Currency(b) | 2021 | % Change Total | Organic | | --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | | North America | $1,261.4 | 64.4 | 72.4 | 8.9 | **1,407.1** | 12 | 5 | | Latin America | 1,071.9 | 102.2 | 8.4 | (56.5) | **1,126.0** | 5 | 10 | | Europe | 753.8 | 15.4 | 120.8 | 27.3 | **917.3** | 22 | 2 | | Rest of World | 603.8 | 8.6 | 113.8 | 23.6 | **749.8** | 24 | 1 | | **Segment revenues(c)** | 3,690.9 | 190.6 | 315.4 | 3.3 | **4,200.2** | 14 | 5 | | **Revenues - GAAP** | $3,690.9 | 190.6 | 315.4 | 3.3 | **4,200.2** | 14 | 5 | | **Operating profit:** | | | | | | | | | North America(d) | $91.7 | 44.9 | 11.6 | 0.2 | **148.4** | 62 | 49 | | Latin America | 233.6 | 45.7 | 0.6 | (22.6) | **257.3** | 10 | 20 | | Europe | 51.2 | 28.1 | 9.7 | 0.8 | **89.8** | 75 | 55 | | Rest of World | 117.1 | 2.5 | 7.7 | 4.2 | **131.5** | 12 | 2 | | **Segment operating profit** | 493.6 | 121.2 | 29.6 | (17.4) | **627.0** | 27 | 25 | | Corporate(d)(e) | (112.3) | (53.0) | — | 8.8 | **(156.5)** | 39 | 47 | | **Operating profit - non-GAAP** | 381.3 | 68.2 | 29.6 | (8.6) | **470.5** | 23 | 18 | | Other items not allocated to segments(f) | (167.8) | 41.9 | 10.6 | (0.5) | **(115.8)** | (31) | (25) | | **Operating profit (loss) - GAAP** | $213.5 | 110.1 | 40.2 | (9.1) | **354.7** | 66 | 52 | 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) 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. (e) 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. (f) See pages 28–30 for more information. ### Analysis of Segment Results: 2021 versus 2020 ### North America Revenues increased 12% ($145.7 million) primarily due to the favorable impact of acquisitions ($72.4 million), a 5% organic increase ($64.4 million), and the favorable impact of currency exchange rates ($8.9 million) from the Canadian dollar. Organic revenue increased primarily due to price increases and global services volume growth in the U.S. and organic growth from PAI. Operating profit increased 62% ($56.7 million) primarily due to an organic increase ($44.9 million), the favorable impact of acquisitions ($11.6 million), and the favorable impact of currency exchange rates ($0.2 million). The organic profit increase was driven by the impact of bad debt expense versus the prior year, productivity initiatives in the U.S. and Canada, and revenue growth from U.S. global services and PAI. The increase was partially offset by higher labor costs due to wage increases in the U.S. The change in bad debt expense was driven by a first quarter of 2021 change to the allowance for doubtful accounts calculation method for the segment’s U.S. business, which resulted in a $12.3 million operating profit increase, and 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 5% ($54.1 million) primarily due to an organic increase of 10% ($102.2 million) and the favorable impact of acquisitions ($8.4 million), partially offset by the unfavorable impact of currency exchange rates ($56.5 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 versus prior year results which were more impacted by the COVID-19 pandemic. Operating profit was up 10% ($23.7 million) primarily due to an organic increase of 20% ($45.7 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 ($0.6 million), partially offset by unfavorable currency ($22.6 million). The organic increase was driven by Argentina and Mexico. ### Europe Revenues increased 22% ($163.5 million) due to the favorable impact of acquisitions ($120.8 million) and currency exchange rates ($27.3 million), and a 2% organic increase ($15.4 million). The favorable currency impact was driven by the euro. The organic increase was primarily due to organic volume growth in France. Operating profit increased 75% ($38.6 million) due to an organic increase ($28.1 million), the favorable impact of acquisitions ($9.7 million) and currency exchange rates ($0.8 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 24% ($146.0 million) due to the favorable impact of acquisitions ($113.8 million), the favorable impact of currency exchange rates ($23.6 million), and a 1% organic increase ($8.6 million). The currency impact was driven by most currencies throughout the segment. Operating profit increased 12% ($14.4 million) due to the favorable impact of acquisitions ($7.7 million), the favorable impact of currency exchange rates ($4.2 million), driven by most currencies throughout the segment, and an organic increase ($2.5 million). The organic increase was primarily due to the impact of labor and other operational cost saving actions throughout the segment, including those taken in response to COVID-19, partially offset by lower government COVID-19 assistance in several countries. ### Income and Expense Not Allocated to Segments ### Corporate Expenses *(In millions)* | | Years Ended December 31, 2021 | 2020 | 2019 | % change 2021 | 2020 | | --- | ---: | ---: | ---: | ---: | ---: | | General, administrative and other expenses | **$(141.7)** | (116.3) | (123.2) | **22** | (6) | | Foreign currency transaction gains (losses) | **2.7** | (6.5) | (4.8) | **fav** | 35 | | Reconciliation of segment policies to GAAP | **(17.5)** | 10.5 | 0.3 | **unfav** | fav | | Corporate items | **(156.5)** | (112.3) | (127.7) | **39** | (12) | 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 in 2021 were $44.2 million higher than the prior year primarily driven by higher bad debt expense ($28.5 million) included in Corporate expense as part of the reconciliation of segment 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 ($11.2 million), an increase in employee compensation, including share-based and other incentives ($9.5 million), and higher legal fees ($4.0 million). These increases were partially offset by lower foreign currency transaction losses in the current year period ($9.2 million). 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 2020, the Corporate reconciling adjustment was a reduction of Corporate expense of $11.0 million, to offset business unit allowances that were higher than U.S. GAAP required. In 2021, the adjustment was an increase of Corporate expense of $17.5 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 $12.3 million operating profit increase in the North America segment, resulting in no impact to consolidated operating profit for the first quarter of 2021. We changed the U.S. calculation of the allowance in order to more closely align it with the U.S. GAAP consolidated calculation and to minimize reconciling differences. Other than for the U.S. business, the reconciling differences were not significant. The bad debt expense increase excludes the impact of the internal loss in our U.S. global services operations described on the next page. ### Other Items Not Allocated to Segments *(In millions)* | Revenues: | Years Ended December 31, 2021 | 2020 | 2019 | % change 2021 | 2020 | | --- | ---: | ---: | ---: | ---: | ---: | | Acquisitions and dispositions | **$—** | — | (0.5) | **—** | (100) | | Internal loss | **—** | — | 4.0 | **—** | (100) | | Revenues | **$—** | — | 3.5 | **—** | (100) | | Operating profit: | | | | | | | Reorganization and Restructuring | **$(43.6)** | (66.6) | (28.8) | **(35)** | unfav | | Acquisitions and dispositions | **(71.9)** | (83.1) | (88.5) | **(13)** | (6) | | Argentina highly inflationary impact | **(11.9)** | (10.7) | (14.5) | **11** | (26) | | Chile antitrust matter | **(9.5)** | — | — | **unfav** | — | | Internal loss | **21.1** | (6.9) | (20.9) | **fav** | (67) | | Reporting compliance | **—** | (0.5) | (2.1) | **(100)** | (76) | | Operating profit | **$(115.8)** | (167.8) | (154.8) | **(31)** | 8 | #### 2021 versus 2020 The impact of other items not allocated to segments on operating profit was a smaller loss ($115.8 million in 2021 versus $167.8 million in the prior year). 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 net costs of $28.8 million in 2019, primarily severance costs and charges related to the modification of share-based compensations awards in 2019. We recognized $66.6 million of net costs in operating profit and $0.6 million of costs in interest and other nonoperating income (expense) in 2020, primarily severance costs. We recognized $43.6 million of net costs in 2021, primarily severance costs. 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 will reduce our workforce by 1,600 to 1,800 positions and result in in annualized cost savings of $35 million to $40 million. For the current restructuring actions, we expect to incur additional costs between $1 million and $3 million in future periods. Due to the unique circumstances around these charges, they have not been allocated to segment results and are excluded from non-GAAP results. Charges related to the employees, assets, leases and contracts impacted by these restructuring actions were excluded from the segments and corporate expenses as shown in the table below. *(In millions)* | Reportable Segments: | Years Ended December 31, 2021 | 2020 | 2019 | % change 2021 | 2020 | | --- | ---: | ---: | ---: | ---: | --- | | North America | **$0.1** | (13.7) | (3.1) | **fav** | unfav | | Latin America | **(13.0)** | (20.4) | (9.5) | **(36)** | unfav | | Europe | **(27.6)** | (23.6) | (5.1) | **17** | unfav | | Rest of World | **(3.2)** | (7.1) | (1.9) | **(55)** | unfav | | Total reportable segments | **(43.7)** | (64.8) | (19.6) | **(33)** | unfav | | Corporate items | **0.1** | (1.8) | (9.2) | **fav** | (80) | | Total | **$(43.6)** | (66.6) | (28.8) | **(35)** | unfav | **Acquisitions and dispositions** Part of our strategy is the pursuit of accretive business acquisitions. In 2021, we acquired business operations in the U.S. and we completed the remaining planned acquisitions from G4S. In 2020, we acquired multiple business operations from G4S at different times during the year. In 2019, we completed four business acquisitions in the U.S., Brazil and Colombia. Certain acquisition and disposition items that are not considered part of the ongoing activities of the business and are special in nature are consistently excluded from non-GAAP results. These items are described below: #### 2021 Acquisitions and Dispositions Items - Amortization expense for acquisition-related intangible assets was $47.7 million in 2021. - We incurred $10.5 million in integration costs, primarily related to G4S, in 2021. - Transaction costs related to business acquisitions were $6.5 million in 2021. - Restructuring costs related to acquisitions were $5.3 million in 2021. - Compensation expense related to the retention of key PAI employees was $1.8 million in 2021. #### 2020 Acquisitions and Dispositions Items - Amortization expense for acquisition-related intangible assets was $35.1 million in 2020. - We incurred $23.5 million in integration costs related primarily to Dunbar and G4S in 2020. - Transaction costs related to business acquisitions were $19.3 million in 2020. - Restructuring costs related to acquisitions were $4.7 million in 2020. #### 2019 Acquisitions and Dispositions Items - We incurred $43.1 million in integration costs related to Dunbar, Rodoban, TVS and COMEF in 2019. - Amortization expense for acquisition-related intangible assets was $27.8 million in 2019. - Transaction costs related to business acquisitions were $7.9 million in 2019. - Restructuring costs related to acquisitions, primarily Rodoban and Dunbar, were $5.6 million in 2019. - In 2019, we recognized $2.2 million in net charges, primarily asset impairment and severance costs, related to the exit from our top-up prepaid mobile phone business in Brazil. - Compensation expense related to the retention of key Dunbar employees was $1.5 million in 2019. **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 2019, we recognized $14.5 million in pretax charges related to highly inflationary accounting, including currency remeasurement losses of $11.3 million. In 2020, we recognized $10.7 million in pretax charges related to highly inflationary accounting, including currency remeasurement losses of $7.7 million. In 2021, we recognized $11.9 million in pretax charges related to highly inflationary accounting, including currency remeasurement losses of $9.0 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 23 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 2019, we incurred $4.5 million in costs (primarily third party expenses) to reconstruct the accounts receivables subledger. In 2020, we incurred an additional $0.3 million in costs related to this activity. In the third quarter of 2019, we were able to identify $4.0 million of revenues billed and collected in prior periods which had never been recorded in the general ledger. We also identified and recorded $0.3 million in bank fees, which had been incurred in prior periods. Based on the reconstructed subledger, we were able to analyze and quantify the uncollected receivables from prior periods. Although we planned to attempt to collect these receivables, we estimated an increase to bad debt expense of $13.7 million in the third quarter of 2019. The estimate of the allowance for doubtful accounts was adjusted in the fourth quarter of 2019 for an additional $6.4 million and again in 2020 for an additional $6.6 million. In 2021, we recognized a decrease in bad debt expense of $3.7 million, primarily related to collection of these receivables. We also recognized $1.3 million of legal charges in 2021 as we attempted to collect additional insurance recoveries related to these receivables losses. In the fourth quarter of 2021, we successfully collected $18.8 million of insurance recoveries related to these internal losses. We have defined accounts receivable impacted by the embezzlement as accounts receivable recorded as of and prior to the third quarter of 2019. In the fourth quarter of 2021, we wrote off the remaining accounts receivable of $8.1 million which had previously been fully reserved. 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 amounts from segment and non-GAAP results. **Reporting compliance** Certain compliance costs (primarily third party expenses) are excluded from segment and non-GAAP results. These costs relate to the implementation and January 1, 2019 adoption of the new lease accounting standard (amounts were not significant in 2021, $0.5 million in 2020 and $1.8 million in 2019). We also incurred $0.3 million in 2019 in costs related to mitigation of material weaknesses. We did not incur any such costs in 2020 or 2021. ### Other Operating Income and Expense Amounts below represent consolidated other operating income and expense. *(In millions)* | Foreign currency items: | Years Ended December 31, 2021 | 2020 | 2019 | % change 2021 | 2020 | | --- | ---: | ---: | ---: | ---: | ---: | | Transaction losses | **$(30.5)** | (11.2) | (22.9) | **unfav** | (51) | | Derivative instrument gains (losses) | **24.2** | (3.0) | 6.9 | **fav** | unfav | | Gains on sale of property and other assets | **—** | 0.9 | 5.8 | **(100)** | (84) | | Impairment losses | **(9.5)** | (11.6) | (7.7) | **(18)** | 51 | | Share in earnings of equity method affiliates | **1.1** | 0.8 | 0.9 | **38** | (11) | | Royalty income | **5.6** | 4.8 | 5.1 | **17** | (6) | | Insurance recoveries - Internal Loss | **18.8** | — | — | **100** | — | | Gains related to litigation | **4.4** | — | — | **100** | — | | Indemnity for forced relocation | **1.7** | — | — | **100** | — | | Other | **4.2** | 3.7 | 2.5 | **14** | 48 | | Other operating income (expense) | **$20.0** | (15.6) | (9.4) | **fav** | 66 | #### 2021 versus 2020 We reported other operating income of $20.0 million in 2021 versus other operating expense of $15.6 million in the prior year. The change was primarily due to $18.8 million in insurance recoveries related to the internal loss in our U.S. global services operations. In addition, we recognized gains related to litigation in our Romania business and lower losses from foreign currency items in 2021 as compared to 2020. The foreign currency items above do not include business acquisition-related currency items which are reported in interest and other nonoperating income (expense). ### Nonoperating Income and Expense ### Interest Expense *(In millions)* | | Years Ended December 31, 2021 | 2020 | 2019 | % change 2021 | 2020 | | --- | ---: | ---: | ---: | ---: | ---: | | Interest expense | **$112.2** | 96.5 | 90.6 | **16** | 7 | Interest expense was higher in 2021 primarily due to higher borrowing levels due to business acquisitions. See Note 15 for further information. ### Interest and Other Nonoperating Income (Expense) *(In millions)* | | Years Ended December 31, 2021 | 2020 | 2019 | % change 2021 | 2020 | | --- | ---: | ---: | ---: | --- | ---: | | Interest income | **$12.1** | 5.6 | 5.6 | **fav** | — | | Gain (loss) on equity securities(a) | **16.0** | 10.6 | (2.9) | **51** | fav | | Foreign currency transaction gains (losses)(b) | **0.4** | (3.6) | — | **fav** | — | | Derivative instrument losses(c) | **—** | (7.0) | — | **fav** | — | | Retirement benefit cost other than service cost | **(38.7)** | (37.9) | (52.7) | **2** | (28) | | G4S indemnification asset adjustment(d) | **2.7** | — | — | **fav** | — | | Acquisition-related gains (losses)(e) | **0.4** | — | — | **fav** | — | | Penalties and interest on non-income taxes(f) | **(1.8)** | — | — | **unfav** | — | | Interest on Colombia tax claim(g) | **—** | — | (1.1) | **—** | fav | | Non-income taxes on intercompany billings(h) | **(3.9)** | (4.6) | (4.2) | **(15)** | 10 | | Venezuela operations(i) | **—** | — | (0.9) | **—** | fav | | Gain on lease termination(j) | **—** | — | 5.2 | **—** | fav | | Gain on a disposition of a subsidiary(k) | **—** | 4.1 | — | **unfav** | fav | | Interest on non-income tax credits(l) | **1.2** | — | — | **fav** | — | | Earn-out liability adjustment(m) | **1.3** | — | — | **fav** | — | | Gains related to litigation(n) | **1.7** | — | — | **fav** | — | | Other | **1.6** | (4.9) | (1.7) | **fav** | unfav | | Interest and other nonoperating income (expense) | **$(7.0)** | (37.7) | (52.7) | **(81)** | (28) | (a) The gain is primarily related to the market value increase of an investment in MoneyGram International, Inc. The investment was sold in 2021 and the gain was fully realized. (b) Amounts in 2021 and 2020 primarily represent currency transaction gains and losses on contingent consideration payable related to G4S business acquisitions. (c) Represents loss on foreign currency forward contracts related to acquisition of business operations from G4S. (d) Adjustments 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. (e) 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. (f) Represents penalties and interest on non-income taxes that have not yet been paid. (g) Related to an unfavorable court ruling in 2019 on a non-income tax claim in Colombia. The court ruled that Brink's must pay interest accruing from 2009 to the current date. The principal amount of the claim was less than $1 million and was recognized in selling, general and administrative expenses in 2019. (h) Certain of our Latin American subsidiaries incur non-income taxes related to the billing of intercompany charges. These intercompany charges do not impact Latin America segment results and are eliminated in our consolidation. (i) Charges incurred for providing financial support to Brink's Venezuelan subsidiaries after the June 30, 2018 deconsolidation. We do not expect any future funding of the Venezuela business, as long as current U.S. sanctions remain in effect. (j) Gain on termination of a mining lease obligation related to former coal operations. We have no remaining mining leases. (k) This gain is primarily related to the sale of our former French security services subsidiary in the first quarter of 2020. (l) 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. (m) Adjustment to the liability for contingent consideration pertaining to the 2019 Balance Innovations business acquisition. (n) Related to a favorable court ruling in litigation with a customer of our Romania business. The court ruled that the customer must pay our subsidiary in Romania for services provided many years ago. The principal amount of the settlement is reported in operating income (expense). The penalties for years of non-payment are reported in interest and other nonoperating income (expense). Interest and other nonoperating income (expense) was higher in 2021 compared to 2020 primarily due to higher interest income and gain on equity securities. Interest and other nonoperating income (expense) was higher in 2020 compared to 2019 primarily due to higher retirement benefit costs in 2019, mainly due to settlement charges in the U.S. frozen pension plan. ### Income Taxes ### Summary Rate Reconciliation – GAAP | (In percentages) | 2021 | 2020 | 2019 | | --- | ---: | ---: | ---: | | U.S. federal tax rate | **21.0%** | 21.0% | 21.0% | | Increases (reductions) in taxes due to: | | | | | Foreign rate differential | **7.6** | 12.9 | 17.3 | | Taxes on cross border income, net of credits | **4.6** | 11.0 | 9.3 | | Tax on accelerated U.S. income(a) | **—** | — | (7.9) | | Adjustments to valuation allowances | **6.7** | 6.6 | 16.0 | | Foreign income taxes | **6.1** | 10.6 | 13.7 | | French business tax | **0.7** | 3.7 | 3.0 | | State income taxes, net | **0.9** | (1.6) | (2.2) | | Share-based compensation | **0.2** | (3.1) | (4.8) | | Acquisition costs | **0.5** | 6.0 | — | | Other | **2.8** | 4.3 | (0.2) | | Income tax rate on continuing operations | **51.1%** | 71.4% | 65.2% | (a) In 2019, we recognized a benefit of $7.3 million related to a previously recognized $23.5 million current tax expense that accelerated U.S. taxable income in 2015. ### Summary Rate Reconciliation – Non-GAAP(a) | (In percentages) | 2021 | 2020 | 2019 | | --- | ---: | ---: | ---: | | U.S. federal tax rate | **21.0%** | 21.0% | 21.0% | | Increases (reductions) in taxes due to: | | | | | Foreign rate differential | **6.1** | 5.2 | 7.4 | | Adjustments to valuation allowances | **1.4** | (0.2) | 4.0 | | French business tax | **0.4** | 1.0 | 1.0 | | Other | **4.7** | 4.8 | (2.0) | | Income tax rate on Non-GAAP continuing operations | **33.6%** | 31.8% | 31.4% | (a) See pages 35–37 for a reconciliation of non-GAAP results to GAAP. ### Overview Our effective tax rate has varied in the past three years from the statutory U.S. federal rate due to various factors, including - changes in judgment about the need for valuation allowances, - changes in the geographical mix of earnings, - changes in laws in the U.S., France, Mexico, and Argentina, - U.S. tax on accelerated taxable income, - timing of benefit recognition for uncertain tax positions, - state income taxes, and - tax benefit for distributions of share-based payments. We establish or reverse valuation allowances for deferred tax assets depending on all available information including historical and expected future operating performance of our subsidiaries. Changes in judgment about the future realization of deferred tax assets can result in significant adjustments to the valuation allowances. Based on our historical and future expected taxable earnings, we believe it is more-likely-than-not that we will realize the benefit of the deferred tax assets, net of valuation allowances. ### Continuing Operations #### 2021 Compared to U.S. Statutory Rate The effective income tax rate on continuing operations in 2021 was greater than the 21% U.S. statutory tax rate primarily due to the geographical mix of earnings, book losses for which no tax benefit can be recorded, nondeductible expenses in Mexico, taxes on cross border payments and the characterization of a French business tax as an income tax. #### 2020 Compared to U.S. Statutory Rate The effective income tax rate on continuing operations in 2020 was greater than the 21% U.S. statutory tax rate primarily due to the geographical mix of earnings, book losses for which no tax benefit can be recorded, nondeductible expenses in Mexico, taxes on cross border payments and the characterization of a French business tax as an income tax, partially offset by the significant tax benefits related to the distribution of share-based payments. ### Noncontrolling Interests *(In millions)* | | Years Ended December 31, 2021 | 2020 | 2019 | % change 2021 | 2020 | | --- | ---: | ---: | ---: | --- | ---: | | Net income attributable to noncontrolling interests | **$12.1** | 5.9 | 4.2 | **unfav** | 40 | Compared to 2020, the increase in net income attributable to noncontrolling interests to $12.1 million in 2021 is primarily due to the G4S acquisitions which closed in the first quarter of 2021 and higher operating results reported by some of our subsidiaries in 2021. Compared to 2019, the increase in net income attributable to noncontrolling interests to $5.9 million in 2020 is primarily due to the G4S acquisitions that closed in the second and third quarters of 2020. ### Non-GAAP Results Reconciled to GAAP Non-GAAP results described in this filing are financial measures that are not required by or presented in accordance with GAAP. The purpose of the Non-GAAP results is to report financial information from the primary operations of our business by excluding the effects of certain income and expenses that do not reflect the ordinary earnings of our operations. The specific items excluded have not been allocated to segments, are described in detail on pages 28–30, and are reconciled to comparable GAAP measures below. The full-year Non-GAAP tax rate in each year excludes certain pretax and income tax amounts. Amounts reported for prior periods have been updated in this report to present information consistently for all periods presented. The Non-GAAP financial measures are intended to provide investors with a supplemental comparison of our operating results and trends for the periods presented. Our management believes these measures are also useful to investors as such measures allow investors to evaluate our performance using the same metrics that our management uses to evaluate past performance and prospects for future performance. We do not consider these items to be reflective of our 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. | Effective Income Tax Rate(a) | 2021 Pre-tax income | Income tax | Effective tax rate | 2020 Pre-tax income | Income tax | Effective tax rate | 2019 Pre-tax income | Income tax | Effective tax rate | | --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | | GAAP | $235.5 | 120.3 | 51.1% | $79.3 | 56.6 | 71.4% | $93.5 | 61.0 | 65.2% | | Retirement plans(c) | 29.8 | 7.7 | | 33.8 | 7.9 | | 47.3 | 11.1 | | | Venezuela operations(b)(i) | — | — | | — | — | | 0.9 | — | | | Reorganization and restructuring(b) | 43.6 | 11.7 | | 67.1 | 15.8 | | 28.8 | 7.1 | | | Acquisitions and dispositions(b) | 68.8 | 2.5 | | 91.5 | 11.6 | | 93.6 | 5.1 | | | Chile antitrust matter(b) | 9.5 | — | | — | — | | — | — | | | Tax on accelerated income(d) | — | — | | — | — | | — | 7.3 | | | Argentina highly inflationary impact(b) | 12.3 | (1.1) | | 10.6 | (1.3) | | 14.5 | (1.4) | | | Internal loss(b) | (21.1) | (1.3) | | 6.9 | 1.6 | | 20.9 | 4.0 | | | Reporting compliance(b) | — | — | | 0.5 | — | | 2.1 | 0.1 | | | Deferred tax valuation allowance(e) | — | (12.8) | | — | — | | — | — | | | Gain on lease termination(f) | — | — | | — | — | | (5.2) | (1.2) | | | Non-GAAP | $378.4 | 127.0 | 33.6% | $289.7 | 92.2 | 31.8% | $296.4 | 93.1 | 31.4% | Amounts may not add due to rounding. (a) From continuing operations. (b) See “Other Items Not Allocated To Segments” on pages 28–30 for details. We do not consider these items to be reflective of our operating performance as they result from events and circumstances that are not a part of our core business. (c) Our U.S. retirement plans are frozen and costs related to these plans are excluded from non-GAAP results. Certain non-U.S. operations also have retirement plans. Settlement charges related to these non-U.S. plans are also excluded from non-GAAP results. (d) The non-GAAP tax rate excludes the 2019 foreign tax benefits that resulted from the transaction that accelerated U.S. tax in 2015. (e) There was a change in judgement resulting in a valuation allowance against certain tax attributes with a limited statutory carryforward period that are no longer more-likely-than-not to be realized due to lower than expected Canada operating results. (f) Gain on termination of a mining lease obligation related to former coal operations. We have no remaining mining leases. (g) Amounts in 2020 and 2019 primarily relate to interest incurred on a cross currency swap hedging foreign currency risk on the intercompany financing of the Rodoban acquisition. (h) In addition to the items discussed in “Other Items Not Allocated To Segments” on pages 28–30, includes a $4.5 million gain on the sale of a French security services business in 2020, acquisition-related pretax currency transaction losses of $3.6 million in 2020 and acquisition-related pretax losses on foreign currency forward contracts of $7.0 million in 2020. (i) Post-deconsolidation funding of ongoing costs related to our Venezuelan operations was $0.9 million in 2019 and was expensed as incurred and reported in interest and other nonoperating income (expense). We do not expect any future funding of the Venezuela business, as long as current U.S. sanctions remain in effect. ### Non-GAAP reconciled to GAAP *(In millions)* | Revenues: | Years Ended December 31, 2021 | 2020 | 2019 | | --- | ---: | ---: | ---: | | GAAP | **$4,200.2** | 3,690.9 | 3,683.2 | | Acquisitions and dispositions(b) | **—** | **—** | 0.5 | | Internal loss(b) | **—** | **—** | (4.0) | | Non-GAAP | **$4,200.2** | 3,690.9 | 3,679.7 | | **Operating profit:** | | | | | GAAP | **$354.7** | 213.5 | 236.8 | | Reorganization and Restructuring(b) | **43.6** | 66.6 | 28.8 | | Acquisitions and dispositions(b) | **71.9** | 83.1 | 88.5 | | Argentina highly inflationary impact(b) | **11.9** | 10.7 | 14.5 | | Chile antitrust matter(b) | **9.5** | — | — | | Internal loss(b) | **(21.1)** | 6.9 | 20.9 | | Reporting compliance(b) | **—** | 0.5 | 2.1 | | Non-GAAP | **$470.5** | 381.3 | 391.6 | | **Interest expense:** | | | | | GAAP | **$(112.2)** | (96.5) | (90.6) | | Acquisitions and dispositions(b)(g) | **1.3** | 1.9 | 5.8 | | Non-GAAP | **$(110.9)** | (94.6) | (84.8) | | **Interest and other nonoperating income (expense):** | | | | | GAAP | **$(7.0)** | (37.7) | (52.7) | | Retirement plans(c) | **29.8** | 33.8 | 47.3 | | Venezuela operations(b)(i) | **—** | — | 0.9 | | Reorganization and Restructuring(b) | **—** | 0.5 | — | | Acquisitions and dispositions(b)(h) | **(4.4)** | 6.5 | (0.7) | | Argentina highly inflationary impact(b) | **0.4** | (0.1) | — | | Gain on lease termination(f) | **—** | — | (5.2) | | Non-GAAP | **$18.8** | 3.0 | (10.4) | | Non-GAAP margin | **11.2%** | 10.3% | 10.6% | | **Provision for income taxes:** | | | | | GAAP | **$120.3** | 56.6 | 61.0 | | Retirement plans(c) | **7.7** | 7.9 | 11.1 | | Reorganization and Restructuring(b) | **11.7** | 15.8 | 7.1 | | Acquisitions and dispositions(b)(g)(h) | **2.5** | 11.6 | 5.1 | | Tax on accelerated income(d) | **—** | — | 7.3 | | Argentina highly inflationary impact(b) | **(1.1)** | (1.3) | (1.4) | | Internal loss(b) | **(1.3)** | 1.6 | 4.0 | | Reporting compliance(b) | **—** | — | 0.1 | | Deferred tax valuation allowance(e) | **(12.8)** | — | — | | Gain on lease termination(f) | **—** | — | (1.2) | | Non-GAAP | **$127.0** | 92.2 | 93.1 | | **Net income (loss) attributable to noncontrolling interests:** | | | | | GAAP | **$12.1** | 5.9 | 4.2 | | Reorganization and Restructuring(b) | **0.5** | 0.3 | — | | Acquisitions and dispositions(b) | **0.9** | 0.5 | 0.1 | | Non-GAAP | **$13.5** | 6.7 | 4.3 | Amounts may not add due to rounding. See page 35 for footnote explanations. ### Non-GAAP reconciled to GAAP *(In millions, except for per share amounts)* | Income (loss) from continuing operations attributable to Brink's: | Years Ended December 31, 2021 | 2020 | 2019 | | --- | ---: | ---: | ---: | | GAAP | **$103.1** | 16.8 | 28.3 | | Retirement plans(c) | **22.1** | 25.9 | 36.2 | | Venezuela operations(b)(i) | **—** | — | 0.9 | | Reorganization and Restructuring(b) | **31.4** | 51.0 | 21.7 | | Acquisitions and dispositions(b) | **65.4** | 79.4 | 88.4 | | Tax on accelerated income(d) | **—** | — | (7.3) | | Argentina highly inflationary impact(b) | **13.4** | 11.9 | 15.9 | | Chile antitrust matter(b) | **9.5** | — | — | | Internal loss(b) | **(19.8)** | 5.3 | 16.9 | | Reporting compliance(b) | **—** | 0.5 | 2.0 | | Deferred tax valuation allowance(e) | **12.8** | — | — | | Gain on lease termination(f) | **—** | — | (4.0) | | Non-GAAP | **$237.9** | 190.8 | 199.0 | | **Diluted EPS** | | | | | GAAP | **$2.06** | 0.33 | 0.55 | | Retirement plans(c) | **0.44** | 0.51 | 0.71 | | Venezuela operations(b)(i) | **—** | — | 0.02 | | Reorganization and Restructuring(b) | **0.63** | 1.00 | 0.43 | | Acquisitions and dispositions(b) | **1.31** | 1.56 | 1.73 | | Tax on accelerated income(d) | **—** | — | (0.14) | | Argentina highly inflationary impact(b) | **0.27** | 0.23 | 0.31 | | Chile antitrust matter(b) | **0.19** | — | — | | Internal loss(b) | **(0.40)** | 0.10 | 0.33 | | Reporting compliance(b) | **—** | 0.01 | 0.04 | | Deferred tax valuation allowance(e) | **0.26** | — | — | | Gain on lease termination(f) | **—** | — | (0.08) | | Non-GAAP | **$4.75** | 3.76 | 3.89 | Amounts may not add due to rounding. See page 35 for footnote explanations. ### Foreign Operations We currently serve customers in more than 100 countries, including 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, we have ceased support of our 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 our reported dollar revenues and operating profit, which may continue in 2022. See Application of Critical Accounting Policies—Foreign Currency Translation on pages 57–58 for a description of our accounting methods and assumptions used to include our Argentina operations in our consolidated financial statements, and a description of the accounting for subsidiaries operating in highly inflationary economies. See also Note 1 to the consolidated financial statements for a description of how we account for currency remeasurement for our Argentine subsidiaries, beginning July 1, 2018 under the heading, "Argentina". At December 31, 2021, Argentina's economy remains highly inflationary for accounting purposes. At December 31, 2021, we had net monetary assets denominated in Argentine pesos of $60.1 million (including cash of $52.9 million) and nonmonetary net assets of $155.3 million (including $99.8 million of goodwill, $8.2 million in equity securities denominated in Argentine pesos and $4.3 million in debt securities denominated in 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 and during the fourth quarter of 2019, 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, we recognized $10.4 million in 2020 and $4.7 million in 2019 of such conversion losses when we converted Argentine pesos into U.S. dollars at rates that were approximately 100% and 25%, respectively, less favorable than the rates at which we remeasured the financial statements of Brink’s Argentina. These conversion losses are classified in the consolidated statements of operations as other operating income (expense). We did not have any such conversion losses in 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 which are denominated in currencies other than the functional currency of a given foreign entity. From time to time, we use short term foreign currency forward and swap contracts to hedge transactional risks associated with foreign currencies, as discussed in Item 7A on pages 59-60. At December 31, 2021, the notional value of our short term outstanding foreign currency forward and swap contracts was $614 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 December 31, 2021, the fair value of our short term foreign currency contracts was a net asset of approximately $1.9 million, of which $3.4 million was included in prepaid expenses and other and $1.5 million was included in accrued liabilities on the 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 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)* | | Twelve Months Ended December 31, 2021 | 2020 | 2019 | | --- | ---: | ---: | ---: | | Derivative instrument gains (losses) included in other operating income (expense) | $24.2 | (3.0) | 6.9 | | Derivative instrument losses included in other nonoperating income (expense)(a) | — | (7.0) | — | (a) Represents losses on foreign currency forward contracts related to acquisitions of business operations from G4S. We also have a long term cross currency swap 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 December 31, 2021, the notional value of this long term contract was $75 million with a weighted-average maturity of 1.3 years. At December 31, 2021, the fair value of the long term cross currency swap contract was a $26.3 million net asset, of which a $5.8 million asset is included in prepaid expenses and other assets and $20.5 million is included in other assets on the 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 expenses and other assets and a $20.4 million asset is included in other assets on the 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)* | | Twelve Months Ended December 31, 2021 | 2020 | 2019 | | --- | ---: | ---: | ---: | | Derivative instrument gains included in other operating income (expense) | $0.2 | 22.1 | 5.8 | | Offsetting transaction losses | (0.2) | (22.1) | (5.8) | | Derivative instrument losses included in interest expense | (1.3) | (1.9) | (5.1) | | Net derivative instrument gains (losses) | (1.1) | 20.2 | 0.7 | In the second quarter of 2021, we entered into ten cross currency swaps to hedge a portion of our net investments in certain of our subsidiaries with euro functional currencies. 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 December 31, 2021, the notional value of these cross currency swap contracts was $400 million with a remaining weighted average maturity of 6.2 years. At December 31, 2021, the fair value of these currency swaps was a net asset of $28.5 million, of which $6.0 million was included in prepaid expenses and other and $22.5 million was included in other assets on the 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)* | | Twelve Months Ended December 31, 2021 | 2020 | 2019 | | --- | ---: | ---: | ---: | | Net derivative instrument gains included in interest expense | $(4.1) | — | — | 39 ### LIQUIDITY AND CAPITAL RESOURCES ### Overview The discussion of liquidity and capital resources comparing 2020 versus 2019 can be found in Item 7. Management's Discussion and Analysis of Financial Conditions and Results of Operations of our 2020 10-K, starting on page 43. Over the last three years, we used cash generated from our operations and borrowings to - acquire new business operations ($952 million), - invest in the infrastructure of our business (new facilities, cash sorting and other equipment for our cash management services operations, armored trucks, CompuSafe® units, and information technology) ($451 million), - repurchase shares of Brink's common stock ($250 million), and - pay dividends to Brink’s shareholders ($97 million). Cash flows from operating activities increased by $160.3 million in 2021 as compared to the prior year primarily due 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 $15.7 million in 2021 compared to a decrease of $6.5 million in 2020), partially offset by $56.1 million decrease in restricted cash held for customers and higher amounts paid for interest. Cash used for investing activities decreased by $110.7 million in 2021 due to higher amounts paid for business acquisitions in 2020. Cash also decreased $50.8 million in 2021 as a result of the strengthening of the U.S. dollar in 2021, primarily against the euro. We financed our liquidity needs in 2021 with debt and cash flows from operations. ### Operating Activities *(In millions)* | Cash flows from operating activities | Years Ended December 31, 2021 | 2020 | 2019 | $ change 2021 | 2020 | | --- | ---: | ---: | ---: | ---: | ---: | | Operating activities - GAAP | **$478.0** | 317.7 | 368.6 | **$160.3** | (50.9) | | (Increase) decrease in restricted cash held for customers | **(60.2)** | (116.3) | (23.7) | **56.1** | (92.6) | | (Increase) decrease in certain customer obligations(a) | **(15.7)** | 6.5 | (11.4) | **(22.2)** | 17.9 | | G4S intercompany payments | **2.6** | 111.1 | — | **(108.5)** | 111.1 | | Operating activities - non-GAAP | **$404.7** | 319.0 | 333.5 | **$85.7** | (14.5) | (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. ### 2021 versus 2020 ### GAAP Operating cash flows increased by $160.3 million in 2021 compared to 2020. The increase was primarily due 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 $15.7 million in 2021 compared to a decrease of $6.5 million in 2020), partially offset by $56.1 million decrease in restricted cash held for customers and higher amounts paid for interest (we had $107.7 million in cash payments for interest in 2021 as compared to $80.4 million in 2020). ### Non-GAAP Non-GAAP cash flows from operating activities increased by $85.7 million in 2021 as compared to 2020. The increase was primarily due 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 | Years Ended December 31, 2021 | 2020 | 2019 | $ change 2021 | 2020 | | --- | ---: | ---: | ---: | ---: | ---: | | Capital expenditures | **$(167.9)** | (118.5) | (164.8) | **$(49.4)** | 46.3 | | Acquisitions, net of cash acquired | **(313.2)** | (439.7) | (183.9) | **126.5** | (255.8) | | Dispositions, net of cash disposed | **—** | (2.6) | 11.2 | **2.6** | (13.8) | | Marketable securities: | | | | | | | Purchases | **(15.6)** | (2.9) | (11.8) | **(12.7)** | 8.9 | | Sales | **35.1** | 2.0 | 1.3 | **33.1** | 0.7 | | Proceeds from sale of property, equipment and investments | **7.7** | 5.3 | 10.3 | **2.4** | (5.0) | | Redemption of cash-surrender value of life insurance policies | **—** | — | 7.8 | **—** | (7.8) | | Other | **(0.8)** | (9.0) | (3.1) | **8.2** | (5.9) | | Investing activities | **$(454.7)** | (565.4) | (333.0) | **$110.7** | (232.4) | Cash used by investing activities decreased by $110.7 million in 2021 as compared to 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 year Capital expenditures(a): | Years Ended December 31, 2021 | 2020 | 2019 | $ change 2021 | 2020 | | --- | ---: | ---: | ---: | ---: | ---: | | North America | **$40.4** | 27.4 | 40.7 | **$13.0** | (13.3) | | Latin America | **45.0** | 35.1 | 80.3 | **9.9** | (45.2) | | Europe | **50.6** | 33.4 | 16.2 | **17.2** | 17.2 | | Rest of World | **26.0** | 16.6 | 17.3 | **9.4** | (0.7) | | Corporate items | **5.9** | 6.0 | 10.3 | **(0.1)** | (4.3) | | Capital expenditures - GAAP and non-GAAP | **$167.9** | 118.5 | 164.8 | **$49.4** | (46.3) | | Financing leases(b): | | | | | | | North America | **$50.6** | 24.1 | 51.8 | **$26.5** | (27.7) | | Latin America | **14.2** | 3.9 | 3.7 | **10.3** | 0.2 | | Europe | **20.6** | 3.3 | 4.2 | **17.3** | (0.9) | | Rest of World | **0.5** | 0.1 | — | **0.4** | 0.1 | | Financing leases - GAAP and non-GAAP | **$85.9** | 31.4 | 59.7 | **$54.5** | (28.3) | | Total: | | | | | | | North America | **$91.0** | 51.5 | 92.5 | **$39.5** | (41.0) | | Latin America | **59.2** | 39.0 | 84.0 | **20.2** | (45.0) | | Europe | **71.2** | 36.7 | 20.4 | **34.5** | 16.3 | | Rest of World | **26.5** | 16.7 | 17.3 | **9.8** | (0.6) | | Corporate items | **5.9** | 6.0 | 10.3 | **(0.1)** | (4.3) | | Total property and equipment acquired | **$253.8** | 149.9 | 224.5 | **$103.9** | (74.6) | | **Depreciation and amortization(a)** | | | | | | | North America | **$68.7** | 62.3 | 64.2 | **$6.4** | (1.9) | | Latin America | **46.2** | 44.0 | 44.8 | **2.2** | (0.8) | | Europe | **41.4** | 32.2 | 21.3 | **9.2** | 10.9 | | Rest of World | **23.2** | 20.0 | 11.0 | **3.2** | 9.0 | | Corporate items | **9.7** | 9.1 | 10.8 | **0.6** | (1.7) | | Depreciation and amortization - non-GAAP | **189.2** | 167.6 | 152.1 | **21.6** | 15.5 | | Argentina highly inflationary impact | **2.2** | 1.8 | 1.8 | **0.4** | — | | Reorganization and Restructuring | **0.3** | 1.3 | 0.2 | **(1.0)** | 1.1 | | Acquisitions and dispositions | **0.1** | 1.0 | 3.1 | **(0.9)** | (2.1) | | Amortization of intangible assets | **47.7** | 35.1 | 27.8 | **12.6** | 7.3 | | Depreciation and amortization - GAAP | **$239.5** | 206.8 | 185.0 | **$32.7** | 21.8 | (a) Incremental depreciation related to highly inflationary accounting in Argentina, accelerated depreciation related to restructuring activities and acquisition-related integration activities, and amortization of acquisition-related intangible assets have also 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 consolidated statements of cash flows. 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 resulting from highly inflationary accounting in Argentina, accelerated depreciation from restructuring activities 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 consolidated statements of cash flows. Our reinvestment ratio, which we define as the annual amount of property and equipment acquired during the year divided by the annual amount of depreciation, was 1.3 in 2021, 0.9 in 2020, and 1.5 in 2019. Capital expenditures in 2021 for our operating units were primarily for machinery and equipment, armored vehicles, buildings and information technology. Capital expenditures in 2021 were $49.4 million higher compared to 2020. Total property and equipment acquired in 2021 was $103.9 million higher than the prior year. These increases were primarily due to the impacts of the G4S acquisition, investments in cash devices and lower spending in 2020 due to the COVID-19 pandemic. Corporate capital expenditures in the last three years were primarily for investing in information technology. ### Financing Activities *(In millions)* | Cash flows from financing activities Borrowings and repayments: | Years Ended December 31, 2021 | 2020 | 2019 | $ change 2021 | 2020 | | --- | ---: | ---: | ---: | ---: | ---: | | Short-term borrowings | **$(4.3)** | (3.9) | (14.8) | **$(0.4)** | 10.9 | | Cash supply chain customer debt | **—** | (10.5) | — | **10.5** | (10.5) | | Long-term revolving credit facilities, net | **548.7** | (111.1) | (225.1) | **659.8** | 114.0 | | Other long-term debt, net | **(133.0)** | 924.1 | 271.2 | **(1,057.1)** | 652.9 | | Borrowings (repayments) | **411.4** | 798.6 | 31.3 | **(387.2)** | 767.3 | | Debt financing costs | **(0.8)** | (13.2) | (4.0) | **12.4** | (9.2) | | Repurchase shares of Brink's common stock | **(200.0)** | (50.0) | — | **(150.0)** | (50.0) | | Dividends to: | | | | | | | Shareholders of Brink’s | **(37.2)** | (30.1) | (29.9) | **(7.1)** | (0.2) | | Noncontrolling interests in subsidiaries | **(5.1)** | (16.8) | (2.3) | **11.7** | (14.5) | | Acquisition-related financing activities: | | | | | | | Settlement of acquisition-related contingencies | **6.2** | 9.7 | — | **(3.5)** | 9.7 | | Payment of acquisition-related obligation | **(4.0)** | (7.3) | (20.3) | **3.3** | 13.0 | | Proceeds from exercise of stock options | **2.3** | — | — | **2.3** | — | | Tax withholdings associated with share-based compensation | **(5.5)** | (10.3) | (8.9) | **4.8** | (1.4) | | Cross currency swap contract | **4.0** | 3.1 | (3.9) | **0.9** | 7.0 | | Financing activities | **$171.3** | 683.7 | (38.0) | **$(512.4)** | 721.7 | ### 2021 versus 2020 Cash flows from financing activities decreased by $512.4 million in 2021 compared to 2020 as net borrowings decreased compared to the prior year period. There was also a $150 million increase in cash used to repurchase shares of our common stock in 2021, compared to the prior period. ### Dividends We paid dividends to Brink’s shareholders of $0.20 per share in each of the last three quarters in 2021 and paid $0.15 per share in each of the nine quarters prior. Future dividends are dependent on our earnings, financial condition, shareholders’ equity levels, our cash flow and business requirements, as determined by the Board. ### Effect of Exchange Rate Changes on Cash and Cash Equivalents Changes in currency exchange rates decreased the amount of cash and cash equivalents by $50.8 million during 2021, compared to an increase of $37.9 million in 2020 and a reduction of $8.1 million in 2019. The decrease in 2021 was due to the strengthening of the U.S. dollar in 2021, primarily against the euro. ### Capitalization We use a combination of debt, leases and equity to capitalize our operations. As of December 31, 2021, debt as a percentage of capitalization (defined as total debt and equity) was 92%, which is consistent with 92% at December 31, 2020. Our debt in 2021 increased primarily from the borrowings under the senior secured revolving credit facility partially offset by repayment of the senior secured term loan A. Our equity increased in 2021 primarily due to the increase in reported net income, acquired noncontrolling interest related to the G4S acquisition and stock-based compensation, partially offset by share repurchases and dividends payments to Brink's shareholders. ### Summary of Debt, Equity and Other Liquidity Information *(In millions)* | Debt: Short-term borrowings | Amount available under credit facilities December 31, 2021 | Outstanding balance December 31, 2021 | 2020 | $ change(a) | | --- | ---: | ---: | ---: | ---: | | Other | **$—** | **$9.8** | 14.2 | (4.4) | | Total Short-term borrowings | **$—** | **$9.8** | 14.2 | (4.4) | | Long-term debt | | | | | | Revolving Facility | **$505.0** | **$495.0** | — | 495.0 | | Term Loan A | **—** | **1,224.7** | 1,292.4 | (67.7) | | Senior Unsecured Notes | — | **989.8** | 987.5 | 2.3 | | Letter of Credit Facilities | **57.0** | **—** | — | — | | Other facilities | **—** | **68.9** | 40.2 | 28.7 | | Financing leases | **—** | **178.5** | 151.4 | 27.1 | | Total Long-term debt | **$562.0** | **$2,956.9** | 2,471.5 | $485.4 | | Total Debt | **$562.0** | **$2,966.7** | 2,485.7 | $481.0 | | Total equity | | **$252.6** | 202.5 | $50.1 | (a) In addition to cash borrowings and repayments, the change in the debt balance also includes changes in currency exchange rates. ### Reconciliation of Net Debt to U.S. GAAP Measures *(In millions)* | Debt: | December 31, 2021 | 2020 | $ change | | --- | ---: | ---: | ---: | | Short-term borrowings | **$9.8** | 14.2 | $(4.4) | | Long-term debt | **2,956.9** | 2,471.5 | 485.4 | | Total Debt | **2,966.7** | 2,485.7 | 481.0 | | Less: | | | | | Cash and cash equivalents | **710.3** | 620.9 | 89.4 | | Amounts held by cash management services operations(a) | **(34.7)** | (19.1) | (15.6) | | Cash and cash equivalents available for general corporate purposes | **675.6** | 601.8 | 73.8 | | Net Debt(b) | **$2,291.1** | 1,883.9 | $407.2 | (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 $54 million at December 31, 2021 and $25 million at December 31, 2020 (see Note 1 to the 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 December 31, 2021, and December 31, 2020. Net Debt at the end of 2021 increased by $407 million when compared to Net Debt at the end of 2020 primarily due to the funding of business acquisitions and other working capital needs. ### Liquidity Needs Our operating liquidity needs are typically financed by cash from operations, short-term borrowings and the available borrowing capacity under our revolving credit facility (our debt facilities are described in more detail in Note 15 to the consolidated financial statements, including certain limitations and considerations related to the cash and borrowing capacity). As of December 31, 2021, $505 million was available under the revolving credit facility. Based on our current cash on hand, amounts available under our credit facilities and current projections of cash flows from operations, we believe that we will be able to meet our liquidity needs for more than the next twelve months. *Limitations on dividends from foreign subsidiaries.* A significant portion of our operations are outside the U.S. which may make it difficult to or costly to repatriate additional cash for use in the U.S. See Item 1A., *Risk Factors*, for more information on the risks associated with having businesses outside the U.S. 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. ### Cash and Cash Equivalents At December 31, 2021, we had $710.3 million in cash and cash equivalents, compared to $620.9 million at December 31, 2020. We plan to use the current cash and cash equivalents for working capital needs, capital expenditures, acquisitions and other general corporate purposes. ### Equity #### Common Stock At December 31, 2021, we had 100 million shares of common stock authorized and 47.4 million shares issued and outstanding. #### Preferred Stock At December 31, 2021, we had the authority to issue up to 2 million shares of preferred stock, par value $10 per share. #### Share Repurchase Program On October 27, 2021, we announced that the Board authorized a $250 million share repurchase program that expires on December 31, 2023 (the "2021 Repurchase Program"). This authorization replaces our previous $250 million repurchase program, authorized by the Board in February 2020 (the "2020 Repurchase Program"), which expired on December 31, 2021, with no amount remaining available. Under the 2021 Repurchase Program, we are not obligated to repurchase any specific dollar amount or number of shares. 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. At December 31, 2021, $250 million remains available under the 2021 Repurchase Program. Under the 2020 Repurchase Program, we entered into three accelerated share repurchase arrangements ("ASR") with a financial institution. In each case, in exchange for an upfront payment at the beginning of each purchase period, the financial institution delivered to us shares of our common stock. The shares received were retired in the period they were delivered to us, and the upfront payment was accounted for as a reduction to shareholders' equity in the consolidated balance sheet. For purposes of calculating earnings per share, we reported each ASR as a repurchase of our common stock and as a forward contract indexed to our common stock. Each ASR met the applicable criteria for equity classification, and, as a result, none were accounted for as a derivative instrument. Below is a summary of each ASR entered into under the 2020 Repurchase Program: | | Upfront Payment | Shares Received | Average Repurchase Price | | --- | ---: | ---: | ---: | | August 2020 | $50,000,000 | 849,978 | $58.83 | | September 2020 | — | 246,676 | — | | | $50,000,000 | 1,096,654 | $45.59 | | August 2021 | $50,000,000 | 524,315 | $95.36 | | September 2021 | — | 131,384 | — | | | $50,000,000 | 655,699 | $76.25 | | November 2021 | $150,000,000 | 1,742,160 | $86.10 | | (a) | — | — | — | | | $150,000,000 | 1,742,160 | $86.10 | | | $250,000,000 | 3,494,513 | $71.54 | (a) We received 1,742,160 shares in early November 2021. Under this ASR, the purchase period has a scheduled termination date of June 1, 2022, although the financial institution is eligible to early terminate the ASR after January 31, 2022. At termination, either additional shares will be delivered to us or we will need to issue new shares of our common stock to the financial institution. ### Off Balance Sheet Arrangements We have certain operating leases that are considered short term and are not capitalized to the balance sheet. We use operating leases both on and off balance sheet to lower our cost of financings. We believe that operating leases are an important component of our capital structure. ### 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. We have made various assumptions to estimate the amount of payments to be made in the future. The most significant assumptions include: - Changing discount rates and other assumptions in effect at measurement dates (normally December 31) - Investment returns on plan assets - Addition of new claimants (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 2021 | Projected 2022 | 2023 | 2024 | 2025 | 2026 | | --- | ---: | ---: | ---: | ---: | ---: | ---: | | Beginning funded status | **$(151.1)** | (65.8) | (42.5) | (18.1) | 8.9 | 38.7 | | Net periodic pension credit(a) | **26.5** | 26.1 | 27.1 | 29.5 | 31.1 | 32.3 | | Payment from Brink’s | **—** | — | — | — | — | — | | Benefit plan actuarial gain (loss) | **58.8** | (2.8) | (2.7) | (2.5) | (1.3) | (1.6) | | Ending funded status | **$(65.8)** | (42.5) | (18.1) | 8.9 | 38.7 | 69.4 | | **UMWA plans** | | | | | | | | Beginning funded status | **$(272.1)** | (219.4) | (217.0) | (215.2) | (214.1) | (213.8) | | Net periodic postretirement cost(a) | **2.5** | 2.4 | 1.8 | 1.1 | 0.3 | (0.4) | | Benefit plan actuarial gain | **50.2** | — | — | — | — | — | | Ending funded status | **$(219.4)** | (217.0) | (215.2) | (214.1) | (213.8) | (214.2) | | **Black Lung plans** | | | | | | | | Beginning funded status | **$(105.0)** | (101.3) | (94.0) | (87.2) | (80.8) | (74.9) | | Net periodic postretirement cost(a) | **(2.3)** | (2.6) | (2.4) | (2.2) | (2.1) | (1.9) | | Payment from Brink’s | **7.9** | 9.9 | 9.2 | 8.6 | 8.0 | 7.4 | | Benefit plan actuarial loss | **(1.9)** | — | — | — | — | — | | Ending funded status | **$(101.3)** | (94.0) | (87.2) | (80.8) | (74.9) | (69.4) | (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 benefits are not provided to employees hired after 2005 or to those covered by a collective bargaining agreement. We did not make cash contributions to the primary U.S. pension plan in 2021. There are approximately 10,800 beneficiaries in the plan. Based on our current assumptions, we do not expect to make contributions in the foreseeable future. #### UMWA Plan Retirement benefits related to former coal operations include medical benefits provided by the Pittston Coal Group Companies Employee Benefit Plan for UMWA Represented Employees. There are approximately 2,700 beneficiaries in the UMWA plans. The company does not expect to make contributions to these plans until 2032, based on our actuarial assumptions. #### Black Lung Under the Federal Black Lung Benefits Act of 1972, Brink’s is responsible for paying lifetime black lung benefits to miners and their dependents for claims filed and approved after June 30, 1973. There are approximately 800 black lung beneficiaries as of December 31, 2021. *Non-U.S. defined-benefit pension plans.* We have various defined-benefit pension plans covering eligible current and former employees of some of our international operations. See Note 4 to the consolidated financial statements for information about these non-U.S. plans' benefit obligation and estimated future benefit payments over the next 10 years. ### Summary of Total Expenses Related to All U.S. Retirement Liabilities This table summarizes actual and projected expense (income) related to U.S. retirement liabilities. These expenses are not allocated to segment results. *(In millions)* | | Actual 2021 | Projected 2022 | 2023 | 2024 | 2025 | 2026 | | --- | ---: | ---: | ---: | ---: | ---: | ---: | | Primary U.S. pension plan | **$7.4** | (2.8) | (6.5) | (13.8) | (18.1) | (21.1) | | UMWA plans | **10.3** | 5.2 | 5.1 | 5.2 | 5.4 | 10.4 | | Black Lung plans | **10.9** | 10.1 | 9.4 | 8.8 | 8.1 | 7.5 | | Total | **$28.6** | 12.5 | 8.0 | 0.2 | (4.6) | (3.2) | ### Summary of Total Payments from U.S. Plans to Participants This table summarizes actual and estimated payments from the plans to participants. *(In millions)* | Payments from U.S. Plans to participants | Actual 2021 | Projected 2022 | 2023 | 2024 | 2025 | 2026 | | --- | ---: | ---: | ---: | ---: | ---: | ---: | | Primary U.S. pension plan | **$46.3** | 47.4 | 47.4 | 47.3 | 47.2 | 47.2 | | UMWA plans | **22.9** | 26.6 | 26.5 | 26.2 | 26.0 | 25.6 | | Black Lung plans | **7.9** | 9.9 | 9.2 | 8.6 | 8.0 | 7.4 | | Total | **$77.1** | 83.9 | 83.1 | 82.1 | 81.2 | 80.2 | ### Summary of Projected Payments from Brink’s to U.S. Plans This table summarizes estimated payments from Brink’s to U.S. retirement plans. *(In millions)* | Projected payments | Projected Payments to Plans from Brink's Primary U.S. Pension Plan | UMWA Plans | Black Lung Plans | Total | | --- | ---: | ---: | ---: | ---: | | 2022 | $— | — | 9.9 | 9.9 | | 2023 | — | — | 9.2 | 9.2 | | 2024 | — | — | 8.6 | 8.6 | | 2025 | — | — | 8.0 | 8.0 | | 2026 | — | — | 7.4 | 7.4 | | 2027 | — | — | 6.8 | 6.8 | | 2028 | — | — | 6.3 | 6.3 | | 2029 | — | — | 5.8 | 5.8 | | 2030 | — | — | 5.3 | 5.3 | | 2031 | — | — | 5.0 | 5.0 | | 2032 | — | 21.7 | 4.7 | 26.4 | | 2033 | — | 21.5 | 4.4 | 25.9 | | 2034 | — | 20.7 | 4.1 | 24.8 | | 2035 | — | 19.8 | 3.8 | 23.6 | | 2036 and thereafter | — | 211.4 | 40.4 | 251.8 | | Total projected payments | $— | 295.1 | 129.7 | 424.8 | The amounts in the tables above are based on a variety of estimates, including actuarial assumptions as of December 31, 2021. The estimated amounts will change in the future to reflect payments made, investment returns, actuarial revaluations, and other changes in estimates. Actual amounts could differ materially from the estimated amounts. ### Contingent Matters In August 2020, the Company received a subpoena issued in connection with an investigation being conducted by the U.S. Department of Justice (the “DOJ”). The Company is fully cooperating with the investigation and responding to requests from the DOJ for documents and other information, primarily related to cross-border shipments of cash and things of value and anti-money laundering compliance. Given that the investigation is still ongoing and that no civil or criminal claims have been brought to date, the Company cannot predict the outcome of the investigation, the timing of the ultimate resolution of the matter, or reasonably estimate the possible range of loss, if any, that may result from this matter. Accordingly, no accruals have been made with respect to this matter. At the end of the fourth quarter of 2018, we became aware of an investigation initiated by the Chilean Fiscalía Nacional Económica (the Chilean antitrust agency) (“FNE”) related to potential anti-competitive practices among competitors in the cash logistics industry in Chile. In October 2021, the FNE filed a complaint before the Chilean antitrust court alleging that Brink’s Chile (as well as competitor companies) engaged in collusion in 2017 and 2018 and requested that the court approve a fine of $30.5 million. The Company is seeking access to the FNE’s investigative file and the evidence supporting the allegations against it, and intends to vigorously defend itself against the FNE’s complaint. Based on available information to date, the Company has recorded a charge of $9.5 million in connection with this matter. In addition, we are involved in various other lawsuits and claims in the ordinary course of business. We are not able to estimate the loss or range of losses for some of these matters. We have recorded accruals for losses that are considered probable and reasonably estimable. Except as otherwise noted, we do not believe that it is reasonably possible the ultimate disposition of any of the lawsuits currently pending against the Company could have a material adverse effect on our liquidity, financial position or results of operations. ### APPLICATION OF CRITICAL ACCOUNTING POLICIES The application of accounting principles requires the use of assumptions, estimates and judgments. We make assumptions, estimates and judgments based on, among other things, knowledge of operations, markets, historical trends and likely future changes, similarly situated businesses and, when appropriate, the opinions of advisors with relevant knowledge and experience. Reported results could have been materially different had we used a different set of assumptions, estimates and judgments. ### Deferred Tax Asset Valuation Allowance Deferred tax assets result primarily from net operating losses, tax credit carryforwards, and the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial statement and income tax purposes, as determined under enacted tax laws and rates. ### Accounting Policy We establish valuation allowances, in accordance with the Financial Accounting Standards Board ("FASB") ASC Topic 740, *Income Taxes*, when we estimate it is not more likely than not that a deferred tax asset will be realized. We decide to record valuation allowances primarily based on an assessment of positive and negative evidence including historical earnings and future taxable income that incorporates prudent, feasible tax-planning strategies. We assess deferred tax assets on an individual jurisdiction basis. Changes in tax statutes, the timing of deductibility of expenses or expectations for future performance could result in material adjustments to our valuation allowances, which would increase or decrease tax expense. Our valuation allowances are as follows. ### Valuation Allowances *(In millions)* | | December 31, 2021 | 2020 | | --- | ---: | ---: | | U.S. | **$95.8** | 94.9 | | Non-U.S. | **45.7** | 33.2 | | Total | **$141.5** | 128.1 | ### Application of Accounting Policy #### U.S. Deferred Tax Assets We had $190 million of net deferred tax assets at December 31, 2021, of which $176 million related to U.S. jurisdictions. In 2021, we concluded that we were not more-likely-than-not to realize assets related to certain attributes with a limited statutory carryforward and we recorded a $1 million valuation allowance through income from continuing operations. In 2020, we concluded that we were not more-likely-than-not to realize assets related to certain attributes with a limited statutory carryforward and we recorded a $4 million valuation allowance through income from continuing operations. We used various estimates and assumptions to evaluate the need for the valuation allowance in the U.S. These included - projected revenues and operating income for our U.S. entities, - projected royalties and management fees paid to U.S. entities from subsidiaries outside the U.S., - projected Global Intangible Low-Taxed Income ("GILTI") inclusion in our U.S. taxable income, - estimated required contributions to our U.S. retirement plans, - the estimated impact of U.S. tax reform, and - interest rates on projected U.S. borrowings. Our projections assumed continued growth of our revenues and operating profit both in the U.S. and outside the U.S. Had we used different assumptions, we might have made different conclusions about the need for valuation allowances. For example, if we did not have growth in either the U.S. or non-U.S. jurisdictions with respect to the GILTI inclusions or using different assumptions, we might have concluded that we require a full valuation allowance offsetting our U.S. deferred tax assets. #### Non-U.S. Deferred Tax Assets In 2021, we recognized a tax expense of $9 million through income from continuing operations from a change in judgment about the need for valuation allowances for deferred tax assets related mainly to Canada and in certain other non-U.S. jurisdictions. In 2020, we recognized a tax benefit of $2 million through income from continuing operations from a change in judgment about the need for valuation allowances for deferred tax assets in certain non-U.S. jurisdictions. ### Business Acquisitions ### Accounting Policy In the three years ended December 31, 2021, we have completed multiple business acquisitions. When we acquire a controlling interest in an entity that is determined to meet the definition of a business, we apply the acquisition method described in FASB ASC Topic 805, *Business Combinations.* Using the acquisition method, we allocate the total purchase price to the assets acquired and the liabilities assumed based on their estimated fair values at the acquisition date. Any excess purchase price over the fair value of the assets acquired and the liabilities assumed is recognized as goodwill. ### Application of Accounting Policy The purchase price allocation process requires us to make significant estimates and assumptions, primarily related to intangible assets. The allocation of the purchase consideration transferred may be subject to revision based on the final determination of fair values during the measurement period. We use all available information to make these fair value determinations and, for material business acquisitions, we engage an outside valuation specialist to assist in the fair value determination of the acquired intangible assets. We typically use an income method to estimate the fair value of intangible assets, which is based primarily on future cash flow projections. The forecasted cash flows also reflect significant assumptions related to expected customer attrition rates, revenue growth rates, market participant synergies and discount rates applied to the cash flows. Unanticipated events and circumstances may occur which may affect the accuracy or validity of such assumptions. The estimated fair values assigned to assets acquired and liabilities assumed in a purchase price allocation can have a significant effect on future results of operations. For example, a higher fair value assigned to intangible assets results in higher amortization expense, which results in lower net income. ### Goodwill, Other Intangible Assets and Property and Equipment Valuations ### Accounting Policy At December 31, 2021, we had property and equipment of $865.6 million, goodwill of $1,411.7 million and other intangible assets of $491.2 million, net of accumulated depreciation and amortization. We review these assets for possible impairment using the guidance in FASB ASC Topic 350, *Intangibles - Goodwill and Other*, for goodwill and other intangible assets and FASB ASC Topic 360, *Property, Plant and Equipment*, for property and equipment. Our review for impairment requires the use of significant judgments about the future performance of our operating subsidiaries. Due to the many variables inherent in the estimates of the fair value of these assets, differences in assumptions could have a material effect on the impairment analyses. #### Goodwill We review goodwill for impairment annually and whenever events or circumstances make it more likely than not that impairment may have occurred. Application of the goodwill impairment test requires judgment, including the identification of reporting units, assignment of assets and liabilities to reporting units, assignment of goodwill to reporting units, and determination of the fair value of each reporting unit. Under U.S. GAAP, the annual impairment test may be either a quantitative test or a qualitative assessment. The qualitative assessment can be performed in order to determine whether facts and circumstances support a determination that reporting unit fair values are greater than their carrying values. We performed a goodwill impairment test on these reporting units as of October 1, 2021 and elected to forego the optional qualitative assessment and performed a quantitative goodwill impairment assessment instead. We estimated the fair value of each reporting unit using a weighting of two valuation methodologies: the Income Approach and the Public Company Market Multiple Method, with greatest weight placed on the Income Approach. The resulting reporting unit fair values were compared to each reporting unit's carrying value. As a result of the evaluation, we concluded that goodwill was not impaired, and the fair value of each reporting unit exceeded its carrying value for all reporting units. #### Finite-lived Intangible Assets and Property and Equipment We review finite-lived intangible assets and property and equipment for impairment whenever events or changes in circumstances indicate that the related carrying amounts may not be recoverable. For purposes of assessing impairment, assets are grouped at the lowest levels for which there are identifiable cash flows that are largely independent of the cash flows of other groups of assets. To determine whether impairment has occurred, we compare estimates of the future undiscounted net cash flows of groups of assets to their carrying value. #### Estimates of Future Cash Flows We made significant assumptions when preparing financial projections of cash flow used in our impairment analyses, including assumptions of future results of operations including revenue growth rate and operating income over the forecast period, capital requirements, income taxes, long-term growth rates for determining terminal value, and discount rates. Our projections assumed continued growth of our revenues and operating profit both in the U.S. and outside the U.S. Our conclusions regarding asset impairment may have been different if we had used different assumptions. ### Retirement and Post employment Benefit Obligations We provide benefits through defined benefit pension plans and retiree medical benefit plans and under statutory requirements. ### Accounting Policy We account for pension and other retirement benefit obligations under FASB ASC Topic 715, *Compensation – Retirement Benefits.* We account for post employment benefit obligations, including workers’ compensation obligations, under FASB ASC Topic 712, *Compensation – Non retirement Post employment Benefits.* To account for these benefits, we make assumptions of expected return on assets, discount rates, inflation, demographic factors and changes in the laws and regulations covering the benefit obligations. Because of the inherent volatility of these items and because the obligations are significant, changes in the assumptions could have a material effect on our liabilities and expenses related to these benefits. Our most significant retirement plans include our primary U.S. pension plan and the retiree medical plans of our former coal business that were collectively bargained with the United Mine Workers of America (the “UMWA”). The critical accounting estimates that determine the carrying values of liabilities and the resulting annual expense are discussed below. ### Application of Accounting Policy ### Discount Rate Assumptions For plans accounted under FASB ASC Topic 715, we discount estimated future payments using discount rates based on market conditions at the end of the year. In general, our liability changes in an inverse relationship to interest rates. That is, the lower the discount rate, the higher the associated plan obligation. #### U.S. Plans For our largest retirement plans, including the primary U.S. pension and UMWA plans and Black Lung obligations, we derive the discount rates used to measure the present value of benefit obligations using the cash flow matching method. Under this method, we compare the plan’s projected payment obligations by year with the corresponding yields on a Mercer yield curve. Each year’s projected cash flows are then discounted back to their present value at the measurement date and an overall discount rate is determined. The overall discount rate is then rounded to the nearest tenth of a percentage point. We used Mercer’s Above-Mean Curve to determine the discount rates for retirement cost and the year-end benefit obligation. To derive the Above-Mean Curve, Mercer uses only those bonds with a yield higher than the mean yield of the same portfolio of high quality bonds. The Above-Mean Curve reflects the way an active investment manager would select high-quality bonds to match the cash flows of the plan. #### Non-U.S. Plans We use the same cash flow matching method to derive the discount rates for our major non-U.S. retirement plans. Where the cash flow matching method is not possible, rates of local high-quality long-term government bonds are used to estimate the discount rate. The discount rates for the primary U.S. pension plan, UMWA retiree medical plans and Black Lung obligations were: | Discount rate: | Primary U.S. Plan 2021 | 2020 | 2019 | UMWA Plans 2021 | 2020 | 2019 | Black Lung 2021 | 2020 | 2019 | | --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | | Retirement cost | **2.4%** | 3.3% | 4.4% | **2.3%** | 3.2% | 4.3% | **2.2%** | 3.1% | 4.2% | | Benefit obligation at year end | **2.8%** | 2.4% | 3.3% | **2.8%** | 2.3% | 3.2% | **2.7%** | 2.2% | 3.1% | #### Sensitivity Analysis The discount rate we select at year end materially affects the valuations of plan obligations at year end and the calculations of net periodic expenses for the following year. The tables below compare hypothetical plan obligation valuations for our largest plans as of December 31, 2021, actual expenses for 2021 and projected expenses for 2022 assuming we had used discount rates that were one percentage point lower or higher. #### Plan Obligations at December 31, 2021 *(In millions)* | | Hypothetical 1% lower | Actual | Hypothetical 1% higher | | --- | ---: | ---: | ---: | | Primary U.S. pension plan | $939.6 | **830.6** | 741.4 | | UMWA plans | 442.2 | **397.4** | 359.9 | 53 #### Actual 2021 and Projected 2022 Expense (Income) *(In millions, except for percentages)* | Years Ending December 31, Primary U.S. pension plan | Actual 2021 | Hypothetical sensitivity analysis for discount rate assumption 1% lower 2021 | 1% higher 2021 | Projected 2022 | Hypothetical sensitivity analysis for discount rate assumption 1% lower 2022 | 1% higher 2022 | | --- | ---: | ---: | ---: | ---: | ---: | ---: | | Discount rate assumption | **2.4%** | 1.4% | 3.4% | 2.8% | 1.8% | 3.8% | | Retirement cost | **$7.4** | 13.9 | 1.8 | $(2.8) | 3.2 | (8.1) | | UMWA plans | | | | | | | | Discount rate assumption | **2.3%** | 1.3% | 3.3% | 2.8% | 1.8% | 3.8% | | Retirement cost | **$10.3** | 11.2 | 9.3 | $5.2 | 6.1 | 4.2 | ### Expected-Return-on-Assets Assumption Our expected-return-on-assets assumption, which materially affects our net periodic benefit cost, reflects the long-term average rate of return we expect the plan assets to earn. We select the expected-return-on-assets assumption using advice from our investment advisor considering each plan’s asset allocation targets and expected overall investment manager performance and a review of the most recent long-term historical average compounded rates of return, as applicable. We selected 7.00% as the expected-return-on-assets assumption for our primary U.S. pension plan and 8.00% for our UMWA retiree medical plans for actual 2021 expense. We selected 7.00% as the expected-return-on-assets assumption for our primary U.S. pension plan and 8.00% for our UMWA retiree medical plans for projected 2022 expense. The twenty to thirty year compound annual return of our primary U.S. pension plan has averaged from 7.5% to 8.7%. #### Sensitivity Analysis *Effect of using different expected-rate-of-return assumptions.* Our 2021 and projected 2022 expense would have been different if we had used different expected-rate-of-return assumptions. For every hypothetical change of one percentage point in the assumed long-term rate of return on plan assets (and holding other assumptions constant), our actual 2021 and projected 2022 expense would be as follows: *(In millions, except for percentages)* | Years Ending December 31, Expected-return-on-asset assumption | Actual 2021 | Hypothetical sensitivity analysis for expected-return-on asset assumption 1% lower 2021 | 1% higher 2021 | Projected 2022 | Hypothetical sensitivity analysis for expected-return-on asset assumption 1% lower 2022 | 1% higher 2022 | | --- | ---: | ---: | ---: | ---: | ---: | ---: | | Primary U.S. pension plan | **7.00%** | 6.00% | 8.00% | 7.00% | 6.00% | 8.00% | | UMWA plans | **8.00%** | 7.00% | 9.00% | 8.00% | 7.00% | 9.00% | | Primary U.S. pension plan | **$7.4** | 14.2 | 0.6 | $(2.8) | 4.2 | (9.8) | | UMWA plans | **10.3** | 11.8 | 8.8 | 5.2 | 6.9 | 3.6 | 54 *Effect of improving or deteriorating actual future market returns.* Our funded status at December 31, 2022, and our 2023 expense will be different from currently projected amounts if our projected 2022 returns are better or worse than the returns we have assumed for each plan. *(In millions, except for percentages)* | Years Ending December 31, Return on investments in 2022 | Projected | Hypothetical sensitivity analysis of 2022 asset return better or worse than expected Better return | Worse return | | --- | ---: | ---: | ---: | | Primary U.S. pension plan | 7.00% | 14.00% | —% | | UMWA plans | 8.00% | 16.00% | —% | | Projected Funded Status at December 31, 2022 | | | | | Primary U.S. pension plan | $(42) | 9 | (94) | | UMWA plans | (217) | (203) | (230) | | 2023 Expense(a) | | | | | Primary U.S. pension plan | $(7) | (9) | (5) | | UMWA plans | 5 | 3 | 8 | (a) Actual future returns on investments will not affect our earnings until 2023 since the earnings in 2022 will be based on the "expected return on assets" assumption. *Effect of using fair market value of assets to determine expense.* For our defined-benefit pension plans, we calculate expected investment returns by applying the expected long-term rate of return to the market-related value of plan assets. In addition, our plan asset actuarial gains and losses that are subject to amortization are based on the market-related value. The market-related value of the plan assets is different from the actual or fair market value of the assets. The actual or fair market value is, at a point in time, the value of the assets that is available to make payments to pensioners and to cover any transaction costs. The market-related value recognizes changes in fair value from the expected value on a straight-line basis over five years. This recognition method spreads the effects of year-over-year volatility in the financial markets over several years. Our expenses related to our primary U.S. pension plan would have been different if our accounting policy were to use the fair market value of plan assets instead of the market-related value to recognize investment gains and losses. *(In millions)* | Years Ending December 31, | Based on market-related value of assets Actual 2021 | Projected 2022 | Projected 2023 | Hypothetical(a) 2021 | 2022 | 2023 | | --- | ---: | ---: | ---: | ---: | ---: | ---: | | Primary U.S. pension plan expense | **$7.4** | (2.8) | (6.5) | $(1.7) | (10.3) | (11.9) | (a) Assumes that our accounting policy was to use the fair market value of assets instead of the market-related value of assets to determine our expense related to our primary U.S. pension plan. For our UMWA plans, we calculate expected investment returns by applying the expected long-term rate of return to the fair market value of the assets at the beginning of the year. This method is likely to cause the expected return on assets, which is recorded in earnings, to fluctuate more than had we used the accounting methodology of our defined-benefit pension plans. ### Medical Inflation Assumption We estimate the trend in healthcare cost inflation to predict future cash flows related to our retiree medical plans. Our assumption is based on recent plan experience and industry trends. For the UMWA plans, our largest retiree medical plans, we have assumed a medical inflation rate of 5.8% for 2022, and we project this rate to decline to 5% in 2030 and hold at 5% thereafter. Our overall medical inflation rate assumption, including the assumption that medical inflation rates will gradually decline over the next nine years and hold at 5%, is based on macroeconomic assumptions of gross domestic growth rates, the excess of national health expenditures over other goods and services, and population growth. Our assumption of a medical inflation rate of 5.8% for 2022 is based on our recent actual experience. The average annual medical inflation rate of the Company over the last five to eleven years ranged from 0.3% to 4.3%. If we had assumed that medical inflation rates were one percentage point higher in each future year, the plan obligation for these plans at December 31, 2021, would have been approximately $45.3 million higher and the expense for 2021 would have been $1.1 million higher. If we had assumed that the medical inflation rates were one percentage point lower, the plan obligation at December 31, 2021, would have been approximately $38.8 million lower and the related 2021 expenses would have been $0.9 million lower. ### Workers’ Compensation Besides the effects of changes in medical costs, worker’s compensation costs are affected by the severity and types of injuries, changes in state and federal regulations and their application and the quality of programs which assist an employee’s return to work. Our liability for future payments for workers’ compensation claims is evaluated annually with the assistance of an actuary. ### Numbers of Participants *Mortality tables.* We use the Society of Actuaries base mortality tables for private sector plans, Pri-2012, and the Mercer modified MP-2021 projection scale, with a Blue Collar adjustment factor for the majority of our U.S. retirement plans and a White Collar adjustment factor for our nonqualified U.S. pension plan. #### 2019 Annuity Contract Buy-out On October 8, 2019, we purchased a single premium group annuity contract from an insurance company to provide for the payment of pension benefits to approximately 2,600 primary U.S. pension plan participants. We purchased the contract with $53 million of plan assets. The insurance company took over the payments of these benefits starting January 1, 2020. This transaction settled $54 million of our primary U.S. pension plan obligation. As a result, we recognized a settlement charge of $19.3 million in the fourth quarter of 2019. *Number of participants.* The number of participants by major plan in the past five years is as follows: | Plan | Number of participants 2021 | 2020 | 2019 | 2018 | 2017 | | --- | ---: | ---: | ---: | ---: | ---: | | UMWA plans | **2,700** | 2,900 | 3,000 | 3,200 | 3,300 | | Black Lung | **800** | 700 | 800 | 800 | 760 | | U.S. pension | **10,800** | 11,000 | 11,200 | 14,000 | 14,200 | Because we are no longer operating in the coal industry, we anticipate that the number of participants in the UMWA retirement medical plan will decline over time due to mortality. Because the U.S. pension plan has been frozen, the number of its participants will also decline over time. ### Foreign Currency Translation The majority of our subsidiaries outside the U.S. conduct business in their local currencies. Our financial results are reported in U.S. dollars, which include the results of these subsidiaries. ### Accounting Policy Our accounting policy for foreign currency translation is different depending on whether the economy in which our foreign subsidiary operates has been designated as highly inflationary. Economies with a three-year cumulative inflation rate of more than 100% are considered highly inflationary. Subsequent reductions in cumulative inflation rates below 100% do not change the method of translation unless the reduction is deemed to be other than temporary. #### Non-Highly Inflationary Economies Assets and liabilities of foreign subsidiaries in non-highly inflationary economies are translated into U.S. dollars using rates of exchange at the balance sheet date. Translation adjustments are recorded in other comprehensive income (loss). Revenues and expenses are translated at rates of exchange in effect during the year. Transaction gains and losses are recorded in net income. #### Highly Inflationary Economies Foreign subsidiaries that operate in highly inflationary countries must use the reporting currency (the U.S. dollar) as the functional currency. Local-currency monetary assets and liabilities are remeasured into dollars each balance sheet date, with remeasurement adjustments and other transaction gains and losses recognized in earnings. Other than nonmonetary equity and available for sale debt securities, nonmonetary assets and liabilities do not fluctuate with changes in local currency exchange rates to the dollar. For nonmonetary equity securities traded in highly inflationary economies, the fair market value of the equity securities are remeasured at the current exchange rates to determine gain or loss to be recorded in net income. For nonmonetary available for sale debt securities traded in highly inflationary economies, the fair market value of these debt securities are remeasured at the current exchange rates, with changes recorded in the gains (losses) on marketable securities component of accumulated other comprehensive income (loss). We reclassify amounts from accumulated other comprehensive income (loss) into earnings when these debt securities are sold. ### Application of Accounting Policy #### Argentina We operate in Argentina through wholly owned subsidiaries and a smaller controlled subsidiary (together "Brink's Argentina"). Revenues from Brink's Argentina represented approximately 4% of our consolidated revenues for the year ended December 31, 2021 and 5% and 6% of our consolidated revenues for the years ended December 31, 2020 and 2019, respectively. The operating environment in Argentina continues to present business challenges, including ongoing devaluation of the Argentine peso and significant inflation. For the year ended December 31, 2019, the Argentine peso declined by approximately 37% (from 37.6 to 59.9 pesos to the U.S. dollar). For the year ended December 31, 2020, the Argentine peso declined by approximately 29% (from 59.9 to 84.0 pesos to the U.S. dollar). For the year ended December 31, 2021, the Argentine peso declined approximately 19% (from 84.0 to 103.1 pesos to the U.S. dollar). Beginning July 1, 2018, we designated Argentina's economy as highly inflationary for accounting purposes. As a result, we consolidated Brink's Argentina using our accounting policy for subsidiaries operating in highly inflationary economies beginning with the third quarter of 2018. Argentine peso-denominated monetary assets and liabilities are now remeasured at each balance sheet date using the currency exchange rate then in effect, with currency remeasurement gains and losses recognized in earnings. In 2021, we recognized $9.0 million pretax remeasurement losses. In 2020 and in 2019, we recognized $7.7 million and $11.3 million pretax remeasurement losses, respectively. At December 31, 2021, Argentina's economy remained highly inflationary for accounting purposes. At December 31, 2021, we had net monetary assets denominated in Argentine pesos of $60.1 million, including cash of $52.9 million. At December 31, 2021, we had net nonmonetary assets of $155.3 million, including $99.8 million of goodwill, $8.2 million in equity securities denominated in Argentine pesos and $4.3 million in debt securities denominated in Argentine pesos. At December 31, 2020, we had net monetary assets denominated in Argentine pesos of $31.3 million (including cash of $24.4 million) and net nonmonetary assets of $146.2 million (including $99.8 million of goodwill). At December 31, 2020, 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 and during the fourth quarter of 2019, 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, we recognized $10.4 million in 2020 and $4.7 million in 2019 of such conversion losses when we converted Argentine pesos into U.S. dollars at rates that were approximately 100% and 25% less favorable than the rates at which we remeasured the financial statements of Brink’s Argentina. These conversion losses are classified in the consolidated statements of operations as other operating income (expense). We did not have any such conversion losses in 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. ## Market risk As filed, 6,014 characters. We currently serve customers in more than 100 countries, including 53 countries where we operate subsidiaries. These operations expose us to a variety of market risks, including the effects of changes in interest rates and foreign currency exchange rates. These financial exposures are monitored and managed by us as an integral part of our overall risk management program. We may periodically use various derivative and non-derivative financial instruments, as discussed below, to hedge our interest rate and foreign currency exposures when appropriate. The risk that counterparties to these instruments may be unable to perform is minimized by limiting the counterparties used to major financial institutions with investment grade credit ratings. We do not expect to incur a loss from the failure of any counterparty to perform under the agreements. We do not use derivative financial instruments for purposes other than hedging underlying financial exposures. The sensitivity analyses discussed below for the market risk exposures were based on the facts and circumstances in effect at December 31, 2021. Actual results will be determined by a number of factors that are not under management’s control and could vary materially from those disclosed. ### Interest Rate Risk We use both fixed and floating rate debt and leases to finance our operations. Floating rate obligations, including both the term loan facility and the revolving credit facility under our senior secured credit facility, expose us to fluctuations in cash flows due to changes in the general level of interest rates. Fixed rate obligations, including our senior unsecured notes, are subject to fluctuations in fair values as a result of changes in interest rates. Our floating rate debt typically is based on an underlying floating rate component as well as a fixed rate margin component. Based on the contractual interest rates on our floating rate debt at December 31, 2021, a hypothetical 10% increase in rates would increase cash outflows by approximately $0.5 million over a twelve-month period. In other words, the weighted-average interest rate on our floating rate instruments (including any fixed rate margin component) was 2.56% per annum at December 31, 2021. If the underlying floating rate component were to increase by 10%, our average rate on this debt would increase by 0.03 percentage points to 2.59%. The effect on the fair values of our $600 million and $400 million unsecured senior notes of a hypothetical 10% decrease in the yield curve from year-end 2021 levels would result in a $19.4 million increase in the fair value of our unsecured senior notes. ### Foreign Currency Risk We have exposure to the effects of foreign currency exchange rate fluctuations on the results of all of our foreign operations. Our foreign operations generally use local currencies to conduct business, but their results are reported in U.S. dollars. We are also exposed periodically to the foreign currency rate fluctuations that affect transactions not denominated in the functional currency of our domestic and foreign operations. To mitigate these exposures, we enter into foreign currency forward and swap contracts from time to time. At December 31, 2021, the notional value of our shorter outstanding foreign currency forward and swap contracts was $614.0 million with average contract maturities of approximately one month. These contracts primarily offset exposures in the euro, the British pound and the Mexican peso. Additionally, these contracts are not designated as hedges for accounting purposes, and accordingly, changes in their fair value are recorded immediately in earnings. In the first quarter of 2019, we entered into a long term cross currency swap contract to hedge exposure in Brazilian real, which is designated as a cash flow hedge for accounting purposes. At December 31, 2021, the notional value of this long term contract was $75 million with a weighted-average remaining maturity of 1.3 years. The effect on the fair value of these cross currency swaps of a hypothetical 10% appreciation in the forward Brazilian real exchange rates from year-end 2021 levels would result in a $7.5 million change in fair values, changing the December 31, 2021 net asset of $26.3 million to a net asset of $18.8 million. 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. At December 31, 2021, the notional value of this long term contract was $400 million with a weighted-average remaining maturity of 6.2 years. The effect on the fair value of these cross currency swaps of a hypothetical 10% appreciation in the forward April 2031 euro exchange rate from year-end 2021 levels would result in a $37.2 million change in fair values, changing the December 31, 2021 net asset of $28.5 million to a net liability of $8.7 million. The effects of a hypothetical simultaneous 10% appreciation in the U.S. dollar from the 2021 levels against all other currencies of countries in which we have continuing operations are as follows: *(In millions)* | Effect on Earnings: | Hypothetical Effects Increase/ (decrease) | | --- | ---: | | Translation of 2021 earnings into U.S. dollars(a) | $(18.9) | | Transaction gains (losses)(b) | (5.8) | | Effect on Other Comprehensive Income (Loss): | | | Translation of net assets of foreign subsidiaries (b) | (132.7) | (a) Excludes our Venezuela operations which we deconsolidated effective June 30, 2018. See Note 1 to the consolidated financial statements. (b) Net of outstanding foreign currency swap and forward contracts. The hypothetical foreign currency effects above detail the consolidated effect attributable to Brink’s of a simultaneous change in the value of a large number of foreign currencies relative to the U. S. dollar. The foreign currency exposure effect related to a change in an individual currency could be significantly different. ## Controls and procedures As filed, 1,673 characters. #### (a) Disclosure Controls and Procedures Pursuant to Rule 13a-15(b) under the Securities Exchange Act of 1934, we carried out an evaluation, with the participation of our management, including our Chief Executive Officer and Executive Vice President and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures (as defined under Rule 13a-15(e) under the Securities Exchange Act of 1934) as of the end of the period covered by this report. Based upon that evaluation, our Chief Executive Officer and Executive Vice President and Chief Financial Officer concluded that our disclosure controls and procedures are effective in ensuring that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934, 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 Chief Executive Officer and Executive Vice President and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. #### (b) Internal Controls over Financial Reporting See pages 62 and 63 for Management’s Annual Report on Internal Control over Financial Reporting and the Attestation Report of the Registered Public Accounting Firm. #### (c) Changes in Internal Controls over Financial Reporting There has been no change in our internal control over financial reporting during the quarter ended December 31, 2021, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. Filed Feb 28, 2022. Source: SEC EDGAR, the filing index for accession 0000078890-22-000077. Last ingested by Listed: Nov 4, 2026, 07:32 ET. No prices; not investment advice.