2005 Financial Review

MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION

MARKET RISK EXPOSURES

The Company’s continuing operations have activities in approximately 50 countries. These operations expose the Company to a variety of market risks, including the effects of changes in interest rates, commodities prices and foreign currency exchange rates. These financial and commodity exposures are monitored and managed by the Company as an integral part of its overall risk management program.

The Company periodically uses various derivative and non-derivative financial instruments, as discussed below, to hedge its interest rate, commodities prices and foreign currency exposures when appropriate. The risk that counterparties to these instruments may be unable to perform is minimized by limiting the counterparties used to major financial institutions with investment grade credit ratings. The Company does not expect to incur a loss from the failure of any counterparty to perform under the agreements. The Company does not use derivative financial instruments for purposes other than hedging underlying financial or commercial exposures.

The sensitivity analyses discussed below for the market risk exposures were based on the facts and circumstances in effect at December 31, 2005. Actual results will be determined by a number of factors that are not under management’s control and could vary materially from those disclosed.

Interest Rate Risk

The Company uses both fixed and floating rate debt and leases to finance its operations. Floating rate obligations, including the Company’s Revolving Facility, expose the Company to fluctuations in cash flows due to changes in the general level of interest rates. Fixed rate obligations, including the Company’s Senior Notes and Dominion Terminal Associates debt, are subject to fluctuations in fair values as a result of changes in interest rates.

Based on the contractual interest rates on the floating rate debt at December 31, 2005, a hypothetical 10% increase in rates would increase cash outflows by approximately $0.7 million over a twelve-month period (in other words, the Company’s weighted average interest rate on its floating rate instruments was 4.25% per annum at December 31, 2005. If that average rate were to increase by 43 basis points to 4.68%, the cash outflows associated with these instruments would increase by $0.7 million annually). The effect on the fair value of the Company’s Senior Notes and Dominion Terminal Associates debt for a hypothetical 10% decrease in the yield curve from year-end 2005 levels would result in a $4.3 million increase in the fair values of this debt.

Commodities Price Risk

The Company consumes various commodities in the normal course of its business and, from time to time, uses derivative financial instruments to minimize the variability in forecasted cash flows due to price movements in these commodities. The derivative contracts are entered into in accordance with guidelines set forth in the Company’s risk management policies.

During 2004 and 2003, BAX Global utilized swap contracts to fix a portion of forecasted jet fuel purchases at specific price levels. In addition, depending on market conditions, the Company has been able to adjust its pricing through the use of surcharges on shipments to partially offset large increases in the cost of jet fuel. At December 31, 2005, the Company had no outstanding jet fuel hedge derivatives.

During 2003, the Company utilized option strategies and forward sales contracts to hedge the selling price on a portion of its forecasted natural gas and gold sales. The Company exited the natural gas business in 2003 and the gold business in early 2004. Following the sale of these businesses, the Company had no outstanding natural gas or gold derivatives.

Foreign Currency Risk

The Company’s continuing operations, primarily through its Brink’s operations, has exposure to the effects of foreign currency exchange rate fluctuations on the results of all of its foreign operations, which are operated primarily in local currencies but are reported in U.S. dollars.

The Company is exposed periodically to the foreign currency rate fluctuations that affect transactions not denominated in the functional currency of domestic and foreign operations. To mitigate these exposures, the Company may, from time to time, enter into foreign currency forward contracts. The Company does not use derivative financial instruments to hedge investments in foreign subsidiaries since such investments are long-term in nature.

The effects of a hypothetical simultaneous 10% appreciation in the U.S. dollar from year-end 2005 levels against all other currencies of countries in which the Company has continuing operations are as follows: