THE BRINK'S COMPANY 
By RICHMOND, Va., Jan. 30, 2014 /PRNewswire/ -- The Brink's Company (NYSE: BCO), a global leader in security-related services, today reported fourth-quarter earnings.
Fourth-Quarter Highlights
GAAP:
-- Revenue up 6% (11% organic growth), EPS $.53 vs. $.70
-- Segment profit up 17% (30% organic growth), margin 8.1% vs. 7.3%
-- International profit up 30% (44% organic growth), margin 10.3% vs. 8.5%
-- North America margin of 0.1% vs. 3.3%
Non-GAAP:
-- Revenue up 6% (11% organic growth), EPS $.79 vs. $.60
-- Segment profit up 24% (37% organic growth), margin 8.8% vs. 7.5%
-- International profit up 38% (52% organic growth), margin 10.8% vs. 8.5%
-- North America margin 1.4% vs. 4.2%
Other:
-- Full-year GAAP EPS $1.47 vs. $2.29; Non-GAAP EPS $2.37 vs. $2.32
-- Full-year GAAP segment margin down from 7.1% to 6.4%; Non-GAAP flat at
7.2%; organic revenue growth 8%
-- Full-year capital spending down $13 million to $183 million
-- Underfunding of legacy liabilities improves by $265 million
Tom Schievelbein, chairman, president and chief executive officer, said: "The improvement in fourth-quarter earnings reflects strong performance from international operations, driven primarily by Venezuela and Brazil. In 2014, we expect a segment margin rate of about 7% on organic revenue growth of 5% to 8%, as we invest in adjacencies and our high-value service offerings and control costs in our core business."
1
Summary Reconciliation of Fourth-Quarter GAAP to Non-GAAP EPS*
-------------------------------------------------------------
Fourth
Quarter Full Year
2013 2012 2013 2012
---- ---- ---- ----
GAAP EPS $0.53 $0.70 $1.47 $2.29
Exclude Venezuela net monetary
asset remeasurement losses - - 0.17 -
Exclude U.S. retirement plan
expenses 0.17 0.16 0.65 0.70
Exclude employee benefit
settlement and severance losses 0.01 0.01 0.04 0.06
Exclude gains and losses on
acquisitions and dispositions 0.08 (0.18) 0.04 (0.29)
Exclude tax benefit from change
in retiree health care funding
strategy - - - (0.43)
Adjust quarterly tax rate to
full-year average rate - (0.09) - -
Non-GAAP EPS $0.79 $0.60 $2.37 $2.32
Summary of Fourth-Quarter and Full-Year Results*
-----------------------------------------------
Fourth Quarter Full Year
-------------- ---------
(In
millions, Change Change
except
for per
share
amounts) 2013 2012 % 2013 2012 %
------
GAAP
----
Revenues $1,039 977 6% $3,942 3,735 6%
Segment operating
profit (a) 84 72 17 253 264 (4)
Non-segment expense (22) (21) 2 (81) (89) (9)
Operating profit 62 50 24 172 175 (2)
Income
from
continuing
operations
(b) 26 34 (24) 72 111 (35)
Diluted
EPS
from
continuing
operations
(b) 0.53 0.70 (24) 1.47 2.29 (36)
Non-GAAP
--------
Revenues $1,039 977 6% $3,942 3,735 6%
Segment operating
profit (a) 91 73 24 283 268 6
Non-segment expense (12) (11) 16 (43) (42) 1
Operating profit 79 63 25 241 226 7
Income
from
continuing
operations
(b) 39 29 34 116 113 3
Diluted
EPS
from
continuing
operations
(b) 0.79 0.60 32 2.37 2.32 2
-------- ---- ---- --- ---- ---- ---
(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 12 - 17. Amounts may not add due to rounding.
2
The Brink's Company and subsidiaries
Fourth Quarter 2013 vs. 2012 (Unaudited)
(In millions)
Segment Results - GAAP
Acquisitions /
Organic Dispositions Currency % Change
4Q '12 Change (a) (b) 4Q '13 Total Organic
------ ------ --- --- ------ ----- -------
Revenues:
Latin America $432 85 5 (51) 470 9 20
EMEA 286 9 - 11 306 7 3
Asia Pacific 36 3 - (2) 37 3 9
--- --- --- --- ---
International 754 97 5 (42) 813 8 13
North America 224 6 - (3) 226 1 3
--- --- --- --- ---
Total $977 103 5 (45) 1,039 6 11
---
Operating
profit:
International $64 29 - (9) 84 30 44
North America 7 (7) - - - (97) (95)
--- --- --- --- ---
Segment operating
profit 72 22 - (9) 84 17 30
Non-segment (21) (1) 1 - (22) 2 6
--- --- --- --- ---
Total $50 20 1 (9) 62 24 40
---
Segment
operating
margin:
International 8.5% 10.3%
North America 3.3% 0.1%
--- ---
Segment
operating
margin 7.3% 8.1%
---------- --- ---
Segment Results - Non-GAAP*
Acquisitions /
Organic Dispositions Currency % Change
4Q '12 Change (a) (b) 4Q '13 Total Organic
------ ------ --- --- ------ ----- -------
Revenues:
Latin
America $432 85 5 (51) 470 9 20
EMEA 286 9 - 11 306 7 3
Asia
Pacific 36 3 - (2) 37 3 9
--- --- --- --- ---
International 754 97 5 (42) 813 8 13
North
America 224 6 - (3) 226 1 3
--- --- --- --- ---
Total $977 103 5 (45) 1,039 6 11
---- --- --- --- -----
Operating
profit:
International $64 33 - (9) 88 38 52
North
America 10 (6) - - 3 (67) (65)
--- --- --- --- ---
Segment
operating
profit 73 27 - (9) 91 24 37
Non-
segment (11) (2) - - (12) 16 16
--- --- --- --- ---
Total $63 25 - (9) 79 25 40
--- --- --- --- ---
Segment
operating
margin:
International 8.5% 10.8%
North
America 4.2% 1.4%
Segment
operating
margin 7.5% 8.8%
---------- --- ---
(a) Includes operating results and gains/losses on acquisitions,
sales and exits of businesses.
(b) 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.
*Non-GAAP results are reconciled to the applicable GAAP results on pages 12-17. Amounts may not add due to rounding.
3
The Brink's Company and subsidiaries
Full Year 2013 vs. 2012 (Unaudited)
(In millions)
Segment Results - GAAP
Acquisitions /
Organic Dispositions Currency % Change
2012 Change (a) (b) 2013 Total Organic
---- ------ --- --- ---- ----- -------
Revenues:
Latin America $1,579 262 16 (136) 1,721 9 17
EMEA 1,126 26 - 27 1,178 5 2
Asia Pacific 136 15 - (7) 145 6 11
--- --- --- --- ---
International 2,842 303 16 (116) 3,044 7 11
North America 893 11 - (6) 898 1 1
--- --- --- --- ---
Total $3,735 314 16 (122) 3,942 6 8
---
Operating
profit:
International $232 50 2 (36) 248 7 22
North America 32 (27) - - 5 (85) (84)
--- --- --- --- ---
Segment operating
profit 264 23 2 (36) 253 (4) 9
Non-segment (89) 6 2 - (81) (9) (7)
--- --- --- --- ---
Total $175 29 4 (36) 172 (2) 17
---
Segment
operating
margin:
International 8.2% 8.2%
North America 3.6% 0.5%
--- ---
Segment
operating
margin 7.1% 6.4%
---------- --- ---
Segment Results - Non-GAAP
Acquisitions /
Organic Dispositions Currency % Change
2012 Change (a) (b) 2013 Total Organic
---- ------ --- --- ---- ----- -------
Revenues:
Latin America $1,579 262 16 (136) 1,721 9 17
EMEA 1,126 26 - 27 1,178 5 2
Asia Pacific 136 15 - (7) 145 6 11
--- --- --- --- ---
International 2,842 303 16 (116) 3,044 7 11
North America 893 11 - (6) 898 1 1
--- --- --- --- ---
Total $3,735 314 16 (122) 3,942 6 8
---
Operating
profit:
International $227 60 2 (22) 267 17 26
North America 41 (24) - - 16 (60) (59)
--- --- --- --- ---
Segment operating
profit 268 36 2 (23) 283 6 14
Non-segment (42) - - - (43) 1 1
--- --- --- --- ---
Total $226 36 2 (23) 241 7 16
---
Segment
operating
margin:
International 8.0% 8.8%
North America 4.6% 1.8%
--- ---
Segment
operating
margin 7.2% 7.2%
---------- --- ---
Amounts may not add due to rounding. See page 3 for footnote explanations.
4
Non-Segment Expenses
On a GAAP basis, non-segment expenses increased slightly to $22 million versus the year-ago quarter of $21 million. On a non-GAAP basis, non-segment expenses increased to $12 million from the year-ago quarter of $11 million.
Capital Expenditures and Capital Leases
Full-year capital expenditures and capital lease additions were $183 million versus $196 million in 2012. In 2014, these expenditures are expected to total $200 million to $210 million.
Income Taxes
On a GAAP basis, fourth-quarter tax expense was $21 million (37% effective rate) versus $3 million in 2012 (7% effective rate). The full-year 2013 tax expense was $52 million (35% effective rate) versus $27 million in 2012 (17% effective rate). The full-year 2013 effective rate was unfavorably affected by tax expense resulting from repatriation, partially offset by a tax benefit from the mix of earnings. 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 mix of earnings. On a non-GAAP basis, the full-year rate for 2013 was 33% versus 37% in 2012 due in large part to higher Venezuela earnings.
2014 Outlook
See page 8 for a summary of selected 2013 results and 2014 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. This outlook assumes no change in exchange rates used for reporting Venezuela results for 2014.
Recent Events
Brink's disclosed today that it is exploring re-entry into the home security industry. In 2008, Brink's spun off its Brink's Home Security unit to shareholders and entered into a 5-year non-compete agreement, which expired on October 31, 2013.
On November 1, Brink's completed the sale of its Threshold Financial Technologies, Inc. subsidiary to DirectCash Payments Inc. for $50 million, generating a fourth-quarter gain of $19 million ($.31 per share after taxes). Under the terms of the agreement, DirectCash acquired Threshold's private label ATM network and payment processing businesses in Canada while Brink's continues to own and operate Threshold's integrated managed services business as Brink's Integrated Managed Services (Brink's IMS). On November 22, Brink's completed the sale of its ICD, Ltd., commercial security subsidiary for $33 million, generating a fourth-quarter gain of $10 million ($.13 per share after taxes). Results from both of the divested businesses are disclosed as discontinued operations.
5
Conference Call
Brink's will host a conference call on January 30 at 11:00 a.m. Eastern Time to review fourth-quarter results. Interested parties can listen by calling (877) 870-4263 (in the U.S.) or (412) 317-0790 (international) Participants should call in at least five minutes prior to the start of the call. Participants can pre-register at http://dpregister.com/10039412 to receive a direct dial-in number for the call. The call also will be accessible via live webcast at www.Brinks.com. A replay of the call will be available through February 14, 2014, at (877) 344-7529 (in the U.S.) or (412) 317-0088 (international). The conference number is 10039412. 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 operations and provide an alternative for valuing 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.
6
Forward-Looking Statements
Financial information for the fourth quarter and full year 2013 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 operating profit, currency impact on revenue, segment margin, non-segment expense, interest expense, income tax rate, non-controlling interest expense, capital expenditures, fixed asset acquisitions, capital leases and depreciation and amortization for 2014, and future exchange rates used to report Venezuela results. 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 develop and implement solutions for our customers and
gain market acceptance of those solutions,
-- our ability to maintain an effective IT infrastructure and safeguard
confidential information,
-- 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,
-- changes in currency restrictions and in foreign 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 and the possibility of work stoppages,
-- 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,
-- costs related to dispositions and market exits,
-- our ability to identify, evaluate and pursue acquisitions and other
strategic opportunities, including those in the home security industry
and emerging markets,
-- the willingness of our customers to absorb price increases and
surcharges, including those related to fuel or labor costs,
-- 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, and
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,
-- our ability to realize deferred tax assets,
-- the outcome of pending and future claims, litigation and administrative
proceedings,
-- public perception of the Company's business and reputation,
-- access to the capital and credit markets,
-- seasonality, pricing and other competitive industry factors, and
-- the promulgation and adoption of new accounting standards and
interpretations, new government regulations and interpretations of
existing regulations.
This list of risks, uncertainties and contingencies is not intended to be exhaustive. Additional factors that could cause our results to differ materially from those described in the forward-looking statements can be found under "Risk Factors" in Item 1A of our Annual Report on Form 10-K for the period ended December 31, 2012, 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.
Contact:
Investor Relations
804.289.9709
7
The Brink's Company and subsidiaries
Outlook Summary (Unaudited)
(In millions)
GAAP Non-GAAP
---- --------
2014 2014
2013 Estimate 2013 Estimate
---- -------- ---- --------
Organic revenue growth
International 11% 7% - 9% 11% 7% - 9%
North America 1% 0% - 2% 1% 0% - 2%
Total 8% 5% - 8% 8% 5% - 8%
Currency impact on revenue
International (4)% (4%) - (6%) (4)% (4%) - (6%)
North America (1)% flat (1)% flat
Total (3)% (3%) - (5%) (3)% (3%) - (5%)
Segment margin
International(a) 8.2% 7.5% - 8.5% 8.8% 7.5% - 8.5%
North
America(b) 0.5% 1.5% - 2.5% 1.8% 2.5% - 3.5%
Total 6.4% ~6.8% 7.2% ~7%
Non-segment expense
General and
administrative $45 47 $45 47
Retirement
plans(b) 41 19 - -
Acquisition
gains (3) - - -
Royalty
income (2) (2) (2) (2)
Total $81 64 $43 45
--- --- --- ---
Effective income tax rate(a) 35% 33% - 37% 33% 33% - 37%
Interest expense $25 27 - 29 $25 27 - 29
Interest and other income (expense)(c) $2 1 - 2 $2 1 - 2
Net income attributable to
noncontrolling
interests(a) $24 26 - 30 $29 26 - 30
Fixed assets acquired
Capital
expenditures $178 185 - 195 $178 185 - 195
Capital
leases(d) 5 15 5 15
Total $183 200 - 210 $183 200 - 210
---- --------- ---- ---------
Depreciation and amortization $174 185 - 190 $174 185 - 190
(a) Remeasurement losses on net monetary assets in
Venezuela ($13 million in 2013) have been
excluded from non-GAAP results.
(b) Costs related to U.S. retirement plans have
been excluded from non-GAAP results including
$12 million in 2013 and $5 million in 2014
related to North America, and $41 million in
2013 and $19 million in 2014 related to Non-
segment.
(c) Acquisition gains and losses are excluded from
non-GAAP results.
(d) Includes capital leases for newly acquired
assets only.
Amounts may not add due to rounding.
8
The Brink's Company and subsidiaries
Condensed Consolidated Statements of Income (Unaudited)
(In millions, except for per share amounts)
Fourth
Quarter Full Year
------- ---------
2013 2012 2013 2012
---- ---- ---- ----
Revenues $1,039.4 977.1 $3,942.2 3,735.0
Costs and
expenses:
Cost of revenues 829.0 786.7 3,197.1 3,024.3
Selling, general
and
administrative
expenses 146.0 141.2 564.0 546.7
----- ----- ----- -----
Total costs and
expenses 975.0 927.9 3,761.1 3,571.0
Other operating
income (expense) (2.0) 1.2 (9.4) 11.0
---- --- ---- ----
Operating profit 62.4 50.4 171.7 175.0
Interest expense (6.8) (6.2) (25.1) (23.1)
Interest and
other income
(expense) 0.4 0.8 1.6 7.2
--- --- --- ---
Income from
continuing
operations
before tax 56.0 45.0 148.2 159.1
Provision for
income taxes 20.9 3.3 52.0 27.1
---- --- ---- ----
Income from
continuing
operations 35.1 41.7 96.2 132.0
Income (loss)
from
discontinued
operations, net
of tax 14.9 (6.1) (15.1) (22.3)
---- ---- ----- -----
Net income 50.0 35.6 81.1 109.7
Less net income
attributable to
noncontrolling
interests (9.1) (7.7) (24.3) (20.8)
---- ---- ----- -----
Net income
attributable
to Brink's $40.9 27.9 $56.8 88.9
----- ---- ----- ----
Amounts
attributable to
Brink's:
Continuing
operations $26.0 34.0 $71.9 111.2
Discontinued
operations 14.9 (6.1) (15.1) (22.3)
---- ---- ----- -----
Net income
attributable
to Brink's $40.9 27.9 $56.8 88.9
----- ---- ----- ----
Earnings (loss) per share
attributable to Brink's
common shareholders(a):
Basic:
Continuing
operations $0.53 0.70 $1.48 2.30
Discontinued
operations 0.31 (0.13) (0.31) (0.46)
---- ----- ----- -----
Net income $0.84 0.58 $1.17 1.84
----- ---- ----- ----
Diluted:
Continuing
operations $0.53 0.70 $1.47 2.29
Discontinued
operations 0.30 (0.13) (0.31) (0.46)
---- ----- ----- -----
Net income $0.83 0.57 $1.16 1.83
----- ---- ----- ----
Weighted-average
shares
Basic 48.8 48.5 48.7 48.4
Diluted 49.2 48.8 49.0 48.6
(a) Earnings per share may not add due to rounding.
9
The Brink's Company and subsidiaries
Supplemental Financial Information (Unaudited)
(In millions)
Fourth
Quarter Full Year
------- ---------
2013 2012 2013 2012
---- ---- ---- ----
DISCONTINUED OPERATIONS
Income (loss) from
operations(a)(b) $(0.5) (3.3) $(26.0) (22.5)
Gain (loss) on sale(a) 19.9 (0.3) 16.3 (0.3)
Adjustments to contingencies
of former operations (1.6) (0.6) (0.7) (0.5)
Income (loss) from
discontinued operations
before income taxes 17.8 (4.2) (10.4) (23.3)
Provision (benefit) for income
taxes 2.9 1.9 4.7 (1.0)
Income (loss) from
discontinued operations, net
of tax $14.9 (6.1) $(15.1) (22.3)
---
(a) Discontinued operations include
gains and losses related to
businesses that Brink's recently
sold. These include Threshold
Financial Technologies, Inc. in
Canada, cash-in-transit
operations in Germany, Poland,
Turkey, and Hungary, and guarding
operations in France, Morocco, and
Germany. Revenues from these
International operations were
$59.3 million in the three months
and $184.3 million in the year
ended December 31, 2013, and $56.5
million in the three months and
$211.5 million in the year ended
December 31, 2012.
(b) The loss from operations in 2013
included $16.2 million of
severance expenses paid to
terminate certain employees of the
German cash-in-transit
operations. We contributed a
portion of the cost to fund the
severance payments to the business
prior to the execution of the sale
transaction.
Full Year
---------
SELECTED CASH FLOW INFORMATION 2013 2012
---- ----
Property and equipment acquired during
the year
Capital
expenditures
International $125.6 129.7
North
America 52.1 48.2
---- ----
Capital expenditures 177.7 177.9
Capital
Leases(a)
International 0.9 2.7
North
America 4.6 15.4
--- ----
Capital leases 5.5 18.1
Total
International 126.5 132.4
North
America 56.7 63.6
---- ----
Total $183.2 196.0
------ -----
Depreciation and amortization
International $115.4 100.3
North
America 58.2 55.4
---- ----
Depreciation and
amortization $173.6 155.7
------ -----
(a) Represents the amount
of property and
equipment acquired
using capital leases.
Because 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.
10
The Brink's Company and subsidiaries
GAAP and Non-GAAP Results (Unaudited)
(In millions, except for per share amounts)
2012 2013
---- ----
1Q 2Q 3Q 4Q Full Year 1Q 2Q 3Q 4Q Full Year
--- --- --- --- --------- --- --- --- --- ---------
GAAP Basis
----------
Revenues:
Latin
America $386.3 375.9 385.2 432.0 1,579.4 $412.9 413.6 423.8 470.4 1,720.7
EMEA 272.8 281.4 286.0 285.7 1,125.9 277.8 293.4 301.2 305.9 1,178.3
Asia Pacific 33.8 33.1 33.7 35.8 136.4 36.6 36.6 34.9 36.7 144.8
---- ---- ---- ---- ----- ---- ---- ---- ---- -----
International 692.9 690.4 704.9 753.5 2,841.7 727.3 743.6 759.9 813.0 3,043.8
North America 224.2 224.2 221.3 223.6 893.3 223.2 226.3 222.5 226.4 898.4
----- ----- ----- ----- ----- ----- ----- ----- ----- -----
Revenues $917.1 914.6 926.2 977.1 3,735.0 $950.5 969.9 982.4 1,039.4 3,942.2
------ ----- ----- ----- ------- ------ ----- ----- ------- -------
Operating profit:
International $67.1 41.5 59.0 64.4 232.0 $36.3 48.1 79.7 84.0 248.1
North America 6.0 10.6 8.0 7.3 31.9 (2.0) 6.3 0.2 0.2 4.7
--- ---- --- --- ---- ---- --- --- --- ---
Segment operating
profit 73.1 52.1 67.0 71.7 263.9 34.3 54.4 79.9 84.2 252.8
Non-segment (24.3) (21.3) (22.0) (21.3) (88.9) (17.0) (21.6) (20.7) (21.8) (81.1)
----- ----- ----- ----- ----- ----- ----- ----- ----- -----
Operating
profit $48.8 30.8 45.0 50.4 175.0 $17.3 32.8 59.2 62.4 171.7
Amounts
attributable to
Brink's:
Income from
continuing
operations $22.5 33.6 21.1 34.0 111.2 $2.9 13.2 29.8 26.0 71.9
Diluted EPS -
continuing
operations 0.47 0.69 0.43 0.70 2.29 0.06 0.27 0.61 0.53 1.47
------------- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
Non-GAAP Basis
--------------
Revenues:
Latin
America $386.3 375.9 385.2 432.0 1,579.4 $412.9 413.6 423.8 470.4 1,720.7
EMEA 272.8 281.4 286.0 285.7 1,125.9 277.8 293.4 301.2 305.9 1,178.3
Asia Pacific 33.8 33.1 33.7 35.8 136.4 36.6 36.6 34.9 36.7 144.8
---- ---- ---- ---- ----- ---- ---- ---- ---- -----
International 692.9 690.4 704.9 753.5 2,841.7 727.3 743.6 759.9 813.0 3,043.8
North America 224.2 224.2 221.3 223.6 893.3 223.2 226.3 222.5 226.4 898.4
----- ----- ----- ----- ----- ----- ----- ----- ----- -----
Revenues $917.1 914.6 926.2 977.1 3,735.0 $950.5 969.9 982.4 1,039.4 3,942.2
------ ----- ----- ----- ------- ------ ----- ----- ------- -------
Operating profit:
International $67.9 41.8 53.8 63.9 227.4 $50.0 48.6 80.5 88.0 267.1
North America 8.2 12.8 10.2 9.5 40.7 0.9 9.2 3.1 3.1 16.3
--- ---- ---- --- ---- --- --- --- --- ----
Segment operating
profit 76.1 54.6 64.0 73.4 268.1 50.9 57.8 83.6 91.1 283.4
Non-segment (9.6) (11.7) (10.4) (10.6) (42.3) (7.6) (11.4) (11.3) (12.3) (42.6)
---- ----- ----- ----- ----- ---- ----- ----- ----- -----
Operating
profit $66.5 42.9 53.6 62.8 225.8 $43.3 46.4 72.3 78.8 240.8
Amounts
attributable to
Brink's:
Income from
continuing
operations $33.2 22.7 27.7 29.1 112.7 $18.7 22.8 35.4 39.0 115.9
Diluted EPS -
continuing
operations 0.69 0.47 0.57 0.60 2.32 0.38 0.47 0.72 0.79 2.37
------------- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
Amounts may not add due to rounding. Non-GAAP results for 2012 and 2013 are reconciled to applicable GAAP results on pages 12-17.
11
The Brink's Company and subsidiaries
Non-GAAP Results Reconciled to GAAP (Unaudited)
(In millions, except for per share amounts)
GAAP Basis Gains on Acquisitions Net monetary Asset Remeasurement Employee Benefit U.S. Retirement Plans Adjust Income Non-GAAP
and Asset Dispositions Losses in Venezuela Settlement Losses Tax Rate Basis
(a) (b) (c) (d) (e)
--- --- --- --- ---
First Quarter 2013
------------------
Revenues:
Latin
America $412.9 - - - - - 412.9
EMEA 277.8 - - - - - 277.8
Asia Pacific 36.6 - - - - - 36.6
---- --- --- --- --- --- ----
International 727.3 - - - - - 727.3
North America 223.2 - - - - - 223.2
----- --- --- --- --- --- -----
Revenues $950.5 - - - - - 950.5
------ --- --- --- --- --- -----
Operating profit:
International $36.3 - 13.4 0.3 - - 50.0
North America (2.0) - - - 2.9 - 0.9
---- --- --- --- --- --- ---
Segment operating
profit 34.3 - 13.4 0.3 2.9 - 50.9
Non-segment (17.0) (1.1) - - 10.5 - (7.6)
----- ---- --- --- ---- --- ----
Operating
profit $17.3 (1.1) 13.4 0.3 13.4 - 43.3
Amounts
attributable to
Brink's:
Income from
continuing
operations $2.9 (1.1) 8.4 0.2 8.2 0.1 18.7
Diluted EPS -
continuing
operations 0.06 (0.02) 0.17 - 0.17 - 0.38
------------- ---- ----- ---- --- ---- --- ----
Second Quarter 2013
-------------------
Revenues:
Latin
America $413.6 - - - - - 413.6
EMEA 293.4 - - - - - 293.4
Asia Pacific 36.6 - - - - - 36.6
---- --- --- --- --- --- ----
International 743.6 - - - - - 743.6
North America 226.3 - - - - - 226.3
----- --- --- --- --- --- -----
Revenues $969.9 - - - - - 969.9
------ --- --- --- --- --- -----
Operating profit:
International $48.1 - - 0.5 - - 48.6
North America 6.3 - - - 2.9 - 9.2
--- --- --- --- --- --- ---
Segment operating
profit 54.4 - - 0.5 2.9 - 57.8
Non-segment (21.6) - - - 10.2 - (11.4)
----- --- --- --- ---- --- -----
Operating
profit $32.8 - - 0.5 13.1 - 46.4
Amounts
attributable to
Brink's:
Income from
continuing
operations $13.2 - - 0.4 7.7 1.5 22.8
Diluted EPS -
continuing
operations 0.27 - - 0.01 0.16 0.03 0.47
------------- ---- --- --- ---- ---- ---- ----
See page 14 for notes.
12
The Brink's Company and subsidiaries
Non-GAAP Results Reconciled to GAAP (Unaudited)
(In millions, except for per share amounts)
GAAP Basis Gains on Acquisitions Net Monetary Asset Remeasurement Employee Benefit U.S. Retirement Plans Adjust Income
and Asset Dispositions Losses in Venezuela Settlement Losses Tax Rate Non-GAAP Basis
(a) (b) (c) (d) (e)
--- --- --- --- ---
Third Quarter 2013
------------------
Revenues:
Latin
America $423.8 - - - - - 423.8
EMEA 301.2 - - - - - 301.2
Asia Pacific 34.9 - - - - - 34.9
---- --- --- --- --- --- ----
International 759.9 - - - - - 759.9
North America 222.5 - - - - - 222.5
----- --- --- --- --- --- -----
Revenues $982.4 - - - - - 982.4
------ --- --- --- --- --- -----
Operating profit:
International $79.7 - - 0.8 - - 80.5
North America 0.2 - - - 2.9 - 3.1
--- --- --- --- --- --- ---
Segment operating
profit 79.9 - - 0.8 2.9 - 83.6
Non-segment (20.7) (0.9) - - 10.3 - (11.3)
----- ---- --- --- ---- --- -----
Operating
profit $59.2 (0.9) - 0.8 13.2 - 72.3
Amounts
attributable to
Brink's:
Income from
continuing
operations $29.8 (0.9) - 0.6 7.7 (1.8) 35.4
Diluted EPS -
continuing
operations 0.61 (0.02) - 0.01 0.16 (0.04) 0.72
------------- ---- ----- --- ---- ---- ----- ----
Fourth Quarter 2013
-------------------
Revenues:
Latin
America $470.4 - - - - - 470.4
EMEA 305.9 - - - - - 305.9
Asia Pacific 36.7 - - - - - 36.7
---- --- --- --- --- --- ----
International 813.0 - - - - - 813.0
North America 226.4 - - - - - 226.4
----- --- --- --- --- --- -----
Revenues $1,039.4 - - - - - 1,039.4
------ --- --- --- --- --- -------
Operating profit:
International $84.0 3.1 - 0.9 - - 88.0
North America 0.2 - - - 2.9 - 3.1
--- --- --- --- --- --- ---
Segment operating
profit 84.2 3.1 - 0.9 2.9 - 91.1
Non-segment (21.8) (0.8) - - 10.3 - (12.3)
----- ---- --- --- ---- --- -----
Operating
profit $62.4 2.3 - 0.9 13.2 - 78.8
Amounts
attributable to
Brink's:
Income from
continuing
operations $26.0 4.0 - 0.6 8.2 0.2 39.0
Diluted EPS -
continuing
operations 0.53 0.08 - 0.01 0.17 - 0.79
------------- ---- ---- --- ---- ---- --- ----
See page 14 for notes.
13
The Brink's Company and subsidiaries
Non-GAAP Results Reconciled to GAAP (Unaudited)
(In millions, except for per share amounts)
GAAP Basis Gains and Losses on Net Monetary Asset Remeasurement Employee Benefit Adjust Income
Acquisitions and Losses in Venezuela Settlement Losses Tax Rate
Dispositions U.S. Retirement Plans Non-GAAP Basis
(a) (b) (c) (d) (e)
--- --- --- --- ---
Full Year 2013
--------------
Revenues:
Latin
America $1,720.7 - - - - - 1,720.7
EMEA 1,178.3 - - - - - 1,178.3
Asia
Pacific 144.8 - - - - - 144.8
International 3,043.8 - - - - - 3,043.8
North
America 898.4 - - - - - 898.4
Revenues $3,942.2 - - - - - 3,942.2
------ --- --- --- --- --- -------
Operating profit:
International $248.1 3.1 13.4 2.5 - - 267.1
North
America 4.7 - - - 11.6 - 16.3
Segment operating profit 252.8 3.1 13.4 2.5 11.6 - 283.4
Non-segment (81.1) (2.8) - - 41.3 - (42.6)
Operating profit $171.7 0.3 13.4 2.5 52.9 - 240.8
Amounts attributable to Brink's:
Income from continuing operations $71.9 2.0 8.4 1.8 31.8 - 115.9
Diluted EPS - continuing operations 1.47 0.04 0.17 0.04 0.65 - 2.37
---------------------------------- ---- ---- ---- ---- ---- --- ----
(a) To eliminate:
a $1.1 million adjustment in the first quarter of 2013 to the amount of gain recognized on a 2010 business acquisition in Mexico as a result of a favorable adjustment to the purchase price
received in the first quarter of 2013.
$1.7 million of adjustments in the third and fourth quarters of 2013 primarily related to the January 2013 acquisition of Rede Trel in Brazil.
$3.1
million in adjustments in the fourth quarter of 2013 related to the increase in a loss contingency assumed in the 2010 Mexico acquisition and the impairment of an intangible asset acquired in
the 2009 India acquisition.
$2.6 million tax adjustment related to the Belgium disposition.
(b) To eliminate currency exchange losses related to a 16% devaluation of the
official exchange rate in Venezuela from 5.3 to 6.3 bolivar fuertes to the
U.S. dollar in February 2013.
(c) To eliminate employee benefit settlement losses in Mexico.
(d) To eliminate expenses related to U.S. retirement plans.
(e) 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 2013 is 33.3%.
Amounts may not add due to rounding.
14
The Brink's Company and subsidiaries
Non-GAAP Results Reconciled to GAAP (Unaudited)
(In millions, except for per share amounts)
GAAP Basis Gains and Losses on Employee Benefit U.S. Retirement Plans Tax Benefit on Adjust Income Non-GAAP
Acquisitions and Settlement and Change in Health Tax Rate Basis
Dispositions Severance Losses Care Funding
Strategy
(a) (b) (c) (d) (e)
--- --- --- --- ---
First Quarter 2012
------------------
Revenues:
Latin
America $386.3 - - - - - 386.3
EMEA 272.8 - - - - - 272.8
Asia Pacific 33.8 - - - - - 33.8
---- --- --- --- --- --- ----
International 692.9 - - - - - 692.9
North America 224.2 - - - - - 224.2
----- --- --- --- --- --- -----
Revenues $917.1 - - - - - 917.1
------ --- --- --- --- --- -----
Operating profit:
International $67.1 - 0.8 - - - 67.9
North America 6.0 - - 2.2 - - 8.2
--- --- --- --- --- --- ---
Segment operating
profit 73.1 - 0.8 2.2 - - 76.1
Non-segment (24.3) - - 14.7 - - (9.6)
----- --- --- ---- --- --- ----
Operating
profit $48.8 - 0.8 16.9 - - 66.5
Amounts
attributable to
Brink's:
Income from
continuing
operations $22.5 (1.2) 0.6 10.2 - 1.1 33.2
Diluted EPS -
continuing
operations 0.47 (0.02) 0.01 0.21 - 0.02 0.69
------------- ---- ----- ---- ---- --- ---- ----
Second Quarter 2012
-------------------
Revenues:
Latin
America $375.9 - - - - - 375.9
EMEA 281.4 - - - - - 281.4
Asia Pacific 33.1 - - - - - 33.1
---- --- --- --- --- --- ----
International 690.4 - - - - - 690.4
North America 224.2 - - - - - 224.2
----- --- --- --- --- --- -----
Revenues $914.6 - - - - - 914.6
------ --- --- --- --- --- -----
Operating profit:
International $41.5 - 0.3 - - - 41.8
North America 10.6 - - 2.2 - - 12.8
---- --- --- --- --- --- ----
Segment operating
profit 52.1 - 0.3 2.2 - - 54.6
Non-segment (21.3) (0.9) - 10.5 - - (11.7)
----- ---- --- ---- --- --- -----
Operating
profit $30.8 (0.9) 0.3 12.7 - - 42.9
Amounts
attributable to
Brink's:
Income from
continuing
operations $33.6 (0.9) 0.2 7.6 (20.9) 3.1 22.7
Diluted EPS -
continuing
operations 0.69 (0.02) - 0.16 (0.43) 0.06 0.47
------------- ---- ----- --- ---- ----- ---- ----
See page 17 for notes.
15
The Brink's Company and subsidiaries
Non-GAAP Results Reconciled to GAAP (Unaudited)
(In millions, except for per share amounts)
GAAP Basis Gains and Losses on Employee Benefit U.S. Retirement Plans Tax Benefit on Adjust Income Non-GAAP
Acquisitions and Settlement and Change in Health Tax Rate Basis
Dispositions Severance Losses Care Funding
Strategy
(a) (b) (c) (d) (e)
--- --- --- --- ---
Third Quarter 2012
------------------
Revenues:
Latin
America $385.2 - - - - - 385.2
EMEA 286.0 - - - - - 286.0
Asia Pacific 33.7 - - - - - 33.7
---- --- --- --- --- --- ----
International 704.9 - - - - - 704.9
North America 221.3 - - - - - 221.3
----- --- --- --- --- --- -----
Revenues $926.2 - - - - - 926.2
------ --- --- --- --- --- -----
Operating profit:
International $59.0 (7.2) 2.0 - - - 53.8
North America 8.0 - - 2.2 - - 10.2
--- --- --- --- --- --- ----
Segment operating
profit 67.0 (7.2) 2.0 2.2 - - 64.0
Non-segment (22.0) 0.1 - 11.5 - - (10.4)
----- --- --- ---- --- --- -----
Operating
profit $45.0 (7.1) 2.0 13.7 - - 53.6
Amounts
attributable to
Brink's:
Income from
continuing
operations $21.1 (3.0) 1.4 8.2 - - 27.7
Diluted EPS -
continuing
operations 0.43 (0.06) 0.03 0.17 - - 0.57
------------- ---- ----- ---- ---- --- --- ----
Fourth Quarter 2012
-------------------
Revenues:
Latin
America $432.0 - - - - - 432.0
EMEA 285.7 - - - - - 285.7
Asia Pacific 35.8 - - - - - 35.8
---- --- --- --- --- --- ----
International 753.5 - - - - - 753.5
North America 223.6 - - - - - 223.6
----- --- --- --- --- --- -----
Revenues $977.1 - - - - - 977.1
------ --- --- --- --- --- -----
Operating profit:
International $64.4 (1.3) 0.8 - - - 63.9
North America 7.3 - - 2.2 - - 9.5
--- --- --- --- --- --- ---
Segment operating
profit 71.7 (1.3) 0.8 2.2 - - 73.4
Non-segment (21.3) - - 10.7 - - (10.6)
----- --- --- ---- --- --- -----
Operating
profit $50.4 (1.3) 0.8 12.9 - - 62.8
Amounts
attributable to
Brink's:
Income from
continuing
operations $34.0 (8.9) 0.6 7.8 (0.2) (4.2) 29.1
Diluted EPS -
continuing
operations 0.70 (0.18) 0.01 0.16 - (0.09) 0.60
------------- ---- ----- ---- ---- --- ----- ----
See page 17 for notes.
16
The Brink's Company and subsidiaries
Non-GAAP Results Reconciled to GAAP (Unaudited)
(In millions, except for per share amounts)
GAAP Basis Gains and Losses on Employee Benefit U.S. Retirement Plans Tax Benefit on Adjust Income
Acquisitions and Settlement and Change in Health Tax Rate
Dispositions Severance Losses Care Funding
Strategy Non-GAAP Basis
(a) (b) (c) (d) (e)
--- --- --- --- ---
Full Year 2012
--------------
Revenues:
Latin
America $1,579.4 - - - - - 1,579.4
EMEA 1,125.9 - - - - - 1,125.9
Asia
Pacific 136.4 - - - - - 136.4
International 2,841.7 - - - - - 2,841.7
North
America 893.3 - - - - - 893.3
Revenues $3,735.0 - - - - - 3,735.0
------ --- --- --- --- --- -------
Operating profit:
International $232.0 (8.5) 3.9 - - - 227.4
North
America 31.9 - - 8.8 - - 40.7
Segment operating profit 263.9 (8.5) 3.9 8.8 - - 268.1
Non-segment (88.9) (0.8) - 47.4 - - (42.3)
Operating profit $175.0 (9.3) 3.9 56.2 - - 225.8
Amounts attributable to Brink's:
Income from continuing operations $111.2 (14.0) 2.8 33.8 (21.1) - 112.7
Diluted EPS - continuing operations 2.29 (0.29) 0.06 0.70 (0.43) - 2.32
---------------------------------- ---- ----- ---- ---- ----- --- ----
(a) 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 former 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).
(b) 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.
(c) To eliminate expenses related to U.S. retirement plans.
(d) To eliminate tax benefit related to change in retiree health care
funding strategy.
(e) 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 was 36.6%.
Amounts may not add due to rounding.
17
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
2013 2012
---- ----
Cash flows from operating
activities - GAAP $201.5 $250.5
Decrease (increase) in certain
customer obligations(a) 9.8 (15.7)
Cash outflows (inflows)
related to discontinued
operations(b) (5.4) 4.9
---- ---
Cash flows from
operating
activities - Non-
GAAP $205.9 $239.7
---
(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 Cash Management Services
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
NET DEBT - RECONCILED TO U.S. GAAP December 31,
2013 2012
---- ----
Debt:
Short-
term debt $80.9 $26.7
Long-term
debt 355.1 362.6
Total Debt 436.0 389.3
----- -----
Less:
Cash and
cash
equivalents 255.5 201.7
Amounts
held by
Cash
Management
Services
operations(a) (31.3) (44.0)
Cash and cash equivalents
available for general
corporate purposes 224.2 157.7
----- -----
Net Debt $211.8 $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 $306 million
18
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, 2013
-----------------
Primary U.S. UMWA plans Other unfunded U.S.
pension plan plans Total
(b) (c)
--- ---
Funded
status
of U.S.
retirement
plans -
GAAP $113 142 55 310
Present
value of
projected
earnings
of plan
assets(a) (16) (77) - (93)
Discounted cash flows
at plan discount
rates - Non-GAAP $97 65 55 217
--- --- --- ---
Plan discount rate 5.00% 4.70%
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 2014 to 2018. We have
estimated that we will achieve the
required funded ratio after the
2018 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 2013, we
project that the plan assets plus
expected earnings on those
investments will cover the benefit
payments for these plans until
2033. We project that Brink's will
be required to contribute cash to
the plan beginning in 2033 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, 2013, as determined in accordance
with GAAP and should be read in conjunction with our consolidated balance sheets.
# # #
19
SOURCE The Brink's Company
