Segment information

The Brink’s Company offers transportation and logistics management services for cash and valuables throughout the world. These services include:


•	Cash-in-Transit (“CIT”) Services – armored vehicle transportation of valuables


•	ATM Services – replenishing and maintaining customers’ automated teller machines; providing network infrastructure services


•	Global Services – secure international transportation of valuables


•	Cash Management Services


◦	Currency and coin counting and sorting; deposit preparation and reconciliations; other cash management services


◦	Safe and safe control device installation and servicing (including our patented CompuSafe^® service)


◦	Check and cash processing services for banking customers (“Virtual Vault Services”)


◦	Check imaging services for banking customers


•	Payment Services – bill payment and processing services on behalf of utility companies and other billers at any of our Brink’s or Brink’s – operated payment locations in Latin America and Brink’s Money™ general purpose reloadable prepaid cards and payroll cards in the U.S.


•	Guarding Services – protection of airports, offices, and certain other locations in Europe and Brazil with or without electronic surveillance, access control, fire prevention and highly trained patrolling personnel

We identify our operating segments based on how our chief operating decision maker (“CODM”) allocates resources, assesses performance and makes decisions. Our CODM is our President and Chief Executive Officer. Our CODM evaluates performance and allocates resources to each operating segment based on operating profit or loss, excluding income and expenses not allocated to segments.

We have nine operating segments:


•	Each of the five countries within Largest 5 Markets (U.S., France, Mexico, Brazil and Canada)


•	Each of the three regions within Global Markets (Latin America, EMEA and Asia)


•	Payment Services

When reviewing segment operating results for the first quarter of 2015, the CODM determined that it was no longer useful to include the operations of Venezuela in the evaluation of the results for the Global Markets – Latin America segment. Accordingly, the Company changed the composition of its reportable segments effective January 1, 2015 to exclude the Venezuela business. The Venezuela operations are now reported as part of other items not allocated to segments for all periods presented. This change in the Company’s segment composition and segment performance measure provides the CODM with information to effectively assess segment performance and to make resource and allocation decisions. In addition, the removal of Venezuela from the Latin America segment provides our investors with an understanding of segment results that aligns with management’s view of the business, which is consistent with FASB ASC Topic 280, Segment Reporting.

We believe that Brink’s has significant competitive advantages including:


•	brand name recognition


•	reputation for a high level of service and security


•	risk management and logistics expertise


•	global infrastructure and customer base


•	proprietary cash processing


•	proven operational excellence


•	high-quality insurance coverage and general financial strength.



	Revenues			Operating Profit (Loss)
	Three Months Ended June 30,			Three Months Ended June 30,
(In millions)	2015		2014	2015			2014
Reportable Segments:
U.S.	$	184.1	180.3	$	6.4		5.9
France	107.4		133.1	6.7			4.9
Mexico	85.1		98.1	4.5			(0.9	)
Brazil	67.7		91.5	2.1			5.4
Canada	39.6		45.3	2.4			2.4
Largest 5 Markets	483.9		548.3	22.1			17.7
Latin America	91.2		93.1	19.2			11.4
EMEA	112.3		137.5	9.1			12.0
Asia	38.6		34.0	5.9			5.1
Global Markets	242.1		264.6	34.2			28.5
Payment Services	22.1		23.8	(3.7		)	(1.3	)
Total reportable segments	748.1		836.7	52.6			44.9

Reconciling Items:
Corporate expenses:
General, administrative and other expenses	—		—	(25.3		)	(23.3	)
Foreign currency transaction gains	—		—	1.1			0.4
Reconciliation of segment policies to GAAP	—		—	2.2			2.0
Other items not allocated to segments:
FX devaluation in Venezuela	—		—	(6.0		)	(9.8	)
Venezuela operations	12.2		22.3	1.4			1.9
Venezuela impairment	—		—	(34.5		)	—
2014 Reorganization and Restructuring	—		—	1.2			—
Mexican settlement losses	—		—	(1.1		)	(0.9	)
U.S. retirement plans	—		—	(6.5		)	(3.6	)
Acquisitions and dispositions	—		—	0.3			1.3
Share-based compensation adj.	—		—	—			(4.2	)
Total	$	760.3	859.0	$	(14.6	)	8.7



	Revenues			Operating Profit (Loss)
	Six Months Ended June 30,			Six Months Ended June 30,
(In millions)	2015		2014	2015			2014
Reportable Segments:
U.S.	$	367.7	356.1	$	14.7		7.2
France	213.1		261.9	10.8			11.5
Mexico	170.8		198.3	12.4			2.8
Brazil	141.5		177.9	8.2			15.1
Canada	78.4		89.7	4.1			4.7
Largest 5 Markets	971.5		1,083.9	50.2			41.3
Latin America	182.0		183.7	35.7			21.5
EMEA	228.0		274.4	17.3			21.2
Asia	77.3		67.0	12.4			10.3
Global Markets	487.3		525.1	65.4			53.0
Payment Services	44.9		46.0	(3.2		)	(0.5	)
Total reportable segments	1,503.7		1,655.0	112.4			93.8

Reconciling Items:
Corporate expenses:
General, administrative and other expenses	—		—	(42.9		)	(52.9	)
Foreign currency transaction losses	—		—	(3.7		)	(0.3	)
Reconciliation of segment policies to GAAP	—		—	5.4			4.2
Other items not allocated to segments:
FX devaluation in Venezuela	—		—	(26.6		)	(133.1	)
Venezuela operations	32.7		153.6	4.1			36.3
Venezuela impairment	—		—	(34.5		)	—
2014 Reorganization and Restructuring	—		—	(0.3		)	—
Mexican settlement losses	—		—	(2.4		)	(1.7	)
U.S. retirement plans	—		—	(13.5		)	(9.6	)
Acquisitions and dispositions	—		—	0.3			2.5
Share-based compensation adj.	—		—	—			(4.2	)
Total	$	1,536.4	1,808.6	$	(1.7	)	(65.0	)

FX devaluation in Venezuela The rate we use to remeasure operations in Venezuela declined significantly in February 2015 (from 52 to 170 bolivars to the U.S. dollar) and in March 2014 (from 6.3 to 50 bolivars to the U.S. dollar). These currency devaluations resulted in losses from the remeasurement of bolivar-denominated net monetary assets. Nonmonetary assets were not remeasured to a lower basis when the currency devalued. Instead, under highly inflationary accounting rules, these assets retained their higher historical bases and the excess is recognized in earnings as the asset is consumed, resulting in incremental expense until the excess basis is depleted. Expenses related to these Venezuelan devaluations have not been allocated to segment results.

Venezuela operations We have excluded from our segment results all of our Venezuela operating results, including foreign exchange devaluation discussed separately above, due to management’s inability to allocate, generate or redeploy resources in-country or globally. In light of these unique circumstances, the Venezuela business is largely independent of the rest of our global operations. As a result, the CODM, the Company’s Chief Executive Officer, assesses segment performance and makes resource decisions by segment excluding Venezuela operating results. Additionally, management believes excluding Venezuela from segment results makes it possible to more effectively evaluate the company’s performance between periods.

Factors considered by management in excluding Venezuela results include:


•	Continued inability to repatriate cash to redeploy to other operations or dividend to shareholders


•	Highly inflationary environment


•	Fixed exchange rate policy


•	Continued currency devaluations and


•	Our difficulty raising prices and controlling costs

Venezuela impairment In the second quarter of 2015, we recognized an impairment of the Venezuela property, plant and equipment. This charge was not allocated to segment results.

2014 Reorganization and Restructuring Brink’s reorganized and restructured its business in December 2014, eliminating the management roles and structures in its former Latin America and EMEA regions and implementing a plan to reduce the cost structure of various country operations by eliminating approximately 1,700 positions across its global workforce. Severance costs of $21.8 million associated with these actions were recognized in 2014. Additional charges related to severance and lease terminations of $0.3 million were recognized in the first half of 2015. These amounts have not been allocated to segment results.

Mexican settlement losses Employee termination costs in Mexico are accounted for as retirement benefits under FASB ASC Topic 715, Compensation — Retirement Benefits. Settlement charges related to these termination benefits have not been allocated to segment results.

U.S. retirement plans Costs related to our frozen U.S. retirement plans have not been allocated to segment results.

Acquisitions and dispositions A favorable adjustment to the purchase price of a third quarter 2014 business acquisition in EMEA was recognized in the second quarter of 2015. Brink’s sold an equity investment in a CIT business in Peru in September 2014. The purchase price adjustment and the equity earnings have not been allocated to segment results.

Share-based compensation adjustment Accounting adjustments related to share-based compensation in the second quarter of 2014 have not been allocated to segment results. The accounting adjustments revised the accounting for certain share-based awards from fixed to variable fair value accounting as noted in FASB ASC Topic 718, Stock Compensation. As of July 11, 2014, all outstanding equity awards had met the conditions for a grant date as defined in FASB ASC Topic 718 and have since been accounted for as fixed share-based compensation expense.