UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): April 25, 2018
THE BRINK’S COMPANY
(Exact name of registrant as specified in its charter)
Virginia | 001-09148 | 54-1317776 |
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
1801 Bayberry Court
P. O. Box 18100
Richmond, VA 23226-8100
(Address and zip code of
principal executive offices)
Registrant’s telephone number, including area code: (804) 289-9600
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2.):
[ ] | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
[ ] | Soliciting materials pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
[ ] | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
[ ] | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 | Results of Operations and Financial Condition. |
On April 25, 2018, The Brink's Company issued a press release regarding its results for the first quarter ended March 31, 2018. A copy of this release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.
In accordance with General Instruction B.2 of Form 8-K, the information in this Item 2.02 of this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific references in such a filing.
Item 7.01 | Regulation FD Disclosure. |
On April 25, 2018, The Brink's Company provided slides to accompany its earnings presentation. A copy of the slides is furnished as Exhibit 99.2 to this Current Report on Form 8-K.
In accordance with General Instruction B.2 of Form 8-K, the information in this Item 7.01 of this Current Report on Form 8-K, including Exhibit 99.2, shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific references in such a filing.
Item 9.01 | Financial Statements and Exhibits | ||
(d) | Exhibits | ||
99.1 | Press Release, dated April 25, 2018, issued by The Brink's Company | ||
99.2 | Slide presentation of The Brink's Company | ||
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
THE BRINK’S COMPANY (Registrant) | ||
Date: April 25, 2018 | By: | /s/Ronald J. Domanico |
Ronald J. Domanico | ||
Executive Vice President and Chief Financial Officer | ||
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EXHIBIT INDEX
4
 | Exhibit 99.1 | |
Contact: Investor Relations |  |
804.289.9709 | FOR IMMEDIATE RELEASE |
Brink's Reports First-Quarter Results
North America Profits Double, South America Profits up 42%
Acquisitions Contribute $51 Million Revenue and $9 Million Profit to Segment Results
More Acquisitions Expected in 2018 and 2019
RICHMOND, Va., April 25, 2018 – The Brink’s Company (NYSE:BCO), the global leader in cash management, secure logistics and security solutions, today announced results for the first-quarter of 2018 including the following highlights:
(In millions, except for per share amounts) | First-Quarter 2018 | ||||||||||
GAAP | Change | Non-GAAP | Change | ||||||||
Revenue | $ | 879 | +12% | $ | 853 | +15% | |||||
Operating Profit | $ | 65 | (9%) | $ | 72 | +34% | |||||
Operating Margin | 7.4 | % | (160) bps | 8.4 | % | +120 bps | |||||
Net Income / Adjusted EBITDA(a) | $ | 22 | (36%) | $ | 110 | +25% | |||||
EPS | $ | 0.42 | (37%) | $ | 0.65 | +12% | |||||
(a) | The non-GAAP financial metric, adjusted EBITDA, is presented with its corresponding GAAP metric, net income attributable to Brink's. |
Doug Pertz, president and chief executive officer, said: “Our first-quarter non-GAAP results, which include a 34% increase in operating profit on revenue growth of 15%, reflect strong operating leverage and a continuation of the profit momentum we achieved in 2017. It’s clear that our strategy to accelerate profitable growth, both organically and through accretive acquisitions, is working.
“As we move through 2018, we expect operating profit margin improvement to accelerate as organic initiatives gain momentum, and as we achieve further growth from the six acquisitions we completed last year. We expect increased profit growth in the second half from normal seasonality and the addition of the Rodoban acquisition in Brazil. We also remain committed to driving additional growth by pursuing synergistic acquisitions. Including our pending $145 million investment in Rodoban, we expect to invest approximately $800 million in new acquisitions between now and the end of 2019.”
First-quarter non-GAAP operating profit increased 34% despite higher corporate expenses due in part to increased security-related costs that are expected to decline in subsequent quarters. Earnings were affected by a higher tax rate and higher interest costs related primarily to borrowings to support completed and potential acquisitions.
Brink’s affirmed its 2018 non-GAAP guidance, which includes revenue growth of 8% to approximately $3.45 billion, operating profit growth of at least 30% to a range between $365 million and $385 million, earnings growth to a range between $3.65 and $3.85 per share, and adjusted EBITDA growth of approximately $100 million to a range between $515 million and $535 million. For 2019, Brink’s continues to target $625 million of adjusted EBITDA.
The company’s 2018 guidance and 2019 adjusted EBITDA target assume annual organic revenue growth of approximately 5%, supplemented by contributions from the six acquisitions closed in 2017 and from Rodoban, which is expected to close around mid-year. Upon completion of the Rodoban acquisition, total expenditures on acquisitions since March 2017 will be approximately $510 million. These acquisitions are expected to generate adjusted EBITDA of
$60 million to $70 million in 2018 and approximately $90 million with synergies through 2019, reflecting an average post-synergy purchase multiple of less than six.
Conference Call
Brink’s will host a conference call on April 25 at 8:30 a.m. ET to review first-quarter results. Interested parties can listen by calling 888-349-0094 (in the U.S.) or 412-902-0124 (international). Participants can pre-register at http://dpregister.com/10118824 to receive a direct dial-in number for the call. The call also will be accessible live via webcast on the Brink’s website (www.brinks.com). To access the webcast and related earnings material, click here. A replay of the call will be available through May 25, 2018, at 877-344-7529 (in the U.S.) or 412-317-0088 (international). The conference number is 10118824. An archived version of the webcast will be available online in the Investor Relations section of www.brinks.com or by clicking here.
2018 Guidance (Unaudited)
(In millions except as noted)
2017 GAAP | 2017 Non-GAAP(a) | 2018 GAAP Outlook(b) | Reconciling Items(a) | 2018 Non-GAAP Outlook(a) | |||||||||||
Revenues | $ | 3,347 | 3,193 | 3,476 | (26 | ) | 3,450 | ||||||||
Operating profit | 274 | 281 | 319 – 339 | 46 | 365 – 385 | ||||||||||
Nonoperating expense | (92 | ) | (33 | ) | (87) – (91) | 38 | (49) – (53) | ||||||||
Provision for income taxes | (158 | ) | (85 | ) | (97) – (104) | — | (117) – (123) | ||||||||
Noncontrolling interests | (7 | ) | (6 | ) | (8 | ) | — | (7 | ) | ||||||
Income from continuing operations attributable to Brink's | 17 | 157 | 127 – 137 | — | 192 – 202 | ||||||||||
EPS from continuing operations attributable to Brink's | $ | 0.33 | 3.03 | 2.40 – 2.60 | — | 3.65 – 3.85 | |||||||||
Operating profit margin | 8.2 | % | 8.8 | % | 9.2% – 9.8% | 1.4 | % | 10.6% – 11.2% | |||||||
Effective income tax rate | 86.9 | % | 34.2 | % | 42.0 | % | — | 37.0 | % | ||||||
Adjusted EBITDA | 425 | 515 – 535 | |||||||||||||
Changes from 2017 | Revenue Change | Operating Profit Change | EPS Change | ||||||||||||||||
2018 GAAP Outlook(b) | % Change vs. 2017 | 2018 Non-GAAP Outlook(a) | % Change vs. 2017 | 2018 GAAP Outlook(b) | 2018 Non-GAAP Outlook(a) | 2018 Non-GAAP Outlook(a) | |||||||||||||
Organic | 392 | 12 | 160 | 5 | 91 – 111 | 75 – 95 | 0.54 – 0.74 | ||||||||||||
Acquisitions / Dispositions(c) | 110 | 3 | 110 | 3 | (18 | ) | 28 | 0.33 | |||||||||||
Currency | (373 | ) | (11 | ) | (13 | ) | — | (28 | ) | (19 | ) | (0.25 | ) | ||||||
Total | 129 | 4 | 257 | 8 | 45 – 65 | 84 – 104 | 0.62 – 0.82 | ||||||||||||
Amounts may not add due to rounding
(a) | The 2017 Non-GAAP amounts are reconciled to the corresponding GAAP items on pages 8-10. The 2018 Non-GAAP outlook amounts for operating profit and nonoperating expense exclude the impact of other items not allocated to segments and certain retirement plan costs. The 2018 Non-GAAP outlook amounts for provision for income taxes, noncontrolling interests, income from continuing operations, EPS from continuing operations, effective income tax rate and Adjusted EBITDA cannot be reconciled to GAAP without unreasonable effort. We cannot reconcile these amounts to GAAP because we are unable to accurately forecast the tax impact of Venezuela operations and the related exchange rates used to measure those operations. |
(b) | 2018 GAAP outlook includes the actual impact of Venezuela operations through March 31, 2018, but does not include any forecasted amounts from Venezuela operations for the remainder of 2018. The 2018 GAAP outlook excludes future restructuring actions for which the timing and amount are currently under review. |
(c) | 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. |
The Brink’s Company and subsidiaries
(In millions, except for per share amounts) (Unaudited)
First-Quarter 2018 vs. 2017
GAAP | Organic | Acquisitions / | % Change | |||||||||||||||||||
1Q'17 | Change | Dispositions(a) | Currency(b) | 1Q'18 | Total | Organic | ||||||||||||||||
Revenues: | ||||||||||||||||||||||
North America | $ | 305 | 5 | 2 | 8 | 320 | 5 | 2 | ||||||||||||||
South America | 202 | 36 | 37 | (20 | ) | 255 | 26 | 18 | ||||||||||||||
Rest of World | 234 | 4 | 12 | 29 | 278 | 19 | 2 | |||||||||||||||
Revenues non-GAAP | $ | 740 | 45 | 51 | 17 | 853 | 15 | 6 | ||||||||||||||
Other items not allocated to segments(d) | 48 | 338 | — | (360 | ) | 26 | (46 | ) | fav | |||||||||||||
Revenues - GAAP | $ | 788 | 383 | 51 | (343 | ) | 879 | 12 | 49 | |||||||||||||
Operating profit: | ||||||||||||||||||||||
North America | $ | 10 | 9 | — | 1 | 21 | fav | 90 | ||||||||||||||
South America | 39 | 16 | 7 | (7 | ) | 56 | 42 | 42 | ||||||||||||||
Rest of World | 25 | (3 | ) | 1 | 2 | 26 | 1 | (11 | ) | |||||||||||||
Segment operating profit | 75 | 23 | 9 | (5 | ) | 102 | 36 | 30 | ||||||||||||||
Corporate(c) | (21 | ) | (10 | ) | — | 1 | (30 | ) | 42 | 46 | ||||||||||||
Operating profit - non-GAAP | $ | 54 | 13 | 9 | (4 | ) | 72 | 34 | 24 | |||||||||||||
Other items not allocated to segments(d) | 17 | (9 | ) | (7 | ) | (9 | ) | (7 | ) | unfav | (49 | ) | ||||||||||
Operating profit (loss) - GAAP | $ | 71 | 4 | 2 | (13 | ) | 65 | (9 | ) | 6 | ||||||||||||
GAAP interest expense | (5 | ) | (15 | ) | unfav | |||||||||||||||||
GAAP interest and other income (expense) | (11 | ) | (13 | ) | 17 | |||||||||||||||||
GAAP provision for income taxes | 14 | 11 | (21 | ) | ||||||||||||||||||
GAAP noncontrolling interests | 6 | 3 | (45 | ) | ||||||||||||||||||
GAAP income (loss) from continuing operations(f) | 35 | 22 | (36 | ) | ||||||||||||||||||
GAAP EPS(f) | $ | 0.67 | 0.42 | (37 | ) | |||||||||||||||||
GAAP weighted-average diluted shares | 51.5 | 52.1 | 1 | |||||||||||||||||||
Non-GAAP(e) | Organic | Acquisitions / | % Change | |||||||||||||||||
1Q'17 | Change | Dispositions(a) | Currency(b) | 1Q'18 | Total | Organic | ||||||||||||||
Segment revenues - GAAP/non-GAAP | $ | 740 | 45 | 51 | 17 | 853 | 15 | 6 | ||||||||||||
Non-GAAP operating profit | 54 | 13 | 9 | (4 | ) | 72 | 34 | 24 | ||||||||||||
Non-GAAP interest expense | (5 | ) | (15 | ) | unfav | |||||||||||||||
Non-GAAP interest and other income (expense) | (1 | ) | 1 | fav | ||||||||||||||||
Non-GAAP provision for income taxes | 16 | 21 | 30 | |||||||||||||||||
Non-GAAP noncontrolling interests | 1 | 2 | 57 | |||||||||||||||||
Non-GAAP income from continuing operations(f) | 30 | 34 | 13 | |||||||||||||||||
Non-GAAP EPS(f) | $ | 0.58 | 0.65 | 12 | ||||||||||||||||
Non-GAAP weighted-average diluted shares | 51.5 | 52.1 | 1 | |||||||||||||||||
Amounts may not add due to rounding.
(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 Venezuela devaluations and the sum of monthly currency changes. Monthly currency changes represent the accumulation throughout the year of the impact on current period results from 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 of public companies. |
(d) | See pages 6-7 for more information. |
(e) | Non-GAAP results are reconciled to applicable GAAP results on pages 8-10. |
(f) | Attributable to Brink's. |
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The Brink’s Company and subsidiaries
(In millions) (Unaudited)
Selected Items - Condensed Consolidated Balance Sheets
December 31, 2017 | March 31, 2018 | |||||
Assets | ||||||
Cash and cash equivalents | $ | 614.3 | 562.2 | |||
Restricted cash | 112.6 | 159.4 | ||||
Accounts receivable, net | 642.3 | 633.9 | ||||
Property and equipment, net | 640.9 | 659.7 | ||||
Goodwill and intangibles | 559.4 | 543.4 | ||||
Deferred income taxes | 226.2 | 233.3 | ||||
Other | 263.9 | 307.2 | ||||
Total assets | $ | 3,059.6 | 3,099.1 | |||
Liabilities and Equity | ||||||
Accounts payable | 174.6 | 162.8 | ||||
Debt | 1,236.7 | 1,255.7 | ||||
Retirement benefits | 571.6 | 565.9 | ||||
Accrued liabilities | 488.5 | 453.2 | ||||
Other | 250.0 | 295.0 | ||||
Total liabilities | 2,721.4 | 2,732.6 | ||||
Equity | 338.2 | 366.5 | ||||
Total liabilities and equity | $ | 3,059.6 | 3,099.1 | |||
Selected Items - Condensed Consolidated Statements of Cash Flows
Three Months Ended March 31, | ||||||
2017 | 2018 | |||||
Net cash provided by operating activities | $ | 39.4 | 56.8 | |||
Net cash used by investing activities | (49.2 | ) | (48.6 | ) | ||
Net cash provided (used) by financing activities | 52.8 | (13.8 | ) | |||
Effect of exchange rate changes on cash | 6.9 | 0.3 | ||||
Cash, cash equivalents and restricted cash: | ||||||
Increase (decrease) | 49.9 | (5.3 | ) | |||
Balance at beginning of period | 239.0 | 726.9 | ||||
Balance at end of period | $ | 288.9 | 721.6 | |||
Supplemental Cash Flow Information | ||||||
Capital expenditures | $ | (27.8 | ) | (36.7 | ) | |
Acquisitions | (14.2 | ) | — | |||
Depreciation and amortization | 33.9 | 38.8 | ||||
Cash paid for income taxes, net | (17.9 | ) | (20.5 | ) | ||
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About The Brink’s Company
The Brink’s Company (NYSE:BCO) is the global leader in cash management, secure logistics and security solutions including cash-in-transit, ATM services, cash management services (including vault outsourcing, money processing and intelligent safe services), international transportation of valuables, and payment services. Our customers include financial institutions, retailers, government agencies, mints, jewelers and other commercial operations. Our global network of operations in 41 countries serve customers in more than 100 countries. For more information, please visit our website at www.Brinks.com or call 804-289-9709.
Forward-Looking Statements
This release contains forward-looking information. Words such as "anticipate," "assume," "estimate," "expect," “target” "project," "predict," "intend," "plan," "believe," "potential," "may," "should" and similar expressions may identify forward-looking information. Forward-looking information in these materials includes, but is not limited to: 2018 GAAP and non-GAAP outlook, including revenue, organic growth, operating profit, operating profit margin, expected currency impact and impact of acquisitions, tax rate, and adjusted EBITDA, the impact of Venezuela operations and related exchange rates and expected costs related to Reorganization and Restructuring activities, 2019 non-GAAP adjusted EBITDA outlook and the expected contributions from acquisitions, the expected closing of the acquisition of Rodoban and the expected investment in acquisitions in 2018 and 2019. Forward-looking information in this document is subject to known and unknown risks, uncertainties and contingencies, which are difficult to predict or quantify, and which could cause actual results, performance or achievements to differ materially from those that are anticipated.
These risks, uncertainties and contingencies, many of which are beyond our control, include, but are not limited to: our ability to improve profitability and execute further cost and operational improvement 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, 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; 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 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 and environmental 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 critical accounting policies; the promulgation and adoption of new accounting standards, new government regulations and interpretation of existing standards and regulations.
This list of risks, uncertainties and contingencies is not intended to be exhaustive. Additional factors that could cause our results to differ materially from those described in the forward-looking statements can be found under "Risk Factors" in Item 1A of our Annual Report on Form 10-K for the period ended December 31, 2017, and in our other public filings with the Securities and Exchange Commission. The forward-looking information included in this document is representative only as of the date of this document and The Brink's Company undertakes no obligation to update any information contained in this document.
5
The Brink’s Company and subsidiaries
Segment Results: 2017 and 2018 (Unaudited)
(In millions, except for percentages)
Revenues | |||||||||||||||||||
2017 | 2018 | ||||||||||||||||||
1Q | 2Q | 3Q | 4Q | Full Year | 1Q | ||||||||||||||
Revenues: | |||||||||||||||||||
North America | $ | 304.6 | 311.0 | 316.5 | 322.1 | 1,254.2 | $ | 320.1 | |||||||||||
South America | 202.2 | 204.6 | 247.4 | 270.4 | 924.6 | 254.8 | |||||||||||||
Rest of World | 233.5 | 244.0 | 264.8 | 271.8 | 1,014.1 | 278.4 | |||||||||||||
Segment revenues - GAAP and Non-GAAP | 740.3 | 759.6 | 828.7 | 864.3 | 3,192.9 | 853.3 | |||||||||||||
Other items not allocated to segments(a) | |||||||||||||||||||
Venezuela operations | 48.1 | 46.3 | 20.8 | 38.9 | 154.1 | 25.8 | |||||||||||||
GAAP | $ | 788.4 | 805.9 | 849.5 | 903.2 | 3,347.0 | $ | 879.1 | |||||||||||
Operating Profit | |||||||||||||||||||
2017 | 2018 | ||||||||||||||||||
1Q | 2Q | 3Q | 4Q | Full Year | 1Q | ||||||||||||||
Operating profit: | |||||||||||||||||||
North America | $ | 10.2 | 16.8 | 16.9 | 30.1 | 74.0 | $ | 20.6 | |||||||||||
South America | 39.2 | 36.4 | 47.7 | 59.5 | 182.8 | 55.6 | |||||||||||||
Rest of World | 25.4 | 25.4 | 33.3 | 31.1 | 115.2 | 25.6 | |||||||||||||
Corporate | (21.3 | ) | (17.8 | ) | (21.5 | ) | (30.0 | ) | (90.6 | ) | (30.3 | ) | |||||||
Non-GAAP | 53.5 | 60.8 | 76.4 | 90.7 | 281.4 | 71.5 | |||||||||||||
Other items not allocated to segments(a) | |||||||||||||||||||
Venezuela operations | 21.1 | (4.5 | ) | 2.5 | 1.3 | 20.4 | 3.5 | ||||||||||||
Reorganization and Restructuring | (4.1 | ) | (5.6 | ) | (6.4 | ) | (6.5 | ) | (22.6 | ) | (3.7 | ) | |||||||
Acquisitions and dispositions | 0.4 | (2.4 | ) | (6.1 | ) | 2.8 | (5.3 | ) | (6.5 | ) | |||||||||
GAAP | $ | 70.9 | 48.3 | 66.4 | 88.3 | 273.9 | $ | 64.8 | |||||||||||
Margin | |||||||||||||||||||
2017 | 2018 | ||||||||||||||||||
1Q | 2Q | 3Q | 4Q | Full Year | 1Q | ||||||||||||||
Margin: | |||||||||||||||||||
North America | 3.3 | % | 5.4 | 5.3 | 9.3 | 5.9 | 6.4 | % | |||||||||||
South America | 19.4 | 17.8 | 19.3 | 22.0 | 19.8 | 21.8 | |||||||||||||
Rest of World | 10.9 | 10.4 | 12.6 | 11.4 | 11.4 | 9.2 | |||||||||||||
Non-GAAP | 7.2 | 8.0 | 9.2 | 10.5 | 8.8 | 8.4 | |||||||||||||
Other items not allocated to segments(a) | 1.8 | (2.0 | ) | (1.4 | ) | (0.7 | ) | (0.6 | ) | (1.0 | ) | ||||||||
GAAP | 9.0 | % | 6.0 | 7.8 | 9.8 | 8.2 | 7.4 | % | |||||||||||
(a) | See explanation of items on page 7. |
6
The Brink’s Company and subsidiaries
Other Items Not Allocated To Segments (Unaudited)
(In millions)
Brink’s measures its segment results before income and expenses for corporate activities and for certain other items. See below for a summary of the other items not allocated to segments.
Venezuela operations We have excluded from our segment results all of our Venezuela operating results, due to the Venezuelan government's restrictions that have prevented us from repatriating funds. As a result, the Chief Executive Officer, the Company's Chief Operating Decision maker ("CODM"), assesses segment performance and makes resource decisions by segment excluding Venezuela operating results.
Reorganization and Restructuring
2016 Restructuring
In the fourth quarter of 2016, management implemented restructuring actions across our global business operations and our corporate functions. As a result of these actions, we recognized $18.1 million in related 2016 costs, an additional $17.3 million in 2017 and $2.7 million in the first three months of 2018. We expect to incur additional costs between $7 and $9 million in future periods, primarily severance costs.
Other Restructurings
Management routinely implements restructuring actions in targeted sections of our business. As a result of these actions, we recognized $1.0 million in the first three months of 2018, primarily severance costs. For the current restructuring actions, we expect to incur additional costs between $1 and $3 million in future periods.
Due to the unique circumstances around these charges, these management-directed items have not been allocated to segment results and are excluded from non-GAAP results.
Acquisitions and dispositions 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 non-GAAP results. These items are described below:
2018 Acquisitions and Dispositions
• | Amortization expense for acquisition-related intangible assets was $3.8 million in the first three months of 2018. |
• | Severance costs related to our 2017 acquisitions in Argentina, France and Brazil were $2.1 million in the first three months of 2018. |
• | Transaction costs related to business acquisitions was $0.5 million in the first three months of 2018. |
2017 Acquisitions and Dispositions
• | Amortization expense for acquisition-related intangible assets was $8.4 million in 2017. |
• | Fourth quarter 2017 gain of $7.8 million related to the sale of real estate in Mexico. |
• | Severance costs of $4.0 million related to our recent acquisitions in Argentina and Brazil. |
• | Transaction costs of $2.6 million related to acquisitions of new businesses in 2017. |
• | Currency transaction gains of $1.8 million related to acquisition activity. |
7
The Brink’s Company and subsidiaries
Non-GAAP Results Reconciled to GAAP (Unaudited)
(In millions, except for percentages and per share amounts)
Non-GAAP results described in this press release are financial measures that are not required by or presented in accordance with U.S. generally accepted accounting principles (“GAAP”). The purpose of the Non-GAAP results is to report financial information from the primary operations of our business by excluding the effects of certain income and expenses that do not reflect the ordinary earnings of our operations. The specific items excluded have not been allocated to segments, are described on page 7 and in more detail in our Form 10-Q, and are reconciled to comparable GAAP measures below.
Non-GAAP results adjust the quarterly Non-GAAP tax rates so that the Non-GAAP tax rate in each of the quarters is equal to the full-year estimated Non-GAAP tax rate. The full-year Non-GAAP tax rate in both years excludes certain pretax and income tax amounts. Amounts reported for prior periods have been updated in this report to present information consistently for all periods presented.
The 2018 Non-GAAP outlook amounts for provision for income taxes, income (loss) from continuing operations, EPS from continuing operations, effective income tax rate and Adjusted EBITDA cannot be reconciled to GAAP without unreasonable effort. We cannot reconcile these amounts to GAAP because we are unable to accurately forecast the tax impact of Venezuela operations and the related exchange rates used to measure those operations. The impact of Venezuela operations and related exchange rates during the remainder of 2018 could be significant to our full-year GAAP provision for income taxes, and, therefore, to income (loss) from continuing operations, EPS from continuing operations, effective income tax rate and Adjusted EBITDA.
The Non-GAAP financial measures are intended to provide investors with a supplemental comparison of our operating results and trends for the periods presented. Our management believes these measures are also useful to investors as such measures allow investors to evaluate our performance using the same metrics that our management uses to evaluate past performance and prospects for future performance. 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. Additionally, non-GAAP results are utilized as performance measures in certain management incentive compensation plans.
Non-GAAP Results Reconciled to GAAP
YTD '17 | YTD '18 | ||||||||||||||||||
Pre-tax | Tax | Effective tax rate | Pre-tax | Tax | Effective tax rate | ||||||||||||||
Effective Income Tax Rate | |||||||||||||||||||
GAAP | $ | 54.9 | 14.4 | 26.2 | % | $ | 36.7 | 11.4 | 31.1 | % | |||||||||
Retirement plans(c) | 7.3 | 2.7 | 8.8 | 1.9 | |||||||||||||||
Venezuela operations(a) | (18.2 | ) | (4.9 | ) | (1.6 | ) | (1.5 | ) | |||||||||||
Reorganization and Restructuring(a) | 4.1 | 1.4 | 3.7 | 1.2 | |||||||||||||||
Acquisitions and dispositions(a) | (0.4 | ) | 0.2 | 9.6 | 3.1 | ||||||||||||||
Tax on accelerated income(g) | — | — | — | 0.5 | |||||||||||||||
Income tax rate adjustment(b) | — | 2.5 | — | 4.6 | |||||||||||||||
Non-GAAP | $ | 47.7 | 16.3 | 34.2 | % | $ | 57.2 | 21.2 | 37.0 | % | |||||||||
Amounts may not add due to rounding.
(a) | See “Other Items Not Allocated To Segments” on pages 6-7 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. |
(b) | 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 37.0% for 2018 and was 34.2% for 2017. |
(c) | 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. |
(d) | Penalties upon prepayment of Private Placement notes in September 2017 and a term loan in October 2017. |
(e) | Related to an unfavorable court ruling in the third quarter of 2017 on a non-income tax claim in Brazil. The court ruled that Brink's must pay interest accruing from the initial claim filing in 1994 to the current date. The principal amount of the claim was approximately $1 million and was recognized in selling, general and administrative expenses in the third quarter of 2017. |
(f) | Represents the estimated impact of tax legislation enacted into law in the fourth quarter of 2017. This primarily relates to the U.S. Tax Reform expense from the remeasurement of our net deferred tax assets. |
(g) | The non-GAAP tax rate excludes the 2018 and 2017 foreign tax benefits that resulted from the transaction that accelerated U.S. tax in 2015. |
(h) | There is no difference between GAAP and non-GAAP share-based compensation amounts for the periods presented. |
(i) | Adjusted EBITDA is defined as non-GAAP income from continuing operations excluding the impact of non-GAAP interest expense, non-GAAP income tax provision, non-GAAP depreciation and amortization and non-GAAP share-based compensation. |
(j) | Because we reported a loss from continuing operations on a GAAP basis in the fourth quarter of 2017, GAAP EPS was calculated using basic shares. However, as we reported income from continuing operations on a non-GAAP basis in the fourth quarter of 2017, non-GAAP EPS was calculated using diluted shares. |
8
The Brink’s Company and subsidiaries
Non-GAAP Results Reconciled to GAAP (Unaudited) - continued
(In millions, except for percentages and per share amounts)
2017 | 2018 | ||||||||||||||||||
1Q | 2Q | 3Q | 4Q | Full Year | 1Q | ||||||||||||||
Revenues: | |||||||||||||||||||
GAAP | $ | 788.4 | 805.9 | 849.5 | 903.2 | 3,347.0 | $ | 879.1 | |||||||||||
Venezuela operations(a) | (48.1 | ) | (46.3 | ) | (20.8 | ) | (38.9 | ) | (154.1 | ) | (25.8 | ) | |||||||
Non-GAAP | $ | 740.3 | 759.6 | 828.7 | 864.3 | 3,192.9 | $ | 853.3 | |||||||||||
Operating profit (loss): | |||||||||||||||||||
GAAP | $ | 70.9 | 48.3 | 66.4 | 88.3 | 273.9 | $ | 64.8 | |||||||||||
Venezuela operations(a) | (21.1 | ) | 4.5 | (2.5 | ) | (1.3 | ) | (20.4 | ) | (3.5 | ) | ||||||||
Reorganization and Restructuring(a) | 4.1 | 5.6 | 6.4 | 6.5 | 22.6 | 3.7 | |||||||||||||
Acquisitions and dispositions(a) | (0.4 | ) | 2.4 | 6.1 | (2.8 | ) | 5.3 | 6.5 | |||||||||||
Non-GAAP | $ | 53.5 | 60.8 | 76.4 | 90.7 | 281.4 | $ | 71.5 | |||||||||||
Operating margin: | |||||||||||||||||||
GAAP margin | 9.0 | % | 6.0 | % | 7.8 | % | 9.8 | % | 8.2 | % | 7.4 | % | |||||||
Non-GAAP margin | 7.2 | % | 8.0 | % | 9.2 | % | 10.5 | % | 8.8 | % | 8.4 | % | |||||||
Interest expense: | |||||||||||||||||||
GAAP | $ | (4.8 | ) | (6.0 | ) | (7.7 | ) | (13.7 | ) | (32.2 | ) | $ | (15.0 | ) | |||||
Venezuela operations(a) | — | — | — | 0.1 | 0.1 | — | |||||||||||||
Acquisitions and dispositions(a) | — | — | 0.8 | 0.3 | 1.1 | 0.2 | |||||||||||||
Non-GAAP | $ | (4.8 | ) | (6.0 | ) | (6.9 | ) | (13.3 | ) | (31.0 | ) | $ | (14.8 | ) | |||||
Interest and other income (expense): | |||||||||||||||||||
GAAP | $ | (11.2 | ) | (11.4 | ) | (21.2 | ) | (16.4 | ) | (60.2 | ) | $ | (13.1 | ) | |||||
Retirement plans(c) | 7.3 | 8.6 | 9.0 | 10.0 | 34.9 | 8.8 | |||||||||||||
Venezuela operations(a) | 2.9 | 2.2 | 0.9 | 0.8 | 6.8 | 1.9 | |||||||||||||
Acquisitions and dispositions(a) | — | — | — | 6.3 | 6.3 | 2.9 | |||||||||||||
Prepayment penalties(d) | — | — | 6.5 | 1.8 | 8.3 | — | |||||||||||||
Interest on Brazil tax claim(e) | — | — | 4.1 | (2.5 | ) | 1.6 | — | ||||||||||||
Non-GAAP | $ | (1.0 | ) | (0.6 | ) | (0.7 | ) | — | (2.3 | ) | $ | 0.5 | |||||||
Taxes: | |||||||||||||||||||
GAAP | $ | 14.4 | 17.3 | 16.4 | 109.6 | 157.7 | $ | 11.4 | |||||||||||
Retirement plans(c) | 2.7 | 3.1 | 3.2 | 3.6 | 12.6 | 1.9 | |||||||||||||
Venezuela operations(a) | (4.9 | ) | (3.8 | ) | (3.1 | ) | (0.9 | ) | (12.7 | ) | (1.5 | ) | |||||||
Reorganization and Restructuring(a) | 1.4 | 1.9 | 2.2 | 2.1 | 7.6 | 1.2 | |||||||||||||
Acquisitions and dispositions(a) | 0.2 | 0.3 | 2.5 | 1.5 | 4.5 | 3.1 | |||||||||||||
Prepayment penalties(d) | — | — | 2.4 | (2.2 | ) | 0.2 | — | ||||||||||||
Interest on Brazil tax claim(e) | — | — | 1.4 | (0.9 | ) | 0.5 | — | ||||||||||||
Tax reform(f) | — | — | — | (86.0 | ) | (86.0 | ) | — | |||||||||||
Tax on accelerated income(g) | — | — | — | 0.4 | 0.4 | 0.5 | |||||||||||||
Income tax rate adjustment(b) | 2.5 | (0.3 | ) | (1.5 | ) | (0.7 | ) | — | 4.6 | ||||||||||
Non-GAAP | $ | 16.3 | 18.5 | 23.5 | 26.5 | 84.8 | $ | 21.2 | |||||||||||
Noncontrolling interests: | |||||||||||||||||||
GAAP | $ | 5.8 | (0.7 | ) | 1.2 | 0.6 | 6.9 | $ | 3.2 | ||||||||||
Venezuela operations(a) | (4.9 | ) | 2.2 | 0.6 | 0.5 | (1.6 | ) | (0.6 | ) | ||||||||||
Reorganization and Restructuring(a) | 0.3 | 0.1 | 0.2 | 0.2 | 0.8 | — | |||||||||||||
Income tax rate adjustment(b) | 0.2 | — | (0.2 | ) | — | — | (0.4 | ) | |||||||||||
Non-GAAP | $ | 1.4 | 1.6 | 1.8 | 1.3 | 6.1 | $ | 2.2 | |||||||||||
Amounts may not add due to rounding.
See page 8 for footnote explanations.
9
2017 | 2018 | ||||||||||||||||||
1Q | 2Q | 3Q | 4Q | Full Year | 1Q | ||||||||||||||
Income (loss) from continuing operations attributable to Brink's: | |||||||||||||||||||
GAAP | $ | 34.7 | 14.3 | 19.9 | (52.0 | ) | 16.9 | $ | 22.1 | ||||||||||
Retirement plans(c) | 4.6 | 5.5 | 5.8 | 6.4 | 22.3 | 6.9 | |||||||||||||
Venezuela operations(a) | (8.4 | ) | 8.3 | 0.9 | — | 0.8 | 0.5 | ||||||||||||
Reorganization and Restructuring(a) | 2.4 | 3.6 | 4.0 | 4.2 | 14.2 | 2.5 | |||||||||||||
Acquisitions and dispositions(a) | (0.6 | ) | 2.1 | 4.4 | 2.3 | 8.2 | 6.5 | ||||||||||||
Prepayment penalties(d) | — | — | 4.1 | 4.0 | 8.1 | — | |||||||||||||
Interest on Brazil tax claim(e) | — | — | 2.7 | (1.6 | ) | 1.1 | — | ||||||||||||
Tax reform(f) | — | — | — | 86.0 | 86.0 | — | |||||||||||||
Tax on accelerated income(g) | — | — | — | (0.4 | ) | (0.4 | ) | (0.5 | ) | ||||||||||
Income tax rate adjustment(b) | (2.7 | ) | 0.3 | 1.7 | 0.7 | — | (4.2 | ) | |||||||||||
Non-GAAP | $ | 30.0 | 34.1 | 43.5 | 49.6 | 157.2 | $ | 33.8 | |||||||||||
Adjusted EBITDA(i): | |||||||||||||||||||
Net income (loss) attributable to Brink's - GAAP | $ | 34.7 | 14.2 | 19.9 | (52.1 | ) | 16.7 | $ | 22.3 | ||||||||||
Interest expense - GAAP | 4.8 | 6.0 | 7.7 | 13.7 | 32.2 | 15.0 | |||||||||||||
Income tax provision - GAAP | 14.4 | 17.3 | 16.4 | 109.6 | 157.7 | 11.4 | |||||||||||||
Depreciation and amortization - GAAP | 33.9 | 34.6 | 37.9 | 40.2 | 146.6 | 38.8 | |||||||||||||
EBITDA | 87.8 | 72.1 | 81.9 | 111.4 | 353.2 | 87.5 | |||||||||||||
Discontinued operations - GAAP | — | 0.1 | — | 0.1 | 0.2 | (0.2 | ) | ||||||||||||
Retirement plans(c) | 7.3 | 8.6 | 9.0 | 10.0 | 34.9 | 8.8 | |||||||||||||
Venezuela operations(a) | (13.7 | ) | 4.1 | (2.6 | ) | (1.5 | ) | (13.7 | ) | (1.5 | ) | ||||||||
Reorganization and Restructuring(a) | 2.9 | 4.9 | 5.7 | 6.1 | 19.6 | 2.5 | |||||||||||||
Acquisitions and dispositions(a) | (1.0 | ) | 1.3 | 3.4 | (0.5 | ) | 3.2 | 5.6 | |||||||||||
Prepayment penalties(d) | — | — | 6.5 | 1.8 | 8.3 | — | |||||||||||||
Interest on Brazil tax claim(e) | — | — | 4.1 | (2.5 | ) | 1.6 | — | ||||||||||||
Income tax rate adjustment(b) | (0.2 | ) | — | 0.2 | — | — | 0.4 | ||||||||||||
Share-based compensation(h) | 4.5 | 4.0 | 4.0 | 5.2 | 17.7 | 6.8 | |||||||||||||
Adjusted EBITDA | $ | 87.6 | 95.1 | 112.2 | 130.1 | 425.0 | $ | 109.9 | |||||||||||
EPS: | |||||||||||||||||||
GAAP | $ | 0.67 | 0.28 | 0.38 | (1.02 | ) | 0.33 | $ | 0.42 | ||||||||||
Retirement plans(c) | 0.09 | 0.11 | 0.11 | 0.12 | 0.43 | 0.13 | |||||||||||||
Venezuela operations(a) | (0.16 | ) | 0.15 | 0.02 | — | 0.02 | 0.01 | ||||||||||||
Reorganization and Restructuring costs(a) | 0.04 | 0.07 | 0.08 | 0.08 | 0.27 | 0.05 | |||||||||||||
Acquisitions and dispositions(a) | (0.01 | ) | 0.04 | 0.09 | 0.05 | 0.16 | 0.12 | ||||||||||||
Prepayment penalties(d) | — | — | 0.08 | 0.08 | 0.16 | — | |||||||||||||
Interest on Brazil tax claim(e) | — | — | 0.05 | (0.03 | ) | 0.02 | — | ||||||||||||
Tax reform(f) | — | — | — | 1.65 | 1.66 | — | |||||||||||||
Tax on accelerated income(g) | — | — | — | (0.01 | ) | (0.01 | ) | (0.01 | ) | ||||||||||
Income tax rate adjustment(b) | (0.05 | ) | 0.01 | 0.03 | 0.01 | — | (0.08 | ) | |||||||||||
Share adjustment(j) | — | — | — | 0.02 | — | — | |||||||||||||
Non-GAAP | $ | 0.58 | 0.66 | 0.84 | 0.95 | 3.03 | $ | 0.65 | |||||||||||
Depreciation and Amortization: | |||||||||||||||||||
GAAP | $ | 33.9 | 34.6 | 37.9 | 40.2 | 146.6 | $ | 38.8 | |||||||||||
Venezuela operations(a) | (0.4 | ) | (0.4 | ) | (0.4 | ) | (0.5 | ) | (1.7 | ) | (0.5 | ) | |||||||
Reorganization and Restructuring costs(a) | (0.9 | ) | (0.6 | ) | (0.5 | ) | (0.2 | ) | (2.2 | ) | (1.2 | ) | |||||||
Acquisitions and dispositions(a) | (0.6 | ) | (1.1 | ) | (2.7 | ) | (4.0 | ) | (8.4 | ) | (3.8 | ) | |||||||
Non-GAAP | $ | 32.0 | 32.5 | 34.3 | 35.5 | 134.3 | $ | 33.3 | |||||||||||
Amounts may not add due to rounding.
See page 8 for footnote explanations.
10
First Quarter 2018
April 25, 2018
Exhibit 99.2
Safe Harbor Statement and Non-GAAP Results
2
These materials contain forward-looking information. Words such as "anticipate," "assume," "estimate," "expect," “target” "project," "predict," "intend,"
"plan," "believe," "potential," "may," "should" and similar expressions may identify forward-looking information. Forward-looking information in these
materials includes, but is not limited to information regarding: 2018 non-GAAP outlook, including revenue, operating profit, margin rate, earnings per
share and adjusted EBITDA; 2018 and future years’ tax rates; 2019 adjusted EBITDA target; 2018 and 2019 margin rate targets for specific
businesses; closing of the Rodoban acquisition; 2018 and 2019 capital expenses and cash flow; expected impact of U.S. Tax Reform; net debt and
leverage outlook and future investment in and results of acquisitions.
Forward-looking information in this document is subject to known and unknown risks, uncertainties and contingencies, which are difficult to predict or
quantify, and which could cause actual results, performance or achievements to differ materially from those that are anticipated. These risks,
uncertainties and contingencies, many of which are beyond our control, include, but are not limited to: our ability to improve profitability and execute
further cost and operational improvement 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, 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; 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 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 critical accounting policies; the promulgation and adoption of new accounting standards, new government
regulations and interpretation of existing standards and regulations.
This list of risks, uncertainties and contingencies is not intended to be exhaustive. Additional factors that could cause our results to differ materially
from those described in the forward-looking statements can be found under "Risk Factors" in Item 1A of our Annual Report on Form 10-K for the
period ended December 31, 2017, and in our other public filings with the Securities and Exchange Commission. The forward-looking information
discussed today and included in these materials is representative as of today only and The Brink's Company undertakes no obligation to update any
information contained in this document.
These materials are copyrighted and may not be used without written permission from Brink's.
Today’s presentation is focused primarily on non-GAAP results. Detailed reconciliations of non-GAAP to GAAP results are included in the appendix
and in the First Quarter 2018 Earnings Release available in the Quarterly Results section of the Brink’s website: www.brinks.com.
First-Quarter 2018 Non-GAAP Results
3
8.2%
Margin
Note: See detailed reconciliations of non-GAAP to GAAP results included in the First Quarter 2018 Earnings Release available in the Quarterly Results section of the
Brink’s website: www.brinks.com.
(Non-GAAP, $ Millions, except EPS)
Op Profit +34%
Organic +24%
Acq +17%
FX (7%)
$54
$72
2017 2018
7.2%
Margin
8.4%
Margin
11.8%
Margin
13.3%
Margin
Revenue +15%
Organic +6%
Acq +7%
FX +2%
$740
$853
2017 2018
Adj. EBITDA +25%
$88
$110
2017 2018
11.8%
Margin
12.9%
Margin
EPS +12%
$0.58
$0.65
2017 2018
1
Excess interest cost,
net and tax impact 10%
or $(0.06) per share
North America: Strong Margin Improvement
4
8.2%
Margin
Op Profit +102%
$10
$21
2017 2018
3.3%
Margin
6.4%
Margin 11.8%
Margin
Revenue +5%
Organic +2%
Acq +1%
FX +3%
$305
$320
2017 2018
Highlights
• Organic revenue: U.S. up 4%, N.A. up 5%
excluding recycler sales in 1Q17
• 6.4% margin, up 310 bps
• Strong growth and continued improvement
in Mexico
• Profits up ~40% in U.S.; up ~70%
excluding recycler sales in 1Q17
• Continued improvement expected
Organic +90%
Acq +3%
FX +9%
($ Millions)
South America: Strong Revenue and Margin Growth
5
8.2%
Margin
Op Profit +42%
$39
$56
2017 2018
19.4%
Margin
21.8%
Margin 11.8%
Margin
Revenue +26%
Organic +18%
Acq +18%
FX (10%)
$202
$255
2017 2018
Highlights
• Strong organic revenue growth throughout
the region
• Acquisition integration on track
• 21.8% margin, up 240 bps
• Positive outlook for continued growth
• Rodoban acquisition (Brazil) expected to
close in mid-2018
Organic +42%
Acq +19%
FX (18%)
($ Millions)
ROW: Growth Offset by Pricing Pressure in France
6
8.2%
Margin
Op Profit +1%
$25
$26
2017 2018
10.9%
Margin
9.2%
Margin
11.8%
Margin
Revenue +19%
Organic +2%
Acq +5%
FX +12%
$234
$278
2017 2018
Highlights
• Revenue growth due to strong euro and
acquisition of Temis in France
• Organic profit decline due to price and
volume pressure in France, partially offset
by growth in other countries
• Expect improvement in France from higher
pricing and cost reductions
• 2019 France 12% margin target affirmed
Organic (11%)
Acq +6%
FX +7%
($ Millions)
$3,193
$3,450
2017 2018
On Track to Meet 2018 Guidance
7
8.2%
Margin
Op Profit
+30% - +37%
$281
$365-$385
2017 2018
8.8%
Margin
~10.9%1
Margin
11.8%
Margin
13.3%
Margin
Revenue
Total +8%
Organic +5%
Acq./Disp. +3%
FX -
Adjusted EBITDA
+21% - +26%
$425
$515-$535
2017 2018
13.3%
Margin
~15.2%1
Margin
EPS
+20% - +27%
$3.03
$3.65-$3.85
2017 2018
1. Margin percentage calculated based on middle of range provided
Note: See detailed reconciliations of non-GAAP to GAAP results included in the First Quarter 2018 Earnings Release available in the Quarterly Results section of the
Brink’s website: www.brinks.com.
2019 Adjusted EBITDA Target = $625 Million
(Non-GAAP, $ Millions except EPS)
Three-Year Strategic Plan
8
Organic Growth + Acquisitions
11.8%
Margin
13.3%
Margin
Organic Growth + Acquisitions = Increased Value for Shareholders
2019 Adjusted EBITDA Target = $625 Million
Strategy 1.0
Core Organic Growth
20182017 2019
Strategy 1.5
Acquisitions
• Focus on “core-core” & “core-adjacent”
• Capture synergies & improve density
• ~$400M/Year Additional Investment in 2018-2019
• Close the Gap
• Accelerate Profitable Growth
• Introduce Differentiated Services
2019 EBITDA Target: $90M
2019 EBITDA Target: $535M
(Acquisitions announced/closed to date)
$216
$390
$90
$470
2016 Actual North
America
South
America
Rest of
World
Contingency 2019 Target
Organic
Completed &
Announced
Acquisitions
2019 Target
w/ Acquisitions
Strategy 1.0 + 1.5 = Core Organic Growth + Acquisitions
9
OP
Margin 7.4% 3.7% 2% 0.4% (2.5%) ~11% ~12%
EBITDA
Margin 11.8% ~15% ~16%
Adjusted
EBITDA
Op Profit
Adjusted
EBITDA
Op Profit
Note: See detailed reconciliations of non-GAAP to GAAP results included in the First Quarter 2018 Earnings Release available in the Quarterly Results section of the
Brink’s website: www.brinks.com.
1. Includes completed and announced acquisitions and partial achievement of synergies through 2019
$342
$535
$625
2019 Adjusted EBITDA Target = $625 Million
1
1
(Non-GAAP, $ Millions)
2016 Actual 2019 Target
Organic Only
Completed &
Announced
Acquisitions
2019 Target with
Completed &
Announced
Acquisitions
Potential
Acquisitions with
Full Synergies
Illustrative EBITDA
with Potential
Acquisitions & Full
Synergies
Strategy 1.0 + 1.5 + Potential Future Acquisitions
10
Note: See detailed reconciliations of non-GAAP to GAAP results included in the First Quarter 2018 Earnings Release available in the Quarterly Results section of the
Brink’s website: www.brinks.com.
1. Includes completed, announced, and potential acquisitions and announced licensing agreement. Potential acquisition impact based on spending $400 million in
2018 and 2019 with synergies fully realized.
$625$90
$535
$342
$110 - $140 $735 - $765
Adjusted
EBITDA
1
(Non-GAAP, $ Millions)
11.8%
Adjusted
EBITDA
Margin
~16%~15%
1
Illustrative EBITDA Post-Synergy Potential with $400M of Acquisitions in 2018-2019
$740 $17
$45
$51 $853
2017
Revenue
FX Organic Acq / Disp 2018
Revenue
First-Quarter 2018 Non-GAAP Revenue Up 15%
11Note: See detailed reconciliations of non-GAAP to GAAP results included in the First Quarter 2018 Earnings Release available in the Quarterly Results section of the
Brink’s website: www.brinks.com. Amounts may not add due to rounding.
2%% Change 6% 7%
Strong Organic and Inorganic Growth
(Non-GAAP, $ Millions)
$54 ($4)
$13
$9 $72
2017
Op Profit
FX Organic Acq / Disp 2018
Op Profit
First-Quarter 2018 Non-GAAP Operating Profit Up 34%
12Note: See detailed reconciliations of non-GAAP to GAAP results included in the First Quarter 2018 Earnings Release available in the Quarterly Results section of the
Brink’s website: www.brinks.com. Amounts may not add due to rounding.
(7%)% Change 24% 17%
Strong Organic and Inorganic Growth
7.2%OP Margin 8.4%
34%
(Non-GAAP, $ Millions)
$72 ( $14 )
( $21 )
( $2 ) $34
$33
$36
$7 $110
Op Profit Net Interest Taxes Non-controlling
Interest
Income from
Continuing Ops
D&A Interest Exp
& Taxes
Share-based
Compensation
Adjusted
EBITDA
First-Quarter 2018 Adjusted EBITDA = $110 Million
13Note: See detailed reconciliations of non-GAAP to GAAP results included in the First Quarter 2018 Earnings Release available in the Quarterly Results section of the
Brink’s website: www.brinks.com. Amounts may not add due to rounding.
$18vs2017
($9) ($5) $4 $1 $15 $2 $22($1)
(Non-GAAP, $ Millions)
$5
$2
$4
$4 $15
2017 Interest Rate
Impact & Other
2017
Acquistions
Available
Excess Cash
from Debt
Refinance
2018
First-Quarter 2018 Interest Expense
14
($ Millions)
Note: See detailed reconciliations of non-GAAP to GAAP results included in the First Quarter 2018 Earnings Release available in the Quarterly Results section of the
Brink’s website: www.brinks.com. Amounts may not add due to rounding.
Interest Expense Interest Expense Summary
• Negative EPS impact ~($.05) related to
excess cash earmarked for acquisitions
• Weighted average interest rate of 4.8% in
1Q18 versus 3.8% in 1Q17
• $1.1 billion from the 2017 refinancing: 55%
fixed rate; 45% floating rate
Income Tax Evolution
15
2017
Effective Tax Rate
Note: See detailed reconciliations of non-GAAP to GAAP results included in the First Quarter 2018 Earnings Release available in the Quarterly Results section of the
Brink’s website: www.brinks.com. Amounts may not add due to rounding.
• Global Capital Structure
Optimization
• U.S. Foreign Tax Credit/
Withholding Taxes
• Mexico – further align
union contract with tax
deduction limits
• Favorable pending tax
law changes
• Expect favorable impact
from M&A initiatives
Future ETR Target
33% - 35%
Statutory Tax Rates*
Argentina 35%
Brazil 34%
Chile 27%
Colombia 40%
France 34%
Israel** 36%
Mexico 30%
Global Wtd. Avg. 32%
Other ETR Items (net),
incl. Withholding Taxes 2%
2017 ETR 34%
2017 Cash Tax Rate 30%
2017 ETR 34%
Tax Law and
Acquisition Changes 3%
- U.S. deductions
- U.S. credit loss
- Brazil royalties
- Argentina changes
2018 ETR Outlook 37%
2018 Cash Tax Rate 27%
* Top 7 in alphabetical order; U.S. has no statutory earnings
** Including dividend withholding taxes
Tax Initiatives
2018
ETR Changes
0 0
(ETR)
$0.58 ( 0.05 )
0.16
0.12 (0.05)
( 0.03 )
( 0.03 )
( 0.03 )
( 0.02 )
0.65
2017
EPS
Currency Organic Acq / Disp Acquisitions Available
Excess Cash
from Debt
Refinance
Interest Rate
Impact/Other
Tax Shares / Non-
controlling
interest
2018
EPS
First-Quarter 2018 Non-GAAP EPS
16
Operating Profit Net Interest
+0.07
from Acquisitions
+0.23 (0.11)
Note: See detailed reconciliations of non-GAAP to GAAP results included in the First Quarter 2018 Earnings Release available in the Quarterly Results section of the
Brink’s website: www.brinks.com. Amounts may not add due to rounding.
2015 Actual 2016 Actual 2017 Actual 2017 Actual 2018 Outlook 2019 Outlook 2020 Outlook
Capital expenditures 2015 – 20201
Facility
Equipment /
Other
IT
Armored
Vehicles
% Revenue 3.5% 4.2% 5.8% 5.8% ~6% ~5.5% ~4%
D&A1 $118 $112 $119 $119
Reinvestment Ratio 0.9 1.1 1.6 1.6
$124
1. Excludes CompuSafe®
2. Excludes potential acquisitions (through year-end 2019)
Note: See detailed reconciliations of non-GAAP to GAAP results included in the First Quarter 2018 Earnings Release available in the Quarterly Results section of the
Brink’s website: www.brinks.com. .
$106
$185
~$200 ~$200
~4% of Revenue
Higher 2017-19 CapEx reflects investment in strategic initiatives
$185
High
Return
Growth
CapEx
High
Return
Growth
CapEx
High
Return
Growth
CapEx
17
CapEx Expected to Return to ~4% of Revenue in 2020
2 2 2
(Non-GAAP, $ Millions)
Strong Free Cash Flow Expected
18
Actual
2017
Target
2018
Target
2019
Adjusted EBITDA $425 ~$525 ~$625
Working Capital & Other (86) ~(10) ~(15)
Cash Taxes (84) ~(85) ~(75)
Cash Interest (27) ~(60) ~(65)
Non-GAAP Cash from Operating
Activities 229 ~370 ~470
Capital Expenditures excl.
CompuSafes (185) ~(200) ~(200)
CompuSafes (38) (25) (25)
Exclude Capital Leases 52 55 55
Non-GAAP Cash Capital Expenditures ~(170) ~(170) ~(170)
Non-GAAP Free Cash Flow before
dividends 58 ~200 ~300
EBITDA – Non-GAAP Cash CapEx 255 ~355 ~455
Amounts may not add due to rounding.
Note: Non-GAAP Free Cash Flow excludes the impact of Venezuela operations. See detailed reconciliations of non-GAAP to GAAP results included in the First Quarter 2018
Earnings Release available in the Quarterly Results section of the Brink’s website: www.brinks.com
Projected Adjusted EBITDA growth
Working capital improvement, restructuring
No cash taxes projected in U.S. for at least five years
Impact of debt restructuring
U.S. fleet investment primarily under capital leases
Investment above historic levels to support strategic
initiatives
Free cash flow includes completed and announced acquisitions
(Non-GAAP, $ Millions)
Leverage Ratio <1.5x with Potential Acquisitions
$301
$612
$681
~ $480
~ $1,100
March 2017 Dec 2017 March 2018 2019 Target with Completed &
Announced Acquisitions
Illustrative Net Debt with
Potential Acquisitions with Full
Synergies
Leverage
Ratio1 0.8 1.4
Net Debt and Financial Leverage
1. Net Debt divided by Adjusted EBITDA
2. Includes completed, announced and potential acquisitions and announced licensing agreement. Potential acquisition impact based on spending $400 million
in 2018 and 2019 with synergies fully realized.
19
1.5
Note: See detailed reconciliations of non-GAAP to GAAP results included in the Appendix.
~0.8 ~1.5
2
Illustration assumes $400 per year in acquisitions in 2018-2019
(Non-GAAP, $ Millions)
Continued Improvement Expected
20
$216
$281
$365-
$385
~ $470
$126
$144
~ $150
~ $155
$342
$425
$515-$535
~ $625
7.4%
8.8%
10.6%-11.2%
~12%
11.8%
13.3%
~15.2%
~16%
2016 2017 2018 Outlook 2019 Target
Adj. EBITDA
Margin
Op Profit
Margin
D&A/Other
Op Profit
Adj.
EBITDA
Non-GAAP Operating Profit & Adj. EBITDA
Note: See detailed reconciliations of non-GAAP to GAAP results included in the First Quarter 2018 Earnings Release available in the Quarterly Results section of the
Brink’s website: www.brinks.com. Amounts may not add due to rounding.
2018 Non-GAAP Outlook
• Revenue ~3.45 billion (5% organic growth)
• Operating Profit $365 - $385 million;
margin 10.6% - 11.2%
• Adjusted EBITDA $515 to $535 million;
margin ~15.2%
• EPS $3.65 - $3.85
2019 Preliminary Target
• Adjusted EBITDA ~$625 million
(Non-GAAP, $ Millions, except EPS)
Appendix
Non-GAAP Reconciliation — Outlook
The Brink’s Company and subsidiaries
2018 and 2019 Guidance (Unaudited)
(In millions, except as noted)
22
2018
GAAP
Outlook(b)
Reconciling
Items(a)
2018
Non-GAAP
Outlook(a)
2019 GAAP
Outlook(b)
Reconciling
Items(a)
2019
Non-GAAP
Outlook(a)
Revenues $ 3,476 (26) 3,450
Not
provided —
Not
provided
Operating profit 319 – 339 46 365 – 385 440 30 470
EPS from continuing operations attributable to Brink's $ 2.40 – 2.60 — 3.65 – 3.85
Not
provided —
Not
provided
Adjusted EBITDA $ 515 – 535 ~ 625
(a) The 2018 and 2019 Non-GAAP outlook amounts for operating profit exclude the impact of other items not allocated to segments. The 2018 Non-GAAP
outlook amounts for EPS from continuing operations, depreciation and amortization/other as well as 2018 and 2019 Adjusted EBITDA cannot be reconciled to
GAAP without unreasonable effort. We cannot reconcile these amounts to GAAP because we are unable to accurately forecast the tax impact of Venezuela
operations and the related exchange rates used to measure those operations.
(b) 2018 and 2019 GAAP outlook does not include any forecasted amounts from Venezuela operations. The 2018 and 2019 GAAP outlook excludes future
restructuring actions for which the timing and amount are currently under review.
2016 Non-GAAP Results Reconciled to GAAP (1 of 4)
The Brink’s Company and subsidiaries
Non-GAAP Reconciliations
(In millions)
23
2016
Full Year
Revenues:
GAAP 3,020.6
Venezuela operations(a) (109.4)
Acquisitions and dispositions(a) (2.8)
Non-GAAP 2,908.4
Operating profit (loss):
GAAP 184.5
Venezuela operations(a) (18.5)
Reorganization and Restructuring(a) 30.3
Acquisitions and dispositions(a) 19.5
Non-GAAP 215.8
Interest expense:
GAAP (20.4)
Venezuela operations(a) 0.1
Non-GAAP (20.3)
Taxes:
GAAP 78.5
Retirement plans(c) 11.3
Venezuela operations(a) (14.1)
Reorganization and Restructuring(a) 7.4
Acquisitions and dispositions(a) 1.8
Deferred tax valuation allowance(b) (14.7)
Non-GAAP 70.2
Amounts may not add due to rounding.
See slide 25 for footnote explanations.
2016 Non-GAAP Results Reconciled to GAAP (2 of 4)
The Brink’s Company and subsidiaries
Non-GAAP Reconciliations
(In millions)
24
2016
Full Year
Income (loss) from continuing operations attributable to Brink's:
GAAP 36.2
Retirement plans(c) 20.2
Venezuela operations(a) 2.6
Reorganization and Restructuring(a) 23.7
Acquisitions and dispositions(a) 18.2
Deferred tax valuation allowance(b) 14.7
Non-GAAP 115.6
EPS:
GAAP 0.72
Retirement plans(c) 0.39
Venezuela operations(a) 0.05
Reorganization and Restructuring(a) 0.47
Acquisitions and dispositions(a) 0.37
Deferred tax valuation allowance(b) 0.29
Non-GAAP 2.28
Depreciation and Amortization:
GAAP 131.6
Venezuela operations(a) (0.7)
Reorganization and Restructuring(a) (0.8)
Acquisitions and dispositions(a) (3.6)
Non-GAAP 126.5
Amounts may not add due to rounding.
See slide 25 for footnote explanations.
2016 Non-GAAP Results Reconciled to GAAP (3 of 3)
The Brink’s Company and subsidiaries
Non-GAAP Reconciliations
(In millions)
25
2016
Full Year
Adjusted EBITDA(e):
Net income (loss) attributable to Brink's - GAAP 34.5
Interest expense - GAAP 20.4
Income tax provision - GAAP 78.5
Depreciation and amortization - GAAP 131.6
EBITDA 265.0
Discontinued operations - GAAP 1.7
Retirement plans(c) 31.5
Venezuela operations(a) (12.3)
Reorganization and Restructuring(a) 30.3
Acquisitions and dispositions(a) 16.4
Share-based compensation(d) 9.5
Adjusted EBITDA 342.1
The 2018 and 2019 Non-GAAP outlook for Adjusted EBITDA and Non-GAAP operating profit, as well as 2018, 2019 and 2020 outlook for capital expenditures, 2018
and 2019 target free cash flows, and 2019 target and 2019 pro-forma net debt cannot be reconciled to GAAP without unreasonable effort. We cannot reconcile these
amounts to GAAP because we are unable to accurately forecast the tax impact of Venezuela operations and the related exchange rates used to measure those
operations. The impact of Venezuela operations and related exchange rates could be significant to our GAAP provision for income taxes, and, therefore, to income
(loss) from continuing operations, EPS from continuing operations, effective income tax rate and Adjusted EBITDA.
Amounts my not add due to rounding.
(a) See “Other Items Not Allocated To Segments” on slide 26 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.
(b) There was a change in judgment resulting in a valuation allowance against certain tax attributes with a limited statutory carryforward period that are no longer more-
likely-than-not to be realized due to lower than expected U.S. operating results, certain non-GAAP pre-tax items, and other timing of tax deductions related to executive
leadership transition.
(c) 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.
(d)There is no difference between GAAP and non-GAAP share-based compensation amounts for the periods presented.
(e) Adjusted EBITDA is defined as non-GAAP income from continuing operations excluding the impact of non-GAAP interest expense, non-GAAP income tax provision,
non-GAAP depreciation and amortization and non-GAAP share-based compensation.
Non-GAAP Reconciliation — Other
The Brink’s Company and subsidiaries
Other Items Not Allocated to Segments (Unaudited)
(In millions)
26
Brink’s measures its segment results before income and expenses for corporate activities and for certain other items. A summary of the other items not allocated to segment
results is below.
Venezuela operations We have excluded from our segment results all of our Venezuela operating results, due to the Venezuelan government's restrictions that have
prevented us from repatriating funds. As a result, the Chief Executive Officer, the Company's Chief Operating Decision maker ("CODM"), assesses segment performance
and makes resource decisions by segment excluding Venezuela operating results.
Reorganization and Restructuring
2016 Restructuring
In the fourth quarter of 2016, management implemented restructuring actions across our global business operations and our corporate functions. As a result of these
actions, we recognized $18.1 million in related 2016 costs.
Executive Leadership and Board of Directors
In 2015, we recognized $1.8 million in charges related to Executive Leadership and Board of Directors restructuring actions, which were announced in January 2016. We
recognized $4.3 million in charges in 2016 related to the Executive Leadership and Board of Directors restructuring actions.
2015 Restructuring
Brink's initiated a restructuring of its business in the third quarter of 2015. We recognized $11.6 million in related 2015 costs and an additional $6.5 million in 2016 related to
this restructuring. The actions under this program were substantially completed by the end of 2016, with cumulative pretax charges of approximately $18 million.
Due to the unique circumstances around these charges, they have not been allocated to segment results and are excluded from non-GAAP results.
Acquisitions and dispositions 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 non-GAAP results. These items are described below:
2016 Acquisitions and Dispositions
- Due to management's decision in the first quarter of 2016 to exit the Republic of Ireland, the prospective impacts of shutting down this operation were included in items
not allocated to segments and were excluded from the operating segments effective March 1, 2016. This activity is also excluded from the consolidated non-GAAP
results. Beginning May 1, 2016, due to management's decision to also exit Northern Ireland, the results of shutting down these operations were treated similarly to the
Republic of Ireland.
- Amortization expense for acquisition-related intangible assets was $3.6 million in 2016.
- Brink's recognized a $2.0 million loss related to the sale of corporate assets in the second quarter of 2016.
Non-GAAP Reconciliation — Other
The Brink’s Company and subsidiaries
Non-GAAP Reconciliations — Other Amounts (Unaudited)
(In millions)
Amounts Used to Calculate Reinvestment Ratio
Property and Equipment Acquired During the Period
Full-Year
2015
Full Year
2016
Full Year
2017
Capital expenditures — GAAP 101.1 112.2 174.5
Capital leases — GAAP 18.9 29.4 51.7
Total Property and equipment acquired 120.0 141.6 226.2
Venezuela property and equipment acquired (4.3) (5.0) (4.2)
CompuSafe (10.2) (13.1) (37.5)
Total property and equipment acquired excluding Venezuela & CompuSafe 105.5 123.5 184.5
Depreciation
Depreciation and amortization — GAAP 139.9 131.6 146.6
Amortization of intangible assets (4.2) (3.6) (8.4)
Venezuela depreciation (3.9) (0.7) (1.7)
Reorganization and Restructuring - (0.8) (2.2)
CompuSafe (14.2) (14.9) (15.6)
Depreciation and amortization — Non-GAAP (excluding CompuSafe) 117.6 111.6 118.7
Reinvestment Ratio 0.9 1.1 1.6
27
Non-GAAP Reconciliation — Cash Flows
The Brink’s Company and subsidiaries
(In millions)
28
Full Year
2017
Cash flows from operating activities
Operating activities - GAAP $ 252.1
Venezuela operations (17.3)
(Increase) decrease in certain customer obligations(a) (6.1)
Operating activities - non-GAAP $ 228.7
(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.
Non-GAAP cash flows from operating activities is a supplemental financial measure that is not required by, or presented in accordance with GAAP. The purpose of this non-GAAP
measure is to report financial information excluding cash flows from Venezuela operations and the impact of cash received and processed in certain of our Cash Management
Services operations. We believe this measure is helpful in assessing cash flows from operations, enables period-to-period comparability and is useful in predicting future operating
cash flows. This non-GAAP measure should not be considered as an alternative to cash flows from operating activities determined in accordance with GAAP and should be read in
conjunction with our consolidated statements of cash flows.
Non-GAAP Reconciliation — Net Debt
The Brink’s Company and subsidiaries
Non-GAAP Reconciliations — Net Debt (Unaudited)
(In millions)
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.
Net Debt is a supplemental non-GAAP financial measure that is not required by, or presented in accordance with GAAP. We use Net Debt as a measure of our financial leverage. We believe that
investors also may find Net Debt to be helpful in evaluating our financial leverage. Net Debt should not be considered as an alternative to Debt determined in accordance with GAAP and should be
reviewed in conjunction with our condensed consolidated balance sheets. Set forth above is a reconciliation of Net Debt, a non-GAAP financial measure, to Debt, which is the most directly
comparable financial measure calculated and reported in accordance with GAAP, as of December 31, 2016, March 31, 2017, December 31, 2017, and March 31,2018.
December 31, March 31, December 31, March 31,
(In millions) 2016 2017 2017 2018
Debt:
Short-term borrowings $ 162.8 $ 156.4 $ 45.2 $ 64.8
Long-term debt 280.4 372.0 1,191.5 1,190.9
Total Debt 443.2 528.4 1,236.7 1,255.7
Restricted cash borrowings(a) (22.3) (24.0) (27.0) (28.6)
Total Debt without restricted cash borrowings 420.9 504.4 1,209.7 1,227.1
Less:
Cash and cash equivalents 183.5 218.7 614.3 562.2
Amounts held by Cash Management Services operations(b) (9.8) (15.1) (16.1) (16.3)
Cash and cash equivalents available for general corporate
purposes 173.7 203.6 598.2 545.9
Net Debt $ 247.2 $ 300.8 $ 611.5 $ 681.2
29