Exhibit 99
[LOGO] The Brink's Company
1801 Bayberry Court
P.O. Box 18100
Richmond, VA 23226-8100 USA
PRESS RELEASE
Tel. 804.289.9600
Fax 804.289.9758
Contact: FOR IMMEDIATE RELEASE
Investor Relations
804.289.9709
THE BRINK'S COMPANY REPORTS
FOURTH-QUARTER EARNINGS
Profits Decline at Brink's, Incorporated and Brink's Home Security
Company Expects Continued Sales Growth and Earnings Rebound In 2006
RICHMOND, Va., February 9, 2006 - The Brink's Company (NYSE: BCO) reported
that income from continuing operations for the fourth quarter of 2005 was $3.2
million or 6 cents per share versus $16.5 million or 30 cents per share in 2004.
The lower results were driven by a decline in profits at Brink's, Incorporated,
the company's secure transportation and cash management subsidiary. Profits at
Brink's Home Security also declined. In addition, the effective tax rate for the
fourth-quarter of 2005 was unusually high due to taxes on repatriated dividends
and the mix of income and losses by tax jurisdiction.
On January 31, The Brink's Company completed the sale of its BAX Global
subsidiary to Deutsche Bahn AG for $1.1 billion. Accordingly, results for BAX
Global have been reported as discontinued operations for all periods presented.
Fourth-quarter 2005 revenue from continuing operations was $663.1 million,
up 9% from $606 million in the fourth quarter of 2004, as both operating units
reported higher sales. Fourth-quarter 2005 operating profit from continuing
operations was $24.1 million, down 32% from $35.3 million in the fourth-quarter
of 2004, largely reflecting the profit decline at Brink's, Incorporated.
1
Year-over-year reductions in costs related to former coal operations and lower
corporate expenses partially offset the lower profits at Brink's, Incorporated.
The fourth-quarter 2005 tax provision was unusually high in relation to
income before taxes primarily due to the recording of $3 million in additional
taxes on the repatriation of $49 million in dividends under the American Jobs
Creation Act and a higher level of losses in units where the use of tax benefits
from operating losses is not probable.
Fourth-quarter 2005 net income for The Brink's Company, including
discontinued operations and the cumulative effect of a change in accounting
principle, was $47.7 million or 83 cents per share versus $39 million or 70
cents per share in the fourth quarter of 2004.
Michael T. Dan, chairman, president and chief executive officer of The
Brink's Company, said: "Fourth-quarter results in both operating units were
disappointing. Despite solid revenue growth, profits at Brink's, Incorporated
were substantially lower due to higher costs in European and North American
operations. The full-year operating profit margin at Brink's, Incorporated was
5.2%. In 2006, we expect to see improved performance in Europe based on actions
taken in 2005 and cost controls worldwide. As a result, we should see the
operating margin in this business rebound toward 7% with percentage revenue
growth in the high single digits. The decline in fourth-quarter profits at
Brink's Home Security was due primarily to higher costs related to installations
in new residential construction markets along with the effects of revenue losses
from Hurricane Katrina. Most of the hurricane-related losses are expected to be
recovered from insurance at a later date. In 2006, we expect year-over-year
sales and profit growth at Brink's Home Security to exceed 10%."
Dan added: "The recent sale of BAX Global has provided approximately $1
billion that will be used to substantially change the company and enhance
shareholder value. We have already contributed $225 million to the VEBA, pushing
its funding level to over $400 million, the high end of our previously announced
goal. We have also reduced debt by $46 million and will reduce it by up to an
additional $140 million. This will leave us with sufficient borrowing capacity
2
to pursue growth opportunities. We are also evaluating how to address pension
liabilities and growth opportunities. Finally, pending consideration and
approval by our board of directors, we are studying the return of between $400
million and $600 million to shareholders through share repurchases."
Full-Year 2005 Results
Full-year 2005 revenue from continuing operations was $2.5 billion, up 12%
from $2.3 billion in 2004. Full-year operating profit from continuing operations
was $115.4 million, down 16% from $137.4 million in 2004. Income from continuing
operations was $39.3 million or 69 cents per share in 2005, compared with $71.5
million or $1.29 per share in 2004.
Fourth-Quarter Business Unit Performance
Brink's, Incorporated ("Brink's")
- --------------------------------
Brink's fourth-quarter 2005 revenue rose 9% to $560.1 million.
International revenue increased 9% to $358 million due primarily to higher sales
in South America and the Asia-Pacific region. Revenues in Europe were up
slightly due to the acquisitions that were completed earlier in 2005, partially
offset by the effect of weakening European currencies relative to the U.S.
dollar. North American revenue increased 7% to $202.1 million, largely on
increased Global Services and Cash Logistics business.
Brink's fourth-quarter 2005 operating profit was $25.2 million, down $16.7
million from the year-ago quarter. Profits from International operations
declined from $26.7 million to $14.7 million, reflecting weak results in Europe.
Profits in North America declined $4.7 million to $10.5 million due mainly to
higher vehicle and pension costs in the United States. Higher safety and
security costs also dampened results in both North American and International
operations.
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Brink's Home Security
- ---------------------
Fourth-quarter 2005 revenue at Brink's Home Security increased 14% to $103
million due primarily to growth in the subscriber base. Operating profit
declined 5% to $20.3 million as slightly higher profits from recurring services
were more than offset by increased investment in new subscribers.
Excluding the impact of Hurricane Katrina on the subscriber count, the
annualized disconnect rate for the fourth quarter of 2005 increased to 8.0%
versus 5.9% in the year-ago quarter and for the full-year increased to 6.7%
versus 6.6% in 2004. Including the effects of Hurricane Katrina, the disconnect
rates for the fourth-quarter and twelve months of 2005 were 8.2% and 7.2%,
respectively. The fourth-quarter 2005 disconnect rate included a reduction of
approximately 5,300 subscribers as a result of updating records and reconciling
subscriber counts.
Brink's Home Security installed 41,900 new subscribers during the quarter,
a 10% increase over the number of new subscribers added in the fourth quarter of
2005, and ended the year with approximately 1,019,000 subscribers generating
monthly recurring revenue of $29.1 million (see Non-GAAP Reconciliations for a
reconciliation of monthly recurring revenue to reported revenue).
Other Costs and Expenses - Continuing Operations
Costs related to former coal operations, which consist primarily of costs
for company-sponsored medical coverage for former miners and their dependents,
declined to $6.3 million in the fourth quarter of 2005 from $12.4 million in the
prior-year period. The decrease in costs related to former coal operations is
due primarily to the recording of higher gains from asset sales and liability
settlements in the fourth-quarter of 2005 than in the prior-year period.
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Discontinued BAX Global Operations
Fourth-quarter 2005 revenue from BAX Global was $856.5 million versus
$691.1 million in the year-ago period. Fourth-quarter operating profit was $45.2
million, up from $24.5 million in 2004.
Full-year 2005 revenue from BAX Global was $2.9 billion versus $2.4 billion in
2004. Full-year 2005 operating profit was $91.4 million up from $52.6 million in
2004. See "Income From Discontinued Operations" for additional details.
Change in Accounting Principle
The Brink's Company adopted FASB Interpretation No. 47, "Accounting for
Contingent Asset Retirement Obligations" (FIN 47) during the fourth quarter of
2005 and, accordingly, recorded a $5.4 million after-tax charge against
earnings. The company does not currently expect that FIN 47 will have a
significant annual effect on reported operating results in the future.
This release 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 sales growth and profit improvement
for the company and its subsidiaries in 2006, expected improvements in Brink's,
Incorporated's European operations, possible insurance recoveries, use of
proceeds from the sale of BAX Global and the impact of FIN 47 on operating
results. The forward-looking information in this document is subject to known
and unknown risks, uncertainties and contingencies that could cause actual
results 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 operational improvements in the security operations and
the timing of any such impact, including the effect of restructuring efforts by
Brink's, Incorporated, the ability of the businesses to meet demand
appropriately, the ability to identify and execute further cost and operational
improvements in the core businesses, Brink's, Incorporated's ability to
integrate recent acquisitions, the performance of Brink's, Incorporated's
operations in Europe, positions taken by insurers with respect to claims made,
the financial condition of the insurers, IT costs and costs associated with
ongoing contractual obligations, the ability of Brink's Home Security to
continue to maintain its subscriber growth and return to a lower disconnect
rate, the transition by Brink's Home Security of customer care operations to its
Knoxville facility and costs associated with the completion of the new facility,
pension plan and other employee obligations, labor relations, safety and
security performance, decisions by the company's board of directors regarding
the use of proceeds from the sale of BAX Global, strategic initiatives and
acquisition opportunities, the company's tax position and the tax impact of
various decisions regarding the use of proceeds, the satisfaction or waiver of
limitations on the use of proceeds contained in various of the company's
financing arrangements, the demand for capital, the cash and debt position of
the company, overall domestic and international economic, political, social and
business conditions, capital markets performance, the strength of the U.S.
dollar relative to foreign currencies, interest rates, inflation, new government
regulations and legislative initiatives (including local initiatives relating to
police response to alarms), domestic and international demand for services of
the subsidiaries of The Brink's Company, the financial stability of companies
with payment obligations under the Health Benefit Act, pricing and other
competitive factors, variations in costs or expenses and performance delays of
any public or private sector supplier, service provider or customer. The
information included in this release is representative only as of the date of
this release, and The Brink's Company undertakes no obligation to update any
information contained in this release.
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About The Brink's Company
The Brink's Company (NYSE: BCO) is a global leader in business and security
services and operates two businesses, Brink's, Incorporated and Brink's Home
Security. Brink's, Incorporated is the world's premier provider of secure
transportation and cash management services. Brink's Home Security is one of the
largest and most successful residential alarm companies in North America. For
more information, please visit The Brink's Company website at
www.brinkscompany.com, or call toll-free 877-275-7488.
Conference Call
The Brink's Company will host a conference call today, February 9, at 11:00 a.m.
eastern time to discuss this press release. Interested parties can listen to the
conference call by dialing 877-407-0778 within North America or 201-689-8565
from outside North America, or via live webcast at www.brinkscompany.com. Please
dial in at least five minutes prior to the start of the call. Dial-in replay
will be available through February 23, 2006, by calling 877-660-6853 within
North America or 201-612-7415 outside North America. The conference pass code is
286 and the conference ID for the replay is 191961. A webcast replay will also
be available at www.brinkscompany.com.
6
THE BRINK'S COMPANY
and Subsidiaries
Condensed Consolidated Statements of Operations
(Unaudited)
Three Months Ended Years Ended
December 31, December 31,
(In millions, except per share amounts) 2005 2004 2005 2004
- --------------------------------------------------------------------------------------------------------------------------------
Revenues $ 663.1 606.0 2,549.0 2,277.5
Expenses:
Operating expenses 529.2 469.5 2,041.8 1,790.7
Selling, general and administrative expenses 116.1 103.2 406.8 360.5
- --------------------------------------------------------------------------------------------------------------------------------
Total expenses 645.3 572.7 2,448.6 2,151.2
Other operating income, net 6.3 2.0 15.0 11.1
- --------------------------------------------------------------------------------------------------------------------------------
Operating profit 24.1 35.3 115.4 137.4
Interest expense (4.6) (4.8) (18.6) (20.8)
Interest and other income, net 2.2 0.7 9.3 7.9
Minority interest (4.0) (4.6) (14.3) (12.4)
- --------------------------------------------------------------------------------------------------------------------------------
Income from continuing operations before income taxes 17.7 26.6 91.8 112.1
Income tax expense 14.5 10.1 52.5 40.6
- --------------------------------------------------------------------------------------------------------------------------------
Income from continuing operations 3.2 16.5 39.3 71.5
Income from discontinued operations, net of tax 49.9 22.5 108.5 50.0
Cumulative effect of change in accounting principle (5.4) - (5.4) -
- --------------------------------------------------------------------------------------------------------------------------------
Net income $ 47.7 39.0 142.4 121.5
- --------------------------------------------------------------------------------------------------------------------------------
Basic net income per common share:
Continuing operations $ 0.06 0.30 0.70 1.31
Discontinued operations 0.87 0.41 1.93 0.92
Cumulative effect of change in accounting principle (0.09) - (0.10) -
- --------------------------------------------------------------------------------------------------------------------------------
$ 0.84 0.71 2.53 2.23
================================================================================================================================
Diluted net income per common share:
Continuing operations $ 0.06 0.29 0.69 1.29
Discontinued operations 0.86 0.41 1.90 0.91
Cumulative effect of change in accounting principle (0.09) - (0.09) -
- --------------------------------------------------------------------------------------------------------------------------------
$ 0.83 0.70 2.50 2.20
================================================================================================================================
Weighted-average common shares outstanding:
Basic 57.0 55.2 56.3 54.6
Diluted 57.8 56.0 57.0 55.3
- --------------------------------------------------------------------------------------------------------------------------------
7
THE BRINK'S COMPANY
and Subsidiaries
(Unaudited)
Three Months Ended Years Ended
December 31, December 31,
(In millions, except as noted) 2005 2004 2005 2004
- -----------------------------------------------------------------------------------------------------------------
Segment Information
Revenues:
Brink's $ 560.1 515.9 2,156.9 1,931.9
Brink's Home Security 103.0 90.1 392.1 345.6
- -----------------------------------------------------------------------------------------------------------------
Revenues $ 663.1 606.0 2,549.0 2,277.5
=================================================================================================================
Operating profit:
Brink's $ 25.2 41.9 111.9 144.7
Brink's Home Security 20.3 21.4 87.4 80.8
- -----------------------------------------------------------------------------------------------------------------
Business segments 45.5 63.3 199.3 225.5
Former coal operations (6.3) (12.4) (39.2) (45.9)
Corporate (15.1) (15.6) (44.7) (42.2)
- -----------------------------------------------------------------------------------------------------------------
Operating profit $ 24.1 35.3 115.4 137.4
=================================================================================================================
Supplemental Financial Information
Brink's:
Revenues:
North America $ 202.1 188.4 778.2 733.7
International 358.0 327.5 1,378.7 1,198.2
- -----------------------------------------------------------------------------------------------------------------
Revenues $ 560.1 515.9 2,156.9 1,931.9
- -----------------------------------------------------------------------------------------------------------------
Operating profit:
North America $ 10.5 15.2 49.4 55.2
International 14.7 26.7 62.5 89.5
- -----------------------------------------------------------------------------------------------------------------
Operating profit $ 25.2 41.9 111.9 144.7
- -----------------------------------------------------------------------------------------------------------------
Brink's Home Security:
Revenues $ 103.0 90.1 392.1 345.6
- -----------------------------------------------------------------------------------------------------------------
Operating profit:
Recurring services $ 40.0 39.8 167.5 147.8
Investment in new subscribers (19.7) (18.4) (80.1) (67.0)
- -----------------------------------------------------------------------------------------------------------------
Operating profit $ 20.3 21.4 87.4 80.8
- -----------------------------------------------------------------------------------------------------------------
Monthly recurring revenues (a) $ 29.1 26.1
Annualized disconnect rate 8.2% 5.9% 7.2% 6.6%
Number of subscribers (in thousands):
Beginning of period 997.8 896.5 921.4 833.5
Installations 41.9 38.2 167.3 146.0
Disconnects (20.9) (13.3) (69.9) (58.1)
- -----------------------------------------------------------------------------------------------------------------
End of period 1,018.8 921.4 1,018.8 921.4
Average number of subscribers 1,011.1 908.7 972.8 875.5
- -----------------------------------------------------------------------------------------------------------------
(a) See "Non-GAAP Reconciliations" below.
8
THE BRINK'S COMPANY
and Subsidiaries
Supplemental Financial Information (continued)
(Unaudited)
COSTS OF FORMER COAL OPERATIONS INCLUDED IN CONTINUING OPERATIONS
Three Months Ended Years Ended
December 31, December 31,
(In millions) 2005 2004 2005 2004
- -------------------------------------------------------------------------------------------------------------------------
Company-sponsored postretirement benefits other
than pensions $ 8.6 9.2 35.2 37.1
Black lung 1.0 1.1 4.1 4.8
Pension 1.1 0.4 4.5 1.8
Administrative, legal and other expenses, net 2.0 2.4 7.2 9.2
Gains on sale of property and equipment and other income (a) (6.4) (0.7) (11.8) (7.0)
- -------------------------------------------------------------------------------------------------------------------------
Costs of former coal operations $ 6.3 12.4 39.2 45.9
=========================================================================================================================
(a) The company recognized gains of $2.8 million in the third quarter of 2005
and $3.0 million in the fourth quarter of 2005 related to recognizing
deferred gains on the 2003 sale of its West Virginia coal operations. In
addition, the company recognized a $3.1 million gain in the fourth quarter
of 2005 from the settlement of royalty obligations for former Kentucky coal
operations.
INCOME FROM DISCONTINUED OPERATIONS
Three Months Ended Years Ended
December 31, December 31,
(In millions) 2005 2004 2005 2004
- ---------------------------------------------------------------------------------------------------------------
Gain (loss) on sales of:
Timber $ - - - 20.7
Gold - - - (0.9)
Coal - 5.0 - 5.0
BAX Global (costs associated with sale) (2.8) - (2.8) -
Income (loss) from operations:
BAX Global (a) 43.9 23.9 86.8 49.5
Timber - - - (0.5)
Gold - - - (1.2)
Adjustments to contingent assets and liabilities of
former operations:
Litigation settlement gain (b) 15.1 - 15.1 -
Health Benefit Act 2.3 3.2 2.3 3.2
Reclamation liabilities (1.4) (0.1) (6.2) (0.1)
Workers' compensation 0.4 (4.9) 0.4 (4.9)
Withdrawal liability - 7.3 6.1 15.4
Other (0.2) (0.4) 0.1 (3.3)
- ---------------------------------------------------------------------------------------------------------------
Income from discontinued operations before income taxes 57.3 34.0 101.8 82.9
Income tax (expense) benefit (c) (7.4) (11.5) 6.7 (32.9)
- ---------------------------------------------------------------------------------------------------------------
Income from discontinued operations $ 49.9 22.5 108.5 50.0
===============================================================================================================
(a) In January 2006, the company sold its BAX Global operations for $1.1
billion. BAX Global's results of operations have been reported as
discontinued operations for all periods presented.
(b) The company reached an agreement with the U.S. government in the fourth
quarter of 2005 related to refunds of prior-year Federal Black Lung Excise
Tax payments. The company expects to receive refunds of $15.1 million in
early 2006.
(c) During the third quarter of 2005, the company finalized discussions with
the Internal Revenue Service over certain tax credit carryforwards related
to the former natural resources businesses. The company recognized a $27.4
million tax benefit in the third quarter of 2005 in discontinued operations
as a result of resolving these discussions. The benefit does not result in
current cash receipts but has increased the company's tax credit
carryforwards available to reduce future U.S. income tax payments.
9
THE BRINK'S COMPANY
and Subsidiaries
Supplemental Financial Information (continued)
(Unaudited)
Cumulative Effect of a Change in Accounting Principle
In March 2005, the Financial Accounting Standards Board ("FASB") issued FASB
Interpretation No. 47, "Accounting for Contingent Asset Retirement Obligations"
("FIN 47"), an interpretation of Statement of Financial Accounting Standards
("SFAS") No. 143, "Asset Retirement Obligations." FIN 47 clarifies that the term
"conditional asset retirement obligation" as used in SFAS No. 143 refers to a
legal obligation associated with the retirement of a tangible long-lived asset
in which the timing and (or) method of settlement is conditional on a future
event that may or may not be within the control of the entity. An entity is
required to recognize a liability for the fair value of a conditional asset
retirement obligation if the fair value of the liability can be reasonably
estimated, even if conditional on a future event. The company has conditional
asset retirement obligations primarily associated with leased facilities. The
company adopted FIN 47 on December 31, 2005 and recognized the following upon
implementing the standard.
(In millions)
- -----------------------------------------------------------------------------
Total assets (a) $ 4.7
- -----------------------------------------------------------------------------
Total liabilities (b) (10.1)
- -----------------------------------------------------------------------------
Cumulative effect of change in accounting principle, net of tax $ (5.4)
=============================================================================
(a) Includes $1.1 million of assets held for sale.
(b) Includes $2.1 million of liabilities held for sale.
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THE BRINK'S COMPANY
and Subsidiaries
Supplemental Financial Information (continued)
(Unaudited)
SELECTED CASH FLOW INFORMATION
Three Months Ended Years Ended
December 31, December 31,
(In millions) 2005 2004 2005 2004
- --------------------------------------------------------------------------------------------------
Depreciation and amortization:
Brink's $ 23.4 23.1 90.5 81.0
Brink's Home Security 15.2 13.5 58.1 51.5
Corporate 0.3 0.2 0.7 0.7
- --------------------------------------------------------------------------------------------------
Depreciation and amortization $ 38.9 36.8 149.3 133.2
==================================================================================================
Capital expenditures:
Brink's $ 35.7 26.4 109.0 76.2
Brink's Home Security (a) 42.5 30.8 162.2 117.6
Corporate - 0.3 0.5 1.1
- --------------------------------------------------------------------------------------------------
Capital expenditures $ 78.2 57.5 271.7 194.9
==================================================================================================
(a) Capital expenditures at BHS in the first quarter of 2005 include $10.2
million for the purchase of BHS's headquarters. The facility was previously
leased. BHS capital expenditures for 2005 also include $7.4 million for the
development of the Knoxville facility.
Other Brink's Home Security cash flow information:
Impairment charges from subscriber disconnects $ 12.3 9.0 45.2 38.4
Amortization of deferred revenue (7.8) (6.6) (29.5) (26.1)
Deferral of subscriber acquisition costs
(current year payments) (6.0) (5.1) (22.9) (19.5)
Deferral of revenue from new subscribers
(current year receipts) 10.5 8.7 40.7 34.6
==================================================================================================
11
THE BRINK'S COMPANY
and Subsidiaries
NON-GAAP RECONCILIATIONS
(Unaudited)
Monthly Recurring Revenues
A reconciliation of monthly recurring revenues to reported Brink's Home Security
revenues follows:
Years Ended
December 31,
2005 2004
- ----------------------------------------------------------------------------
December:
Monthly recurring revenues ("MRR") (a) $ 29.1 26.1
Amounts excluded from MRR:
Amortization of deferred revenue 3.3 2.1
Other revenues (b) 2.5 1.8
- ----------------------------------------------------------------------------
Revenues on a GAAP basis 34.9 30.0
============================================================================
Revenues (GAAP basis):
December 34.9 30.0
January - November 357.2 315.6
- ----------------------------------------------------------------------------
January - December $ 392.1 345.6
============================================================================
(a) MRR is calculated based on the number of subscribers at period end
multiplied by the average fee per subscriber received in the last month of
the period for contracted monitoring and maintenance services.
(b) Revenues that are not pursuant to monthly contractual billings.
The company believes the presentation of MRR is useful to investors because the
measure is widely used in the industry to assess the amount of recurring
revenues from subscriber fees that a monitored security service business
produces. This supplemental non-GAAP information should be viewed in conjunction
with the company's consolidated statement of operations.
Net Debt and Net Financings
December 31,
2005 2004
- ----------------------------------------------------------------------------
Short-term debt and current maturities of
long-term debt $ 61.0 62.6
Long-term debt 251.9 181.6
- ----------------------------------------------------------------------------
Debt 312.9 244.2
Less cash and cash equivalents (96.2) (169.0)
- ----------------------------------------------------------------------------
Net Debt 216.7 75.2
Securitization facility (a) - 25.0
- ----------------------------------------------------------------------------
Net Financings $ 216.7 100.2
============================================================================
(a) The company's five-year securitization facility terminated on December 15,
2005 in accordance with its terms.
The company believes that Net Debt and Net Financings are useful measures of the
company's financial leverage. This supplemental non-GAAP information should be
viewed in conjunction with the company's condensed consolidated balance sheets.
12
THE BRINK'S COMPANY
and Subsidiaries
NON-GAAP RECONCILIATIONS (continued)
(Unaudited)
Organic Revenue Growth
The following table provides supplemental information related to 2005 Organic
Revenue Growth which is not required by GAAP. The company defines Organic
Revenue Growth as the change in revenue from the prior year due to factors such
as changes in prices for products and services (including the effect of fuel
surcharges), changes in business volumes and changes in product mix. Estimates
of changes due to fluctuations in foreign currency translation rates and the
effects of new acquisitions are excluded from Organic Revenue Growth.
Three Months % change Year Ended % change
Ended December 31, from 2004 December 31, from 2004
- ------------------------------------------------------------------------------------------------------
2004 revenues as reported:
Brink's $ 515.9 N/A 1,931.9 N/A
BHS 90.1 N/A 345.6 N/A
- ------------------------------------------------------------------------------------------------------
$ 606.0 N/A 2,277.5 N/A
======================================================================================================
Effects on 2005 revenue of acquisitions
and dispositions, net:
Brink's $ 30.7 6 104.0 5
BHS - - - -
- ------------------------------------------------------------------------------------------------------
$ 30.7 5 104.0 5
======================================================================================================
Effects on 2005 revenue of changes in
currency translation rates:
Brink's $ (17.3) (3) 18.2 1
BHS 0.1 - 0.4 -
- ------------------------------------------------------------------------------------------------------
$ (17.2) (3) 18.6 1
======================================================================================================
2005 Organic Revenue Growth:
Brink's $ 30.8 6 102.8 5
BHS 12.8 14 46.1 13
- ------------------------------------------------------------------------------------------------------
$ 43.6 7 148.9 7
======================================================================================================
2005 revenues as reported:
Brink's $ 560.1 9 2,156.9 12
BHS 103.0 14 392.1 13
- ------------------------------------------------------------------------------------------------------
$ 663.1 9 2,549.0 12
======================================================================================================
The supplemental 2005 Organic Revenue Growth information presented above is
non-GAAP financial information that management believes is an important measure
to evaluate results of existing operations without the effects of acquisitions,
dispositions and currency exchange rates. This supplemental non-GAAP information
does not affect net income or any other reported amounts. This supplemental
non-GAAP information should be viewed in conjunction with the company's
condensed consolidated statement of operations.
13
THE BRINK'S COMPANY
and Subsidiaries
OTHER
Value-added taxes ("VAT") and customs duties
During 2004, the company determined that one of its non-U.S. Brink's business
units had not paid foreign customs duties and VAT with respect to the
importation of certain goods and services. The company was 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. As a result of its investigation,
the company accrued charges of $1.1 million to operating profit and recorded
estimated interest expense of $0.7 million related to this matter during 2004.
The company believes that the range of reasonably possible losses is between
$0.4 and $3.0 million for potential penalties on unpaid VAT and between $0
million and $35 million for unpaid customs duties and associated penalties. The
company believes that the assertion of penalties on unpaid custom duties would
be excessive and would vigorously defend against any such assertion. The company
does not expect to be assessed interest charges in connection with any penalties
that may be asserted. The company continues to diligently pursue the timely
resolution of this matter and, accordingly, the company's estimate of the
potential losses could change materially in future periods. The assertion of
potential penalties may be material to the company's financial position and
results of operations.
# # #
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