Company: BCO
Filing Date: 2025-02-26
Form Type: 10-K
Source: 0000078890-25-000059
Chunk: 49

Company: BRINKS CO
Filing Date: 2025-02-26
Form: 10-K
Item: Item 1
Chunk 49
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. Refer to Note 4 for further explanation.  

31

Income Taxes

Summary Reconciliation of Effective Income Tax Rate to U.S. Federal Tax Rate

(In percentages)202420232022U.S. federal tax rate21.0 %21.0 %21.0 %Increases (reductions) in taxes due to:Foreign rate differential7.5 4.7 7.5 Taxes on cross border income, net of credits2.9 7.9 6.9 Adjustments to valuation allowances(2.8)18.5 (21.1)Foreign income taxes(1.0)6.0 (0.7)French business tax0.3 0.4 0.8 State income taxes, net2.0 0.6 0.7 Share-based compensation1.3 1.8 1.3 Acquisition costs— 0.2 — Nondeductible fines and penalties3.8 — — Other(0.2)(2.1)1.9 Effective income tax rate on continuing operations34.8 %59.0 %18.3 %

Overview

Our effective tax rate has varied in the past three years from the statutory U.S. federal rate due to various factors, including

•changes in judgment about the need for valuation allowances,

•changes in the geographical mix of earnings,

•changes in laws in the U.S., France, Mexico, Brazil and Argentina,

•timing of benefit recognition for uncertain tax positions,

•state income taxes, and

•tax benefit for distributions of share-based payments.

We establish or reverse valuation allowances for deferred tax assets depending on all available information including historical and expected future operating performance of our subsidiaries. Changes in judgment about the future realization of deferred tax assets can result in significant adjustments to the valuation allowances. Based on our historical and future expected taxable earnings, we believe it is more-likely-than-not that we will realize the benefit of the deferred tax assets, net of valuation allowances.

Numerous foreign jurisdictions have enacted or are in the process of enacting legislation to adopt a minimum effective tax rate described in the Global Anti-Base Erosion ("Pillar Two") model rules issued by the Organization for Economic Co-operation and Development. A minimum effective tax rate of 15% would apply to multinational companies with consolidated revenue above €750 million.

Under the Pillar Two rules, a company