Edgar Filing: BRINKS CO

form_10-q.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2009

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.)

1801 Bayberry Court, Richmond, Virginia 23226-8100

(Address of principal executive offices) (Zip Code)

(804) 289-9600

(Registrant's telephone number, including area code)

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 whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes o No 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 “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

(Check one): 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 July 28, 2009, 45,573,583 shares of $1 par value common stock were outstanding.

Part I - Financial Information

Item 1. Financial Statements

THE BRINK’S COMPANY

and subsidiaries

Consolidated Balance Sheets

(Unaudited)

	June 30,			December 31,
(In millions)	2009			2008

ASSETS

Current assets:
Cash and cash equivalents	$	178.2			250.9
Accounts receivable, net		459.4			450.7
Prepaid expenses and other		124.6			99.7
Deferred income taxes		29.5			31.1
Total current assets		791.7			832.4

Property and equipment, net		568.7			534.0
Goodwill		181.5			139.6
Deferred income taxes		197.1			202.6
Other		143.7			107.2

Total assets	$	1,882.7			1,815.8


LIABILITIES AND SHAREHOLDERS’ EQUITY

Current liabilities:
Short-term borrowings	$	7.1			7.2
Current maturities of long-term debt		20.2			8.4
Accounts payable		122.1			137.8
Income taxes payable		2.9			21.2
Accrued liabilities		398.4			360.5
Total current liabilities		550.7			535.1

Long-term debt		165.1			173.0
Accrued pension costs		369.4			373.4
Retirement benefits other than pensions		245.2			249.9
Deferred income taxes		19.6			21.5
Other		158.0			157.6
Total liabilities		1,508.0			1,510.5

Commitments and contingencies (notes 4, 5, 9 and 13)

Equity:
The Brink’s Company (“Brink’s”) shareholders’ equity:
Common stock		45.6			45.7
Capital in excess of par value		488.9			486.3
Retained earnings		340.6			310.0
Accumulated other comprehensive loss		(596.5	)		(628.0	)
Total Brink’s shareholders’ equity		278.6			214.0

Noncontrolling interests		96.1			91.3

Total equity		374.7			305.3

Total liabilities and shareholders’ equity	$	1,882.7			1,815.8

See accompanying notes to consolidated financial statements.

THE BRINK’S COMPANY

and subsidiaries

Consolidated Statements of Income

(Unaudited)

	Three Months						Six Months
	Ended June 30,						Ended June 30,
(In millions, except per share amounts)	2009			2008			2009			2008

Revenues	$	751.9			797.8			1,484.4			1,590.6

Costs and expenses:
Cost of revenues		620.5			644.9			1,211.6			1,261.8
Selling, general and administrative expenses		102.6			110.5			206.9			219.2
Total costs and expenses		723.1			755.4			1,418.5			1,481.0
Other operating income (expense)		(2.1	)		0.4			2.5			(0.3	)

Operating profit		26.7			42.8			68.4			109.3

Interest expense		(2.8	)		(3.3	)		(5.5	)		(5.8	)
Interest and other income		2.0			3.0			6.0			5.1
Income from continuing operations before tax		25.9			42.5			68.9			108.6
Provision for income taxes		6.6			4.3			17.1			22.6

Income from continuing operations		19.3			38.2			51.8			86.0

Income from discontinued operations		4.3			18.0			5.1			35.2
Net income		23.6			56.2			56.9			121.2
Less net income attributable to noncontrolling interests		(3.3	)		(7.5	)		(13.6	)		(22.4	)

Net income attributable to Brink’s		20.3			48.7			43.3			98.8

Amounts attributable to Brink’s:
Income from continuing operations		16.0			30.7			38.2			63.6
Income from discontinued operations		4.3			18.0			5.1			35.2

Net income attributable to Brink’s	$	20.3			48.7			43.3			98.8

Earnings per share attributable to Brink’s common shareholders:
Basic:
Continuing operations	$	0.35			0.66			0.82			1.38
Discontinued operations		0.09			0.39			0.11			0.76
Net income		0.44			1.06			0.93			2.14

Diluted:
Continuing operations	$	0.34			0.66			0.82			1.36
Discontinued operations		0.09			0.39			0.11			0.75
Net income		0.44			1.05			0.93			2.12

Weighted-average shares
Basic		46.4			46.0			46.3			46.2
Diluted		46.6			46.5			46.6			46.7

Cash dividends paid per common share	$	0.10			0.10			0.20			0.20

See accompanying notes to consolidated financial statements.

THE BRINK’S COMPANY

and subsidiaries

Consolidated Statement of Shareholders’ Equity

Six months ended June 30, 2009

(Unaudited)

							Capital						Accumulated
							in Excess						Other
				Common			of Par			Retained			Comprehensive			Noncontrolling
(In millions)	Shares			Stock			Value			Earnings			Loss			Interests			Total

Balance as of December 31, 2008		45.7		$	45.7			486.3			310.0			(628.0	)		91.3			305.3

Net income		-			-			-			43.3			-			13.6			56.9
Other comprehensive income		-			-			-			-			31.5			0.5			32.0
Shares repurchased		(0.2	)		(0.2	)		(2.5	)		(3.4	)		-			-			(6.1	)
Dividends:
Brink’s common shareholders
($0.20 per share)		-			-			-			(9.1	)		-			-			(9.1	)
Noncontrolling interests		-			-			-			-			-			(9.3	)		(9.3	)
Share-based compensation:
Stock options and awards:
Compensation expense		-			-			1.3			-			-			-			1.3
Consideration received from
exercise of stock options		0.1			0.1			1.2			-			-			-			1.3
Other share-based benefit programs		-			-			2.6			(0.2	)		-			-			2.4

Balance as of June 30, 2009		45.6		$	45.6			488.9			340.6			(596.5	)		96.1			374.7

See accompanying notes to consolidated financial statements.

THE BRINK’S COMPANY

and subsidiaries

Consolidated Statements of Cash Flows

(Unaudited)

	Six Months
	Ended June 30,
(In millions)	2009			2008

Cash flows from operating activities:
Net income	$	56.9			121.2
Adjustments to reconcile net income to net cash provided (used) by operating activities:
Income from discontinued operations, net of tax		(5.1	)		(35.2	)
Depreciation and amortization		63.5			61.1
Stock compensation expense		1.3			1.5
Deferred income taxes		(8.5	)		8.0
Retirement benefit funding (more) less than expense:
Pension		0.8			(6.5	)
Other than pension		6.1			(1.9	)
Gains on sales of property and other assets		(8.2	)		-
Impairment losses		2.1			0.3
Other operating		(0.3	)		(0.1	)
Changes in operating assets and liabilities, net of effects of acquisitions:
Accounts receivable		6.7			(18.0	)
Accounts payable, income taxes payable and accrued liabilities		(31.2	)		(16.7	)
Prepaid and other current assets		(19.0	)		(24.3	)
Other		(2.9	)		(3.4	)
Discontinued operations		23.6			130.3
Net cash provided by operating activities		85.8			216.3

Cash flows from investing activities:
Capital expenditures		(74.5	)		(70.4	)
Acquisitions		(49.0	)		(5.4	)
Marketable securities:
Purchases		(10.5	)		-
Sales		3.1			1.8
Other		5.1			2.9
Discontinued operations		-			(90.1	)
Net cash used by investing activities		(125.8	)		(161.2	)

Cash flows from financing activities:
Repayment of long term debt		(5.9	)		(6.1	)
Revolving credit facilities borrowings (payments)		(6.3	)		70.4
Short-term borrowings (repayments)		(0.5	)		(4.1	)
Repurchase shares of common stock of Brink’s		(6.9	)		(53.5	)
Dividends to:
Shareholders of Brink’s		(9.1	)		(9.1	)
Noncontrolling interests in subsidiaries		(9.3	)		(8.8	)
Proceeds from exercise of stock options		1.3			4.9
Excess tax benefits associated with stock compensation		0.2			8.7
Minimum tax withholdings associated with stock compensation		(0.2	)		(13.0	)
Net cash used by financing activities		(36.7	)		(10.6	)

Effect of exchange rate changes on cash		4.0			5.4

Cash and cash equivalents:
Increase (decrease)		(72.7	)		49.9
Balance at beginning of period		250.9			196.4
Balance at end of period	$	178.2			246.3

See accompanying notes to consolidated financial statements.

THE BRINK’S COMPANY

and subsidiaries

Notes to Consolidated Financial Statements

(Unaudited)

Note 1 – Basis of presentation

The Brink’s Company (along with its subsidiaries, “Brink’s” or “we”) has two geographic reportable segments:

· International

· North America

Our unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial reporting and applicable quarterly reporting regulations of the Securities and Exchange Commission (the “SEC”). Accordingly, the unaudited consolidated financial statements do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for interim periods are not necessarily indicative of the results that may be expected for the full year. For further information, refer to our Annual Report on Form 10-K for the year ended December 31, 2008.

We have made a number of estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent assets and liabilities to prepare these consolidated financial statements. Actual results could differ materially from these estimates. The most significant estimates are related to goodwill and other long-lived assets, pension and other retirement benefit obligations, legal contingencies, foreign currency translation and deferred tax assets.

We have evaluated subsequent events for potential recognition and disclosure through July 30, 2009, the date the consolidated financial statements included in this Quarterly Report on Form 10-Q were issued.

Accounting Corrections

During the second quarter of 2009, adjustments were made to correct amounts previously reported for the first quarter of 2009 and prior annual periods. The adjustments decreased income from continuing operations in the current period by $3.4 million, net of tax. We have concluded these adjustments, individually or in the aggregate, are not material to the current or any previous annual period.

Recently Adopted Accounting Standards

We adopted Statement of Financial Accounting Standard (“SFAS”) 141(R), Business Combinations, effective January 1, 2009. SFAS 141(R) establishes requirements for an acquirer to record the assets acquired, liabilities assumed, and any related noncontrolling interests related to the acquisition of a controlled subsidiary, measured at fair value, as of the acquisition date. In 2008, we expensed all acquisition costs for transactions that were expected to close in 2009. SFAS 141(R) did not otherwise have an effect on our historical financial statements, but does affect the way we account for acquisitions after the effective date.

We adopted SFAS 160, Noncontrolling Interests in Consolidated Financial Statements an Amendment of ARB No. 51, effective January 1, 2009. SFAS 160 establishes new accounting and reporting standards for the noncontrolling interest, previously known as minority interest, in a subsidiary and for the deconsolidation of a subsidiary. This statement clarifies that a noncontrolling interest in a subsidiary is an ownership interest in the consolidated entity that should be reported as a separate component within equity in the consolidated financial statements. Additionally, consolidated net income is to be reported with separate disclosure of the amounts attributable to the parent and to the noncontrolling interests. We retroactively restated our consolidated balance sheets, consolidated statements of income, consolidated statement of shareholders’ equity, consolidated statements of cash flows and consolidated statements of comprehensive income as required by SFAS 160. The adoption of SFAS 160 resulted in a $91.3 million reclassification of noncontrolling interests from other long-term liabilities to shareholders’ equity on the December 31, 2008, consolidated balance sheet. Prior to the adoption of SFAS 160 noncontrolling interests were a deduction from income in arriving at net income. Under SFAS 160 noncontrolling interests are a deduction from net income used to arrive at net income attributable to Brink’s.

We adopted SFAS 161, Disclosures about Derivative Instruments and Hedging Activities an Amendment of SFAS 133, effective January 1, 2009. SFAS 161 requires enhanced disclosures about an entity's derivative and hedging activities. The adoption of SFAS 161 had no impact on our financial statements.

We adopted SFAS 162, The Hierarchy of Generally Accepted Accounting Principles, effective November 15, 2008. SFAS 162 identifies the sources of accounting principles and the framework for selecting the principles to be used in the preparation of financial statements that are presented in conformity with GAAP. Because SFAS 162 does not change GAAP, the adoption of SFAS 162 did not have an impact on our financial statements.

We adopted SFAS 165, Subsequent Events, effective for our quarter ended June 30, 2009. SFAS 165 establishes general standards of accounting and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. This standard requires the disclosure of the date through which an entity has evaluated subsequent events and the basis for selecting that date. The adoption of SFAS 165 did not have a material effect on our financial statements.

We adopted FASB Staff Position ("FSP") EITF 03-6-1, Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities, effective January 1, 2009. FSP EITF 03-6-1 affects entities that accrue cash dividends (whether paid or unpaid) on share-based payment awards during the award’s service period for dividends that are nonforfeitable. The FASB concluded that unvested awards containing rights to nonforfeitable dividends are participating securities. We have a small number of unvested awards that receive nonforfeitable cash dividends during the service period. Because of this, we are required to compute basic and diluted earnings per share under the two-class method. The adoption of FSP EITF 03-6-1 did not have a material effect on our financial statements.

We adopted FSP 157-2, Partial Deferral of the Effective Date of SFAS 157, effective January 1, 2009. FSP 157-2 delayed the effective date of SFAS 157, Fair Value Measurements, for all nonrecurring fair value measurements of nonfinancial assets and nonfinancial liabilities. The adoption of FSP 157-2 did not have a material effect on our results of operations or financial position.

We adopted FSP FAS 157-4, Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly, effective for our quarter ended June 30, 2009. This FSP provides guidance for estimating fair value under SFAS 157, Fair Value Measurements, when the volume and level of activity for the asset or liability have significantly decreased. This FSP also provides guidance for identifying circumstances that indicate a transaction is not orderly. This FSP affirms that the objective of fair value measurement in a market for an asset that is not active is the price that would be received in an orderly (i.e., not distressed) transaction on the measurement date under current market conditions. If the market is determined to be not active, the entity must consider all available evidence in determining whether an observable transaction is orderly. The adoption of FSP 157-4 did not have a material effect on our results of operations or financial position.

We adopted FSP FAS 115-2 and FAS 124-2, Recognition and Presentation of Other-Than-Temporary Impairments, effective for our quarter ended June 30, 2009. This FSP provides guidance on the recognition of other-than-temporary impairments of investments in debt securities and provides new presentation and disclosure requirements for other-than-temporary impairments of investments in debt and equity securities. The adoption of FSP FAS 115-2 did not have a material effect on our financial statements.

We adopted FSP FAS 107-1 and APB 28-1, Interim Disclosures about Fair Value of Financial Instruments, effective for our quarter ended June 30, 2009. FSP FAS 107-1 amends SFAS 107, Disclosures about Fair Value of Financial Instruments, to require disclosures about the fair value of financial instruments in interim reporting periods. Previously, the disclosures were required only in annual financial statements. The adoption of FSP FAS 107-1 resulted in the disclosure of the fair value of our significant fixed rate long-term debt and our marketable securities as of June 30, 2009. This standard did not otherwise have an effect on our financial statements.

We adopted FSP FAS 141(R)-1, Accounting for Assets Acquired and Liabilities Assumed in a Business Combination that Arise from Contingencies, effective for our quarter ended June 30, 2009. This standard is effective for each of our business combinations which were completed on or after January 1, 2009. This FSP provides that contingent assets acquired or liabilities assumed in a business combination be recorded at fair value if the acquisition-date fair value can be determined during the measurement period. If the acquisition-date fair value cannot be determined, such items would be recognized at the acquisition date if they meet the recognition requirements of SFAS 5, Accounting for Contingencies. In periods after the acquisition date, items not recognized as part of the acquisition but recognized subsequently would be reflected in that subsequent period’s income. The adoption of FSP FAS 141(R)-1 did not have a material effect on our financial statements.

Standards Not Yet Adopted

In December 2008, the FASB issued FSP FAS 132(R)-1, Employers’ Disclosures about Postretirement Benefit Plan Assets, which will be effective for us on December 31, 2009. FSP SFAS 132(R)-1 requires enhanced disclosures about plan assets in an employer’s defined benefit pension or other postretirement plans in order to provide users of financial statements with an understanding of how investment allocation decisions are made, the major categories of plan assets, the inputs and valuation techniques used to measure the fair value of plan assets, and significant concentrations of risk within plan assets.

In June 2009, the FASB issued SFAS 166, Accounting for Transfers of Financial Assets, which will be effective for us on January 1, 2010. SFAS 166 removes the concept of a qualifying special-purpose entity (QSPE) from SFAS 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishment of Liabilities, and removes the exception from applying FASB Interpretation 46R, Consolidation of Variable Interest Entities. This statement also clarifies the requirements for isolation and limitations on portions of financial assets that are eligible for sale accounting. We are currently evaluating the impact of adopting this standard on the consolidated financial statements.

In June 2009, the FASB issued SFAS 167, Amendments to FASB Interpretation No. 46R, which will be effective for us on January 1, 2010. SFAS 167 requires an analysis to determine whether a variable interest gives the entity a controlling financial interest in a variable interest entity. This statement requires an ongoing reassessment and eliminates the quantitative approach previously required for determining whether an entity is the primary beneficiary. We do not expect a material effect from the adoption of this standard on our consolidated financial statements.

In June 2009, the FASB issued SFAS 168, The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles – a replacement of FASB Statement No. 162, which will be effective for us on September 30, 2009. SFAS 168’s objective is to establish the FASB Accounting Standards Codification as the source of authoritative non-governmental accounting principles to be applied in the preparation of financial statements in conformity with US GAAP. Although SFAS 168 does not change GAAP, the adoption of SFAS 168 will impact our financial statements since all future references to authoritative accounting literature will be in accordance with SFAS 168.

Note 2 – Segment information

SFAS 131, Disclosures about Segments of an Enterprise and Related Information, establishes standards for reporting information about operating segments. Segments are identified by us based on how resources are allocated and operating decisions are made. Management evaluates performance and allocates resources based on operating profit or loss, excluding corporate allocations. Although we have four operating segments, under the aggregation criteria set forth in SFAS 131, we conduct business in two geographic reportable segments: International and North America. Prior to the spin-off of Brink’s Home Security Holdings, Inc. (“BHS”) in October of 2008, our two reportable segments were Brink’s and BHS.

Our primary services include:

Core services

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

Automated teller machine (“ATM”) replenishment and servicing

Value-added services

Global Services – arranging secure long-distance transportation of valuables

Cash Logistics – money processing, supply chain management of cash from point-of-sale through transport, vaulting and bank deposit

Other security services

Guarding services, including airport security

Brink’s operates in approximately 50 countries.

	Three Months						Six Months
	Ended June 30,						Ended June 30,
(In millions)	2009			2008			2009			2008

Revenues:
International	$	530.0			563.1			1,041.6			1,125.6
North America		221.9			234.7			442.8			465.0
Revenues	$	751.9			797.8			1,484.4			1,590.6

Operating profit:
International	$	15.4			41.7			54.8			110.3
North America		13.0			10.9			27.5			24.3
Segment operating profit		28.4			52.6			82.3			134.6
Corporate expense		(2.4	)		(9.6	)		(6.8	)		(24.5	)
Former operations income (expense)		0.7			(0.2	)		(7.1	)		(0.8	)
Operating profit	$	26.7			42.8			68.4			109.3

Note 3 – Shares used to calculate earnings per share

Shares used to calculate earnings per share were as follows:

	Three Months				Six Months
	Ended June 30,				Ended June 30,
(In millions)	2009		2008		2009		2008

Weighted-average shares:
Basic (a)		46.4		46.0		46.3		46.2
Effect of dilutive stock options		0.2		0.5		0.3		0.5
Diluted		46.6		46.5		46.6		46.7

Antidilutive stock options and awards excluded from denominator		2.3		0.1		2.4		0.2

(a) We have deferred compensation plans for our employees and directors denominated in common stock units. Each unit represents one share of common stock. The number of shares used to calculate basic earnings per share includes the weighted-average units credited to employees and directors under the deferred compensation plans. Accordingly, included in basic shares are weighted-average units of 0.8 million in the three months and 0.8 million in the six months ended June 30, 2009, as well as 0.5 million in the three months and 0.6 million in the six months ended June 30, 2008.

Note 4 – Retirement benefits

Pension plans

We have various defined benefit plans for eligible employees.

The components of net periodic pension cost (credit) for our pension plans were as follows:

	U.S. Plans						Non-U.S. Plans						Total
(In millions)	2009			2008			2009			2008			2009			2008

Three months ended June 30,

Service cost	$	-			-			1.5			2.6			1.5			2.6
Interest cost on projected benefit obligation		11.7			11.5			2.9			3.4			14.6			14.9
Return on assets – expected		(14.3	)		(14.7	)		(2.2	)		(3.0	)		(16.5	)		(17.7	)
Amortization of losses		2.6			0.4			0.8			1.0			3.4			1.4
Net periodic pension cost (credit)	$	-			(2.8	)		3.0			4.0			3.0			1.2

Six months ended June 30,

Service cost	$	-			-			2.9			5.0			2.9			5.0
Interest cost on projected benefit obligation		23.3			22.9			5.8			6.6			29.1			29.5
Return on assets – expected		(28.5	)		(29.5	)		(4.3	)		(6.1	)		(32.8	)		(35.6	)
Amortization of losses		5.0			0.7			1.7			1.9			6.7			2.6
Settlement loss		0.3			-			-			-			0.3			-
Net periodic pension cost (credit)	$	0.1			(5.9	)		6.1			7.4			6.2			1.5

Based on December 31, 2008, data, assumptions and funding regulations, we are not required to make a contribution to our primary U.S. plan for the fiscal year 2009. We intend to make a voluntary contribution of $150 million in cash and Brink’s common stock to our primary U.S. pension plan by September 15, 2009 (see note 14).

Retirement benefits other than pensions

We provide retirement health care benefits for eligible current and former employees in the U.S. and Canada, including former employees of the former coal operations. Retirement benefits related to the former coal operation include medical benefits provided by the Pittston Coal Group Companies Employee Benefit Plan for employees represented by the United Mine Workers of America (the “UMWA”) as well as costs related to Black lung obligations.

The components of net periodic postretirement cost (credit) related to retirement benefits other than pensions were as follows:

	UMWA plans						Black lung and other plans						Total
(In millions)	2009			2008			2009			2008			2009			2008

Three months ended June 30,

Interest cost on accumulated postretirement
benefit obligations	$	6.2			7.8			0.7			0.7			6.9			8.5
Return on assets – expected		(5.7	)		(9.7	)		-			-			(5.7	)		(9.7	)
Amortization of losses (gains)		3.9			2.0			(0.1	)		-			3.8			2.0
Other		-			-			(1.4	)		-			(1.4	)		-
Net periodic postretirement cost (credit)	$	4.4			0.1			(0.8	)		0.7			3.6			0.8

Six months ended June 30,

Service cost	$	-			-			-			0.1			-			0.1
Interest cost on accumulated postretirement
benefit obligations		13.4			15.7			1.4			1.6			14.8			17.3
Return on assets – expected		(11.3	)		(19.3	)		-			-			(11.3	)		(19.3	)
Amortization of losses (gains)		8.9			4.0			-			0.1			8.9			4.1
Curtailment gain and other (a)		-			-			(1.4	)		(2.0	)		(1.4	)		(2.0	)
Net periodic postretirement cost (credit)	$	11.0			0.4			-			(0.2	)		11.0			0.2

(a) In January 2008, Brink’s announced the freezing of the Canadian retirement benefit plan.

Weighted-average asset allocations

We changed our primary U.S. retirement plans’ target weighted-average asset allocations in the second quarter of 2009.

The target weighted-average asset allocations at June 30, 2009 and December 31, 2008 by asset category are as follows:

	Primary U.S. pension plan						UMWA plans
	June 30, 2009			December 31, 2008			June 30, 2009			December 31, 2008

Equity securities		50	%		70	%		60	%		70	%
Debt securities		35	%		30	%		25	%		30	%
Alternative investments		15	%		-			15	%		-
Total		100	%		100	%		100	%		100	%

Note 5 – Income taxes

	Three Months						Six Months
	Ended June 30,						Ended June 30,
	2009			2008			2009			2008

Continuing operations
Provision for income taxes (in millions)	$	6.6			4.3			17.1			22.6
Effective tax rate		25.5	%		10.1	%		24.8	%		20.8	%

Discontinued operations
Provision for income taxes (in millions)	$	1.6			14.1			1.9			30.6
Effective tax rate		27.1	%		43.9	%		27.1	%		46.5	%

2009 Compared to U.S. Statutory Rate

The effective income tax rate on continuing operations in the second quarter of 2009 was lower than the 35% U.S. statutory tax rate largely due to $2.8 million in lower taxes related to non-U.S. tax jurisdictions. These taxes were lower than 35% primarily due to lower effective tax rates in our non-U.S. jurisdictions and inflation adjustments in certain countries that are treated as permanent differences.

The effective income tax rate on continuing operations in the first six months of 2009 was lower than the 35% U.S. statutory tax rate largely due to $7.1 million in lower taxes related to non-U.S. tax jurisdictions. These taxes were lower than 35% primarily due to lower effective tax rates in our non-U.S. jurisdictions and inflation adjustments in certain countries that are treated as permanent differences.

2008 Compared to U.S. Statutory Rate

The effective income tax rate on continuing operations in the second quarter of 2008 was lower than the 35% U.S. statutory tax rate primarily due to an $8.8 million valuation allowance release for certain non-U.S. tax jurisdictions and $2.3 million in lower taxes related to non-U.S. tax jurisdictions. These taxes were lower than 35% primarily due to lower effective tax rates in our non-U.S. jurisdictions and inflation adjustments in certain countries that are treated as permanent differences.

The effective income tax rate on continuing operations in the first six months of 2008 was lower than the 35% U.S. statutory tax rate primarily due to an $8.8 million valuation allowance release for non-U.S. tax jurisdictions and $6.8 million in lower taxes related to non-U.S. tax jurisdictions. These taxes were lower than 35% primarily due to lower effective tax rates in our non-U.S. jurisdictions and inflation adjustments in certain countries that are treated as permanent differences.

Note 6 – Share-based compensation plans

On July 9, 2009, our board of directors granted 289,350 options and 178,406 restricted stock units under the 2005 Equity Incentive Plan. The options have an exercise price of $27.59 per share.

On July 10, 2009, our board of directors granted 22,671 deferred stock units under the Non-Employee Directors’ Equity Plan.

Note 7 – Common stock

On September 14, 2007, our board of directors authorized the purchase of up to $100 million of our outstanding common shares. Under the program, we used $6.1 million to purchase 234,456 shares of common stock between January 1, 2009, and March 31, 2009, at an average price of $26.20 per share. No shares were purchased in the second quarter of 2009. As of June 30, 2009, we had $33.7 million under the program available to purchase shares. The repurchase authorization does not have an expiration date.

Note 8 – Acquisitions

On January 8, 2009, we acquired 100% of the capital stock and voting interests in Sebival-Seguranca Bancaria Industrial e de Valores Ltda. and Setal Servicos Especializados, Tecnicos e Auxiliares Ltda. (“Sebival”) for approximately $47.6 million in cash. Both of the businesses which comprise Sebival were controlled by the same owner. Sebival provides cash in transit and payment processing services in Brazil and the acquisition expands our operations into the midwestern region of that country. Acquisition-related costs were $0.8 million and were included in selling, general and administrative expenses in our consolidated statement of income for the year ended December 31, 2008.

The Sebival acquisition has been accounted for as a business combination under the acquisition method of accounting. Under the acquisition method of accounting, the assets acquired and the liabilities assumed are recorded at their respective fair values as of the acquisition date in our consolidated financial statements. We have provisionally recognized assets acquired and liabilities assumed in the transaction. The amounts reported are provisional as we are completing the valuation work required to accurately allocate the purchase price. The excess of the purchase price over the fair value of the net assets acquired has been recorded as goodwill in the amount of $30.7 million. The acquired goodwill consists of intangible assets that do not qualify for separate recognition, combined with synergies expected from integrating Sebival’s operations into our existing Brazilian operations. All of the goodwill has been assigned to the Latin America operating segment and is expected to be deductible for tax purposes. Sebival’s results of operations are included in our consolidated financial statements from the date of acquisition.

We have determined the following provisional estimated fair values for the assets purchased and liabilities assumed as of the date of the acquisition. The determination of estimated fair value required management to make significant estimates and assumptions.

	Estimated Fair
	Value at
(In millions)	January 8, 2009

Accounts receivable	$	6.3
Other current assets		4.6
Property and equipment, net		5.3
Identifiable intangible assets		19.2
Goodwill		30.7
Other noncurrent assets		1.1
Current liabilities		(11.1	)
Noncurrent liabilities		(8.5	)
Total net assets acquired	$	47.6

Actual results of Sebival and pro forma revenue and earnings of The Brink’s Company for the six months ended June 30, 2009, are as follows:

Actual Results of Sebival and Pro Forma Results of The Brink’s Company

(In millions)	Revenue		Net income attributable to Brink’s

Actual results of Sebival for the six months ended June 30, 2009	$	31.8		1.4
Pro forma results of The Brink’s Company (a)
Six months ended June 30, 2009		1,484.4		43.3
Six months ended June 30, 2008		1,627.9		100.4

(a) Pro forma results of The Brink’s Company, assuming the Sebival acquisition occurred on January 1, 2008.

In the first quarter of 2009, we acquired a controlling interest in a Panama armored transportation operation, which was previously 49% owned. We recognized a gain of $0.5 million related to the step-up in basis of our previous ownership in this company and a gain of $0.5 million related to the bargain purchase of the remaining 51% interest. The total pretax gain resulting from this transaction of $1.0 million was recognized in our consolidated statements of income in other operating income (expense).

Note 9 – Income from discontinued operations

	Three Months						Six Months
	Ended June 30,						Ended June 30,
(In millions)	2009			2008			2009			2008

BHS:
Income from operations before tax (a)	$	-			35.2			-			66.9
Expense associated with the spin-off		-			(3.4	)		-			(4.3	)
Adjustments to contingencies of former operations:
Gain from FBLET refunds (see note 13)		19.7			-			19.7			-
BAX Global indemnification (see note 13)		(12.5	)		-			(12.5	)		-
Other		(1.3	)		0.3			(0.2	)		3.2
Income from discontinued operations before income taxes		5.9			32.1			7.0			65.8
Provision for income taxes		1.6			14.1			1.9			30.6
Income from discontinued operations	$	4.3			18.0			5.1			35.2

(a)	BHS operations were spun off on October 31, 2008. Revenues of the operations were $133.9 million for the second quarter of 2008 and $261.7 million for the first half of 2008.

Note 10 – Supplemental cash flow information

	Six Months
	Ended June 30,
(In millions)	2009		2008

Cash paid for:
Interest	$	4.9		5.7
Income taxes		43.9		41.1

Note 11 – Comprehensive income

	Three Months						Six Months
	Ended June 30,						Ended June 30,
(In millions)	2009			2008			2009			2008

Net income	$	23.6			56.2			56.9			121.2
Other comprehensive income (loss), net of reclasses and taxes:
Benefit plan experience loss		6.8			2.0			8.8			3.9
Benefit plan prior service cost		(0.9	)		0.4			1.9			0.7
Foreign currency translation adjustments		39.7			(0.1	)		20.4			28.3
Marketable securities		1.2			(0.2	)		0.9			(0.9	)
Other comprehensive income		46.8			2.1			32.0			32.0
Comprehensive income		70.4			58.3			88.9			153.2

Net income attributable to noncontrolling interests		(3.3	)		(7.5	)		(13.6	)		(22.4	)
Foreign currency translation adjustments attributable to noncontrolling interests		(1.9	)		1.1			(0.5	)		(1.5	)
Comprehensive income attributable to noncontrolling interests		(5.2	)		(6.4	)		(14.1	)		(23.9	)

Comprehensive income attributable to Brink’s	$	65.2			51.9			74.8			129.3

Note 12 – Fair Value

Financial assets carried at fair value at June 30, 2009, and December 31, 2008, are classified in one of three categories as noted below.

Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for identical assets and liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs.

Level 2: Observable prices that are based on inputs not quoted on active market markets, but are corroborated by market data.

Level 3: Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs.

(In millions)	Level 1		Level 2		Level 3		Total

June 30, 2009

Available-for-sale:
Mutual funds	$	15.9		-		-		15.9
Non-U.S. debt securities		10.5		-		-		10.5
Equity securities		1.5		-		-		1.5
Other		-		1.1		-		1.1
Total available-for-sale securities at fair value	$	27.9		1.1		-		29.0

December 31, 2008

Available-for-sale:
Mutual funds	$	19.2		-		-		19.2
Equity securities		0.9		-		-		0.9
Total available-for-sale securities at fair value	$	20.1		-		-		20.1

Other financial assets and liabilities not measured at fair value on a recurring basis include cash and cash equivalents, accounts receivable, floating rate debt, accounts payable and accrued liabilities. The financial statement carrying amounts of these items approximate the fair value due to their short-term nature. Estimated fair value of our fixed-rate Dominion Terminal Associates (“DTA”) bonds is estimated by discounting the future cash flows using rates for similar debt at the valuation date.

The fair value and carrying value of our available-for-sale securities and DTA bonds are as follows:

	June 30,				December 31,
	2009				2008
(In millions)	Fair Value		Carrying Value		Fair Value		Carrying Value

DTA bonds	$	44.5		43.2		44.5		43.2
Available-for-sale securities (a)		29.0		26.6		20.1		19.2

(a) Carrying value of our available-for-sale securities reflects unrecognized gains recorded in accumulated other comprehensive loss.

Note 13 – Commitments and contingent matters

Operating leases

We have made residual value guarantees of approximately $60.3 million at June 30, 2009, related to operating leases, principally for trucks and other vehicles.

Federal Black Lung Excise Tax (“FBLET”) refunds

In late 2008, Congress passed the Energy Improvement and Extension Act of 2008 which enabled taxpayers to file claims for FBLET refunds for periods prior to those open under the statute of limitations previously applicable to us. In the second quarter of 2009, we received FBLET refunds and recognized the majority of these refunds as a pretax gain of $19.7 million. The gain related to these refunds was recorded in discontinued operations.

Former operations

As previously disclosed, BAX Global, a former business unit of ours, is defending a claim related to the apparent diversion by a third party of goods being transported for a customer. During the second quarter of 2009, BAX Global advised us that it is probable that it will be deemed liable for this claim. We have contractually indemnified the purchaser of BAX Global for this contingency. Although it is possible that this claim ultimately may be decided in favor of BAX Global, we have accrued a loss reserve of $12.5 million related to this matter. We recognized the loss in discontinued operations. We believe we have insurance coverage applicable to this matter and that it will be resolved without a material adverse effect on our liquidity, financial position or results of operations.

Value-added taxes (“VAT”) and customs duties

During 2004, we determined that one of our non-U.S. Brink’s business units had not paid customs duties and VAT with respect to the importation of certain goods and services. We were advised that civil and criminal penalties could be asserted for the non-payment of these customs duties and VAT. Although no penalties have been asserted to date, they could be asserted at any time. The business unit has provided the appropriate government authorities with an accounting of unpaid customs duties and VAT and has made payments covering its calculated unpaid VAT. We believe that the range of reasonably possible losses is between $0.4 million and $3.0 million for potential penalties on unpaid VAT and have accrued $0.4 million. We believe that the range of possible losses for unpaid customs duties and associated penalties, none of which has been accrued, is between $0 and $35 million. We believe that the assertion of the penalties on unpaid customs duties would be excessive and would vigorously defend against any such assertion. We do not expect to be assessed interest charges in connection with any penalties that may be asserted. We continue to diligently pursue the timely resolution of this matter and, accordingly, our estimate of the potential losses could change materially in future periods. The assertion of potential penalties may be material to our financial position and results of operations.

Other

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.

Note 14 – Subsequent event

We announced that, in the third quarter of 2009, we intend to make a voluntary contribution of $150 million, up to $60 million of which we expect to be in the form of shares of Brink’s common stock, to improve the funded status of our primary U.S. pension plan. The contribution is subject to the completion of various amendments to documents governing the plan and the trust created under the plan and our investment policy, as well as the engagement of a third-party investment advisor to act as an independent fiduciary to the trust that will make investment decisions regarding our common stock to be held by the plan.

THE BRINK’S COMPANY

and subsidiaries

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS

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 for our operations on a geographic basis. As a result, our reportable segments are International and North America. Prior to the spin-off of Brink’s Home Security Holdings, Inc. (“BHS”) in October 2008, our reportable segments were Brink’s and BHS. Our International segment includes 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.

RESULTS OF OPERATIONS

Overview

	Three Months				Six Months
	Ended June 30,				Ended June 30,
(In millions)	2009		2008		2009		2008

Income attributable to Brink’s:
Continuing operations	$	16.0		30.7		38.2		63.6
Discontinued operations		4.3		18.0		5.1		35.2
Net income attributable to Brink’s	$	20.3		48.7		43.3		98.8

The income items in the table above are reported after taxes and income attributable to noncontrolling interests.

Income from continuing operations attributable to Brink’s declined 48% in the second quarter of 2009 versus the year-ago quarter due primarily to lower operating profit from our international cash-in-transit operations, continued weakness in diamond and jewelry markets, higher foreign currency transaction costs, and a higher effective income tax rate, partially offset by higher operating profit from our North American operations and lower corporate expenses. Higher retirement plan expenses related to former operations were partially offset by a gain recognized in the second quarter of 2009 related to a 2008 sale of coal assets.

Income from continuing operations attributable to Brink’s declined 40% in the first half of 2009 versus the same period of the prior year due primarily to lower results from our International segment and a higher effective income tax rate, partially offset by higher operating profit from our North American operations and lower corporate expenses. Higher retirement plan expenses related to former operations were partially offset by a gain related to the 2008 sale of coal assets.

Income from discontinued operations in the second quarter and first half of 2009 consisted primarily of gains related to Federal Black Lung Excise Tax (“FBLET”) refunds, partially offset by a second-quarter 2009 charge related to a litigation matter at a former subsidiary. Income from discontinued operations in 2008 primarily included the results of BHS.

Our full-year 2009 revenue growth rate, excluding currency impact and acquisitions, is expected to be in the low- to- middle single-digit percentage range with a segment operating margin between 7.0% and 7.5%.

Consolidated Review

	Three Months									Six Months
	Ended June 30,						%			Ended June 30,						%
(In millions)	2009			2008			change			2009			2008			change

Revenues:
International	$	530.0			563.1			(6	)		1,041.6			1,125.6			(7	)
North America		221.9			234.7			(5	)		442.8			465.0			(5	)
Revenues	$	751.9			797.8			(6	)		1,484.4			1,590.6			(7	)

Operating profit:
International	$	15.4			41.7			(63	)		54.8			110.3			(50	)
North America		13.0			10.9			19			27.5			24.3			13
Segment operating profit		28.4			52.6			(46	)		82.3			134.6			(39	)
Corporate expense		(2.4	)		(9.6	)		(75	)		(6.8	)		(24.5	)		(72	)
Former operations income (expense)		0.7			(0.2	)	NM				(7.1	)		(0.8	)		200	+

Operating profit		26.7			42.8			(38	)		68.4			109.3			(37	)

Interest expense		(2.8	)		(3.3	)		(15	)		(5.5	)		(5.8	)		(5	)
Interest and other income		2.0			3.0			(33	)		6.0			5.1			18
Income from continuing operations before tax		25.9			42.5			(39	)		68.9			108.6			(37	)
Provision for income taxes		6.6			4.3			53			17.1			22.6			(24	)

Income from continuing operations		19.3			38.2			(49	)		51.8			86.0			(40	)

Income from discontinued operations		4.3			18.0			(76	)		5.1			35.2			(86	)
Net income		23.6			56.2			(58	)		56.9			121.2			(53	)
Less net income attributable to
noncontrolling interests		(3.3	)		(7.5	)		(56	)		(13.6	)		(22.4	)		(39	)

Net income attributable to Brink’s		20.3			48.7			(58	)		43.3			98.8			(56	)

Amounts attributable to Brink’s: