form_10q.htm

 
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549


FORM 10-Q


x  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2014

¨  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________ to ________


Commission file number 001-09148


 
THE BRINK’S COMPANY
  
 
(Exact name of registrant as specified in its charter)
  


 
Virginia
  
54-1317776
  
 
(State or other jurisdiction of
  
(I.R.S. Employer
  
 
incorporation or organization)
  
Identification No.)
  


1801 Bayberry Court, Richmond, Virginia 23226-8100
(Address of principal executive offices) (Zip Code)

(804) 289-9600
(Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes  x No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Yes  x  No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See definition of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
(Check one):  Large Accelerated Filer  x  Accelerated Filer  ¨  Non-Accelerated Filer  ¨  Smaller Reporting Company  ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes  ¨  No  x

As of October 28, 2014, 48,573,324 shares of $1 par value common stock were outstanding.
 
 
 
 
1
 
 
Part I - Financial Information
Item 1.  Financial Statements

THE BRINK’S COMPANY
and subsidiaries
 

Consolidated Balance Sheets
(Unaudited)

   
September 30,
    
December 31,
  
(In millions)
  
2014
    
2013
  
             
ASSETS
            
             
Current assets:
            
Cash and cash equivalents
   $ 223.0       255.5  
Accounts receivable, net
     558.2       622.2  
Prepaid expenses and other
     137.2       153.0  
Deferred income taxes
     60.2       72.0  
Total current assets
     978.6       1,102.7  
                 
Property and equipment, net
     687.7       758.7  
Goodwill
     229.0       240.2  
Other intangibles
     42.9       46.3  
Deferred income taxes
     232.4       251.7  
Other
     97.1       98.4  
                 
Total assets
   $ 2,267.7       2,498.0  
                 
                 
LIABILITIES AND EQUITY
                
                 
Current liabilities:
                
Short-term borrowings
   $ 59.4       80.9  
Current maturities of long-term debt
     33.8       24.6  
Accounts payable
     162.4       185.6  
Accrued liabilities
     509.0       507.5  
Total current liabilities
     764.6       798.6  
                 
Long-term debt
     400.7       330.5  
Accrued pension costs
     100.4       214.8  
Retirement benefits other than pensions
     180.0       186.0  
Deferred income taxes
     14.0       18.0  
Other
     131.8       170.6  
Total liabilities
     1,591.5       1,718.5  
                 
Contingent liabilities (notes 3, 4, 11 and 12)
                
                 
Equity:
                
The Brink’s Company (“Brink’s”) shareholders:
                
Common stock
     48.6       48.4  
Capital in excess of par value
     583.5       566.4  
Retained earnings
     645.0       696.4  
Accumulated other comprehensive loss
     (645.1 )     (617.3 )
Brink’s shareholders
     632.0       693.9  
                 
Noncontrolling interests
     44.2       85.6  
                 
Total equity
     676.2       779.5  
                 
Total liabilities and equity
   $ 2,267.7       2,498.0  
                 
See accompanying notes to consolidated financial statements.
  

 
 
 
2
 
 
THE BRINK’S COMPANY
and subsidiaries
 

Consolidated Statements of Income (Loss)
(Unaudited)

         
Three Months
Nine Months
         
Ended September 30,
Ended September 30,
 
(In millions, except for per share amounts)
2014
2013
2014
2013
                 
 
Revenues
$
 913.1
 982.4
 2,806.2
 2,902.8
                 
 
Costs and expenses:
          
 
Cost of revenues
  
 770.9
 783.2
 2,321.1
 2,368.1
 
Selling, general and administrative expenses
  
 135.5
 141.2
 416.0
 418.0
   
Total costs and expenses
  
 906.4
 924.4
 2,737.1
 2,786.1
 
Other operating income (expense)
  
 40.8
 1.2
 (83.4)
 (7.4)
                 
   
Operating profit (loss)
  
 47.5
 59.2
 (14.3)
 109.3
                 
 
Interest expense
  
 (6.6)
 (6.5)
 (18.3)
 (18.3)
 
Interest and other income (expense)
  
 0.4
 0.3
 0.7
 1.2
   
Income (loss) from continuing operations before tax
  
 41.3
 53.0
 (31.9)
 92.2
 
Provision (benefit) for income taxes
  
 23.2
 15.0
 36.9
 31.1
                 
   
Income (loss) from continuing operations
  
 18.1
 38.0
 (68.8)
 61.1
                 
 
Income (loss) from discontinued operations, net of tax
  
 1.5
 (6.0)
 0.7
 (30.0)
                 
   
Net income (loss)
  
 19.6
 32.0
 (68.1)
 31.1
     
Less net income (loss) attributable to noncontrolling interests
  
 (0.6)
 8.2
 (31.4)
 15.2
                 
   
Net income (loss) attributable to Brink’s
  
 20.2
 23.8
 (36.7)
 15.9
                 
 
Amounts attributable to Brink’s
          
   
Continuing operations
  
 18.7
 29.8
 (37.4)
 45.9
   
Discontinued operations
  
 1.5
 (6.0)
 0.7
 (30.0)
                 
   
Net income (loss) attributable to Brink’s
$
 20.2
 23.8
 (36.7)
 15.9
                 
 
Earnings (loss) per share attributable to Brink’s common shareholders(a)
          
   
Basic:
          
     
Continuing operations
$
 0.38
 0.61
 (0.76)
 0.94
     
Discontinued operations
  
 0.03
 (0.12)
 0.01
 (0.62)
     
Net income (loss)
  
 0.41
 0.49
 (0.75)
 0.33
                 
   
Diluted:
          
     
Continuing operations
$
 0.38
 0.61
 (0.76)
 0.94
     
Discontinued operations
  
 0.03
 (0.12)
 0.01
 (0.61)
     
Net income (loss)
  
 0.41
 0.49
 (0.75)
 0.32
                 
 
Weighted-average shares
          
   
Basic
  
 49.1
 48.7
 49.0
 48.6
   
Diluted
  
 49.4
 49.0
 49.0
 48.9
                 
 
Cash dividends paid per common share
$
 0.10
 0.10
 0.30
 0.30
                 
 
(a)
Amounts may not add due to rounding
          
                 
 
See accompanying notes to consolidated financial statements.
    
 
 
 
3
 
 
THE BRINK’S COMPANY
and subsidiaries
 

Consolidated Statements of Comprehensive Income (Loss)
(Unaudited)

   
Three Months
    
Nine Months
  
   
Ended September 30,
    
Ended September 30,
  
(In millions)
  
2014
    
2013
    
2014
    
2013
  
                         
Net income (loss)
   $ 19.6       32.0       (68.1 )     31.1  
                                 
Benefit plan adjustments:
                                
     Benefit plan experience gains
     9.4       13.6       29.0       49.0  
     Benefit plan prior service (costs) credits
     (0.4 )     5.4       (1.3 )     6.7  
     Deferred profit sharing
     (0.1 )     -       (0.1 )     -  
     Total benefit plan adjustments
     8.9       19.0       27.6       55.7  
                                 
Foreign currency translation adjustments
     (50.4 )     8.2       (46.3 )     (23.9 )
Unrealized losses on available-for-sale securities
     (0.3 )     0.3       (0.4 )     0.2  
Gains (losses) on cash flow hedges
     (0.1 )     0.3       (0.1 )     1.1  
          Other comprehensive income (loss) before tax
     (41.9 )     27.8       (19.2 )     33.1  
Provision for income taxes
     3.3       6.9       10.3       19.8  
                                 
     Other comprehensive income (loss)
     (45.2 )     20.9       (29.5 )     13.3  
                                 
         Comprehensive income (loss)
     (25.6 )     52.9       (97.6 )     44.4  
             Less comprehensive income (loss) attributable to noncontrolling interests
     (2.7 )     8.9       (33.1 )     14.1  
                                 
         Comprehensive income (loss) attributable to Brink's
   $ (22.9 )     44.0       (64.5 )     30.3  
                                 
See accompanying notes to consolidated financial statements.
                                
 
 
 
4
 
 
THE BRINK’S COMPANY
and subsidiaries
 

Consolidated Statement of Equity

Nine Months ended September 30, 2014
(Unaudited)

   
Attributable to Brink’s
              
               
Capital
          
Accumulated
    
Attributable
        
               
in Excess
          
Other
    
to
        
         
Common
    
of Par
    
Retained
    
Comprehensive
    
Noncontrolling
        
(In millions)
  
Shares
    
Stock
    
Value
    
Earnings
    
Loss
    
Interests
    
Total
  
                                           
Balance as of December 31, 2013
     48.4     $ 48.4       566.4       696.4       (617.3 )     85.6       779.5  
                                                         
Net income (loss)
     -       -       -       (36.7 )     -       (31.4 )     (68.1 )
Other comprehensive income (loss)
     -       -       -       -       (27.8 )     (1.7 )     (29.5 )
Dividends to:
                                                        
Brink’s common shareholders ($0.30 per share)
     -       -       -       (14.5 )     -       -       (14.5 )
Noncontrolling interests
     -       -       -       -       -       (8.7 )     (8.7 )
Share-based compensation:
                                                        
Stock options and awards:
                                                        
Compensation expense
     -       -       16.2       -       -       -       16.2  
Consideration from exercise of stock options
     -       -       0.4       -       -       -       0.4  
Reduction in excess tax benefit of stock compensation
     -       -       (0.6 )     -       -       -       (0.6 )
Other share-based benefit programs
     0.2       0.2       1.1       (0.2 )     -       -       1.1  
Capital contributions from noncontrolling interest
     -       -       -       -       -       0.4       0.4  
                                                         
Balance as of September 30, 2014
     48.6     $ 48.6       583.5       645.0       (645.1 )     44.2       676.2  
                                                         
See accompanying notes to consolidated financial statements.
  
 
 
 
5
 
 
THE BRINK’S COMPANY
and subsidiaries
 

Consolidated Statements of Cash Flows
(Unaudited)

   
Nine Months
  
   
Ended September 30,
  
(In millions)
  
2014
    
2013
  
             
Cash flows from operating activities:
            
Net income (loss)
   $ (68.1 )     31.1  
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
                
(Income) loss from discontinued operations, net of tax
     (0.7 )     30.0  
Depreciation and amortization
     127.5       126.6  
Share-based compensation expense
     16.2       7.5  
Deferred income taxes
     (10.9 )     (26.8 )
Gains:
                
Available-for-sale securities
     (0.3 )     (0.3 )
Property and other investments
     (45.5 )     (0.7 )
Business acquisitions
     -       (2.0 )
Impairment loss
     6.8       -  
Retirement benefit funding (more) less than expense:
                
Pension
     (83.7 )     15.3  
Other than pension
     2.0       11.5  
Remeasurement loss due to Venezuela currency devaluation
     121.6       13.4  
Other operating
     4.0       2.7  
Changes in operating assets and liabilities, net of effects of acquisitions:
                
Accounts receivable and income taxes receivable
     (81.7 )     (100.9 )
Accounts payable, income taxes payable and accrued liabilities
     77.4       38.2  
Customer obligations
     15.5       (4.9 )
Prepaid and other current assets
     (3.4 )     (17.8 )
Other
     (5.1 )     (14.9 )
Discontinued operations
     0.9       (3.6 )
Net cash provided by operating activities
     72.5       104.4  
                 
Cash flows from investing activities:
                
Capital expenditures
     (83.8 )     (122.2 )
Acquisitions
     (4.9 )     (18.1 )
Sales of available-for-sale securities
     0.7       1.2  
Cash proceeds from sale of property and other investments
     62.6       10.8  
Other
     (0.1 )     (0.5 )
Discontinued operations
     (4.7 )     (2.8 )
Net cash used by investing activities
     (30.2 )     (131.6 )
                 
Cash flows from financing activities:
                
Borrowings (repayments) of debt:
                
Short-term debt
     (0.5 )     55.3  
Long-term revolving credit facilities
     126.0       97.2  
Other long-term debt:
                
Borrowings
     6.7       4.5  
Repayments
     (73.2 )     (20.8 )
Acquisition of a noncontrolling interest in a subsidiary
     -       (18.5 )
Payment of acquisition-related obligation
     -       (12.8 )
Dividends to:
                
Shareholders of Brink’s
     (14.5 )     (14.4 )
Noncontrolling interests in subsidiaries
     (8.7 )     (4.2 )
Proceeds from exercise of stock options
     0.4       3.0  
Minimum tax withholdings associated with share-based compensation
     (1.2 )     (3.3 )
Other
     (0.9 )     (0.6 )
Discontinued operations
     -       (2.3 )
Net cash provided by financing activities
     34.1       83.1  
Effect of exchange rate changes on cash
     (108.9 )     (15.3 )
Cash and cash equivalents:
                
Increase (decrease)
     (32.5 )     40.6  
Balance at beginning of period
     255.5       201.7  
Balance at end of period
   $ 223.0       242.3  
                 
See accompanying notes to consolidated financial statements.
  
 
 
 
6
 
 
THE BRINK’S COMPANY
and subsidiaries
 

Notes to Consolidated Financial Statements
(Unaudited)

Note 1 – Basis of presentation

The Brink’s Company (along with its subsidiaries, “Brink’s” or “we”) has four geographic operating segments:
·  
Latin America
·  
Europe, Middle East, and Africa (“EMEA”)
·  
North America (U.S. and Canada)
·  
Asia Pacific

Our unaudited interim consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial reporting and applicable quarterly reporting regulations of the Securities and Exchange Commission (the “SEC”).  Accordingly, the unaudited consolidated financial statements do not include all of the information and notes required by GAAP for complete financial statements.  In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included.  Operating results for interim periods are not necessarily indicative of the results that may be expected for the full year.  These unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements and notes in our Annual Report on Form 10-K for the year ended December 31, 2013.

We have made a number of estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent assets and liabilities to prepare these consolidated financial statements. Actual results could differ materially from these estimates.  The most significant estimates are related to goodwill and other long-lived assets, pension and other retirement benefit obligations, legal contingencies, costs associated with restructuring activities, foreign currency translation and deferred tax assets.

The consolidated financial statements include all of the assets, liabilities, revenues, expenses and cash flows of Brink’s and all entities in which Brink’s has a controlling voting interest.  Intercompany accounts and transactions between consolidated companies have been eliminated in consolidation.

Foreign Currency Translation
Our consolidated financial statements are reported in U.S. dollars.  Our foreign subsidiaries maintain their records primarily in the currency of the country in which they operate.

The method of translating local currency financial information into U.S. dollars depends on whether the economy in which our foreign subsidiary operates has been designated as highly inflationary or not.  Economies with a three-year cumulative inflation rate of more than 100% are considered highly inflationary.

Assets and liabilities of foreign subsidiaries in non-highly inflationary economies are translated into U.S. dollars using rates of exchange at the balance sheet date.  Translation adjustments are recorded in other comprehensive income (loss).  Revenues and expenses are translated at rates of exchange in effect during the year.  Transaction gains and losses are recorded in net income.

Foreign subsidiaries that operate in highly inflationary countries use the U.S. dollar as their functional currency.  Local-currency monetary assets and liabilities are remeasured into U.S. dollars using rates of exchange as of each balance sheet date, with remeasurement adjustments and other transaction gains and losses recognized in earnings.  Non-monetary assets and liabilities do not fluctuate with changes in local currency exchange rates to the dollar.

Venezuela
The economy in Venezuela has had significant inflation in the last several years.  We consolidate our Venezuelan results using our accounting policy for subsidiaries operating in highly inflationary economies.

Since 2003, the Venezuelan government has controlled the exchange of local currency into other currencies, including the U.S. dollar.  The Venezuelan government requires that currency exchanges be made at official rates or through auctions controlled by the government.  Different exchange processes exist for different industries and purposes.  The government does not approve all requests to convert bolivars to other currencies.
 
 
 
7
 
 
The government devalued the official rate for essential services in February 2013 from 5.3 to 6.3 bolivars to the dollar.  Late in 2013, the government added another official exchange process, known as SICAD, for travel and certain other purposes, made available at government discretion.  The published rate for this process in the first nine months of 2014 ranged from 10.0 to 12.0 bolivars to the U.S. dollar.  Since the end of the first quarter of 2013, we have only been able to obtain dollars once using the SICAD process.  We do not know whether we will be able to access the SICAD process again in the future. 

On March 24, 2014, the government initiated another exchange mechanism known as SICAD II.  Conversions under this mechanism are also subject to specific eligibility requirements.  Transactions have been reported to be in a range of 49 to 52 bolivars to the dollar.  Through September 30, 2014, we received approval to obtain $1.2 million (weighted average exchange rate of 51) through the SICAD II mechanism.  We do not know whether we will be able to access dollars under this new process on a consistent basis in the future.

As a result of the restrictions on currency exchange, we have in the past been unable to obtain sufficient U.S. dollars to purchase certain imported supplies and fixed assets to fully operate our business in Venezuela.  Consequently, we have occasionally purchased more expensive, bolivar-denominated supplies and fixed assets.  Furthermore, there is a risk that the current SICAD II process will be discontinued or not accessible when needed in the future, which may prevent us from obtaining dollars to operate our Venezuelan operations.

Remeasurement rates during 2013.  Through January 31, 2013, we used an official rate of 5.3 bolivars to the dollar to remeasure our bolivar-denominated monetary assets and liabilities into U.S. dollars and to translate our revenue and expenses.  After the devaluation in February 2013, we began to use the 6.3 official exchange rate to remeasure bolivar denominated monetary assets and liabilities and to translate our revenue and expenses.  We recognized a $13.4 million net remeasurement loss in the first nine months of 2013 when we changed from the 5.3 to 6.3 exchange rate.  The after-tax effect of these losses attributable to noncontrolling interests was $4.7 million in the first nine months of 2013.

Remeasurement rates during 2014.  Through March 23, 2014, we used the official rate of 6.3 bolivars to the dollar to remeasure our bolivar denominated monetary assets and liabilities into U.S. dollars and to translate our revenue and expenses.  Effective March 24, 2014, we began to use the exchange rate published for the SICAD II process to remeasure bolivar denominated monetary assets and liabilities and to translate our revenue and expenses.  We recognized a $121.6 million net remeasurement loss in the first nine months of 2014 when we changed from the official rate of 6.3 to SICAD II exchange rate, which has averaged approximately 50 since opening on March 24, 2014.  Transaction gains and losses since March 31, 2014 have not been significant.  At September 30, 2014, the rate was approximately 50.  The after-tax effect of these losses attributable to noncontrolling interests was $39.7 million in the first nine months of 2014.

Remeasuring our Venezuelan results using the SICAD II rate has had the following effects on our reported results:
·  
Brink’s Venezuela has become a less-significant component of Brink’s consolidated revenue and operating profit.
·  
Our investment in our Venezuelan operations on an equity-method basis has declined.  Our investment was $125.3 million at December 31, 2013, and was $60.6 million at September 30, 2014.
·  
Our bolivar-denominated net monetary assets included in our consolidated balance sheets has declined.  Our bolivar-denominated net monetary assets were $120.4 million (including $93.8 million of cash and cash equivalents) at December 31, 2013, and were $22.8 million (including $17.6 million of cash and cash equivalents) at September 30, 2014.
 
 
8
 
 
Note 2 – 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 based on operating profit or loss for the geographic components of Brink’s, excluding non-segment expenses.

We have four geographic operating segments: Latin America; Europe, Middle East and Africa (“EMEA”); North America and Asia Pacific.  These four operating segments are also our reportable segments.

We currently serve customers in more than 100 countries, including approximately 43 countries where we operate subsidiaries.

The primary services of the reportable segments include:
·  
Cash-in-Transit (“CIT”) Services – armored vehicle transportation of valuables
·  
ATM Services – replenishing and maintaining customers’ automated teller machines; providing network infrastructure services
·  
Global Services – secure international transportation of valuables
·  
Cash Management Services
o  
Currency and coin counting and sorting; deposit preparation and reconciliations; other cash management services
o  
Safe and safe control device installation and servicing (including our patented CompuSafe® service)
o  
Check and cash processing services for banking customers (“Virtual Vault Services”)
o  
Check imaging services for banking customers
·  
Payment Services – bill payment and processing services on behalf of utility companies and other billers at any of our Brink’s or Brink’s operated payment locations in Latin America; Brink’s Money™ prepaid payroll cards; Brink’s Checkout™ e-commerce online payment services
·  
Security and Guarding Services – protection of airports, offices, and certain other locations in Europe with or without electronic surveillance, access control, fire prevention and highly trained patrolling personnel

   
Three Months
    
Nine Months
  
   
Ended September 30,
    
Ended September 30,
  
(In millions)
  
2014
    
2013
    
2014
    
2013
  
                         
Revenues:
                        
Latin America
   $ 343.2       423.8       1,118.1       1,250.3  
EMEA
     303.5       301.2       904.4       872.4  
North America
     227.9       222.5       673.7       672.0  
Asia Pacific
     38.5       34.9       110.0       108.1  
Revenues
   $ 913.1       982.4       2,806.2       2,902.8  
                                 
                                 
   
Three Months
    
Nine Months
  
   
Ended September 30,
    
Ended September 30,
  
(In millions)
     2014       2013       2014       2013  
                                 
Operating profit (loss):
                                
Latin America
   $ (5.1 )     42.8       (81.4 )     90.6  
EMEA
     15.6       32.1       47.7       59.4  
North America
     1.5       0.2       8.3       4.5  
Asia Pacific
     5.0       4.8       14.0       14.1  
Segment operating profit (loss)
     17.0       79.9       (11.4 )     168.6  
Non-segment
     30.5       (20.7 )     (2.9 )     (59.3 )
Operating profit (loss)
   $ 47.5       59.2       (14.3 )     109.3  
 
 
9
 
 
Note 3 – 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:

   
U.S. Plans
    
Non-U.S. Plans
    
Total
  
(In millions)
  
2014
    
2013
    
2014
    
2013
    
2014
    
2013
  
                                     
Three months ended September 30,
                                    
                                     
Service cost
   $ -       -       3.1       3.7       3.1       3.7  
Interest cost on projected benefit obligation
     11.3       10.6       4.5       4.7       15.8       15.3  
Return on assets – expected
     (16.2 )     (14.2 )     (3.7 )     (3.2 )     (19.9 )     (17.4 )
Amortization of losses
     7.0       11.2       0.6       1.5       7.6       12.7  
Amortization of prior service (credit) cost
     -       -       0.2       0.2       0.2       0.2  
Settlement loss
     -       -       2.4       0.8       2.4       0.8  
Net periodic pension cost
   $ 2.1       7.6       7.1       7.7       9.2       15.3  
                                                 
Nine months ended September 30,
                                                
                                                 
Service cost
   $ -       -       9.8       11.1       9.8       11.1  
Interest cost on projected benefit obligation
     34.0       31.7       14.9       14.3       48.9       46.0  
Return on assets – expected
     (47.8 )     (42.7 )     (11.3 )     (9.6 )     (59.1 )     (52.3 )
Amortization of losses
     21.2       33.9       1.7       4.6       22.9       38.5  
Amortization of prior service cost
     -       -       0.6       0.7       0.6       0.7  
Settlement loss
     -       -       4.2       1.6       4.2       1.6  
Net periodic pension cost
   $ 7.4       22.9       19.9       22.7       27.3       45.6  

In the first nine months of 2014, we made $87.2 million in cash contributions to our primary U.S. pension plan.  We do not expect to contribute any additional amounts during the fourth quarter of 2014.

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 operation include medical benefits provided by the Pittston Coal Group Companies Employee Benefit Plan for UMWA 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:

   
UMWA Plans
    
Black Lung and Other Plans
    
Total
  
(In millions)
  
2014
    
2013
    
2014
    
2013
    
2014
    
2013
  
                                     
Three months ended September 30,
                                    
                                     
Interest cost on accumulated postretirement benefit obligations
   $ 4.4       4.9       0.6       0.5       5.0       5.4  
Return on assets – expected
     (5.6 )     (5.2 )     -       -       (5.6 )     (5.2 )
Amortization of losses
     2.9       4.9       0.2       0.2       3.1       5.1  
Amortization of prior service (credit) cost
     (1.2 )     -       0.4       0.5       (0.8 )     0.5  
Net periodic postretirement cost
   $ 0.5       4.6       1.2       1.2       1.7       5.8  
                                                 
Nine months ended September 30,
                                                
                                                 
Service cost
   $ -       -       0.1       0.2       0.1       0.2  
Interest cost on accumulated postretirement benefit obligations
     13.6       14.8       1.6       1.5       15.2       16.3  
Return on assets – expected
     (16.8 )     (15.6 )     -       -       (16.8 )     (15.6 )
Amortization of losses
     9.5       14.7       0.5       0.5       10.0       15.2  
Amortization of prior service (credit) cost
     (3.5 )     -       1.3       1.3       (2.2 )     1.3  
Net periodic postretirement cost
   $ 2.8       13.9       3.5       3.5       6.3       17.4  
 
 
10
 
 
Note 4 – Income taxes

   
Three Months
    
Nine Months
  
   
Ended September 30,
    
Ended September 30,
  
(In millions)
  
2014
    
2013
    
2014
    
2013
  
                         
Continuing operations
                        
Provision (benefit) for income taxes
   $ 23.2       15.0       36.9       31.1  
Effective tax rate
     56.2 %     28.3 %     (115.7 ) %     33.7 %

2014 Compared to U.S. Statutory Rate
The effective income tax rate on continuing operations in the first nine months of 2014 was negative and less than the 35% U.S. statutory tax rate primarily due to the significant nondeductible expenses resulting from the currency devaluation in Venezuela in the first quarter.  These nondeductible expenses caused our earnings before tax in the period to be negative.

Excluding the Venezuela nondeductible expenses, our effective tax rate on continuing operations in the first nine months is 44%.  The rate is higher than 35% primarily due to third-quarter tax expense for a divestiture of an equity-method investment in Peru and the realization of tax benefit for only a portion of the restructuring charges of the Netherlands operations, combined with higher tax expense resulting from cross border payments, nondeductible expenses in Mexico and the characterization of a French business tax as an income tax, partially offset by lower taxes resulting from the geographical mix of earnings.

2013 Compared to U.S. Statutory Rate
The effective income tax rate on continuing operations in the first nine months of 2013 was lower than the 35% U.S. statutory tax rate largely due to the geographical mix of earnings, mostly offset by higher taxes due to cross border payments, and the characterization of a French business tax as an income tax.
 
 
11
 
 
Note 5 – Accumulated other comprehensive income (loss)
 
Other comprehensive income (loss), including the amounts reclassified from accumulated other comprehensive income (loss) into earnings, was as follows:

   
Amounts Arising During
    
Amounts Reclassified to
        
   
the Current Period
    
Net Income (Loss)
        
                           
Total Other
  
         
Income
          
Income
    
Comprehensive
  
(In millions)
  
Pretax
    
Tax
    
Pretax
    
Tax
    
Income (Loss)
  
                               
Three months ended September 30, 2014
                              
                               
Amounts attributable to Brink's:
                              
Benefit plan adjustments
   $ (3.6 )     0.5       12.4       (3.8 )     5.5  
Foreign currency translation adjustments
     (48.1 )     -       (0.1 )     -       (48.2 )
Unrealized gains (losses) on available-for-sale securities
     0.1       (0.1 )     (0.4 )     0.1       (0.3 )
Gains (losses) on cash flow hedges
     1.4       -       (1.5 )     -       (0.1 )
      (50.2 )     0.4       10.4       (3.7 )     (43.1 )
                                         
Amounts attributable to noncontrolling interests:
                                        
Benefit plan adjustments
     -       -       0.1       -       0.1  
Foreign currency translation adjustments
     (2.2 )     -       -       -       (2.2 )
      (2.2 )     -       0.1       -       (2.1 )
                                         
Total
                                        
Benefit plan adjustments(a)
     (3.6 )     0.5       12.5       (3.8 )     5.6  
Foreign currency translation adjustments(b)
     (50.3 )     -       (0.1 )     -       (50.4 )
Unrealized gains (losses) on available-for-sale securities(c)
     0.1       (0.1 )     (0.4 )     0.1       (0.3 )
Gains (losses) on cash flow hedges(d)
     1.4       -       (1.5 )     -       (0.1 )
    $ (52.4 )     0.4       10.5       (3.7 )     (45.2 )
                                         
Three months ended September 30, 2013
                                        
                                         
Amounts attributable to Brink's:
                                        
Benefit plan adjustments
   $ (0.3 )     -       19.2       (6.8 )     12.1  
Foreign currency translation adjustments
     7.6       -       -       -       7.6  
Unrealized gains (losses) on available-for-sale securities
     0.3       (0.1 )     -       -       0.2  
Gains (losses) on cash flow hedges
     (0.1 )     -       0.4       -       0.3  
      7.5       (0.1 )     19.6       (6.8 )     20.2  
                                         
Amounts attributable to noncontrolling interests:
                                        
Benefit plan adjustments
     -       -       0.1       -       0.1  
Foreign currency translation adjustments
     0.6       -       -       -       0.6  
      0.6       -       0.1       -       0.7  
                                         
Total
                                        
Benefit plan adjustments(a)
     (0.3 )     -       19.3       (6.8 )     12.2  
Foreign currency translation adjustments(b)
     8.2       -       -       -       8.2  
Unrealized gains (losses) on available-for-sale securities(c)
     0.3       (0.1 )     -       -       0.2  
Gains (losses) on cash flow hedges(d)
     (0.1 )     -       0.4       -       0.3  
    $ 8.1       (0.1 )     19.7       (6.8 )     20.9  
 
 
 
12
 
 
 
   
Amounts Arising During
    
Amounts Reclassified to
        
   
the Current Period
    
Net Income (Loss)
        
                           
Total Other
  
         
Income
          
Income
    
Comprehensive
  
(In millions)
  
Pretax
    
Tax
    
Pretax
    
Tax
    
Income (Loss)
  
                               
Nine months ended September 30, 2014
                              
                               
Amounts attributable to Brink's:
                              
Benefit plan adjustments
   $ (7.9 )     1.3       35.2       (11.6 )     17.0  
Foreign currency translation adjustments
     (44.1 )     -       (0.3 )     -       (44.4 )
Unrealized gains (losses) on available-for-sale securities
     (0.1 )     -       (0.3 )     0.1       (0.3 )
Gains (losses) on cash flow hedges
     (0.3 )     -       0.2       -       (0.1 )
      (52.4 )     1.3       34.8       (11.5 )     (27.8 )
                                         
Amounts attributable to noncontrolling interests:
                                        
Benefit plan adjustments
     -       -       0.3       (0.1 )     0.2  
Foreign currency translation adjustments
     (1.9 )     -       -       -       (1.9 )
      (1.9 )     -       0.3       (0.1 )     (1.7 )
                                         
Total
                                        
Benefit plan adjustments(a)
     (7.9 )     1.3       35.5       (11.7 )     17.2  
Foreign currency translation adjustments(b)
     (46.0 )     -       (0.3 )     -       (46.3 )
Unrealized gains (losses) on available-for-sale securities(c)
     (0.1 )     -       (0.3 )     0.1       (0.3 )
Gains (losses) on cash flow hedges(d)
     (0.3 )     -       0.2       -       (0.1 )
    $ (54.3 )     1.3       35.1       (11.6 )     (29.5 )
                                         
Nine months ended September 30, 2013
                                        
                                         
Amounts attributable to Brink's:
                                        
Benefit plan adjustments
   $ (1.6 )     0.4       57.1       (20.2 )     35.7  
Foreign currency translation adjustments
     (22.5 )     -       (0.1 )     0.1       (22.5 )
Unrealized gains (losses) on available-for-sale securities
     0.5       (0.2 )     (0.3 )     0.1       0.1  
Gains (losses) on cash flow hedges
     2.5       -       (1.4 )     -       1.1  
      (21.1 )     0.2       55.3       (20.0 )     14.4  
                                         
Amounts attributable to noncontrolling interests:
                                        
Benefit plan adjustments
     -       -       0.2       -       0.2  
Foreign currency translation adjustments
     (1.3 )     -       -       -       (1.3 )
      (1.3 )     -       0.2       -       (1.1 )
                                         
Total
                                        
Benefit plan adjustments(a)
     (1.6 )     0.4       57.3       (20.2 )     35.9  
Foreign currency translation adjustments(b)
     (23.8 )     -       (0.1 )     0.1       (23.8 )
Unrealized gains (losses) on available-for-sale securities(c)
     0.5       (0.2 )     (0.3 )     0.1       0.1  
Gains (losses) on cash flow hedges(d)
     2.5       -       (1.4 )     -       1.1  
    $ (22.4 )     0.2       55.5       (20.0 )     13.3  


(a)  
The amortization of prior experience losses and prior service cost and settlement costs are part of total net periodic retirement benefit cost when reclassified to net income.  Net periodic retirement benefit cost also includes service costs, interest costs, and expected returns on assets.  The total pretax expense is allocated between cost of revenues and selling, general and administrative expenses on a plan-by-plan basis:

   
Three Months
    
Nine Months
  
   
Ended September 30,
    
Ended September 30,
  
   
2014
    
2013
    
2014
    
2013
  
                         
Total net periodic retirement benefit cost included in:
                        
Cost of revenues
   $ 8.8       16.8       26.7       50.0  
Selling, general and administrative expenses
     2.1       4.3       6.9       13.0  

(b)