Edgar Filing: BRINKS CO

form_10k.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES

EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2008

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________ to ____________

Commission file number 1-9148

THE BRINK’S COMPANY

(Exact name of registrant as specified in its charter)

	Virginia		54-1317776
	(State or other jurisdiction of		(I.R.S. Employer
	incorporation or organization)		Identification No.)

	P.O. Box 18100,
	1801 Bayberry Court
	Richmond, Virginia		23226-8100
	(Address of principal executive offices)		(Zip Code)

	Registrant’s telephone number, including area code		(804) 289-9600

	Securities registered pursuant to Section 12(b) of the Act:
			Name of each exchange on
	Title of each class		which registered
	The Brink’s Company Common Stock, Par Value $1		New York Stock Exchange

	Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes x No o

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

Yes o No x

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definition of “accelerated filer,” “large accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer x Accelerated filer o Non-accelerated filer o Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o No x

As of February 23, 2009, there were issued and outstanding 45,467,782 shares of common stock. The aggregate market value of shares of common stock held by non-affiliates as of June 30, 2008, was $2,909,041,476.

Documents incorporated by reference: Part III incorporates information by reference from portions of the Registrant’s definitive 2009 Proxy Statement to be filed pursuant to Regulation 14A.

THE BRINK’S COMPANY

FORM 10-K

FOR THE YEAR ENDED DECEMBER 31, 2008

TABLE OF CONTENTS

PART I

		Page
Item 1.	Business	2
Item 1A.	Risk Factors	9
Item 1B.	Unresolved Staff Comments	15
Item 2.	Properties	15
Item 3.	Legal Proceedings	15
Item 4.	Submission of Matters to a Vote of Security Holders	15

	PART II

Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer
	Purchases of Equity Securities	17
Item 6.	Selected Financial Data	19
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	55
Item 8.	Financial Statements and Supplementary Data	57
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	105
Item 9A.	Controls and Procedures	105
Item 9B.	Other Information	105

	PART III

Item 10.	Directors, Executive Officers and Corporate Governance	106
Item 11.	Executive Compensation	106
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	106
Item 13.	Certain Relationships and Related Transactions, and Director Independence	106
Item 14.	Principal Accountant Fees and Services	106

	PART IV

Item 15.	Exhibits and Financial Statement Schedules	107

PART I

ITEM 1. BUSINESS

The Brink’s Company (along with its subsidiaries, “we,” “our,” “Brink’s” or the “Company”), based in Richmond, Virginia, is a leading provider of secure transportation, cash logistics and other security-related services to banks and financial institutions, retailers, government agencies, mints, jewelers and other commercial operations around the world. Brink’s is the oldest and largest secure transportation and cash logistics company in the U.S., and a market leader in many other countries. Our international network serves customers in more than 50 countries and employs approximately 56,900 people. Our operations include approximately 800 facilities and 9,400 vehicles. Our brand, global infrastructure and expertise in security and logistics are important competitive advantages. About 70% of our $3.2 billion in revenues are from outside North America. Over the past several years, we have changed from a conglomerate (with operations in the heavy-weight freight transportation, coal and other natural resource industries) into a company focused solely on the security industry. We completed the spin-off of our home security business in the fourth quarter of 2008 to sharpen the focus on our core business.

Management allocates resources to and makes operating decisions for our operations on a geographic basis. As a result, we changed our reportable segments in the fourth quarter of 2008 to International and North America. Our International segment is comprised of three distinct regions: Europe, Middle East and Africa (“EMEA”); Latin America; and Asia Pacific. Our North America segment includes operations in the U.S. and Canada.

Financial information related to The Brink’s Company, our two operating segments (International and North America), and former operations is included in the consolidated financial statements on pages 57-104.

A significant portion of our business is conducted outside of the United States. Financial results are reported in U.S. dollars and are affected by fluctuations in the relative value of foreign currencies. Our business is also subject to other risks customarily associated with operating in foreign countries including changing labor and economic conditions, political instability, restrictions on repatriation of earnings and capital, as well as nationalization, expropriation and other forms of restrictive government actions. The future effects of these risks cannot be predicted. Additional information about risks associated with our foreign operations is provided on pages 10, 36 and 56.

We have significant liabilities associated with our retirement plans, a portion of which has been funded. These liabilities increased $465 million in 2008 primarily as a result of a significant decline in the value of the investments of these plans. See pages 26, 43 and 47 – 51 for more information on these liabilities. Additional risk factors are described on pages 9 – 12.

Available Information and Corporate Governance Documents

The following items are available free of charge on our website (www.brinkscompany.com) as soon as reasonably possible after filing or furnishing them with the Securities and Exchange Commission:

·	Annual reports on Form 10-K

·	Quarterly reports on Form 10-Q

·	Current reports on Form 8-K, and amendments to those reports

In addition, the following documents are also available free of charge on our website:

·	Corporate governance policies

·	Business Code of Ethics

·	The charters of the following Board Committees: Audit and Ethics, Compensation and Benefits, and Corporate Governance and Nominating.

Printed versions of these items will be mailed free of charge to shareholders upon request. Such requests can be made by contacting the Corporate Secretary at 1801 Bayberry Court, P. O. Box 18100, Richmond, Virginia 23226-8100.

General

Our 2008 segment operating profit was $272 million on revenues of $3.2 billion, resulting in a segment operating profit margin of 8.6%. Our revenues and segment operating profit have grown over the last several years.

Our operations are located around the world and most of our revenues (70%) and segment operating profit (79%) are earned outside of North America.

International operations has three regions: Europe, Middle East, and Africa (“EMEA”); Latin America and Asia Pacific. On a combined basis, international operations generated 2008 revenues of $2.2 billion (70% of total) and segment operating profit of $215 million (79% of total). Over the past three years, we have acquired security operations in numerous countries in EMEA and Latin America.

Brink’s EMEA, which generated $1.4 billion or 43% of total 2008 revenues, operates 264 branches in 20 countries. Its largest operations are in France, the Netherlands and Germany. In 2008, France accounted for $698 million or 51% of EMEA revenues (22% of total).

Brink’s Latin America, which generated $801 million or 25% of total 2008 revenues, operates 211 branches in eight countries. Its largest operations are in Venezuela, Brazil and Colombia. In 2008, Venezuela accounted for $351 million or 44% of Latin American revenues (11% of total).

Brink’s Asia-Pacific operates 32 branches in eight countries, and accounted for $72 million or 2% of total 2008 revenues.

North American operations include 184 branches in the U.S. and 52 branches in Canada. North American operations generated 2008 revenues of $932 million (30% of total) and segment operating profit of $57 million (21% of total).

The largest seven Brink’s operations (U.S., France, Venezuela, Brazil, the Netherlands, Colombia and Germany) accounted for $2,345 million or 74% of total 2008 revenues.

(In millions)	2008		% total		% change		2007		% total		% change			2006		% total		% change

Revenues by region:

EMEA:
France	$	697.7		22		11	$	628.8		23		15		$	546.5		23		8
Other		661.2		21		18		562.7		21		23			456.6		20		14
Total		1,358.9		43		14		1,191.5		44		19			1,003.1		43		10

Latin America:
Venezuela		350.9		11		56		224.9		8		31			171.7		7		33
Other		449.7		14		22		369.3		14		31			282.5		12		25
Total		800.6		25		35		594.2		22		31			454.2		19		28

Asia Pacific		71.8		2		15		62.6		2		(7	)		67.0		3		(6	)
Total International		2,231.3		70		21		1,848.3		68		21			1,524.3		65		14

North America		932.2		30		5		886.3		32		7			830.0		35		7

Total Revenues	$	3,163.5		100		16	$	2,734.6		100		16		$	2,354.3		100		11

Geographic financial information related to long-lived assets is included in the consolidated financial statements on page 75.

Brink’s ownership interests in subsidiaries and affiliated companies ranged from 36% to 100% at December 31, 2008. In some instances, local laws limit the extent of Brink’s ownership interest.

Growth Strategy

Over the past several years, we have expanded largely through internal growth supplemented by acquisitions. Sources of revenue growth over the last three years from existing operations are shown in the following table:

Annual Revenue growth

(In percentages)	2008			2007			2006

Organic (a)		11	%		9	%		8	%
Acquisitions		1	%		1	%		2	%
Changes in currency exchange rates		4	%		6	%		1	%

(a) Organic revenue growth represents revenue growth from existing operations, excluding the effects of changes in currency exchange rates.

We intend to continue to pursue growth through acquisitions as long as we are able to acquire businesses that meet internal metrics for projected growth, profitability and return on investment. We are interested in both new and existing markets for our core business and other security-related businesses. Although there are risks and start-up expenses when entering new markets, we believe that growth through a combination of organic and acquisition is the best long-term strategy.

Services

Our primary services include:

·	Cash-in-transit (“CIT”) armored car transportation

·	Automated teller machine (“ATM”) replenishment and servicing

·	Global Services – arranging secure long-distance transportation of valuables

·	Cash Logistics – supply chain management of cash

·	Guarding services, including airport security

Brink’s typically provides customized services under separate contracts designed to meet the distinct needs of customers. Contracts usually cover an initial term of at least one year and in many cases one to three years, and generally remain in effect thereafter until canceled by either party.

Core Services (53% of total revenue in 2008)

CIT and ATM Services are core services we provide to customers throughout the world. Core services generated approximately $1.7 billion of revenues in 2008.

CIT We have been serving customers since 1859. Our success in CIT is driven by a combination of rigorous security practices, high quality customer service, risk management expertise and logistics expertise. CIT services generally include the secure transportation of:

·	cash between businesses and banks

·	cash, securities and other valuables between commercial banks, central banks, and investment banking and brokerage firms

·	new currency, coins and precious metals for central banks

ATM Services We manage nearly 81,000 ATM units worldwide for banks and other cash dispensing operators. We provide cash replenishment, monitoring and forecasting capabilities, deposit pick-up and processing services. Advanced online tools deliver consolidated electronic reports for simplified reconciliation.

Value-Added Services (35% of total revenue in 2008)

Our core services, combined with our brand and global infrastructure, provide a substantial platform from which we offer additional value-added services. Value-added services generated approximately $1.1 billion of revenues in 2008.

Global Services With operations spanning approximately 50 countries, Brink’s is a leading global provider of secure long-distance logistics for valuables including diamonds, jewelry, precious metals, securities, currency, high-tech devices, electronics and pharmaceuticals. We typically employ a combination of armored car and secure air transportation to leverage our extensive global network. Our specialized diamond and jewelry operation has offices in the major diamond and jewelry centers of the world.

Cash Logistics Brink’s offers a fully integrated approach to managing the supply chain of cash, from point-of-sale through transport, vaulting, bank deposit and related credit. Cash Logistics services include:

·	money processing and cash management services

·	deploying and servicing “intelligent” safes and safe control devices, including our patented CompuSafeâ service

·	integrated check and cash processing services (“Virtual Vault”)

·	check imaging services

Money processing services generally include counting, sorting and wrapping currency. Other currency management services include cashier balancing, counterfeit detection, account consolidation and electronic reporting. Retail and bank customers use Brink’s to count and reconcile coins and currency, prepare bank deposit information, and replenish coins and currency in specific denominations.

Brink’s offers a variety of advanced technology applications including online cash tracking, cash inventory management, check imaging for real-time deposit processing, and a variety of other web-based information tools that enable banks and other customers to reduce costs while improving service to their customers.

CompuSafeâ service offers customers an integrated, closed-loop system for preventing theft and managing cash. We market CompuSafe services to a variety of cash-intensive customers such as convenience stores, gas stations, restaurants, retail chains and entertainment venues. Our service includes the installation of a specialized safe in the customer’s facility. The customer’s employees deposit currency into the safe’s cassettes, which can only be removed by Brink’s personnel. Upon removal, the cassettes are transported to a secure location where contents are verified and transferred for deposit. Our CompuSafe service system features currency recognition counterfeit detection technology, multi-language touch screens and electronic interface between point-of-sale, back-office systems and external banks. Our electronic reporting interface with external banks enables our CompuSafe service customers to receive same-day credit on their cash balances, even if the cash remains on the customer’s premises.

Virtual Vault services combine CIT, Cash Logistics, vaulting and electronic reporting technologies to help banks expand into new markets while minimizing investment in vaults and branch facilities. In addition to secure storage, we process deposits, provide check imaging and reconciliation services, and electronically transmit debits and credits.

We believe the quality and scope of our cash processing and information systems differentiate our Cash Logistics services from competitive offerings.

Other Security Services (12% of total revenue in 2008)

Security and Guarding We protect airports, offices, warehouses, stores, and public venues with electronic surveillance, access control, fire prevention and highly trained patrolling personnel. Other security services generated approximately $0.4 billion of revenues in 2008.

Our guarding services are generally offered in European markets including France, Germany, Luxembourg and Greece. A significant portion of this business involves long-term contracts related primarily to guarding services at airports. Generally, other guarding contracts are for a one-year period, the majority of which are extended. Our security officers are typically stationed at customer sites, and responsibilities include detecting and deterring specific security threats.

Industry and Competition

Brink’s competes with large multinational, regional and smaller companies throughout the world. Our largest multinational competitors are Group 4 Securicor plc (headquartered in the U.K.), Loomis AB, formerly a division of Securitas AB (Sweden), Prosegur, Compania de Seguridad, S.A. (Spain) and Garda World Security Corporation (Canada).

We believe the primary factors in attracting and retaining customers are security expertise, service quality and price. Our competitive advantages include:

·	brand name recognition

·	reputation for a high level of service and security

·	risk management and logistics expertise

·	global infrastructure and customer base

·	proprietary cash processing and information systems

·	high-quality insurance coverage and general financial strength

We believe our cost structure is generally competitive, although certain competitors may have lower costs due to a variety of factors including lower wages, less costly employee benefits, or less stringent security and service standards.

Although Brink’s faces competitive pricing pressure in many markets, we resist competing on price alone. We believe our high levels of service and security differentiate us from competitors.

The availability of high-quality and reliable insurance coverage is an important factor in our ability to attract and retain customers and manage the risks inherent in our business. Brink’s is self-insured for much of the liability related to potential losses of cash or valuables while such items are in our possession. However, we purchase insurance coverage for losses in excess of what we consider to be prudent levels of self-insurance. Our insurance policies cover losses from most causes, with the exception of war, nuclear risk and certain other exclusions typical in such policies.

Insurance for security is provided by different groups of underwriters at negotiated rates and terms. Premiums may fluctuate depending on market conditions. The security loss experience of Brink’s and, to a limited extent, other armored carriers affects our premium rates.

Revenues are generated from charges per service performed or based on the value of goods transported. As a result, revenues are affected by the level of economic activity in our various markets as well as the volume of business for specific customers. CIT contracts generally run for a period of one year. Contracts for Cash Logistics are typically longer. Costs are incurred when preparing to serve a new customer or to transition away from an existing customer. Operating profit is generally stronger in the second half of the year, particularly in the fourth quarter, as economic activity is stronger during this period.

As part of the spin-off of BHS, we also agreed not to compete with BHS in the United States, Canada and Puerto Rico with respect to certain activities related to BHS’s security system monitoring and surveillance business until October 31, 2013.

Service Mark and Patents

BRINKS is a registered service mark in the U.S. and certain foreign countries. The BRINKS mark, name and related marks are of material significance to our business. We own patents expiring in 2009 for certain coin sorting and counting machines. We also own patents for safes, including our integrated CompuSafeâ services which expire between 2015 and 2022. These patents provide important advantages to Brink’s. However, Brink’s operations are not dependent on the existence of these patents.

We have agreed to license the Brink’s name. Examples include licenses to a distributor of security products (padlocks, door hardware, etc.) offered for sale to consumers through major retail chains.

We entered into a Brand Licensing Agreement in connection with the spin-off of Brink's Home Securtiy Holdings, Inc. ("BHS"). Under the agreement, BHS licenses the rights to use certain trademarks, including trademarks that contain the word “Brink’s” in the United States, Canada and Puerto Rico. In exchange for these rights, BHS has agreed to pay a licensing fee equal to 1.25% of its net revenues during the period after the spin-off until the expiration date of the agreement. The license will expire on October 31, 2011, subject to earlier termination upon the occurrence of certain events.

Government Regulation

Our U.S. operations are subject to regulation by the U.S. Department of Transportation with respect to safety of operations, equipment and financial responsibility. Intrastate operations in the U.S. are subject to state regulation. Interprovincial operations in Canada are subject to federal and provincial regulations. Our International operations are regulated to varying degrees by the countries in which we operate.

Employee Relations

At December 31, 2008, our company had approximately 56,900 employees, including approximately 12,100 employees in North America (of whom approximately 1,800 were classified as part-time employees) and approximately 44,800 employees outside North America. At December 31, 2008, Brink’s was a party to 11 collective bargaining agreements in North America with various local unions covering approximately 1,800 employees, almost all of whom are employees in Canada and members of unions affiliated with the International Brotherhood of Teamsters. The agreements have various expiration dates beginning in 2009 and extending through 2012. Outside of North America, approximately 62% of branch employees are members of labor or employee organizations. We believe our employee relations are satisfactory.

DISCONTINUED OPERATIONS

Brink’s Home Security Holdings, Inc.

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

On October 31, 2008, we completed the 100% spin-off of BHS. The spin-off of BHS was in the form of a tax-free stock distribution to our shareholders of record as of the close of business on October 21, 2008. We distributed one share of BHS common stock for every share of our common stock outstanding. BHS filed a Registration Statement on Form 10 with the Securities and Exchange Commission (the “SEC”) which provided information about BHS and the spin-off, including historical and pro forma financial information. BHS is publicly traded on the New York Stock Exchange (“NYSE”) under the ticker symbol “CFL.” We remain a public company traded on the NYSE and continue to use the ticker symbol “BCO.” We continue to operate our secure transportation and cash management unit.

After the spin-off, we reclassified BHS’ results of operations, including previously reported results and corporate expenses directly related to the spin-off, within discontinued operations.

In connection with the spin-off, we entered into certain agreements with BHS to define responsibility for obligations arising before and after the spin-off, including obligations relating to liabilities of the businesses, employees, taxes and intellectual property. We entered into a Brand Licensing Agreement with BHS. Under the agreement, BHS licenses the rights to use certain trademarks, including trademarks that contain the word “Brink’s” in the United States, Canada and Puerto Rico. In exchange for these rights, BHS has agreed to pay a licensing fee equal to 1.25% of its net revenues during the period after the spin-off until the expiration date of the agreement. The license will expire on October 31, 2011, subject to earlier termination upon the occurrence of certain events.

We also entered into a Non-Compete Agreement with BHS, which will expire on October 31, 2013, pursuant to which we agreed not to compete with BHS in the United States, Canada and Puerto Rico with respect to certain restricted activities specified in the Non-Compete Agreement in which BHS currently is, or is currently planning to be, engaged.

We contributed $50 million in cash to BHS at the time of the spin-off and forgave all the existing intercompany debt owed by BHS to us and our subsidiaries as of the distribution date.

Former Coal Business

We have significant liabilities related to retirement medical plans of our former coal operations, a portion of which have been funded with contributions to a Voluntary Employees’ Beneficiary Association trust (“VEBA”). Some of the obligations have not been funded. We expect to have ongoing expense and cash outflow for these liabilities. See notes 3, 16 and 20 to the consolidated financial statements for more information.

ITEM 1A. RISK FACTORS

We are exposed to risk in the operation of our businesses. Some of these risks are common to all companies doing business in the industries in which we operate and some are unique to our business. In addition, there are risks associated with investing in our common stock. These risk factors should be considered carefully when evaluating the company and its businesses.

The weak economy is expected to have a negative impact on demand for our services. Global economic conditions have deteriorated significantly, and demand for our services is expected to be negatively impacted in regions where we provide our services. For example, demand for our services is significantly affected by the amount of discretionary consumer and business spending which historically has displayed significant cyclicality. Further deterioration in general global economic conditions would have a negative impact on our financial condition, results of operations and cash flows, although it is difficult to predict the extent and the length of time the economic downturn will affect our business.

The inability to access capital or significant increases in the cost of capital could adversely affect our business. Our ability to obtain adequate and cost effective financing depends on our credit ratings as well as the liquidity of financial markets. A negative change in our ratings outlook or any downgrade in our current investment-grade credit ratings by our rating agencies could adversely affect our cost and/or access to sources of liquidity and capital. Additionally, such a downgrade could increase the costs of borrowing under available credit lines. Disruptions in the capital and credit markets could adversely affect our ability to access short-term and long-term capital. Our access to funds under short-term credit facilities is dependent on the ability of the participating banks to meet their funding commitments. Those banks may not be able to meet their funding commitments if they experience shortages of capital and liquidity. Longer disruptions in the capital and credit markets as a result of uncertainty, changing or increased regulation, reduced alternatives or failures of significant financial institutions could adversely affect our access to capital needed for our business.

We have significant retirement obligations. Poor investment performance of retirement plan holdings could unfavorably affect our liquidity and results of operations. We have substantial pension and retiree medical obligations, a portion of which have been funded. The amount of these obligations is significantly affected by factors that are not in our control, including interest rates used to determine the present value of future payment streams, investment returns, medical inflation rates, participation rates and changes in laws and regulations. Our liabilities for these plans increased by $465 million in 2008 primarily as a result of significant decline in value of plan investments. The funded status of our primary U.S. pension plan was 59% at the end of 2008. As a result, we expect that we will be required to contribute a significant amount of cash to our primary U.S. pension plan in the next several years. This could adversely affect our liquidity and our ability to use our resources to make acquisitions and to otherwise grow our business. We also expect our future net periodic costs of our retirement plans will be adversely affected by the investment losses sustained in 2008. If these investments have additional losses, our future cash requirements and costs for these plans will be further adversely affected.

We have significant operations outside the United States. We currently operate in approximately 50 countries. Revenue outside the U.S. was approximately 70% of total revenue in 2008. We expect revenue outside the U.S. to continue to represent a significant portion of total revenue. Business operations outside the U.S. are subject to political, economic and other risks inherent in operating in foreign countries, such as

·	the difficulty of enforcing agreements, collecting receivables and protecting assets through foreign legal systems

·	trade protection measures and import or export licensing requirements

·	difficulty in staffing and managing widespread operations

·	required compliance with a variety of foreign laws and regulations

·	changes in the general political and economic conditions in the countries where we operate, particularly in emerging markets

·	threat of nationalization and expropriation

·	higher costs and risks of doing business in a number of foreign jurisdictions

·	limitations on the repatriation of earnings

·	fluctuations in equity, revenues and profits due to changes in foreign currency exchange rates, including measures taken by governments to devalue official currency exchange rates

·	inflation levels exceeding that of the U.S.

We are exposed to certain risks when we operate in countries that have high levels of inflation, including the risk that

·	the rate of price increases for services will not keep pace with cost inflation

·	adverse economic conditions may discourage business growth which could affect demand for our services

·	the devaluation of the currency may exceed the rate of inflation and reported U.S. dollar revenues and profits may decline.

We try to manage these risks by monitoring current and anticipated political and economic developments and adjusting operations as appropriate. Changes in the political or economic environments of the countries in which we operate could have a material adverse effect on our business, financial condition and results of operations.

We operate in highly competitive industries. We compete in industries that are subject to significant competition and pricing pressures. We face significant pricing pressures from competitors in most markets. Because we believe we have competitive advantages such as brand name recognition and a reputation for a high level of service and security, we resist competing on price alone. However, continued pricing pressure could impact our customer base or pricing structure and have an adverse effect on results of operations.

Our earnings and cash flow could be materially affected by increased losses of customer valuables. We purchase insurance coverage for losses of customer valuables for amounts in excess of what we consider prudent deductibles and/or retentions. Insurance is provided by different groups of underwriters at negotiated rates and terms. Coverage is available to us in major insurance markets, although premiums charged are subject to fluctuations depending on market conditions. Our loss experience and that of other armored carriers affects premium rates charged to us. We are self-insured for losses below our coverage limits and recognize expense up to these limits for actual losses. Our insurance policies cover losses from most causes, with the exception of war, nuclear risk and various other exclusions typical for such policies. The availability of high-quality and reliable insurance coverage is an important factor in order for us to obtain and retain customers and to manage the risks of our business. If our losses increase, or if we are unable to obtain adequate insurance coverage at reasonable rates, our financial condition and results of operations could be materially and adversely affected.

Restructuring charges may be required in the future. There is a possibility we will take restructuring actions in one of our markets in the future to reduce expenses if a major customer is lost or if recurring operating losses continue. These actions could result in significant restructuring charges at these subsidiaries, including recognizing impairment charges to write down assets, and recording accruals for employee severance and operating leases. These charges, if required, could significantly affect results of operations and cash flows.

We depend heavily on the availability of fuel and the ability to pass higher fuel costs to customers. Fuel prices have fluctuated significantly in recent years. In some periods, our operating profit has been adversely affected because we are not able to immediately offset the full impact of higher fuel prices through increased prices or fuel surcharges. We do not have any long-term fuel purchase contracts, and have not entered into any other hedging arrangements that protect against fuel price increases. A significant increase in fuel costs and an inability to pass increases on to customers or a shortage of fuel could adversely affect our results of operations.

We have certain environmental and other exposures related to our former coal operations. We may incur future environmental and other liabilities that are presently unknown in connection with our former coal operations.

We operate in regulated industries. Our U.S. operations are subject to regulation by the U.S. Department of Transportation with respect to safety of operations and equipment and financial responsibility. Intrastate operations in the U.S. are subject to regulation by state regulatory authorities and interprovincial operations in Canada are subject to regulation by Canadian and provincial regulatory authorities. Our International operations are regulated to varying degrees by the countries in which we operate.

Changes in laws or regulations could require a change in the way we operate, which could increase costs or otherwise disrupt operations. In addition, failure to comply with any applicable laws or regulations could result in substantial fines or revocation of our operating permits and licenses. If laws and regulations were to change or we failed to comply, our business, financial condition and results of operations could be materially and adversely affected.

We could be materially affected by an unfavorable outcome related to non-payment of value-added taxes and custom duties. During 2004, we determined that one of our non-U.S. business units had not paid foreign customs duties and value-added taxes with respect to the importation of various goods and services. We have been advised that there could be civil and criminal penalties asserted for the non-payment of these customs duties and value-added taxes. To date no penalties have been asserted. We believe that the range of reasonably possible losses related to customs duties penalties is between $0 and approximately $35 million. These penalties could be asserted at any time. The business unit has discussed this matter with the appropriate government authorities, provided an accounting of unpaid customs duties and taxes and made payments covering its calculated unpaid value added taxes. An adverse outcome in this matter could materially affect our financial condition, results of operations and cash flows.

We have retained obligations from the sale of BAX Global. In January 2006 we sold BAX Global. We retained some of the obligations related to these operations, primarily for taxes owed prior to the date of sale and for any amounts paid related to one pending litigation matter for which losses could be between $0 and $14 million at the date of sale. In addition, we provided indemnification customary for these sorts of transactions. Future unfavorable developments related to these matters could require us to record additional expenses or make cash payments in excess of recorded liabilities. The occurrence of these events could have a material adverse affect on our financial condition, results of operations and cash flows.

We are subject to covenants for credit facilities. We have credit facilities with financial covenants, including a limit on the ratio of debt to earnings before interest, taxes, depreciation, and amortization, limits on the ability to pledge assets, limits on the use of proceeds of asset sales and minimum coverage of interest costs. Although we believe none of these covenants are presently restrictive to operations, the ability to meet the financial covenants can be affected by changes in our results of operations or financial condition. We cannot provide assurance that we will meet these covenants. A breach of any of these covenants could result in a default under existing credit facilities. Upon the occurrence of an event of default under any of our credit facilities, the lenders could cause amounts outstanding to be immediately payable and terminate all commitments to extend further credit. The occurrence of these events would have a significant impact on our liquidity and cash flows.

Acquisitions. One element of our growth strategy is to strengthen our brand portfolio and/or expand our geographic reach through active programs of selective acquisitions. Acquisition opportunities are limited, and acquisitions present risks of failing to achieve efficient and effective integration, strategic objectives and anticipated revenue improvements and cost savings. There can be no assurance that we will be able to acquire attractive businesses on favorable terms, that all future acquisitions will be quickly accretive to earnings or that future acquisitions will be rapidly integrated into existing operations.

Our effective income tax rate could change. We operate in approximately 50 countries, all of which have different income tax laws and associated income tax rates. Our effective income tax rate can be significantly affected by changes in the mix of pretax earnings by country and the related income tax rates in those countries. In addition, our effective income tax rate is significantly affected by the ability to realize deferred tax assets, including those associated with net operating losses. Changes in income tax laws, income apportionment, or estimates of the ability to realize deferred tax assets, could significantly affect our effective income tax rate, financial position and results of operations.

Our performance could be negatively impacted by the spin-off of BHS, which was completed in 2008. In connection with the BHS spin-off, we received both a private letter ruling from the Internal Revenue Service (the “IRS”) and a favorable opinion from Cravath, Swaine & Moore LLP that the spin-off qualifies for tax-free treatment under Section 355 of the Internal Revenue Code of 1986, as amended. However, the IRS could subsequently determine that the spin-off should be treated as a taxable transaction. If the spin-off fails to qualify for tax-free treatment, it could have a material adverse tax impact on us as well as on our shareholders. We also entered into certain agreements with BHS that could potentially affect our ability to conduct our operations in the manner most advantageous to us until the expiration of such agreements. We have agreed to license certain trademarks that contain the word “Brink’s” to BHS until October 31, 2011, subject to earlier termination. We also have agreed not to compete with BHS in the United States, Canada and Puerto Rico with respect to certain activities related to BHS’s security system monitoring and surveillance business until October 31, 2013.

Forward-Looking Statements

This document contains both historical and forward-looking information. Words such as “anticipates,” “estimates,” “expects,” “projects,” “intends,” “plans,” “believes,” “may,” “should” and similar expressions may identify forward-looking information. Forward-looking information in this document includes, but is not limited to, statements regarding expected revenue growth and earnings for The Brink’s Company, including organic revenue growth and operating profit margin in 2009 and long-term organic revenue growth and operating profit margin, the pursuit of growth through acquisitions in new and existing markets, the differentiation of Brink’s Cash Logistics services, Brink’s cost structure, the seasonality of Brink’s operating profit, employee relations, significant liabilities and ongoing expenses and cash outflows related to retirement medical plans of former coal operations, customer demand for Brink’s services, the impact of the global economic slowdown, anticipated expenses related to retirement plans, Brink’s improving position in North America, expected corporate expenses, net, potential changes in foreign currency exchange rates, customer outsourcing efforts, the anticipated effective tax rate for 2009 and the Company’s future tax position, operating profit pressures in Europe, expenses related to former operations, expected trademark royalties from BHS, future interest expense, anticipated dividends from a real estate investment, the impact of exchange rates, the possibility that Venezuela may be considered highly inflationary again, the possibility that Brink’s Venezuela may be subject to less favorable exchange rates or that the bolivar fuerte may be devalued, projected contributions and expense for the primary U.S. pension plan and its expected long-term rate of return, capital expenditures in 2009, future depreciation and amortization, the ability to meet liquidity needs, estimated contractual obligations for the next five years and beyond, future contributions to and use of the VEBA and expected investment returns on funds held by the VEBA, the Company’s borrowing capacity under the Letter of Credit Facility and the Revolving Facility, contractual indemnities associated with the sale of BAX Global and the spin-off of BHS, surety bond renewals and premium levels, the outcome of the issue relating to the non-payment of customs duties and value-added tax by a non-U.S. subsidiary of Brink’s, Incorporated, the outcome of pending litigation and the anticipated financial impact of the disposition of these matters, future realization of deferred tax assets, the carrying value of goodwill, estimated discount rates, the assumed inflation rate for a number of the Company’s benefit plans, the impact of recent and future accounting rule changes, the likelihood of losses due to non-performance by parties to hedging instruments, the use of earnings from foreign subsidiaries and equity affiliates, future recognition of unrecognized tax benefits and uncertain tax positions, and expected future cash payments and expense levels for black lung obligations. Forward-looking information in this document is subject to known and unknown risks, uncertainties, and contingencies, which could cause actual results, performance or achievements to differ materially from those that are anticipated.

These risks, uncertainties and contingencies, many of which are beyond the control of The Brink’s Company and its subsidiaries, include, but are not limited to the impact of a potential global economic slowdown on the Company’s business opportunities, access to the credit markets and funding requirements for pension plans and other employee benefits, the recent market volatility and its impact on the demand for the services of Brink’s, the implementation of investments in technology and value-added services and cost reduction efforts and their impact on revenue and profit growth, the ability to identify and execute further cost and operational improvements and efficiencies in the core business, the ability to cost effectively match customer demand with appropriate resources, the willingness of Brink’s customers to absorb fuel surcharges and other future price increases, the actions of competitors, the Company’s ability to identify strategic opportunities and integrate them successfully, acquisitions and dispositions made in the future, Brink’s ability to integrate recent acquisitions, decisions by the Company’s Board of Directors, regulatory and labor issues and higher security threats, the impact of turnaround actions responding to current conditions in Europe, the return to profitability of operations in jurisdictions where Brink’s has recorded valuation adjustments, the input of governmental authorities regarding the non-payment of customs duties and value-added tax, the stability of the Venezuelan economy and changes in Venezuelan policy regarding exchange rates, the potential for a devaluation of the bolivar fuerte, the absence of the currency conversion project in Venezuela, variations in costs or expenses and performance delays of any public or private sector supplier, service provider or customer, the ability of the Company and its subsidiaries to obtain appropriate insurance coverage, positions taken by insurers with respect to claims made and the financial condition of insurers, safety and security performance, Brink’s loss experience, changes in insurance costs, risks customarily associated with operating in foreign countries including changing labor and economic conditions, currency devaluations, safety and security issues, political instability, restrictions on repatriation of earnings and capital, nationalization, expropriation and other forms of restrictive government actions, costs associated with information technology and other ongoing contractual obligations, costs associated with the purchase and implementation of cash processing and security equipment, changes in the scope or method of remediation or monitoring of the Company’s former coal operations, the timing of the pass-through of certain costs to third parties and the timing of approvals by governmental authorities relating to the disposal of the coal assets, changes to estimated liabilities and assets in

actuarial assumptions due to payments made, investment returns, annual actuarial revaluations, and periodic revaluations of reclamation liabilities, the funding levels, accounting treatment, investment performance and costs of the Company’s pension plans and the VEBA, whether the Company’s assets or the VEBA’s assets are used to pay benefits, projections regarding the number of participants in and beneficiaries of the Company’s employee and retiree benefit plans, black lung claims incidence, the number of dependents of mine workers for whom benefits are provided, actual retirement experience of the former coal operation’s employees, actual medical and legal expenses relating to benefits, changes in inflation rates (including medical inflation) and interest rates, changes in mortality and morbidity assumptions, mandatory or voluntary pension plan contributions, discovery of new facts relating to civil suits, the addition of claims or changes in relief sought by adverse parties, the cash, debt and tax position and growth needs of the Company, the demand for capital by the Company and the availability and cost of such capital, the nature of the Company’s hedging relationships, the financial performance of the Company, utilization of third-party advisors and the ability of the Company to hire and retain corporate staff, changes in employee obligations, overall domestic and international economic, political, social and business conditions, capital markets performance, the strength of the U.S. dollar relative to foreign currencies, foreign currency exchange rates, changes in estimates and assumptions underlying the Company’s critical accounting policies, as more fully described in the section “Application of Critical Accounting Policies” but including the likelihood that net deferred tax assets will be realized, discount rates, expectations of future performance, the timing of deductibility of expenses, inflation, the promulgation and adoption of new accounting standards and interpretations, including SFAS 141(R), SFAS 160, SFAS 16-1, SFAS 162, FSP EITF 03-6-1, and FSP 132(R)-1, anticipated return on assets, inflation, seasonality, pricing and other competitive industry factors, labor relations, fuel prices, new government regulations and interpretations of existing regulations, legislative initiatives, judicial decisions, issuances of permits, variations in costs or expenses and the ability of counterparties to perform. The information included in this document is representative only as of the date of this document, and The Brink’s Company undertakes no obligation to update any information contained in this document.

ITEM 1B. UNRESOLVED STAFF COMMENTS

Not applicable.

ITEM 2. PROPERTIES

We have property and equipment in locations throughout the world. Branch facilities generally have office space to support operations, a vault to securely process and store valuables and a garage to house armored vehicles and serve as a vehicle terminal. Many branches have additional space to repair and maintain vehicles.

We own or lease armored vehicles, panel trucks and other vehicles that are primarily service vehicles. Our armored vehicles are of bullet-resistant construction and are specially designed and equipped to provide security for the crew and cargo.

The following table discloses leased and owned facilities and vehicles for Brink’s most significant operations as of December 31, 2008.

	Facilities						Vehicles
Region	Leased		Owned		Total		Leased		Owned		Total

U. S.		176		25		201		2,075		329		2,404
Canada		41		12		53		450		53		503
EMEA		245		37		282		866		2,580		3,446
Latin America		184		50		234		260		2,625		2,885
Asia Pacific		35		-		35		2		131		133
Total		681		124		805		3,653		5,718		9,371

As of December 31, 2008, we had approximately 7,500 Brink’s-owned CompuSafeâ devices located on customers’ premises, most of which are in North America.

ITEM 3. LEGAL PROCEEDINGS

We are involved in various lawsuits and claims in the ordinary course of business. We are not able to estimate the range of losses for some of these matters. We have recorded accruals for losses that are considered probable and reasonably estimable. We do not believe that the ultimate disposition of any of these matters will have a material adverse effect on our liquidity, financial position or results of operations.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

Not applicable.

Executive Officers of the Registrant

The following is a list as of February 15, 2009, of the names and ages of the executive and other officers of The Brink’s Company indicating the principal positions and offices held by each. There are no family relationships among any of the officers named.

Name	Age	Positions and Offices Held	Held Since

Executive Officers:
Michael J. Cazer	41	Vice President and Chief Financial Officer	2008
Michael T. Dan	58	President, Chief Executive Officer and Chairman of the Board	1998
Frank T. Lennon	67	Vice President and Chief Administrative Officer	2005
McAlister C. Marshall, II	39	Vice President, General Counsel and Secretary	2008
Matthew A. P. Schumacher	50	Controller	2001

Other Officers:
Jonathan A. Leon	42	Treasurer	2008
Arthur E. Wheatley	66	Vice President – Risk Management and Insurance	1988

Executive and other officers of The Brink’s Company are elected annually and serve at the pleasure of its board of directors.

Mr. Cazer is the Vice President and Chief Financial Officer of The Brink’s Company. Mr. Cazer was hired on April 7, 2008. He most recently served as Chief Financial Officer of GE Security, a General Electric subsidiary focused on global communication and information technologies for security and life safety products, from April 2005 to April 2008, having previously served as Chief Financial Officer of GE Consumer and Industrial Europe, a General Electric subsidiary engaged in the design, manufacturing and sales of electrical distribution equipment, lighting products and household appliances in Europe, from April 2004 to April 2005, and as Chief Financial Officer of GE Fanuc, a joint venture between General Electric and FANUC of Japan focused on automation and embedded computing, from December 2001 to April 2004.

Mr. Dan was elected President, Chief Executive Officer and Director of The Brink’s Company in February 1998 and was elected Chairman of the Board effective January 1, 1999. He also serves as Chief Executive Officer of Brink’s, Incorporated, a position he has held since July 1993. From August 1992 to July 1993 he served as President of North American operations of Brink’s, Incorporated and as Executive Vice President of Brink’s, Incorporated from 1985 to 1992.

Mr. Lennon was appointed Vice President and Chief Administrative Officer in 2005. Prior to this position, he was the Vice President, Human Resources and Administration from 1990 through 2005.

Mr. Marshall was appointed Vice President, General Counsel and Secretary of The Brink’s Company on September 15, 2008. Prior to joining The Brink’s Company, Mr. Marshall was the Vice President, General Counsel and Secretary at Tredegar Corporation from October 2006 to September 2008. Prior to this position, Mr. Marshall was the Assistant General Counsel and Secretary for The Brink’s Company from July 2006 to September 2006. Prior to this position, Mr. Marshall was the Assistant General Counsel and Director-Corporate Governance and Compliance for The Brink’s Company from July 2004 to July 2006. Prior to this position, Mr. Marshall was the Assistant General Counsel for The Brink’s Company from July 2000 to July 2004.

Messrs. Schumacher and Wheatley have served in their present positions for more than the past five years.

Mr. Leon is the Treasurer of The Brink’s Company. Mr. Leon was hired June 12, 2008. Before joining The Brink’s Company, Mr. Leon was the Assistant Treasurer for Universal Corporation from January 2007 to June 2008. Prior to this position, Mr. Leon was the Assistant Treasurer for The Brink’s Company from July 2005 to January 2007. Prior to this position, Mr. Leon had held various financial management positions with The Brink’s Company from February 1998 to July 2005.

PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Our common stock trades on the New York Stock Exchange under the symbol “BCO.” As of February 24, 2009, there were approximately 2,900 shareholders of record of common stock.

The dividends declared and the high and low prices of our common stock for each full quarterly period within the last two years are as follows:

	2008 Quarters								2007 Quarters
	1st		2nd		3rd		4th		1st		2nd		3rd		4th

Dividends declared per common share	$	0.1000		0.1000		0.1000		0.1000	$	0.0625		0.1000		0.1000		0.1000
Stock prices:
High	$	70.11		74.61		71.48		61.32	$	65.50		68.47		67.65		64.83
Low		49.04		65.23		57.68		18.19		57.77		61.44		52.42		55.69

We completed the spin-off of BHS on October 31, 2008. See note 15 to the consolidated financial statements for a description of limitations of our ability to pay dividends in the future.

The following table provides information about our common stock repurchases during the quarter ended December 31, 2008.

							(d) Maximum Number
					(c) Total Number		(or Approximate
					of Shares Purchased		Dollar Value) of
	(a) Total Number				as Part of Publicly		Shares that May Yet
	of Shares		(b) Average Price		Announced Plans		be Purchased Under
Period	Purchased		Paid per Share		or Programs		the Plans or Programs
October 1 through
October 31, 2008		-	$	-		-	$	43,730,344	(1)
November 1 through
November 30, 2008		-		-		-		43,730,344	(1)
December 1 through
December 31, 2008		160,500	$	24.03		160,500	$	39,873,744	(1)

(1)

On September 14, 2007, the board of directors authorized the repurchase of up to $100 million of common stock from time to time as market conditions warrant and as covenants under existing agreements permit. The program does not require the acquisition of a specific number of shares and may be modified or discontinued at any time.

The following graph compares the cumulative 5-year total return provided to shareholders on The Brink’s Company’s common stock relative to the cumulative total returns of the S&P Midcap 400 index and the S&P Midcap 400 Commercial Services & Supplies Index. The graph tracks the performance of a $100 investment in our common stock and in each index (with the reinvestment of all dividends) from December 31, 2003, through December 31, 2008. The Company previously used the S&P Midcap Diversified Commercial & Professional Services Index, but this index has been discontinued, so the Company has instead used the S&P Midcap 400 Commercial Services & Supplies Index.

Source – Research Data Group, Inc.

Comparison of Five-Year Cumulative Total Return Among

Brink’s Common Stock, the S&P MidCap 400 Index and

the S&P Midcap 400 Commercial Services & Supplies Index (1)

	Years Ended December 31,
	2003		2004		2005		2006		2007		2008

The Brink's Company	$	100.00		175.12		212.61		284.27		266.51		206.80
S&P Midcap 400 Index		100.00		116.48		131.11		144.64		156.18		99.59
S&P Midcap 400 Commercial Services & Supplies Index	$	100.00		125.07		131.26		156.87		159.80		106.37
Copyright © 2009, Standard & Poor's, a division of The McGraw-Hill Companies, Inc. All rights reserved.

(1)

For the line designated as “The Brink’s Company” the graph depicts the cumulative return on $100 invested in The Brink’s Company’s common stock. For the S&P Midcap 400 Index and the S&P Midcap 400 Commercial Services & Supplies Index, cumulative returns are measured on an annual basis for the periods from December 31, 2003, through December 31, 2008, with the value of each index set to $100 on December 31, 2003. Total return assumes reinvestment of dividends and the reinvestment of proceeds from the sale of the shares received related to the spin-off of our former monitored security business on October 31, 2008. We chose the S&P Midcap 400 Index and the S&P Midcap 400 Commercial Services & Supplies Index because we are included in these indices, which broadly measure the performance of mid-size companies in the United States market.

ITEM 6. SELECTED FINANCIAL DATA

Five Years in Review

(In millions, except per share amounts)	2008			2007			2006			2005			2004

Revenues and Income

Revenues	$	3,163.5			2,734.6			2,354.3			2,113.3			1,897.9
Segment operating profit		271.9			223.3			184.1			119.5			149.0
Corporate and former operations expense, net		(43.4	)		(62.3	)		(73.4	)		(82.0	)		(86.7	)
Operating profit		228.5			161.0			110.7			37.5			62.3
Income (loss) from continuing operations		131.8			78.4			53.1			(3.3	)		25.3
Income from discontinued operations (a)		51.5			58.9			534.1			151.1			96.2
Cumulative effect of change in accounting principle (b)		-			-			-			(5.4	)		-
Net income	$	183.3			137.3			587.2			142.4			121.5

Financial Position

Property and equipment, net	$	534.0			1,118.4			981.9			867.4			914.0
Total assets		1,815.8			2,394.3			2,188.0			3,036.9			2,692.7
Long-term debt, less current maturities		173.0			89.2			126.3			251.9			181.6
Shareholders’ equity		214.0			1,046.3			753.8			837.5			688.5

Supplemental Information

Depreciation and amortization	$	122.3			110.0			93.0			88.0			78.8
Capital expenditures		165.3			141.8			113.8			107.8			76.1

Per Common Share

Basic, net income (loss):
Continuing operations	$	2.85			1.68			1.06			(0.06	)		0.46
Discontinued operations (a)		1.11			1.27			10.69			2.69			1.76
Cumulative effect of change in accounting principle (b)		-			-			-			(0.10	)		-
Net income	$	3.96			2.95			11.75			2.53			2.23

Diluted, net income (loss):
Continuing operations	$	2.82			1.67			1.05			(0.06	)		0.46
Discontinued operations (a)		1.10			1.25			10.58			2.69			1.74
Cumulative effect of change in accounting principle (b)		-			-			-			(0.10	)		-
Net income	$	3.93			2.92			11.64			2.53			2.20

Cash dividends	$	0.4000			0.3625			0.2125			0.1000			0.1000

Weighted Average Shares

Basic		46.3			46.5			50.0			56.3			54.6
Diluted		46.7			47.0			50.5			56.3			55.3

(a)

Income from discontinued operations reflects the operations and gains and losses, if any, on disposal of our former home security, coal, natural gas, timber, gold, and air freight businesses, as well as the domestic cash handling operations in the United Kingdom. Expenses related to postretirement obligations are recorded as a component of continuing operations after the respective disposal dates. Adjustments to contingent liabilities are recorded within discontinued operations.

(b)	Our 2005 results of operations include a noncash after-tax charge of $5.4 million or $0.10 per diluted share to reflect the cumulative effect of a change in accounting principle pursuant to the adoption of FIN 47, Accounting for Conditional Asset Retirement Obligations.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

THE BRINK’S COMPANY

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 2008

	TABLE OF CONTENTS

		Page
OPERATIONS		21

RESULTS OF OPERATIONS
Overview of Results		23
	Consolidated Review	24
	Higher Projected Expenses Related to U.S. Retirement Plans	26
	Segment Operating Results	27
	Corporate Expense, Net	30
	Former Operations, Net	31
	Other Operating Income, Net	31
	Nonoperating Income and Expense	32
	Income Taxes	33
	Minority Interest	34
	Discontinued Operations	35
	Foreign Operations	36

LIQUIDITY AND CAPITAL RESOURCES
	Overview	37
	Summary Cash Flow Information	37
	Operating Activities	38
	Investing Activities	38
	Financing Activities	39
	Capitalization	40
	Off Balance Sheet Arrangements	42
	Contractual Obligations	43
	Surety Bonds and Letters of Credit	44
	Contingent Matters	44

APPLICATION OF CRITICAL ACCOUNTING POLICIES
	Deferred Tax Asset Valuation Allowance	45
	Goodwill, Other Intangible Assets and Property and Equipment Valuations	46
	Retirement Benefit Obligations	47
	Foreign Currency Translation	52

RECENT ACCOUNTING PRONOUNCEMENTS		52

OPERATIONS

The Brink’s Company

Overview

The Brink’s Company offers transportation and logistics management services for cash and valuables throughout the world. These services include armored car transportation, automated teller machine (“ATM”) replenishment and servicing, currency deposit processing and cash management services. Cash management services include cash logistics services (“Cash Logistics”), deploying and servicing safes and safe control devices (e.g. our patented CompuSafe® service), coin sorting and wrapping, integrated check and cash processing services (“Virtual Vault Services”), arranging secure transportation of valuables over long distances and around the world (“Global Services”), and guarding services, including airport security.

Management allocates resources to and makes operating decisions on a geographic basis. As a result, we changed our reportable segments in the fourth quarter of 2008 to International and North America. In 2007, our reportable segments were Brink’s and BHS. Our International segment includes three distinct regions: EMEA, Latin America and Asia Pacific. Our North America segment includes operations in the U.S. and Canada.

We believe that Brink’s has significant competitive advantages including:

·	brand name recognition

·	reputation for a high level of service and security

·	risk management and logistics expertise

·	global infrastructure and customer base

·	proprietary cash processing and information systems

·	high-quality insurance coverage and general financial strength.

We focus our time and resources on service quality, protecting and strengthening our brand, and addressing our risks. We are a premium provider of services in most of the markets we serve. Our marketing and sales efforts are enhanced by the “Brink’s” brand, so we seek to protect and build its value. Since our services focus on handling, transporting, protecting, and managing valuables, we strive to understand and manage risk. Overlaying our approach is an understanding that we must be disciplined and patient enough to charge prices that reflect the value provided, the risk assumed and the need for an adequate return for our investors.

Business environments around the world change constantly. We must adapt to changes in competitive landscapes, regional economies and each customer’s level of business. We balance underlying business risk and the effects of changing demand on the utilization of our resources. As a result, we operate largely on a decentralized basis so local management can react quickly to changes in the business environment.

We measure financial performance on a long-term basis. The key financial factors on which we focus are:

·	Return on capital

·	Revenue and earnings growth

·	Cash flow generation

These and similar measures are critical components of our incentive compensation plans and performance evaluations.

Because of our emphasis on managing risks while providing a high level of service, we believe Brink’s spends more than its competitors on training and retaining employees, as well as on facilities. As a result, we focus our marketing and selling efforts on customers who appreciate the value and breadth of our services, information capabilities, risk management and financial strength.

In order to earn an adequate return on capital, we focus on the effective and efficient use of resources as well as appropriate pricing levels. We attempt to maximize the amount of business that flows through our branches, vehicles and systems in order to obtain the lowest costs possible without compromising safety, security or service. Due to our higher investment in people and processes, we generally charge higher prices than competitors that do not provide the same level of service and risk management.

Despite an extremely challenging business environment in 2008 we achieved an increase in segment operating profit of 40 basis points. We expect 2009 organic revenue growth in the mid to high single-digit range, with a segment operating profit margin close to 8%. We define organic revenue growth as revenue growth excluding changes in revenue earned from newly acquired businesses and changes in revenue due to changes in currency exchange rates. We are targeting long-term organic revenue growth in the high single-digit percentage range and segment operating margin improvement of 50 basis points per year, but these long-term goals depend on an economic recovery. Our goal is to eventually achieve a 10% segment operating margin when economic conditions improve.

The industries we serve have been consolidating. As a result, the demands and expectations of customers in these industries have grown. Customers are increasingly seeking suppliers, such as Brink’s, with broad geographic solutions, sophisticated outsourcing capabilities and financial strength.

Our operating results may vary from period to period. Since revenues are generated from charges per service performed or based on the value of goods transported, they can be affected by both the level of economic activity and the volume of business for specific customers. As contracts generally run for one or more years, costs are incurred to prepare to serve, or to transition away, from a customer. We also periodically incur costs to reduce operations when volumes decline, including costs to reduce the number of employees and close or consolidate branch and administrative facilities. In addition, safety and security costs can vary depending on performance, cost of insurance coverage, and changes in crime rates (i.e. attacks and robberies).

Cash Logistics is a fully integrated solution that proactively manages the supply chain of cash from point-of-sale through bank deposit. The process includes cashier balancing and reporting, deposit processing and consolidation, and electronic information exchange (including “same-day” credit capabilities). Retail customers use Brink’s Cash Logistics services to count and reconcile coins and currency in a secure environment, to prepare bank deposit information, and to replenish customer coins and currency in proper denominations.

Because Cash Logistics involves a higher level of service and more complex activities, customers are charged higher prices, which result in higher margins. The ability to offer Cash Logistics to customers differentiates Brink’s from many of its competitors. As a result, management is focused on continuing to grow Cash Logistics revenue.

Brink’s revenues and related operating profit are generally higher in the second half of the year, particularly in the fourth quarter, because of generally increased economic activity associated with the holiday season. Conversely, margins are typically lower in the first half of the year.

On October 31, 2008, we completed the tax-free spin-off of Brink’s Home Security Holdings, Inc. (“BHS”), our former monitored security business in North America. On August 5, 2007, we sold our domestic cash handling operations in the United Kingdom. On January 31, 2006, we sold BAX Global Inc. (“BAX Global”), a wholly owned freight transportation subsidiary, for approximately $1 billion in cash and recorded a pretax gain of approximately $587 million. See “Discontinued Operations” for a description of the transactions and see “Liquidity and Capital Resources” for a description of the effect of these dispositions on our cash flow and financial position. We have reported the earnings and cash flows of these operations within discontinued operations for all periods presented.

We have significant liabilities associated with our former operations, primarily related to retirement plans, which are partially funded by plan trusts. These trusts sustained market losses during the second half of 2008. As a result, our net liabilities at December 31, 2008, increased substantially compared to the prior year. We expect expenses related to these plans will increase in 2009 as a result of these market losses.

Information about our liabilities related to former operations is contained in the following sections of this report:

·	Results of Operations – Higher Projected Expenses Related to U.S. Retirement Plans on page 26

·	Liquidity and Capital Resources – Contractual Obligations on page 43

·	Application of Critical Accounting Policies on pages 45-52

·	Notes 3, 16 and 20 to the consolidated financial statements, which begin on page 76

RESULTS OF OPERATIONS

Overview of Results

	Years Ended December 31,						% change
(In millions)	2008		2007		2006		2008			2007

Income from:
Continuing operations	$	131.8		78.4		53.1		68			48
Discontinued operations		51.5		58.9		534.1		(13	)		(89	)
Net income	$	183.3		137.3		587.2		34			(77	)

The income items in the above table are reported after tax.

Continuing Operations

2008

Income from continuing operations was higher in 2008 compared to 2007 primarily due to a $48.6 million improvement in segment operating profit driven by strong organic profit growth in our international operations. We also benefited from a $12.4 million gain on the sale of certain assets of our former coal operations, lower expense related to retirement plans, and a lower effective income tax rate. These improvements were partially offset by lower profits in North America, higher corporate expense, increased minority expenses, and an other-than-temporary impairment of our marketable securities.

Compared to 2008, our income from continuing operations in 2009 is expected to be adversely affected by several factors including the continuing global economic slowdown, the absence of profitable work performed in 2008 related to the completed currency conversion project, and higher expenses related to our retirement plans. Offsetting factors include an improving competitive landscape in North America and customer outsourcing initiatives, and lower expected corporate expenses.

2007

Income from continuing operations was higher in 2007 compared to 2006 primarily due to a $39.2 million improvement in segment operating profit driven by our international operations and lower expenses related to former operations. International segment operating profit increased primarily due to growth in Latin America, improved performance in Europe and lower safety and security costs worldwide. Interest expense decreased in 2007 as a result of reduced debt levels. The effective tax rate for 2007 was approximately 1.2 percentage points lower than 2006 largely because of a change in the mix of earnings by jurisdiction.

Discontinued Operations

Income from discontinued operations includes the results of businesses that we have spun off or sold.

Consolidated Review

	Years Ended December 31,									% change
(In millions)	2008			2007			2006			2008			2007

Revenues:
International	$	2,231.3			1,848.3			1,524.3			21			21
North America		932.2			886.3			830.0			5			7
Revenues		3,163.5			2,734.6			2,354.3			16			16

Operating profit:
International		215.0			152.9			114.2			41			34
North America		56.9			70.4			69.9			(19	)		1
Segment operating profit		271.9			223.3			184.1			22			21
Corporate expense, net		(55.3	)		(48.4	)		(46.9	)		14			3
Former operations		11.9			(13.9	)		(26.5	)	NM				(48	)

Operating profit		228.5			161.0			110.7			42			45

Interest expense		(12.0	)		(10.8	)		(12.0	)		11			(10	)
Interest and other income, net		8.1			10.5			16.9			(23	)		(38	)
Income from continuing operations before income taxes and minority interest		224.6			160.7			115.6			40			39
Provision for income taxes		53.0			59.5			44.2			(11	)		35
Minority interest		39.8			22.8			18.3			75			25

Income from continuing operations		131.8			78.4			53.1			68			48

Income from discontinued operations, net of tax		51.5			58.9			534.1			(13	)		(89	)

Net income	$	183.3			137.3			587.2			34			(77	)

Segment revenue and operating profit

Revenues in 2008 were higher compared to 2007 as a result of a combination of the effects of organic revenue growth and favorable changes in currency exchange rates. Organic revenue growth includes revenues from the “conversion project” (discussed below). Segment operating profit was higher due to improved performance from our International segment including significant operating profit from the conversion project in the first half of 2008, partially offset by lower results from our North America segment.

Compared to 2008, income from continuing operations in 2009 is expected to be adversely affected by several factors, including:

·	the effects of the current global economic slowdown,

·	the completion in 2008 of the currency conversion project in Venezuela, which generated $51 million in revenues,

·	higher expenses related to retirement plans (see page 26 for more information),

·	a higher tax rate as a result of valuation allowance reversals that occurred in 2008, which are not anticipated in 2009, and

·	potential unfavorable changes in foreign currency exchange rates, including measures taken by governments to devalue official currency exchange rates.

Offsetting these factors, our income from continuing operations in 2009 may be positively affected compared to 2008 by several factors, including:

·	increased opportunities in North America given an improving competitive landscape

·	an acceleration of outsourcing and cost reduction efforts by customers due to the weak economy, which may improve demand for our value-added cash logistics services.

Revenues in 2007 increased from 2006 primarily due to growth in existing operations with particularly strong growth in our International segment. Exchange rate fluctuations affected reported revenues favorably in 2007 compared to 2006. Operating profit was higher in 2007 compared to 2006, largely due to stronger performance in our International segment and lower safety and security costs. In addition, operating profit benefited from the weaker U.S. dollar.

Corporate expense, net

Corporate expense, net, was higher in 2008 compared to 2007 as a result of costs incurred to consider various strategic alternatives, which ultimately resulted in the decision to spin off BHS. Corporate expense, net, also increased due to foreign currency transaction losses related primarily to the remeasurement of foreign currency-denominated intercompany dividends. The increase in expense was partially offset by higher royalty income from BHS after the spin-off. Corporate expense, net, in 2009 is expected to decrease more than one-third from 2008.

Corporate expense, net, in 2007 was higher than 2006 as a result of professional, legal and advisory fees incurred related to initiatives by certain of our shareholders and a proxy contest initiated by MMI Investments, L.P., one of our shareholders, over board of director candidates that were elected at the 2008 annual meeting.

Former Operations

Results of our former operations in 2008 improved compared to 2007 primarily due to a $12.4 million gain on the sale of certain assets of our former coal operations as well as lower expenses related to retirement plans.

Expenses related to former operations in 2007 were $12.6 million lower than 2006 due to lower expenses related to retirement plans.

Income Taxes

Our effective tax rate on income from continuing operations was 23.6% in 2008, 37.0% in 2007 and 38.2% in 2006. The effective tax rate varied from statutory rates in these periods primarily due to the geographical mix of earnings, changes in valuation allowances for deferred tax assets and state income taxes.

We currently estimate our 2009 effective tax rate will be between 30% and 33%, although the actual 2009 effective tax rate could be materially different from this estimate.

Discontinued Operations

On October 31, 2008, we completed the tax-free spin-off of BHS. On August 5, 2007, we sold our United Kingdom domestic cash handling operations. On January 31, 2006, we sold BAX Global for approximately $1 billion in cash resulting in a pretax gain of approximately $587 million. All three of these operations have been reported within discontinued operations for all periods presented.

Revisions to estimated amounts related to contingent liabilities of our former operations, including those related to obligations under the Coal Industry Retiree Health Benefit Act of 1992 (the “Health Benefit Act”), are recorded in discontinued operations.

In 2006, we recognized:

·	a $148.3 million pretax benefit primarily as a result of a 2006 federal law amending the Health Benefit Act that reduced our obligation for healthcare and death benefits for former coal miners, and

·	a $9.9 million pretax benefit on the settlement of liabilities related to two coal industry multi-employer pension plans.

Higher Projected Expenses Related to U.S. Retirement Plans

Our most significant retirement plans include our primary U.S. pension plan and the retiree medical plans of our former coal business that were collectively bargained with the United Mine Workers of America (the “UMWA”). The market value of the investments used to pay benefits for these retirement plans significantly declined in 2008. As a result of this, our 2009 expense related to our U.S. retirement plans is expected to increase by approximately $36.5 million from 2008 levels (see tables below).

The projected expenses in the following tables are based on a variety of estimates, including actuarial assumptions as of December 31, 2008, as described in the Application of Critical Accounting Policies and in the notes to the consolidated financial statements. These estimated amounts will change in the future to reflect payments made, investment returns, actuarial revaluations, and other changes in estimates. Actual amounts could differ materially from the estimated amounts. See the Application of Critical Accounting Policies on pages 47 to 51 for a sensitivity analysis of how our results could have been different had we selected different assumptions or accounting policies. See the Contractual Obligations table on page 43 for future contributions and cash outflows.

Actual and Projected Expenses (Income) related to U.S. Retirement Plans

(In millions)	Actual Expense (Income)							Projected Expense (Income)
Years Ending December 31,	2006		2007		2008			2009			2010		2011		2012		2013

Primary U.S. pension plan	$	6.9		2.5		(12.8	)		(2.0	)		9.5		15.9		21.1		23.6
UMWA Plans		12.7		4.0		0.6			26.3			26.2		26.3		26.5		26.9
Total	$	19.6		6.5		(12.2	)		24.3			35.7		42.2		47.6		50.5

Included in:
Segment operating profit - North America	$	2.6		1.0		(4.9	)		(0.7	)		3.7		6.2		8.1		9.1
Corporate expenses, net		0.2		0.1		(0.3	)		(0.1	)		0.2		0.3		0.4		0.5
Former operations, net (a)		16.5		5.3		(6.4	)		25.1			31.8		35.7		39.1		40.9
Discontinued operations (a)		0.3		0.1		(0.6	)		-			-		-		-		-
Total	$	19.6		6.5		(12.2	)		24.3			35.7		42.2		47.6		50.5

(a)Discontinued operations in 2006, 2007 and 2008 include pension expense allocated to BHS. In future years, these will be recorded in continuingoperations within former operations, net.

Segment Operating Results

2008

Overview

Revenues were 16% higher (12% on a constant-currency basis) compared to 2007 primarily as a result of organic revenue growth in Latin America, including revenues from the conversion project. Segment operating profit in 2008 was higher than in 2007 primarily as a result of strong performance in Latin America, including conversion project activities, partially offset by lower results in North America.

	Years Ended									Percentage
	December 31,									Change
(In millions)	2007		Constant-Currency Change			Currency Change		2008		As Reported			Constant-Currency

Revenues:
International	$	1,848.3		285.5			97.5		2,231.3		21			15
North America		886.3		45.1			0.8		932.2		5			5
Revenues	$	2,734.6		330.6			98.3		3,163.5		16			12

Operating profit:
International	$	152.9		58.0			4.1		215.0		41			38
North America		70.4		(13.6	)		0.1		56.9		(19	)		(19	)
Segment operating profit	$	223.3		44.4			4.2		271.9		22			20

International

Revenues increased in 2008 over 2007 in all regions. Revenue increases in EMEA and Latin America were primarily the result of organic revenue growth (including the conversion project) and favorable changes in currency exchange rates. Operating profit in 2008 was higher than 2007 primarily due to the effects of strong volumes in Latin America, including the conversion project. Operating profit in EMEA was higher than 2007 primarily due to favorable changes in currency exchange rates and improved operating results in some countries.

International operating profit in 2009 will be negatively affected by the absence of the highly profitable conversion project.

EMEA. Revenues increased 14% (8% on a constant-currency basis) to $1,358.9 million in 2008 from $1,191.5 million in 2007. Revenues increased as a result of both organic revenue growth and favorable changes in currency exchange rates. Operating profit increased compared to the prior-year period due to favorable changes in currency exchange rates and improved operating results in some countries despite higher labor costs and the overall economic slowdown caused by the global financial crisis, which resulted in decreased volumes as well as recessionary and competitive pricing pressures. The improvement in operating profit also reflects the strong performance of Global Services and lower security costs. We expect pressure on our European operating profit in 2009 as a result of the difficult economic situation and the competitive environment.

Latin America. Revenues increased 35% (32% on a constant-currency basis) to $800.6 million in 2008 from $594.2 million in 2007. Revenues increased primarily due to higher volumes across the region (including significant volumes from the conversion project), normal inflationary price increases and favorable changes in currency exchange rates. Operating profit in 2008 was significantly higher than in 2007 as a result of the effects of the conversion project and solid improvement in Brazil and Argentina.

The Conversion Project

Venezuela changed its national currency from the bolivar to the bolivar fuerte on January 1, 2008, and Brink’s performed additional cash handling services to assist in the conversion. We recognized approximately $51 million in incremental revenues during 2008 associated with the conversion project. The conversion project activities utilized existing assets, personnel and other resources which also serviced normal operations.

Asia-Pacific. Revenues increased 15% (13% on a constant-currency basis) to $71.8 million in 2008 from $62.6 million in 2007. Operating profit in 2008 was higher than in 2007, reflecting improvements in our Global Services operations.

North America

Revenues increased 5% to $932.2 million in 2008 compared to $886.3 million in 2007. Revenues increased primarily in CIT services, driven mainly by higher volumes rather than higher prices. Operating profit in 2008 decreased $13.5 million compared to 2007 due largely to higher spending on labor, fuel, selling, general and administrative expenses and employment-related legal settlement expenses, partially offset by lower expense related to U.S. retirement plans and the benefit of reductions in postretirement benefit obligations in Canada. Expenses allocated to North America related to the primary U.S. pension plan are expected to increase by $4.2 million in 2009.

2007

Overview

Revenues at Brink’s were 16% higher in 2007 compared to 2006 primarily as a result of a combination of the effects of organic revenue growth, and favorable changes in currency exchange rates. Operating profit in 2007 was higher than 2006 largely as a result of strong performance in Latin America, particularly in Venezuela, Brazil and Colombia, improved performance in Europe and lower safety and security costs.

	Years Ended								Percentage
	December 31,								Change
(In millions)	2006		Constant-Currency Change		Currency Change		2007		As Reported		Constant-Currency

Revenues:
International	$	1,524.3		190.6		133.4		1,848.3		21		13
North America		830.0		47.1		9.2		886.3		7		6
Revenues	$	2,354.3		237.7		142.6		2,734.6		16		10

Operating profit:
International	$	114.2		30.7		8.0		152.9		34		27
North America		69.9		-		0.5		70.4		1		-
Segment operating profit	$	184.1		30.7		8.5		223.3		21		17

International

Revenues increased in 2007 over 2006 in all regions except for Asia-Pacific. Increased revenues in EMEA and Latin America were primarily the result of organic revenue growth and favorable changes in currency exchange rates. Revenue decreased in Asia-Pacific primarily due to the loss of a major customer in Australia during the second quarter of 2006. International operating profit in 2007 was higher due to the effects of strong volumes in Latin America.

EMEA. Revenues increased to $1,191.5 million in 2007 from $1,003.1 million in 2006, an increase of $188.4 million or 19% (9% on a constant-currency basis) largely as a result of organic revenue growth and favorable changes in currency exchange rates.

Operating profit increased 24% in 2007 compared to 2006 due to improved results in several countries, partially offset by $2.1 million of impairment charges recorded on long-lived assets and $2.4 million of restructuring charges.

Latin America. Revenues increased to $594.2 million in 2007 from $454.2 million in 2006, an increase of 31% (24% on a constant-currency basis). This increase was due primarily to price increases in economies with relatively higher levels of inflation and higher volumes. Increases in volume were a reflection of the overall improvement in Latin American economies. Operating profit in 2007 was 38% higher than in 2006 due to the above-mentioned price and volume increases, and cost reduction and productivity improvements across the region.

Asia-Pacific. Revenues decreased to $62.6 million in 2007 from $67.0 million in 2006, a decrease of 7% (9% on a constant-currency basis). This decrease was primarily due to the loss of Australia’s largest customer during the second quarter of 2006, partially offset by stronger performance in Hong Kong, Taiwan and Japan.

We restructured our Australian operation in 2006 after the loss of the customer and recorded charges of $4.6 million. The charges principally related to employee severance payments and lease obligations for cl