Management’s Discussion and Analysis

Operations Results of Operations Liquidity and Capital Resources Market Risk Exposures Application of Critical Accounting Pronouncements Recent Accounting Pronouncements Forward-Looking Information

Overview Summary of Cash Flow Information Operating Activities Investing Activities Business Segment Cash Flows Financing Activities Capitalization Off Balance Sheet Arrangements Contractual Obligations Other Potential Use of Credit Other Contingent Gains and Losses

Liquidity and Capital Resources

Investing Activities

Proceeds from Disposition of Assets and Investments

Investing activities in 2003 included $119.4 million of cash proceeds from the 2003 sales of the natural resource businesses and equity interests and the realization in 2003 of $26.0 million of cash related to the monetization of noncash proceeds from the prior-year sale of the Company’s former Virginia coal operations. Proceeds from dispositions of assets and investments in 2002 included $42.3 million of cash associated with the disposal of a portion of the Company’s former coal operations.

The Company expects to collect up to a total of $33.7 million of cash in 2004 (including $31.8 million collected in January 2004) related to selling the remainder of its timber business.

Higher capital expenditures at BHS in both 2003 and 2002 as compared to the prior-year periods were primarily due to an increase in subscriber installations. More was spent at Brink’s in 2002 over 2001 for armored vehicles, facilities and information technology. BAX Global reduced capital spending in the area of information technology in each of the last two years.

Capital expenditures in 2004 are currently expected to range from $210 million to $230 million, depending on operating results throughout the year. Expected capital expenditures for 2004 reflect an increase in customer installations at BHS and information technology spending at Brink’s and BAX Global.

Operating performance and cash flows at BAX Global have been reduced over the last few years by the effects of the soft U.S. economy. Because of this, BAX Global has delayed capital spending on a few information technology projects for which it has acquired software and incurred some development costs. These costs, which have been capitalized, amount to approximately $8 million. BAX Global is in the process of restarting these projects and expects to complete them. If these projects were to be abandoned at a later date, any capitalized amounts would be expensed immediately.

Aircraft heavy maintenance expenditures vary as a result of the amount of flight time and the timing of regularly scheduled maintenance for airplanes. The Company expects to spend between $25 million and $35 million on aircraft heavy maintenance in 2004.

VEBA

The Company made contributions totalling $82 million to the Company’s VEBA in 2003. All income from VEBA investments has been retained in the VEBA.

Other Investing Activities

Investing activities in 2003 reflected approximately $13 million of higher proceeds from the sale of operating assets, primarily at Brink’s, offset by approximately $8 million of cash used for acquisitions, also primarily at Brink’s.

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