Welcome to the Brink's Company's Fourth Quarter and Full Year 2017 Earnings Call. Brink's issued a press release on fourth quarter and full year results this morning. The company also filed an 8-K that includes the release in the slides that will be used in today's call. For those of you listening by phone, the release and slides are available on the company's website at brinks.com. [Operator Instructions]. As a reminder, this conference is being recorded. Now for the company's safe harbor statement. This call and the Q&A session will contain forward-looking statements. Actual results could differ materially from projected and estimated results. Information regarding factors that could cause such differences is available in today's press release and in the company's most recent SEC filings. Information presented and discussed on this call is representative as of today only. Brink's assumes no obligation to update any forward-looking statements. The call is copyrighted and may not be used without written permission from Brink's. It is now my pleasure to introduce your host, Ed Cunningham, Vice President of Investor Relations and Corporate Communications. Mr. Cunningham, you may begin.

Thank you, Nicole. Good morning. Joining me today are CEO, Doug Pertz; and CFO, Ron Domanico. This morning, we reported results on both the GAAP and non-GAAP basis. The non-GAAP results exclude certain retirement expenses, reorganization and restructuring costs, and certain items related to acquisitions and dispositions, tax-related adjustments and our 2017 debt refinancing. In addition to these items, our non-GAAP results exclude Venezuela due to a variety of factors including our inability to repatriate cash, Venezuela's fixed exchange rate policies and currency devaluations and the difficulties we face operating in a highly inflationary economy. We believe the non-GAAP results make it easier for investors to assess operating performance between periods. Accordingly, our comments today including those referring to our guidance will focus primarily on non-GAAP results. Reconciliations of non-GAAP to GAAP results were provided in the press release in the appendix to the slides we're using today in this morning's 8-K and on our website. Finally, Page 3 of the press release provides the details behind our 2018 guidance including revenue, operating profit, corporate expense, noncontrolling interest, income taxes, earnings and adjusted EBITDA. I'll now turn the call over to Doug.

Thanks, Ed, and good morning, everyone. I'm going to provide a brief review of strong yields we reported this morning as well as our outlook for continued profit momentum in 2018 and '19. I'll spend a few minutes on the solid progress we've made on our three-year strategic plan including an update on our breakthrough initiatives that we're gaining traction on in the U.S. operations. Then Ron will provide a financial review and we'll then open it up to questions. Now to our fourth quarter earnings. Fourth quarter revenue increased 13%, driven by acquisitions and organic growth, primarily in South America. The organic growth rate of 5% reflects a revenue decline in the U.S. versus the year-ago quarter that included the sale of 450 recyclers in 2016 that did not reoccur this last year in '17. Excluding this revenue, organic growth was 9%. Operating profit for the quarter was up 15% and the margin rate improved by 20 basis points to 10.5%, as the previously reported theft charge of $11 million was more than offset by profit growth of 43% in South America and 27% in North America. Fourth quarter profits in the U.S. were up 43% against the year-ago comp, that included the extra $3 million of profit boost from the recycler sales in 2016. Adjusted EBITDA for the quarter was up $130 million, up 16%, even after the impact of the theft loss. And earnings came in at $0.95 per share up 8%, despite the $0.14 charge related to the theft. Excluding lost underlying earnings, we're up 24%. No matter how you look at it, the quarter was a strong quarter and a strong finish to our year. Speaking of the year, our full year results include revenue growth of 10% to $3.2 billion, including 6% organic growth…

Thanks, Doug, and good day, everyone. Let's take a deeper look at our full year 2017 performance, starting with Slide 15. Adjusting for forex, 2017 revenue of $3.2 billion increased $256 million versus 2016. The six acquisitions we completed in 2017 added $100 million in revenue, most of it from Maco in Argentina. This was partly offset by the 2016 divestitures. The 6% organic increase was driven by volume growth and price execution, especially in Argentina, Brazil, Mexico and the United States. Turning to Slide 16. Adjusting for forex, 2017 operating profit of $281 million increased $76 million or 37% versus 2016. The operating margin of 8.8% increased 140 basis points versus prior year. We are rapidly integrating acquisitions to ensure synergy capture. This integration eliminates the distinction between our existing and the acquired businesses. Consequently, we report the operating profit from acquisitions as the pro rata trailing 12-month performance of each company from the date of closing. Using this methodology, acquisitions added $20 million in operating profit and organic growth added $56 million. Our 2017 acquisitions continued to perform in line with expectations and with the guidance we shared with you on our third quarter earnings call. South America operating profit grew 49% or $60 million from volume and margin expansion in Argentina and Brazil and the positive impact of the Maco acquisition. North America operating profit was up 85% or $34 million reflecting progress on our breakthrough initiatives in the U.S. and Mexico. Rest of the world was up 4% versus 2016, with the decrease in France, offset primarily by improvement in Asia-Pacific. In total, our 3 segments had operating profit growth of 30%, which was partly offset by a $32 million increase in corporate expenses due primarily to the $11 million theft loss and higher incentive-based compensation.…

Thanks, Ron. Like Ron, I want to thank our entire Brink's team for their efforts in achieving our tremendous 2017 results. This slide offers a brief summary of the progress we've made and the additional progress we expect to make in 2018 and '19 during the plan period. I hope it's clear that we're delivering on our commitments to our customers and our investors and that our opportunities for additional growth are substantial. With our organic improvement initiatives gaining traction and an acquisition strategy that's just getting underway, we are more excited than ever about our opportunities to continue to deliver sustainable growth in revenue, earnings and most importantly, shareholder value. Thanks, again, for joining the call, and Nicole, please open up the call for questions.

[Operator Instructions]. Our first question comes from Jamie Clement with Macquarie.

So Doug, I just want to delve a little bit more into the U.S. fleet and the network. So I think you said you had about 700 in the new trucks on the road at the end of '17. Did I get that right?

That's right. About 440 additions during the year. But remember, those additions are not in a straight line. A majority of them were in the second half of the year.

Okay, so I think, back at the Investor Day, I think, the general target was like 1,000 between '17, '18 and '19. Is that still the right number? Or have you found a greater opportunity to actually utilize the more efficient, less expensive trucks?

I think, we're still around that range of somewhere between 900 to 1,000 additions. And remember, we had some going into '17. So that number is going to vary around that number as we go out of that. I think what we'll continue to see is evaluate how many -- what percent of our routes can be 1 person, what type of liability should we use on that. And frankly, if there's even a better way to do it and as we go into '19 and '20. But I think the general direction is still there as you can see in the chart, on Page 9, the 1-person vehicle savings were around that $6 million, actually they were a little bit better than that, $6 million for the year. And there's still a lot of blue there that means as we continue to ramp up and get the full benefit of the 700-plus for the full year this year, we're getting even more benefit from one-person vehicle this year and going through the plan period.

Okay, that's great. And Doug, you used the term launchpad, being close to the -- is that the same concept as the secured garages?

It is. Yes.

Okay.

Launchpad gives us the ability, as you know, to go into markets that we currently have a number of routes going in that area, like Long Island as an example, and having a launchpad there that is basically just that a secured garage, have the trucks out of -- work out of there rather than having every morning to go out of our Brooklyn branch.

Okay. And then I think it should be my last question and I'll get back into queue. In the slide where you have the red bar talking about contingencies with 2019, I think if I remember correctly, at the Investor Day, the absolute dollar number give or take was about $100 million. I thought earlier in '17, you might have knocked it down to $75 million. Is $75 million to $100 million the right way to think about it? Because in the chart you just used a percentage term, so obviously, depending on what revenue number you want to use, et cetera, et cetera, but is $75 million to $100 million the right range?

Yes, so there's two things. We specifically did not put a number on there. We put a range on it. But you're absolutely correct in what we're trying to get the point across on is that in fact that is in that range and it is in that -- originally in that $90 million number. It was pushed down from, I think, $92 million to $67 million. But what we're really saying is it's in that where it originally was and that the roll up of all of our countries and their plans together come out to something more than what the target is. But we anticipate that each year, as we go through the plan, some countries are going to do better, some initiatives are going to be better, some aren't going to be as good, some countries are going to be hit by other external more macro issues, et cetera and they're not going to be as good.

Foreign exchange, also, right? Foreign exchange, you can't control that, yes.

And there's other things that will go up and down. And so what we're saying, which I knew, this would be a topic, is that effectively, we still think there's about 2.5 percentage points in there that is a cushion or gives us the ability to cushion for those ups and downs as well as potentially give us the upside should we see that it's consistently being achieved to push up the target, again, as we get closer to the timeframe.

[Operator Instructions]. Our next question comes from Tobey Sommer of SunTrust.

I'm wondering if you could update us on the traction and realization of the price increase that you implemented in the fourth quarter in the United States?

Yes, Toby. Thanks. I think, we laid out that we were late, obviously in getting the balance of the increased cost that we saw in the third quarter that negatively impacted the third quarter. We were late in getting that out into the fourth quarter. We've been very pleased, though, with the responsiveness that we've seen, in other words, the traction, the ability to make it and let it to get it stick. And we think that that's supported by the rest of the marketplace. It is also seeing similar sorts of macro conditions that suggest customers are accepting that. So it's been well accepted and the impact is very similar to what we initially projected. So we're pleased.

In terms of the long-term effective tax rates, could you give us a little bit more color on the ability for that to perhaps come a little bit lower than the 2018 level?

Yes, absolutely. So we're still, like everybody else, digesting this. We are a multinational company as you're well aware. We're on the ground in 21 countries. The U.S. is about 1/4 of our revenue and 10% of our earnings.

So long.

So long. So as that mix changes, we will be able to take advantage of the lower U.S. federal statutory rate. We also have opportunities to move debt into countries where the earnings are being realized to take a greater advantage of that. The number we put out there, Tobey, was based on where we are right now and the anticipated time it's going to take to make some of those changes to optimize our tax. The main message to everybody is that we're not going to be U.S. federal taxpayer for at least, say, the next 5 years. And that as our mix of earnings from our foreign entities and the U.S. change, we'll be able to take advantage of the lower rates. So the rate we put out there, we feel is the best we could come up with based on our understanding of the interpretation of the act, but we were fully mobilized to reduce the rate as much as possible. And we will keep you and the rest of the investment community up to date on our initiatives in that area.

Could you comment on the acquisition pipeline, in particular, maybe some color about acquisition size? So far the targets have been kind of discrete country operations, but wondering if there's anything larger that can touch multiple countries or geographies?

Look, Tobey, I think the best way to continue to describe it is, we continue to have a reasonable good sized backlog that continues to be about the same size in terms of numbers of deals. They vary in size from what we've done so far in terms of the sizes. There are always potential for larger ones and I tried to talk a little bit in my script about some of those that would be in our core, but larger than what we've done so far. And those will be potentials, but we're certainly not suggesting that something is out there nor are we -- do we have anything in the sites at this point. I think it's more important to say that we have the capacity to do it and we are open to doing that and similar to what our core priorities are in our acquisition strategy. I think the best way to look at this and this is the guidance we've tried to lay out there is, our targets internally and our teams are certainly driven by this, both our operating teams in the field as well as our M&A team is driven to try and achieve or exceed the $400-plus million enterprise value in acquisitions per year, this year, which we've got $145 million in the works so far. And that yet again, in '19, hopefully we can exceed that, but we'll see.

Last question from me and I'll get back in the queue. Any changes to management incentive compensation variables this year kind of versus last year?

Not materially. One of the things that we mentioned, I think, it was in our strat plan meeting, investor meeting in last March, was a significant expansion in the breadth and probably depth as well, of our long-term equity plan that was tied very closely to our three-year strategy plan targets. And that will continue, we expect that, I should say, to continue this year. And I think that's very important in terms of assuring that we have everybody pulling the same way and very much aligned with shareholder value creation. And again, those are three-year longer plan target -- longer-term plans that are tied to achieving specific performance goals that are linked to, I think, shareholder value. So I don't know that we're changing much from where they were last year, but that's certainly has changed from where things were in the past. And I think what you'll see is, that's helping change the culture, the thought process, the sense of urgency, the customer focus and all that is very important and linked together with, I think, what your investors want to see and get paid on.

[Operator Instructions]. Our next question is a follow-up from Jamie Clement of Macquarie.

Ron, two, I think, quick ones. First is, what was the diluted share count for the quarter? I'm not -- I don't think I saw it in the press release, I believe, and although I could be very wrong.

We're still around 51 million shares, Jamie. But we'll look for a more precise number and we'll get that out.

And when is the Q coming out? Excuse me, pardon me, the K coming out? I apologize. Do you have a rough week for that?

No, we're allowed 60 days. I think we'll use 59. So we...

Fair enough. And on the tax front, thanks a lot for the disclosure there. So the purpose is -- of your non-GAAP -- excuse me, your GAAP to non-GAAP tax guidance for 2018, you're not assuming a 0 rate in the U.S. because you're a 0 taxpayer in your estimations, right? You're still assuming a rate on the U.S, right?

Absolutely. Our effective -- yes, our effective tax rate is based on the analysis we're doing. And it's not reflective of our cash tax payments.

Our next question is a follow-up from Tobey Sommer of SunTrust.

Two questions for me. One I was wondering if you could comment on the turnaround in the sales, kind of, culture in the U.S. You have several initiatives. You already described CompuSafe, but maybe you could touch on mid and small market, small-sized financial institutions and other facets of that turnaround? And if you could comment on the opportunity and impact of, kind of, new technology initiatives on trucks and perhaps even on staff? Those 2 topics would be great.

Yes, I don't have any necessarily specifics to provide details on the sales piece on it. But I'm very pleased in our direction that we're starting to ramp up, if you will, which is kind of my favorite word in terms of the CompuSafe and so forth. Because I do think it's a process, it's going to take some time, but is improving. It's improving from both the operating standpoint, in other words the customer service levels, the on-time delivery, the services we are providing to our customer as well as the sales management and support for our customers. As you know, we have a new head of sales from about 9 months ago. And I think, very pleased with what we've started to see in terms of the results, the focus, the digging in, in terms of just what you're suggesting. How do we increase our account share with our existing FIs in particular? How do we make sure we have the right focus in the retail sector? And then how do we then bring that down to the sub-tier 1 credit unions and others making sure that we can work with them to help provide the best service to their customers. Now that's linked together with what I did talk a little bit about with the launch in the U.S. of our track-and-trace programs, which we think by implementation by midyear, will provide a better customer-facing technology, better service levels and hopefully be a step change from what we've been providing in the past that our customers will see a real difference. And along with that, we're going to be launching some new services, effectively new products in our industry for both our retail and our FI side of the business that will be linked to the track-and-trace,…

If I could just follow up on Jamie's question, the dilutive share count for the full year 2017 was 51.8 million shares and for the fourth quarter alone was 52.2 million.

So Tobey, did that help answer that question?

Absolutely.

This concludes our question-and-answer session as well as the conference. Thank you for attending today's presentation. You may now disconnect and have a nice day.