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  • Notes to Consolidated Financial Statements
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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 2 – Segment Information

The Company conducts business in three different operating segments: Brink’s, BHS, and BAX Global. These reportable segments are identified by the Company based on how resources are allocated and how operating decisions are made. Management evaluates performance and allocates resources based on operating profit or loss, excluding corporate allocations.

Brink’s offers services globally including armored car transportation, automated teller machine (“ATM”) replenishment and servicing, currency and deposit processing including its “Cash Logistics” operations, coin sorting and wrapping, arranging the secure air transportation of valuables (“Global Services”) and the deploying and servicing of safes and safe control devices, including its patented CompuSafe® service. Brink’s operates in approximately 50 countries.

BHS offers monitored security services in North America primarily for owner-occupied, single-family residences. To a lesser extent, BHS offers security services for commercial and multi-family properties. BHS typically installs and owns the on-site security systems, and charges fees to monitor and service the systems.

BAX Global provides transportation and supply chain management services on a global basis, specializing in the heavy freight market for business-to-business shipping. In North America, BAX Global provides overnight, second day and deferred freight delivery as well as supply chain management services and charter services. Internationally, BAX Global provides air and ocean delivery services, freight forwarding services, supply chain management services and international customs brokerage services. BAX Global has approximately 90 stations in the U.S. and approximately 170 stations in international locations and has agency agreements with approximately 115 agent locations.

The Company has no single customer that represents more than 10% of its total revenue.

		Assets					Revenues					Operating Profit (Loss)
		December 31,					Years Ended December 31,					Years Ended December 31,
(In millions)		2004	2003	2002			2004	2003	2002			2004	2003	2002
Business Segments
Brink’s	$	1,041.2	945.2	842.8		$	1,931.9	1,689.0	1,579.9		$	144.7	112.5	96.1
BHS		440.6	410.9	387.5			345.6	310.4	282.4			80.8	71.2	60.9
BAX Global		839.7	763.1	741.6			2,440.6	1,999.2	1,871.5			56.2	3.0	17.6
Business Segments		2,321.5	2,119.2	1,971.9			4,718.1	3,998.6	3,733.8			281.7	186.7	174.6
Corporate:
VEBA (a)		-	105.2	18.2			-	-	-			-	-	-
Other		101.3	45.8	72.8			-	-	-			(45.9)	(27.8)	(23.1)
Former operations and interests:
Net deferred tax assets		230.1	228.0	238.7			-	-	-			-	-	-
Gain on sale of equity interest		-	-	-			-	-	-			-	10.4	-
Other (b)		25.3	50.4	158.3			-	-	-			(45.9)	(69.5)	(19.2)
	$	2,678.2	2,548.6	2,459.9		$	4,718.1	3,998.6	3,733.8		$	189.9	99.8	132.3

(a)

See notes 4 and 5.

(b)

Former coal operations operating loss in 2004 and 2003 represents ongoing expenses of former coal operations; these types of expenses were classified as discontinued operations in 2002. Operating loss in 2002 represents impairment and other charges.

		Capital Expenditures					Depreciation and Amortization
		Years Ended December 31,					Years Ended December 31,
(In millions)		2004	2003	2002			2004	2003	2002
Business Segments
Brink’s	$	76.2	80.9	79.3		$	81.0	70.6	61.3
BHS		117.6	98.0	86.9			42.9	40.1	37.3
BAX Global (a)		25.4	23.6	27.1			41.8	47.0	44.4
Corporate		1.1	0.2	0.1			0.7	2.5	0.3
Property and equipment		220.3	202.7	193.4			166.4	160.2	143.3
Amortization of BHS deferred subscriber acquisition costs		-	-	-			8.6	7.8	6.6
	$	220.3	202.7	193.4		$	175.0	168.0	149.9

(a)

Excludes aircraft heavy maintenance expenditures and amortization.

		Years Ended December 31
(In millions)		2004	2003	2002
Other BHS Information
Impairment charges from subscriber disconnects	$	38.4	34.3	32.3
Amortization of deferred revenue		(26.1)	(25.0)	(23.9)
Deferred subscriber acquisition costs (current year payments)		(19.5)	(18.4)	(17.7)
Deferred revenue from new subscribers (current year receipts)		34.6	28.2	27.1

 

		Long-Lived Assets					Revenues
		December 31,					Years Ended December 31,
(In millions)		2004	2003	2002			2004	2003	2002
Geographic
International:
Business segments:
France	$	168.1	156.4	134.7		$	516.9	420.7	376.7
Other		315.9	278.8	241.3			2,303.7	1,741.6	1,546.8
Subtotal		484.0	435.2	376.0			2,820.6	2,162.3	1,923.5
United States:
Business segments		776.6	767.9	751.2			1,897.5	1,836.3	1,810.3
Corporate		1.5	0.7	0.8			-	-	-
Former operations		2.3	6.4	53.6			-	-	-
Subtotal		780.4	775.0	805.6			1,897.5	1,836.3	1,810.3
	$	1,264.4	1,210.2	1,181.6		$	4,718.1	3,998.6	3,733.8

Revenues are recorded in the country where the service is initiated/performed with the exception of most of BAX Global’s export freight service where revenue is shared among the origin and destination countries.

		December 31,
(In millions)		2004	2003	2002
Net assets outside the U.S.
EMEA (a)	$	252.5	241.8	203.5
Latin America (b)		92.0	73.7	64.2
Asia Pacific		155.2	116.9	74.4
Canada and other		53.6	40.0	35.7
	$	553.3	472.4	377.8

(a)

Europe, Middle East and Africa.

(b)

Latin America, Mexico and Puerto Rico.

 

		December 31,
(In millions)		2004	2003	2002
Investments in unconsolidated equity affiliates
Brink’s	$	11.9	23.1	23.8
Other		5.2	6.9	11.7
	$	17.1	30.0	35.5
Share of earnings of unconsolidated equity affiliates
Brink’s	$	1.0	1.6	1.3
Other		-	(1.3)	(0.1)
	$	1.0	0.3	1.2

The Company’s accounting method for a 20%-owned Mexican investee of Brink’s changed in the third quarter of 2004 from the equity method of accounting to the cost method of accounting reflecting management’s conclusion that the Company no longer sufficiently influences the management of the investee to merit equity-method accounting. The Company’s investment at December 31, 2004 was approximately $9 million. The Company has approximately $14 million of currency exchange losses in accumulated other comprehensive loss related to the investee.

Undistributed earnings of equity affiliates included in consolidated retained earnings approximated $8.6 million at December 31, 2004 and $33 million at December 31, 2003.