Notes to Consolidated Financial Statements

Note 1 - Summary of Significant Accounting Policies Note 2 - Segment Information Note 3 - Earnings Per Share Note 4 - Employee and Retiree Benefits Note 5 - Investments Held by VEBA Trust Note 6 - Former Natural Resource Operations Note 7 - Costs Associated With Exit Activities Note 8 - Property and Equipment Note 9 - Impairment of Long-Lived Assets Note 10 - Other Assets Note 11 - Accrued Liabilities Note 12 - Other Liabilities Note 13 - Long-Term Debt Note 14 - Accounts Receivable and Asset Securitization Note 15 - Operating Leases Note 16 - Equity-Based Compensation Plans Note 17 - Capital Stock Note 18 - Income Taxes Note 19 - Supplemental Cash Flow Information Note 20 - Other Operating Income, Net Note 21 - Other Nonoperating Income (Expense), Net Note 22 - Risk Management Note 23 - Other Commitments and Contingencies Note 24 - Selected Quarterly Financial Data (unaudited)

Note 4 – Employee and Retiree Benefits

The employee benefit plans and other liabilities described below cover employees and retirees of both the Company’s continuing operating units and former coal operations. Accordingly, a portion of these benefit expenses have been included in the results of discontinued operations for the years presented. The measurement date for all plans is December 31.

Pension Plans

The Company has noncontributory defined benefit pension plans covering substantially all U.S. non-union employees who meet certain minimum requirements. The Company also has other contributory and noncontributory defined benefit plans for eligible non-U.S. employees. Benefits under most of the plans are based on salary (including commissions, bonuses, overtime and premium pay) and years of service. The Company’s policy is to fund at least the minimum actuarially determined amounts required by applicable regulations.

The weighted average assumptions used in determining the net pension cost and benefit obligations for the Company’s pension plans were as follows:

(a) Salary scale assumptions are determined through historical experience and vary by age and industry.

The net pension cost for 2003, 2002 and 2001 for all pension plans is as follows:

In June 2003, the Company amended the benefit formula for its U.S. pension plan which resulted in a $4.1 million reduction in service cost in 2003 from what it would have otherwise been. This change had no effect on benefits earned for service prior to June 2003.

Reconciliations of the PBO, plan assets, funded status and net pension assets at December 31, 2003 and 2002 for all of the Company’s pension plans are as follows:

Information comparing plan assets to plan obligations as of December 31, 2003 and 2002 are aggregated below. The accumulated benefit obligation (“ABO”) differs from the PBO in that the ABO includes no assumption about future compensation levels.

The Company’s unrecognized experience loss increased in 2002 primarily due to lower discount rate assumptions (which increased the ABO and PBO) and lower than expected returns on plan assets. The unrecognized experience loss at the end of 2003 was slightly lower than the prior year as actuarial losses related to lower discount rates were offset by better than expected returns on plan assets.

The Company’s U.S. plan asset allocation at December 31, 2003 and 2002 by asset category is as follows:

The Company’s primary U.S. defined benefit pension plan had assets at December 31, 2003 of approximately $542 million. This pension plan’s assets are invested primarily using actively managed accounts with asset allocation targets of 47.5% domestic equities and 22.5% international equities, which include a broad array of market cap sizes and investment styles, and 30% fixed income securities. The Company’s policy does not permit certain investments, including investments in The Brink’s Company common stock, unless part of a commingled fund, or derivative instruments unless used for hedging purposes. Fixed-income investments must have an investment grade rating at the time of purchase. The plan rebalances its assets on a quarterly basis if actual allocations of assets exceed predetermined limits. Among other factors, the performance of asset groups and investment managers will affect the long-term rate of return.

Pension accounting principles require companies to use estimates of expected asset returns over long periods of time. The Company selects the expected long-term rate of return assumption using advice from its investment advisor and its actuary considering the plan’s asset allocation targets and expected overall investment manager performance and a review of its most recent ten-year historical average compounded rate of return.

Based on December 31, 2003 data, assumptions and funding regulations, the Company does not expect to be required to make a contribution to the plan for the 2004 and 2005 plan years. Under existing regulations, a contribution of over $40 million could be required for the 2006 plan year but the actual payment could be delayed until as late as September 2007.

There are limits to the amount of benefits which can be paid to participants from a U.S. qualified pension plan. The Company maintains an unfunded nonqualified plan to pay benefits for those eligible current and former employees in the U.S. whose benefits exceed the regulatory limits.

Multi-employer Pension Plans

The Company participates in the United Mine Workers of America (“UMWA”) 1950 and 1974 pension plans, but expects to ultimately withdraw from these plans. Upon withdrawal from the plans, the Company must pay the plans a portion of any underfunded liability of the plans, as determined by the plan agreements. In 2001, the Company recorded estimated withdrawal liabilities for coal-related multi-employer pension plans of $8.2 million associated with its planned exit from the coal business. In 2002, the Company increased the estimated liabilities by $26.8 million to $35.0 million and in 2003, the Company increased the estimated liabilities by $17.0 million ($14 million in the fourth quarter) to $52.0 million.

The Company’s estimate of the obligation in each year is based on the funded status of the multi-employer plans for the most recent measurement date. The increases in the Company’s estimated liability in 2002 and 2003 are due to increases in the UMWA plans’ unfunded liability. The actual withdrawal liability, if any, is subject to several factors, including funding and benefit levels of the plans as of annual measurement dates (June 30 each year) and the date that the Company is determined to have completely withdrawn from the plans. Accordingly, the ultimate obligation could change materially.

Expense included in continuing operations for multi-employer pension plans (excluding coal-related plans) was $2.8 million in 2003, $1.8 million in 2002, and $1.2 million in 2001.

Savings Plans

The Company sponsors a 401(k) plan to assist eligible U.S. employees in providing for retirement. Employee contributions in 2001, 2002 and the first half of 2003 were matched at rates of between 50% to 100% for up to 5% of compensation (subject to certain limitations). In June 2003, the Company modified the match provision of the plan and employee contributions were matched at a rate of 75% in the last half of 2003. Contribution expense in continuing operations under the plan aggregated $11.5 million in 2003, $10.9 million in 2002, and $9.8 million in 2001. Contribution expense included in discontinued operations was $0.1 in 2003, $0.6 million in 2002 and $0.7 million in 2001.

The Company sponsors other defined contribution benefit plans based on hours worked or other measurable factors. Contributions under all of these plans aggregated $5.0 million in 2003, $3.6 million in 2002, and $3.2 million in 2001.

Postretirement Benefits Other Than Pensions

Summary

The Company has various postretirement benefits other than pensions. The related amounts recorded on the balance sheets for the last two years are detailed below.

Company-Sponsored Plans

The Company provides certain postretirement health care and life insurance benefits (the “Company-sponsored plans”) for eligible active and retired employees in the U.S. and Canada of the Company’s current and former businesses, including eligible participants of the former coal operations (the “coal-related” plans). The components of net periodic postretirement costs related to Company-sponsored plans were as follows:

Reconciliations of the APBO and funded status to the accrued other postretirement benefit cost (the amount recorded on the balance sheet at the measurement date) for Company-sponsored plans at December 31, 2003 and 2002 are as follows:

The APBO for each of the plans was determined using the unit credit method and an assumed discount rate as follows:

For Company-sponsored coal-related plans, the assumed health care cost trend rate used in 2003 was 9% for 2004, declining ratably to 5% in 2009 and thereafter (in 2002: 10% for 2003 declining ratably to 5% in 2008 and thereafter). Other plans provide for fixed-dollar value coverage for eligible participants and, accordingly, are not adjusted for inflation.

The table below shows the estimated effects of a one percentage point change in the assumed health care cost trend rates.

On December 8, 2003, the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (the “Act”) was signed into law. The Act introduces a prescription drug benefit under Medicare as well as a federal subsidy to sponsors of retiree health care benefit plans that provide a benefit that is at least actuarially equivalent to certain Medicare benefits. Because of the broadness of coverage provided under the Company’s plan, the Company believes that the plan benefits are at least actuarially equivalent to the Medicare benefits. The Company reflected the estimated effect of the new legislation in 2003 as a $45.7 million reduction to the actuarial loss for 2003, as permitted by FASB Staff Position No. 106-1, “Accounting and Disclosure Requirements Related to the Medicare Prescription Drug, Improvement and Modernization Act of 2003.” The estimated value of the projected federal subsidy assumes no changes in participation rates and assumes that the subsidy is received in the year after claims are paid. The estimated reduction in per capita claim costs for participants over 65 years old was 12%.

There was no effect on 2003 expense. For 2004, a reduction in net periodic postretirement costs of approximately $5.8 million is expected. Future guidance from the FASB could result in a material change to this recognition.

The Company’s unrecognized experience loss decreased in 2003 primarily due to the favorable effect of the new Medicare subsidy, offset by a lower discount rate used in 2003 to estimate the APBO.

In the first quarter of 2004, the Company restricted the use of the VEBA so that it will be used to only pay benefits related to the Company’s coal-related postretirement medical plan. Accordingly, under SFAS No. 106, estimated returns on the VEBA assets will be included in the determination of net periodic postretirement costs.

Health Benefit Act Liabilities

Background
In October 1992, the Coal Industry Retiree Health Benefit Act of 1992 (the “Health Benefit Act”) was enacted as part of the Energy Policy Act of 1992. The Health Benefit Act established rules for the payment of future health care benefits for thousands of retired union mine workers and their dependents.

Assigned Beneficiaries. The Health Benefit Act established a trust fund, The United Mine Workers of America Combined Benefit Fund (the “Combined Fund”), to which “signatory operators” and “related persons”, including The Brink’s Company and certain of its subsidiaries (collectively, the “Brink’s Companies”), are jointly and severally liable to pay annual premiums for those beneficiaries directly assigned to a signatory operator and its related persons, on the basis set forth in the Health Benefit Act.

In October 1993 and on an annual basis in subsequent years, the Brink’s Companies have received notices from the Social Security Administration with regard to the current number of assigned beneficiaries for which the Brink’s Companies are deemed responsible under the Health Benefit Act.

Unassigned Beneficiaries. In addition, the Health Benefit Act provides that assigned companies, including the Brink’s Companies, are required to fund, pro rata according to the total number of assigned beneficiaries, a portion of the health benefits for unassigned beneficiaries if not funded from other designated sources. To date, almost all of the funding for unassigned beneficiaries has been provided from transfers from the Abandoned Mine Land Reclamation Fund (the “AML Fund”) or other government sources.

Information and Assumptions Used to Estimate Obligation
The Company’s liability for Health Benefit Act obligations is equal to the undiscounted estimated amount of future annual premiums the Company expects to pay to the Combined Fund over approximately 70 years. The Company’s estimated annual premium is generally equal to the total number of beneficiaries (including assigned beneficiaries and an allocated percentage of the total unassigned beneficiaries) at October 1, the beginning of the plan year, multiplied by the premium per beneficiary for that year. The Company expects to pay annual premiums over the next 70 or more years, but it expects these annual premiums to gradually decline over time as the number of beneficiaries decreases.

The estimated liability at December 31, 2003 assumes that almost all of the costs for unassigned beneficiaries for the plan year ending September 30, 2004 will continue to be paid with transfers of cash from the AML Fund and other government sources. Transfers to the Combined Fund from the AML Fund beyond this date are not sufficiently assured and the Company’s current estimate of its obligations assumes that no future transfers will be made by the AML Fund. The Company’s estimate of its probable liability for premiums for unassigned beneficiaries could materially decrease in future periods depending on the availability of future funding by the AML Fund or other sources. Moreover, the Company’s estimate of its liability for unassigned beneficiaries could change materially in the future if other responsible coal operators become insolvent. This liability could also change materially if the percentage of unassigned beneficiaries that are allocated to the Company changes due to relative mortality rates of the Company’s assigned beneficiaries compared to the total assigned beneficiaries.

Information provided by the Combined Fund and assumptions made by the Company are as follows:

According to the Health Benefit Act, the rate of inflation for per-beneficiary health care premiums is equal to the medical care component of the Consumer Price Index. At December 31, 2003, annual inflation rates for per-beneficiary health care premiums were assumed to be 4.5% for all future years (at December 31, 2002: 5% in 2003, declining to 4.5% over five years). The U.S. Life 79-81 mortality table has been used to estimate a gradual decline in the number of beneficiaries. The Company’s estimate assumes that there will be no additions to the Combined Fund unassigned beneficiary group as a result of future coal operator insolvencies.

Undiscounted Obligation for Health Benefit Act Liabilities

Reconciliation of Health Benefit Act Liabilities

(a) Charged to income (loss) from discontinued operations.

The $31.3 million actuarial loss in 2003 was recorded in the fourth quarter and was primarily related to the assumed increase in the number of unassigned beneficiaries allocated to the Company. The increased allocation was due to two factors. First, the Company increased its allocation percentage because of a change in the way the Company interprets the statute governing the allocation, based on findings of recent court cases. Second, other coal operations became insolvent during the period, which transferred their assigned beneficiaries to the unassigned pool and reduced the denominator (the total assigned pool) in the computation of the allocation percentage, increasing the Company’s allocation assumption.

The $24.0 million actuarial loss in 2002 primarily resulted from the Company’s being able to obtain and use Company-specific information regarding the age of the beneficiaries covered by the Health Benefit Act rather than using averages relating to the entire population of beneficiaries covered, slightly higher per-beneficiary health care premiums, and slightly lower mortality than was estimated at the end of 2001 for the plan year ended September 30, 2002.

The $8.0 million actuarial loss in 2001 was primarily the result of a higher number of assigned beneficiaries as of October 1, 2001 than was estimated at the end of 2000. The Combined Fund premium per beneficiary for the plan year beginning October 1, 2001 was essentially equal to that estimated at the end of 2000.

The Company currently estimates that its annual cash funding under the Health Benefit Act will be slightly higher in 2004, increase in 2005 to approximately $12 million as a result of the assumption that premiums for unassigned beneficiaries will not be paid for through transfers from the AML Fund, and then payments are expected to decline thereafter as the number of beneficiaries decreases.

Pneumoconiosis (Black Lung) Benefits

The Company acts as self-insurer with respect to almost all black lung benefits. Provision is made for estimated benefits based on annual reports prepared by independent actuaries. Unrecognized losses, representing the excess of the present value of expected future benefits over existing accrued liabilities, are amortized over the average remaining life expectancy of participants (approximately 10 years).

The components of net periodic postretirement benefit costs related to black lung benefits were as follows:

Reconciliations of the APBO and funded status to the accrued other postretirement benefit costs for black lung benefits at December 31, 2003 and 2002 are as follows:

The following are the other key actuarial assumptions for the black lung obligations:

The 1959-1961 Mortality Table for U.S. White Males and Females is used.

The U.S. Department of Labor issued regulations in 2000 that are intended to expand entitlement provisions and that may have the effect of limiting an employer’s ability to rebut claims. The regulation is being disputed by companies in the coal industry. Due to the Company’s judgment that any additional amounts owed are not reasonably estimable, the Company has not included any additional amounts related to the new regulations in the actuarial present value of self-insured black lung benefits.