Segment information

9 Months Ended

Sep. 30, 2022

Segment Reporting [Abstract]

Segment information

Segment information

We identify our operating segments based on how our chief operating decision maker (“CODM”) allocates resources, assesses performance and makes decisions. Our CODM is our President and Chief Executive Officer. Our CODM evaluates performance and allocates resources to each operating segment based on a profit or loss measure which, at the reportable segment level, excludes the following:

•Corporate expenses - include corporate headquarters costs, regional management costs, currency transaction gains and losses, adjustments to reconcile segment accounting policies to GAAP, and costs related to global initiatives.

•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. Net charges related to a change in the methodology for estimating the allowance for doubtful accounts have been 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 losses has included estimated bad debt expense for uncollectible receivables as well as legal costs to recover losses from insurance. The charges related to the internal losses have been offset by collections of previously reserved receivables and insurance recoveries. Finally, we have also excluded from our segment results estimated charges related to an antitrust legal matter in our Brink's Chile operations.

We manage our business in the following four segments:

•North America – operations in the U.S. and Canada, including the Brink’s Global Services ("BGS") line of business,

•Latin America – operations in Latin American countries where we have an ownership interest, including the BGS line of business. This segment includes operations in Mexico, which was previously reported in the North America segment,

•Europe – total operations in European countries that primarily provide services outside of the BGS line of business, and

•Rest of World – operations in the Middle East, Africa and Asia. This segment also includes total operations in European countries that primarily provide BGS services and BGS activity in Latin American countries where we do not have an ownership interest.

Prior to 2021, all business units within the operating segments followed an internal Brink's accounting policy for determining an allowance for doubtful accounts and recognizing bad debt expense. The allowance amounts reported by the operating segments were then reconciled to the required U.S. GAAP estimated consolidated allowance amount, and any differences were reported as part of Corporate expenses. During the first quarter of 2021, we changed the allowance calculation method of the U.S. business within the North America operating segment, in order to more closely align it with U.S. GAAP requirements. Differences between U.S. GAAP and existing internal policy were not significant for all other business units within the operating segments, and so no other changes were made, and reconciling amounts for those units will continue to be reported as part of Corporate expense. For the North America segment, the impact of this change in reporting was to reduce the segment allowance and to increase segment operating profit by $12.3 million in the first quarter of 2021. There was no net impact to condensed consolidated results, as a corresponding offsetting adjustment occurred on Corporate expenses.

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:

	Revenues			Operating Profit
	Three Months Ended September 30,			Three Months Ended September 30,
(In millions)	2022		2021	2022		2021
Reportable Segments:
North America	$	400.6	360.7	38.2		25.0
Latin America	301.1		289.3	66.5		64.6
Europe	220.0		238.0	25.9		28.1
Rest of World	215.0		187.5	48.3		31.9
Total reportable segments	1,136.7		1,075.5	178.9		149.6
Reconciling Items:
Corporate expenses:
General, administrative and other expenses	—		—	(57.0)		(34.8)
Foreign currency transaction gains (losses)	—		—	3.6		1.4
Reconciliation of segment policies to GAAP(a)	—		—	1.3		(0.3)
Other items not allocated to segments:
Reorganization and Restructuring(b)	—		—	(19.6)		(14.0)
Acquisitions and dispositions(c)	—		—	(35.7)		(16.6)
Argentina highly inflationary impact(d)	—		—	(12.0)		(2.3)
Change in allowance estimate(e)	—		—	0.3		—
Chile antitrust matter(f)	—		—	(0.3)		(9.5)
Internal loss(g)	—		—	—		0.7
Total	$	1,136.7	1,075.5	$	59.5	74.2

	Revenues			Operating Profit
	Nine Months Ended September 30,			Nine Months Ended September 30,
(In millions)	2022		2021	2022		2021
Reportable Segments:
North America	$	1,171.0	1,034.6	96.7		98.4
Latin America	898.7		831.8	194.2		180.4
Europe	668.8		683.2	63.1		57.4
Rest of World	606.1		552.4	120.9		94.2
Total reportable segments	3,344.6		3,102.0	474.9		430.4
Reconciling Items:
Corporate expenses:
General, administrative and other expenses	—		—	(125.4)		(103.4)
Foreign currency transaction gains (losses)	—		—	9.4		1.4
Reconciliation of segment policies to GAAP(a)	—		—	4.0		(11.8)
Other items not allocated to segments:
Reorganization and Restructuring(b)	—		—	(34.0)		(35.7)
Acquisitions and dispositions(c)	—		—	(66.3)		(55.8)
Argentina highly inflationary impact(d)	—		—	(27.1)		(8.8)
Change in allowance estimate(e)	—		—	(16.0)		—
Chile antitrust matter(f)	—		—	(1.1)		(9.5)
Internal loss(g)	—		—	—		2.4
Total	$	3,344.6	3,102.0	$	218.4	209.2

(a)This line item includes adjustments to bad debt expense and a Mexico profit sharing plan accrual reported by the segments to the estimated consolidated amounts required by U.S. GAAP.

(b)Management periodically implements restructuring actions in targeted sections of our business. Due to the unique circumstances around the charges related to these actions, they have not been allocated to segment results.

(c)Certain acquisition and disposition items that are not considered part of the ongoing activities of the business and are special in nature are consistently excluded from segment results. These items include amortization expense for acquisition-related intangible assets and integration, transaction and restructuring costs related to business acquisitions.

(d)We have designated Argentina's economy as highly inflationary for accounting purposes. Currency remeasurement gains and losses related to peso-denominated monetary assets and liabilities as well as incremental expense related to nonmonetary assets are excluded from segment results.

(e)Represents impact of a change in our methodology to estimate our allowance for doubtful accounts in the first quarter of 2022. See Note 1 and Note 10 for further details.

(f)See details regarding the Chile antitrust matter at Note 14.

(g)Represents net credits related to an internal loss in our U.S. global services operations. The credits result from collection of previously reserved accounts receivable.