Brink(BCO) - 2021 Q4 - Annual Report

PART I Item 1. Business Brink's is a global leader in cash management, logistics, and payment solutions, driving profitable growth and digital innovation - The Brink's Company is a global leader in total cash management, route-based logistics, and payment solutions, including cash-in-transit, ATM services, cash management services, and international transportation of valuables[8] - The company manages its business across four segments: North America, Latin America, Europe, and Rest of World, which includes operations in the Middle East, Africa, and Asia[9] - Brink's has three long-term strategic objectives: Accelerate Profitable Growth (organic growth, high-value services, acquisitions), Deliver Operational Excellence (safety, security, productivity), and Introduce Digital Solutions (leveraging IT for new digital payment solutions like Brink's Complete and ATM managed services)[11][12][13] Revenue Contribution by Service Type (2021) | Service Type | % of Total Revenues (2021) | | :------------------ | :------------------------- | | Core Services | 50% | | High-Value Services | 45% | | Other Security Services | 5% | - The company completed several acquisitions, including PAI Midco, Inc. for approximately $216 million in April 2021, and the majority of G4S plc's cash management operations for an aggregate of $826 million by December 31, 2021, expanding its ATM and cash management services[43][44] - Brink's recognized $43.6 million in net restructuring costs in 2021, primarily severance costs, with substantially all costs from 2021 plans addressing the COVID-19 pandemic. These actions are expected to reduce the workforce by 1,600-1,800 positions and generate $35-$40 million in annualized cost savings[47][155] Overview Brink's is a global leader in cash management, logistics, and payment solutions, operating globally across four primary segments - The Brink's Company is a global leader in total cash management, route-based logistics, and payment solutions, including cash-in-transit, ATM services, cash management services, and international transportation of valuables[8] - Customers include financial institutions, retailers, government agencies, mints, jewelers, and other commercial operations worldwide[8] - The company operates in more than 100 countries, with controlling ownership interests in 53 countries, employing approximately 74,500 people, and managing about 1,300 facilities and 16,300 vehicles[8] - Business is managed across four segments: North America (U.S. and Canada, including Brink's Global Services), Latin America, Europe (primarily non-BGS services), and Rest of World (Middle East, Africa, Asia, and BGS services in Europe/Latin America without ownership)[9] Strategy Brink's updated its strategy to accelerate profitable growth, achieve operational excellence, and introduce digital solutions - Three long-term strategic objectives: Accelerate Profitable Growth (organic revenue, high-value services, acquisitions, customer experience), Deliver Operational Excellence (safety, security, productivity via Lean Management), and Introduce Digital Solutions (strengthening IT for new digital offerings)[11][12] - The 2022-2024 strategic plan includes two main strategies: 'Strategy 1.0' focusing on organic growth and operational excellence in core cash logistics, and 'Strategy 2.0' capitalizing on technology for digital solutions (Brink's Complete for cash payments) and ATM managed services[12][13] - The strategy is supported by proven growth and profitability, strong cash usage, positioning in the evolving payments landscape, and a winning culture[14] Services Brink's offers Core, High-Value, and Other Security Services, with a growing emphasis on digital and ATM managed solutions - Core Services (50% of 2021 revenues) include Cash-in-transit (secure transportation of cash, securities, valuables) and Basic ATM services (cash replenishment, treasury management, maintenance for 131,500 ATMs worldwide)[16][17] - High-Value Services (45% of 2021 revenues) include Brink's Global Services (secure transport of high-value commodities), Cash management services (money processing, digital cash payment via Brink's Complete/BLUbeem, CompuSafe service with 47,400 devices), Vaulting services, and ATM managed services (comprehensive ATM management, including ownership of devices for some customers)[18][19][20][21][22] - Other Security Services (5% of 2021 revenues) include Guarding (personnel for airports, offices, etc.) and Commercial security systems (design, installation, and monitoring of alarms, CCTV, access control)[24][25] Industry and Competition Brink's competes in a highly competitive industry, leveraging brand, security, and global network over price - Brink's competes with large multinational (Loomis AB, Prosegur, Garda World Security Corporation), regional, and smaller companies globally[26] - Key competitive advantages include brand name recognition, reputation for high service and security, risk management and logistics expertise, global network, operational excellence, and high-quality insurance coverage and financial strength[26] - The company resists competing on price alone, emphasizing service levels, security expertise, and value-added solutions[26] Seasonality Revenues and earnings are typically higher in the second half of the year, especially the fourth quarter, due to holiday season activity - Revenues and earnings are generally higher in the second half of the year, especially in the fourth quarter, due to increased activity associated with the holiday season[27] Insurance Coverage Reliable insurance coverage is crucial for Brink's to attract customers and manage business risks, with premiums influenced by market conditions - Reliable insurance coverage is vital for customer attraction, retention, and risk management[28] - Insurance covers losses from most causes, excluding war, nuclear risk, and other typical exclusions, with premiums fluctuating based on market conditions and the security loss experience of Brink's and the industry[28][29] Service Mark and Patents The 'BRINKS' service mark is materially significant, while patents for safes and services provide advantages but are not critical to overall operations - BRINKS is a registered service mark in the U.S. and other countries, holding material significance to the business[30] - The company owns patents for safes and related devices/services, including CompuSafe, expiring between 2022 and 2039, which provide important advantages but are not critical for overall business existence[30] Government Regulation Brink's operations are subject to various federal, state, and foreign regulations, including licensing and financial responsibility requirements - Business aspects are subject to regulation by federal, state, and foreign agencies concerning commercial lending, operational safety, equipment, financial responsibility, import/export, and firearm regulations[31] - Compliance with licensing, permits, and registration requirements is necessary across various jurisdictions[31] - Brink's Capital LLC is federally registered as a Money Services Business to offer money transmission and payment services[31] Human Capital Management Brink's fosters a culture of safety, integrity, and diversity, managing a global workforce amidst labor challenges and D&I expansion - Company culture is underpinned by values: Safety, Integrity, Engagement, Continuous Improvement, Customer Focus, and Diversity and Inclusion[32] - As of December 31, 2021, Brink's had approximately 74,500 employees (72,200 full-time, 2,300 part-time), with about 86% (64,000) outside the U.S[8][33] - The company experienced labor shortages and inflationary wage pressures in the U.S. in 2021, responding with enhanced workforce planning, updated job descriptions, and efforts to improve brand attractiveness and reduce turnover[34] - Employee safety and wellness are paramount, with 2021 priorities including mitigating COVID-19 impacts through PPE, enhanced cleaning, and vaccine incentives[36] - Diversity and Inclusion (D&I) initiatives are expanding globally, with a D&I leader appointed in February 2021, a U.S. D&I Council established, and plans to develop global gender diversity goals for leadership in 2022. Employee Resource Groups (ERGs) have also expanded[37][38][39] - Approximately 51% of employees outside North America are represented by trade unions or collective bargaining agreements. In North America, Canada has unionized employees, while the U.S. does not[40][41] Business Divestitures Brink's divested a French security services company in Q1 2020 and exited a Brazilian prepaid mobile phone business in Q2 2019 - Sold 100% ownership in a French security services company in Q1 2020[42] - Exited a top-up prepaid mobile phone business in Brazil in Q2 2019[42] - These divestitures did not qualify as discontinued operations; their results are included in continuing operations[42] Business Acquisitions Brink's completed strategic acquisitions, including PAI Midco, Inc. for $216 million and the majority of G4S's cash management operations for $826 million - Acquired 100% of PAI Midco, Inc., the largest privately-held ATM services provider in the U.S., for approximately $216 million on April 1, 2021. PAI generated about $94 million in revenues in 2020[43] - Completed the acquisition of the majority of G4S's cash management operations in multiple phases, with an aggregate purchase consideration of $826 million by December 31, 2021. These businesses generated approximately $800 million in revenues in 2019[44] - In 2019, acquired Rodoban (CIT, money processing, ATM services in Brazil) for $134 million, Balance Innovations (software for retail cash management) for $49 million, COMEF (bank correspondent services in Brazil), and TVS (CIT, money processing in Colombia)[45] Reorganization and Restructuring Brink's recognized $43.6 million in net restructuring costs in 2021, expecting $35-$40 million in annualized cost savings from workforce reductions Net Restructuring Costs (in millions) | Year | Net Costs (in millions) | | :--- | :---------------------- | | 2019 | $28.8 | | 2020 | $66.6 | | 2021 | $43.6 | - Substantially all 2021 restructuring costs resulted from management initiatives to address the COVID-19 pandemic[47] - Current restructuring actions are expected to reduce the workforce by 1,600 to 1,800 positions and generate annualized cost savings of $35 million to $40 million, with an additional $1 million to $3 million in future costs[155] Available Information and Corporate Governance Documents Brink's provides public access to its SEC filings and corporate governance documents on its website - Annual, quarterly, and current reports (Form 10-K, 10-Q, 8-K) are available free on www.brinks.com and the SEC's website[49][50] - Corporate Governance Guidelines, Code of Ethics, and Board committee charters are also available on the company's website[49] Item 1A. Risk Factors Brink's faces diverse risks including strategic execution, intense competition, decreased cash usage, operational challenges, financial obligations, and cybersecurity threats - Strategic risks include potential failure to achieve profitable growth, operational excellence, or successful digital solution introduction, which could adversely affect results[52] - Competitive risks involve significant competition and pricing pressures, with failure to differentiate on service quality potentially leading to lost business or inability to offset cost increases[53] - Decreased use of cash could negatively impact the business, despite efforts to develop new services to streamline cash processing costs[54] - Acquisition risks include difficulties in integration, failure to realize expected benefits, increased acquisition prices due to competition, and potential dilution to shareholders from financing[55] - The ongoing COVID-19 pandemic continues to create volatility, uncertainty, and economic disruption, impacting customer volumes, operating procedures, and costs, with long-term effects remaining uncertain[56][57][59] - Operational risks include political, economic, and regulatory challenges in over 100 foreign countries, labor shortages and increased labor costs, and the inability to achieve efficiency and cost control initiatives[63][66][69][70] - Financial risks involve significant retirement obligations (pension, retiree medical), potential non-realization of U.S. deferred tax assets, changes in effective income tax rates, future restructuring charges, and inability to access capital or increased cost of capital[71][72][76][77][78][79] - Information technology risks include business disruptions, cybersecurity breaches (hacking, ransomware, insider threats), and regulatory violations related to data privacy (e.g., GDPR)[82][83][85] - Risks related to the company's securities include the share repurchase program not enhancing long-term shareholder value or increasing stock price volatility, and general risks like activist shareholders and negative publicity impacting reputation and profitability[86][87][88][90] Item 1B. Unresolved Staff Comments The company reported no unresolved staff comments from the SEC - None[95] Item 2. Properties Brink's maintains a global network of 1,279 facilities and 16,315 vehicles to support its cash management and logistics operations - Branch facilities typically include office space, a secure vault for valuables, and a garage for armored vehicles, with many also offering vehicle repair and maintenance[96] Facilities and Vehicles by Segment (as of December 31, 2021) | Segments | Leased Facilities | Owned Facilities | Total Facilities | Leased Vehicles | Owned Vehicles | Total Vehicles | | :-------------- | :---------------- | :--------------- | :--------------- | :-------------- | :------------- | :------------- | | 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 | Item 3. Legal Proceedings For a discussion of legal proceedings, the report refers to Note 23 to the consolidated financial statements - Discussion of legal proceedings is incorporated by reference to Note 23 of the consolidated financial statements[98] Item 4. Mine Safety Disclosures This item is not applicable to The Brink's Company - Not applicable[99] Information about Our Executive Officers This section lists Brink's executive officers as of February 25, 2022, including their ages and current roles Executive Officers (as of February 25, 2022) | Name | Age | Positions and Offices Held | Held Since | | :------------------- | :-- | :------------------------------------------------------------ | :--------- | | Douglas A. Pertz | 67 | Director, President and Chief Executive Officer | 2016 | | Richard M. Eubanks | 49 | Executive Vice President, Chief Operating Officer | 2021 | | Ronald J. Domanico | 63 | Executive Vice President, Chief Financial Officer | 2016 | | Michael F. Beech | 60 | Executive Vice President and President LATAM and Global Security | 2014 | | Rohan Pal | 56 | Executive Vice President, Chief Information Officer and Chief Digital Officer | 2019 | | Dominik Bossart | 47 | Executive Vice President and President MEA, Asia and Brink's Global | 2019 | | Simon J. Davis | 57 | Executive Vice President and Chief Human Resources Officer | 2019 | | Lindsay K. Blackwood | 45 | Executive Vice President, General Counsel and Corporate Secretary | 2021 | | James K. Parks | 53 | Executive Vice President and President of Europe | 2020 | - Executive and other officers are elected annually and serve at the pleasure of the Board, with no family relationships among them[100][101] PART II Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Brink's common stock trades on the NYSE under 'BCO', with a new $250 million share repurchase program authorized in October 2021 - Brink's common stock trades on the New York Stock Exchange under the symbol 'BCO'. As of February 22, 2022, there were 1,165 shareholders of record[109] - On October 27, 2021, the Board authorized a new $250 million share repurchase program, expiring December 31, 2023, replacing the previous $250 million program which was fully utilized[110][114] Share Repurchase Program Activity (2020-2021) | Program | Upfront Payment | Shares Received | Average Repurchase Price | | :------------- | :-------------- | :-------------- | :----------------------- | | August 2020 | $50,000,000 | 849,978 | $58.83 | | September 2020 | — | 246,676 | — | | Total 2020 | $50,000,000 | 1,096,654 | $45.59 | | August 2021 | $50,000,000 | 524,315 | $95.36 | | September 2021 | — | 131,384 | — | | Total Q3 2021 | $50,000,000 | 655,699 | $76.25 | | November 2021 | $150,000,000 | 1,742,160 | $86.10 | | Total | $250,000,000 | 3,494,513 | $71.54 | Five-Year Cumulative Total Return (Indexed to $100 at 12/31/2016) | Index/Company | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | | :------------------- | :----- | :----- | :----- | :----- | :----- | :----- | | The Brink's Company | $100.00 | $192.47 | $159.40 | $225.19 | $181.10 | $166.60 | | S&P MidCap 400 Index | $100.00 | $116.24 | $103.36 | $130.44 | $148.26 | $184.97 | | New Peer Group | $100.00 | $122.01 | $122.76 | $170.16 | $189.67 | $251.34 | Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations This section analyzes Brink's financial condition and results for the three-year period ended December 31, 2021, covering operations, liquidity, and critical accounting policies - Non-GAAP financial measures are provided to report operating profit, income from continuing operations, and EPS without certain income and expense items that do not reflect the regular earnings of operations, aiding investors in evaluating core performance[131] - Organic growth represents the change in revenues or operating profit excluding the effect of acquisitions/dispositions for one year and changes in currency exchange rates[132] Consolidated Financial Highlights (in millions, except EPS) | Metric | 2021 | 2020 | 2019 | % Change 2021 vs 2020 | | :-------------------------------------- | :---------- | :---------- | :---------- | :-------------------- | | GAAP | | | | | | Revenues | $4,200.2 | $3,690.9 | $3,683.2 | 14% | | Operating profit | $354.7 | $213.5 | $236.8 | 66% | | Income from continuing operations | $103.1 | $16.8 | $28.3 | Fav | | Diluted EPS from continuing operations | $2.06 | $0.33 | $0.55 | Fav | | Non-GAAP | | | | | | Non-GAAP revenues | $4,200.2 | $3,690.9 | $3,679.7 | 14% | | Non-GAAP operating profit | $470.5 | $381.3 | $391.6 | 23% | | Non-GAAP income from continuing operations | $237.9 | $190.8 | $199.0 | 25% | | Non-GAAP diluted EPS from continuing operations | $4.75 | $3.76 | $3.89 | 26% | - Consolidated revenues increased by $509.3 million (14%) in 2021, primarily due to acquisitions ($315.4 million), organic increases across all segments ($190.6 million), and favorable currency exchange rates ($3.3 million). Organic revenue growth was 5%, driven by volume recovery post-COVID-19 and price increases[134][141] - Consolidated operating profit increased by $141.2 million (66%) on a GAAP basis, and $89.2 million (23%) on a Non-GAAP basis, mainly from organic increases in all segments, favorable impact of acquisitions, and lower charges related to internal loss and restructuring[135][138] OPERATIONS Brink's provides secure transportation and logistics for cash and valuables globally, leveraging brand recognition and risk management expertise - Brink's offers secure transportation and route-based logistics management services for cash and valuables worldwide, including cash-in-transit, ATM services, global services, cash management, vaulting, payment services, commercial security systems, and guarding services[126] - Competitive advantages include brand name recognition, reputation for high service and security, risk management and logistics expertise, global network, operational excellence, and high-quality insurance coverage and financial strength[127] - The company focuses on service quality, brand strengthening, risk management, and efficient resource use to maximize business flow through its infrastructure[127][128] - Operating results can vary due to economic activity, customer volume, and costs for scaling operations (employees, branches). Revenues and operating profit are generally higher in the second half of the year, particularly the fourth quarter, due to the holiday season[129] RESULTS OF OPERATIONS Brink's 2021 consolidated results show significant revenue and operating profit growth, driven by acquisitions, organic recovery, and price increases Analysis of Results In 2021, Brink's GAAP revenues increased 14% to $4,200.2 million and operating profit rose 66% to $354.7 million, driven by acquisitions and organic growth Consolidated Financial Performance (2021 vs 2020) | Metric (in millions) | 2021 | 2020 | Change ($) | Change (%) | | :------------------- | :---------- | :---------- | :---------- | :--------- | | GAAP | | | | | | Revenues | $4,200.2 | $3,690.9 | $509.3 | 14% | | Cost of revenues | $3,235.8 | $2,877.3 | $358.5 | 12% | | SG&A expenses | $629.7 | $584.5 | $45.2 | 8% | | Operating profit | $354.7 | $213.5 | $141.2 | 66% | | Income from cont. ops | $103.1 | $16.8 | $86.3 | Fav | | Diluted EPS (GAAP) | $2.06 | $0.33 | $1.73 | Fav | | Non-GAAP | | | | | | Non-GAAP revenues | $4,200.2 | $3,690.9 | $509.3 | 14% | | Non-GAAP operating profit | $470.5 | $381.3 | $89.2 | 23% | | Non-GAAP income from cont. ops | $237.9 | $190.8 | $47.1 | 25% | | Non-GAAP diluted EPS | $4.75 | $3.76 | $0.99 | 26% | - Revenue increase driven by acquisitions ($315.4 million), organic growth in Latin America ($102.2 million), North America ($64.4 million), Europe ($15.4 million), and Rest of World ($8.6 million), and favorable currency exchange rates ($3.3 million). Organic revenue increased 5% due to volume recovery and price increases[134] - Operating profit increase primarily due to organic growth across segments, income/lower charges from internal loss ($28.0 million), lower reorganization/restructuring charges ($23.0 million), and lower acquisition/disposition costs ($10.6 million), partially offset by higher corporate expenses ($53.0 million) and a $9.5 million estimated loss for a Chile antitrust matter[135][136] Analysis of Segment Results: 2021 versus 2020 All segments reported revenue and operating profit growth in 2021, driven by acquisitions, organic growth, and cost savings Segment Revenues and Operating Profit (2021 vs 2020, in millions) | Segment | 2020 Revenues | 2021 Revenues | % Change | Organic % Change | 2020 Operating Profit | 2021 Operating Profit | % Change | Organic % Change | | :------------ | :------------ | :------------ | :------- | :--------------- | :-------------------- | :-------------------- | :------- | :--------------- | | North America | $1,261.4 | $1,407.1 | 12% | 5% | $91.7 | $148.4 | 62% | 49% | | Latin America | $1,071.9 | $1,126.0 | 5% | 10% | $233.6 | $257.3 | 10% | 20% | | Europe | $753.8 | $917.3 | 22% | 2% | $51.2 | $89.8 | 75% | 55% | | Rest of World | $603.8 | $749.8 | 24% | 1% | $117.1 | $131.5 | 12% | 2% | | Total Segments| $3,690.9 | $4,200.2 | 14% | 5% | $493.6 | $627.0 | 27% | 25% | Income and Expense Not Allocated to Segments Corporate expenses increased by $44.2 million in 2021, while other unallocated items resulted in a smaller net loss Corporate Expenses (in millions) | Metric | 2021 | 2020 | 2019 | % Change 2021 vs 2020 | | :-------------------------------------- | :-------- | :-------- | :-------- | :-------------------- | | General, administrative and other expenses | $(141.7) | $(116.3) | $(123.2) | 22% | | Foreign currency transaction gains (losses) | $2.7 | $(6.5) | $(4.8) | Fav | | Reconciliation of segment policies to GAAP | $(17.5) | $10.5 | $0.3 | Unfav | | Total Corporate items | $(156.5) | $(112.3) | $(127.7) | 39% | - Corporate expenses increased by $44.2 million in 2021, driven by higher bad debt expense ($28.5 million), new service offering development ($11.2 million), employee compensation ($9.5 million), and legal fees ($4.0 million), partially offset by lower foreign currency transaction losses ($9.2 million)[150] Other Items Not Allocated to Segments (Operating Profit Impact, in millions) | Item | 2021 | 2020 | 2019 | % Change 2021 vs 2020 | | :------------------------------------ | :-------- | :-------- | :-------- | :-------------------- | | Reorganization and Restructuring | $(43.6) | $(66.6) | $(28.8) | (35)% | | Acquisitions and dispositions | $(71.9) | $(83.1) | $(88.5) | (13)% | | Argentina highly inflationary impact | $(11.9) | $(10.7) | $(14.5) | 11% | | Chile antitrust matter | $(9.5) | — | — | Unfav | | Internal loss | $21.1 | $(6.9) | $(20.9) | Fav | | Reporting compliance | — | $(0.5) | $(2.1) | (100)% | | Total Operating profit impact | $(115.8) | $(167.8) | $(154.8) | (31)% | - The impact of other items not allocated to segments was a smaller loss of $115.8 million in 2021 (vs. $167.8 million in 2020), primarily due to lower restructuring expenses, reduced net charges from the internal loss matter, and decreased acquisition/disposition costs, partially offset by the Chile antitrust matter charge[153] Reorganization and Restructuring Brink's recognized $43.6 million in net restructuring costs in 2021, primarily severance, from initiatives addressing the COVID-19 pandemic Net Reorganization and Restructuring Costs (in millions) | Year | Total Net Costs | | :--- | :-------------- | | 2019 | $28.8 | | 2020 | $66.6 | | 2021 | $43.6 | - Substantially all 2021 restructuring costs resulted from management initiatives to address the COVID-19 pandemic[155] - Current restructuring actions are expected to reduce the workforce by 1,600 to 1,800 positions and result in annualized cost savings of $35 million to $40 million, with an additional $1 million to $3 million in future costs[155] - Acquisition and disposition items, such as intangible asset amortization, integration, transaction, and restructuring costs, are excluded from non-GAAP results as they are not considered part of ongoing business activities[156] Other Operating Income and Expense Brink's reported $20.0 million in other operating income in 2021, a significant improvement driven by insurance recoveries and litigation gains Other Operating Income (Expense) (in millions) | Item | 2021 | 2020 | 2019 | % Change 2021 vs 2020 | | :------------------------------------ | :-------- | :-------- | :-------- | :-------------------- | | Foreign currency transaction losses | $(30.5) | $(11.2) | $(22.9) | Unfav | | Derivative instrument gains (losses) | $24.2 | $(3.0) | $6.9 | Fav | | Gains on sale of property and other assets | — | $0.9 | $5.8 | (100)% | | Impairment losses | $(9.5) | $(11.6) | $(7.7) | (18)% | | Share in earnings of equity method affiliates | $1.1 | $0.8 | $0.9 | 38% | | Royalty income | $5.6 | $4.8 | $5.1 | 17% | | 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% | | Total Other operating income (expense) | $20.0 | $(15.6) | $(9.4) | Fav | - The shift from expense to income was primarily due to $18.8 million in insurance recoveries related to the internal loss in U.S. global services operations, gains from litigation in Romania, and lower foreign currency items losses compared to 2020[167] Nonoperating Income and Expense Interest expense increased by 16% to $112.2 million in 2021, while other nonoperating income improved significantly due to higher interest income and equity gains Interest Expense (in millions) | Year | Interest Expense | | :--- | :--------------- | | 2019 | $90.6 | | 2020 | $96.5 | | 2021 | $112.2 | - Interest expense increased by 16% in 2021 primarily due to higher borrowing levels associated with business acquisitions[169] Interest and Other Nonoperating Income (Expense) (in millions) | Item | 2021 | 2020 | 2019 | | :------------------------------------ | :-------- | :-------- | :-------- | | Interest income | $12.1 | $5.6 | $5.6 | | Gain (loss) on equity securities | $16.0 | $10.6 | $(2.9) | | Foreign currency transaction gains (losses) | $0.4 | $(3.6) | — | | Derivative instrument losses | — | $(7.0) | — | | Retirement benefit cost other than service cost | $(38.7) | $(37.9) | $(52.7) | | G4S indemnification asset adjustment | $2.7 | — | — | | Acquisition-related gains (losses) | $0.4 | — | — | | Penalties and interest on non-income taxes | $(1.8) | — | — | | Interest on Colombia tax claim | — | — | $(1.1) | | Non-income taxes on intercompany billings | $(3.9) | $(4.6) | $(4.2) | | Venezuela operations | — | — | $(0.9) | | Gain on lease termination | — | — | $5.2 | | Gain on a disposition of a subsidiary | — | $4.1 | — | | Interest on non-income tax credits | $1.2 | — | — | | Earn-out liability adjustment | $1.3 | — | — | | Gains related to litigation | $1.7 | — | — | | Other | $1.6 | $(4.9) | $(1.7) | | Total | $(7.0) | $(37.7) | $(52.7) | - Interest and other nonoperating income (expense) improved by $30.7 million in 2021 compared to 2020, primarily due to higher interest income and a gain on equity securities (fully realized from MoneyGram International, Inc. investment sale)[137][171] Income Taxes Brink's effective income tax rate was 51.1% in 2021, significantly higher than the U.S. federal statutory rate, influenced by geographical earnings mix and valuation allowances GAAP Summary Rate Reconciliation (in percentages) | Item | 2021 | 2020 | 2019 | | :------------------------------------ | :------ | :------ | :------ | | U.S. federal tax rate | 21.0% | 21.0% | 21.0% | | Foreign rate differential | 7.6% | 12.9% | 17.3% | | Taxes on cross border income, net of credits | 4.6% | 11.0% | 9.3% | | 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% | Non-GAAP Summary Rate Reconciliation (in percentages) | Item | 2021 | 2020 | 2019 | | :------------------------------------ | :------ | :------ | :------ | | U.S. federal tax rate | 21.0% | 21.0% | 21.0% | | 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% | - The effective tax rate varies due to geographical mix of earnings, valuation allowances, changes in tax laws, and other factors[174] - Valuation allowances for deferred tax assets are established when realization is not more likely than not, based on historical earnings and future taxable income projections[175] Noncontrolling Interests Net income attributable to noncontrolling interests increased to $12.1 million in 2021, primarily due to G4S acquisitions and improved subsidiary operating results Net Income Attributable to Noncontrolling Interests (in millions) | Year | Net Income Attributable to Noncontrolling Interests | | :--- | :-------------------------------------------------- | | 2019 | $4.2 | | 2020 | $5.9 | | 2021 | $12.1 | - The increase in 2021 is primarily due to the G4S acquisitions that closed in the first quarter of 2021 and higher operating results from some subsidiaries[179] Non-GAAP Results Reconciled to GAAP Brink's provides non-GAAP financial measures to offer a supplemental comparison of core operating results by excluding certain non-recurring items - Non-GAAP results exclude items not reflective of ordinary earnings, such as retirement plans, reorganization and restructuring, acquisitions and dispositions, Argentina highly inflationary impact, Chile antitrust matter, internal loss, and reporting compliance costs[181][184][186] - These measures are intended to provide investors with a supplemental comparison of operating results and trends, and are used by management to evaluate performance and in incentive compensation plans[182] Non-GAAP Reconciliation to GAAP (Income from Continuing Operations Attributable to Brink's, in millions, except EPS) | Item | 2021 | 2020 | 2019 | | :------------------------------------ | :---------- | :---------- | :---------- | | GAAP Income (loss) from continuing operations attributable to Brink's | $103.1 | $16.8 | $28.3 | | Retirement plans | $22.1 | $25.9 | $36.2 | | Venezuela operations | — | — | $0.9 | | Reorganization and Restructuring | $31.4 | $51.0 | $21.7 | | Acquisitions and dispositions | $65.4 | $79.4 | $88.4 | | Tax on accelerated income | — | — | $(7.3) | | Argentina highly inflationary impact | $13.4 | $11.9 | $15.9 | | Chile antitrust matter | $9.5 | — | — | | Internal loss | $(19.8) | $5.3 | $16.9 | | Reporting compliance | — | $0.5 | $2.0 | | Deferred tax valuation allowance | $12.8 | — | — | | Gain on lease termination | — | — | $(4.0) | | Non-GAAP Income from continuing operations attributable to Brink's | $237.9 | $190.8 | $199.0 | | GAAP Diluted EPS | $2.06 | $0.33 | $0.55 | | Non-GAAP Diluted EPS | $4.75 | $3.76 | $3.89 | Foreign Operations Brink's global operations expose it to political, economic, and currency risks, with Argentina remaining highly inflationary and hedging strategies in place - Brink's serves customers in over 100 countries, with 53 subsidiaries, exposing it to risks like political instability, currency restrictions, and nationalization[190] - The strengthening U.S. dollar in 2021 reduced reported dollar revenues and operating profit, a trend that may continue in 2022[191] - Argentina's economy remains highly inflationary, resulting in $9.0 million in pretax remeasurement losses in 2021. Currency controls in Argentina require central bank approval for many transactions, including dividend repatriation[192][193][300][302] - The company uses short-term foreign currency forward and swap contracts (notional value $614 million at Dec 31, 2021) to hedge transactional risks, with changes in fair value recorded immediately in earnings[195] - Long-term cross-currency swaps are used to hedge Brazilian real exposure (cash flow hedge) and euro functional currencies (net investment hedges), with fair value changes recorded in accumulated other comprehensive income (loss)[196][199][200][201] LIQUIDITY AND CAPITAL RESOURCES Brink's finances operations through cash and debt, managing substantial retirement obligations and contingent legal matters Overview Brink's finances operations through cash and borrowings, with $952 million for acquisitions and $250 million for share repurchases over three years - Over the last three years, cash was used for acquisitions ($952 million), infrastructure investments ($451 million), share repurchases ($250 million), and dividends ($97 million)[204] - Cash flows from operating activities increased by $160.3 million in 2021, primarily due to higher operating profit, working capital changes, and lower G4S intercompany payments[204] - Cash used for investing activities decreased by $110.7 million in 2021 due to lower payments for business acquisitions in 2020[204] - Cash decreased by $50.8 million in 2021 due to the strengthening of the U.S. dollar, primarily against the euro[204] Operating Activities GAAP operating cash flows increased by $160.3 million to $478.0 million in 2021, driven by higher operating profit and working capital changes Cash Flows from Operating Activities (in millions) | Metric | 2021 | 2020 | 2019 | $ Change 2021 vs 2020 | | :-------------------------------------- | :-------- | :-------- | :-------- | :-------------------- | | Operating activities - GAAP | $478.0 | $317.7 | $368.6 | $160.3 | | (Increase) decrease in restricted cash held for customers | $(60.2) | $(116.3) | $(23.7) | $56.1 | | (Increase) decrease in certain customer obligations | $(15.7) | $6.5 | $(11.4) | $(22.2) | | G4S intercompany payments | $2.6 | $111.1 | — | $(108.5) | | Operating activities - non-GAAP | $404.7 | $319.0 | $333.5 | $85.7 | - GAAP operating cash flows increased by $160.3 million in 2021 due to higher operating profit, working capital changes, lower G4S intercompany payments, and changes in customer obligations, partially offset by a $56.1 million decrease in restricted cash held for customers and higher interest payments[207] - Non-GAAP cash flows from operating activities increased by $85.7 million in 2021, primarily due to higher operating profit and working capital changes, partially offset by higher interest payments[208] Investing Activities Cash used in investing activities decreased by $110.7 million in 2021 to $454.7 million, mainly due to lower G4S acquisition payments Cash Flows from Investing Activities (in millions) | Item | 2021 | 2020 | 2019 | $ Change 2021 vs 2020 | | :------------------------------------ | :---------- | :---------- | :---------- | :-------------------- | | Capital expenditures | $(167.9) | $(118.5) | $(164.8) | $(49.4) | | Acquisitions, net of cash acquired | $(313.2) | $(439.7) | $(183.9) | $126.5 | | Dispositions, net of cash disposed | — | $(2.6) | $11.2 | $2.6 | | Marketable securities: Purchases | $(15.6) | $(2.9) | $(11.8) | $(12.7) | | Marketable securities: Sales | $35.1 | $2.0 | $1.3 | $33.1 | | Proceeds from sale of property, equipment and investments | $7.7 | $5.3 | $10.3 | $2.4 | | Redemption of cash-surrender value of life insurance policies | — | — | $7.8 | — | | Other | $(0.8) | $(9.0) | $(3.1) | $8.2 | | Total Investing activities | $(454.7) | $(565.4) | $(333.0) | $110.7 | - Cash used by investing activities decreased by $110.7 million in 2021, primarily due to decreased payments related to the G4S acquisition in 2021 compared to 2020, offset by increased payments for the PAI acquisition[210] Capital Expenditures and Total Property and Equipment Acquired (in millions) | Item | 2021 | 2020 | 2019 | $ Change 2021 vs 2020 | | :------------------------------------ | :-------- | :-------- | :-------- | :-------------------- | | Capital expenditures - GAAP and non-GAAP | $167.9 | $118.5 | $164.8 | $49.4 | | Financing leases - GAAP and non-GAAP | $85.9 | $31.4 | $59.7 | $54.5 | | Total property and equipment acquired | $253.8 | $149.9 | $224.5 | $103.9 | - Capital expenditures in 2021 were $49.4 million higher than 2020, and total property and equipment acquired was $103.9 million higher, mainly due to G4S acquisition impacts, investments in cash devices, and lower spending in 2020 due to COVID-19[213] Financing Activities Cash flows from financing activities decreased by $512.4 million in 2021 to $171.3 million, driven by reduced net borrowings and increased share repurchases Cash Flows from Financing Activities (in millions) | Item | 2021 | 2020 | 2019 | $ Change 2021 vs 2020 | | :------------------------------------ | :---------- | :---------- | :---------- | :-------------------- | | Borrowings (repayments) | $411.4 | $798.6 | $31.3 | $(387.2) | | Debt financing costs | $(0.8) | $(13.2) | $(4.0) | $12.4 | | Repurchase shares of Brink's common stock | $(200.0) | $(50.0) | — | $(150.0) | | Dividends to Shareholders of Brink's | $(37.2) | $(30.1) | $(29.9) | $(7.1) | | Dividends to Noncontrolling interests | $(5.1) | $(16.8) | $(2.3) | $11.7 | | Acquisition-related financing activities | $2.2 | $2.4 | $(20.3) | $(0.2) | | 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 | | Cross currency swap contract | $4.0 | $3.1 | $(3.9) | $0.9 | | Total Financing activities | $171.3 | $683.7 | $(38.0) | $(512.4) | - Cash flows from financing activities decreased by $512.4 million in 2021, primarily due to a decrease in net borrowings and a $150 million increase in cash used for common stock repurchases[216] - Dividends paid to Brink's shareholders were $0.20 per share in each of the last three quarters of 2021, up from $0.15 per share in prior periods[217] Effect of Exchange Rate Changes on Cash and Cash Equivalents Changes in currency exchange rates decreased cash and cash equivalents by $50.8 million in 2021, primarily due to the strengthening U.S. dollar - Changes in currency exchange rates decreased cash and cash equivalents by $50.8 million in 2021, compared to an increase of $37.9 million in 2020[218] - The decrease in 2021 was primarily due to the strengthening of the U.S. dollar against the euro[218] Capitalization Brink's debt-to-capitalization ratio remained at 92% in 2021, with total debt increasing to $2,966.7 million primarily from revolving credit facility borrowings - Debt as a percentage of capitalization was 92% at December 31, 2021, consistent with 2020[220] Summary of Debt, Equity and Other Liquidity Information (in millions) | Item | Dec 31, 2021 | Dec 31, 2020 | $ Change | | :------------------------------------ | :----------- | :----------- | :------- | | Total Debt | $2,966.7 | $2,485.7 | $481.0 | | Total equity | $252.6 | $202.5 | $50.1 | - Debt increased primarily from borrowings under the senior secured revolving credit facility, partially offset by repayment of the senior secured term loan A[220] - Equity increased due to net income, acquired noncontrolling interest, and stock-based compensation, partially offset by share repurchases and dividends[220] Reconciliation of Net Debt to U.S. GAAP Measures (in millions) | Item | Dec 31, 2021 | Dec 31, 2020 | $ Change | | :------------------------------------ | :----------- | :----------- | :------- | | Total Debt | $2,966.7 | $2,485.7 | $481.0 | | Less: Cash and cash equivalents | $710.3 | $620.9 | $89.4 | | Less: Amounts held by cash management services operations | $(34.7) | $(19.1) | $(15.6) | | Cash and cash equivalents available for general corporate purposes | $675.6 | $601.8 | $73.8 | | Net Debt | $2,291.1 | $1,883.9 | $407.2 | - Net Debt increased by $407 million in 2021, primarily due to funding business acquisitions and other working capital needs[225] - Brink's expects to meet liquidity needs for over the next twelve months using cash from operations, short-term borrowings, and $505 million available under its revolving credit facility[226] - As of December 31, 2021, cash and cash equivalents totaled $710.3 million, planned for working capital, capital expenditures, acquisitions, and general corporate purposes[229] Off Balance Sheet Arrangements Brink's uses both on and off-balance sheet operating leases as a component of its capital structure to manage financing costs - The company uses operating leases, both on and off balance sheet, to lower financing costs, considering them an important part of its capital structure[233] - Short-term operating leases are not capitalized to the balance sheet[233] U.S. Retirement Liabilities ARPA significantly reduced and deferred minimum funding requirements for Brink's primary U.S. pension plan, eliminating expected cash payments in the foreseeable future - The American Rescue Plan Act (ARPA) in March 2021 provided funding relief for single-employer defined benefit pension plans, significantly reducing and deferring minimum funding requirements for Brink's primary U.S. pension plan[235] - Based on revised assumptions due to ARPA, no cash payments to the primary U.S. pension plan are needed in the foreseeable future[235][238] Funded Status of U.S. Retirement Plans (in millions, as of Dec 31, 2021) | Plan | Beginning Funded Status | Ending Funded Status | | :------------------------ | :---------------------- | :------------------- | | Primary U.S. pension plan | $(151.1) | $(65.8) | | UMWA plans | $(272.1) | $(219.4) | | Black Lung plans | $(105.0) | $(101.3) | - The UMWA plans (2,700 beneficiaries) are not expected to require company contributions until 2032. Black Lung plans (800 beneficiaries) require ongoing payments from Brink's[239][240] Summary of Projected Payments from Brink's to U.S. Plans (in millions) | Year | 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 through 2031 | — | — | $34.1 | $34.1 | | 2032 and thereafter | — | $295.1 | $95.2 | $390.3 | | Total projected payments | — | $295.1 | $129.7 | $424.8 | Contingent Matters Brink's is cooperating with a DOJ investigation and recorded a $9.5 million charge for a Chilean antitrust matter - The company is cooperating with a U.S. Department of Justice (DOJ) investigation related to cross-border cash shipments and anti-money laundering compliance, but cannot predict the outcome or estimate potential losses[245] - An estimated loss of $9.5 million was recognized in Q3 2021 for a potential fine related to a Chilean antitrust matter, where Brink's Chile is accused of collusion in 2017 and 2018[136][152][247] - Brink's is involved in various other lawsuits and claims in the ordinary course of business, with accruals recorded for probable and estimable losses, but no material adverse effect on liquidity, financial position, or results of operations is expected from these matters[248] APPLICATION OF CRITICAL ACCOUNTING POLICIES Brink's critical accounting policies involve significant estimates for deferred tax assets, business acquisitions, goodwill impairment, and retirement benefit obligations - Application of accounting principles requires significant assumptions, estimates, and judgments, particularly for goodwill, intangibles, long-lived assets, pension and retirement benefits, legal contingencies, allowance for doubtful accounts, deferred tax assets, and purchase price allocations[250][390] Deferred Tax Asset Valuation Allowance Brink's establishes valuation allowances for deferred tax assets when realization is not more likely than not, based on historical earnings and future taxable income - Deferred tax assets arise from net operating losses, tax credit carryforwards, and temporary differences between financial statement and income tax purposes[251] - Valuation allowances are established when it's not more likely than not that a deferred tax asset will be realized, based on positive and negative evidence including historical earnings and future taxable income[252] Valuation Allowances (in millions) | Item | Dec 31, 2020 | | :--------- | :----------- | | U.S. | $94.9 | | Non-U.S. | $33.2 | | Total | $128.1 | - In 2021, a $1 million valuation allowance was recorded for U.S. deferred tax assets, and a $9 million tax expense was recognized for non-U.S. deferred tax assets (mainly Canada) due to changes in judgment[254][257] Business Acquisitions Brink's accounts for acquisitions by allocating purchase price to acquired assets and liabilities based on estimated fair values, involving significant estimates for intangible assets - Business acquisitions are accounted for using the acquisition method, allocating the total purchase price to acquired assets and assumed liabilities based on estimated fair values at the acquisition date[258] - The purchase price allocation requires significant estimates and assumptions, primarily for intangible assets, often involving outside valuation specialists and income-based valuation methods[259][260] - Estimated fair values assigned to assets and liabilities can significantly affect future results, as higher intangible asset values lead to increased amortization expense and lower net income[260] Goodwill, Other Intangible Assets and Property and Equipment Valuations As of December 31, 2021, Brink's held $1,411.7 million in goodwill, $491.2 million in other intangible assets, and $865.6 million in property and equipment, with no goodwill impairment identified - As of December 31, 2021, the company had $865.6 million in property and equipment, $1,411.7 million in goodwill, and $491.2 million in other intangible assets[262] - Goodwill is tested for impairment annually (as of October 1) at the reporting unit level, using a quantitative assessment that weights the Income Approach and Public Company Market Multiple Method[263][264] - Finite-lived intangible assets and property and equipment are reviewed for impairment when events indicate carrying amounts may not be recoverable, comparing undiscounted future net cash flows to carrying value[265] - No goodwill impairment was identified in 2021, and the fair value of each reporting unit exceeded its carrying value[264][371] Retirement and Postemployment Benefit Obligations Brink's manages significant defined benefit pension and retiree medical obligations, with ARPA reducing future funding requirements for the primary U.S. pension plan - The company provides benefits through defined benefit pension plans and retiree medical benefit plans, with significant obligations for its primary U.S. pension plan and UMWA retiree medical plans[268][270] - Critical accounting estimates for these benefits include expected return on assets, discount rates, inflation, demographic factors, and changes in laws/regulations, with changes in assumptions having a material effect on liabilities and expenses[269] Discount Rates for U.S. Retirement Plans (in percentages) | Plan/Metric | 2021 (Cost) | 2020 (Cost) | 2019 (Cost) | 2021 (Obligation) | 2020 (Obligation) | 2019 (Obligation) | | :----------------------- | :---------- | :---------- | :---------- | :---------------- | :---------------- | :---------------- | | Primary U.S. pension plan | 2.4% | 3.3% | 4.4% | 2.8% | 2.4% | 3.3% | | UMWA plans | 2.3% | 3.2% | 4.3% | 2.8% | 2.3% | 3.2% | | Black Lung | 2.2% | 3.1% | 4.2% | 2.7% | 2.2% | 3.1% | - Sensitivity analysis shows that a 1% lower discount rate would increase the primary U.S. pension plan obligation by $109 million and UMWA plans by $44.8 million as of December 31, 2021[276] - Expected return on assets for the primary U.S. pension plan is 7.00% and for UMWA plans is 8.00% for 2022, with a 1% change in this assumption materially affecting net periodic benefit cost[278][281] - The American Rescue Plan Act (ARPA) has significantly reduced and deferred minimum funding requirements for the primary U.S. pension plan, leading to no expected cash contributions in the foreseeable future[235][238] Foreign Currency Translation Brink's reports financial results in U.S. dollars, with Argentina's highly inflationary economy leading to remeasurement losses and currency controls - Foreign currency translation depends on whether the economy is designated as highly inflationary (three-year cumulative inflation rate over 100%)[297] - For highly inflationary economies, the U.S. dollar is the functional currency, with local-currency monetary assets and liabilities remeasured into dollars at each balance sheet date, and gains/losses recognized in earnings[298] - Argentina's economy remains highly inflationary, with the Argentine peso declining approximately 19% in 2021. Brink's recognized $9.0 million in pretax remeasurement losses in 2021[299][300] - Currency controls in Argentina, implemented in September 2019, require central bank approval for many transactions, including dividend repatriation[302] Item 7A. Quantitative and Qualitative Disclosures About Market Risk Brink's manages market risks from interest rates and foreign currency exchange rates through monitoring and hedging strategies - Brink's is exposed to market risks from changes in interest rates and foreign currency exchange rates, which are monitored and managed as part of its overall risk management program[306] - A hypothetical 10% increase in floating interest rates would increase cash outflows by approximately $0.5 million over a twelve-month period, based on contractual rates at December 31, 2021[309] - The company uses short-term foreign currency forward and swap contracts (notional value $614.0 million at Dec 31, 2021) to hedge transactional risks, primarily in euro, British pound, and Mexican peso, with fair value changes recorded immediately in earnings[311] - Long-term cross-currency swaps are used to hedge Brazilian real exposure (notional $75 million) and net investments in euro functional currencies (notional $400 million), designated as cash flow and net investment hedges, respectively[312][313] Hypothetical Effects of 10% U.S. Dollar Appreciation (in millions) | Item | Hypothetical Effects Increase/ (decrease) | | :------------------------------------ | :---------------------------------------- | | Effect on Earnings: | | | Translation of 2021 earnings into U.S. dollars | $(18.9) | | Transaction gains (losses) | $(5.8) | | Effect on Other Comprehensive Income (Loss): | | | Translation of net assets of foreign subsidiaries | $(132.7) | Item 8. Financial Statements and Supplementary Data This section presents Brink's consolidated financial statements, management's report on internal control, independent auditor reports, and detailed notes MANAGEMENT'S ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING Management assessed Brink's internal control over financial reporting as effective as of December 31, 2021, excluding recently acquired Kuwait and PAI operations - Management is responsible for establishing and maintaining adequate internal control over financial reporting, designed to provide reasonable assurance for financial statement preparation and presentation[321] - As of December 31, 2021, management assessed its internal control over financial reporting as effective based on the COSO criteria[322] - The assessment excluded Kuwait operations (acquired Feb 2021) and PAI operations (acquired April 2021), which constituted 7% of total assets and 3% of revenue in the consolidated financial statements for 2021[322] REPORTS OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMS KPMG LLP issued an unqualified opinion on Brink's consolidated financial statements and internal control over financial reporting, excluding recent acquisitions - KPMG LLP issued an unqualified opinion on the effectiveness of Brink's internal control over financial reporting as of December 31, 2021, based on COSO criteria[325] - KPMG also issued an unqualified opinion on the consolidated financial statements for the two-year period ended December 31, 2021[326][330] - KPMG's audit of internal control over financial reporting excluded Kuwait operations from G4S and PAI Midco, Inc. due to their recent acquisition in 2021[327] - Deloitte & Touche LLP, the predecessor auditor, issued an opinion on the financial statements for the year ended December 31, 2019, presenting them fairly in all material respects[343] - Critical audit matters identified by KPMG included the valuation of goodwill for the Europe reporting unit and the fair value of acquired customer relationship intangible assets from the PAI acquisition, both involving significant estimates and judgments[334][335][338][339] CONSOLIDATED FINANCIAL STATEMENTS This section presents Brink's core consolidated financial statements, including balance sheets, statements of operations, an