The Brink’s Company announced today that its non-GAAP results
will exclude retirement expenses related to its former operations
and frozen U.S. pension plans. These expenses will continue to be
included in the company’s GAAP results.
Joseph W. Dziedzic, vice president and chief financial officer
of The Brink’s Company, said: “Our GAAP earnings contain
substantial expenses related to frozen retirement plans and
retirement plans from former operations. Excluding these expenses
from non-GAAP results will help investors assess the performance of
our ongoing operations more accurately. The valuation impact of our
legacy liabilities and related cash outflows can now be assessed on
a basis that is separate and distinct from ongoing operations.”
The company’s quarterly non-GAAP results for 2011 and 2010 have
been adjusted to reflect the exclusion of retirement expenses. This
adjustment adds $13 million (27 cents per share) to non-GAAP
earnings for the first nine months of 2011 and $14 million (28
cents per share) to full-year 2010 earnings. GAAP results for these
periods remain unchanged. A reconciliation to GAAP results for
these periods is provided in the attached pages.
In the first nine months of 2011, approximately $19 million of
U.S. retirement plan expenses (including UMWA retirement plan and
Black Lung expenses) were reported in GAAP results as non-segment
expense and approximately $2 million of additional expenses were
included in North American segment results.
On December 31, 2011, the total underfunding related to U.S.
pension plans and obligations related to former coal operations
(UMWA, Black Lung and other) was $628 million versus $418 million
at the end of 2010. From 2012 through 2016, the combined
contributions to these plans are expected to be $39 million in
2012, $47 million in 2013, $57 million in 2014, $52 million in 2015
and $47 million in 2016. There are no cash outflows to the UMWA
plan expected until 2023.
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.
Page 1
Non-GAAP Results
Non-GAAP results described in this 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. For 2011, a forecasted
full-year tax rate is used. 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 our legacy
liabilities more accurately. 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.
Forward-Looking Statements
This release contains forward-looking information about the
exclusion of certain retirement costs from the company’s Non-GAAP
results and the impact of these costs on the company. Words such as
"anticipates," "estimates," "expects," "projects," "intends,"
"plans," "believes," "may," "should" and similar expressions may
identify forward-looking information. The forward-looking
information in this release is subject to known and unknown risks,
uncertainties and contingencies, which could cause actual results,
performance or achievements to differ materially from those that
are anticipated. Additional discussion of factors that could affect
future results is contained in the company’s periodic filings with
the Securities and Exchange Commission. All forward-looking
information should be evaluated in the context of these risks,
uncertainties and contingencies. The information included in this
release is representative only as of the date of this release, and
the company undertakes no obligation to update any information
contained in this release.
Page 2
The Brink’s Company and subsidiaries
(Unaudited)
U.S. Retirement Plans
(in millions)
Underfunded Status
As of Year-End 2011 2010 U.S. pension plans $
305 192 UMWA plans 262 164 Black lung and other plans 61 62
Total
$
628
418
The change in underfunding from 2010 to 2011 is driven primarily
by a reduction in the discount rate from 5.3% to 4.6% for the
primary U.S. pension plan and 5.3% to 4.4% for UMWA plans.
Payments from Brink’s to U.S.
Plans
Actual Projected 2011 2012
2013 2014 2015 2016 U.S. pension
plans $ - 31.5 41.5 51.1 47.0 42.4 UMWA plans - - - - - - Black
lung and other plans (a) 7.0 7.1 5.8 5.5 5.2 4.9 Total $ 7.0
38.6 47.3 56.6 52.2 47.3
(a) These plans are not funded.
The amounts in the tables above are based on a variety of
estimates, including actuarial assumptions as of December 31, 2011.
The estimated amounts will change in the future to reflect payments
made, investment returns, actuarial revaluations, and other changes
in estimates. Actual amounts could differ materially from the
estimated amounts.
Page 3
The Brink’s Company and subsidiaries Non-GAAP
Results - Reconciled to Amounts Reported Under GAAP (Unaudited)
(In millions, except for per share
amounts)
GAAPBasis
Gains onAcquisitions andAssetDispositions
(a)
BelgiumSettlementCharge (b)
MexicoEmployeeBenefitSettlementLosses
(c)
U.S.RetirementPlans (d)
U.S.ValuationAllowanceRelease (e)
AdjustIncome TaxRate (f)
Non-GAAPBasis
First Quarter
2011 Operating profit: International $ 45.2 - - - - - -
45.2 North America 6.8 - - - 0.7 - - 7.5 Segment operating
profit 52.0 - - - 0.7 - - 52.7 Non-segment (15.0) (0.4) - -
6.2 - - (9.2)
Operating profit $ 37.0 (0.4) - - 6.9 - - 43.5
Amounts attributable to Brink’s: Income from
continuing operations $ 18.9 (3.1) - - 4.4 - (0.9) 19.3 Diluted EPS
– continuing operations 0.39 (0.06) - -
0.09 - (0.02) 0.40
Second
Quarter 2011 Operating profit: International $ 26.2 -
10.1 1.0 - - - 37.3 North America 10.4 - - - 0.8 - - 11.2
Segment operating profit 36.6 - 10.1 1.0 0.8 - - 48.5 Non-segment
(16.2) - - - 6.2 - - (10.0)
Operating profit $ 20.4 -
10.1 1.0 7.0 - - 38.5
Amounts attributable to
Brink’s: Income from continuing operations $ 5.3 - 6.3 0.7 4.4
- 0.6 17.3 Diluted EPS – continuing operations 0.11 -
0.13 0.01 0.09 - 0.01
0.36
Third Quarter 2011 Operating profit:
International $ 61.4 - - 0.7 - - - 62.1 North America 8.7 -
- - 0.8 - - 9.5 Segment operating profit 70.1 - - 0.7 0.8 - - 71.6
Non-segment (7.6) (9.3) - - 6.2 - - (10.7)
Operating
profit $ 62.5 (9.3) - 0.7 7.0 - - 60.9
Amounts
attributable to Brink’s: Income from continuing operations $
31.5 (6.6) - 0.5 4.4 (4.4) 3.9 29.3 Diluted EPS – continuing
operations 0.66 (0.14) - 0.01
0.09 (0.09) 0.08 0.61
Amounts may not add due to rounding.
See page 5 for notes.
Page 4
The Brink’s Company and subsidiaries
Non-GAAP Results - Reconciled to
Amounts Reported Under GAAP (Unaudited) (Continued)
(In millions, except for per share
amounts)
Mexico Gains on Employee U.S. Adjust Acquisitions and
Belgium Benefit U.S. Valuation Income Non- GAAP Asset Settlement
Settlement Retirement Allowance Tax Rate GAAP Basis
Dispositions (a) Charge (b) Losses (c)
Plans (d) Release (e) (f) Basis
Nine Months 2011 Operating profit: International $
132.8 - 10.1 1.7 - - - 144.6 North America 25.9 -
- - 2.3 - - 28.2 Segment operating profit
158.7 - 10.1 1.7 2.3 - - 172.8 Non-segment (38.8 ) (9.7 ) -
- 18.6 - - (29.9 )
Operating profit $ 119.9 (9.7 )
10.1 1.7 20.9 - - 142.9
Amounts attributable to
Brink’s: Income from continuing operations $ 55.7 (9.7 ) 6.3
1.2 13.2 (4.4 ) 3.6 65.9 Diluted EPS – continuing operations
1.16 (0.20 ) 0.13 0.02
0.27 (0.09 ) 0.07 1.37
Amounts may not add due to rounding.
(a)
To eliminate gain recognized on the sale
of the U.S. document destruction business, gains on
available-for-sale equity and debt securities, gains related to
acquisition of controlling interest in subsidiaries that were
previously accounted for as equity or cost method investments, and
gains on sales of former operating assets, as follows:
First-Quarter 2011 Third-Quarter 2011
Nine Months 2011 Operating Operating
Operating Profit EPS Profit EPS Profit EPS 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
)
(b)
To eliminate settlement charge related to exit of Belgium
cash-in-transit business.
(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 expenses related to U.S. retirement liabilities.
(e)
To eliminate the positive impact of a valuation allowance release
in the United States.
(f)
To adjust effective income tax rate to be equal to the estimated
full-year non-GAAP effective income tax rate. The mid-point of the
range of the estimated non-GAAP effective tax rate is 37.5% for the
full-year 2011.
Page 5
The Brink’s Company and subsidiaries Non-GAAP
Results - Reconciled to Amounts Reported Under GAAP (Unaudited)
(Continued)
(In millions, except for per share
amounts)
GAAPBasis
RemeasureVenezuelanNetMonetaryAssets
(a)
Royalty(b)
ExitBelgiumCITBusiness(c)
MexicoAcquisition(d)
Non-SegmentAssetSales (e)
U.S.RetirementPlans (f)
U.S.HealthcareLegislationTax Charge(g)
AdjustIncomeTaxRate (h)
Non-GAAPBasis
First Quarter 2010 Operating profit:
International $ 24.5 4.9 - - - - - - - 29.4 North America
10.4 - - - - - (0.3 ) - - 10.1
Segment operating profit 34.9 4.9 - - - - (0.3 ) - - 39.5
Non-segment (11.1 ) - (1.8 ) - - - 4.9 - -
(8.0 )
Operating profit $ 23.8 4.9 (1.8 ) - - - 4.6 -
- 31.5
Amounts attributable to Brink’s: Income from
continuing operations $ (4.8 ) 3.0 (1.1 ) - - - 2.9 13.7 0.6 14.3
Diluted EPS – continuing operations (0.10 ) 0.06
(0.02 ) - - - 0.06
0.28 0.01 0.29
Second
Quarter 2010 Operating profit: International $ 33.8 (1.7
) - - - - - - - 32.1 North America 10.3 - -
- - - (0.1 ) - - 10.2 Segment operating profit
44.1 (1.7 ) - - - - (0.1 ) - - 42.3 Non-segment (12.6 ) -
(1.9 ) - - - 5.9 - - (8.6 )
Operating
profit $ 31.5 (1.7 ) (1.9 ) - - - 5.8 - - 33.7
Amounts attributable to Brink’s: Income from continuing
operations $ 20.7 (1.0 ) (1.2 ) - - - 3.6 - (3.8 ) 18.3 Diluted EPS
– continuing operations 0.42 (0.02 )
(0.02 ) - - - 0.07 -
(0.08 ) 0.37
Third Quarter 2010
Operating profit: International $ 52.6 - - - - - - - - 52.6
North America 5.4 - - - - - (0.1 ) - -
5.3 Segment operating profit 58.0 - - - - - (0.1 ) -
- 57.9 Non-segment (13.9 ) - (1.2 ) - - - 5.9
- - (9.2 )
Operating profit $ 44.1 - (1.2 ) - - - 5.8
- - 48.7
Amounts attributable to Brink’s: Income from
continuing operations $ 21.7 - (0.7 ) - - - 3.6 - 0.9 25.5 Diluted
EPS – continuing operations 0.45 -
(0.01 ) - - - 0.08
- 0.02 0.53
Amounts may not add due to rounding.
See page 7 for notes.
Page 6
The Brink’s Company and subsidiaries
Non-GAAP Results - Reconciled to
Amounts Reported Under GAAP (Unaudited) (Continued)
(In millions, except for per share
amounts)
GAAPBasis
RemeasureVenezuelanNetMonetaryAssets
(a)
Royalty(b)
ExitBelgiumCITBusiness(c)
MexicoAcquisition(d)
Non-SegmentAssetSales (e)
U.S.RetirementPlans (f)
U.S.HealthcareLegislationTax Charge(g)
AdjustIncomeTaxRate (h)
Non-GAAPBasis
Fourth Quarter 2010 Operating profit:
International $ 53.9 - - 13.4 - - - - - 67.3 North America
18.0 - - - - - (0.5 ) - - 17.5
Segment operating profit
71.9 - - 13.4 - - (0.5 ) - - 84.8 Non-segment (25.0 ) - -
- 8.6 - 6.0 - - (10.4 )
Operating
profit $ 46.9 - - 13.4 8.6 - 5.5 - - 74.4
Amounts
attributable to Brink’s: Income from continuing operations $
19.2 - - 7.8 8.6 (3.0 ) 3.4 - 2.3 38.3 Diluted EPS – continuing
operations 0.40 - - 0.16
0.18 (0.06 ) 0.07 - 0.05
0.80
Full Year 2010 Operating
profit: International $ 164.8 3.2 - 13.4 - - - - - 181.4
North America 44.1 - - - - - (1.0 ) - -
43.1 Segment operating profit 208.9 3.2 - 13.4 - - (1.0 ) -
- 224.5 Non-segment (62.6 ) - (4.9 ) - 8.6 - 22.7
- - (36.2 )
Operating profit $ 146.3 3.2 (4.9 ) 13.4
8.6 - 21.7 - - 188.3
Amounts attributable to Brink’s:
Income from continuing operations $ 56.8 2.0 (3.0 ) 7.8 8.6 (3.0 )
13.5 13.7 - 96.4 Diluted EPS – continuing operations 1.17
0.04 (0.06 ) 0.16 0.18
(0.06 ) 0.28 0.29 - 1.99
Amounts may not add due to rounding. (a) To eliminate
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. (b) To eliminate royalty
income from former home security business. (c)
To eliminate loss on exit of Belgium
cash-in-transit business.
(d) 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. (e) To
eliminate gain on exchange of marketable equity securities. (f) To
eliminate expenses related to U.S. retirement liabilities. (g) 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. (h)
To adjust the effective income tax rate to be equal to the
full-year non-GAAP effective income tax rate. The non-GAAP
effective tax rate for 2010 was 36.2%.
Page 7
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