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
Results of Operations
Consolidated Review
| Revenues | Operating Profit | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Years Ended December 31, |
% change | Years Ended December 31, |
% change | ||||||||||||
| (In millions) | 2004 | 2003 | 2002 | 2004 | 2003 | 2004 | 2003 | 2002 | 2004 | 2003 | |||||
| Business Segments | |||||||||||||||
| Brink’s | $ | 1,931.9 | 1,689.0 | 1,579.9 | 14 | 7 | $ | 144.7 | 112.5 | 96.1 | 29 | 17 | |||
| BHS | 345.6 | 310.4 | 282.4 | 11 | 10 | 80.8 | 71.2 | 60.9 | 13 | 17 | |||||
| BAX Global | 2,440.6 | 1,999.2 | 1,871.5 | 22 | 7 | 56.2 | 3.0 | 17.6 | 200+ | (83) | |||||
| Business segments | 4,718.1 | 3,998.6 | 3,733.8 | 18 | 7 | 281.7 | 186.7 | 174.6 | 51 | 7 | |||||
| Corporate | - | - | - | - | - | (45.9) | (27.8) | (23.1) | 65 | 20 | |||||
| Gain on sale of equity interest | - | - | - | - | - | - | 10.4 | - | (100) | NM | |||||
| Former coal operations | - | - | - | - | - | (45.9) | (69.5) | (19.2) | 34 | (200+) | |||||
| $ | 4,718.1 | 3,998.6 | 3,733.8 | 18 | 7 | $ | 189.9 | 99.8 | 132.3 | 90 | (25) | ||||
Revenues in 2004 were 18% higher than 2003 because of growth in all segments and changes in currency exchange rates. Operating profit increased 90% in 2004 due to improved operating performance by the Company’s business segments, particularly at BAX Global, and lower expenses related to former coal operations. These improvements were partially offset by higher corporate expenses and the nonrecurrence of the 2003 gain on the sale of an equity investment.
Revenues in 2003 were 7% higher than 2002 because of growth in all business segments and changes in currency exchange rates. Operating profit in 2003 was 25% lower than in the prior year primarily because the cost of retiree and other benefits and other costs related to the former coal business were classified within former coal operations in continuing operations. Prior to 2003, these expenses were recorded within discontinued operations. Operating profit was stronger at Brink’s and BHS on growth in these businesses, offset by lower profits at BAX Global primarily due to the effects of soft demand for air freight services for most of 2003. Demand for air freight services began to improve in the fourth quarter of 2003. This trend has continued through 2004.
For subsidiaries outside the U.S., U.S. dollar revenue growth rates include the effect of changes in currency exchange rates. On occasion in this report, the change in revenue versus the prior year has been disclosed using constant exchange rates in order to provide information about growth rates without the impacts of changing foreign currency exchange rates. Relative to most other currencies relevant to the Company, the U.S. dollar weakened in 2004 and 2003 compared to the respective prior-year periods, so growth at constant-currency exchange rates was lower than growth computed using actual currency exchange rates. Changes in currency exchange rates did not materially affect period-to-period comparisons of segment operating profit for the periods presented herein.