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Brink's Reports Fourth-Quarter Results, Restructures European Operations
Submitted by admin on 2/1/2013 @ 3:00 AM
Companies mentioned in this article:
The Brink's Company
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 per share
amounts) 2011 2012
---- ----
GAAP Basis 1Q 2Q 3Q 4Q Full Year 1Q 2Q 3Q 4Q Full Year
--- --- --- --- --------- --- --- --- --- ---------
Revenue $29 32 30 29 119 26 26 26 27 104
Operating loss (7) (13) (4) (4) (28) (4) (4) (6) (4) (18)
Income taxes 2 4 - (2) 5 - 1 - (1) 1
Net loss (5) (9) (4) (6) (24) (4) (3) (6) (4) (18)
Diluted EPS (0.10) (0.18) (0.08) (0.13) (0.49) (0.08) (0.07) (0.12) (0.09) (0.36)
Non-GAAP Basis
Revenue $29 32 30 29 119 26 26 26 27 104
Operating loss (7) (3) (4) (4) (18) (4) (4) (3) (4) (16)
Income taxes 2 1 - (2) 1 - 1 - (1) 1
Net loss (5) (2) (4) (6) (17) (4) (3) (3) (4) (15)
Diluted EPS (0.10) (0.05) (0.08) (0.13) (0.36) (0.08) (0.07) (0.06) (0.09) (0.31)
(a) 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 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(TM) 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:
-- Revenue up 4% (6% organic growth), EPS $.67 vs. $.48
-- Segment profit down 6% (4% organic decline), margin 7.2% vs. 7.9%
-- International profit down 9% (6% organic decline), margin 8.4% vs. 9.8%
-- North America margin 3.0% vs. 2.3%
Non-GAAP:
-- Revenue up 4% (6% organic growth), EPS $.60 vs. $.67
-- Segment profit down 6% (4% organic decline), margin 7.4% vs. 8.1%
-- 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
-- North America cost reductions drive profit improvement; margin 3.9% vs.
2.6%
Other:
-- Full-year GAAP EPS $2.20 vs. $2.01; Non-GAAP EPS $2.31 vs. $2.32
-- Full-year non-GAAP segment margin 7.0% vs. 7.1%; organic revenue growth
7%
-- 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
-- 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, CEO retirement costs and other 0.01 0.06 0.06 0.08
Exclude additional European operations to be exited 0.01 0.01 0.08 0.06
Exclude gains and losses on acquisitions and asset dispositions (0.18) - (0.29) (0.20)
Exclude tax benefit from change in retiree health care funding strategy - - (0.43) -
Adjust quarterly tax rate to full-year average rate (0.06) 0.02 - -
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 per share
amounts) 2012 2011 Change 2012 2011 Change
-----------
GAAP
----
Revenues $1,007 968 4% $3,842 3,766 2%
Segment operating profit (a) 72 77 (6) 260 259 -
Non-segment expense (21) (21) 1 (89) (60) 49
Operating profit 51 56 (9) 171 200 (14)
Income from continuing operations (b) 33 23 40 107 97 11
Diluted EPS from continuing
operations (b) 0.67 0.48 40 2.20 2.01 9
Non-GAAP
--------
Revenues $1,004 966 4% $3,833 3,756 2%
Segment operating profit (a) 74 79 (6) 268 267 -
Non-segment expense (11) (11) (1) (42) (41) 4
Operating profit 63 68 (7) 226 227 -
Income from continuing operations (b) 29 32 (9) 112 112 1
Diluted EPS from continuing
operations (b) 0.60 0.67 (10) 2.31 2.32 -
(a) Segment operating profit is a non-GAAP measure.Disclosure of segment 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 '11 Change Dispositions (b) (c) 4Q '12 Total Organic
------ ------ --------------- --- ------ ----- -------
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
profit 77 (3) - (2) 72 (6) (4)
---
Non-segment (a) (21) - - - (21) 1 1
--- --- --- --- --- ---
Total $56 (3) - (2) 51 (9) (6)
--- --- --- --- --- ---
Segment operating margin:
International 9.8% 8.4%
North America 2.3% 3.0%
Segment operating margin 7.9% 7.2%
------------------------ --- ---
Segment Results - Non-GAAP
--------------------------
Organic Acquisitions / Currency % Change
4Q '11 Change Dispositions (b) (c) 4Q '12 Total Organic
------ ------ --------------- --- ------ ----- -------
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
profit 79 (4) 1 (2) 74 (6) (4)
Non-segment (a) (11) - - - (11) (1) (1)
--- --- --- --- ---
Total $68 (3) 1 (2) 63 (7) (5)
--- --- --- --- ---
Segment operating margin:
International 10.0% 8.4%
North America 2.6% 3.9%
--- ---
Segment operating margin 8.1% 7.4%
------------------------ --- ---
(a) Includes income and expense not allocated to segments.
--- ------------------------------------------------------
(b) Includes operating results and gains/losses on acquisitions, sales and exits of businesses.
--- -------------------------------------------------------------------------------------------
(c) 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 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 (b) (c) 2012 Total Organic
---- ------ --------------- --- ---- ----- -------
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
profit 259 18 (2) (15) 260 - 7
Non-segment (a) (60) (21) (8) - (89) 49 35
--- --- --- --- ---
Total $200 (3) (11) (15) 171 (14) (1)
---- --- --- --- ---
Segment operating margin:
International 8.2% 7.9%
North America 3.2% 3.4%
Segment operating margin 6.9% 6.8%
------------------------ --- ---
Segment Results - Non-GAAP
--------------------------
Organic Acquisitions / Currency % Change
2011 Change Dispositions (b) (c) 2012 Total Organic
---- ------ --------------- --- ---- ----- -------
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
profit 267 15 1 (15) 268 - 6
Non-segment (a) (41) (2) - - (42) 4 4
--- --- --- --- ---
Total $227 13 1 (15) 226 - 6
---- --- --- --- ---
Segment operating margin:
International 8.4% 7.8%
North America 3.6% 4.4%
Segment operating margin 7.1% 7.0%
------------------------ --- ---
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:
-- continuing market volatility and commodity price fluctuations and their
impact on the demand for our services,
-- our ability to continue profit growth in Latin America,
-- our ability to maintain or improve volumes at favorable pricing levels
and increase cost efficiencies in the United States and Europe,
-- investments in information technology and value-added services and their
impact on revenue and profit growth,
-- our ability to implement high-value solutions,
-- 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,
-- the strength of the U.S. dollar relative to foreign currencies and
foreign currency exchange rates,
-- the stability of the Venezuelan economy, changes in Venezuelan policy
regarding foreign-owned businesses, and changes in exchange rates,
-- fluctuations in value of the Venezuelan bolivar fuerte,
-- regulatory and labor issues in many of our global operations, including
negotiations with organized labor,
-- our ability to identify and execute further cost and operational
improvements and efficiencies in our core businesses,
-- our ability to integrate successfully recently acquired companies and
improve their operating profit margins,
-- the actions of competitors, our ability to identify acquisitions and
other strategic opportunities in emerging markets,
-- the willingness of our customers to absorb fuel surcharges and other
future price increases,
-- the impact of turnaround actions responding to current conditions in
Europe and our productivity and cost control efforts in that region,
-- our ability to obtain necessary information technology and other
services at favorable pricing levels from third party service providers,
-- variations in costs or expenses and performance delays of any public or
private sector supplier, service provider or customer,
-- 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,
-- security threats worldwide and losses of customer valuables,
-- 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,
-- the impact of the Patient Protection and Affordable Care Act on black
lung liability and the Company's ongoing operations,
-- 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,
-- changes in estimates and assumptions underlying our critical accounting
policies,
-- the outcome of pending and future claims and litigation,
-- access to the capital and credit markets,
-- 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%) - (4%) (7)%
(2%) - (4%)
North America flat flat flat flat
Total (5)% (1%) - (3%) (5)% (1%) - (3%)
Segment margin
International (a) 7.9% 6.0% - 6.5% 7.8% 7.0% - 7.5%
North America (b) 3.4% 2.8% - 3.3% 4.4% 4.0% - 4.5%
Total 6.8% 5.0% - 5.5% 7.0% 6.0% - 6.5%
Non-segment expense:
General and administrative $44 45 $44 45
Retirement plans (b) 47 42 - -
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 interests (a) $21 8 - 10 $19 17 - 20
Fixed assets acquired:
Capital expenditures $185 195 $185 195
Capital leases (c) 18 10 18 10
Total $203 205 $203 205
---- --- ---- ---
Depreciation and amortization $166 180 - 190 $166 180 - 190
(a) Projected remeasurement losses on net monetary assets in Venezuela in the 2013 estimate, and the
related effect on income tax rates and net income attributable to noncontrolling interest, have been
excluded from non-GAAP results.
(b) Costs related to U.S. retirement plans have been excluded from non-GAAP 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 expenses 145.2 139.3 561.7 526.6
----- ----- ----- -----
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 before tax 45.0 52.0 154.5 184.4
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 of tax (4.7) (7.5) (17.9) (22.0)
---- ---- ----- -----
Net income 35.6 24.9 109.7 98.5
Less net income attributable to noncontrolling interests (7.7) (9.1) (20.8) (24.0)
---- ---- ----- -----
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 before tax (a) $(3.7) (4.2) (18.3) (28.0)
Adjustments to contingencies of former operations (b):
Workers' compensation (0.4) (2.2) (0.2) (1.4)
Gain from Federal Black Lung Excise Tax
refunds - - - 4.2
Other (0.2) (0.4) (0.3) (0.6)
Loss from discontinued operations before income taxes (4.3) (6.8) (18.8) (25.8)
Provision (credit) for income taxes 0.4 0.7 (0.9) (3.8)
--- --- ---- ----
Loss from discontinued operations, net of tax $(4.7) (7.5) (17.9) (22.0)
----- ---- ----- -----
(a) Discontinued operations include cash-in-transit operations in Germany and Poland,
and guarding operation in France and Morocco.Revenues from these 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 amortization $165.5 156.6
------ -----
(a) Represents the amount of property and
equipment acquired using capital
leases.Since these assets are acquired
without using cash, the 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 Year 1Q 2Q 3Q 4Q Full 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 profit 58.5 49.8 74.2 76.8 259.3 71.0 51.9 65.2 72.0 260.1
Non-segment (15.0) (16.2) (7.6) (21.0) (59.8) (24.3) (21.3) (22.0) (21.3) (88.9)
Operating profit $43.5 33.6 66.6 55.8 199.5 $46.7 30.6 43.2 50.7 171.2
Amounts attributable to Brink's:
Income from continuing operations $23.6 14.0 35.6 23.3 96.5 $20.9 33.8 19.5 32.6 106.8
Diluted EPS - continuing operations 0.49 0.29 0.74 0.48 2.01 0.43 0.69 0.40 0.67 2.20
----------------------------------- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
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 profit 60.1 52.4 76.2 78.5 267.2 74.6 55.1 64.3 73.9 267.9
Non-segment (9.2) (10.0) (10.7) (10.7) (40.6) (9.6) (11.7) (10.4) (10.6) (42.3)
Operating profit $50.9 42.4 65.5 67.8 226.6 $65.0 43.4 53.9 63.3 225.6
Amounts attributable to Brink's:
Income from continuing operations $25.0 20.7 33.8 32.1 111.6 $32.0 22.9 28.0 29.3 112.2
Diluted EPS - continuing operations 0.52 0.43 0.70 0.67 2.32 0.66 0.47 0.58 0.60 2.31
----------------------------------- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
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)
------------------------------------------
GAAP Basis Additional Gains and Losses on Employee Benefit Settlement Adjust Income Tax
Acquisitions and Dispositions and Severance Losses Rate
(b) U.S. Retirement Plans Tax Non-GAAP Basis
European (c) (d) Benefit on (f)
Operations Change in
to be Exited Health
(a) Care
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 profit 71.0 0.6 - 0.8 2.2 - - 74.6
Non-segment (24.3) - - - 14.7 - - (9.6)
Operating profit $46.7 0.6 - 0.8 16.9 - - 65.0
Amounts attributable to Brink's:
Income from continuing operations $20.9 0.7 (1.2) 0.6 10.2 - 0.8 32.0
Diluted EPS - continuing operations 0.43 0.01 (0.02) 0.01 0.21 - 0.02 0.66
----------------------------------- ---- ---- ----- ---- ---- --- ---- ----
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 profit 51.9 0.7 - 0.3 2.2 - - 55.1
Non-segment (21.3) - (0.9) - 10.5 - - (11.7)
Operating profit $30.6 0.7 (0.9) 0.3 12.7 - - 43.4
Amounts attributable to Brink's:
Income from continuing operations $33.8 0.7 (0.9) 0.2 7.6 (20.9) 2.4 22.9
Diluted EPS - continuing operations 0.69 0.01 (0.02) - 0.16 (0.43) 0.05 0.47
----------------------------------- ---- ---- ----- --- ---- ----- ---- ----
See page 15 for notes.
----------------------
Page 13
The Brink's Company and subsidiariesNon-GAAP Results Reconciled to GAAP (Unaudited)
(In millions, except for per share amounts)
------------------------------------------
GAAP Basis Additional Gains and Losses on Employee Benefit Settlement Adjust Income Tax
Acquisitions and Dispositions and Severance Losses Rate
(b) U.S. Retirement Plans Tax Non-GAAP Basis
European (c) (d) Benefit on (f)
Operations Change in
to be Exited Health
(a) Care
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 profit 65.2 2.1 (7.2) 2.0 2.2 - - 64.3
Non-segment (22.0) - 0.1 - 11.5 - - (10.4)
Operating profit $43.2 2.1 (7.1) 2.0 13.7 - - 53.9
Amounts attributable to Brink's:
Income from continuing operations $19.5 2.2 (3.0) 1.4 8.2 - (0.3) 28.0
Diluted EPS - continuing operations 0.40 0.04 (0.06) 0.03 0.17 - (0.01) 0.58
----------------------------------- ---- ---- ----- ---- ---- --- ----- ----
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 profit 72.0 0.2 (1.3) 0.8 2.2 - - 73.9
Non-segment (21.3) - - - 10.7 - - (10.6)
Operating profit $50.7 0.2 (1.3) 0.8 12.9 - - 63.3
Amounts attributable to Brink's:
Income from continuing operations $32.6 0.3 (8.9) 0.6 7.8 (0.2) (2.9) 29.3
Diluted EPS - continuing operations 0.67 0.01 (0.18) 0.01 0.16 - (0.06) 0.60
----------------------------------- ---- ---- ----- ---- ---- --- ----- ----
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)
------------------------------------------
GAAP Basis Additional Gains and Losses on Employee Benefit Settlement Adjust Income Tax
Acquisitions and Dispositions and Severance Losses Rate
(b) U.S. Retirement Plans Tax Non-GAAP Basis
European (c) (d) Benefit on (f)
Operations Change in
to be Exited Health
(a) Care
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 profit 260.1 3.6 (8.5) 3.9 8.8 - - 267.9
Non-segment (88.9) - (0.8) - 47.4 - - (42.3)
Operating profit $171.2 3.6 (9.3) 3.9 56.2 - - 225.6
Amounts attributable to Brink's:
Income from continuing operations $106.8 3.9 (14.0) 2.8 33.8 (21.1) - 112.2
Diluted EPS - continuing operations 2.20 0.08 (0.29) 0.06 0.70 (0.43) - 2.31
----------------------------------- ---- ---- ----- ---- ---- ----- --- ----
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 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. Gains and losses related to business acquisitions and dispositions.A $0.9 million gain was 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.Third quarter gain on the
sale of real estate in Venezuela ($7.2 million).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.
--- ---------------------------------------------------------------------------------------------------------------------------------------------------
(c) To eliminate employee benefit settlement and acquisition-related severance losses (Mexico and 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)
------------------------------------------
GAAP Basis Additional Gains on Acquisitions and Mexico Employee Benefit CEO Retirement Costs U.S. Retirement Plans Adjust Income Tax
Asset Dispositions (b) Settlement Losses Rate Non-GAAP Basis
European (c) (d) (e) (f)
Operations
to be Exited
(a)
---
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 profit 58.5 0.9 - - - 0.7 - 60.1
Non-segment (15.0) - (0.4) - - 6.2 - (9.2)
Operating profit $43.5 0.9 (0.4) - - 6.9 - 50.9
Amounts attributable to Brink's:
Income from continuing operations $23.6 0.9 (3.0) - - 4.4 (0.8) 25.0
Diluted EPS - continuing operations 0.49 0.02 (0.06) - - 0.09 (0.02) 0.52
----------------------------------- ---- ---- ----- --- --- ---- ----- ----
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 profit 49.8 0.8 - 1.0 - 0.8 - 52.4
Non-segment (16.2) - - - - 6.2 - (10.0)
Operating profit $33.6 0.8 - 1.0 - 7.0 - 42.4
Amounts attributable to Brink's:
Income from continuing operations $14.0 1.0 - 0.7 - 4.4 0.5 20.7
Diluted EPS - continuing operations 0.29 0.02 - 0.01 - 0.09 0.01 0.43
----------------------------------- ---- ---- --- ---- --- ---- ---- ----
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)
------------------------------------------
GAAP Basis Additional Gains on Acquisitions and Mexico Employee Benefit CEO Retirement Costs U.S. Retirement Plans Adjust Income Tax
Asset Dispositions (b) Settlement Losses Rate Non-GAAP Basis
European (c) (d) (e) (f)
Operations
to be Exited
(a)
---
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 profit 74.2 0.5 - 0.7 - 0.8 - 76.2
Non-segment (7.6) - (9.3) - - 6.2 - (10.7)
Operating profit $66.6 0.5 (9.3) 0.7 - 7.0 - 65.5
Amounts attributable to Brink's:
Income from continuing operations $35.6 0.5 (6.6) 0.5 - 4.4 (0.6) 33.8
Diluted EPS - continuing operations 0.74 0.01 (0.14) 0.01 - 0.09 (0.01) 0.70
----------------------------------- ---- ---- ----- ---- --- ---- ----- ----
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 profit 76.8 0.4 - 0.4 - 0.9 - 78.5
Non-segment (21.0) - - - 4.1 6.2 - (10.7)
Operating profit $55.8 0.4 - 0.4 4.1 7.1 - 67.8
Amounts attributable to Brink's:
Income from continuing operations $23.3 0.5 - 0.3 2.6 4.5 0.9 32.1
Diluted EPS - continuing operations 0.48 0.01 - 0.01 0.05 0.09 0.02 0.67
----------------------------------- ---- ---- --- ---- ---- ---- ---- ----
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)
------------------------------------------
GAAP Basis Additional Gains on Acquisitions and Mexico Employee Benefit CEO Retirement Costs U.S. Retirement Plans Adjust Income Tax
Asset Dispositions (b) Settlement Losses Rate Non-GAAP Basis
European (c) (d) (e) (f)
Operations
to be Exited
(a)
---
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 profit 259.3 2.6 - 2.1 - 3.2 - 267.2
Non-segment (59.8) - (9.7) - 4.1 24.8 - (40.6)
Operating profit $199.5 2.6 (9.7) 2.1 4.1 28.0 - 226.6
Amounts attributable to Brink's:
Income from continuing operations $96.5 2.9 (9.6) 1.5 2.6 17.7 - 111.6
Diluted EPS - continuing operations 2.01 0.06 (0.20) 0.03 0.05 0.37 - 2.32
----------------------------------- ---- ---- ----- ---- ---- ---- --- ----
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 2011 Third Quarter 2011 Full Year 2011
Operating Profit EPS Operating Profit EPS Operating EPS
Profit
------
Sale of U.S. Document Destruction business $ - - (6.7) (0.09) (6.7) (0.09)
Gains on available-for-sale equity and debt securities - (0.05) - - - (0.05)
Acquisition of controlling interests (0.4) (0.01) (2.1) (0.04) (2.5) (0.05)
Sale of former operating assets - - (0.5) (0.01) (0.5) (0.01)
--- --- ---- ----- ---- -----
$(0.4) (0.06) (9.3) (0.14) (9.7) (0.20)
===== ===== ==== ===== ==== =====
(c) To eliminate employee benefit settlement loss related to Mexico.Portions of Brink's Mexican subsidiaries' accrued employee
termination benefit were paid 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)
------------------------------------------
GAAP Basis Additional Gains and Losses on Remeasure Venezuelan Net U.S. Healthcare Legislation
Acquisitions and Dispositions Monetary Assets Tax Charge (f)
(b) Royalty (c) U.S. Retirement Plans Non-GAAP Basis
European (d) (e)
Operations
to be Exited
(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 profit 239.1 2.2 - - 3.2 (1.0) - 243.5
Non-segment (62.6) - 8.6 (4.9) - 22.7 - (36.2)
Operating profit $176.5 2.2 8.6 (4.9) 3.2 21.7 - 207.3
Amounts attributable to Brink's:
Income from continuing operations $81.6 2.3 5.6 (3.0) 2.0 13.5 13.7 115.7
Diluted EPS - continuing operations 1.69 0.05 0.12 (0.06) 0.04 0.28 0.29 2.39
----------------------------------- ---- ---- ---- ----- ---- ---- ---- ----
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
Loss recognized related to acquisition of controlling interest in subsidiary previously accounted for as cost method investment and bargain
purchase gain in Mexico.Exchange of marketable equity securities.
--- --------------------------------------------------------------------------------------------------------------------------------------------
(c) To eliminate royalty income from former home security business.
--- ---------------------------------------------------------------
(d) To reverse remeasurement gains and losses in Venezuela.For accounting purposes, Venezuela is considered a 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 -
GAAP $250.5 247.0
Decrease (increase) in
certain customer
obligations (a) (15.7) 11.7
Cash outflows (inflows)
related to
discontinued
operations (b) 11.3 11.4
---- ----
Cash flows from operating
activities - Non-GAAP $246.1 270.1
---
(a) 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 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
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
operations (a) (44.0) (25.1)
Cash and cash equivalents
available for general
corporate purposes 157.7 157.8
----- -----
Net Debt $231.6 231.6
------ -----
(a) Title to cash received and processed in
certain of our secure cash logistics
operations transfers to us for a short
period of time.The cash is generally
credited to customers' accounts the
following day and we do not consider it as
available for general corporate purposes in
the management of our liquidity and capital
resources and in our computation of Net
Debt.
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.
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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
-----------------
UMWA Other unfunded Total
Primary U.S. plans (c) U.S. plans
pension plan
(b)
-------------
Funded status of U.S. retirement plans - GAAP $263 257 65 585
Present value of projected earnings of plan assets
(a) (65) (15) - (80)
Discounted cash flows at plan discount rates - Non-GAAP $198 242 65 505
---- --- --- ---
Plan discount rate 4.20% 3.90%
Expected return of assets 8.00% 8.25%
(a) 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 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.
(b) For the primary U.S. pension plan, we are required by ERISA regulations to maintain minimum funding levels, and as
a result, we 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.
(c) There are no minimum funding requirements for the UMWA plans because they are not covered by ERISA funding
regulations.Using assumptions 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 Year 3Q Full 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.
(a) Amounts excluded from Non-GAAP basis of Discontinued Operations including 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