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Brink’s To Exclude Retirement Costs From Non-GAAP Earnings

Page 2

 

The Brink’s Company and subsidiaries (Unaudited)
U.S. Retirement Plans

(in millions)
 
 
 
 

Underfunded Status
As of Year-End   2011   2010
 
U.S. pension plans $ 305 192
UMWA plans 262 164
Black lung and other plans   61 62

Total
$

628

418
 
 

The change in underfunding from 2010 to 2011 is driven primarily by a reduction in the discount rate from 5.3% to 4.6% for the primary U.S. pension plan and 5.3% to 4.4% for UMWA plans.
 
 
 

Payments from Brink’s to U.S. Plans
    Actual   Projected
    2011 2012   2013   2014   2015   2016
 
U.S. pension plans $ - 31.5 41.5 51.1 47.0 42.4
UMWA plans - - - - - -
Black lung and other plans (a)   7.0 7.1 5.8 5.5 5.2 4.9
Total $ 7.0 38.6 47.3 56.6 52.2 47.3

(a) These plans are not funded.
 
The amounts in the tables above are based on a variety of estimates, including actuarial assumptions as of December 31, 2011. The estimated amounts will change in the future to reflect payments made, investment returns, actuarial revaluations, and other changes in estimates. Actual amounts could differ materially from the estimated amounts.
 

Page 3
 
The Brink’s Company and subsidiaries
Non-GAAP Results - Reconciled to Amounts Reported Under GAAP (Unaudited)

(In millions, except for per share amounts)
 
     

GAAPBasis
 

Gains onAcquisitions andAssetDispositions (a)
 

BelgiumSettlementCharge (b)
 

MexicoEmployeeBenefitSettlementLosses (c)
 

U.S.RetirementPlans (d)
 

U.S.ValuationAllowanceRelease (e)
 

AdjustIncome TaxRate (f)
 

Non-GAAPBasis
             
First Quarter 2011
Operating profit:
International $ 45.2 - - - - - - 45.2
North America   6.8 - - - 0.7 - - 7.5
Segment operating profit 52.0 - - - 0.7 - - 52.7
Non-segment   (15.0) (0.4) - - 6.2 - - (9.2)
Operating profit $ 37.0 (0.4) - - 6.9 - - 43.5
 
Amounts attributable to Brink’s:
Income from continuing operations $ 18.9 (3.1) - - 4.4 - (0.9) 19.3
Diluted EPS – continuing operations   0.39   (0.06)   -   -   0.09   -   (0.02)   0.40
 
Second Quarter 2011
Operating profit:
International $ 26.2 - 10.1 1.0 - - - 37.3
North America   10.4 - - - 0.8 - - 11.2
Segment operating profit 36.6 - 10.1 1.0 0.8 - - 48.5
Non-segment   (16.2) - - - 6.2 - - (10.0)
Operating profit $ 20.4 - 10.1 1.0 7.0 - - 38.5
 
Amounts attributable to Brink’s:
Income from continuing operations $ 5.3 - 6.3 0.7 4.4 - 0.6 17.3
Diluted EPS – continuing operations   0.11   -   0.13   0.01   0.09   -   0.01   0.36
 
Third Quarter 2011
Operating profit:
International $ 61.4 - - 0.7 - - - 62.1
North America   8.7 - - - 0.8 - - 9.5
Segment operating profit 70.1 - - 0.7 0.8 - - 71.6
Non-segment   (7.6) (9.3) - - 6.2 - - (10.7)
Operating profit $ 62.5 (9.3) - 0.7 7.0 - - 60.9
 
Amounts attributable to Brink’s:
Income from continuing operations $ 31.5 (6.6) - 0.5 4.4 (4.4) 3.9 29.3
Diluted EPS – continuing operations   0.66   (0.14)   -   0.01   0.09   (0.09)   0.08   0.61

Amounts may not add due to rounding.

See page 5 for notes.

Page 4
                 
The Brink’s Company and subsidiaries

Non-GAAP Results - Reconciled to Amounts Reported Under GAAP (Unaudited) (Continued)

(In millions, except for per share amounts)
 
Mexico
Gains on Employee U.S. Adjust
Acquisitions and Belgium Benefit U.S. Valuation Income Non-
GAAP Asset Settlement Settlement Retirement Allowance Tax Rate GAAP
    Basis   Dispositions (a)   Charge (b)   Losses (c)     Plans (d)   Release (e)   (f)   Basis
 
Nine Months 2011
Operating profit:
International $ 132.8 - 10.1 1.7 - - - 144.6
North America   25.9   -   - - 2.3 -   - 28.2  
Segment operating profit 158.7 - 10.1 1.7 2.3 - - 172.8
Non-segment   (38.8 ) (9.7 ) - - 18.6 -   - (29.9 )
Operating profit $ 119.9 (9.7 ) 10.1 1.7 20.9 - - 142.9
 
Amounts attributable to Brink’s:
Income from continuing operations $ 55.7 (9.7 ) 6.3 1.2 13.2 (4.4 ) 3.6 65.9
Diluted EPS – continuing operations     1.16     (0.20 )   0.13   0.02     0.27   (0.09 )   0.07   1.37  

Amounts may not add due to rounding.

(a)
 

To eliminate gain recognized on the sale of the U.S. document destruction business, gains on available-for-sale equity and debt securities, gains related to acquisition of controlling interest in subsidiaries that were previously accounted for as equity or cost method investments, and gains on sales of former operating assets, as follows:
  First-Quarter 2011   Third-Quarter 2011   Nine Months 2011
Operating   Operating   Operating  
Profit EPS Profit EPS Profit EPS
Sale of U.S. Document Destruction business $ -

 
- (6.7 ) (0.09 ) (6.7 ) (0.09 )
Gains on available-for-sale equity and debt securities - (0.05 ) - - - (0.05 )
Acquisition of controlling interests (0.4 ) (0.01 ) (2.1 ) (0.04 ) (2.5 ) (0.05 )
Sale of former operating assets   -   -   (0.5 ) (0.01 ) (0.5 ) (0.01 )
$ (0.4 ) (0.06 ) (9.3 ) (0.14 ) (9.7 ) (0.20 )

(b)
  To eliminate settlement charge related to exit of Belgium cash-in-transit business.

(c)
To eliminate employee benefit settlement loss related to Mexico. Portions of Brink’s Mexican subsidiaries’ accrued employee termination benefit were paid in the second and third quarters of 2011. The employee termination benefit is accounted for under FASB ASC Topic 715, Compensation – Retirement Benefits. Accordingly, the severance payments resulted in settlement losses.

(d)
To eliminate expenses related to U.S. retirement liabilities.

(e)
To eliminate the positive impact of a valuation allowance release in the United States.

(f)
To adjust effective income tax rate to be equal to the estimated full-year non-GAAP effective income tax rate. The mid-point of the range of the estimated non-GAAP effective tax rate is 37.5% for the full-year 2011.
 

Page 5
 
The Brink’s Company and subsidiaries
Non-GAAP Results - Reconciled to Amounts Reported Under GAAP (Unaudited) (Continued)

(In millions, except for per share amounts)
                     
 
       

GAAPBasis
 

RemeasureVenezuelanNetMonetaryAssets (a)
 

Royalty(b)
 

ExitBelgiumCITBusiness(c)
 

MexicoAcquisition(d)
 

Non-SegmentAssetSales (e)
 

U.S.RetirementPlans (f)
 

U.S.HealthcareLegislationTax Charge(g)
 

AdjustIncomeTaxRate (h)
 

Non-GAAPBasis
 
First Quarter 2010
Operating profit:
International $ 24.5 4.9 - - - - - - - 29.4
North America   10.4   -   -   - - - (0.3 ) - -   10.1  
Segment operating profit 34.9 4.9 - - - - (0.3 ) - - 39.5
Non-segment   (11.1 ) -   (1.8 ) - - - 4.9   - -   (8.0 )
Operating profit $ 23.8 4.9 (1.8 ) - - - 4.6 - - 31.5
 
Amounts attributable to Brink’s:
Income from continuing operations $ (4.8 ) 3.0 (1.1 ) - - - 2.9 13.7 0.6 14.3
Diluted EPS – continuing operations   (0.10 )   0.06     (0.02 )   -   -   -   0.06     0.28   0.01     0.29  
 
Second Quarter 2010
Operating profit:
International $ 33.8 (1.7 ) - - - - - - - 32.1
North America   10.3   -   -   - - - (0.1 ) - -   10.2  
Segment operating profit 44.1 (1.7 ) - - - - (0.1 ) - - 42.3
Non-segment   (12.6 ) -   (1.9 ) - - - 5.9   - -   (8.6 )
Operating profit $ 31.5 (1.7 ) (1.9 ) - - - 5.8 - - 33.7
 
Amounts attributable to Brink’s:
Income from continuing operations $ 20.7 (1.0 ) (1.2 ) - - - 3.6 - (3.8 ) 18.3
Diluted EPS – continuing operations   0.42     (0.02 )   (0.02 )   -   -   -   0.07     -   (0.08 )   0.37  
 
Third Quarter 2010
Operating profit:
International $ 52.6 - - - - - - - - 52.6
North America   5.4   -   -   - - - (0.1 ) - -   5.3  
Segment operating profit 58.0 - - - - - (0.1 ) - - 57.9
Non-segment   (13.9 ) -   (1.2 ) - - - 5.9   - -   (9.2 )
Operating profit $ 44.1 - (1.2 ) - - - 5.8 - - 48.7
 
Amounts attributable to Brink’s:
Income from continuing operations $ 21.7 - (0.7 ) - - - 3.6 - 0.9 25.5
Diluted EPS – continuing operations   0.45     -     (0.01 )   -   -   -   0.08     -   0.02     0.53  

Amounts may not add due to rounding.

See page 7 for notes.

Page 6
 
The Brink’s Company and subsidiaries

Non-GAAP Results - Reconciled to Amounts Reported Under GAAP (Unaudited) (Continued)

(In millions, except for per share amounts)
             
     
       

GAAPBasis
 

RemeasureVenezuelanNetMonetaryAssets (a)
 

Royalty(b)
 

ExitBelgiumCITBusiness(c)
 

MexicoAcquisition(d)
 

Non-SegmentAssetSales (e)
 

U.S.RetirementPlans (f)
 

U.S.HealthcareLegislationTax Charge(g)
 

AdjustIncomeTaxRate (h)
 

Non-GAAPBasis
 
Fourth Quarter 2010
Operating profit:
International $ 53.9 - - 13.4 - - - - - 67.3
North America   18.0   - -   - - -   (0.5 ) - - 17.5  

Segment operating profit
71.9 - - 13.4 - - (0.5 ) - - 84.8
Non-segment   (25.0 ) - -   - 8.6 -   6.0   - - (10.4 )
Operating profit $ 46.9 - - 13.4 8.6 - 5.5 - - 74.4
 
Amounts attributable to Brink’s:
Income from continuing operations $ 19.2 - - 7.8 8.6 (3.0 ) 3.4 - 2.3 38.3
Diluted EPS – continuing operations   0.40     -   -     0.16   0.18   (0.06 )   0.07     -   0.05   0.80  
 
Full Year 2010
Operating profit:  
International $ 164.8 3.2 - 13.4 - - - - - 181.4
North America   44.1   - -   - - -   (1.0 ) - - 43.1  
Segment operating profit 208.9 3.2 - 13.4 - - (1.0 ) - - 224.5
Non-segment   (62.6 ) - (4.9 ) - 8.6 -   22.7   - - (36.2 )
Operating profit $ 146.3 3.2 (4.9 ) 13.4 8.6 - 21.7 - - 188.3
 
Amounts attributable to Brink’s:
Income from continuing operations $ 56.8 2.0 (3.0 ) 7.8 8.6 (3.0 ) 13.5 13.7 - 96.4
Diluted EPS – continuing operations   1.17     0.04   (0.06 )   0.16   0.18   (0.06 )   0.28     0.29   -   1.99  
 
Amounts may not add due to rounding.
 
(a) To eliminate remeasurement gains and losses in Venezuela. For accounting purposes, Venezuela is considered a highly inflationary economy. Under U.S. GAAP, subsidiaries that operate in Venezuela record gains and losses in earnings for the remeasurement of bolivar fuerte-denominated net monetary assets.
(b) To eliminate royalty income from former home security business.
(c)

To eliminate loss on exit of Belgium cash-in-transit business.
(d) To eliminate loss recognized related to acquisition of controlling interest in subsidiary previously accounted for as cost method investment and bargain purchase gain in Mexico.
(e) To eliminate gain on exchange of marketable equity securities.
(f) To eliminate expenses related to U.S. retirement liabilities.
(g) To eliminate $13.7 million of tax expense related to the reversal of a deferred tax asset as a result of U.S. healthcare legislation.
(h) To adjust the effective income tax rate to be equal to the full-year non-GAAP effective income tax rate. The non-GAAP effective tax rate for 2010 was 36.2%.

Page 7

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