Brink's Reports Fourth-Quarter Results, Restructures European Operations
Brink's Reports Fourth-Quarter Results, Restructures European Operations
GAAP EPS $.67 vs. $.48; Non-GAAP EPS $.60 vs. $.67
Improvement in Europe, North America Offset by Lower Profits in Latin America
2013 Segment Margin Expected to be 6.0% to 6.5%
PR Newswire
RICHMOND, Va., Feb. 1, 2013
RICHMOND, Va., Feb. 1, 2013 /PRNewswire/ -- The Brink's Company (NYSE: BCO), a
global leader in security-related services, today reported fourth-quarter
earnings. The company also announced its intent to divest its cash-in-transit
(CIT) operations in Germany, and that it has completed the divestitures of
guarding operations in France and Morocco. The divestiture of its CIT
business in Poland is expected to be completed by March 31.
In 2012, these businesses generated $104 million of revenue and an operating
loss of $18 million or $.36 per share. Brink's will continue to operate its
Global Services business in each of these countries. Results from these
businesses are now reported in discontinued operations (see table below).
Quarterly Amounts Reclassified as Discontinued Operations^(a)
(In
millions,
except for 2011 2012
per share
amounts)
GAAP Basis 1Q 2Q 3Q 4Q Full 1Q 2Q 3Q 4Q Full
Year Year
Revenue $ 29 32 30 29 119 26 26 26 27 104
Operating (7) (13) (4) (4) (28) (4) (4) (6) (4) (18)
loss
Income 2 4 - (2) 5 - 1 - (1) 1
taxes
Net loss (5) (9) (4) (6) (24) (4) (3) (6) (4) (18)
Diluted (0.10) (0.18) (0.08) (0.13) (0.49) (0.08) (0.07) (0.12) (0.09) (0.36)
EPS
Non-GAAP
Basis
Revenue $ 29 32 30 29 119 26 26 26 27 104
Operating (7) (3) (4) (4) (18) (4) (4) (3) (4) (16)
loss
Income 2 1 - (2) 1 - 1 - (1) 1
taxes
Net loss (5) (2) (4) (6) (17) (4) (3) (3) (4) (15)
Diluted (0.10) (0.05) (0.08) (0.13) (0.36) (0.08) (0.07) (0.06) (0.09) (0.31)
EPS
Amounts in the table represent the results of the European operations reclassified to
Discontinued Operations in the fourth quarter of 2012. The consolidated income statement
(a) also includes amounts related to operations divested in prior years including the
company's former coal operations. Non-GAAP results are reconciled to the applicable GAAP
results on page 21.
Page 1
Tom Schievelbein, chairman, president and chief executive officer, said:
"Eliminating the operating losses from these businesses improves the overall
earnings power of Brink's by 31 cents per share on a non-GAAP basis, and
enables our new leadership team to focus on achieving sustainable returns in
our remaining markets, which continue to be very challenging.
"Fourth-quarter earnings from continuing operations declined due primarily to
lower operating results in Latin America, partially offset by improvement in
Europe and North America. In 2013, it will be very difficult to match 2012
earnings due to an increase in productivity investments and our assumption of
currency devaluation in Venezuela. We expect our first-quarter year-over-year
comparison to be particularly challenging given the strong Latin America
performance last year. In light of these factors, we expect our 2013 segment
margin rate to be between 6% and 6.5% on organic revenue growth of 5% to 8%.
Our long-term margin goal of 10% is still in place, although it's clear that
achieving it will take longer than originally planned.
"Our recent results are far from satisfactory, and we continue to face
challenges on several fronts, but I'm confident that we are making steady
progress in our efforts to position Brink's for strong profit growth in 2014
and beyond.
"In 2013, we will continue to take decisive action to accelerate the execution
of our strategy. Eliminating the operating losses in Europe is an important
step in our plan to maximize profits in mature, slow-growth CIT markets.
Despite recent challenges in Latin America, we are optimistic about that
region's long-term growth prospects and will continue to invest aggressively
there. We will also continue to seek opportunities to invest in adjacent
markets. Our recent introduction of the Brink's Money™ card and the
acquisition of a payments service company in Brazil are the latest additions
to our small but growing payments business.
"I can assure you that, with our new leadership team in place, we will
continue to be aggressive in our efforts to improve productivity, deliver
solutions to our customers and build value for shareholders."
Fourth-Quarter Highlights
GAAP:
o Revenue up 4% (6% organic growth), EPS $.67 vs. $.48
o Segment profit down 6% (4% organic decline), margin 7.2% vs. 7.9%
o International profit down 9% (6% organic decline), margin 8.4% vs. 9.8%
o North America margin 3.0% vs. 2.3%
Non-GAAP:
o Revenue up 4% (6% organic growth), EPS $.60 vs. $.67
o Segment profit down 6% (4% organic decline), margin 7.4% vs. 8.1%
o International profit down 10% (8% organic decline), margin 8.4% vs. 10.0%;
EMEA improvement more than offset by lower profit in Latin America and
Asia-Pacific
o North America cost reductions drive profit improvement; margin 3.9% vs.
2.6%
Other:
o Full-year GAAP EPS $2.20 vs. $2.01; Non-GAAP EPS $2.31 vs. $2.32
o Full-year non-GAAP segment margin 7.0% vs. 7.1%; organic revenue growth 7%
o Negative currency impact on a GAAP basis: $17 million on revenue, $2
million on profit in fourth quarter; $196 million on revenue, $15 million
on profit in 2012
o Full-year capital spending down $32 million to $203 million
Page 2
Summary Reconciliation of Fourth-Quarter GAAP to Non-GAAP EPS*
Fourth Quarter Full Year
2012 2011 2012 2011
GAAP EPS $ 0.67 $ 0.48 $ 2.20 $ 2.01
Exclude U.S. retirement plan expenses 0.16 0.09 0.70 0.37
Exclude employee benefit settlement, 0.01 0.06 0.06 0.08
CEO retirement costs and other
Exclude additional European operations 0.01 0.01 0.08 0.06
to be exited
Exclude gains and losses on (0.18) - (0.29) (0.20)
acquisitions and asset dispositions
Exclude tax benefit from change in - - (0.43) -
retiree health care funding strategy
Adjust quarterly tax rate to full-year (0.06) 0.02 - -
average rate
Non-GAAP EPS* $ 0.60 $ 0.67 $ 2.31 $ 2.32
Summary of Fourth-Quarter and Full-Year Results*
Fourth Quarter Full Year
% %
(In millions, except for 2012 2011 Change 2012 2011 Change
per share amounts)
GAAP
Revenues $ 1,007 968 4 % $ 3,842 3,766 2 %
Segment
operating 72 77 (6) 260 259 -
profit (a)
Non-segment (21) (21) 1 (89) (60) 49
expense
Operating 51 56 (9) 171 200 (14)
profit
Income from continuing 33 23 40 107 97 11
operations (b)
Diluted EPS from 0.67 0.48 40 2.20 2.01 9
continuing operations (b)
Non-GAAP
Revenues $ 1,004 966 4 % $ 3,833 3,756 2 %
Segment
operating 74 79 (6) 268 267 -
profit (a)
Non-segment (11) (11) (1) (42) (41) 4
expense
Operating 63 68 (7) 226 227 -
profit
Income from continuing 29 32 (9) 112 112 1
operations (b)
Diluted EPS from 0.60 0.67 (10) 2.31 2.32 -
continuing operations (b)
Segment operating profit is a non-GAAP measure. Disclosure of segment
(a) operating profit enables investors to assess operating performance
excluding non-segment income and expense.
(b) Amounts reported are attributable to shareholders of The Brink's Company
and exclude earnings related to noncontrolling interests.
*Non-GAAP results are reconciled to the applicable GAAP results on pages 13 -
19. Amounts may not add due to rounding.
Page 3
The Brink's Company and subsidiaries
Fourth Quarter 2012 vs. 2011 (Unaudited)
(In millions)
Segment Results – GAAP
Organic Acquisitions Currency % Change
/
4Q Change Dispositions (c) 4Q Total Organic
'11 (b) '12
Revenues:
Latin America $ 393 47 1 (9) 432 10 12
EMEA 292 13 - (10) 294 1 4
Asia Pacific 40 4 - - 44 9 10
International 724 63 1 (19) 770 6 9
North America 244 (9) - 2 237 (3) (4)
Total $ 968 54 1 (17) 1,007 4 6
Operating
profit:
International $ 71 (4) - (2) 65 (9) (6)
North America 6 1 - - 7 27 24
Segment
operating 77 (3) - (2) 72 (6) (4)
profit
Non-segment (21) - - - (21) 1 1
(a)
Total $ 56 (3) - (2) 51 (9) (6)
Segment
operating
margin:
International 9.8% 8.4%
North America 2.3% 3.0%
Segment
operating 7.9% 7.2%
margin
Segment Results - Non-GAAP
Organic Acquisitions Currency % Change
/
4Q Change Dispositions (c) 4Q Total Organic
'11 (b) '12
Revenues:
Latin America $ 393 47 1 (9) 432 10 12
EMEA 289 13 - (10) 292 1 4
Asia Pacific 40 4 - - 44 9 10
International 722 64 1 (19) 767 6 9
North America 244 (9) - 2 237 (3) (4)
Total $ 966 55 1 (17) 1,004 4 6
Operating profit:
International $ 72 (6) 1 (2) 65 (10) (8)
North America 6 3 - - 9 44 41
Segment
operating 79 (4) 1 (2) 74 (6) (4)
profit
Non-segment (11) - - - (11) (1) (1)
(a)
Total $ 68 (3) 1 (2) 63 (7) (5)
Segment operating
margin:
International 10.0% 8.4%
North America 2.6% 3.9%
Segment operating 8.1% 7.4%
margin
(a) Includes income and expense not allocated to segments.
(b) Includes operating results and gains/losses on acquisitions, sales and exits of
businesses.
Revenue and Segment Operating Profit: The "Currency" amount in the table is the
summation of the monthly currency changes, plus (minus) the U.S. dollar amount of
remeasurement currency gains (losses) of bolivar fuerte-denominated net monetary
assets recorded under highly inflationary accounting rules related to the Venezuelan
operations. The monthly currency change is equal to the Revenue or Operating Profit
for the month in local currency, on a country-by-country basis, multiplied by the
difference in rates used to translate the current period amounts to U.S. dollars
(c) versus the translation rates used in the year-ago month. The functional currency in
Venezuela is the U.S. dollar under highly inflationary accounting rules.
Remeasurement gains and losses under these rules are recorded in U.S. dollars but
these gains and losses are not recorded in local currency. Local currency Revenue and
Operating Profit used in the calculation of monthly currency change for Venezuela
have been derived from the U.S. dollar results of the Venezuelan operations under
U.S. GAAP (excluding remeasurement gains and losses) using current period currency
exchange rates.
Amounts may not add due to rounding.
Page 4
The Brink's Company and subsidiaries
Full Year 2012 vs. 2011 (Unaudited)
(In millions)
Segment Results – GAAP
Organic Acquisitions Currency % Change
/
2011 Change Dispositions (c) 2012 Total Organic
(b)
Revenues:
Latin America $ 1,461 215 2 (98) 1,579 8 15
EMEA 1,178 70 - (90) 1,158 (2) 6
Asia Pacific 154 10 - (5) 159 3 7
International 2,792 296 2 (193) 2,897 4 11
North America 974 (24) (3) (3) 945 (3) (2)
Total $ 3,766 272 (1) (196) 3,842 2 7
Operating
profit:
International $ 228 17 (2) (15) 228 - 7
North America 31 1 - - 33 4 3
Segment
operating 259 18 (2) (15) 260 - 7
profit
Non-segment (60) (21) (8) - (89) 49 35
(a)
Total $ 200 (3) (11) (15) 171 (14) (1)
Segment
operating
margin:
International 8.2% 7.9%
North America 3.2% 3.4%
Segment
operating 6.9% 6.8%
margin
Segment Results – Non-GAAP
Organic Acquisitions Currency % Change
/
2011 Change Dispositions (c) 2012 Total Organic
(b)
Revenues:
Latin America $ 1,461 215 2 (98) 1,579 8 15
EMEA 1,167 71 - (89) 1,149 (2) 6
Asia Pacific 154 10 - (5) 159 3 7
International 2,781 296 2 (192) 2,888 4 11
North America 974 (24) (3) (3) 945 (3) (2)
Total $ 3,756 273 (1) (194) 3,833 2 7
Operating
profit:
International $ 233 8 1 (15) 227 (3) 4
North America 35 7 - - 41 19 19
Segment
operating 267 15 1 (15) 268 - 6
profit
Non-segment (41) (2) - - (42) 4 4
(a)
Total $ 227 13 1 (15) 226 - 6
Segment
operating
margin:
International 8.4% 7.8%
North America 3.6% 4.4%
Segment
operating 7.1% 7.0%
margin
Amounts may not add due to rounding. See page 4 for footnote explanations.
Page 5
Non-Segment Expenses
On a GAAP basis, non-segment expenses remained flat versus the year-ago
quarter at $21 million as higher retirement plan expenses ($5 million) were
offset primarily by the inclusion in last year's results of the former CEO's
retirement costs ($4 million). On a non-GAAP basis, non-segment expenses were
flat.
Capital Expenditures and Capital Leases
Full-year capital expenditures and capital lease additions were $203 million
versus $235 million in 2011, reflecting reductions of $17 million in North
America and $15 million in International.
Income Taxes
On a GAAP basis, fourth-quarter tax expense was $5 million (10% effective
rate) versus $20 million in 2011 (38% effective rate). The full-year 2012 tax
expense was $27 million (17% effective rate) versus $64 million in 2011 (35%
effective rate). The full-year 2012 effective rate was favorably affected by a
$21 million non-cash tax benefit related to a change in retiree health care
funding strategy and a $7.5 million tax benefit related to a change in
judgment of an income tax accrual, partially offset by tax expense resulting
from repatriation and the mix of earnings. The full-year 2011 effective rate
was favorably affected by an $8 million valuation allowance release in the
U.S., partially offset by tax expense resulting from repatriation and the mix
of earnings. On a non-GAAP basis, the full-year rate for 2012 was 37% versus
35% in 2011.
2013 Outlook
See page 9 for a summary of selected 2012 results and 2013 outlook items
including guidance on revenue, segment margin, non-segment expense, interest
expense, tax rate, non-controlling interest expense, capital expenditures,
capital leases and depreciation and amortization.
Recent Events
On December 31, Mel Parker joined Brink's as president of Brink's North
America. Parker most recently served as vice president and general manager of
Dell's North American consumer, small business and member loyalty division.
Prior to his tenure at Dell, Parker served in a variety of leadership
positions at Newell Rubbermaid, Staples and Pepsico.
On January 7, Patty Watson joined Brink's as chief information officer.
Before joining Brink's, Watson served as the senior technology executive for
the treasury, credit and payments division of Bank of America. Prior to her
tenure at Bank of America, Watson was an officer in the United States Air
Force, where she last served as director of operations.
On January 28, Brink's announced that Darren McCue will join the company as
the chief commercial strategy officer on February 19. McCue will join Brink's
from Aetna, where he served as executive vice president of strategy and
business development for consumer financial solutions. Before Aetna, McCue
held leadership roles at Payflex and FlexAmerica and spent eight years with
Booz Allen Hamilton and Manugistics in their management and supply chain
optimization consulting practices.
Page 6
On January 8, Brink's announced that it has entered into an agreement with
NetSpend Holdings, Inc. (NASDAQ: NTSP), to sell its Brink's Money prepaid
payroll card to U.S. employers. The initial rollout of Brink's Money is
scheduled for the first quarter of 2013.
On January 10, Brink's acquired the remaining 26% ownership interest in our
cash logistics business in Chile for $18 million and now owns 100% of the
business.
On January 31, Brink's acquired Brazil-based Rede Transacoes Eletronicas Ltda.
(Redetrel). Redetrel distributes electronic prepaid products, including
mobile phone airtime, via a network of approximately 20,000 retail locations
across Brazil. Redetrel's strong distribution network supplements Brink's
existing payments business, ePago, which has operations in Brazil, Mexico,
Colombia and Panama.
On January 17, Brink's declared a quarterly dividend of 10 cents per share on
its common stock. The dividend is payable on March 1, 2013, to shareholders
of record on February 1, 2013.
Conference Call
Brink's will host a conference call on February 1 at 11:00 a.m. Eastern Time
to review fourth-quarter results. Interested parties can listen by calling
(800) 860-2442 (domestic), (412) 858-4600 (international) and (866) 605-3852
in Canada, or via live webcast at www.Brinks.com. Please call in at least
five minutes prior to the start of the call. A replay will be available
through February 15, 2013, by calling (877) 344-7529 (domestic) or + (412)
317-0088 (international). The conference account number is 10023432. A
webcast replay will also be available at www.Brinks.com.
About The Brink's Company
The Brink's Company (NYSE:BCO) is the world's premier provider of secure
transportation and cash management services. For more information, please
visit The Brink's Company website at www.Brinks.com or call 804-289-9709.
Non-GAAP Results
Non-GAAP results described in this earnings release are financial measures
that are not required by, or presented in accordance with U.S. generally
accepted accounting principles ("GAAP"). The purpose of the non-GAAP results
is to report financial information without certain income and expense items
and adjust the quarterly non-GAAP tax rates so that the non-GAAP tax rate in
each of the quarters is equal to the full-year non-GAAP tax rate. The full
year non-GAAP tax rate in both years excludes certain pretax and tax income
and expense amounts. The non-GAAP information provides information to assist
comparability and estimates of future performance. Brink's believes these
measures are helpful in assessing operations and estimating future results and
enable period-to-period comparability of financial performance. In addition,
Brink's believes the measures will help investors assess the ongoing operation
and provides an alternative for valuing our legacy liabilities. Non-GAAP
results should not be considered as an alternative to revenue, income or
earnings per share amounts determined in accordance with GAAP and should be
read in conjunction with their GAAP counterparts.
Page 7
Forward-Looking Statements
Financial information for the fourth quarter and full year 2012 included in
this release is unaudited and remains subject to the completion of the
external audit. This release contains both historical and forward-looking
information. Words such as "anticipates," "assumes," "estimates," "expects,"
"projects," "predicts," "intends," "plans," "believes," "potential," "may,"
"should" and similar expressions may identify forward-looking information.
Forward-looking information in this release includes, but is not limited to,
anticipated revenue, segment profit, segment margin, non-segment expense,
interest expense, tax rate, non-controlling interest expense, capital
expenditures, productivity investments and improvement, capital leases and
depreciation and amortization for 2013, as well as long-term profit growth and
margin rate results and the execution of the Company's strategy, including
planned divestitures. Forward-looking information in this document is subject
to known and unknown risks, uncertainties and contingencies, which are
difficult to predict or quantify, and which could cause actual results,
performance or achievements to differ materially from those that are
anticipated.
These risks, uncertainties and contingencies, many of which are beyond our
control, include, but are not limited to:
o continuing market volatility and commodity price fluctuations and their
impact on the demand for our services,
o our ability to continue profit growth in Latin America,
o our ability to maintain or improve volumes at favorable pricing levels and
increase cost efficiencies in the United States and Europe,
o investments in information technology and value-added services and their
impact on revenue and profit growth,
o our ability to implement high-value solutions,
o risks customarily associated with operating in foreign countries including
changing labor and economic conditions, currency devaluations, safety and
security issues, political instability, restrictions on repatriation of
earnings and capital, nationalization, expropriation and other forms of
restrictive government actions,
o the strength of the U.S. dollar relative to foreign currencies and foreign
currency exchange rates,
o the stability of the Venezuelan economy, changes in Venezuelan policy
regarding foreign-owned businesses, and changes in exchange rates,
o fluctuations in value of the Venezuelan bolivar fuerte,
o regulatory and labor issues in many of our global operations, including
negotiations with organized labor,
o our ability to identify and execute further cost and operational
improvements and efficiencies in our core businesses,
o our ability to integrate successfully recently acquired companies and
improve their operating profit margins,
o the actions of competitors, our ability to identify acquisitions and other
strategic opportunities in emerging markets,
o the willingness of our customers to absorb fuel surcharges and other
future price increases,
o the impact of turnaround actions responding to current conditions in
Europe and our productivity and cost control efforts in that region,
o our ability to obtain necessary information technology and other services
at favorable pricing levels from third party service providers,
o variations in costs or expenses and performance delays of any public or
private sector supplier, service provider or customer,
o our ability to obtain appropriate insurance coverage, positions taken by
insurers with respect to claims made and the financial condition of
insurers, safety and security performance, our loss experience, changes in
insurance costs,
o security threats worldwide and losses of customer valuables,
o costs associated with the purchase and implementation of cash processing
and security equipment, employee and environmental liabilities in
connection with our former coal operations, black lung claims incidence,
o the impact of the Patient Protection and Affordable Care Act on black lung
liability and the Company's ongoing operations,
o changes to estimated liabilities and assets in actuarial assumptions due
to payments made, investment returns, interest rates and annual actuarial
revaluations, the funding requirements, accounting treatment, investment
performance and costs and expenses of our pension plans, the VEBA and
other employee benefits, mandatory or voluntary pension plan
contributions, the nature of our hedging relationships,
o changes in estimates and assumptions underlying our critical accounting
policies,
o the outcome of pending and future claims and litigation,
o access to the capital and credit markets,
o seasonality, pricing and other competitive industry factors.
This list of risks, uncertainties and contingencies is not intended to be
exhaustive. Additional factors that could cause our results to differ
materially from those described in the forward-looking statements can be found
under "Risk Factors" in Item 1A of our Annual Report on Form 10-K for the
period ended December 31, 2011, and in our other public filings with the
Securities and Exchange Commission. The forward looking information included
in this document is representative only as of the date of this document and
The Brink's Company undertakes no obligation to update any information
contained in this document.
Page 8
The Brink's Company and subsidiaries
Outlook Summary (Unaudited)
(In millions)
GAAP Non-GAAP
2013 2013
2012 Estimate 2012 Estimate
Organic revenue growth
International 11% 7% - 9% 11% 7% - 9%
North America (2)% 0% - 2% (2)% 0% - 2%
Total 7% 5% - 8% 7% 5% - 8%
Currency impact on revenue
International (7)% (2%) – (7)%
(4%) (2%) –
(4%)
North America flat flat flat flat
Total (5)% (1%) – (5)% (1%) –
(3%) (3%)
Segment margin
International (a) 7.9% 6.0% - 7.8% 7.0% -
6.5% 7.5%
North America (b) 3.4% 2.8% - 4.4% 4.0% -
3.3% 4.5%
Total 6.8% 5.0% - 7.0% 6.0% -
5.5% 6.5%
Non-segment expense:
General and $ 44 45 $ 44 45
administrative
Retirement plans 47 42 - -
(b)
Royalty income (2) (2) (2) (2)
Total $ 89 85 $ 42 43
Effective income tax rate (a) 17% 44% - 47% 37% 36% - 39%
Interest expense $ 24 27 – 29 $ 24 27 – 29
Net income attributable to
noncontrolling $ 21 8 – 10 $ 19 17 – 20
interests (a)
Fixed assets acquired:
Capital $ 185 195 $ 185 195
expenditures
Capital leases (c) 18 10 18 10
Total $ 203 205 $ 203 205
Depreciation and amortization $ 166 180 – 190 $ 166 180 – 190
Projected remeasurement losses on net monetary assets in Venezuela in the
(a) 2013 estimate, and the related effect on income tax rates and net income
attributable to noncontrolling interest, have been excluded from non-GAAP
results.
Costs related to U.S. retirement plans have been excluded from non-GAAP
(b) results including $9 million in 2012 and $12 million in 2013 related to
North America, and $47 million in 2012 and $42 million in 2013 related to
Non-segment.
(c) Includes capital leases for newly acquired assets only.
Amounts may not add due to rounding.
Page 9
The Brink's Company and subsidiaries
Condensed Consolidated Statements of Income (Unaudited)
(In millions, except for per share amounts)
Fourth Quarter Full Year
2012 2011 2012 2011
Revenues $ 1,006.5 968.3 3,842.1 3,766.3
Costs and expenses:
Cost of revenues 811.7 773.4 3,118.5 3,057.8
Selling, general and administrative 145.2 139.3 561.7 526.6
expenses
Total costs and expenses 956.9 912.7 3,680.2 3,584.4
Other operating income (expense) 1.1 0.2 9.3 17.6
Operating profit 50.7 55.8 171.2 199.5
Interest expense (6.5) (5.9) (23.8) (24.0)
Interest and other income (expense) 0.8 2.1 7.1 8.9
Income from continuing operations 45.0 52.0 154.5 184.4
before tax
Provision for income taxes 4.7 19.6 26.9 63.9
Income from continuing operations 40.3 32.4 127.6 120.5
Loss from discontinued operations, net (4.7) (7.5) (17.9) (22.0)
of tax
Net income 35.6 24.9 109.7 98.5
Less net income attributable to (7.7) (9.1) (20.8) (24.0)
noncontrolling interests
Net income attributable to Brink's $ 27.9 15.8 88.9 74.5
Amounts attributable to Brink's:
Income from continuing operations $ 32.6 23.3 106.8 96.5
Loss from discontinued operations (4.7) (7.5) (17.9) (22.0)
Net income attributable to Brink's $ 27.9 15.8 88.9 74.5
Earnings (loss) per share attributable to Brink's common shareholders (a):
Basic:
Continuing operations $ 0.67 0.49 2.21 2.02
Discontinued operations (0.10) (0.16) (0.37) (0.46)
Net income $ 0.58 0.33 1.84 1.56
Diluted:
Continuing operations $ 0.67 0.48 2.20 2.01
Discontinued operations (0.10) (0.16) (0.37) (0.46)
Net income $ 0.57 0.33 1.83 1.55
(a) Earnings per share may not add
due to rounding.
Weighted-average shares
Basic 48.5 48.0 48.4 47.8
Diluted 48.8 48.2 48.6 48.1
Page 10
The Brink's Company and subsidiaries
Supplemental Financial Information (Unaudited)
(In millions)
Fourth Quarter Full Year
2012 2011 2012 2011
DISCONTINUED OPERATIONS
Discontinued European
Operations:
Loss from operations $ (3.7) (4.2) (18.3) (28.0)
before tax (a)
Adjustments to contingencies
of former operations (b):
Workers' compensation (0.4) (2.2) (0.2) (1.4)
Gain from Federal Black - - - 4.2
Lung Excise Tax refunds
Other (0.2) (0.4) (0.3) (0.6)
Loss from discontinued (4.3) (6.8) (18.8) (25.8)
operations before income taxes
Provision (credit) for income 0.4 0.7 (0.9) (3.8)
taxes
Loss from discontinued $ (4.7) (7.5) (17.9) (22.0)
operations, net of tax
Discontinued operations include cash-in-transit operations in Germany and
Poland, and guarding operation in France and Morocco. Revenues from these
(a) European operations were $27.1 million in the fourth quarter of 2012,
$28.8 million in the fourth quarter of 2011, $104.4 million in 2012, and
$119.2 million in 2011.
(b) Primarily relates to former coal businesses
Full Year
SELECTED CASH FLOW INFORMATION 2012 2011
Property and Equipment Acquired During the Period
Capital expenditures
International $ 130.3 140.6
North America 54.2 51.4
Capital expenditures 184.5 192.0
Capital Leases (a)
International 2.7 7.6
North America 15.4 35.4
Capital leases 18.1 43.0
Total
International 133.0 148.2
North America 69.6 86.8
Total $ 202.6 235.0
Depreciation and amortization
International $ 102.3 100.0
North America 63.2 56.6
Depreciation and $ 165.5 156.6
amortization
Represents the amount of property and equipment acquired using capital
leases. Since these assets are acquired without using cash, the
(a) acquisitions are not reflected in the consolidated cash flow statement.
Amounts are provided here to assist in the comparison of assets acquired
in the current year versus prior years. Sales leaseback transactions are
excluded from "Capital leases" in this table.
Page 11
The Brink's Company and subsidiaries
GAAP and Non-GAAP Results (Unaudited)
(In millions, except for per share amounts)
2011 2012
1Q 2Q 3Q 4Q Full 1Q 2Q 3Q 4Q Full
Year Year
GAAP Basis
Revenue:
Latin America $ 332.3 360.5 375.1 392.8 1,460.7 $ 386.3 375.9 385.2 432.0 1,579.4
EMEA 278.5 302.0 305.6 291.6 1,177.7 280.4 289.4 294.6 294.0 1,158.4
Asia Pacific 34.9 38.5 40.3 40.0 153.7 37.6 38.5 39.1 43.7 158.9
International 645.7 701.0 721.0 724.4 2,792.1 704.3 703.8 718.9 769.7 2,896.7
North America 239.0 246.8 244.5 243.9 974.2 236.4 237.6 234.6 236.8 945.4
Revenues $ 884.7 947.8 965.5 968.3 3,766.3 $ 940.7 941.4 953.5 1,006.5 3,842.1
Operating
profit:
International $ 51.7 39.4 65.5 71.3 227.9 $ 65.2 40.5 56.9 65.0 227.6
North America 6.8 10.4 8.7 5.5 31.4 5.8 11.4 8.3 7.0 32.5
Segment
operating 58.5 49.8 74.2 76.8 259.3 71.0 51.9 65.2 72.0 260.1
profit
Non-segment (15.0) (16.2) (7.6) (21.0) (59.8) (24.3) (21.3) (22.0) (21.3) (88.9)
Operating $ 43.5 33.6 66.6 55.8 199.5 $ 46.7 30.6 43.2 50.7 171.2
profit
Amounts
attributable to
Brink's:
Income from
continuing $ 23.6 14.0 35.6 23.3 96.5 $ 20.9 33.8 19.5 32.6 106.8
operations
Diluted EPS –
continuing 0.49 0.29 0.74 0.48 2.01 0.43 0.69 0.40 0.67 2.20
operations
Non-GAAP Basis
Revenue:
Latin America $ 332.3 360.5 375.1 392.8 1,460.7 $ 386.3 375.9 385.2 432.0 1,579.4
EMEA 276.0 299.3 302.7 288.9 1,166.9 278.0 287.2 292.3 291.7 1,149.2
Asia Pacific 34.9 38.5 40.3 40.0 153.7 37.6 38.5 39.1 43.7 158.9
International 643.2 698.3 718.1 721.7 2,781.3 701.9 701.6 716.6 767.4 2,887.5
North America 239.0 246.8 244.5 243.9 974.2 236.4 237.6 234.6 236.8 945.4
Revenues $ 882.2 945.1 962.6 965.6 3,755.5 $ 938.3 939.2 951.2 1,004.2 3,832.9
Operating profit:
International $ 52.6 41.2 66.7 72.1 232.6 $ 66.6 41.5 53.8 64.7 226.6
North America 7.5 11.2 9.5 6.4 34.6 8.0 13.6 10.5 9.2 41.3
Segment
operating 60.1 52.4 76.2 78.5 267.2 74.6 55.1 64.3 73.9 267.9
profit
Non-segment (9.2) (10.0) (10.7) (10.7) (40.6) (9.6) (11.7) (10.4) (10.6) (42.3)
Operating $ 50.9 42.4 65.5 67.8 226.6 $ 65.0 43.4 53.9 63.3 225.6
profit
Amounts attributable
to Brink's:
Income from continuing $ 25.0 20.7 33.8 32.1 111.6 $ 32.0 22.9 28.0 29.3 112.2
operations
Diluted EPS – 0.52 0.43 0.70 0.67 2.32 0.66 0.47 0.58 0.60 2.31
continuing operations
Amounts may not add due to rounding. Non-GAAP results are reconciled to applicable GAAP results on pages
13-19.
Page 12
The Brink's Company and subsidiaries
Non-GAAP Results Reconciled to GAAP (Unaudited)
(In millions, except for per share amounts)
Tax
Benefit
on
Employee
Additional Gains and Benefit U.S. Change Adjust
European Losses on Settlement Retirement in Income
GAAP Operations Acquisitions and Plans Tax Non-GAAP
Basis to be and Severance Health Rate Basis
Exited Dispositions Losses (d)
(a) (b) Care (f)
(c)
Funding
Strategy
(e)
First Quarter 2012
Revenue:
Latin America $ 386.3 - - - - - - 386.3
EMEA 280.4 (2.4) - - - - - 278.0
Asia Pacific 37.6 - - - - - - 37.6
International 704.3 (2.4) - - - - - 701.9
North America 236.4 - - - - - - 236.4
Revenues $ 940.7 (2.4) - - - - - 938.3
Operating
profit:
International $ 65.2 0.6 - 0.8 - - - 66.6
North America 5.8 - - - 2.2 - - 8.0
Segment
operating 71.0 0.6 - 0.8 2.2 - - 74.6
profit
Non-segment (24.3) - - - 14.7 - - (9.6)
Operating $ 46.7 0.6 - 0.8 16.9 - - 65.0
profit
Amounts
attributable to
Brink's:
Income from
continuing $ 20.9 0.7 (1.2) 0.6 10.2 - 0.8 32.0
operations
Diluted EPS –
continuing 0.43 0.01 (0.02) 0.01 0.21 - 0.02 0.66
operations
Second Quarter 2012
Revenue:
Latin America $ 375.9 - - - - - - 375.9
EMEA 289.4 (2.2) - - - - - 287.2
Asia Pacific 38.5 - - - - - - 38.5
International 703.8 (2.2) - - - - - 701.6
North America 237.6 - - - - - - 237.6
Revenues $ 941.4 (2.2) - - - - - 939.2
Operating
profit:
International $ 40.5 0.7 - 0.3 - - - 41.5
North America 11.4 - - - 2.2 - - 13.6
Segment
operating 51.9 0.7 - 0.3 2.2 - - 55.1
profit
Non-segment (21.3) - (0.9) - 10.5 - - (11.7)
Operating $ 30.6 0.7 (0.9) 0.3 12.7 - - 43.4
profit
Amounts
attributable to
Brink's:
Income from
continuing $ 33.8 0.7 (0.9) 0.2 7.6 (20.9) 2.4 22.9
operations
Diluted EPS –
continuing 0.69 0.01 (0.02) - 0.16 (0.43) 0.05 0.47
operations
See page 15 for notes.
Page 13
The Brink's Company and subsidiaries
Non-GAAP Results Reconciled to GAAP (Unaudited)
(In millions, except for per share amounts)
Tax
Benefit
on
Additional Employee
Gains and Benefit U.S. Change Adjust
European Losses on Settlement Retirement in Income
GAAP Operations Acquisitions and Plans Tax Non-GAAP
Basis to be and Severance Health Rate Basis
Exited Dispositions Losses (d)
(a) (b) Care (f)
(c)
Funding
Strategy
(e)
Third Quarter 2012
Revenue:
Latin America $ 385.2 - - - - - - 385.2
EMEA 294.6 (2.3) - - - - - 292.3
Asia Pacific 39.1 - - - - - - 39.1
International 718.9 (2.3) - - - - - 716.6
North America 234.6 - - - - - - 234.6
Revenues $ 953.5 (2.3) - - - - - 951.2
Operating
profit:
International $ 56.9 2.1 (7.2) 2.0 - - - 53.8
North America 8.3 - - - 2.2 - - 10.5
Segment
operating 65.2 2.1 (7.2) 2.0 2.2 - - 64.3
profit
Non-segment (22.0) - 0.1 - 11.5 - - (10.4)
Operating $ 43.2 2.1 (7.1) 2.0 13.7 - - 53.9
profit
Amounts
attributable to
Brink's:
Income from
continuing $ 19.5 2.2 (3.0) 1.4 8.2 - (0.3) 28.0
operations
Diluted EPS –
continuing 0.40 0.04 (0.06) 0.03 0.17 - (0.01) 0.58
operations
Fourth Quarter 2012
Revenue:
Latin America $ 432.0 - - - - - - 432.0
EMEA 294.0 (2.3) - - - - - 291.7
Asia Pacific 43.7 - - - - - - 43.7
International 769.7 (2.3) - - - - - 767.4
North America 236.8 - - - - - - 236.8
Revenues $ 1,006.5 (2.3) - - - - - 1,004.2
Operating
profit:
International $ 65.0 0.2 (1.3) 0.8 - - - 64.7
North America 7.0 - - - 2.2 - - 9.2
Segment
operating 72.0 0.2 (1.3) 0.8 2.2 - - 73.9
profit
Non-segment (21.3) - - - 10.7 - - (10.6)
Operating $ 50.7 0.2 (1.3) 0.8 12.9 - - 63.3
profit
Amounts
attributable to
Brink's:
Income from
continuing $ 32.6 0.3 (8.9) 0.6 7.8 (0.2) (2.9) 29.3
operations
Diluted EPS –
continuing 0.67 0.01 (0.18) 0.01 0.16 - (0.06) 0.60
operations
See page 15 for notes.
Page 14
The Brink's Company and subsidiaries
Non-GAAP Results Reconciled to GAAP (Unaudited)
(In millions, except for per share amounts)
Tax
Benefit
on
Employee
Additional Gains and Benefit U.S. Change Adjust
European Losses on Settlement Retirement in Income
GAAP Operations Acquisitions and Plans Tax Non-GAAP
Basis to be and Severance Health Rate Basis
Exited Dispositions Losses (d)
(a) (b) Care (f)
(c)
Funding
Strategy
(e)
Full Year 2012
Revenue:
Latin America $ 1,579.4 - - - - - - 1,579.4
EMEA 1,158.4 (9.2) - - - - - 1,149.2
Asia Pacific 158.9 - - - - - - 158.9
International 2,896.7 (9.2) - - - - - 2,887.5
North America 945.4 - - - - - - 945.4
Revenues $ 3,842.1 (9.2) - - - - - 3,832.9
Operating profit:
International $ 227.6 3.6 (8.5) 3.9 - - - 226.6
North America 32.5 - - - 8.8 - - 41.3
Segment
operating 260.1 3.6 (8.5) 3.9 8.8 - - 267.9
profit
Non-segment (88.9) - (0.8) - 47.4 - - (42.3)
Operating $ 171.2 3.6 (9.3) 3.9 56.2 - - 225.6
profit
Amounts
attributable to
Brink's:
Income from
continuing $ 106.8 3.9 (14.0) 2.8 33.8 (21.1) - 112.2
operations
Diluted EPS –
continuing 2.20 0.08 (0.29) 0.06 0.70 (0.43) - 2.31
operations
Amounts may not add due to rounding.
(a) To eliminate results of additional European operations we intend to exit in 2013. Operations do not
currently meet requirements to be classified as discontinued operations.
To eliminate:
o Gains related to the sale of investments in mutual fund securities ($1.9 million in the first
quarter and $0.5 million in the third quarter). Proceeds from the sales were used to fund the
settlement of pension obligations related to our former chief executive officer and chief
administrative officer.
o Gains and losses related to business acquisitions and dispositions. A $0.9 million gain was
(b) recognized in the second quarter and a $0.1 million loss was recognized in the third quarter. In
the fourth-quarter of 2012, tax expense included a benefit of $7.5 million related to a reduction
in an income tax accrual established as part of the 2010 acquisition of subsidiaries in Mexico, and
pretax income included a $2.1 million favorable adjustment to the local profit sharing accrual as a
result of the change in tax expectation.
o Third quarter gain on the sale of real estate in Venezuela ($7.2 million).
o Selling costs related to certain operations expected to be sold in the near term and costs related
to an acquisition completed in first quarter 2013. A $0.8 million loss was recognized in the fourth
quarter.
To eliminate employee benefit settlement and acquisition-related severance losses (Mexico and
(c) Argentina). Employee termination benefits in Mexico are accounted for under FASB ASC Topic 715,
Compensation – Retirement Benefits.
(d) To eliminate expenses related to U.S. retirement plans.
(e) To eliminate tax benefit related to change in retiree health care funding strategy.
(f) To adjust effective income tax rate in the interim period to be equal to the full-year non-GAAP
effective income tax rate. The full-year non-GAAP effective tax rate for 2012 is 36.6%.
Page 15
The Brink's Company and subsidiaries
Non-GAAP Results Reconciled to GAAP (Unaudited)
(In millions, except for per share amounts)
Additional Mexico Adjust
European Gains on Employee CEO U.S. Income
GAAP Operations Acquisitions Benefit Retirement Retirement Tax Non-GAAP
Basis to be and Asset Settlement Costs Plans Rate Basis
Exited Dispositions Losses
(a) (b) (d) (e) (f)
(c)
First Quarter 2011
Revenue:
Latin America $ 332.3 - - - - - - 332.3
EMEA 278.5 (2.5) - - - - - 276.0
Asia Pacific 34.9 - - - - - - 34.9
International 645.7 (2.5) - - - - - 643.2
North America 239.0 - - - - - - 239.0
Revenues $ 884.7 (2.5) - - - - - 882.2
Operating
profit:
International $ 51.7 0.9 - - - - - 52.6
North America 6.8 - - - - 0.7 - 7.5
Segment
operating 58.5 0.9 - - - 0.7 - 60.1
profit
Non-segment (15.0) - (0.4) - - 6.2 - (9.2)
Operating $ 43.5 0.9 (0.4) - - 6.9 - 50.9
profit
Amounts
attributable to
Brink's:
Income from
continuing $ 23.6 0.9 (3.0) - - 4.4 (0.8) 25.0
operations
Diluted EPS –
continuing 0.49 0.02 (0.06) - - 0.09 (0.02) 0.52
operations
Second Quarter 2011
Revenue:
Latin America $ 360.5 - - - - - - 360.5
EMEA 302.0 (2.7) - - - - - 299.3
Asia Pacific 38.5 - - - - - - 38.5
International 701.0 (2.7) - - - - - 698.3
North America 246.8 - - - - - - 246.8
Revenues $ 947.8 (2.7) - - - - - 945.1
Operating
profit:
International $ 39.4 0.8 - 1.0 - - - 41.2
North America 10.4 - - - - 0.8 - 11.2
Segment
operating 49.8 0.8 - 1.0 - 0.8 - 52.4
profit
Non-segment (16.2) - - - - 6.2 - (10.0)
Operating $ 33.6 0.8 - 1.0 - 7.0 - 42.4
profit
Amounts
attributable to
Brink's:
Income from
continuing $ 14.0 1.0 - 0.7 - 4.4 0.5 20.7
operations
Diluted EPS –
continuing 0.29 0.02 - 0.01 - 0.09 0.01 0.43
operations
See page 18 for notes.
Page 16
The Brink's Company and subsidiaries
Non-GAAP Results Reconciled to GAAP (Unaudited)
(In millions, except for per share amounts)
Additional Mexico Adjust
European Gains on Employee CEO U.S. Income
GAAP Operations Acquisitions Benefit Retirement Retirement Tax Non-GAAP
Basis to be and Asset Settlement Costs Plans Rate Basis
Exited Dispositions Losses
(a) (b) (d) (e) (f)
(c)
Third Quarter 2011
Revenue:
Latin America $ 375.1 - - - - - - 375.1
EMEA 305.6 (2.9) - - - - - 302.7
Asia Pacific 40.3 - - - - - - 40.3
International 721.0 (2.9) - - - - - 718.1
North America 244.5 - - - - - - 244.5
Revenues $ 965.5 (2.9) - - - - - 962.6
Operating
profit:
International $ 65.5 0.5 - 0.7 - - - 66.7
North America 8.7 - - - - 0.8 - 9.5
Segment
operating 74.2 0.5 - 0.7 - 0.8 - 76.2
profit
Non-segment (7.6) - (9.3) - - 6.2 - (10.7)
Operating $ 66.6 0.5 (9.3) 0.7 - 7.0 - 65.5
profit
Amounts
attributable to
Brink's:
Income from
continuing $ 35.6 0.5 (6.6) 0.5 - 4.4 (0.6) 33.8
operations
Diluted EPS –
continuing 0.74 0.01 (0.14) 0.01 - 0.09 (0.01) 0.70
operations
Fourth Quarter 2011
Revenue:
Latin America $ 392.8 - - - - - - 392.8
EMEA 291.6 (2.7) - - - - - 288.9
Asia Pacific 40.0 - - - - - - 40.0
International 724.4 (2.7) - - - - - 721.7
North America 243.9 - - - - - - 243.9
Revenues $ 968.3 (2.7) - - - - - 965.6
Operating
profit:
International $ 71.3 0.4 - 0.4 - - - 72.1
North America 5.5 - - - - 0.9 - 6.4
Segment
operating 76.8 0.4 - 0.4 - 0.9 - 78.5
profit
Non-segment (21.0) - - - 4.1 6.2 - (10.7)
Operating $ 55.8 0.4 - 0.4 4.1 7.1 - 67.8
profit
Amounts
attributable to
Brink's:
Income from
continuing $ 23.3 0.5 - 0.3 2.6 4.5 0.9 32.1
operations
Diluted EPS –
continuing 0.48 0.01 - 0.01 0.05 0.09 0.02 0.67
operations
See page 18 for notes.
Page 17
The Brink's Company and subsidiaries
Non-GAAP Results Reconciled to GAAP (Unaudited)
(In millions, except for per share amounts)
Additional Mexico Adjust
European Gains on Employee CEO U.S. Income
GAAP Operations Acquisitions Benefit Retirement Retirement Tax Non-GAAP
Basis to be and Asset Settlement Costs Plans Rate Basis
Exited Dispositions Losses
(a) (b) (d) (e) (f)
(c)
Full Year 2011
Revenue:
Latin America $ 1,460.7 - - - - - - 1,460.7
EMEA 1,177.7 (10.8) - - - - - 1,166.9
Asia Pacific 153.7 - - - - - - 153.7
International 2,792.1 (10.8) - - - - - 2,781.3
North America 974.2 - - - - - - 974.2
Revenues $ 3,766.3 (10.8) - - - - - 3,755.5
Operating profit:
International $ 227.9 2.6 - 2.1 - - - 232.6
North America 31.4 - - - - 3.2 - 34.6
Segment
operating 259.3 2.6 - 2.1 - 3.2 - 267.2
profit
Non-segment (59.8) - (9.7) - 4.1 24.8 - (40.6)
Operating $ 199.5 2.6 (9.7) 2.1 4.1 28.0 - 226.6
profit
Amounts attributable to
Brink's:
Income from continuing $ 96.5 2.9 (9.6) 1.5 2.6 17.7 - 111.6
operations
Diluted EPS – 2.01 0.06 (0.20) 0.03 0.05 0.37 - 2.32
continuing operations
Amounts may not add due to rounding.
(a) To eliminate results of additional European operations we intend to exit in 2013. Operations do not currently
meet requirements to be classified as discontinued operations.
(b) To eliminate gains as follows:
First Quarter Third Quarter Full Year 2011
2011 2011
Operating Operating Operating
Profit EPS Profit EPS EPS
Profit
Sale of U.S.
Document $ - - (6.7) (0.09) (6.7) (0.09)
Destruction
business
Gains on
available-for-sale - (0.05) - - - (0.05)
equity and debt
securities
Acquisition of
controlling (0.4) (0.01) (2.1) (0.04) (2.5) (0.05)
interests
Sale of former - - (0.5) (0.01) (0.5) (0.01)
operating assets
$ (0.4) (0.06) (9.3) (0.14) (9.7) (0.20)
To eliminate employee benefit settlement loss related to Mexico. Portions of
Brink's Mexican subsidiaries' accrued employee termination benefit were paid
(c) in the second and third quarters of 2011. The employee termination benefit is
accounted for under FASB ASC Topic 715, Compensation – Retirement Benefits.
Accordingly, the severance payments resulted in settlement losses.
(d) To eliminate the costs related to the retirement of the former chief
executive officer.
(e) To eliminate expenses related to U.S. retirement liabilities.
(f) To adjust effective income tax rate to be equal to the full-year non-GAAP
effective income tax rate. The non-GAAP effective tax rate for 2011 is 35.1%.
Page 18
The Brink's Company and subsidiaries
Non-GAAP Results Reconciled to GAAP (Unaudited)
(In millions, except for per share amounts)
Additional
Remeasure
European Gains and Venezuelan U.S. U.S.
Losses on Net Retirement Healthcare
GAAP Operations Acquisitions Royalty Monetary Plans Legislation Non-GAAP
Basis and (c) Assets Tax Charge Basis
to be Dispositions (e) (f)
Exited (b) (d)
(a)
Full Year 2010
Revenue:
Latin America $ 877.4 - - - - - - 877.4
EMEA 1,054.5 (9.9) - - - - - 1,044.6
Asia Pacific 126.5 - - - - - - 126.5
International 2,058.4 (9.9) - - - - - 2,048.5
North America 917.8 - - - - - - 917.8
Revenues $ 2,976.2 (9.9) - - - - - 2,966.3
Operating profit:
International $ 195.0 2.2 - - 3.2 - - 200.4
North America 44.1 - - - - (1.0) - 43.1
Segment
operating 239.1 2.2 - - 3.2 (1.0) - 243.5
profit
Non-segment (62.6) - 8.6 (4.9) - 22.7 - (36.2)
Operating $ 176.5 2.2 8.6 (4.9) 3.2 21.7 - 207.3
profit
Amounts attributable to
Brink's:
Income from continuing $ 81.6 2.3 5.6 (3.0) 2.0 13.5 13.7 115.7
operations
Diluted EPS – 1.69 0.05 0.12 (0.06) 0.04 0.28 0.29 2.39
continuing operations
Amounts may not add due to rounding.
(a) To eliminate results of additional European operations we intend to exit in 2013. Operations do not currently
meet requirements to be classified as discontinued operations.
To eliminate
(b) o Loss recognized related to acquisition of controlling interest in subsidiary previously accounted for as
cost method investment and bargain purchase gain in Mexico.
o Exchange of marketable equity securities.
(c) To eliminate royalty income from former home security business.
To reverse remeasurement gains and losses in Venezuela. For accounting purposes, Venezuela is considered a
(d) highly inflationary economy. Under U.S. GAAP, subsidiaries that operate in Venezuela record gains and losses in
earnings for the remeasurement of bolivar fuerte-denominated net monetary assets.
(e) To eliminate expenses related to U.S. retirement liabilities.
(f) To eliminate $13.7 million of tax expense related to the reversal of a deferred tax asset as a result of U.S.
healthcare legislation.
Page 19
The Brink's Company and subsidiaries
Other Reconciliations to GAAP (Unaudited)
(In millions)
NON-GAAP CASH FLOWS FROM OPERATING ACTIVITIES – RECONCILED TO U.S. GAAP
2012 2011
Cash flows from operating activities – $ 250.5 247.0
GAAP
Decrease (increase) in certain (15.7) 11.7
customer obligations (a)
Cash outflows (inflows) related to 11.3 11.4
discontinued operations (b)
Cash flows from operating $ 246.1 270.1
activities – Non-GAAP
To eliminate the change in the balance of customer obligations
related to cash received and processed in certain of our secure cash
logistics operations. The title to this cash transfers to us for a
(a) short period of time. The cash is generally credited to customers'
accounts the following day and we do not consider it as available for
general corporate purposes in the management of our liquidity and
capital resources.
(b) To eliminate cash flows related to our discontinued operations.
Non-GAAP cash flows from operating activities are supplemental financial
measures that are not required by, or presented in accordance with GAAP. The
purpose of the non-GAAP cash flows from operating activities is to report
financial information excluding the impact of cash received and processed in
certain of our secure cash logistics operations and without cash flows from
discontinued operations. Brink's believes these measures are helpful in
assessing cash flows from operations, enable period-to-period comparability
and are useful in predicting future operating cash flows. Non-GAAP cash flows
from operating activities should not be considered as an alternative to cash
flows from operating activities determined in accordance with GAAP and should
be read in conjunction with our consolidated statements of cash flows.
NET DEBT – RECONCILED TO U.S. GAAP December 31,
2012 2011
Debt:
Short-term debt $ 26.7 25.4
Long-term debt 362.6 364.0
Total Debt 389.3 389.4
Less:
Cash and cash equivalents 201.7 182.9
Amounts held by certain cash logistics (44.0) (25.1)
operations (a)
Cash and cash
equivalents available 157.7 157.8
for general corporate
purposes
Net Debt $ 231.6 231.6
Title to cash received and processed in certain of our secure cash
logistics operations transfers to us for a short period of time. The
(a) cash is generally credited to customers' accounts the following day and
we do not consider it as available for general corporate purposes in the
management of our liquidity and capital resources and in our computation
of Net Debt.
Net Debt is a supplemental financial measure that is not required by, or
presented in accordance with GAAP. We use Net Debt as a measure of our
financial leverage. We believe that investors also may find Net Debt to be
helpful in evaluating our financial leverage. Net Debt should not be
considered as an alternative to Debt determined in accordance with GAAP and
should be reviewed in conjunction with our consolidated balance sheets. Set
forth above is a reconciliation of Net Debt, a non-GAAP financial measure, to
Debt, which is the most directly comparable financial measure calculated and
reported in accordance with GAAP. Net Debt excluding cash and debt in
Venezuelan operations was $280 million at December 31, 2012, and $242 million
at December 31, 2011.
Page 20
The Brink's Company and subsidiaries
Other Reconciliations to GAAP (Unaudited)
(In millions)
DISCOUNTED CASH FLOWS AT PLAN DISCOUNT RATES – RECONCILED TO U.S. GAAP
December 31, 2012
Primary U.S. UMWA Other
pension plan (b) plans unfunded Total
(c) U.S. plans
Funded status of U.S. $ 263 257 65 585
retirement plans – GAAP
Present value of
projected earnings of (65) (15) - (80)
plan assets (a)
Discounted cash
flows at plan $ 198 242 65 505
discount rates –
Non-GAAP
Plan discount rate 4.20% 3.90%
Expected return of 8.00% 8.25%
assets
Under GAAP, the funded status of a benefit plan is reduced by the fair
market value of plan assets at the balance sheet date, and the present
value of the projected earnings on plan assets does not reduce the
(a) funded status at the balance sheet date. The non-GAAP measure
presented above additionally reduces the funded status as computed
under GAAP by the present value of projected earnings of plan assets
using the expected return on asset assumptions of the respective plan.
For the primary U.S. pension plan, we are required by ERISA
regulations to maintain minimum funding levels, and as a result, we
(b) estimate we will be required to make minimum required contributions
from 2012 to 2021. We have estimated that we will achieve the required
funded ratio after the 2021 contribution.
There are no minimum funding requirements for the UMWA plans because
they are not covered by ERISA funding regulations. Using assumptions
(c) at the end of 2012, we project that the plan assets plus expected
earnings on those investments will cover the benefit payments for
these plans until 2022. We project that Brink's will be required to
contribute cash to the plan beginning in 2022 to pay beneficiaries.
Discounted cash flows at plan discount rates are supplemental financial
measures that are not required by, or presented in accordance with GAAP. The
purpose of the discounted cash flows at plan discount rate is to present our
retirement obligations after giving effect to the benefit of earning a return
on plan assets. We believe this measure is helpful in assessing the present
value of future funding requirements of the company in order to meet plan
benefit obligations. Discounted cash flows at plan discount rates should not
be considered as an alternative to the funded status of the U.S. retirement
plans at December 31, 2012, as determined in accordance with GAAP and should
be read in conjunction with our consolidated balance sheets.
NON-GAAP DISCONTINUED OPERATIONS − RECONCILED TO U.S. GAAP
2011 2012
2Q Full 3Q Full
Year Year
GAAP Basis
Operating loss $ (13) (28) (6) (18)
Income taxes 4 5 - 1
Net loss (9) (24) (6) (18)
Diluted EPS (0.18) (0.49) (0.12) (0.36)
Amounts excluded
from Non-GAAP (a)
Operating loss $ 10 10 3 3
Income taxes (4) (4) - -
Net loss 6 6 3 3
Diluted EPS 0.13 0.13 0.06 0.06
Non-GAAP Basis
Operating loss $ (3) (18) (3) (16)
Income taxes 1 1 - 1
Net loss (2) (17) (3) (15)
Diluted EPS (0.05) (0.36) (0.06) (0.31)
Amounts may not add due to rounding.
Amounts excluded from Non-GAAP basis of Discontinued Operations including
(a) a settlement loss in Belgium in second quarter of 2011 and an impairment
loss in Poland in third quarter of 2012. These amounts had previously been
excluded from Non-GAAP continuing operations.
Contact:
Investor Relations
804.289.9709
Page 21
SOURCE The Brink's Company
Website: http://www.Brinks.com
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