Management’s Discussion and Analysis
MD&A Quicklinks
- Results of Operations
- Retained Liabilities and Assets of Former Natural Resource Operations
- Executive Overview
- Legacy Liabilities and Assets
- Projected Payments and Expenses of Retained Coal Liabilities and Administrative Costs
- Company-Sponsored Retiree Medical Benefits Obligations and VEBA
- Health Benefit Act Obligations
- Black Lung Obligations
- Withdrawal Liabilities
- Discontinued Operations
- Sale of Other Natural Resources Assets
- Liquidity and Capital Resources
Liquidity and Capital Resources
Investing Activities
Proceeds from Disposition of Assets and Investments
Investing activities in 2004 included $28.6 million of proceeds from the sale of natural resource businesses. Investing activities in 2003 included $119.4 million of cash proceeds from the sale of 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 2002 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.
Capital and Aircraft Heavy Maintenance Expenditures
| Years Ended December 31, | $ change | |||||||
|---|---|---|---|---|---|---|---|---|
| (In millions) | 2004 | 2003 | 2002 | 2004 | 2003 | |||
| Capital Expenditures | ||||||||
| Brink’s | $ | 76.2 | 80.9 | 79.3 | $ | 4.7 | (1.6) | |
| BHS | 117.6 | 98.0 | 86.9 | (19.6) | (11.1) | |||
| BAX Global | 25.4 | 23.6 | 27.1 | (1.8) | 3.5 | |||
| Corporate and other | 1.1 | 0.2 | 0.1 | (0.9) | (0.1) | |||
| Capital expenditures | $ | 220.3 | 202.7 | 193.4 | $ | (17.6) | (9.3) | |
| Aircraft heavy maintenance expenditures | $ | 25.1 | 23.9 | 31.0 | $ | (1.2) | 7.1 | |
Higher capital expenditures at BHS in both 2004 and 2003 as compared to the prior-year periods were primarily due to an increase in subscriber installations.
Capital expenditures in 2005 are currently expected to range from $280 million to $290 million. Expected capital expenditures for 2005 reflect an increase in customer installations at BHS and information technology spending at Brink’s and BAX Global. In addition, BHS’s capital expenditures in 2005 are expected to include approximately $25 million to purchase facilities, including BHS’s headquarters facility, currently occupied under an operating lease, and the development of a second monitoring center.
Aircraft heavy maintenance expenditures vary as a result of the number of airplanes leased and owned, the amount of flight time and the timing of regularly scheduled maintenance for airplanes. The Company expects to spend between $25 million and $30 million on aircraft heavy maintenance in 2005.
VEBA
The Company made $82 million of contributions to its VEBA in 2003, which, as noted above, were classified as an investing activity. The Company classified the $50 million of net contributions in 2004 as an operating activity.
Other Investing Activities
Acquisitions in 2003 and 2004 were made primarily by Brink’s. In the first quarter of 2005, the Company announced agreements by Brink’s to acquire two operations in Europe for approximately $43 million.
In comparison to 2002, investing activities in 2003 reflected approximately $13 million of increased proceeds from the sale of operating assets, primarily at Brink’s.