Brink(BCO) - 2021 Q3 - Quarterly Report

Part I - Financial Information Item 1. Financial Statements This chapter presents the company's unaudited condensed consolidated financial statements as of September 30, 2021, including the balance sheets, statements of operations, comprehensive income (loss), equity, and cash flows, reflecting the company's financial position and operating results for the quarter and nine-month period Condensed Consolidated Balance Sheets (Summary) | Metric | September 30, 2021 (Millions USD) | December 31, 2020 (Millions USD) | | :----------------------- | :----------------------- | :----------------------- | | Assets | | | | Cash and Cash Equivalents | 700.8 | 620.9 | | Restricted Cash | 321.7 | 322.0 | | Accounts Receivable, Net | 728.2 | 679.1 | | Total Current Assets | 1,962.8 | 1,814.8 | | Goodwill | 1,426.6 | 1,219.2 | | Total Assets | 5,552.9 | 5,135.6 | | Liabilities and Equity | | | | Short-term Borrowings | 8.1 | 14.2 | | Accrued Liabilities | 905.2 | 779.2 | | Total Current Liabilities | 1,404.0 | 1,336.2 | | Long-term Debt | 2,701.1 | 2,334.2 | | Total Liabilities | 5,303.9 | 4,933.1 | | Equity Attributable to Brink's Stockholders | 121.4 | 128.8 | | Total Equity | 249.0 | 202.5 | Condensed Consolidated Statements of Operations (Summary) | Metric | Three Months Ended September 30, 2021 (Millions USD) | Three Months Ended September 30, 2020 (Millions USD) | Nine Months Ended September 30, 2021 (Millions USD) | Nine Months Ended September 30, 2020 (Millions USD) | | :--------------------------------- | :----------------------------- | :----------------------------- | :----------------------------- | :----------------------------- | | Revenue | 1,075.5 | 970.5 | 3,102.0 | 2,669.3 | | Operating Profit | 74.2 | 76.4 | 209.2 | 101.6 | | Net Income (Loss) Attributable to Brink's | 19.0 | (23.9) | 55.6 | (9.2) | | Diluted Earnings Per Share from Continuing Operations | 0.38 | (0.47) | 1.11 | (0.17) | | Cash Dividends Per Share | 0.20 | 0.15 | 0.55 | 0.45 | Condensed Consolidated Statements of Cash Flows (Summary) | Metric | Nine Months Ended September 30, 2021 (Millions USD) | Nine Months Ended September 30, 2020 (Millions USD) | | :----------------------- | :----------------------------- | :----------------------------- | | Net Cash Provided by Operating Activities | 273.6 | 87.4 | | Net Cash Used in Investing Activities | (390.3) | (513.5) | | Net Cash Provided by Financing Activities | 234.6 | 749.2 | | Cash, Cash Equivalents, and Restricted Cash at End of Period | 1,022.5 | 795.4 | Notes to Condensed Consolidated Financial Statements This section provides detailed notes to the condensed consolidated financial statements, covering key information such as accounting policies, business operations, financial instruments, debt, equity, retirement benefits, taxes, acquisitions and dispositions, contingent matters, and restructuring activities, offering context and detail for understanding the company's financial position and performance Note 1 - Basis of Presentation This note outlines the basis for preparing the company's condensed consolidated financial statements, including adherence to U.S. GAAP and SEC regulations, emphasizing management's use of estimates and assumptions, and detailing the ongoing impact of the COVID-19 pandemic on operations and financial condition, along with policies on consolidation, foreign currency translation, Argentina and Venezuela operations, internal losses, goodwill, restricted cash, and new accounting standards - The company operates with four reportable segments: North America, Latin America, Europe, and Rest of World[19] - The COVID-19 pandemic has significantly impacted company operations, leading to reduced customer volumes, altered operating procedures, and increased costs, with the company implementing restructuring and operational adjustments in response[20][21] - Argentina's economy has been deemed highly inflationary since July 1, 2018, requiring peso-denominated monetary assets and liabilities to be remeasured at each balance sheet date's exchange rate, with foreign exchange gains or losses recognized in earnings; for the first nine months of 2021, the company recognized $6.6 million in pre-tax remeasurement losses[28] - The company accounts for its Venezuela operations using the cost method, as currency controls and other government regulations restrict operational decision-making, failing to meet accounting standards for control[32] - For the first nine months of 2021, the company recognized a $3.5 million reduction in bad debt expense due to internal misappropriation losses in its U.S. global services business, primarily related to accounts receivable recovery[33] - In the first quarter of 2021, the company adjusted its reporting units from nine to four, aligning with its operating segments: North America, Latin America, Europe, and Rest of World[36] - The company temporarily holds customer cash in France and Malaysia for cash supply chain management services, which is classified as restricted cash; additionally, a $7.5 million restricted cash reserve is required under a revolving credit agreement[37] - The adoption of ASU 2016-13 (Financial Instruments—Credit Losses) on January 1, 2020, resulted in a $1.7 million decrease in retained earnings, while the adoption of ASU 2019-12 (Income Taxes) on January 1, 2021, led to a $0.5 million increase in retained earnings[38][39] Note 2 - Revenue from Contracts with Customers This note details the company's policies and classifications for recognizing revenue from customer contracts, encompassing core services, high-value services, and other security services, primarily recognizing revenue over time as services are provided, and discloses revenue data by reportable segment and revenue type, along with changes in contract assets and liabilities - Company services are categorized into three types: core services (cash-in-transit, ATM services), high-value services (cash management, global services, ATM management, payment services), and other security services (protection for airports, offices, warehouses, stores, and public places)[41][42] - The company primarily recognizes revenue over time as services are provided, measured using the output method (units of service delivered), while revenue from goods sold (e.g., safe equipment) is recognized upon delivery[43] Revenue by Reportable Segment and Revenue Type (Three Months Ended September 30, 2021) | Reportable Segment | Core Services (Millions USD) | High-Value Services (Millions USD) | Other Security Services (Millions USD) | Total (Millions USD) | | :--------- | :------------------ | :-------------------- | :-------------------- | :-------------- | | North America | 178.1 | 182.6 | — | 360.7 | | Latin America | 171.0 | 113.3 | 5.0 | 289.3 | | Europe | 119.4 | 81.8 | 36.8 | 238.0 | | Rest of World | 56.6 | 117.6 | 13.3 | 187.5 | | Total | 525.1 | 495.3 | 55.1 | 1,075.5 | Revenue by Reportable Segment and Revenue Type (Nine Months Ended September 30, 2021) | Reportable Segment | Core Services (Millions USD) | High-Value Services (Millions USD) | Other Security Services (Millions USD) | Total (Millions USD) | | :--------- | :------------------ | :-------------------- | :-------------------- | :-------------- | | North America | 534.0 | 500.6 | — | 1,034.6 | | Latin America | 495.2 | 323.3 | 13.3 | 831.8 | | Europe | 346.8 | 230.9 | 105.5 | 683.2 | | Rest of World | 166.7 | 348.1 | 37.6 | 552.4 | | Total | 1,542.7 | 1,402.9 | 156.4 | 3,102.0 | Changes in Accounts Receivable, Contract Assets, and Contract Liabilities (Millions USD) | Metric | January 1, 2021 (Beginning Balance) | September 30, 2021 (Ending Balance) | Change | | :--------- | :------------------- | :------------------- | :------- | | Accounts Receivable | 679.1 | 728.2 | 49.1 | | Contract Assets | 0.4 | 6.5 | 6.1 | | Contract Liabilities | 15.1 | 15.1 | — | - For the first nine months of 2021, revenue recognized from the January 1, 2021, contract liability balance was $12 million[51] Note 3 - Segment Information This note details the company's division of operations into four reportable segments—North America, Latin America, Europe, and Rest of World—based on how the Chief Operating Decision Maker (CODM) allocates resources and assesses performance, explaining the exclusion of corporate expenses and other unallocated items from segment results, and disclosing revenue and operating profit data for each segment - The company's operations are divided into four reportable segments: North America (U.S. and Canada), Latin America (Latin American countries, including Mexico), Europe (primarily non-BGS services), and Rest of World (primarily BGS services in European countries, along with Middle East, Africa, and Asia operations)[58] - Segment results exclude corporate expenses (e.g., headquarters costs, foreign exchange gains/losses) and unallocated items (e.g., restructuring, acquisition and disposition costs, Argentina highly inflationary impact, Chile antitrust matter, internal losses)[57] Revenue and Operating Profit by Reportable Segment (Three Months Ended September 30, 2021) | Reportable Segment | Revenue (Millions USD) | Operating Profit (Millions USD) | | :--------- | :-------------- | :------------------ | | North America | 360.7 | 25.0 | | Latin America | 289.3 | 64.6 | | Europe | 238.0 | 28.1 | | Rest of World | 187.5 | 31.9 | | Total | 1,075.5 | 149.6 | Revenue and Operating Profit by Reportable Segment (Nine Months Ended September 30, 2021) | Reportable Segment | Revenue (Millions USD) | Operating Profit (Millions USD) | | :--------- | :-------------- | :------------------ | | North America | 1,034.6 | 98.4 | | Latin America | 831.8 | 180.4 | | Europe | 683.2 | 57.4 | | Rest of World | 552.4 | 94.2 | | Total | 3,102.0 | 430.4 | - In the first quarter of 2021, North America's operating profit increased by $12.3 million due to a change in bad debt reserve calculation, but a corresponding increase in corporate expenses resulted in no net impact on consolidated operating profit[60] Note 4 - Retirement Benefits This note discloses the net periodic cost components of the company's pension plans and other postretirement benefits, covering both U.S. and non-U.S. plans, detailing service cost, interest cost, expected return on assets, amortization of losses, and settlement losses, and outlining the company's cash contributions to its primary U.S. pension plan Net Periodic Pension Cost (Three Months Ended September 30, 2021) | Metric | U.S. Plans (Millions USD) | Non-U.S. Plans (Millions USD) | Total (Millions USD) | | :------- | :------------------ | :-------------------- | :-------------- | | Service Cost | — | 2.1 | 2.1 | | Interest Cost | 6.7 | 3.0 | 8.3 | | Expected Return on Assets | (11.6) | (3.1) | (14.9) | | Amortization of Loss | 7.3 | 1.7 | 10.1 | | Settlement Loss | — | 0.3 | 0.3 | | Net Periodic Pension Cost | 2.4 | 4.0 | 5.9 | Net Periodic Pension Cost (Nine Months Ended September 30, 2021) | Metric | U.S. Plans (Millions USD) | Non-U.S. Plans (Millions USD) | Total (Millions USD) | | :------- | :------------------ | :-------------------- | :-------------- | | Service Cost | — | 6.8 | 6.8 | | Interest Cost | 15.9 | 9.0 | 24.9 | | Expected Return on Assets | (35.5) | (9.3) | (44.8) | | Amortization of Loss | 25.4 | 5.0 | 30.4 | | Amortization of Prior Service Cost | — | (0.1) | (0.1) | | Curtailment Gain | — | (0.6) | (0.6) | | Settlement Loss | — | 1.0 | 1.0 | | Net Periodic Pension Cost | 5.8 | 11.8 | 17.6 | - The company made no cash contributions to its primary U.S. pension plan in 2020 or the first nine months of 2021, and based on updated assumptions and the American Rescue Plan Act, no further contributions are required for the remainder of 2021[68] Net Periodic Postretirement Benefit Cost (Three Months Ended September 30, 2021) | Metric | UMWA Plan (Millions USD) | Black Lung and Other Plans (Millions USD) | Total (Millions USD) | | :------- | :------------------ | :------------------------ | :-------------- | | Interest Cost | 2.4 | 0.8 | 3.2 | | Expected Return on Assets | (3.1) | — | (3.1) | | Amortization of Loss | 4.3 | 2.3 | 6.6 | | Amortization of Prior Service Cost | (1.2) | — | (1.2) | | Net Periodic Postretirement Benefit Cost | 2.4 | 3.1 | 5.5 | Net Periodic Postretirement Benefit Cost (Nine Months Ended September 30, 2021) | Metric | UMWA Plan (Millions USD) | Black Lung and Other Plans (Millions USD) | Total (Millions USD) | | :------- | :------------------ | :------------------------ | :-------------- | | Service Cost | — | 0.1 | 0.1 | | Interest Cost | 7.3 | 2.4 | 9.7 | | Expected Return on Assets | (9.2) | — | (9.2) | | Amortization of Loss | 13.3 | 6.7 | 20.0 | | Amortization of Prior Service Cost | (3.5) | (0.2) | (3.7) | | Net Periodic Postretirement Benefit Cost | 7.9 | 9.0 | 16.9 | Note 5 - Income Taxes This note provides the company's income tax provision and effective tax rate from continuing operations, explaining the variance between the effective tax rate and the U.S. statutory rate, primarily attributed to the geographic distribution of earnings, seasonal book losses, non-deductible expenses, and the nature of French business taxes Income Tax Provision and Effective Tax Rate from Continuing Operations | Metric | Three Months Ended September 30, 2021 | Three Months Ended September 30, 2020 | Nine Months Ended September 30, 2021 | Nine Months Ended September 30, 2020 | | :------------------- | :------------------ | :------------------ | :------------------ | :------------------ | | Income Tax Provision (Millions USD) | 22.9 | 58.9 | 59.2 | 3.5 | | Effective Tax Rate | 49.9% | 161.4% | 47.5% | (3,500.0)% | - The effective income tax rate for the first nine months of 2021 exceeded the 21% U.S. statutory rate, primarily due to the geographic distribution of earnings, seasonal book losses without tax benefit, non-deductible expenses in Mexico, cross-border payment taxes, and the nature of French business taxes[74] - The effective income tax rate for the first nine months of 2020 was negative and not meaningful, primarily due to the level of pre-tax loss, compounded by factors such as the geographic distribution of earnings, seasonal book losses, non-deductible expenses, cross-border payment taxes, and the nature of French business taxes[75] Note 6 - Acquisitions and Dispositions This note details the company's significant acquisition activities in the first nine months of 2021 and 2020, including the acquisitions of PAI and G4S businesses, and the disposition of a French security services company, providing purchase consideration, fair value estimates of net assets, and the actual and pro forma impact of these acquisitions on the company's revenue and net income - On April 1, 2021, the company acquired PAI Midco, Inc. and its subsidiaries (PAI), the largest privately held ATM services provider in the U.S., for approximately $216 million, with PAI generating approximately $95 million in revenue in 2020[78] Fair Value of Net Assets Acquired in PAI Acquisition (Millions USD) | Asset Class | Acquisition Date | | :----------- | :------- | | Cash | 12.3 | | Accounts Receivable | 7.3 | | Intangible Assets | 95.0 | | Goodwill | 127.4 | | Total Net Assets | 215.5 | - The $127.4 million of goodwill from the PAI acquisition was allocated to the North America reportable segment, with less than $2 million expected to be tax-deductible[80] - The company completed the phased acquisition of most of G4S's cash management businesses in 2020 and the first quarter of 2021 for a total purchase consideration of $837.1 million, with G4S businesses generating approximately $800 million in annual revenue in 2019[82] Fair Value of Net Assets Acquired in G4S Acquisition (Millions USD) | Asset Class | Acquisition Date | | :----------- | :------- | | Cash | 244.4 | | Restricted Cash | 30.1 | | Accounts Receivable | 145.8 | | Intangible Assets | 206.0 | | Goodwill | 535.9 | | Total Net Assets | 953.5 | | Less: Noncontrolling Interests | (116.4) | | Total Purchase Consideration | 837.1 | - The $535.9 million of goodwill from the G4S acquisition was allocated to the Europe ($191 million), Rest of World ($342 million), and Latin America ($3 million) reportable segments, and is not expected to be tax-deductible[85] Actual Impact of Acquired Businesses on Brink's Consolidated Results (Millions USD) | Period | Business | Revenue | Net Income (Loss) Attributable to Brink's | | :--------- | :--- | :--- | :-------------------------- | | Three Months Ended September 30, 2021 | PAI | 33.5 | 2.9 | | | G4S | 172.6 | 4.9 | | Total | | 206.1 | 7.8 | | Nine Months Ended September 30, 2021 | PAI | 67.5 | 5.4 | | | G4S | 501.0 | 9.1 | | Total | | 568.5 | 14.5 | - On January 1, 2020, the company sold its 100% ownership in a French security services company for a net sales price of approximately $11 million, recognizing a $4.7 million gain on disposition[90] Note 7 - Accumulated Other Comprehensive Income (Loss) This note details the components and changes in accumulated other comprehensive income (loss), including benefit plan adjustments, foreign currency translation adjustments, and gains (losses) on cash flow hedges, disaggregated by amounts attributable to Brink's and noncontrolling interests Changes in Accumulated Other Comprehensive Loss Attributable to Brink's (Millions USD) | Metric | Benefit Plan Adjustments | Foreign Currency Translation Adjustments | Gains (Losses) on Cash Flow Hedges | Total | | :--------------------------------- | :----------- | :----------- | :----------------------------- | :--- | | Balance at December 31, 2020 | (614.8) | (363.2) | (22.0) | (1,000.0) | | Other Comprehensive Income (Loss) Before Reclassifications | (8.4) | (48.2) | 3.0 | (53.6) | | Reclassifications from Accumulated Other Comprehensive Loss to Net Income | 34.6 | (2.0) | 6.4 | 39.0 | | Other Comprehensive Income (Loss) Attributable to Brink's | 26.2 | (50.2) | 9.4 | (14.6) | | Balance at September 30, 2021 | (588.6) | (413.4) | (12.6) | (1,014.6) | - Foreign currency translation adjustments for the three months ended September 30, 2021, primarily reflect the depreciation of the Brazilian Real, Mexican Peso, and Chilean Peso, while for the nine months ended September 30, 2021, they primarily reflect the depreciation of the Euro, Chilean Peso, Mexican Peso, and Brazilian Real[95] Note 8 - Fair Value of Financial Instruments This note provides fair value information for the company's financial instruments, including available-for-sale securities, fixed-rate debt, and forward and swap contracts, detailing their valuation methodologies and impact on financial statements, particularly the use of foreign currency forward and swap contracts and cross-currency swap contracts - The company's mutual funds and equity securities are reported at fair value, based on market quotations and classified as Level 1 valuations[98] Fair Value and Carrying Value of Fixed-Rate Debt (Millions USD) | Debt Type | Carrying Value September 30, 2021 | Fair Value September 30, 2021 | Carrying Value December 31, 2020 | Fair Value December 31, 2020 | | :------------- | :------------------- | :------------------- | :------------------- | :------------------- | | $600 Million Senior Unsecured Notes | 600.0 | 631.1 | 600.0 | 640.9 | | $400 Million Senior Unsecured Notes | 400.0 | 419.3 | 400.0 | 426.8 | - As of September 30, 2021, the company held short-term foreign currency forward and swap contracts not designated as accounting hedges with a notional value of $544 million and an average maturity of approximately one month, primarily hedging Euro, British Pound, and Mexican Peso exposures, with a fair value of approximately $2.8 million net asset[100][101] - The company has a long-term cross-currency swap contract hedging Brazilian Real exposure, designated as a cash flow hedge, with a notional value of $81 million, a weighted-average maturity of 1.4 years, and a fair value of $26.4 million net asset as of September 30, 2021[103][104] - In the second quarter of 2021, the company entered into ten cross-currency swap contracts to hedge net investments in certain Euro functional currency subsidiaries, designated as net investment hedges, with a notional value of $400 million, a weighted-average maturity of 6.8 years, and a fair value of $18.2 million net asset as of September 30, 2021[107][108] Note 9 - Debt This note details the company's short-term and long-term debt structure, including bank credit arrangements and senior unsecured notes, explaining the terms, interest rates, and collateral of the senior secured credit arrangements, the issuance and use of senior unsecured notes, and affirming the company's compliance with all debt covenants at the reporting period end Debt Composition (Millions USD) | Debt Type | September 30, 2021 | December 31, 2020 | | :----------- | :------------ | :------------- | | Short-term Borrowings | 8.1 | 14.2 | | Long-term Debt | 2,837.5 | 2,471.5 | | Total Debt | 2,845.6 | 2,485.7 | | Of which: Current Portion | 144.5 | 151.5 | | Noncurrent Portion | 2,701.1 | 2,334.2 | - The company's senior secured credit arrangements include a $1 billion revolving credit facility and a $1.39 billion term loan, both maturing on February 8, 2024, with the term loan requiring quarterly principal payments of 1.25% of the initial loan amount[113][114] - Interest rates for the revolving credit facility and term loan are based on LIBOR plus a floating margin or an alternative base rate plus a floating margin; as of September 30, 2021, the LIBOR borrowing margin was 2%, and the alternative base rate borrowing margin was 1%[115] - The company issued $400 million of five-year senior unsecured notes in June 2020, bearing an annual interest rate of 5.5% and maturing on July 15, 2025, and $600 million of ten-year senior unsecured notes in October 2017, bearing an annual interest rate of 4.625% and maturing on October 15, 2027[117] - As of September 30, 2021, the company was in compliance with all debt covenants, including both financial and non-financial covenants[122] Note 10 - Credit Losses This note describes the company's exposure to credit loss risk, primarily from core and high-value services provided to customers in the U.S. and over 100 countries globally, detailing the pooling of financial assets by geographic location for credit loss assessment and disclosing changes in the allowance for doubtful accounts for the first nine months of 2021 - The company primarily faces credit loss risk from selling core and high-value services to customers in the U.S. and over 100 countries globally, typically invoicing monthly with payment terms generally ranging from 30 to 60 days[123] - The company pools financial assets by geographic location to assess credit losses and monitors historical loss rates and accounts receivable aging for each pool[123][124] Changes in Allowance for Doubtful Accounts (Nine Months Ended September 30, 2021, Millions USD) | Metric | Amount | | :----------------------- | :--- | | Balance at December 31, 2020 | 30.7 | | Provision for Bad Debts | 2.9 | | Write-offs and Recoveries | (6.8) | | Foreign Currency Exchange Impact | (0.8) | | Balance at September 30, 2021 | 26.0 | - The 2021 provision for bad debts includes a $3.5 million reduction due to internal losses in the U.S. global services business[125] Note 11 - Share-Based Compensation Plans This note details the company's share-based compensation plans, designed to attract and retain employees and non-employee directors while aligning their interests with stockholders, covering compensation expense and activity summaries for various awards including performance share units, restricted stock units, deferred stock units, performance stock options, and time-based stock options - The company grants restricted stock, restricted stock units, performance shares, performance units, stock appreciation rights, stock options, and other equity awards to employees through its 2013 and 2017 equity incentive plans, with the 2017 plan also allowing for deferred stock unit grants to directors[127][128] - Compensation expense is measured using the fair value method and recognized based on changes in retirement eligibility provisions, with the expense recorded in selling, general, and administrative expenses[129][130] Share-Based Compensation Expense (Millions USD) | Award Type | Three Months Ended September 30, 2021 | Three Months Ended September 30, 2020 | Nine Months Ended September 30, 2021 | Nine Months Ended September 30, 2020 | | :----------- | :------------------ | :------------------ | :------------------ | :------------------ | | Performance Share Units | 6.2 | 5.5 | 18.7 | 12.5 | | Restricted Stock Units | 2.4 | 1.5 | 7.0 | 4.5 | | Deferred Stock Units and Stock-Settled Awards | 0.4 | 0.3 | 1.0 | 0.9 | | Performance Stock Options | — | 0.5 | 0.3 | 1.7 | | Time-Based Stock Options | 0.2 | 0.5 | 0.9 | 1.3 | | Cash Awards | 0.2 | 0.4 | 0.8 | 0.8 | | Share-Based Compensation Expense | 9.4 | 8.7 | 28.7 | 21.7 | Performance Stock Option Activity (Nine Months Ended September 30, 2021) | Metric | Shares (Thousands) | Weighted-Average Grant Date Fair Value | | :----------------------- | :----------- | :--------------------- | | Outstanding at December 31, 2020 | 1,165.0 | 11.17 | | Granted | — | — | | Expired | (184.7) | 15.23 | | Exercised | (33.8) | 14.72 | | Outstanding at September 30, 2021 | 946.5 | 10.25 | Restricted Stock Unit (RSU) Activity (Nine Months Ended September 30, 2021) | Metric | Shares (Thousands) | Weighted-Average Grant Date Fair Value | | :----------------------- | :----------- | :--------------------- | | Unvested at December 31, 2020 | 251.8 | 72.30 | | Granted | 110.1 | 78.35 | | Forfeited | (8.5) | 65.95 | | Vested | (77.5) | 74.07 | | Unvested at September 30, 2021 | 275.9 | 74.42 | Performance Share Unit (PSU) Activity (Nine Months Ended September 30, 2021) | Metric | Shares (Thousands) | Weighted-Average Grant Date Fair Value | | :----------------------- | :----------- | :--------------------- | | Unvested at December 31, 2020 | 576.7 | 80.43 | | Granted | 290.5 | 80.59 | | Forfeited | (15.7) | 79.03 | | Vested | (149.5) | 74.03 | | Unvested at September 30, 2021 | 702.0 | 81.90 | Note 12 - Capital Stock This note provides detailed information on the company's capital stock, including weighted-average shares outstanding for EPS calculation, authorized and issued common and preferred stock, dividend payments, and share repurchase programs, also disclosing specific terms and execution of the 2021 Accelerated Share Repurchase (ASR) agreement Weighted-Average Shares Outstanding for Earnings Per Share Calculation (Millions of Shares) | Metric | Three Months Ended September 30, 2021 | Three Months Ended September 30, 2020 | Nine Months Ended September 30, 2021 | Nine Months Ended September 30, 2020 | | :------- | :------------------ | :------------------ | :------------------ | :------------------ | | Basic | 49.8 | 50.4 | 49.9 | 50.6 | | Diluted | 50.3 | 50.4 | 50.4 | 50.6 | - As of September 30, 2021, the company had 100 million shares of common stock authorized for issuance, with 49.1 million shares issued and outstanding[147] - For the first nine months of 2021, the company paid dividends of $0.55 per share to stockholders, totaling $27.3 million, an increase from $0.45 per share or $22.7 million in the first nine months of 2020[148] - On February 6, 2020, the Board of Directors authorized a $250 million share repurchase program, set to expire on December 31, 2021[150] - In August 2021, the company entered into a $50 million Accelerated Share Repurchase (ASR) agreement, repurchasing 524,315 shares of common stock at an average price of $95.36 per share; in September, the ASR was early terminated, and an additional 131,384 shares were received and retired, bringing the total repurchase price to $76.25 per share[151] - As of September 30, 2021, $150 million remained available under the $250 million repurchase program[152] Note 13 - Supplemental Cash Flow Information This note provides supplemental cash flow information, including interest and income taxes paid, along with details on Argentine currency conversions, non-cash investing and financing activities, and restricted cash Cash Paid (Millions USD) | Metric | Nine Months Ended September 30, 2021 | Nine Months Ended September 30, 2020 | | :------- | :------------------ | :------------------ | | Interest | 78.7 | 54.1 | | Income Taxes, Net | 55.9 | 42.9 | - For the three months ended September 30, 2020, the company recognized a $10.4 million foreign exchange loss from converting Argentine Pesos to U.S. Dollars, with no such losses in the first nine months of 2021[155] - For the first nine months of 2021, the company acquired $57.7 million in armored vehicles and other equipment through finance lease arrangements, an increase from $24.3 million in the first nine months of 2020[156] - As of September 30, 2021, the company held $321.7 million in restricted cash, with $167.5 million held for customers and $144.2 million for accrued liabilities[159] Note 14 - Contingent Matters This note discloses the company's contingent matters, including an ongoing U.S. Department of Justice investigation, allegations from Chile's antitrust authority, and other routine business litigation and claims; the company has recorded a $9.5 million charge for the Chile antitrust matter and intends to vigorously defend itself - The company is cooperating with a U.S. Department of Justice (DOJ) investigation regarding cross-border cash and valuables transportation and anti-money laundering compliance, with the outcome or range of loss currently unpredictable[161] - Chile's antitrust authority (FNE) has accused Brink's Chile of collusion in 2017 and 2018, seeking a $30.5 million fine; the company has recorded a $9.5 million charge for this matter and plans to vigorously defend itself[162] - The company is also involved in other routine business litigation and claims, for which it has accrued for probable and reasonably estimable losses, and believes that, apart from disclosed matters, other litigation will not materially adversely affect its liquidity, financial condition, or results of operations[163] Note 15 - Reorganization and Restructuring This note details the company's restructuring activities and associated costs implemented in the first nine months of 2021 and 2020, primarily aimed at addressing the COVID-19 pandemic, with expectations of reducing headcount and generating annual cost savings - For the first nine months of 2021, the company recognized $35.7 million in net restructuring costs, primarily severance, with approximately $5 million related to 2020-approved plans and the remainder to 2021-approved plans, largely in response to the COVID-19 pandemic[164] - Current restructuring actions are expected to eliminate 1,400 to 1,600 positions, generating $30 million to $35 million in annual cost savings, with uncompleted actions projected to incur an additional $5 million to $7 million in future costs[214] Changes in Restructuring Accrued Liabilities (Millions USD) | Metric | Severance | Other | Total | | :----------------------- | :----- | :--- | :--- | | Balance at January 1, 2021 | 9.3 | — | 9.3 | | Expense | 30.1 | 5.6 | 35.7 | | Payments and Utilization | (19.2) | (5.6) | (24.8) | | Foreign Currency Exchange Impact | (0.3) | — | (0.3) | | Balance at September 30, 2021 | 19.9 | — | 19.9 | Note 16 - Subsequent Events This note discloses the company's post-reporting period announcement of an Accelerated Share Repurchase (ASR) program to repurchase $150 million of common stock as part of an existing $250 million repurchase plan, along with an additional $250 million repurchase authorization from the Board of Directors - On October 27, 2021, Brink's announced plans to enter into an Accelerated Share Repurchase (ASR) agreement with J.P. Morgan Chase Bank, N.A. to repurchase $150 million of common stock, as part of the $250 million share repurchase program authorized on February 6, 2020[167] - On the same day, the Board of Directors approved an additional $250 million for share repurchases, with this authorization expiring on December 31, 2023[167] ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Overview of Services and Segment Structure This section outlines Brink's global cash and valuables transportation and logistics management services, including cash-in-transit, ATM services, global services, cash management, payment services, commercial security systems, and security services, also detailing the company's four adjusted operating segments as of Q4 2020: North America, Latin America, Europe, and Rest of World, and their management and reporting structure - Brink's provides global cash and valuables transportation and logistics management services, including cash-in-transit (CIT), ATM services, global services, cash management services, payment services, commercial security systems services, and security services[168] - The company's operations are divided into four operating segments—North America, Latin America, Europe, and Rest of World—based on how the Chief Operating Decision Maker (CODM) allocates resources and assesses performance[169] - The North America segment includes U.S. and Canadian operations and the Brink's Global Services (BGS) business line; the Latin America segment includes operations in Latin American countries and the BGS business line, incorporating Mexico operations previously part of North America[169] - The Europe segment primarily offers non-BGS services but includes the BGS business line; the Rest of World segment primarily provides BGS services, also encompassing other business lines, and includes BGS activities in the Middle East, Africa, Asia, and certain Latin American countries[169] COVID-19 Pandemic Impact This section details the ongoing significant adverse impact of the COVID-19 pandemic on the company's operations and financial condition, including reduced customer volumes and increased operating costs; the company has implemented measures to protect employees, provide essential services, preserve cash, and optimize profitability, continuously assessing the long-term effects, though the full impact remains uncertain - The COVID-19 pandemic began to significantly impact company operations in the first quarter of 2020, leading to reduced customer volumes, altered operating procedures, and increased costs[173] - The company's three priorities in response to the pandemic are: protecting employees and providing essential services; preserving cash and optimizing profitability; and making Brink's stronger post-crisis[172] - The company has taken steps to adjust its operations and reduce costs through restructuring activities and operational changes to mitigate the pandemic's impact and align with anticipated future revenue levels[173] - The full impact of the pandemic depends on numerous uncertain or undetermined factors and is expected to continue affecting the company's financial condition and results of operations for an unknown duration[174] Results of Operations This section provides a detailed analysis of the company's operating results for the third quarter and first nine months of 2021, covering revenue, costs, operating profit, and EPS on both GAAP and non-GAAP bases, including consolidated performance and segment-specific results, and explaining key influencing factors such as acquisitions, exchange rate fluctuations, restructuring, and special items Consolidated Review (GAAP Basis) This section reviews the company's consolidated performance on a GAAP basis, comparing revenue, costs, operating profit, and net income and EPS from continuing operations attributable to Brink's for Q3 2021 versus Q3 2020, and the first nine months of 2021 versus 2020, explaining key drivers of these changes GAAP Consolidated Results Summary (Millions USD, Except Per Share Amounts) | Metric | Three Months Ended September 30, 2021 | Three Months Ended September 30, 2020 | Change % | Nine Months Ended September 30, 2021 | Nine Months Ended September 30, 2020 | Change % | | :--------------------------------- | :------------------ | :------------------ | :--------- | :------------------ | :------------------ | :--------- | | Revenue | 1,075.5 | 970.5 | 11% | 3,102.0 | 2,669.3 | 16% | | Operating Profit | 74.2 | 76.4 | (3)% | 209.2 | 101.6 | Favorable | | Net Income from Continuing Operations Attributable to Brink's | 19.0 | (23.8) | Favorable | 55.7 | (8.3) | Favorable | | Diluted Earnings Per Share from Continuing Operations | 0.38 | (0.47) | Favorable | 1.11 | (0.17) | Favorable | - Consolidated revenue for the third quarter of 2021 increased by $105 million, primarily driven by organic growth in Latin America ($35.3 million), North America ($16.9 million), and Europe ($5 million), along with the impact of acquisitions ($46 million) and favorable foreign currency exchange rates ($4.7 million)[181] - Consolidated operating profit for the third quarter of 2021 decreased by $2.2 million, primarily due to increased corporate expenses, organic declines in Rest of World and North America, and higher charges for the Chile antitrust matter and restructuring costs, partially offset by organic growth in Latin America and Europe, favorable foreign currency exchange rate changes, and the operating impact of acquisitions[182] - Consolidated revenue for the first nine months of 2021 increased by $432.7 million, primarily driven by acquisitions ($275 million), organic growth in Latin America ($73.2 million), North America ($47.1 million), and Europe ($9.3 million), and favorable foreign currency exchange rates ($34.4 million)[184] - Consolidated operating profit for the first nine months of 2021 increased by $107.6 million, primarily due to organic growth across North America, Latin America, Europe, and Rest of World, reduced restructuring charges, lower internal loss-related expenses, decreased acquisition and disposition costs, and the operating impact of acquisitions and favorable foreign currency exchange rate changes, partially offset by increased corporate expenses and charges for the Chile antitrust matter[185] Consolidated Review (Non-GAAP Basis) This section reviews the company's consolidated performance on a non-GAAP basis, comparing revenue, operating profit, and net income and EPS from continuing operations attributable to Brink's for Q3 2021 versus Q3 2020, and the first nine months of 2021 versus 2020, explaining key drivers of these changes Non-GAAP Consolidated Results Summary (Millions USD, Except Per Share Amounts) | Metric | Three Months Ended September 30, 2021 | Three Months Ended September 30, 2020 | Change % | Nine Months Ended September 30, 2021 | Nine Months Ended September 30, 2020 | Change % | | :--------------------------------- | :------------------ | :------------------ | :--------- | :------------------ | :------------------ | :--------- | | Non-GAAP Revenue | 1,075.5 | 970.5 | 11% | 3,102.0 | 2,669.3 | 16% | | Non-GAAP Operating Profit | 115.9 | 99.9 | 16% | 316.6 | 236.2 | 34% | | Non-GAAP Net Income from Continuing Operations Attributable to Brink's | 57.4 | 45.0 | 28% | 156.2 | 108.1 | 44% | | Non-GAAP Diluted Earnings Per Share from Continuing Operations | 1.14 | 0.89 | 28% | 3.10 | 2.12 | 46% | - Non-GAAP consolidated operating profit for the third quarter of 2021 increased by $16 million, primarily driven by organic growth in Latin America and Europe, the operating impact of acquisitions, and favorable foreign currency exchange rate changes, partially offset by increased corporate expenses and organic declines in Rest of World and North America[187] - Non-GAAP consolidated operating profit for the first nine months of 2021 increased by $80.4 million, primarily driven by organic growth across North America, Latin America, Europe, and Rest of World, the operating impact of acquisitions, and favorable foreign currency exchange rate changes, partially offset by increased corporate expenses[189] Revenues and Operating Profit by Segment This section provides a detailed analysis of revenue and operating profit performance for each of the company's reportable segments (North America, Latin America, Europe, and Rest of World) for the third quarter and first nine months of 2021, explaining the specific impact of organic growth, acquisitions, dispositions, and foreign currency exchange rate changes on each segment's results Revenue and Operating Profit by Segment (Three Months Ended September 30, 2021, Millions USD) | Reportable Segment | Q3 2020 Revenue | Organic Change | Acquisitions/Dispositions | FX Impact | Q3 2021 Revenue | Total Change % | Organic Change % | | :--------- | :----------------- | :------- | :-------- | :------- | :----------------- | :------ | :-------- | | North America | 316.8 | 16.9 | 25.2 | 1.8 | 360.7 | 14 | 5 | | Latin America | 256.7 | 35.3 | 0.6 | (3.3) | 289.3 | 13 | 14 | | Europe | 224.0 | 5.0 | 7.7 | 1.3 | 238.0 | 6 | 2 | | Rest of World | 173.0 | (2.9) | 12.5 | 4.9 | 187.5 | 8 | (2) | | Total Segment Revenue | 970.5 | 54.3 | 46.0 | 4.7 | 1,075.5 | 11 | 6 | | Reportable Segment | Q3 2020 Operating Profit | Organic Change | Acquisitions/Dispositions | FX Impact | Q3 2021 Operating Profit | Total Change % | Organic Change % | | :--------- | :------------------- | :------- | :-------- | :------- | :------------------- | :------ | :-------- | | North America | 24.1 | (3.7) | 4.5 | 0.1 | 25.0 | 4 | (15) | | Latin America | 51.1 | 17.0 | 0.1 | (3.6) | 64.6 | 26 | 33 | | Europe | 18.8 | 7.7 | 1.4 | 0.2 | 28.1 | 49 | 41 | | Rest of World | 36.1 | (6.5) | 1.4 | 0.9 | 31.9 | (12) | (18) | | Total Segment Operating Profit | 130.1 | 14.5 | 7.4 | (2.4) | 149.6 | 15 | 11 | - North America segment revenue increased by 14%, driven primarily by the PAI acquisition ($25.2 million) and 5% organic growth ($16.9 million); operating profit increased by $0.9 million, primarily due to the favorable impact of the PAI acquisition ($4.5 million), partially offset by a 15% organic decline ($3.7 million) mainly from increased U.S. labor costs and security losses[195] - Latin America segment revenue increased by 13%, primarily driven by 14% organic growth ($35.3 million); operating profit increased by 26% ($13.5 million), primarily driven by 33% organic growth ($17 million), including benefits from labor and other operating cost savings initiatives, partially offset by unfavorable foreign currency exchange rate impacts[196] Revenue and Operating Profit by Segment (Nine Months Ended September 30, 2021, Millions USD) | Reportable Segment | YTD 2020 Revenue | Organic Change | Acquisitions/Dispositions | FX Impact | YTD 2021 Revenue | Total Change % | Organic Change % | | :--------- | :------------- | :------- | :-------- | :------- | :------------- | :------ | :-------- | | North America | 932.0 | 47.1 | 47.8 | 7.7 | 1,034.6 | 11 | 5 | | Latin America | 786.1 | 73.2 | 7.1 | (34.6) | 831.8 | 6 | 9 | | Europe | 518.2 | 9.3 | 118.1 | 37.6 | 683.2 | 32 | 2 | | Rest of World | 433.0 | (6.3) | 102.0 | 23.7 | 552.4 | 28 | (1) | | Total Segment Revenue | 2,669.3 | 123.3 | 275.0 | 34.4 | 3,102.0 | 16 | 5 | | Reportable Segment | YTD 2020 Operating Profit | Organic Change | Acquisitions/Dispositions | FX Impact | YTD 2021 Operating Profit | Total Change % | Organic Change % | | :--------- | :----------------- | :------- | :-------- | :------- | :----------------- | :------ | :-------- | | North America | 45.9 | 44.1 | 8.2 | 0.2 | 98.4 | Favorable | 96 | | Latin America | 153.4 | 40.9 | 0.5 | (14.4) | 180.4 | 18 | 27 | | Europe | 22.1 | 23.6 | 9.4 | 2.3 | 57.4 | Favorable | Favorable | | Rest of World | 80.7 | 3.6 | 5.8 | 4.1 | 94.2 | 17 | 4 | | Total Segment Operating Profit | 302.1 | 112.2 | 23.9 | (7.8) | 430.4 | 42 | 37 | - North America segment revenue increased by 11%, driven primarily by acquisitions ($47.8 million) and 5% organic growth ($47.1 million); operating profit increased by $52.5 million, primarily due to 96% organic growth ($44.1 million) and the favorable impact of acquisitions ($8.2 million)[203] - Latin America segment revenue increased by 6%, primarily driven by 9% organic growth ($73.2 million); operating profit increased by 18% ($27 million), primarily due to 27% organic growth ($40.9 million), partially offset by unfavorable foreign currency exchange rates ($14.4 million)[205] Income and Expense Not Allocated to Segments This section details corporate expenses and other items not allocated to operating segments, including headquarters costs, foreign exchange gains/losses, accounting policy adjustments, restructuring charges, acquisition and disposition costs, Argentina highly inflationary impact, Chile antitrust matter, internal losses, and reporting compliance costs, explaining their impact on consolidated operating profit and reasons for changes Corporate Expenses (Millions USD) | Metric | Three Months Ended September 30, 2021 | Three Months Ended September 30, 2020 | Change % | Nine Months Ended September 30, 2021 | Nine Months Ended September 30, 2020 | Change % | | :----------------------- | :------------------ | :------------------ | :--------- | :------------------ | :------------------ | :--------- | | General, Administrative, and Other Expenses | (34.8) | (26.6) | 31% | (103.4) | (78.5) | 32% | | Foreign Currency Transaction Gains (Losses) | 1.4 | (7.9) | Favorable | 1.4 | (11.5) | Favorable | | Segment Policy to GAAP Adjustments | (0.3) | 4.3 | Unfavorable | (11.8) | 24.1 | Unfavorable | | Corporate Expenses | (33.7) | (30.2) | 12% | (113.8) | (65.9) | 73% | - Corporate expenses for the first nine months of 2021 increased by $47.9 million, primarily due to higher bad debt expense ($34.7 million), increased new service product development costs ($11.1 million), higher share-based and other incentive compensation ($8.8 million), and a reduction in Mexico profit-sharing plan adjustments ($1.2 million), partially offset by lower foreign currency transaction losses ($12.9 million)[210] Other Items Not Allocated to Segments (Operating Profit, Millions USD) | Metric | Three Months Ended September 30, 2021 | Three Months Ended September 30, 2020 | Change % | Nine Months Ended September 30, 2021 | Nine Months Ended September 30, 2020 | Change % | | :----------------------- | :------------------ | :------------------ | :--------- | :------------------ | :------------------ | :--------- | | Restructuring | (14.0) | (5.1) | Unfavorable | (35.7) | (49.7) | (28)% | | Acquisitions and Dispositions | (16.6) | (16.2) | 2% | (55.8) | (66.2) | (16)% | | Argentina Highly Inflationary Impact | (2.3) | (3.2) | (28)% | (8.8) | (8.4) | 5% | | Chile Antitrust Matter | (9.5) | — | Unfavorable | (9.5) | — | Unfavorable | | Internal Losses | 0.7 | 0.9 | (22)% | 2.4 | (9.9) | Favorable | | Reporting Compliance | — | 0.1 | (100)% | — | (0.4) | (100)% | | Operating Profit | (41.7) | (23.5) | 77% | (107.4) | (134.6) | (20)% | - Other items not allocated to segments resulted in a $41.7 million loss for the third quarter of 2021, primarily due to increased charges for the Chile antitrust matter and restructuring, partially offset by reduced charges from Argentina's highly inflationary accounting treatment[212] - Other items not allocated to segments resulted in a $107.4 million loss for the first nine months of 2021, primarily due to reduced restructuring charges, lower net internal loss-related expenses, and decreased acquisition and disposition costs, partially offset by charges for the Chile antitrust matter[213] Foreign Operations This section discusses risks faced by the company's foreign operations, including labor and economic conditions, political instability, exchange rate fluctuations, and capital repatriation controls, detailing the impact of Argentina's highly inflationary economy, currency controls, and the company's use of foreign currency forward and swap contracts to hedge transactional exposures - The company operates in over 100 countries globally, facing risks such as labor and economic conditions, international sanctions, political instability, profit and capital repatriation controls, nationalization, and expropriation[223] - Argentina's economy remains highly inflationary, with the company holding $58.6 million in Argentine Peso-denominated net monetary assets as of September 30, 2021; the Argentine government implemented currency controls in September 2019, restricting dividend repatriation[224][225] - In the third quarter of 2020, the company converted Argentine Pesos to U.S. Dollars through other market mechanisms, resulting in a $10.4 million foreign exchange loss, with no such losses in the first nine months of 2021[226] - As of September 30, 2021, the company held short-term foreign currency forward and swap contracts not designated as accounting hedges with a notional value of $544 million and a fair value of approximately $2.8 million net asset[228] Impact of Derivative Gains (Losses) on Other Operating Income (Expense) and Nonoperating Income (Expense) (Millions USD) | Metric | Three Months Ended September 30, 2021 | Three Months Ended September 30, 2020 | Nine Months Ended September 30, 2021 | Nine Months Ended September 30, 2020 | | :--------------------------------- | :------------------ | :------------------ | :------------------ | :------------------ | | Derivative Gains (Losses) Included in Other Operating Income (Expense) | 6.3 | (3.4) | 14.5 | 0.5 | | Derivative Losses Included in Other Nonoperating Income (Expense) | — | (0.5) | — | (8.6) | - The company has a long-term cross-currency swap contract hedging Brazilian Real exposure, designated as a cash flow hedge, with a notional value of $81 million and a fair value of $26.4 million net asset as of September 30, 2021[231][232][234] - In the second quarter of 2021, the company entered into ten cross-currency swap contracts to hedge net investments in certain Euro functional currency subsidiaries, designated as net investment hedges, with a notional value of $400 million and a fair value of $18.2 million net asset as of September 30, 2021[235][236] Other Operating Income (Expense) This section analyzes the composition and changes in the company's other operating income (expense) for the third quarter and first nine months of 2021, primarily including foreign currency items, gains (losses) on asset sales, impairment losses, equity in earnings of unconsolidated affiliates, and royalty income Composition of Other Operating Income (Expense) (Millions USD) | Metric | Three Months Ended September 30, 2021 | Three Months Ended September 30, 2020 | Change % | Nine Months Ended September 30, 2021 | Nine Months Ended September 30, 2020 | Change % | | :----------------------- | :------------------ | :------------------ | :--------- | :------------------ | :------------------ | :--------- | | Foreign Currency Items | (0.2) | (9.8) | Favorable | (5.3) | (16.8) | Favorable | | Gains (Losses) on Sale of Assets | — | 0.6 | (100)% | (1.4) | 0.4 | Unfavorable | | Impairment Losses | (5.0) | (3.4) | 47% | (7.5) | (8.3) | (10)% | | Equity in Earnings of Unconsolidated Affiliates | 0.3 | 0.4 | (25)% | 0.7 | 0.6 | 17% | | Royalty Income | 1.5 | 1.2 | 25% | 4.0 | 3.5 | 14% | | Other Gains (Losses) | 1.6 | 1.2 | 33% | 4.3 | 2.2 | 95% | | Other Operating Income (Expense) | (1.8) | (9.8) | (82)% | (5.2) | (18.4) | (72)% | - Other operating income (expense) for the third quarter of 2021 was an expense of $1.8 million, an improvement from the $9.8 million expense in the prior-year period, primarily due to lower net foreign currency item losses[240] - Other operating income (expense) for the first nine months of 2021 was an expense of $5.2 million, an improvement from the $18.4 million expense in the prior-year period, primarily due to lower net foreign currency item losses[241] Nonoperating Income and Expense This section analyzes the company's nonoperating income and expense for the third quarter and first nine months of 2021, primarily including interest expense, interest income, gains (losses) on equity securities, foreign currency transaction gains (losses), and postretirement benefit costs, explaining the reasons for changes such as increased borrowing levels and Brazilian non-income tax credits Interest Expense (Millions USD) | Metric | Three Months Ended September 30, 2021 | Three Months Ended September 30, 2020 | Change % | Nine Months Ended September 30, 2021 | Nine Months Ended September 30, 2020 | Change % | | :------- | :------------------ | :------------------ | :--------- | :------------------ | :------------------ | :--------- | | Interest Expense | 27.6 | 27.1 | 2% | 83.0 | 70.3 | 18% | - Interest expense increased in the third quarter of 2021 primarily due to higher interest rates, while for the first nine months of 2021, it increased mainly due to higher borrowing levels from business acquisitions[243][244] Composition of Interest and Other Nonoperating Income (Expense) (Millions USD) | Metric | Three Months Ended September 30, 2021 | Three Months Ended September 30, 2020 | Change % | Nine Months Ended September 30, 2021 | Nine Months Ended September 30, 2020 | Change % | | :----------------------- | :------------------ | :------------------ | :--------- | :------------------ | :------------------ | :--------- | | Interest Income | 3.3 | 2.3 | 43% | 8.0 | 5.0 | 60% | | Gains (Losses) on Equity Securities | 2.1 | (1.1) | Favorable | 16.3 | 2.3 | Favorable | | Foreign Currency Transaction Gains (Losses) | 0.6 | — | Favorable | 0.5 | (0.1) | Favorable | | Derivative Losses | — | (0.5) | Favorable | — | (8.6) | Favorable | | Postretirement Benefit Costs (Non-Service Costs) | (9.3) | (10.3) | (10)% | (27.6) | (28.6) | (3)% | | G4S Indemnification Asset Adjustment | 2.2 | — | Favorable | 2.7 | — | Favorable | | Acquisition-Related Gains (Losses) | 0.4 | — | Favorable | 0.4 | — | Favorable | | Non-Income Tax Penalties and Interest | — | — | — | (1.7) | — | Unfavorable | | Gain on Disposition of Subsidiary | — | — | — | — | 4.7 | Unfavorable | | Non-Income Tax Credit Interest | 1.2 | — | Favorable | 1.2 | — | Favorable | | Other | 0.8 | (1.3) | Favorable | 0.6 | (2.6) | Favorable | | Interest and Other Nonoperating Income (Expense) | (0.7) | (12.8) | (95)% | (1.6) | (31.4) | (95)% | - Interest and other nonoperating income (expense) for the third quarter of 2021 was an expense of $0.7 million, a significant improvement from the $12.8 million expense in the prior-year period, primarily benefiting from gains on equity securities and the G4S indemnification asset adjustment[245] - Interest and other nonoperating income (expense) for the first nine months of 2021 was an expense of $1.6 million, a significant improvement from the $31.4 million expense in the prior-year period, primarily benefiting from gains on equity securities, the G4S indemnification asset adjustment, and non-income tax credit interest received by Brazilian operations[245] Income Taxes and Noncontrolling Interests This section provides the company's income tax provision and effective tax rate from continuing operations, explaining factors influencing effective tax rate fluctuations, and analyzes changes in net income attributable to noncontrolling interests, primarily due to the G4S acquisition Income Tax Provision and Effective Tax Rate from Continuing Operations | Metric | Three Months Ended September 30, 2021 | Three Months Ended September 30, 2020 | Nine Months Ended September 30, 2021 | Nine Months Ended September 30, 2020 | | :------------------- | :------------------ | :------------------ | :------------------ | :------------------ | | Income Tax Provision (Millions USD) | 22.9 | 58.9 | 59.2 | 3.5 | | Effective Tax Rate | 49.9% | 161.4% | 47.5% | (3,500.0)% | - The effective tax rate can fluctuate significantly due to changes in pre-tax earnings, permanent book-tax differences, changes in the amount and geographic distribution of anticipated earnings, legislative changes, changes in valuation allowances, or accruals for contingent matters[248] Net Income Attributable to Noncontrolling Interests (Millions USD) | Metric | Three Months Ended September 30, 2021 | Three Months Ended September 30, 2020 | Change % | Nine Months Ended September 30, 2021 | Nine Months Ended September 30, 2020 | Change % | | :----------------------- | :------------------ | :------------------ | :--------- | :------------------ | :------------------ | :--------- | | Net Income Attributable to Noncontrolling Interests | 4.0 | 1.4 | Unfavorable | 9.7 | 4.7 | Unfavorable | - Net income attributable to noncontrolling interests increased in the third quarter and first nine months of 2021, primarily due to the G4S acquisitions completed in the third quarter of 2020 and February 2021[249] Non-GAAP Results Reconciled to GAAP This section provides detailed reconciliations of non-GAAP financial measures to their corresponding GAAP measures, aiming to offer supplemental comparisons of operating performance by excluding certain revenue and expense items not reflective of core operations, including retirement plans, restructuring, acquisitions and dispositions, Argentina highly inflationary impact, Chile antitrust matter, internal losses, and reporting compliance costs - Non-GAAP results aim to provide supplemental comparisons of operating performance by excluding certain revenue and expense items not reflective of core operations; these unallocated items include retirement plans, restructuring, acquisitions and dispositions, Argentina highly inflationary impact, Chile antitrust matter, internal losses, and reporting compliance costs[250][251] Non-GAAP to GAAP Effective Income Tax Rate Reconciliation (Nine Months Ended September 30, 2021, Millions USD) | Metric | Pre-Tax Income | Income Tax | Effective Tax Rate | | :----------------------- | :------- | :----- | :------- | | GAAP | 124.6 | 59.2 | 47.5% | | Retirement Plans | 20.3 | 4.9 | | | Restructuring | 35.7 | 9.2 | | | Acquisitions and Dispositions | 52.6 | 3.4 | | | Argentina Highly Inflationary Impact | 8.8 | (0.9) | | | Chile Antitrust Matter | 9.5 | — | | | Internal Losses | (2.4) | (0.8) | | | Reporting Compliance | — | — | | | Income Tax Rate Adjustment | — | 7.7 | | | Non-GAAP | 249.1 | 82.7 | 33.2% | Non-GAAP to GAAP Operating Profit Reconciliation (Millions USD) | Metric | Three Months Ended September 30, 2021 | Three Months Ended September 30, 2020 | Nine Months Ended September 30, 2021 | Nine Months Ended September 30, 2020 | | :----------------------- | :------------------ | :------------------ | :------------------ | :------------------ | | GAAP Operating Profit | 74.2 | 76.4 | 209.2 | 101.6 | | Restructuring | 14.0 | 5.1 | 35.7 | 49.7 | | Acquisitions and Dispositions | 16.6 | 16.2 | 55.8 | 66.2 | | Argentina Highly Inflationary Impact | 2.3 | 3.2 | 8.8 | 8.4 | | Chile Antitrust Matter | 9.5 | — | 9.5 | — | | Internal Losses | (0.7) | (0.9) | (2.4) | 9.9 | | Reporting Compliance | — | (0.1) | — | 0.4 | | Non-GAAP Operating Profit | 115.9 | 99.9 | 316.6 | 236.2 | Non-GAAP to GAAP Net Income from Continuing Operations Attributable to Brink's Reconciliation (Millions USD) | Metr