THE BRINK’S COMPANY | ||
(Exact name of registrant as specified in its charter) | ||
(State or other jurisdiction of | (I.R.S. Employer | |
incorporation or organization) | Identification No.) | |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
(In millions, except for per share amounts) | March 31, 2020 | December 31, 2019 | ||||
ASSETS | ||||||
Current assets: | ||||||
Cash and cash equivalents | $ | |||||
Restricted cash | ||||||
Accounts receivable, net | ||||||
Prepaid expenses and other | ||||||
Total current assets | ||||||
Right-of-use assets, net | ||||||
Property and equipment, net | ||||||
Goodwill | ||||||
Other intangibles | ||||||
Deferred income taxes | ||||||
Other | ||||||
Total assets | $ | |||||
LIABILITIES AND EQUITY | ||||||
Current liabilities: | ||||||
Short-term borrowings | $ | |||||
Current maturities of long-term debt | ||||||
Accounts payable | ||||||
Accrued liabilities | ||||||
Restricted cash held for customers | ||||||
Total current liabilities | ||||||
Long-term debt | ||||||
Accrued pension costs | ||||||
Retirement benefits other than pensions | ||||||
Lease liabilities | ||||||
Deferred income taxes | ||||||
Other | ||||||
Total liabilities | ||||||
Commitments and contingent liabilities (notes 4, 8 and 14) | ||||||
Equity: | ||||||
The Brink's Company ("Brink's") shareholders: | ||||||
Common stock, par value $1 per share: | ||||||
Shares authorized: 100.0 | ||||||
Shares issued and outstanding: 2020 - 50.5; 2019 - 50.1 | ||||||
Capital in excess of par value | ||||||
Retained earnings | ||||||
Accumulated other comprehensive loss | ( | ) | ( | ) | ||
Brink’s shareholders | ||||||
Noncontrolling interests | ||||||
Total equity | ||||||
Total liabilities and equity | $ | |||||
Three Months Ended March 31, | ||||||
(In millions, except for per share amounts) | 2020 | 2019 | ||||
Revenues | $ | |||||
Costs and expenses: | ||||||
Cost of revenues | ||||||
Selling, general and administrative expenses | ||||||
Total costs and expenses | ||||||
Other operating income (expense) | ( | ) | ( | ) | ||
Operating profit | ||||||
Interest expense | ( | ) | ( | ) | ||
Interest and other nonoperating expense | ( | ) | ( | ) | ||
Income (loss) from continuing operations before tax | ( | ) | ||||
Provision (benefit) for income taxes | ( | ) | ||||
Income from continuing operations | ||||||
Net income | ||||||
Less net income attributable to noncontrolling interests | ||||||
Net income attributable to Brink’s | ||||||
Income per share attributable to Brink’s common shareholders(a): | ||||||
Basic: | ||||||
Continuing operations | $ | |||||
Net income | $ | |||||
Diluted: | ||||||
Continuing operations | $ | |||||
Net income | $ | |||||
Weighted-average shares | ||||||
Basic | ||||||
Diluted | ||||||
Cash dividends paid per common share | $ | |||||
Three Months Ended March 31, | ||||||
(In millions) | 2020 | 2019 | ||||
Net income | $ | |||||
Benefit plan adjustments: | ||||||
Benefit plan actuarial gains | ||||||
Benefit plan prior service costs | ( | ) | ( | ) | ||
Total benefit plan adjustments | ||||||
Foreign currency translation adjustments | ( | ) | ||||
Losses on cash flow hedges | ( | ) | ( | ) | ||
Other comprehensive income (loss) before tax | ( | ) | ||||
Provision (benefit) for income taxes | ( | ) | ||||
Other comprehensive income (loss) | ( | ) | ||||
Comprehensive income (loss) | ( | ) | ||||
Less comprehensive income attributable to noncontrolling interests | ||||||
Comprehensive income (loss) attributable to Brink's | $ | ( | ) | |||
Three Months ended March 31, 2020 | |||||||||||||||||||||
(In millions) | Shares | Common Stock | Capital in Excess of Par Value | Retained Earnings | AOCI* | Noncontrolling Interests | Total | ||||||||||||||
Balance as of December 31, 2019 | $ | ( | ) | ||||||||||||||||||
Cumulative effect of change in accounting principle(a) | — | — | — | ( | ) | — | ( | ) | |||||||||||||
Net income | — | — | — | — | |||||||||||||||||
Other comprehensive income | — | — | — | — | ( | ) | ( | ) | ( | ) | |||||||||||
Dividends to: | |||||||||||||||||||||
Brink’s common shareholders ($0.15 per share) | — | — | — | ( | ) | — | — | ( | ) | ||||||||||||
Noncontrolling interests | — | — | — | — | — | ( | ) | ( | ) | ||||||||||||
Share-based compensation: | |||||||||||||||||||||
Stock awards and options: | |||||||||||||||||||||
Compensation expense | — | — | — | — | — | ||||||||||||||||
Other share-based benefit transactions | ( | ) | ( | ) | — | — | ( | ) | |||||||||||||
Balance as of March 31, 2020 | $ | ( | ) | ||||||||||||||||||
Three Months ended March 31, 2019 | |||||||||||||||||||||
(In millions) | Shares | Common Stock | Capital in Excess of Par Value | Retained Earnings | AOCI* | Noncontrolling Interests | Total | ||||||||||||||
Balance as of December 31, 2018 | $ | ( | ) | ||||||||||||||||||
Cumulative effect of change in accounting principle(b) | — | — | — | ( | ) | — | |||||||||||||||
Net income | — | — | — | — | |||||||||||||||||
Other comprehensive income | — | — | — | — | |||||||||||||||||
Shares repurchased | — | — | ( | ) | — | — | |||||||||||||||
Dividends to: | |||||||||||||||||||||
Brink’s common shareholders ($0.15 per share) | — | — | — | ( | ) | — | — | ( | ) | ||||||||||||
Share-based compensation: | |||||||||||||||||||||
Stock awards and options: | |||||||||||||||||||||
Compensation expense | — | — | — | — | — | ||||||||||||||||
Other share-based benefit transactions | ( | ) | — | — | — | ( | ) | ||||||||||||||
Balance as of March 31, 2019 | $ | ( | ) | ||||||||||||||||||
(a) | Effective January 1, 2020, we adopted the provisions of ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. We recognized a cumulative effect adjustment to January 1, 2020 retained earnings as a result of adopting this standard. See Note 1 for further details. |
(b) | Effective January 1, 2019, we adopted the provisions of ASU 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. We recognized a cumulative effect adjustment to January 1, 2019 retained earnings as a result of adopting this standard. See Note 1 for further details. |
Three Months Ended March 31, | ||||||
(In millions) | 2020 | 2019 | ||||
Cash flows from operating activities: | ||||||
Net income | $ | |||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||
Depreciation and amortization | ||||||
Share-based compensation expense | ||||||
Deferred income taxes | ||||||
(Gains) losses on sale of property, equipment and marketable securities | ( | ) | ||||
Gains on business dispositions | ( | ) | ||||
Loss on derivative instruments | ||||||
Impairment losses | ||||||
Retirement benefit funding less than expense: | ||||||
Pension | ||||||
Other than pension | ||||||
Remeasurement losses due to Argentina currency devaluations | ||||||
Other operating | ||||||
Changes in operating assets and liabilities, net of effects of acquisitions: | ||||||
Accounts receivable and income taxes receivable | ( | ) | ( | ) | ||
Accounts payable, income taxes payable and accrued liabilities | ( | ) | ( | ) | ||
Restricted cash held for customers | ( | ) | ||||
Customer obligations | ( | ) | ||||
Prepaid and other current assets | ( | ) | ( | ) | ||
Other | ( | ) | ( | ) | ||
Net cash provided (used) by operating activities | ( | ) | ||||
Cash flows from investing activities: | ||||||
Capital expenditures | ( | ) | ( | ) | ||
Acquisitions, net of cash acquired | ( | ) | ( | ) | ||
Dispositions, net of cash disposed | ( | ) | ||||
Marketable securities: | ||||||
Purchases | ( | ) | ( | ) | ||
Sales | ||||||
Cash proceeds from sale of property and equipment | ||||||
Acquisition of customer contracts | ( | ) | ||||
Net cash used by investing activities | ( | ) | ( | ) | ||
Cash flows from financing activities: | ||||||
Borrowings (repayments) of debt: | ||||||
Short-term borrowings | ( | ) | ||||
Long-term revolving credit facilities: | ||||||
Borrowings | ||||||
Repayments | ( | ) | ( | ) | ||
Other long-term debt: | ||||||
Borrowings | ||||||
Repayments | ( | ) | ( | ) | ||
Payment of acquisition-related obligation | ( | ) | ( | ) | ||
Debt financing costs | ( | ) | ( | ) | ||
Dividends to: | ||||||
Shareholders of Brink’s | ( | ) | ( | ) | ||
Noncontrolling interests in subsidiaries | ( | ) | ||||
Tax withholdings associated with share-based compensation | ( | ) | ( | ) | ||
Other | ( | ) | ( | ) | ||
Net cash provided by financing activities | ||||||
Effect of exchange rate changes on cash | ( | ) | ( | ) | ||
Cash, cash equivalents and restricted cash: | ||||||
Increase (decrease) | ( | ) | ||||
Balance at beginning of period | ||||||
Balance at end of period | $ | |||||
• | North America |
• | South America |
• | Rest of World |
(In millions) | Core Services | High-Value Services | Other Security Services | Total | ||||||||
Three months ended March 31, 2020 | ||||||||||||
Reportable Segments: | ||||||||||||
North America | $ | |||||||||||
South America | ||||||||||||
Rest of World | ||||||||||||
Total reportable segments | ||||||||||||
Three months ended March 31, 2019 | ||||||||||||
Reportable Segments: | ||||||||||||
North America | $ | |||||||||||
South America | ||||||||||||
Rest of World | ||||||||||||
Total reportable segments | ||||||||||||
(In millions) | Receivables | Contract Asset | Contract Liability | ||||||
Opening (January 1, 2020) | $ | ||||||||
Closing (March 31, 2020) | |||||||||
Increase (decrease) | $ | ||||||||
• | Corporate expenses - former non-segment and regional management costs, currency transaction gains and losses, adjustments to reconcile segment accounting policies to U.S. GAAP, and costs related to global initiatives are excluded from segment results. |
• | Other items not allocated to segments - certain significant items such as reorganization and restructuring actions that are evaluated on an individual basis by management and are not considered part of the ongoing activities of the business are excluded from segment results. We also exclude certain costs, gains and losses related to acquisitions and dispositions of assets and of businesses. Brink's Argentina is consolidated using our accounting policy for subsidiaries operating in highly inflationary economies. We have excluded from our segment results the impact of highly inflationary accounting in Argentina, including currency remeasurement losses. Incremental costs (primarily third party expenses) incurred related to the mitigation of material weaknesses and the implementation and adoption of ASU 2016-02, the new lease accounting standard effective for us January 1, 2019, are excluded from segment results. We have also excluded from our segment results net charges related to an internal loss in our U.S. global services operations. The net impact of the internal loss includes costs incurred to reconstruct an accounts receivable subledger as well as estimated bad debt expense for uncollectible receivables, partially offset by revenue billed and collected, but not previously recorded as a result of the former non-management employee's embezzlement activities. |
Revenues | Operating Profit | ||||||||||||
Three Months Ended March 31, | Three Months Ended March 31, | ||||||||||||
(In millions) | 2020 | 2019 | 2020 | 2019 | |||||||||
Reportable Segments: | |||||||||||||
North America | $ | $ | |||||||||||
South America | |||||||||||||
Rest of World | |||||||||||||
Total reportable segments | |||||||||||||
Reconciling Items: | |||||||||||||
Corporate expenses: | |||||||||||||
General, administrative and other expenses | — | — | ( | ) | ( | ) | |||||||
Foreign currency transaction gains (losses) | — | — | ( | ) | |||||||||
Reconciliation of segment policies to GAAP | — | — | |||||||||||
Other items not allocated to segments: | |||||||||||||
Reorganization and Restructuring | — | — | ( | ) | ( | ) | |||||||
Acquisitions and dispositions | ( | ) | ( | ) | |||||||||
Argentina highly inflationary impact | — | — | ( | ) | ( | ) | |||||||
Internal loss(a) | ( | ) | |||||||||||
Reporting compliance(b) | — | — | ( | ) | ( | ) | |||||||
Total | $ | $ | |||||||||||
(a) | See details regarding the impact of the Internal Loss at Note 1. |
(b) | Costs (primarily third party expenses) related to accounting standard implementation. Additional information provided at page 38. |
U.S. Plans | Non-U.S. Plans | Total | ||||||||||||||||
(In millions) | 2020 | 2019 | 2020 | 2019 | 2020 | 2019 | ||||||||||||
Three months ended March 31, | ||||||||||||||||||
Service cost | $ | |||||||||||||||||
Interest cost on projected benefit obligation | ||||||||||||||||||
Return on assets – expected | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||
Amortization of losses | ||||||||||||||||||
Settlement loss | ||||||||||||||||||
Net periodic pension cost | $ | |||||||||||||||||
UMWA Plans | Black Lung and Other Plans | Total | ||||||||||||||||
(In millions) | 2020 | 2019 | 2020 | 2019 | 2020 | 2019 | ||||||||||||
Three months ended March 31, | ||||||||||||||||||
Interest cost on accumulated postretirement benefit obligations | $ | |||||||||||||||||
Return on assets – expected | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||
Amortization of losses | ||||||||||||||||||
Amortization of prior service credit | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
Net periodic postretirement cost | $ | |||||||||||||||||
Three Months Ended March 31, | ||||||
2020 | 2019 | |||||
Continuing operations | ||||||
Provision (benefit) for income taxes (in millions) | $ | ( | ) | |||
Effective tax rate | % | % | ||||
(In millions) | Estimated Fair Value at Acquisition Date | ||
Fair value of purchase consideration | |||
Cash paid through March 31, 2020 | $ | ||
Liabilities assumed from seller | |||
Receivable from seller | ( | ) | |
Fair value of purchase consideration | $ | ||
Fair value of net assets acquired(a) | |||
Cash | $ | ||
Accounts receivable | |||
Other current assets | |||
Property and equipment, net | |||
Intangible assets(b) | |||
Goodwill(c) | |||
Other noncurrent assets | |||
Current liabilities | ( | ) | |
Noncurrent liabilities | ( | ) | |
Fair value of net assets acquired | $ | ||
(a) | Final allocation will be determined once the valuation is complete. |
(b) | Intangible assets are composed of customer relationships ($ |
(c) | Consists of intangible assets that do not qualify for separate recognition, combined with synergies expected from integrating G4Si’s operations with our existing global services operations. Goodwill has been provisionally assigned to the Global Markets-EMEA reporting unit ($ |
(In millions) | Fair Value at Acquisition Date | ||
Fair value of purchase consideration | |||
Cash paid through March 31, 2020 | $ | ||
Indemnification asset | ( | ) | |
Fair value of purchase consideration | $ | ||
Fair value of net assets acquired | |||
Cash | $ | ||
Accounts receivable | |||
Other current assets | |||
Property and equipment, net | |||
Intangible assets(a) | |||
Goodwill(b) | |||
Other noncurrent assets | |||
Current liabilities | ( | ) | |
Noncurrent liabilities | ( | ) | |
Fair value of net assets acquired | $ | ||
(a) | Intangible assets are composed of customer relationships ($ |
(b) | Consists of intangible assets that do not qualify for separate recognition, combined with synergies expected from integrating Rodoban’s operations with our existing Brink’s Brazil operations. All of the goodwill has been assigned to the Brazil reporting unit and is expected to be deductible for tax purposes. |
(In millions) | Estimated Fair Value at Acquisition Date | ||
Fair value of purchase consideration | |||
Cash paid through March 31, 2020 | $ | ||
Contingent consideration | |||
Indemnification asset | ( | ) | |
Fair value of purchase consideration | $ | ||
Fair value of net assets acquired(a) | |||
Cash | $ | ||
Accounts receivable | |||
Property and equipment, net | |||
Intangible assets(a) | |||
Goodwill(b) | |||
Other current and noncurrent assets | |||
Current liabilities | ( | ) | |
Noncurrent liabilities | ( | ) | |
Fair value of net assets acquired | $ | ||
(a) | Intangible assets are composed of developed technology, customer relationships and trade names. Final allocation will be determined after all valuations have been completed. |
(b) | Consists of intangible assets that do not qualify for separate recognition, combined with synergies expected from integrating these acquired operations into our existing operations. The goodwill from these acquisitions have been assigned to the following reporting units: BI (U.S.), COMEF (Brazil) and TVS (Global Markets - South America). We expect goodwill related to BI to be deductible for tax purposes. We do not expect goodwill related to COMEF or TVS to be deductible for tax purposes. |
(In millions) | Revenue | Net income (loss) attributable to Brink's | ||||
Three months ended March 31, 2020 | ||||||
G4Si | $ | |||||
Total | $ | |||||
(In millions) | Revenue | Net income (loss) attributable to Brink's | ||||
Pro forma results of Brink's for the three months ended March 31, | ||||||
2020 | ||||||
Brink's as reported | $ | |||||
G4Si(a) | ||||||
Total | $ | |||||
2019 | ||||||
Brink's as reported | $ | |||||
G4Si(a) | ||||||
Rodoban(a) | ||||||
Other 2019 acquisitions(a) | ||||||
Total | $ | |||||
(a) | Represents amounts prior to acquisition by Brink's. |
Amounts Arising During the Current Period | Amounts Reclassified to Net Income (Loss) | ||||||||||||||
(In millions) | Pretax | Income Tax | Pretax | Income Tax | Total Other Comprehensive Income (Loss) | ||||||||||
Three months ended March 31, 2020 | |||||||||||||||
Amounts attributable to Brink's: | |||||||||||||||
Benefit plan adjustments | $ | ( | ) | ||||||||||||
Foreign currency translation adjustments(b) | ( | ) | ( | ) | |||||||||||
Gains (losses) on cash flow hedges | ( | ) | ( | ) | ( | ) | |||||||||
( | ) | ( | ) | ( | ) | ( | ) | ||||||||
Amounts attributable to noncontrolling interests: | |||||||||||||||
Foreign currency translation adjustments | ( | ) | ( | ) | |||||||||||
( | ) | ( | ) | ||||||||||||
Total | |||||||||||||||
Benefit plan adjustments(a) | ( | ) | |||||||||||||
Foreign currency translation adjustments(b) | ( | ) | ( | ) | |||||||||||
Gains (losses) on cash flow hedges(c) | ( | ) | ( | ) | ( | ) | |||||||||
$ | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Three months ended March 31, 2019 | |||||||||||||||
Amounts attributable to Brink's: | |||||||||||||||
Benefit plan adjustments | $ | ( | ) | ( | ) | ||||||||||
Foreign currency translation adjustments | |||||||||||||||
Gains (losses) on cash flow hedges | ( | ) | ( | ) | ( | ) | |||||||||
( | ) | ( | ) | ||||||||||||
Amounts attributable to noncontrolling interests: | |||||||||||||||
Foreign currency translation adjustments | |||||||||||||||
Total | |||||||||||||||
Benefit plan adjustments(a) | ( | ) | ( | ) | |||||||||||
Foreign currency translation adjustments | |||||||||||||||
Gains (losses) on cash flow hedges(c) | ( | ) | ( | ) | ( | ) | |||||||||
$ | ( | ) | ( | ) | |||||||||||
(a) | The amortization of actuarial losses and prior service cost is part of total net periodic retirement benefit cost when reclassified to net income. Net periodic retirement benefit cost also includes service cost, interest cost, expected return on assets, and settlement losses. Total service cost is allocated between cost of revenues and selling, general and administrative expenses on a plan-by-plan basis and the remaining net periodic retirement benefit cost items are allocated to interest and other nonoperating income (expense): |
Three Months Ended March 31, | ||||||
(In millions) | 2020 | 2019 | ||||
Total net periodic retirement benefit cost included in: | ||||||
Cost of revenues | $ | |||||
Selling, general and administrative expenses | ||||||
Interest and other nonoperating income (expense) | ||||||
(b) | 2020 foreign currency translation adjustment amounts arising during the current period reflect primarily the Mexican peso and Brazilian real. |
(c) | Pretax gains and losses on cash flow hedges are classified in the condensed consolidated statements of operations as: |
• | other operating income (expense) ($ |
• | interest expense ($ |
(In millions) | Benefit Plan Adjustments | Foreign Currency Translation Adjustments | Gains (Losses) on Cash Flow Hedges | Total | ||||||||
Balance as of December 31, 2019 | $ | ( | ) | ( | ) | ( | ) | ( | ) | |||
Other comprehensive income (loss) before reclassifications | ( | ) | ( | ) | ||||||||
Amounts reclassified from accumulated other comprehensive loss to net income | ( | ) | ( | ) | ||||||||
Other comprehensive income (loss) attributable to Brink's | ( | ) | ( | ) | ( | ) | ||||||
Balance as of March 31, 2020 | $ | ( | ) | ( | ) | ( | ) | ( | ) | |||
(In millions) | March 31, 2020 | December 31, 2019 | ||||
Senior unsecured notes | ||||||
Carrying value | $ | |||||
Fair value | ||||||
March 31, | December 31, | |||||
2020 | 2019 | |||||
Debt: | ||||||
Short-term borrowings | ||||||
Restricted cash borrowings(a) | $ | |||||
Other | ||||||
Total short-term borrowings | $ | |||||
Long-term debt | ||||||
Bank credit facilities: | ||||||
Term loan A(b) | $ | |||||
Senior unsecured notes(c) | ||||||
Revolving Credit Facility | ||||||
Other | ||||||
Financing leases | ||||||
Total long-term debt | $ | |||||
Total debt | $ | |||||
Included in: | ||||||
Current liabilities | $ | |||||
Noncurrent liabilities | ||||||
Total debt | $ | |||||
(a) | These amounts are for short-term borrowings related to cash borrowed under lending arrangements used in the process of managing customer cash supply chains, which is currently classified as restricted cash and not available for general corporate purposes. See Note 13 for more details. |
(b) | Amounts outstanding are net of unamortized debt costs of $ |
(c) | Amounts outstanding are net of unamortized debt costs of $ |
(In millions) | |||
December 31, 2019 | $ | ||
Cumulative effect of change in accounting principle | |||
Provision for uncollectible accounts receivable(a) | |||
Write-offs less recoveries | ( | ) | |
Foreign currency exchange effects | ( | ) | |
March 31, 2020 | $ | ||
(a) |
Compensation Expense | ||||||
Three Months Ended March 31, | ||||||
(in millions) | 2020 | 2019 | ||||
Performance share units | $ | |||||
Restricted stock units | ||||||
Deferred stock units and fees paid in stock | ||||||
Performance-based stock options | ||||||
Time-based vesting stock options | ||||||
Share-based payment expense | ||||||
Income tax benefit | ( | ) | ( | ) | ||
Share-based payment expense, net of tax | $ | |||||
Shares (in thousands) | Weighted-Average Grant-Date Fair Value | |||||
Outstanding balance as of December 31, 2019 | $ | |||||
Granted | ||||||
Forfeited | ||||||
Exercised | ||||||
Outstanding balance as of March 31, 2020 | $ | |||||
Shares (in thousands) | Weighted-Average Grant-Date Fair Value | |||||
Outstanding balance as of December 31, 2019 | $ | |||||
Granted | ||||||
Forfeited | ||||||
Exercised | ||||||
Outstanding balance as of March 31, 2020 | $ | |||||
Shares (in thousands) | Weighted-Average Grant-Date Fair Value | |||||
Nonvested balance as of December 31, 2019 | $ | |||||
Granted | ||||||
Forfeited | ( | ) | ||||
Conversion to cash settled awards(a) | ( | ) | ||||
Vested | ( | ) | ||||
Nonvested balance as of March 31, 2020 | $ | |||||
(a) | Certain RSUs were modified in the first quarter of 2020 to change the awards' classification from share-settled to cash-settled. The weighted-average grant date fair value per share shown above is the removal of the original fair value. |
Shares (in thousands) | Weighted-Average Grant-Date Fair Value | |||||
Nonvested balance as of December 31, 2019 | $ | |||||
Granted | ||||||
Forfeited | ( | ) | ||||
Conversion to cash settled awards(a) | ( | ) | ||||
Vested(b) | ( | ) | ||||
Nonvested balance as of March 31, 2020 | $ | |||||
(a) | Certain IM PSUs were modified in the first quarter of 2020 to change the awards' classification from share-settled to cash-settled. The weighted-average grant date fair value per share shown above is the removal of the original fair value. |
(b) |
Shares (in thousands) | Weighted-Average Grant-Date Fair Value | |||||
Nonvested balance as of December 31, 2019 | $ | |||||
Granted | ||||||
Vested | ||||||
Nonvested balance as of March 31, 2020 | $ | |||||
Three Months Ended March 31, | |||||
(In millions) | 2020 | 2019 | |||
Weighted-average shares: | |||||
Basic(a) | |||||
Effect of dilutive stock awards and options | |||||
Diluted | |||||
Antidilutive stock awards and options excluded from denominator | |||||
(a) | We have deferred compensation plans for directors and certain of our employees. Some amounts owed to participants are denominated in common stock units. Each unit represents one share of common stock. The number of shares used to calculate basic earnings per share includes the weighted-average common stock units credited to employees and directors under the deferred compensation plans. Additionally, nonvested units containing only a service requirement are also included in the computation of basic weighted-average shares when the requisite service period has been completed. Accordingly, included in basic shares are |
Three Months Ended March 31, | ||||||
(In millions) | 2020 | 2019 | ||||
Cash paid for: | ||||||
Interest | $ | |||||
Income taxes, net | ||||||
March 31, | December 31, | |||||
(In millions) | 2020 | 2019 | ||||
Cash and cash equivalents | $ | |||||
Restricted cash | ||||||
Total, cash, cash equivalents, and restricted cash in the condensed consolidated statements of cash flows | $ | |||||
(In millions) | Severance Costs | Other | Total | ||||||
Balance as of January 1, 2020 | $ | ||||||||
Expense | |||||||||
Payments and utilization | ( | ) | ( | ) | ( | ) | |||
Foreign currency exchange effects | ( | ) | ( | ) | |||||
Balance as of March 31, 2020 | $ | ||||||||
• | 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) |
◦ | Vaulting services |
◦ | Check imaging services |
• | 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 Brazil, Colombia, Panama, and Mexico and Brink’s Money™ general purpose reloadable prepaid cards and payroll cards in the U.S. |
• | Commercial security systems services – design and installation of security systems in designated markets in Europe |
• | 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 |
• | North America |
• | South America |
• | Rest of World |
• | Protecting our people and providing essential services to our customers; |
• | Preserving cash and optimizing profitability; and |
• | Positioning Brink’s to be stronger on the other side of the crisis. |
Three Months Ended March 31, | % | |||||||
(In millions, except for per share amounts) | 2020 | 2019 | Change | |||||
GAAP | ||||||||
Revenues | 872.8 | 905.0 | (4 | ) | ||||
Cost of revenues | 693.4 | 702.7 | (1 | ) | ||||
Selling, general and administrative expenses | 148.1 | 141.7 | 5 | |||||
Operating profit | 26.2 | 58.4 | (55 | ) | ||||
Income (loss) from continuing operations(a) | 1.8 | 13.7 | (87 | ) | ||||
Diluted EPS from continuing operations(a) | 0.03 | 0.27 | (89 | ) | ||||
Non-GAAP(b) | ||||||||
Non-GAAP revenues | 872.8 | 905.0 | (4 | ) | ||||
Non-GAAP operating profit | 63.1 | 84.8 | (26 | ) | ||||
Non-GAAP income from continuing operations(a) | 18.4 | 41.0 | (55 | ) | ||||
Non-GAAP diluted EPS from continuing operations(a) | 0.36 | 0.81 | (56 | ) | ||||
(a) | Amounts reported in this table are attributable to the shareholders of Brink’s and exclude earnings related to noncontrolling interests. |
(b) | Non-GAAP results are reconciled to the applicable GAAP results on pages 42–44. |
• | unfavorable changes in currency exchange rates ($15.1 million) driven by the Argentine peso and Brazilian real and higher foreign currency transaction losses, partially offset by lower costs related to the impact of highly inflationary accounting in Argentina, |
• | the following items included in “Other items not allocated to segments”: |
◦ | higher charges incurred, primarily bad debt expense, related to an internal loss in the U.S. global services operations ($9.6 million), |
◦ | higher costs related to business acquisitions and dispositions ($1.7 million), primarily from the impact of acquisition-related charges and intangible asset amortization in the first quarter of 2020 |
• | organic decreases in North America ($10.6 million) and Rest of World ($8.5 million), |
• | an organic increase in South America ($11.6 million), |
• | lower corporate expenses ($3.2 million on an organic basis), and |
• | the favorable operating impact of business acquisitions and dispositions ($0.7 million), excluding intangible amortization and acquisition-related charges. |
• | unfavorable changes in currency exchange rates ($18.1 million) driven by the Argentine peso and Brazilian real and higher foreign currency transaction losses, and |
• | organic decreases in North America ($10.6 million) and Rest of World ($8.5 million), |
• | an organic increase in South America ($11.6 million), |
• | lower corporate expenses ($3.2 million on an organic basis), and |
• | the favorable operating impact of business acquisitions and dispositions ($0.7 million), excluding intangible amortization and acquisition-related charges. |
Organic | Acquisitions / | % Change | |||||||||||||||||||
(In millions) | 1Q'19 | Change | Dispositions(a) | Currency(b) | 1Q'20 | Total | Organic | ||||||||||||||
Revenues: | |||||||||||||||||||||
North America | $ | 434.5 | 8.5 | 5.0 | (3.7 | ) | 444.3 | 2 | 2 | ||||||||||||
South America | 230.3 | 17.4 | 0.7 | (50.5 | ) | 197.9 | (14 | ) | 8 | ||||||||||||
Rest of World | 240.2 | (8.2 | ) | 3.9 | (5.3 | ) | 230.6 | (4 | ) | (3 | ) | ||||||||||
Segment revenues(e) | 905.0 | 17.7 | 9.6 | (59.5 | ) | 872.8 | (4 | ) | 2 | ||||||||||||
Revenues - GAAP | $ | 905.0 | 17.7 | 9.6 | (59.5 | ) | 872.8 | (4 | ) | 2 | |||||||||||
Operating profit: | |||||||||||||||||||||
North America | $ | 44.0 | (10.6 | ) | 0.2 | (0.6 | ) | 33.0 | (25 | ) | (24 | ) | |||||||||
South America | 43.0 | 11.6 | 0.5 | (13.5 | ) | 41.6 | (3 | ) | 27 | ||||||||||||
Rest of World | 23.8 | (8.5 | ) | — | (0.3 | ) | 15.0 | (37 | ) | (36 | ) | ||||||||||
Segment operating profit | 110.8 | (7.5 | ) | 0.7 | (14.4 | ) | 89.6 | (19 | ) | (7 | ) | ||||||||||
Corporate(c) | (26.0 | ) | 3.2 | — | (3.7 | ) | (26.5 | ) | 2 | (12 | ) | ||||||||||
Operating profit - non-GAAP | 84.8 | (4.3 | ) | 0.7 | (18.1 | ) | 63.1 | (26 | ) | (5 | ) | ||||||||||
Other items not allocated to segments(d) | (26.4 | ) | (11.8 | ) | (1.7 | ) | 3.0 | (36.9 | ) | 40 | 45 | ||||||||||
Operating profit - GAAP | $ | 58.4 | (16.1 | ) | (1.0 | ) | (15.1 | ) | 26.2 | (55 | ) | (28 | ) | ||||||||
(a) | Non-GAAP amounts include the impact of prior year comparable period results for acquired and disposed businesses. GAAP results also include the impact of acquisition-related intangible amortization, restructuring and other charges, and disposition-related gains/losses. |
(b) | The amounts in the “Currency” column consist of the effects of Argentina devaluations under highly inflationary accounting and the sum of monthly currency changes. Monthly currency changes represent the accumulation throughout the year of the impact on current period results of changes in foreign currency rates from the prior year period. |
(c) | Corporate expenses are not allocated to segment results. Corporate expenses include salaries and other costs to manage the global business and to perform activities required by public companies. |
(d) | See pages 37–38 for more information. |
(e) | Segment revenues equal our total reported non-GAAP revenues. |
Three Months Ended March 31, | % | |||||||
(In millions) | 2020 | 2019 | change | |||||
General, administrative and other expenses | $ | (27.3 | ) | (27.1 | ) | 1 | ||
Foreign currency transaction gains (losses) | (2.7 | ) | 0.9 | unfav | ||||
Reconciliation of segment policies to GAAP | 3.5 | 0.2 | fav | |||||
Corporate expenses | $ | (26.5 | ) | (26.0 | ) | 2 | ||
Three Months Ended March 31, | % | ||||||||
(In millions) | 2020 | 2019 | change | ||||||
Operating profit: | |||||||||
Reorganization and Restructuring | (5.6 | ) | (3.5 | ) | 60 | ||||
Acquisitions and dispositions | (19.1 | ) | (17.2 | ) | 11 | ||||
Argentina highly inflationary impact | (2.4 | ) | (4.3 | ) | (44 | ) | |||
Internal loss | (9.6 | ) | — | unfav | |||||
Reporting compliance | (0.2 | ) | (1.4 | ) | (86 | ) | |||
Operating profit | $ | (36.9 | ) | (26.4 | ) | 40 | |||
Three Months Ended March 31, | % | ||||||||
(In millions) | 2020 | 2019 | change | ||||||
Reportable Segments: | |||||||||
North America | $ | — | (1.0 | ) | (100 | ) | |||
South America | (1.9 | ) | (0.6 | ) | unfav | ||||
Rest of World | (3.5 | ) | (1.4 | ) | unfav | ||||
Total reportable segments | (5.4 | ) | (3.0 | ) | 80 | ||||
Corporate items | (0.2 | ) | (0.5 | ) | (60 | ) | |||
Total | $ | (5.6 | ) | (3.5 | ) | 60 | |||
• | Amortization expense for acquisition-related intangible assets was $7.2 million in the first three months of 2020. |
• | We incurred $5.5 million in integration costs, primarily related to Dunbar and TVS, in the first three months of 2020. |
• | Transaction costs related to business acquisitions were $5.5 million in the first three months of 2020. |
• | Restructuring costs related to acquisitions, primarily Dunbar, were $0.4 million in the first three months of 2020. |
• | We incurred $4.6 million in integration costs related to Dunbar in the first three months of 2019. |
• | Amortization expense for acquisition-related intangible assets was $6.4 million in the first three months of 2019. |
• | Restructuring costs related to our Dunbar and Rodoban acquisitions were $2.5 million in the first three months of 2019. |
• | Transaction costs related to business acquisitions were $0.4 million in the first three months of 2019. |
• | Compensation expense related to the retention of key Dunbar employees was $1.5 million in the first three months of 2019. |
• | In the first three months of 2019, we recognized $1.7 million in net charges, primarily asset impairment and severance costs, related to the exit from our top-up prepaid mobile phone business in Brazil. |
Three Months Ended March 31, | % | ||||||||
(In millions) | 2020 | 2019 | change | ||||||
Foreign currency items: | |||||||||
Transaction losses | $ | (5.6 | ) | (6.9 | ) | (19 | ) | ||
Derivative instrument gains | 1.3 | 3.9 | (67 | ) | |||||
Gains (losses) on sale of property and other assets | (0.2 | ) | 0.1 | unfav | |||||
Impairment losses | (2.0 | ) | (1.2 | ) | 67 | ||||
Share in earnings of equity affiliates | — | 0.2 | (100 | ) | |||||
Royalty income | 1.1 | 1.2 | (8 | ) | |||||
Other gains (losses) | 0.3 | 0.5 | (40 | ) | |||||
Other operating income (expense) | $ | (5.1 | ) | (2.2 | ) | unfav | |||
Three Months Ended March 31, | % | ||||||||
(In millions) | 2020 | 2019 | change | ||||||
Interest expense | $ | 20.0 | 23.0 | (13 | ) | ||||
Three Months Ended March 31, | % | ||||||||
(In millions) | 2020 | 2019 | change | ||||||
Interest income | $ | 1.1 | 1.2 | (8 | ) | ||||
Loss on equity securities | (2.5 | ) | (0.1 | ) | unfav | ||||
Foreign currency transaction losses | (0.2 | ) | — | unfav | |||||
Derivative instrument losses(a) | (7.7 | ) | — | unfav | |||||
Retirement benefit cost other than service cost | (9.0 | ) | (9.7 | ) | (7 | ) | |||
Non-income taxes on intercompany billings(b) | (0.9 | ) | (1.0 | ) | (10 | ) | |||
Venezuela operations(c) | — | (0.5 | ) | (100 | ) | ||||
Gain on disposition of subsidiary(d) | 4.7 | — | fav | ||||||
Other | (1.1 | ) | (1.1 | ) | — | ||||
Interest and other nonoperating income (expense) | $ | (15.6 | ) | (11.2 | ) | 39 | |||
(a) | Represents loss on foreign currency forward contracts related to acquisition of business operations from G4S. |
(b) | Certain of our Latin American subsidiaries incur non-income taxes related to the billing of intercompany charges. These intercompany charges do not impact South American segment results and are eliminated in our consolidation. |
(c) | Charges incurred for providing financial support to Brink's Venezuelan subsidiaries after the June 30, 2018 deconsolidation. We do not expect any future funding of the Venezuela business, as long as current U.S. sanctions remain in effect. |
(d) | Gain on the sale of our former French security services subsidiary in the first quarter of 2020. |
Three Months Ended March 31, | ||||||
2020 | 2019 | |||||
Continuing operations | ||||||
Provision (benefit) for income taxes (in millions) | $ | (12.2 | ) | 9.7 | ||
Effective tax rate | 129.8 | % | 40.1 | % | ||
Three Months Ended March 31, | % | |||||||
(In millions) | 2020 | 2019 | change | |||||
Net income attributable to noncontrolling interests | $ | 1.0 | 0.8 | 25 | ||||
YTD '20 | YTD '19 | ||||||||||||||||||
(In millions, except for percentages) | Pre-tax | Tax | Effective tax rate | Pre-tax | Tax | Effective tax rate | |||||||||||||
Effective Income Tax Rate(a) | |||||||||||||||||||
GAAP | $ | (9.4 | ) | (12.2 | ) | 129.8 | % | $ | 24.2 | 9.7 | 40.1 | % | |||||||
Retirement plans(d) | 7.7 | 1.8 | 8.4 | 1.9 | |||||||||||||||
Venezuela operations(e) | — | — | 0.5 | — | |||||||||||||||
Reorganization and Restructuring(b) | 5.6 | 1.3 | 3.5 | 1.0 | |||||||||||||||
Acquisitions and dispositions(b) | 22.8 | 2.1 | 18.7 | 1.7 | |||||||||||||||
Argentina highly inflationary impact(b) | 2.4 | (0.2 | ) | 4.3 | — | ||||||||||||||
Internal loss(b) | 9.6 | 2.2 | — | — | |||||||||||||||
Reporting compliance(b) | 0.2 | — | 1.4 | — | |||||||||||||||
Income tax rate adjustment(c) | — | 24.4 | — | 4.9 | |||||||||||||||
Non-GAAP | $ | 38.9 | 19.4 | 49.8 | % | $ | 61.0 | 19.2 | 31.4 | % | |||||||||
(a) | From continuing operations. |
(b) | See “Other Items Not Allocated To Segments” on pages 37–38 for details. We do not consider these items to be reflective of our core operating performance due to the variability of such items from period-to-period in terms of size, nature and significance. |
(c) | Non-GAAP income from continuing operations and non-GAAP EPS have been adjusted to reflect an effective income tax rate in each interim period equal to the full-year non-GAAP effective income tax rate. The full-year non-GAAP effective tax rate is estimated at 49.8% for 2020 and was 31.4% for 2019. |
(d) | Our U.S. retirement plans are frozen and costs related to these plans are excluded from non-GAAP results. Certain non-U.S. operations also have retirement plans. Settlement charges related to these non-U.S. plans are also excluded from non-GAAP results. |
(e) | Post-deconsolidation funding of ongoing costs related to our Venezuelan operations was $0.9 million in 2019 and was expensed as incurred and reported in interest and other nonoperating income (expense). We do not expect any future funding of the Venezuela business, as long as current U.S. sanctions remain in effect. |
Three Months Ended March 31, | ||||||
(In millions, except for percentages and per share amounts) | 2020 | 2019 | ||||
Revenues: | ||||||
GAAP | $ | 872.8 | 905.0 | |||
Non-GAAP | $ | 872.8 | 905.0 | |||
Operating profit: | ||||||
GAAP | $ | 26.2 | 58.4 | |||
Reorganization and Restructuring(b) | 5.6 | 3.5 | ||||
Acquisitions and dispositions(b) | 19.1 | 17.2 | ||||
Argentina highly inflationary impact(b) | 2.4 | 4.3 | ||||
Internal loss(b) | 9.6 | — | ||||
Reporting compliance(b) | 0.2 | 1.4 | ||||
Non-GAAP | $ | 63.1 | 84.8 | |||
Operating margin: | ||||||
GAAP margin | 3.0 | % | 6.5 | % | ||
Non-GAAP margin | 7.2 | % | 9.4 | % | ||
Interest expense: | ||||||
GAAP | $ | (20.0 | ) | (23.0 | ) | |
Acquisitions and dispositions(b) | 0.7 | 1.5 | ||||
Non-GAAP | $ | (19.3 | ) | (21.5 | ) | |
Interest and other nonoperating income (expense): | ||||||
GAAP | $ | (15.6 | ) | (11.2 | ) | |
Retirement plans(d) | 7.7 | 8.4 | ||||
Venezuela operations(e) | — | 0.5 | ||||
Acquisitions and dispositions(b) | 3.0 | — | ||||
Non-GAAP | $ | (4.9 | ) | (2.3 | ) | |
Provision for income taxes: | ||||||
GAAP | $ | (12.2 | ) | 9.7 | ||
Retirement plans(d) | 1.8 | 1.9 | ||||
Reorganization and Restructuring(b) | 1.3 | 1.0 | ||||
Acquisitions and dispositions(b) | 2.1 | 1.7 | ||||
Argentina highly inflationary impact(b) | (0.2 | ) | — | |||
Internal loss(b) | 2.2 | — | ||||
Income tax rate adjustment(c) | 24.4 | 4.9 | ||||
Non-GAAP | $ | 19.4 | 19.2 | |||
Three Months Ended March 31, | ||||||
(In millions, except for percentages and per share amounts) | 2020 | 2019 | ||||
Net income (loss) attributable to noncontrolling interests: | ||||||
GAAP | $ | 1.0 | 0.8 | |||
Reorganization and Restructuring(b) | 0.1 | — | ||||
Non-GAAP | $ | 1.1 | 0.8 | |||
Income (loss) from continuing operations attributable to Brink's: | ||||||
GAAP | $ | 1.8 | 13.7 | |||
Retirement plans(d) | 5.9 | 6.5 | ||||
Venezuela operations(e) | — | 0.5 | ||||
Reorganization and Restructuring(b) | 4.2 | 2.5 | ||||
Acquisitions and dispositions(b) | 20.7 | 17.0 | ||||
Argentina highly inflationary impact(b) | 2.6 | 4.3 | ||||
Internal loss(b) | 7.4 | — | ||||
Reporting compliance(b) | 0.2 | 1.4 | ||||
Income tax rate adjustment(c) | (24.4 | ) | (4.9 | ) | ||
Non-GAAP | $ | 18.4 | 41.0 | |||
Diluted EPS: | ||||||
GAAP | $ | 0.03 | 0.27 | |||
Retirement plans(d) | 0.12 | 0.13 | ||||
Venezuela operations(e) | — | 0.01 | ||||
Reorganization and Restructuring(b) | 0.08 | 0.05 | ||||
Acquisitions and dispositions(b) | 0.40 | 0.33 | ||||
Argentina highly inflationary impact(b) | 0.05 | 0.09 | ||||
Internal loss(b) | 0.14 | — | ||||
Reporting compliance(b) | — | 0.03 | ||||
Income tax rate adjustment(c) | (0.48 | ) | (0.10 | ) | ||
Non-GAAP | $ | 0.36 | 0.81 | |||
Three Months Ended March 31, | $ | ||||||||
(In millions) | 2020 | 2019 | change | ||||||
Cash flows from operating activities | |||||||||
Operating activities - GAAP | $ | 13.4 | (38.0 | ) | 51.4 | ||||
(Increase) decrease in restricted cash held for customers | (81.2 | ) | 36.8 | (118.0 | ) | ||||
(Increase) decrease in certain customer obligations(a) | 6.2 | (11.3 | ) | 17.5 | |||||
Operating activities - non-GAAP | $ | (61.6 | ) | (12.5 | ) | (49.1 | ) | ||
(a) | To adjust for the change in the balance of customer obligations related to cash received and processed in certain of our secure cash management services 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. |
Three Months Ended March 31, | $ | ||||||||
(In millions) | 2020 | 2019 | change | ||||||
Cash flows from investing activities | |||||||||
Capital expenditures | $ | (30.2 | ) | (35.2 | ) | 5.0 | |||
Acquisitions, net of cash acquired | (73.3 | ) | (129.9 | ) | 56.6 | ||||
Dispositions, net of cash disposed | (3.0 | ) | — | (3.0 | ) | ||||
Marketable securities: | |||||||||
Purchases | (0.1 | ) | (1.1 | ) | 1.0 | ||||
Sales | 0.4 | 0.4 | — | ||||||
Proceeds from sale of property and equipment | 1.0 | 1.6 | (0.6 | ) | |||||
Acquisition of customer contracts | (5.2 | ) | — | (5.2 | ) | ||||
Investing activities | $ | (110.4 | ) | (164.2 | ) | 53.8 | |||
Three Months Ended March 31, | $ | Full Year | ||||||||||
(In millions) | 2020 | 2019 | change | 2019 | ||||||||
Property and equipment acquired during the period | ||||||||||||
Capital expenditures:(a) | ||||||||||||
North America | $ | 12.3 | 16.4 | (4.1 | ) | 76.6 | ||||||
South America | 6.9 | 9.7 | (2.8 | ) | 44.4 | |||||||
Rest of World | 7.6 | 6.8 | 0.8 | 33.5 | ||||||||
Corporate | 3.4 | 2.3 | 1.1 | 10.3 | ||||||||
Capital expenditures - GAAP and non-GAAP | $ | 30.2 | 35.2 | (5.0 | ) | 164.8 | ||||||
Financing leases:(b) | ||||||||||||
North America | $ | 12.4 | 9.6 | 2.8 | 51.8 | |||||||
South America | 0.3 | 0.3 | — | 3.7 | ||||||||
Rest of World | 0.5 | 2.2 | (1.7 | ) | 4.2 | |||||||
Financing leases - GAAP and non-GAAP | $ | 13.2 | 12.1 | 1.1 | 59.7 | |||||||
Total: | ||||||||||||
North America | $ | 24.7 | 26.0 | (1.3 | ) | 128.4 | ||||||
South America | 7.2 | 10.0 | (2.8 | ) | 48.1 | |||||||
Rest of World | 8.1 | 9.0 | (0.9 | ) | 37.7 | |||||||
Corporate | 3.4 | 2.3 | 1.1 | 10.3 | ||||||||
Total property and equipment acquired | $ | 43.4 | 47.3 | (3.9 | ) | 224.5 | ||||||
Depreciation and amortization(a) | ||||||||||||
North America | $ | 20.5 | 22.1 | (1.6 | ) | 81.1 | ||||||
South America | 6.7 | 7.1 | (0.4 | ) | 27.9 | |||||||
Rest of World | 7.6 | 9.2 | (1.6 | ) | 32.3 | |||||||
Corporate | 2.1 | 2.8 | (0.7 | ) | 10.8 | |||||||
Depreciation and amortization - non-GAAP | $ | 36.9 | 41.2 | (4.3 | ) | 152.1 | ||||||
Argentina highly inflationary impact | 0.7 | 0.2 | 0.5 | 1.8 | ||||||||
Reorganization and Restructuring | — | 0.1 | (0.1 | ) | 0.2 | |||||||
Acquisitions and dispositions | 0.2 | — | 0.2 | 3.1 | ||||||||
Amortization of intangible assets | 7.2 | 6.4 | 0.8 | 27.8 | ||||||||
Depreciation and amortization - GAAP | $ | 45.0 | 47.9 | (2.9 | ) | 185.0 | ||||||
(a) | Incremental depreciation related to highly inflationary accounting in Argentina, accelerated depreciation related to restructuring and acquisition-related integration activities, and amortization of acquisition-related intangible assets have been excluded from non-GAAP amounts. |
(b) | Represents the amount of property and equipment acquired using financing leases. Because the assets are acquired without using cash, the acquisitions are not reflected in the condensed consolidated cash flow statement. Amounts are provided here to assist in the comparison of assets acquired in the current year versus prior years. |
Three Months Ended March 31, | $ | ||||||||
(In millions) | 2020 | 2019 | change | ||||||
Cash flows from financing activities | |||||||||
Borrowings and repayments: | |||||||||
Short-term borrowings | $ | 0.6 | (5.5 | ) | 6.1 | ||||
Long-term revolving credit facilities, net | 211.4 | (192.7 | ) | 404.1 | |||||
Other long-term debt, net | (18.5 | ) | 325.2 | (343.7 | ) | ||||
Borrowings (repayments) | 193.5 | 127.0 | 66.5 | ||||||
Debt financing costs | (0.7 | ) | (3.9 | ) | 3.2 | ||||
Dividends to: | |||||||||
Shareholders of Brink’s | (7.5 | ) | (7.4 | ) | (0.1 | ) | |||
Noncontrolling interests in subsidiaries | (0.7 | ) | — | (0.7 | ) | ||||
Payment of acquisition-related obligation | (6.8 | ) | (1.5 | ) | (5.3 | ) | |||
Tax withholdings associated with share-based compensation | (9.2 | ) | (7.3 | ) | (1.9 | ) | |||
Other | (0.5 | ) | (0.3 | ) | (0.2 | ) | |||
Financing activities | $ | 168.1 | 106.6 | 61.5 | |||||
March 31, | December 31, | |||||
(In millions) | 2020 | 2019 | ||||
Debt: | ||||||
Short-term borrowings | $ | 14.1 | 14.3 | |||
Long-term debt | 1,830.8 | 1,629.3 | ||||
Total Debt | 1,844.9 | 1,643.6 | ||||
Restricted cash borrowings(a) | (10.1 | ) | (10.3 | ) | ||
Total Debt without restricted cash borrowings | 1,834.8 | 1,633.3 | ||||
Less: | ||||||
Cash and cash equivalents | 274.4 | 311.0 | ||||
Amounts held by Cash Management Services operations(b) | (16.5 | ) | (26.3 | ) | ||
Cash and cash equivalents available for general corporate purposes | 257.9 | 284.7 | ||||
Net Debt(c) | $ | 1,576.9 | 1,348.6 | |||
(a) | Restricted cash borrowings are related to cash borrowed under lending arrangements used in the process of managing customer cash supply chains, which is currently classified as restricted cash and not available for general corporate purposes. |
(b) | Title to cash received and processed in certain of our secure Cash Management Services 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. |
(c) | Included within Net Debt is net cash from our Argentina operations of $22 million at March 31, 2020 and $17 million at December 31, 2019 (see Note 1 to the condensed consolidated financial statements for a discussion of currency controls in Argentina). |
• | our future profitability; |
• | the quality of our accounts receivable; |
• | our relative levels of debt and equity; |
• | the volatility and overall condition of the capital markets; and |
• | the market prices of our securities. |
• | Changing discount rates and other assumptions in effect at measurement dates (normally December 31) |
• | Investment returns of plan assets |
• | Addition of new participants (historically immaterial due to freezing of pension benefits and exit from coal business) |
• | Mortality rates |
• | Change in laws |
Funded Status of U.S. Retirement Plans | |||||||||||||||||||||
Actual | Actual | Projected | |||||||||||||||||||
(In millions) | 2019 | 1Q 2020 | 2-4Q 2020 | 2021 | 2022 | 2023 | 2024 | ||||||||||||||
Primary U.S. pension plan | |||||||||||||||||||||
Beginning funded status | $ | (106.8 | ) | (118.3 | ) | (113.3 | ) | (97.2 | ) | (75.4 | ) | (38.4 | ) | 4.2 | |||||||
Net periodic pension credit(a) | 16.9 | 5.0 | 15.0 | 21.0 | 22.4 | 24.0 | 27.1 | ||||||||||||||
Payment from Brink’s | — | — | — | — | 14.1 | 17.6 | 16.3 | ||||||||||||||
Benefit plan experience gain (loss) | (28.4 | ) | — | 1.1 | 0.8 | 0.5 | 1.0 | — | |||||||||||||
Ending funded status | $ | (118.3 | ) | (113.3 | ) | (97.2 | ) | (75.4 | ) | (38.4 | ) | 4.2 | 47.6 | ||||||||
UMWA plans | |||||||||||||||||||||
Beginning funded status | $ | (297.4 | ) | (246.7 | ) | (245.8 | ) | (246.8 | ) | (247.7 | ) | (249.5 | ) | (252.3 | ) | ||||||
Net periodic postretirement cost(a) | (4.0 | ) | — | (0.1 | ) | (0.9 | ) | (1.8 | ) | (2.8 | ) | (3.9 | ) | ||||||||
Benefit plan experience gain (loss) | 55.1 | — | — | — | — | — | — | ||||||||||||||
Other | (0.4 | ) | 0.9 | (0.9 | ) | — | — | — | — | ||||||||||||
Ending funded status | $ | (246.7 | ) | (245.8 | ) | (246.8 | ) | (247.7 | ) | (249.5 | ) | (252.3 | ) | (256.2 | ) | ||||||
Black lung plans | |||||||||||||||||||||
Beginning funded status | $ | (67.9 | ) | (99.2 | ) | (97.7 | ) | (91.4 | ) | (83.9 | ) | (77.0 | ) | (70.5 | ) | ||||||
Net periodic postretirement cost(a) | (3.0 | ) | (0.7 | ) | (2.3 | ) | (2.6 | ) | (2.5 | ) | (2.2 | ) | (2.1 | ) | |||||||
Payment from Brink’s | 8.4 | 2.2 | 8.6 | 10.1 | 9.4 | 8.7 | 8.1 | ||||||||||||||
Benefit plan experience gain (loss) | (36.7 | ) | — | — | — | — | — | — | |||||||||||||
Ending funded status | $ | (99.2 | ) | (97.7 | ) | (91.4 | ) | (83.9 | ) | (77.0 | ) | (70.5 | ) | (64.5 | ) | ||||||
(a) | Excludes amounts reclassified from accumulated other comprehensive income (loss). |
Actual | Actual | Projected | ||||||||||||||||||||||
(In millions) | 2019 | 1Q 2020 | 2-4Q 2020 | FY2020 | 2021 | 2022 | 2023 | 2024 | ||||||||||||||||
Primary U.S. pension plan | $ | 21.8 | 1.9 | 5.5 | 7.4 | 3.1 | (1.3 | ) | (4.4 | ) | (11.3 | ) | ||||||||||||
UMWA plans | 15.9 | 2.8 | 8.5 | 11.3 | 11.4 | 11.6 | 11.9 | 12.3 | ||||||||||||||||
Black lung plans | 7.4 | 2.6 | 7.9 | 10.5 | 9.8 | 9.1 | 8.5 | 7.9 | ||||||||||||||||
Total | $ | 45.1 | 7.3 | 21.9 | 29.2 | 24.3 | 19.4 | 16.0 | 8.9 | |||||||||||||||
• | from Brink’s to U.S. retirement plans, and |
• | from the plans to participants. |
Actual | Actual | Projected | ||||||||||||||||||||||
(In millions) | 2019 | 1Q 2020 | 2-4Q 2020 | FY2020 | 2021 | 2022 | 2023 | 2024 | ||||||||||||||||
Payments from Brink’s to U.S. Plans | ||||||||||||||||||||||||
Primary U.S. pension plan | $ | — | — | — | — | — | 14.1 | 17.6 | 16.3 | |||||||||||||||
Black lung plans | 8.4 | 2.2 | 8.6 | 10.8 | 10.1 | 9.4 | 8.7 | 8.1 | ||||||||||||||||
Total | $ | 8.4 | 2.2 | 8.6 | 10.8 | 10.1 | 23.5 | 26.3 | 24.4 | |||||||||||||||
Payments from U.S. Plans to participants | ||||||||||||||||||||||||
Primary U.S. pension plan | $ | 48.5 | 10.9 | 36.1 | 47.0 | 47.0 | 47.0 | 47.0 | 46.9 | |||||||||||||||
UMWA plans | 29.3 | 6.6 | 23.6 | 30.2 | 30.2 | 29.7 | 29.3 | 28.7 | ||||||||||||||||
Black lung plans | 8.4 | 2.2 | 8.6 | 10.8 | 10.1 | 9.4 | 8.7 | 8.1 | ||||||||||||||||
Total | $ | 86.2 | 19.7 | 68.3 | 88.0 | 87.3 | 86.1 | 85.0 | 83.7 | |||||||||||||||
• | our ability to improve profitability and execute further cost and operational improvements and efficiencies in our core businesses; |
• | our ability to improve service levels and quality in our core businesses; |
• | market volatility and commodity price fluctuations; |
• | seasonality, pricing and other competitive industry factors; |
• | investment in information technology and its impact on revenue and profit growth; |
• | our ability to maintain an effective IT infrastructure and safeguard confidential information; |
• | our ability to effectively develop and implement solutions for our customers; |
• | risks associated with operating in foreign countries, including changing political, labor and economic conditions, regulatory issues (including the imposition of international sanctions, including by the U.S. government), currency restrictions and devaluations, restrictions on and cost of repatriating earnings and capital, impact on the Company's financial results as a result of jurisdictions determined to be highly inflationary, and restrictive government actions, including nationalization; |
• | labor issues, including negotiations with organized labor and work stoppages; |
• | pandemics (including the ongoing COVID-19 pandemic and related impacts and restrictions on the actions of businesses and consumers, including suppliers and customers), acts of terrorism, strikes or other extraordinary events that negatively affect global or regional cash commerce; |
• | anticipated cash needs in light of our current liquidity position and the impact of COVID-19 on our liquidity; |
• | the strength of the U.S. dollar relative to foreign currencies and foreign currency exchange rates; |
• | our ability to identify, evaluate and complete acquisitions and other strategic transactions and to successfully integrate acquired companies; |
• | costs related to dispositions and product or market exits; |
• | our ability to obtain appropriate insurance coverage, positions taken by insurers relative to claims and the financial condition of insurers; |
• | safety and security performance and loss experience; |
• | employee, environmental and other liabilities in connection with former coal operations, including black lung claims; |
• | the impact of the Patient Protection and Affordable Care Act on legacy liabilities and ongoing operations; |
• | funding requirements, accounting treatment, and investment performance of our pension plans, the VEBA and other employee benefits; |
• | changes to estimated liabilities and assets in actuarial assumptions; |
• | the nature of hedging relationships and counterparty risk; |
• | access to the capital and credit markets; |
• | our ability to realize deferred tax assets; |
• | the outcome of pending and future claims, litigation, and administrative proceedings; |
• | public perception of our business, reputation and brand; |
• | changes in estimates and assumptions underlying our critical accounting policies; and |
• | the promulgation and adoption of new accounting standards, new government regulations and interpretation of existing standards and regulations. |
Period | (a) Total Number of Shares Purchased(1) | (b) Average Price Paid per Share | (c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | (d) Maximum Number (or Approximate Dollar Value) of Shares that May Yet be Purchased Under the Plans or Programs | ||||||||||
January 1 through | ||||||||||||||
January 31, 2020 | — | $ | — | — | $ | — | ||||||||
February 1 through | ||||||||||||||
February 29, 2020 | — | — | — | — | ||||||||||
March 1 through | ||||||||||||||
March 31, 2020 | — | — | — | — | ||||||||||
(1) | On February 6, 2020, the Company’s board of directors authorized the Company to repurchase up to $250,000,000 of common stock from time to time as market conditions warrant and as covenants under existing agreements permit. The program does not require the Company to acquire any specific numbers of shares and may be modified or discontinued at any time. At March 31, 2020, $250,000,000 remains available under this program. The program will expire on December 31, 2021. |
2.1 | |
2.2 | |
31.1 | |
31.2 | |
32.1 | |
32.2 | |
101 | Interactive Data File (Quarterly Report on Form 10-Q, for the quarterly period ended March 31, 2020, furnished in Inline eXtensible Business Reporting Language (iXBRL)). The instance document does not appear in the interactive data file because its iXBRL tags are embedded within the iXBRL document. Attached as Exhibit 101 to this report are the following documents formatted in iXBRL: (i) the Condensed Consolidated Balance Sheets at March 31, 2020, and December 31, 2019, (ii) the Condensed Consolidated Statements of Operations for the three months ended March 31, 2020 and 2019, (iii) the Condensed Consolidated Statements of Comprehensive Income for the three months ended March 31, 2020 and 2019, (iv) the Condensed Consolidated Statements of Equity for the three months ended March 31, 2020 and 2019, (v) the Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2020 and 2019 and (vi) the Notes to the Condensed Consolidated Financial Statements. Users of this data are advised pursuant to Rule 406T of Regulation S-T that this interactive data file is deemed not filed or part of a registration statement or prospectus for purposes of sections 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of section 18 of the Securities and Exchange Act of 1934, and otherwise is not subject to liability under these sections. |
THE BRINK’S COMPANY | |
May 8, 2020 | By: /s/ Ronald J. Domanico |
Ronald J. Domanico | |
(Executive Vice President and | |
Chief Financial Officer) | |
(principal financial officer) | |
i. | Closing for Hong Kong, Ireland and Belgium (“First Closing Countries”) will take place on 6 April 2020 (rather than 30 March 2020); |
ii. | Closing for Cyprus, the Czech Republic, the Dominican Republic, Indonesia, Malaysia and Romania (“Second Closing Countries”) will take place on 20 April 2020 (rather than 30 March 2020); and |
iii. | subject to obtaining works council approval, closing for the Netherlands under SPA 2 will take place on 6 April 2020. |
1 | SPA 1 |
1.1 | G4S and Brink’s agree to the following changes to SPA 1: |
1.1.1 | schedule 1 of SPA 1 with the amended schedule 1 contained in Schedule 1 to this Deed; |
1.1.2 | a new clause 1.14 in SPA 1 shall be included in SPA 1 which shall read as follows: |
1.14.1 | Any references in this Agreement to “Closing” or “Closing Date” shall be deemed to be references to the relevant Closing or the relevant Closing Date for the Shares and/or Group Companies to which the relevant provision relates. |
1.14.2 | Any references in this Agreement to “Closing Statement” shall be deemed to be references to the relevant Closing Statement for the Group Companies or Closing to which the relevant provision relates.” |
1.1.3 | a new clause 1.15 shall be included in SPA 1 which shall read as follows: |
1.15.1 | Any references to “Group Company” or “Group Companies” in the definitions of “Cash Balances”, “Estimated Cash”, “Estimated Intra-Group Financing Payables”, “Estimated Intra-Group Financing Receivables”, “Estimated Third Party Indebtedness”, “Group Companies’ Cash Balances”, “Intra-Group Financing Payables”, “Intra-Group Financing Receivables”, “Intra-Group Trading Payables”, “Intra-Group Trading Receivables”, “Third Party Indebtedness” shall be deemed to be references to Group Companies that are being transferred, directly or indirectly, at the relevant Closing for which the Closing Statement is being prepared. |
1.15.2 | Any references to “Group Company” or “Group Companies” in the definitions of “Cash Processing Centre”, “Cash Solutions Customer” and “CDM Services” shall be deemed to be references to Group Companies that are being transferred, directly or indirectly, at the relevant Closing for which the Cash Reconciliation Process is taking place. |
1.15.3 | Any references to “Group Company” or “Group Companies” in: (i) the definitions of “Claims Made Policies”, “Existing Deposita Contract”, “Existing Financing Arrangements”, “G4S Trade Marks”, “Purchaser’s Group” and “Seller’s Group”; (ii) clause 5.5 of SPA1; and (iii) clause 5.8 of SPA 1, shall be deemed to be references to the Group Companies to which the relevant provision relates.” |
1.1.4 | a new clause 5.2.6 shall be included in SPA 1 which shall read as follows: |
“5.2.6 | G4S Cash Solutions (2019) Limited (UK503) from repaying existing debt using the proceeds from the sale of G4S Cash Solutions (Hong Kong – Holding) Limited (HK122) or G4S Cash Solutions Holdings BV (NL501) from distributing the proceeds of a sale of G4S Cash Solutions (Ireland) Limited (IE100) out of its share premium account, |
1.1.5 | a new clause 5.3.5 shall be included in SPA 1 which shall read as follows: |
(i) | G4S Cash Solutions (Ireland) Limited shall not be a subsidiary of G4S Cash Solutions Holdings BV at the time of the Closing of the sale of the shares of G4S Cash Solutions Holdings BV; |
(ii) | G4S Cash Solutions (Hong Kong – Holding) Limited and its subsidiaries shall not be subsidiaries of G4S Cash Solutions Holdings No 2 Limited at the time of the Closing of the sale of the shares of G4S Cash Solutions Holdings No 2 Limited; |
(iii) | G4S Cash Solutions (2019) Limited shall be entitled to use the sums received in respect of the consideration for the sale pursuant to this Agreement of the |
(iv) | G4S Cash Solutions Holdings BV shall be entitled to distribute the sums received in respect of the consideration for the sale pursuant to this Agreement of the shares of G4S Cash Solutions (Ireland) Limited to G4S Cash Solutions Holdings No 2 B.V. out of its share premium account; |
1.1.6 | clauses 7.1 to 7.5 in SPA 1 shall be amended to read as follows: |
“7 | Closing |
7.1 | Date and place |
7.1.2 | The Seller and the Purchaser shall perform their respective Closing obligations set out in Clauses 7.2 and 7.3 on the relevant Closing Date. |
7.2 | Closing events |
7.3 | Payment on Closing |
(i) | the Bid Amount for the Shares that are the subject of that Closing, as set out in column (5) of the table in Schedule 1; |
(ii) | the Estimated Cash and the Estimated Intra-Group Financing Receivables that relate to the Companies whose Shares are the subject of that Closing and their subsidiaries and subsidiary undertakings; |
(iii) | the Estimated Third Party Indebtedness and the Estimated Intra-Group Financing Payables that relate to the Companies whose Shares are the subject of that Closing and their subsidiaries and subsidiary undertakings; |
(iv) | the Estimated Working Capital Adjustment that relates to the Companies whose Shares are the subject of that Closing and their subsidiaries and subsidiary undertakings; |
(v) | in the case of the Closing of the shares in G4S Cash Solutions Holdings No 2 Limited only, the amount of the Deferred Consideration, |
7.4.1 | All documents and items delivered at each Closing pursuant to Clause 7.2 and Schedule 6 shall be delivered by email and held by the recipient to the order of the person delivering the same until such time as that Closing shall have taken place pursuant to Clause 7.4.2. |
(i) | delivery of all documents and items required to be delivered at a Closing pursuant to Clause 7.2 and Schedule 6 (or waiver of such delivery by the person entitled to receive the relevant document or item); and |
(ii) | receipt into the account specified by the Seller pursuant to Clause 16.6.2 of the payment to be made pursuant to Clause 7.3 in immediately cleared funds in Pounds Sterling, |
1.1.7 | clause 8.2.3 of SPA 1 shall be amended to read as follows: |
“8.2.3 | The Working Capital, the Group Companies’ Cash Balances, the Third Party Indebtedness, the Intra-Group Financing Receivables and the Intra-Group Financing Payables for each Closing, in relation to the relevant Group Companies, shall be derived in relation to the relevant Group Companies from the relevant Closing Statement.” |
1.1.8 | clause 8.3 of SPA 1 shall be amended to read as follows: |
“8.3.1 | Group Companies’ Cash Balances |
(i) | If the relevant Group Companies’ Cash Balances are less than the Estimated Cash, the Seller shall repay to the Purchaser an amount equal to the deficiency; or |
(ii) | if the relevant Group Companies’ Cash Balances are greater than the Estimated Cash, the Purchaser shall pay to the Seller an additional amount equal to the excess. |
8.3.2 | Intra-Group Financing Receivables |
(iii) | If the relevant Intra-Group Financing Receivables are less than the Estimated Intra-Group Financing Receivables, the Seller shall repay to the Purchaser an amount equal to the deficiency; or |
(iv) | if the relevant Intra-Group Financing Receivables are greater than the Estimated Intra-Group Financing Receivables, the Purchaser shall pay to the Seller an additional amount equal to the excess. |
8.3.3 | Third Party Indebtedness |
(v) | If the relevant Third Party Indebtedness is greater than the Estimated Third Party Indebtedness, the Seller shall repay to the Purchaser an amount equal to the excess; or |
(vi) | if the relevant Third Party Indebtedness is less than the Estimated Third Party Indebtedness, the Purchaser shall pay to the Seller an additional amount equal to the deficiency. |
8.3.4 | Intra-Group Financing Payables |
(vii) | If the relevant Intra-Group Financing Payables are greater than the Estimated Intra-Group Financing Payables, the Seller shall repay to the Purchaser an amount equal to the excess; or |
(viii) | if the relevant Intra-Group Financing Payables are less than the Estimated Intra-Group Financing Payables, the Purchaser shall pay to the Seller an additional amount equal to the deficiency. |
8.3.5 | Working Capital |
(ix) | If the relevant Working Capital is less than the Estimated Working Capital, the Seller shall repay to the Purchaser an amount equal to the deficiency; or |
(x) | if the relevant Working Capital exceeds the Estimated Working Capital, the Purchaser shall pay to the Seller an additional amount equal to the excess.” |
1.1.1 | a new paragraph 3.1.2(iv) shall be included in Schedule 6 to SPA 1 which shall read as follows: |
“(iv) | Hong Kong |
1.1.2 | a new paragraph 3.1.2(v) shall be included in Schedule 6 to SPA 1 which shall read as follows: |
“(v) | Ireland |
1.1.3 | paragraph 2.2 in Part 1 of Schedule 7 to SPA 1 shall be amended to read as follows: |
“2.2 | No account shall be taken of the requirements of IFRS 16. There shall be no re-categorisation of leases accounted for as finance leases in the Carve-out Accounts to operating leases in the relevant Closing Statement, or vice versa. A £9,400,000 liability in respect of finance leases shall be included in Third Party Indebtedness in respect of the First Closing Countries and a £1,300,000 liability in respect of finance leases shall be included in Third Party Indebtedness in respect of the Second Closing Countries; no other liability in respect of finance leases (as defined in IAS 17) shall be included in the relevant Closing Statement.” |
1.1.4 | the definition of “ATM Territories” in Part 2 of Schedule 8 to SPA 1 shall be amended to read as follows: |
1.1.5 | a new schedule 13 shall be included in SPA 1 which shall be the schedule 13 contained in Schedule 2 to this letter. |
1.1 | G4S and Brink’s further agree to the inclusion of the following new and amended definitions in clause 1.1 of SPA 1: |
(i) | in respect of each First Closing Country, the amount set out in Part 1 of Schedule 13 attributable to the relevant Company; and |
(ii) | in respect of each Second Closing Country, the amounts set out in Part 2 of Schedule 13 attributable to the relevant Company;”; |
(i) | when the relevant Closing Date is 6 April 2020, 3.3%; or |
(i) | when the relevant Closing Date is 20 April 2020, the SONIA rate on the last day of the month immediately preceding the month of the relevant Closing Date plus 175 basis points;” |
2 | SPA 2 |
2.1 | G4S and Brink’s agree to the following changes to SPA 2: |
2.1.1 | to amend clause 7.1 of SPA 2 to delete clause 7.1.4 which shall be replaced with the words “deleted”; |
2.1.2 | to amend clause 7.2 of SPA 2 to delete clauses 7.2.1(iv) and 7.2.2(iv) which shall be replaced with the words “deleted”; |
2.1.3 | to further amend clause 7.2 of SPA 2 include a new clause 7.2.3 in relation to the Netherlands Shares which shall read as follows: |
(i) | the Seller shall notify the Purchaser in writing of the new date for the NL Closing, such date to be to be a Monday and at least 2 weeks from the date of such notification to the Purchaser; and |
(ii) | the Seller and Purchaser shall each comply with their respective Closing obligations as set out in Clauses 7.3 and 7.4 of this Agreement on the date notified by the Seller as the date for the NL Closing. |
2.2 | G4S and Brink’s further agree to the following changes to SPA 2: |
2.2.1 | to include a new clause 7.10 and a new definition in clause 1.1 in SPA2, which shall read as follows: |
(i) | when the relevant Closing Date is 6 April 2020, 3.3%; or |
(ii) | when the relevant Closing Date is not 6 April 2020, the SONIA rate on the last day of the month immediately preceding the month of the relevant Closing Date plus 175 basis points;” |
2.2.2 | to amend the definition of “Effective Time” in clause 1.1 of SPA 2 to read as follows |
3 | Miscellaneous |
3.1 | This letter is without prejudice to the various assertions made by both parties in correspondence with respect to Closing (and the parties’ obligations with respect thereto) under SPA 1, as to which both parties reserve their respective positions. |
3.2 | The provisions of clauses 15.3, 15.4, 15.5, 15.12, 15.13, 15.15, 15.16 and 15.17 of SPA 1 shall apply to this letter as if set out in full in this letter and as if references in those clauses to “this Agreement” are references to this letter and references to “party” or “parties” are references to Parties to this letter. |
SIGNED and DELIVERED as a DEED by Soren Lundsberg, GC on behalf of G4S plc in the presence of: | /s/ Soren Lundsberg, GC | |
Signature | ||
Witness’s signature | ||
Name: Line Lundsberg-Nielson | ||
Address: | ||
Occupation: Director | ||
SIGNED and DELIVERED as a DEED by The Brink’s Company, a company incorporated in Virginia, United States of America, acting by: Ronald J. Domanico, Executive Vice President and Chief Financial Officer who, in accordance with the laws of that territory, is acting under the authority of the company: | /s/ Ronald J. Domanico | |
Signature | ||
1 | SPA 1 |
1.1 | G4S and Brink’s agree that: |
1.1.1 | Closing for Malaysia and the Dominican Republic (“Third Closing Countries”) shall take place on 27 April 2020; and |
1.1.2 | Closing for Indonesia (“Fourth Closing Country”) shall take place on 6 July 2020 unless deferred in accordance with clause 7.1.1 of SPA 1; and |
1.1.3 | they will, during the course of the week beginning 27 April 2020, work together in good faith to agree any reasonable amendments required to SPA 1 to provide that the Seller will not extract value from the Fourth Closing Country in the period from the Effective Time (which is 31 March 2020) to the Closing Date of the Fourth Country Closing Country. |
1.2 | In order to effect the changes in paragraphs 1.1.1 – 1.1.2 above, G4S and Brink’s agree to: |
1.2.1 | amend clause 7.1.1 of SPA 1 to read as follows: |
“7.1.1 | Closing shall take place virtually on 6 April 2020 in respect of the First Closing Countries, and on 20 April 2020 in respect of the Second Closing Countries (in each case to provide the Seller and the Purchaser with sufficient time between the date of this Agreement and Closing to plan for the Cash Reconciliation Process), or at such other location, time or date as may be agreed between the Purchaser and the Seller. |
1.3 | G4S and Brink’s further agree to the inclusion of the following new and amended definitions in clause 1.1 of SPA 1: |
1.4 | G4S and Brink’s acknowledge that certain minority interests in Romania will be transferred on the Closing Date for the Third Closing Countries and agree that, notwithstanding this delayed transfer of such minority interests, the Closing Date for Romania shall be 20 April 2020. |
1.5 | Steering Committee – Fourth Closing Country (Indonesia) |
1.5.1 | Within 5 Business Days of the date of this Letter the parties shall jointly establish and maintain a steering committee (the “Committee”) until the Closing Date for the Fourth Closing Country (the “Indonesia Closing Date”). |
1.5.2 | G4S and Brink’s agree that the purpose of the Committee is to provide, between the date of this Letter and the Indonesian Closing Date and subject to Applicable Law, the parties with information on the trading, operational and financial performance of the business of the Fourth Closing Country (the “Indonesian Business”) and for the Committee to provide advice to management in respect of material business decisions relating to the Indonesian Business. G4S shall request that management take reasonable account of any such advice. |
1.5.3 | The Committee shall be comprised of two representatives of each of G4S and Brink’s, being Jesus Rosano and David Batubara as the G4S representatives and Dominic Bossart and Nick Sharma (or such other persons as may be nominated by Brink’s) as the Brink’s representatives. |
1.5.4 | The Committee shall discuss and agree detailed terms of reference governing the constitution of the Committee and other administrative matters (including how it shall conduct its proceedings to review, discuss and consider the matters set out in paragraph 1.5.2 above) as soon as reasonably possible following the date of this Letter. |
1.5.5 | G4S and Brink’s each agree to provide the Committee with such information as the Committee may reasonably request in relation to the Committee’s activities as outlined in paragraph 1.5.2 above. |
2 | SPA 2 |
2.1 | G4S and Brink’s agree: |
2.1.1 | to Close and complete the transfer of one of the Baltic Shares, Kuwait Shares or the Philippines Shares before 30 June 2020, but no earlier than 1 June 2020, subject to the relevant conditions set out in clause 4.2.2, 4.3 or 4.5 of SPA 2 (as applicable) being satisfied; |
2.1.2 | to Close and complete the transfer of the Baltic Shares, Kuwait Shares, Macau Shares and the Philippines Shares (if not Closed and completed before 30 June 2020) on 6 July 2020 subject to the relevant conditions set out in clause 4.2.2, 4.3, 4.2.1 or 4.5 of SPA 2 (as applicable) being satisfied; |
2.1.3 | if the Closings and completion of the transfers of the Baltic Shares, Kuwait Shares, Macau Shares or the Philippines Shares do not occur on any of the dates above, to complete the relevant Closing and transfer the relevant Shares as soon as possible after the relevant conditions for the sale and purchase of the relevant Shares as set out in clause 4.2.2, 4.3, 4.2.1 or 4.5 of SPA 2 have been satisfied; |
2.1.4 | the dates for the relevant Closings pursuant to paragraphs 2.1.1 and 2.1.3 above shall be determined in accordance with clause 7.2 of SPA 2; and |
2.1.5 | they will, during the course of the week beginning 27 April 2020, work together in good faith to agree any reasonable amendments required to SPA 2 to provide that the Seller will not extract value from the Baltics, Kuwait, Philippines or Macau in the period from the Effective Time (which is being amended to the definition below) to the Closing Date for each of these countries. |
2.2 | In order to effect this change, and to give effect to other changes, G4S and Brink’s agree to the following changes to SPA 2: |
2.2.1 | clause 4.1 of SPA 2 shall be amended and replaced with the words “deleted”; |
2.2.2 | the lead in wording of clause 7.2 and clauses 7.2.1 of and 7.2.2 of SPA 2 shall be replaced with the words “deleted”; |
2.2.3 | clause 7.2 of SPA 2 shall be further amended to include new clauses 7.2.4, 7.2.5, 7.2.6 and 7.2.7 in relation to the Baltic Shares, Kuwait Shares, Macau Shares and the Philippines Shares which shall read as follows: |
“7.2.4 | Following notification by the Seller of the fulfilment of the conditions set out in Clause 4.2.2 in the case of the Baltic Shares, Clause 4.3 in the case of the Kuwait Shares and Clause 4.5 in the case of the Philippines Shares, Closing of the transfer of the Baltic Shares, Kuwait Shares and Philippines Shares (as applicable) shall take place virtually (including by delivery of documents by email) or at the offices of the |
(i) | at least 2 weeks from the date of such notification from the Seller to the Purchaser; |
(ii) | no earlier than 1 June 2020; and |
(iii) | if the Closing of the transfer of any one of the Baltic Shares, Kuwait Shares and Philippines Shares has taken place before 30 June 2020, no earlier than 6 July 2020. |
7.2.5 | Following notification by the Seller of the fulfilment of the condition set out in Clause 4.2.1, Closing of the transfer of the Macau Shares shall take place virtually (including by delivery of documents by email) or at the offices of the Purchaser’s Lawyers on the date notified in writing by the Seller to the Purchaser, such Closing date to be: |
(i) | at least 2 weeks from the date of such notification from the Seller to the Purchaser; and |
(ii) | no earlier than 6 July 2020. |
7.2.6 | The Seller and the Purchaser shall each comply with their respective Closing obligations as set out in Clauses 7.3 and 7.4 of this Agreement on the date notified by the Seller as the date for the relevant Closing. |
7.2.7 | The parties will discuss in good faith whether it is reasonable to defer specific Closing Dates only in the event that it is impossible because of impediments directly related to COVID-19 to conduct the Cash Count in any particular country or countries, provided that the Purchaser has clearly used its best endeavours to prepare for and conduct each of the Cash Counts, including but not limited to applying for, or taking advantage of, any relevant exemptions or exceptions from COVID-19 related laws, making appropriate contingency plans and using reputable third parties to conduct Cash Counts on its behalf (if required). Upon request, the Purchaser shall inform the Seller of everything it has done to prepare for and conduct each Cash Count in good time before any such Cash Count is due to take place.”; |
2.2.4 | clause 7.10 of SPA 2 shall be amended to read as follows: |
2.2.5 | the definition of “Effective Time” in clause 1.1 of SPA 2 shall be amended to read as follows: |
3 | Miscellaneous |
3.1 | This letter is without prejudice to the various assertions made by both parties in correspondence with respect to Closing (and the parties’ obligations with respect thereto) under SPA 1, as to which both parties reserve their respective positions. |
3.2 | The provisions of clauses 15.3, 15.4, 15.5, 15.12, 15.14, 15.15, 15.16 and 15.17 of SPA 1 shall apply to this letter as if set out in full in this letter and as if references in those clauses to “this Agreement” are references to this letter and references to “party” or “parties” are references to Parties to this letter. |
3.3 | If Closing for the Third Closing Countries does not take place by 11:59pm (London time) on 27 April 2020 for any reason whatsoever (but excluding if Closing for the Third Closing Countries is extended in accordance with clause 7.1.1 of SPA 1), the provisions and amendments agreed pursuant to this Letter shall terminate automatically and this Letter shall be void ab initio. |
SIGNED and DELIVERED as a DEED by Soren Lundsberg, GC on behalf of G4S plc in the presence of: | /s/ Soren Lundsberg | |
Signature | ||
Witness’s signature | ||
Name: Sophie Lundsberg-Nielsen | ||
Address: | ||
Occupation: Solicitor | ||
SIGNED and DELIVERED as a DEED by The Brink’s Company, a company incorporated in Virginia, United States of America, acting by: Dana O’Brien, who, in accordance with the laws of that territory, is acting under the authority of the company: | /s/ Dana O’Brien | |
Signature | ||
/s/ Douglas A. Pertz | ||
Douglas A. Pertz | ||
President and Chief Executive Officer | ||
(Principal Executive Officer) | ||
/s/ Ronald J. Domanico | ||
Ronald J. Domanico | ||
Executive Vice President and Chief Financial Officer | ||
(Principal Financial Officer) | ||
Income taxes - Schedule of Components of Income Tax Expense (Benefit) (Details) - USD ($) $ in Millions |
3 Months Ended | |
|---|---|---|
Mar. 31, 2020 |
Mar. 31, 2019 |
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| Income Tax Disclosure [Abstract] | ||
| Provision (benefit) for income taxes (in millions) | $ (12.2) | $ 9.7 |
| Effective tax rate | 129.80% | 40.10% |
Subsequent Events Subsequent Events |
3 Months Ended |
|---|---|
Mar. 31, 2020 | |
| Subsequent Events [Abstract] | |
| Subsequent Events | Subsequent Events Incremental Amendment to Term Loan Facility On April 1, 2020, we entered into an incremental amendment (the “Incremental Amendment”) with Bank of America, N.A., as administrative agent and the lenders party thereto. The Incremental Amendment relates to the senior secured credit facility, dated as of October 17, 2017, as previously amended on February 8, 2019 (the “Senior Secured Credit Facility”). The execution of the Incremental Amendment, among other things, increases the term loan commitments under the Senior Secured Credit Facility by $590 million (the “Incremental Term Loans”). The proceeds of the Incremental Term Loans will be used to (i) pay fees, costs and expenses incurred in connection with the transactions contemplated by the Incremental Amendment and (ii) finance working capital needs, capital expenditures, permitted acquisitions (including the acquisition of the majority of the cash business of U.K.-based G4S plc) and other general corporate purposes. The Incremental Term Loans have the same maturity date, February 8, 2024, and pricing terms as the existing loans under the Senior Secured Credit Facility. Acquisition of Cash Management Operations On February 26, 2020, we announced that we agreed to purchase the majority of the cash management operations from U.K.-based G4S plc, with closings planned in multiple phases in 2020. As discussed in Note 6, on March 9, 2020 we acquired the G4Si business, which specializes in secure logistics and storage services. On April 6, 2020 we acquired cash management operations in the Netherlands, Belgium, Ireland and Hong Kong. On April 20, 2020 we acquired additional operations in Cyprus, the Czech Republic and Romania. Additionally, on April 28, 2020 we acquired cash management and secure solutions operations in Malaysia and the Dominican Republic. The G4S businesses acquired and to be acquired, which are located primarily in Europe and Asia, generate approximately $800 million in annual revenues.
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Capital Stock |
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| Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Capital Stock | Capital Stock Common Stock At March 31, 2020, we had 100 million shares of common stock authorized and 50.5 million shares issued and outstanding. Dividends We paid regular quarterly dividends on our common stock during the last two years. The payment of future dividends is at the discretion of the Board of Directors and is dependent on our future earnings, financial condition, shareholder equity levels, cash flow, business requirements and other factors. Preferred Stock At March 31, 2020, we had the authority to issue up to 2.0 million shares of preferred stock with a par value of $10 per share. Share Repurchase Program On February 6, 2020, our board of directors authorized a $250 million share repurchase authorization that expires on December 31, 2021. The authorization replaces our previous $200 million repurchase program, authorized by the board of directors in May 2017, which expired December 31, 2019. Under the $200 million repurchase program, we repurchased 1.3 million shares for approximately $94 million, or an average cost of $69.35 per share. There was approximately $106 million remaining available under the $200 million repurchase program when it expired. Under the $250 million repurchase program, we are not obligated to repurchase any specific dollar amount or number of shares. The timing and volume of share repurchases may be executed at the discretion of management on an opportunistic basis, or pursuant to trading plans or other arrangements. Share repurchases under this program may be made in the open market, in privately negotiated transactions, or otherwise. No shares have been repurchased under the $250 million share repurchase program. Shares Used to Calculate Earnings per Share
(a) We have deferred compensation plans for directors and certain of our employees. Some amounts owed to participants are denominated in common stock units. Each unit represents one share of common stock. The number of shares used to calculate basic earnings per share includes the weighted-average common stock units credited to employees and directors under the deferred compensation plans. Additionally, nonvested units containing only a service requirement are also included in the computation of basic weighted-average shares when the requisite service period has been completed. Accordingly, included in basic shares are 0.3 million in the three months ended March 31, 2020, and 0.3 million in the three months ended March 31, 2019.
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Segment information (Tables) |
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| Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Reconciliation of Revenue and Operating Profit from Segments to Consolidated | The following table summarizes our revenues and segment profit for each of our reportable segments and reconciles these amounts to consolidated revenues and operating profit:
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Reorganization and Restructuring Reorganization and Restructuring (Tables) |
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| Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Restructuring Reserve by Type of Cost | The following table summarizes the costs incurred, payments and utilization, and foreign currency exchange effects of other restructurings:
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Acquisitions and Dispositions (Tables) |
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| Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Recognized Identified Assets Acquired and Liabilities Assumed |
(b) Consists of intangible assets that do not qualify for separate recognition, combined with synergies expected from integrating Rodoban’s operations with our existing Brink’s Brazil operations. All of the goodwill has been assigned to the Brazil reporting unit and is expected to be deductible for tax purposes.
(b) Consists of intangible assets that do not qualify for separate recognition, combined with synergies expected from integrating these acquired operations into our existing operations. The goodwill from these acquisitions have been assigned to the following reporting units: BI (U.S.), COMEF (Brazil) and TVS (Global Markets - South America). We expect goodwill related to BI to be deductible for tax purposes. We do not expect goodwill related to COMEF or TVS to be deductible for tax purposes.
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| Business Acquisition, Pro Forma Information | Below are the actual results included in Brink's consolidated results for the businesses we acquired in the first three months of 2020.
The pro forma consolidated results of Brink’s presented below reflect a hypothetical ownership as of January 1, 2018 for the businesses we acquired during 2019 and a hypothetical ownership as of January 1, 2019 for the businesses we acquired in the first three months of 2020.
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Credit losses Credit losses (Tables) |
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| Accounts Receivable, Allowance for Credit Loss | Allowance for doubtful accounts:
(a) The provision in 2020 includes a $9.4 million allowance related to the internal loss in our U.S global services operations. See Note 1 for details.
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Fair value of financial instruments |
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| Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Fair value of financial instruments | Fair value of financial instruments Investments in Marketable Securities We have investments in mutual funds and equity securities that are carried at fair value in the financial statements. For these investments, fair value was based on quoted market prices, which we have categorized as a Level 1 valuation. Fixed-Rate Debt The fair value and carrying value of our fixed-rate debt are as follows:
The fair value estimate of our senior unsecured notes was based on the present value of future cash flows, discounted at rates for similar instruments at the measurement date, which we have categorized as a Level 3 valuation. Forward and Swap Contracts We have outstanding foreign currency forward and swap contracts to hedge transactional risks associated with foreign currencies. At March 31, 2020, the notional value of our short term outstanding foreign currency forward and swap contracts was $722 million, with average maturities of approximately one month. These foreign currency forward and swap contracts primarily offset exposures in the British pound and the Brazilian real and are not designated as hedges for accounting purposes and, accordingly, changes in their fair value are recorded immediately in earnings. At March 31, 2020, the fair value of our short term foreign currency contracts was a net liability of approximately $5.4 million, of which $3.5 million was included in prepaid expenses and other and $8.9 million was included in accrued liabilities on the condensed consolidated balance sheet. At December 31, 2019, the fair value of these foreign currency contracts was a net asset of approximately $0.6 million, of which $0.8 million was included in prepaid expenses and other and $0.2 million was included in accrued liabilities on the condensed consolidated balance sheet. We recognized gains of $1.3 million on our short term foreign currency contracts in the first three months of 2020 and gains of $3.9 million in the first three months of 2019 which are included in other operating income (expense). We additionally recognized losses of $7.7 million in the first three months of 2020 which are included in interest and other nonoperating income and expense since these contracts related to our business acquisitions. In the first quarter of 2019, we entered into a long term cross currency swap contract to hedge exposure in Brazilian real, which is designated as a cash flow hedge for accounting purposes. At March 31, 2020, the notional value of this long term contract was $116 million with a weighted-average maturity of 2.3 years. At March 31, 2020, the fair value of the long term cross currency swap contract was a $28.4 million net asset, of which $3.0 million is included in prepaid expenses and other and $25.4 million is included in other assets on the condensed consolidated balance sheet. At December 31, 2019, the fair value of the long term cross currency swap contract was a $2.1 million net asset, of which a $4.9 million asset is included in other assets and a $2.8 million liability is included in accrued liabilities on the condensed consolidated balance sheet. In the first three months of 2020, we recognized net gains of $25.4 million on this contract, of which gains of $26.1 million were included in other operating income (expense) to offset transaction losses of $26.1 million and expenses of $0.7 million were included in interest expense. In the first three months of 2019, we recognized net gains of $2.4 million on this contract, of which gains of $3.8 million were included in other operating income (expense) to offset transaction losses of $3.8 million and expenses of $1.4 million were included in interest expense. In the first quarter of 2016, we entered into two interest rate swaps to hedge cash flow risk associated with changes in variable interest rates and that are designated as cash flow hedges for accounting purposes. At March 31, 2020, the notional value of these contracts was $40 million with a remaining weighted-average maturity of 0.5 years. At March 31, 2020, the fair value of these interest rates swaps was a liability of $0.4 million and was included in accrued liabilities on the condensed consolidated balance sheet. At December 31, 2019, the fair value of these interest rate swaps was an asset of $0.2 million and was included in prepaid expenses and other on the condensed consolidated balance sheet. The effect of these swaps is included in interest expense and was not significant in the first three months of 2020 or 2019. In the first quarter of 2019, we entered into ten interest rate swaps that hedge cash flow risk associated with changes in variable interest rates and that are designated as cash flow hedges for accounting purposes. At March 31, 2020, the notional value of these contracts was $400 million with a remaining weighted-average maturity of 2.0 years. At March 31, 2020, the fair value of these interest rate swaps was a net liability of $33.0 million, of which $8.8 million was included in accrued liabilities and $24.2 million was included in other liabilities on the condensed consolidated balance sheet. At December 31, 2019, the fair value of these interest rate swaps was a net liability of $15.0 million, of which $3.6 million was included in accrued liabilities and $11.4 million was included in other liabilities on the condensed consolidated balance sheet. The effect of these swaps is included in interest expense. Accordingly, $0.8 million was included in interest expense in the first quarter of 2020. The amount included in interest expense in the first quarter of 2019 was not significant. The fair values of these forward and swap contracts are based on the present value of net future cash payments and receipts, which we have categorized as a Level 2 valuation. Other Financial Instruments Other financial instruments include cash and cash equivalents, accounts receivable, floating rate debt, accounts payable and accrued liabilities. The financial statement carrying amounts of these items approximate the fair value. There were no transfers in or out of any of the levels of the valuation hierarchy in the first three months of 2020.
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Retirement benefits |
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| Retirement Benefits [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Retirement benefits | Retirement benefits Pension plans We have various defined-benefit pension plans covering eligible current and former employees. Benefits under most plans are based on salary and years of service. The components of net periodic pension cost for our pension plans were as follows:
We did not make cash contributions to the primary U.S. pension plan in 2019 or the first three months of 2020. Based on assumptions described in our Annual Report on Form 10-K for the year ended December 31, 2019, we do not expect to make any additional contributions to the primary U.S. pension plan until 2022. Retirement benefits other than pensions We provide retirement healthcare benefits for eligible current and former U.S., Canadian, and Brazilian employees. Retirement benefits related to our former U.S. coal operations include medical benefits provided by the Pittston Coal Group Companies Employee Benefit Plan for United Mine Workers of America Represented Employees (the “UMWA plans”) as well as costs related to Black Lung obligations. The components of net periodic postretirement cost related to retirement benefits other than pensions were as follows:
The components of net periodic pension cost and net periodic postretirement cost other than the service cost component are included in interest and other nonoperating income (expense) in the condensed consolidated statements of operations.
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Credit losses Credit losses (Details) |
3 Months Ended | ||
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Mar. 31, 2020
USD ($)
country
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Jan. 01, 2020
USD ($)
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Dec. 31, 2019
USD ($)
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| Valuation Allowance [Line Items] | |||
| Number of Countries in which Entity Operates | country | 100 | ||
| Accounts Receivable, Allowance for Credit Loss [Roll Forward] | |||
| Allowance for doubtful accounts, beginning balance | $ 30,200,000 | ||
| Retained earnings | 449,900,000 | $ 457,400,000 | |
| Provision for uncollectible accounts receivable(a) | 12,300,000 | ||
| Write-offs less recoveries | (6,600,000) | ||
| Foreign currency exchange effects | (900,000) | ||
| Allowance for doubtful accounts, ending balance | 37,300,000 | ||
| Internal Loss AR Rebuild | |||
| Accounts Receivable, Allowance for Credit Loss [Roll Forward] | |||
| Provision for uncollectible accounts receivable(a) | 9,400,000 | ||
| Allowance for doubtful accounts, ending balance | $ 23,000,000.0 | ||
| Cumulative Effect, Period of Adoption, Adjustment | Accounting Standards Update 2016-13 | |||
| Accounts Receivable, Allowance for Credit Loss [Roll Forward] | |||
| Retained earnings | $ 2,300,000 |
Condensed Consolidated Statement of Equity (Unaudited) (Parenthetical) - $ / shares |
3 Months Ended | |
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Mar. 31, 2020 |
Mar. 31, 2019 |
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| Dividends to: | ||
| Dividends (dollars per share) | $ 0.15 | $ 0.15 |
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares |
Mar. 31, 2020 |
Dec. 31, 2019 |
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| Statement of Financial Position [Abstract] | ||
| Par value (in dollars per share) | $ 1 | $ 1 |
| Shares authorized (in shares) | 100,000,000 | 100,000,000 |
| Shares issued (in shares) | 50,500,000 | 50,100,000 |
| Shares outstanding (in shares) | 50,500,000 | 50,100,000 |
Capital Stock Capital Stock (Details) - USD ($) |
12 Months Ended | |||
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Dec. 31, 2019 |
Mar. 31, 2020 |
Feb. 06, 2020 |
May 08, 2017 |
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| Subsequent Event [Line Items] | ||||
| Shares of common stock authorized (in shares) | 100,000,000 | 100,000,000 | ||
| Shares issued and outstanding (in shares) | 50,100,000 | 50,500,000 | ||
| Maximum shares allowed for issuance (in shares) | 2,000,000.0 | |||
| Par value (in dollars per share) | $ 10 | |||
| Stock repurchase program remaining amount | $ 106,000,000 | |||
| 250 Million Share Repurchase Program | ||||
| Subsequent Event [Line Items] | ||||
| Stock repurchase program amount | $ 250,000,000 | |||
| 200 Million Share Repurchase Program | ||||
| Subsequent Event [Line Items] | ||||
| Stock repurchase program amount | $ 200,000,000 | |||
| Stock repurchased and retired during period, shares | 1,300,000 | |||
| Stock repurchase program amount used | $ 94,000,000 | |||
| Average price per share (in dollars per share) | $ 69.35 |
Income taxes (Tables) |
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Mar. 31, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Income Tax Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Components of Income Tax Expense (Benefit) |
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Debt (Tables) |
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| Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Long-term Debt |
(c) Amounts outstanding are net of unamortized debt costs of $6.9 million as of March 31, 2020 and $7.1 million as of December 31, 2019.
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Supplemental cash flow information (Tables) |
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Mar. 31, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Supplemental Cash Flow Information [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Cash Flow, Supplemental Disclosures |
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| Reconciliation of cash, cash equivalents, and restricted cash | The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the condensed consolidated balance sheets that sum to the total of the same such amounts shown in the condensed consolidated statements of cash flows.
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Debt |
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| Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt | Debt
Long-Term Debt Senior Secured Credit Facility In February 2019, we amended our senior secured credit facility (the “Senior Secured Credit Facility”) with Wells Fargo Bank, National Association, as former administrative agent and Bank of America, N.A. as successor administrative agent. After the amendment, the Senior Secured Credit Facility consisted of a $1 billion revolving credit facility (the "Revolving Credit Facility") and an $800 million term loan facility (the "Term Loan Facility"). Prior to the amendment, the Term Loan Facility had an outstanding balance of approximately $469 million. The proceeds from the amendment were used to repay outstanding principal under the Revolving Credit Facility as well as certain fees related to the closing of the transaction. Loans under the Revolving Credit Facility mature five years after the amendment date (February 8, 2024). Principal payments are due quarterly for the amended Term Loan Facility equal to 1.25% of the initial loan amount with a final lump sum payment due on February 8, 2024. Interest rates for the Senior Secured Credit Facility are based on LIBOR plus a margin or an alternate base rate plus a margin. The Revolving Credit Facility allows us to borrow money or issue letters of credit (or otherwise satisfy credit needs) on a revolving basis over the term of the facility. As of March 31, 2020, $674 million was available under the Revolving Credit Facility. The obligations under the Senior Secured Credit Facility are secured by a first-priority lien on all or substantially all of the assets of the Company and certain of its domestic subsidiaries, including a first-priority lien on equity interests of certain of the Company’s direct and indirect subsidiaries. The Company and certain of its domestic subsidiaries also guarantee the obligations under the Senior Secured Credit Facility. The margin on both LIBOR and alternate base rate borrowings under the Senior Secured Credit Facility is based on the Company’s consolidated net leverage ratio. The margin on LIBOR borrowings, which can range from 1.25% to 2.00%, was 1.75% at March 31, 2020. The margin on alternate base rate borrowings, which can range from 0.25% to 1.00%, was 0.75% as of March 31, 2020. We also pay an annual commitment fee on the unused portion of the Revolving Credit Facility based on the Company’s consolidated net leverage ratio. The commitment fee, which can range from 0.15% to 0.30%, was 0.25% as of March 31, 2020. Senior Unsecured Notes In October 2017, we issued at par ten-year senior unsecured notes (the "Senior Notes") in the aggregate principal amount of $600 million. The Senior Notes will mature on October 15, 2027 and bear an annual interest rate of 4.625%. The Senior Notes are general unsecured obligations guaranteed by certain of the Company’s existing and future U.S. subsidiaries, which are also guarantors under the Senior Secured Credit Facility. The Senior Notes have not been and will not be registered under the Securities Act of 1933 (the “Securities Act”) or the securities laws of any other jurisdiction and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. The notes were offered in the United States only to persons reasonably believed to be qualified institutional buyers in reliance on the exception from registration set forth in Rule 144A under the Securities Act and outside the United States to non-U.S. persons pursuant to Regulation S under the Securities Act. Letter of Credit Facilities and Bank Guarantee Facilities We have three committed letter of credit facilities totaling $80 million, of which approximately $31 million was available at March 31, 2020. At March 31, 2020, we had undrawn letters of credit and guarantees of $49 million issued under these facilities. A $10 million facility expires in April 2022, a $54 million facility expires in December 2022 and a $16 million facility expires in January 2024. We have two uncommitted letter of credit facilities totaling $55 million, of which approximately $33 million was available at March 31, 2020. At March 31, 2020, we had undrawn letters of credit and guarantees of $22 million issued under these facilities. A $40 million facility expires in July 2020 and a $15 million facility has no expiration date. The Senior Secured Credit Facility is also available for issuance of letters of credit and bank guarantees. The Senior Secured Credit Facility, Senior Unsecured Notes, the Letter of Credit Facilities and Bank Guarantee Facilities contain various financial and other covenants. The financial covenants, among other things, limit our ability to provide liens, restrict fundamental changes, limit transactions with affiliates and unrestricted subsidiaries, restrict changes to our fiscal year and to organizational documents, limit asset dispositions, limit the use of proceeds from asset sales, limit sale and leaseback transactions, limit investments, limit the ability to incur debt, restrict certain payments to shareholders, limit negative pledges, limit the ability to change the nature of our business, provide for a maximum consolidated net leverage ratio and provide for minimum coverage of interest costs. If we were not to comply with the terms of our various financing agreements, the repayment terms could be accelerated and the commitments could be withdrawn. An acceleration of the repayment terms under one agreement could trigger the acceleration of the repayment terms under the other financing agreements. We were in compliance with all covenants at March 31, 2020.
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Income taxes |
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Mar. 31, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Income Tax Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Income taxes | Income taxes
2020 Compared to U.S. Statutory Rate The effective income tax rate on continuing operations in the first three months of 2020 was greater than the 21% U.S. statutory tax rate primarily due to the geographical mix of earnings, the seasonality of book losses for which no tax benefit can be recorded, nondeductible expenses in Mexico, taxes on cross border payments and U.S. taxable income limitations, and the characterization of a French business tax as an income tax, partially offset by the tax benefits related to the distribution of share-based payments. 2019 Compared to U.S. Statutory Rate The effective income tax rate on continuing operations in the first three months of 2019 was greater than the 21% U.S. statutory tax rate primarily due to the geographical mix of earnings, the seasonality of book losses for which no tax benefit can be recorded, nondeductible expenses in Mexico, taxes on cross border payments and the characterization of a French business tax as an income tax, partially offset by the tax benefits related to the distribution of share-based payments.
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Capital Stock - Shares Used To Calculate Earnings (Details) - shares shares in Millions |
3 Months Ended | |
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Mar. 31, 2020 |
Mar. 31, 2019 |
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| Equity [Abstract] | ||
| Basic (shares) | 50.6 | 50.0 |
| Effect of dilutive stock options and awards (shares) | 0.7 | 0.9 |
| Diluted (shares) | 51.3 | 50.9 |
| Antidilutive stock options and awards excluded from denominator (shares) | 0.4 | 0.1 |
| Deferred compensation common stock unit (shares) | 0.3 | 0.3 |