Capitalization

The Company uses a combination of debt, leases and equity to capitalize its operations. As of December 31, 2006, debt as a percentage of capitalization (defined as total debt and shareholders' equity) was 18% compared to 27% at December 31, 2005. The decrease resulted from lower debt of $142.7 million partially offset by the impact of a reduction in equity of $83.7 million. Equity decreased in 2006 primarily as a result of the Company's share repurchase programs and the implementation of a new accounting standard for pension and other postretirement benefit obligations, partially offset by over $100 million in income from continuing operations, the gain on the sale of BAX Global, and by the reduction of Health Benefit Act obligations.

Summary of Debt, Equity and Other Liquidity Information

	Amount available under credit facilities			Outstanding Balance
	December 31,			December 31,
(In millions)		2006			2006	2005		$ change (a)
Debt:
Short-term debt:
Multi-currency revolving facility and other committed facilities	$	48		$	33.4	25.5		$	7.9
Long-term debt:
Revolving Facility		348			52.1	123.6			(71.5)
Letter of Credit Facility		9			-	-			-
Senior Notes					-	76.7			(76.7)
Dominion Terminal Associates bonds					43.2	43.2			-
Other					41.5	43.9			(2.4)
Debt	$	405		$	170.2	312.9		$	(142.7)
Shareholders’ equity				$	753.8	837.5		$	(83.7)
Other Liquidity Information:
Cash and cash equivalents				$	137.2	96.2		$	41.0
Net Debt (b)					33.0	216.7			(183.7)

(a)

In addition to cash borrowings and repayments, the change in the debt balance also includes changes in currency exchange rates.

(b)

See reconciliation of Non-GAAP measure below.

Reconciliation of Net Debt and Net Financings to GAAP Measures

	December 31,
(In millions)		2006	2005	2004	2003	2002
Short-term debt	$	33.4	25.5	27.5	35.8	41.8
Long-term debt		136.8	287.4	216.7	238.7	317.5
Debt		170.2	312.9	244.2	274.5	359.3
Less cash and cash equivalents		(137.2)	(96.2)	(169.0)	(128.7)	(102.3)
Net Debt (a)		33.0	216.7	75.2	145.8	257.0
Amounts sold under accounts receivable securitization facility		-	-	25.0	77.0	72.0
Net Financings (a)	$	33.0	216.7	100.2	222.8	329.0

(a)

Net Debt and Net Financings are non-GAAP measures. Net Debt is equal to short-term debt plus the current and noncurrent portion of long-term debt ("Debt" in the tables), less cash and cash equivalents. Net Financings are equal to Net Debt plus the amount sold under the accounts receivable securitization facility.

The supplemental Net Debt and Net Financing information is non-GAAP financial information that management believes is an important measure to evaluate the Company's financial leverage. This supplemental non-GAAP information does not affect any reported amounts. This supplemental non-GAAP information should be viewed in conjunction with the Company's consolidated balance sheets.

Debt

The Company entered into a new unsecured $400 million revolving bank credit facility with a syndicate of banks in the third quarter of 2006. The new facility replaces a $400 million revolving credit facility that was scheduled to mature in 2009. The new facility's interest rate is based on LIBOR plus a margin, prime rate, or competitive bid. The facility allows the Company to borrow (or otherwise satisfy credit needs) on a revolving basis over a five-year term ending August 2011. As of December 31, 2006, $347.9 million was available under the revolving credit facility. The new and prior facility are referred to as the "Revolving Facility" herein.

The Company has 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"). As of December 31, 2006, $8.7 million was available for use under this revolving credit facility. The Revolving Facility and the multi-currency revolving credit facilities described below are also used for the issuance of letters of credit and bank guarantees.

The Company has three unsecured multi-currency revolving bank credit facilities totaling $96.2 million at December 31, 2006, of which $48.2 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.

The Company made scheduled payments of $18.3 million in January 2006 related to its Senior Notes. On March 31, 2006, the Company prepaid the outstanding $58.4 million balance of its Senior Notes and made a make-whole payment of $1.6 million. The Senior Notes were terminated upon prepayment. In addition, the Company significantly reduced other debt during 2006.

The Company's Brink's and BHS subsidiaries have guaranteed the Revolving Facility and the Letter of Credit Facility. The Revolving Facility, the Letter of Credit Facility and the multi-currency revolving bank credit facilities contain various financial and other covenants. The financial covenants, among other things, limit the Company's total indebtedness, limit asset sales, limit the use of proceeds from sales of assets and provide for minimum coverage of interest costs. 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 commitments 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, 2006.

The Company has guaranteed bonds of $43.2 million issued by the Peninsula Ports Authority of Virginia. The guarantee originated as part of the Company's former interest in Dominion Terminal Associates, a deep water coal terminal. The Company continues to pay interest on and guarantee payment of the $43.2 million principal amount and ultimately will have to pay for the retirement of the bonds in accordance with the terms of the guarantee. The bonds bear a fixed interest rate of 6.0% and mature in 2033. The bonds may mature prior to 2033 upon the occurrence of 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.

The Company believes it has adequate sources of liquidity to meet its near-term requirements.

Equity

At December 31, 2006, the Company had 100 million shares of common stock authorized and 48.5 million shares issued and outstanding. Of the outstanding shares, 2.3 million shares were held by The Brink's Company Employee Benefits Trust (the "Employee Benefits Trust") at December 31, 2006, and have been accounted for similarly to treasury stock for earnings per share calculation purposes.

As further discussed below, during 2006 the Company purchased and retired approximately 12.2 million shares of its common stock for $630.9 million. The shares purchased and retired approximated 21% of the number of shares outstanding on December 31, 2005.

Dutch auction
On March 8, 2006, the Company's board of directors authorized a "Dutch Auction" self-tender offer to purchase up to 10 million shares of the Company's common stock. Under certain circumstances up to an additional 2% of the outstanding common stock was authorized to be purchased in the tender offer. The tender offer began on March 9, 2006, and expired on April 6, 2006, and was subject to the terms and conditions described in the offering materials mailed to the Company's shareholders and filed with the Securities and Exchange Commission. On April 11, 2006, the Company purchased 10,355,263 shares in the tender offer at $51.20 per share for a total of approximately $530.2 million in cash. The Company incurred $0.7 million in costs associated with the purchase.

Other Repurchases
Following the self-tender offer, the board authorized additional Company common stock purchases of up to $100 million from time to time as market conditions warranted and as covenants under existing agreements permitted. The additional stock purchase program did not require any specific number of shares be purchased. Under the program, the Company used $100 million to purchase 1,823,118 shares of common stock between May 22 and October 5, 2006, at an average price of $54.85 per share. The Company has no remaining authority under the program.

Preferred Stock
At December 31, 2006, the Company has the authority to issue up to 2.0 million shares of preferred stock, par value $10 per share.