2005 Financial Review

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 2 - Segment Information

The Company conducts business in two operating segments: Brink’s and BHS. These reportable segments are identified by the Company based on how resources are allocated and operating decisions are made. Management evaluates performance and allocates resources based on operating profit or loss, excluding corporate allocations. In November 2005, the Company’s board of directors approved the sale of BAX Global, a wholly owned freight transportation subsidiary of the Company. Accordingly, BAX Global’s results of operations have been reported as discontinued operations for all periods presented and are not included in 2005 revenues and operating profit segment information. Discontinued operations are discussed in note 5. BAX Global’s assets and liabilities have been classified as held for sale on the Company’s consolidated balance sheet for 2005. In January 2006, the Company sold BAX Global.

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 CompuSafeâ 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.

	Revenues					Operating Profit
	Years Ended December 31,					Years Ended December 31,
(In millions)		2005	2004	2003			2005	2004	2003
Business Segments
Brink’s	$	2,156.9	1,931.9	1,689.0		$	111.9	144.7	112.5
BHS		392.1	345.6	310.4			87.4	80.8	71.2
Business Segments		2,549.0	2,277.5	1,999.4			199.3	225.5	183.7
Corporate		-	-	-			(44.7)	(42.2)	(27.3)
Gain on sale of equity interest		-	-	-			-	-	10.4
Former coal operations		-	-	-			(39.2)	(45.9)	(69.5)
	$	2,549.0	2,277.5	1,999.4		$	115.4	137.4	97.3

 

	Capital Expenditures					Depreciation and Amortization
	Years Ended December 31,					Years Ended December 31,
(In millions)		2005	2004	2003			2005	2004	2003
Business Segments
Brink’s	$	109.0	76.2	80.9		$	87.3	79.1	69.4
BHS		162.2	117.6	98.0			49.1	42.9	40.1
Corporate		0.5	1.1	0.2			0.7	0.7	2.5
Property and equipment		271.7	194.9	179.1			137.1	122.7	112.0
Amortization of BHS deferred subscriber acquisition costs		-	-	-			9.0	8.6	7.8
Amortization of Brink’s intangible assets		-	-	-			3.2	1.9	1.2
	$	271.7	194.9	179.1		$	149.3	133.2	121.0

 

	Assets
	December 31,
(In millions)		2005	2004	2003
Business Segments
Brink’s	$	1,096.7	1,055.7	945.2
BHS		585.1	440.6	410.9
Business Segments		1,681.8	1,496.3	1,356.1
BAX Global		976.5	839.7	763.1
Former natural resource operations and interests:
Net deferred tax assets		255.1	230.1	228.0
Other residual coal assets		34.2	25.3	50.4
Corporate:
VEBA (see note 1)		-	-	105.2
Other and eliminations		89.3	101.3	45.8
	$	3,036.9	2,692.7	2,548.6

 

	Years Ended December 31,
(In millions)		2005	2004	2003
Other BHS Information
Impairment charges from subscriber disconnects	$	45.2	38.4	34.3
Amortization of deferred revenue		(29.5)	(26.1)	(25.0)
Deferred subscriber acquisition costs (current year payments)		(22.9)	(19.5)	(18.4)
Deferred revenue from new subscribers (current year receipts)		40.7	34.6	28.2

 

	Long-Lived Assets (a)					Revenues
	December 31,					Years Ended December 31,
(In millions)		2005	2004(b)	2003(b)			2005	2004	2003
Geographic
International:
France	$	145.9	168.1	156.4		$	508.1	466.6	374.2
Other		269.4	315.9	278.8			975.6	822.8	681.8
Subtotal		415.3	484.0	435.2			1,483.7	1,289.4	1,056.0
United States:
Business segments		641.4	776.6	767.9			1,065.3	988.1	943.4
Corporate and former operations		3.2	3.8	7.1			-	-	-
Subtotal		644.6	780.4	775.0			1,065.3	988.1	943.4
	$	1,059.9	1,264.4	1,210.2		$	2,549.0	2,277.5	1,999.4

(a)

Long-lived assets include property, plant and equipment, net, goodwill, other intangible assets, net and deferred charges.

(b)

Includes $321.1 million in 2004 and $347.3 million in 2003 of long-lived assets related to BAX Global.

Revenues are recorded in the country where service is initiated or performed. The Company has no single customer that represents more than 10% of its total revenue.

	December 31,
(In millions)		2005	2004	2003
Net assets outside the U.S. (a)
Europe, Middle East and Africa	$	190.5	252.5	241.8
Latin America		123.9	92.0	73.7
Asia Pacific		166.1	155.2	116.9
Other		38.4	53.6	40.0
	$	518.9	553.3	472.4

(a)

Includes $222.2 million in 2005, and $213.1 million in 2004 and $210.7 million in 2003 related to BAX Global.

	December 31,
(In millions)		2005	2004	2003
Investments in unconsolidated equity affiliates
Brink’s	$	10.2	11.9	23.1
Other		5.5	5.2	6.9
	$	15.7	17.1	30.0
Share of earnings (losses) of unconsolidated equity affiliates
Brink’s	$	3.0	1.0	1.6
Other		0.4	-	(1.3)
	$	3.4	1.0	0.3

 

The Company’s accounting method for a 20%-owned investment 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 influenced the management of the investee. The Company’s equity method investment at December 31, 2003 was $10.1 million.

Undistributed earnings of equity affiliates included in consolidated retained earnings approximated $8.7 million at December 31, 2005 and $8.6 million at December 31, 2004.