Home

• To Our
  Shareholders
• The Brink’s
  Company
• Brink’s,
  Incorporated
• Brink’s Home
  Security
• BAX
  Global
• 2004 Financial
  Review
  • Financial Highlights
  • Management’s Discussion and Analysis
  • Management’s Report on Internal Control Over Financial Reporting
  • Reports of Independent Registered Public Accounting Firm
  • Consolidated Financial Statements
  • Notes to Consolidated Financial Statements
  • Selected Financial Data
  • Board of Directors and Senior Management
  • Corporate Information

Notes to Consolidated Financial Statements

Note 1 – Summary of Significant Account 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 – Share-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 13 – Long-Term Debt

		December 31,
(In millions, denominated in U.S. dollars unless noted)		2004	2003
Bank credit facilities:
Revolving Facility (year-end weighted average rate of 2.90% in 2004 and 2.40% in 2003)	$	18.4	30.9
Euro-denominated credit facilities of French subsidiaries (year-end weighted average rate of 3.11% in 2004 and 3.40% in 2003)		7.5	13.4
Other non-U.S. dollar denominated facilities (year-end weighted average rate of 9.92% in 2004 and 8.70% in 2003)		20.6	19.9
		46.5	64.2
Senior Notes:
Series A, 7.84%, due 2005-2007		55.0	55.0
Series B, 8.02%, due 2008		20.0	20.0
Series C, 7.17%, due 2006-2008		20.0	20.0
		95.0	95.0
Other:
Capital leases (average rates: 5.35% in 2004 and 5.54% in 2003)		32.0	36.3
Dominion Terminal Associates 6.0% bonds, due 2033		43.2	43.2
Total long-term debt		216.7	238.7
Current maturities of long-term debt:
Bank credit facilities		6.0	7.3
Senior Notes		18.3	-
Capital leases		10.8	9.9
Total current maturities of long-term debt		35.1	17.2
Total long-term debt excluding current maturities	$	181.6	221.5

During October 2004, the Company entered into a new unsecured $400 million revolving bank credit facility with a syndicate of banks to replace the existing $350 million facility which was due to expire in 2005. The new facility allows the Company to borrow (or otherwise satisfy credit needs) on a revolving basis over a five-year term ending in October 2009. Both the old and new facility are referred to herein as the “Revolving Facility.” At December 31, 2004, $381.6 million was available for usage under the new Revolving Facility. The Company has the option to borrow based on a eurocurrency-based rate plus a margin, a prime rate or a competitive bid among the individual banks. The margin on eurocurrency-based borrowings, which can range from 0.3% to 1.0% depending on the Company’s credit rating, was 0.6% at December 31, 2004. When borrowings and letters of credit under the Revolving Facility are in excess of $200 million, the applicable interest rate is increased by 0.125%. The Company also pays an annual fee on the Revolving Facility based on the Company's credit rating. The facility fee, which can range from 0.1% to 0.25%, was 0.15% as of December 31, 2004.

During November 2004, the Company also entered into an unsecured $150 million credit facility with a bank to provide letters of credit and other borrowing capacity over a five-year term ending in December 2009 (the “Letter of Credit Facility”). The costs of such letters of credit are expected to be approximately the same as borrowings under its $400 million facility discussed above. The Company intends to use the Letter of Credit Facility to replace surety bonds and other letters of credit needed to support its activities. As of December 31, 2004, $106.7 million was utilized under this revolving credit facility. The Revolving Facility and the multi-currency revolving credit facilities are also used for the issuance of letters of credit and bank guarantees.

At December 31, 2004, the Company had $95 million of Senior Notes outstanding that are scheduled to be repaid in 2005 through 2008, including $18.3 million which was paid as scheduled in January 2005. Interest on each series of the Senior Notes is payable semiannually, and the Company has the option to prepay all or a portion of the Notes prior to maturity with a prepayment penalty. The Senior Notes are unsecured.

The Company has three unsecured multi-currency revolving bank credit facilities with a total of $105 million in available credit at December 31, 2004, of which $37.0 million was unused. When rates are favorable, the Company also borrows from other banks under short-term uncommitted agreements. Various foreign subsidiaries maintain other secured and unsecured lines of credit and overdraft facilities with a number of banks. Amounts borrowed under these agreements are included in short-term borrowings.

Minimum repayments of long-term debt are as follows:

(In millions)		Capital Leases		Other long- term debt		Total
2005	$	10.8		24.3		35.1
2006		7.2		38.4		45.6
2007		4.4		27.2		31.6
2008		3.1		28.8		31.9
2009		4.0		19.3		23.3
Later years		2.5		46.7		49.2
Total	$	32.0		184.7		216.7

The Company’s Brink’s, BHS and BAX Global subsidiaries have guaranteed the Revolving Facility, the Letter of Credit Facility and the Senior Notes. The Revolving Facility, the Letter of Credit Facility, the agreement under which the Senior Notes were issued and the multi-currency revolving bank credit facilities each contain various financial and other covenants. The financial covenants, among other things, limit the Company’s total indebtedness, provide for minimum coverage of interest costs, and require the Company to maintain a minimum level of net worth. The credit agreements do not provide for the acceleration of payments should the Company's credit rating be reduced. If the Company were not to comply with the terms of its various loan agreements, the repayment terms could be accelerated and the commitment could be withdrawn. An acceleration of the repayment terms under one agreement could trigger the acceleration of the repayment terms under the other loan agreements. The Company was in compliance with all financial covenants at December 31, 2004.

In 2003, at the Company’s request, the Peninsula Ports Authority of Virginia issued a new series of bonds to replace the previous bonds related to Dominion Terminal Associates, a deep water coal terminal in which the Company no longer has an interest. The Company continues to pay interest on and guarantee payment of the $43.2 million principle of the new bonds and ultimately will have to pay for the retirement of the new bonds in accordance with the terms of the guarantee. The new bonds bear a fixed interest rate of 6.0% (versus a fixed interest rate of 7.375% for the previous bonds) and mature in 2033. The new bonds may mature prior to 2033 upon the occurrence of certain specified events such as the determination that the bonds are taxable or the failure of the Company to abide by the terms of its guarantee.

At December 31, 2004, the Company had undrawn unsecured letters of credit and guarantees totaling $221.7 million, including $106.7 million issued under the Letter of Credit Facility, and $44.4 million issued under the multicurrency revolving bank credit facility. These letters of credit primarily support the Company’s obligations under various self-insurance programs, credit facilities and aircraft leases.