Edgar Filing: BRINKS CO

form_10-q.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2009

oTRANSITION 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 October 26, 2009, 47,856,930 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)

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

ASSETS

Current assets:
Cash and cash equivalents	$	234.5			250.9
Accounts receivable, net		479.1			450.7
Prepaid expenses and other		142.3			99.7
Deferred income taxes		28.2			31.1
Total current assets		884.1			832.4

Property and equipment, net		591.5			534.0
Goodwill		226.8			139.6
Deferred income taxes		174.1			202.6
Other		168.1			107.2

Total assets	$	2,044.6			1,815.8


LIABILITIES AND SHAREHOLDERS’ EQUITY

Current liabilities:
Short-term borrowings	$	7.6			7.2
Current maturities of long-term debt		20.8			8.4
Accounts payable		109.7			137.8
Income taxes payable		11.0			21.2
Accrued liabilities		448.6			360.5
Total current liabilities		597.7			535.1

Long-term debt		240.7			173.0
Accrued pension costs		172.6			373.4
Retirement benefits other than pensions		244.8			249.9
Deferred income taxes		27.7			21.5
Other		175.0			157.6
Total liabilities		1,458.5			1,510.5

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

Equity:
The Brink’s Company (“Brink’s”) shareholders’ equity:
Common stock		47.9			45.7
Capital in excess of par value		548.9			486.3
Retained earnings		396.4			310.0
Accumulated other comprehensive loss		(512.8	)		(628.0	)
Total Brink’s shareholders’ equity		480.4			214.0

Noncontrolling interests		105.7			91.3

Total equity		586.1			305.3

Total liabilities and shareholders’ equity	$	2,044.6			1,815.8

See accompanying notes to consolidated financial statements.

THE BRINK’S COMPANY

and subsidiaries

Consolidated Statements of Income

(Unaudited)

	Three Months						Nine Months
	Ended September 30,						Ended September 30,
(In millions, except per share amounts)	2009			2008			2009			2008

Revenues	$	801.8			813.4			2,286.2			2,404.0

Costs and expenses:
Cost of revenues		647.5			647.6			1,859.1			1,909.4
Selling, general and administrative expenses		107.6			111.6			314.5			330.8
Total costs and expenses		755.1			759.2			2,173.6			2,240.2
Other operating income (expense)		14.2			(4.4	)		16.7			(4.7	)

Operating profit		60.9			49.8			129.3			159.1

Interest expense		(2.8	)		(3.0	)		(8.3	)		(8.8	)
Interest and other income		1.2			4.5			7.2			9.6
Income from continuing operations before tax		59.3			51.3			128.2			159.9
Provision for income taxes		20.6			14.3			37.7			36.9

Income from continuing operations		38.7			37.0			90.5			123.0

Income from discontinued operations		1.0			18.5			6.1			53.7

Net income		39.7			55.5			96.6			176.7
Less net income attributable to noncontrolling interests		(5.3	)		(7.5	)		(18.9	)		(29.9	)

Net income attributable to Brink’s		34.4			48.0			77.7			146.8

Amounts attributable to Brink’s:
Income from continuing operations		33.4			29.5			71.6			93.1
Income from discontinued operations		1.0			18.5			6.1			53.7

Net income attributable to Brink’s	$	34.4			48.0			77.7			146.8

Earnings per share attributable to Brink’s common shareholders:
Basic:
Continuing operations	$	0.70			0.64			1.53			2.02
Discontinued operations		0.02			0.40			0.13			1.16
Net income		0.72			1.04			1.66			3.18

Diluted:
Continuing operations	$	0.70			0.64			1.52			2.00
Discontinued operations		0.02			0.39			0.13			1.15
Net income		0.72			1.03			1.65			3.14

Weighted-average shares
Basic		47.6			46.1			46.8			46.2
Diluted		47.9			46.5			47.0			46.7

Cash dividends paid per common share	$	0.10			0.10			0.30			0.30

See accompanying notes to consolidated financial statements.

THE BRINK’S COMPANY

and subsidiaries

Consolidated Statement of Shareholders’ Equity

Nine months ended September 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		-			-			-			77.7			-			18.9			96.6
Other comprehensive income		-			-			-			-			115.2			1.7			116.9
Shares repurchased		(0.2	)		(0.2	)		(2.5	)		(3.4	)		-			-			(6.1	)
Stock contribution to pension plan		2.3			2.3			55.3			-			-			-			57.6
Dividends:
Brink’s common shareholders
($0.30 per share)		-			-			-			(13.7	)		-			-			(13.7	)
Noncontrolling interests		-			-			-			-			-			(10.3	)		(10.3	)
Adjustments to spin-off of BHS
(see note 1)		-			-			-			26.0			-			-			26.0
Share-based compensation:
Stock options and awards:
Compensation expense		-			-			5.5			-			-			-			5.5
Consideration received from
exercise of stock options		0.1			0.1			1.2			-			-			-			1.3
Excess tax benefit of
stock compensation		-			-			0.4			-			-			-			0.4
Other share-based benefit programs		-			-			2.7			(0.2	)		-			-			2.5
Acquisitions		-			-			-			-			-			4.1			4.1

Balance as of September 30, 2009		47.9		$	47.9			548.9			396.4			(512.8	)		105.7			586.1

See accompanying notes to consolidated financial statements.

THE BRINK’S COMPANY

and subsidiaries

Consolidated Statements of Cash Flows

(Unaudited)

	Nine Months
	Ended September 30,
(In millions)	2009			2008

Cash flows from operating activities:
Net income	$	96.6			176.7
Adjustments to reconcile net income to net cash provided (used) by operating activities:
Income from discontinued operations, net of tax		(6.1	)		(53.7	)
Depreciation and amortization		97.2			92.6
Stock compensation expense		5.5			6.9
Deferred income taxes		29.2			(5.3	)
Retirement benefit funding (more) less than expense:
Pension		(93.7	)		(8.7	)
Other than pension		9.4			(0.9	)
Gains on sales of property and other assets		(8.3	)		(0.4	)
Gains on acquiring control of equity method affiliates		(14.9	)		-
Impairment losses		2.3			0.5
Other operating		2.1			2.9
Changes in operating assets and liabilities, net of effects of acquisitions:
Accounts receivable		8.1			(39.8	)
Accounts payable, income taxes payable and accrued liabilities		9.1			46.6
Prepaid and other current assets		(33.5	)		(23.2	)
Other		3.8			(10.8	)
Discontinued operations		23.5			160.9
Net cash provided by operating activities		130.3			344.3

Cash flows from investing activities:
Capital expenditures		(112.5	)		(119.4	)
Acquisitions		(74.6	)		(6.1	)
Marketable securities:
Purchases		(10.6	)		(1.6	)
Sales		4.4			2.1
Other		7.8			2.8
Discontinued operations		-			(135.3	)
Net cash used by investing activities		(185.5	)		(257.5	)

Cash flows from financing activities:
Long term debt		(8.7	)		(8.6	)
Revolving credit facilities		69.4			59.8
Short-term debt		(0.3	)		(6.0	)
Repurchase shares of common stock of Brink’s		(6.9	)		(53.6	)
Dividends to:
Shareholders of Brink’s		(13.7	)		(13.6	)
Noncontrolling interests in subsidiaries		(10.3	)		(9.9	)
Proceeds from exercise of stock options		1.3			16.2
Excess tax benefits associated with stock compensation		0.3			11.7
Minimum tax withholdings associated with stock compensation		(0.4	)		(16.7	)
Net cash provided (used) by financing activities		30.7			(20.7	)

Effect of exchange rate changes on cash		8.1			(4.8	)

Cash and cash equivalents:
Increase (decrease)		(16.4	)		61.3
Balance at beginning of period		250.9			196.4
Balance at end of period	$	234.5			257.7

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 October 29, 2009, the date the consolidated financial statements included in this Quarterly Report on Form 10-Q were issued.

Highly Inflationary Economy Determination

In determining whether Venezuela is a highly inflationary economy, we previously used the consumer price index ("CPI") which is based on the inflation rates for the metropolitan area of Caracas, Venezuela. Beginning January 1, 2008, a national consumer price index ("NCPI") was developed for the entire country of Venezuela. However, because inflation data is not available to compute a cumulative three-year inflation rate for Venezuela using only NCPI, we use a blended NCPI and CPI rate to determine whether the three-year cumulative inflation rate has exceeded 100%. At September 30, 2009, the blended three-year cumulative inflation rate was approximately 97%.

Adjustment to Spin-Off of Brink’s Home Security Holdings, Inc. (“BHS”)

On October 31, 2008, we distributed all of our interest in BHS to our shareholders of record as of the close of business on October 21, 2008, in a tax-free distribution. In connection with the spin-off, we entered into a Tax Matters Agreement with BHS which provides a basis for the preparation and filing of tax returns for pre-spin and post-spin operations of BHS in 2008. As authorized by the Tax Matters Agreement, we made certain elections related to BHS’ operations for our U.S. federal 2008 consolidated tax return in the third quarter of 2009. These elections have the effect of decreasing the net deferred tax assets allocated to BHS at the time of the spin-off. As a result, we have increased the amount of our current income tax receivable by $26.0 million, with an offsetting increase in retained earnings to adjust the amount of the spin-off distribution.

Recently Adopted Accounting Standards

We adopted Statement of Financial Accounting Standard (“SFAS”) 168, The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles – a replacement of FASB Statement No. 162, effective for our quarter ended September 30, 2009. SFAS 168 established the FASB Accounting Standards Codification (“Codification”) as the sole 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 US GAAP, the adoption of SFAS 168 impacted our financial statements since all future references to authoritative accounting literature are now in accordance with SFAS 168, except for the following standards, which will remain authoritative until they are integrated into the Codification: SFAS 164, Not-for-Profit Entities: Mergers and Acquisitions, SFAS 166,Accounting for Transfers of Financial Assets, SFAS 167, Amendments to FASB Interpretation No. 46R and SFAS 168.

We adopted the accounting principles established by SFAS 141(R), Business Combinations, which is now part of FASB Accounting Standards Codification (“ASC”) Topic 805, Business Combinations, effective January 1, 2009. FASB ASC Topic 805 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. The adoption of this new guidance 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 the accounting principles established by SFAS 160, Noncontrolling Interests in Consolidated Financial Statements an Amendment of ARB No. 51, which is now part of FASB ASC Topic 810, Consolidation, effective January 1, 2009. FASB ASC Topic 810 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 FASB ASC Topic 810. The adoption of this new guidance 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 this new guidance, noncontrolling interests were deductions from income in arriving at net income. Under FASB ASC Topic 810, noncontrolling interests are a deduction from net income used to arrive at net income attributable to Brink’s.

We adopted the accounting principles established by SFAS 161, Disclosures about Derivative Instruments and Hedging Activities an Amendment of SFAS 133, which is now part of FASB ASC Topic 815, Derivatives and Hedging, effective January 1, 2009. FASB ASC Topic 815 requires enhanced disclosures about an entity's derivative and hedging activities. The adoption of this new guidance had no impact on our financial statements.

We adopted the accounting principles established by SFAS 165, Subsequent Events, which is now part of FASB ASC Topic 855, Subsequent Events, effective for our quarter ended June 30, 2009. FASB ASC Topic 855 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 this new guidance did not have a material effect on our financial statements.

We adopted the accounting principles established by FASB Staff Position ("FSP") EITF 03-6-1, Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities, which is now part of FASB ASC Topic 260, Earnings per Share, effective January 1, 2009. FASB ASC Topic 260 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 this new guidance did not have a material effect on our financial statements.

We adopted the accounting principles established by FSP 157-2, Partial Deferral of the Effective Date of SFAS 157, which is now part of FASB ASC Topic 820, Fair Value Measurements and Disclosures, effective January 1, 2009. This guidance delayed the effective date of FASB ASC Topic 820 for all nonrecurring fair value measurements of nonfinancial assets and nonfinancial liabilities. The adoption of this guidance did not have a material effect on our results of operations or financial position.

We adopted the accounting principles established by 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, which is now part of FASB ASC Topic 820, Fair Value Measurements and Disclosures, effective for our quarter ended June 30, 2009. FASB

ASC Topic 820 provides guidance for estimating fair value when the volume and level of activity for the asset or liability have significantly decreased. FASB ASC Topic 820 also provides guidance for identifying circumstances that indicate a transaction is not orderly and 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 this new guidance did not have a material effect on our results of operations or financial position.

We adopted the accounting principles established by FSP FAS 115-2 and FAS 124-2, Recognition and Presentation of Other-Than-Temporary Impairments, which is now part of FASB ASC Topic 320, Investments – Debt and Equity Securities, effective for our quarter ended June 30, 2009. FASB ASC Topic 320 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 this new guidance did not have a material effect on our financial statements.

We adopted the accounting principles established by FSP FAS 107-1 and APB 28-1, Interim Disclosures about Fair Value of Financial Instruments, which is now part of FASB ASC Topic 825, Financial Instruments, effective for our quarter ended June 30, 2009. FASB ASC Topic 825 requires disclosures about the fair value of financial instruments in interim reporting periods whereas, previously, the disclosures were required only in annual financial statements. The adoption of this new guidance 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 new guidance did not otherwise have an effect on our financial statements.

We adopted the accounting principles established by FSP FAS 141(R)-1, Accounting for Assets Acquired and Liabilities Assumed in a Business Combination that Arise from Contingencies, which is now part of FASB ASC Topic 805, Business Combinations, effective for our quarter ended June 30, 2009. This guidance is effective for each of our business combinations which were completed on or after January 1, 2009. FASB ASC Topic 805 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 FASB ASC Topic 450, 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 this new guidance 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 is now part of FASB ASC Topic 715, Compensation – Retirement Benefits, which will be effective for us on December 31, 2009. This guidance 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 August 2009, the FASB issued Accounting Standards Update (“ASU”) 2009-05, Measuring Liabilities at Fair Value, which will be effective for us on October 1, 2009. This ASU clarifies the application of certain valuation techniques in circumstances in which a quoted price in an active market for the identical liability is not available. We do not expect a material effect from the adoption of this guidance on our consolidated financial statements.

In September 2009, the FASB issued ASU 2009-12, Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent), which will be effective for our year ending December 31, 2009. ASU 2009-12 allows investors to use net asset value as a practical expedient to estimate the fair value of certain investments that do not have readily determinable fair values and sets forth disclosure requirements for these investments. We do not expect a material effect from the adoption of this guidance on our consolidated financial statements.

In October 2009, the FASB issued ASU 2009-13, Multiple-Deliverable Revenue Arrangements, which will be effective for us on January 1, 2011. ASU 2009-13 establishes a selling price hierarchy for determining the selling price of a deliverable in a multiple-deliverable arrangement. In addition, the revised guidance requires additional disclosures about the methods and assumptions used to evaluate multiple-deliverable arrangements and to identify the significant deliverables within those arrangements. We are currently evaluating the potential impact of the amended guidance on our consolidated financial statements.

In October 2009, the FASB issued ASU 2009-14, Certain Revenue Arrangements that Include Software Elements, which will be effective for us on January 1, 2011. ASU 2009-14 amends ASC Topic 985 to exclude from its scope tangible products that contain both software and non-software components that function together to deliver a product’s essential functionality. We are currently evaluating the potential impact of the amended guidance on our consolidated financial statements.

Note 2 – Segment information

FASB ASC Topic 280, Segment Reporting, 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 FASB ASC Topic 280, we conduct business in two geographic reportable segments: International and North America. Prior to the spin-off of BHS in October of 2008, our two reportable segments were Brink’s, Incorporated 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						Nine Months
	Ended September 30,						Ended September 30,
(In millions)	2009			2008			2009			2008

Revenues:
International	$	579.2			575.8			1,620.8			1,701.4
North America		222.6			237.6			665.4			702.6
Revenues	$	801.8			813.4			2,286.2			2,404.0

Operating profit:
International	$	65.2	(a)		56.3			120.0			166.6
North America		10.4			11.8			37.9			36.1
Segment operating profit		75.6			68.1			157.9			202.7
Corporate expense		(10.1	)		(18.8	)		(16.9	)		(43.3	)
Former operations income (expense)		(4.6	)		0.5			(11.7	)		(0.3	)
Operating profit	$	60.9			49.8			129.3			159.1

(a) Includes a $13.9 million gain related to the acquisition (completed in September 2009) of a controlling interest of a CIT and Global Services operation in India. See note 8 for more information.

Note 3 – Shares used to calculate earnings per share

Shares used to calculate earnings per share were as follows:

	Three Months				Nine Months
	Ended September 30,				Ended September 30,
(In millions)	2009		2008		2009		2008

Weighted-average shares:
Basic (a)		47.6		46.1		46.8		46.2
Effect of dilutive stock options and awards		0.3		0.4		0.2		0.5
Diluted		47.9		46.5		47.0		46.7

Antidilutive stock options and awards excluded from denominator		2.4		0.4		2.4		0.3

(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 0.9 million in the three months and 0.8 million in the nine months ended September 30, 2009, as well as 0.5 million in the three months and 0.6 million in the nine months ended September 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 September 30,

Service cost	$	-			-			1.5			2.6			1.5			2.6
Interest cost on projected benefit obligation		12.2			11.5			3.2			3.3			15.4			14.8
Return on assets – expected		(16.3	)		(14.7	)		(2.3	)		(2.9	)		(18.6	)		(17.6	)
Amortization of losses		2.0			0.5			0.9			0.9			2.9			1.4
Net periodic pension cost (credit)	$	(2.1	)		(2.7	)		3.3			3.9			1.2			1.2

Nine months ended September 30,

Service cost	$	-			-			4.4			7.6			4.4			7.6
Interest cost on projected benefit obligation		35.5			34.4			9.0			9.9			44.5			44.3
Return on assets – expected		(44.8	)		(44.2	)		(6.6	)		(9.0	)		(51.4	)		(53.2	)
Amortization of losses		7.0			1.2			2.6			2.8			9.6			4.0
Settlement loss		0.3			-			-			-			0.3			-
Net periodic pension cost (credit)	$	(2.0	)		(8.6	)		9.4			11.3			7.4			2.7

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. On August 20, 2009, we made a voluntary $150 million contribution to our primary U.S. retirement plan to improve the funded status of the plan. The contribution was comprised of $92.4 million of cash and 2,260,738 newly issued shares of our common stock valued for purposes of the contribution at $25.48 per share, or $57.6 million in the aggregate. We do not expect to make additional contributions to the primary U.S. pension plan during 2009.

Because we considered the contribution to be a significant event for the plan, we remeasured our projected benefit obligation and plan assets related to our primary U.S. pension plan as of July 1, 2009. After the contribution and giving effect to the remeasurement, our primary U.S. pension plan’s underfunding improved from a $308 million deficit at December 31, 2008, to a $104 million deficit at September 30, 2009.

As a result of making a voluntary contribution in 2009, our total estimated contributions over the next five to six years, including the $150 million contribution, were reduced from approximately $352 million to approximately $333 million. The primary assumptions used to estimate these amounts are as follows:

1.	a measurement date of July 1, 2009

2.	a discount rate of 6.8%

3.	a voluntary contribution of $150 million made in August 2009

4.	an expected return on assets of 8.75%, and

5.	a change in method of valuing assets for funding purposes from the fair-market-value basis to the asset-smoothing basis.

We elected the asset-smoothing basis of computing asset values for funding purposes to reduce the volatility of future required contributions to the plan. All other assumptions remain the same as they were at December 31, 2008, which can be found in our 2008 Annual Report on Form 10-K. The assumptions used are based on a variety of estimates, including actuarial assumptions as of July 1, 2009. These estimated amounts will change in the future to reflect payments made, investment returns, contribution amounts, actuarial revaluations, and other changes in estimates. Actual amounts could differ materially from the estimated amounts.

After the $150 million contribution, total pension credit in 2009 will be $5.7 million compared to a full-year estimate of $2.0 million that was disclosed in our 2008 Annual Report. The $3.7 million increase in the total pension credit for 2009 is recorded ratably over the second half of the year.

We made various amendments to documents governing the plan and the trust created under the plan as well as our investment policy in order to permit the contribution of the newly issued shares of our common stock, and we engaged a third-party investment advisor to act as an independent fiduciary to the trust and make investment decisions regarding our common stock held by the plan.

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 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 September 30,

Interest cost on accumulated postretirement
benefit obligations	$	6.2			7.8			0.7			0.8			6.9			8.6
Return on assets – expected		(5.6	)		(9.7	)		-			-			(5.6	)		(9.7	)
Amortization of losses (gains)		3.9			2.0			(0.1	)		-			3.8			2.0
Net periodic postretirement cost	$	4.5			0.1			0.6			0.8			5.1			0.9

Nine months ended September 30,

Service cost	$	-			-			-			0.1			-			0.1
Interest cost on accumulated postretirement
benefit obligations		19.6			23.5			2.1			2.4			21.7			25.9
Return on assets – expected		(16.9	)		(29.0	)		-			-			(16.9	)		(29.0	)
Amortization of losses (gains)		12.8			6.0			(0.1	)		0.1			12.7			6.1
Curtailment gain and other (a)		-			-			(1.4	)		(2.0	)		(1.4	)		(2.0	)
Net periodic postretirement cost	$	15.5			0.5			0.6			0.6			16.1			1.1

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

Note 5 – Income taxes

	Three Months						Nine Months
	Ended September 30,						Ended September 30,
	2009			2008			2009			2008

Continuing operations
Provision for income taxes (in millions)	$	20.6			14.3			37.7			36.9
Effective tax rate		34.7	%		27.9	%		29.4	%		23.1	%

Discontinued operations
Provision for (benefit from) income taxes (in millions)	$	(1.6	)		12.4			0.3			43.0
Effective tax rate		(200	+)%		40.1	%		4.7	%		44.5	%

2009 Compared to U.S. Statutory Rate

The effective income tax rate on continuing operations in the first nine months of 2009 was lower than the 35% U.S. statutory tax rate due to $5.7 million in lower tax expense primarily resulting from the net effect of permanent book-tax differences offset by increases in valuation allowances in our non-U.S. jurisdictions. Included in the $5.7 million net benefit is an $8.9 million tax benefit from inflation adjustments in Venezuela that would not be recorded under highly inflationary accounting rules. In addition, the rate was impacted by $3.6 million in lower taxes due to the nontaxable acquisition-related gains, and $1.5 million in higher U.S. taxes due to changes in elections for the recently filed U.S. tax returns and changes in tax laws.

2008 Compared to U.S. Statutory Rate

The effective income tax rate on continuing operations in the first nine months of 2008 was lower than the 35% U.S. statutory tax rate largely due to an $8.8 million valuation allowance release for non-U.S. tax jurisdictions and $10.5 million in lower taxes related 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

The fair value of options granted during the 2009 and 2008 periods was calculated using the Black Scholes option-pricing model and the following estimated weighted-average assumptions:

		Three and Nine Months
		Ended September 30,
Options Granted		2009	2008

Number of shares underlying options, in thousands		289	541
Weighted-average exercise price per share	$	27.59	64.24

Assumptions used to estimate fair value:
Expected dividend yield:
Weighted-average		1.4%	0.6%
Range		1.4%	0.6%
Expected volatility:
Weighted-average		36%	26%
Range		35% - 39%	26% - 27%
Risk-free interest rate:
Weighted-average		1.8%	2.8%
Range		0.9% - 2.4%	2.0% - 3.1%
Expected term in years:
Weighted-average		3.8	3.6
Range		1.9 – 5.3	2.1 - 5.4

Weighted-average fair value estimates at grant date:
In millions	$	2.1	7.8
Per share	$	7.24	14.39

Upon completion of the BHS spin-off on October 31, 2008, 118,500 options that had been granted in the third quarter of 2008 to employees of BHS were canceled.

For employees remaining with Brink’s on October 31, 2008, the number of options and the exercise prices were adjusted to reflect the effect of the spin-off of BHS. For options granted in 2008, 420,104 options were adjusted to 771,867 options. Additionally, the exercise prices for these options were adjusted from $64.15 and $69.11 per share to $34.92 and $37.62 per share, respectively.

Nonvested Shares

	Number of		Weighted-Average Grant-Date
	Shares		Fair Value (b)

Balance as of December 31, 2008	70,865	$	36.27
Granted (a)	201,077		26.90
Cancelled awards	(1,250)		26.80
Vested	(33,801)		35.71
Balance as of September 30, 2009	236,891	$	28.45

(a)	Amounts granted in 2009 include 178,406 restricted stock units under the 2005 Equity Incentive Plan and 22,671 deferred stock units under the Non-Employee Directors’ Equity Plan.

(b)	Fair value is measured at the date of grant based on the average of the high and low per share quoted sales price of Brink’s common stock, adjusted for a discount on units that do not receive or accrue dividends.

Note 7 – Common stock

On August 20, 2009, we issued 2,260,738 new shares of Brink’s common stock as part of the $150 million contribution to our primary U.S. pension plan. The fair value of the contribution to the plan was $25.48 per share, which reflected a discount to the closing share price of our common stock on August 19, 2009. The fair value was discounted from the market price due to the lack of marketability of the newly issued shares at the date of contribution.

On September 14, 2007, our board of directors authorized the purchase of up to $100 million of our outstanding common shares and at December 31, 2008, $39.8 million remained available. 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 and third quarters of 2009. As of September 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

Sebival

Brazilian CIT and payment processing business

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 and the acquisition expands our operations into the midwestern region of Brazil. 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 and actual results may be materially different.

	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

Brink’s Arya

Indian CIT and Global Services business

On September 1, 2009, we acquired additional shares of Brink’s Arya (“Arya”) increasing our ownership in Arya from 40% to 78%. The consideration paid for the additional 38% interest was approximately $22.2 million. We recognized a gain of $13.9 million on the conversion from the equity method of accounting to consolidation. The gain represents the difference between the fair value and the book value of our previously held 40% investment as of the acquisition date and was included in other operating income of our International segment.

In connection with the acquisition of 38% of Arya’s shares, we also agreed to purchase the remaining 22% of the shares we do not currently hold for approximately $12.8 million. This purchase is subject to the satisfaction of certain conditions which are expected to be met by September 1, 2011. We accounted for Arya as 100% owned and included the fixed purchase price in non-current liabilities.

Arya is a cash handling and secure logistics company based in Mumbai, India, and this acquisition expands our presence in one of the largest cash services markets in Asia. The acquisition has been accounted for as a business combination using the acquisition method of accounting with the assets acquired and the liabilities assumed recorded at their estimated fair values as of the acquisition date. 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 $29.0 million which consists of intangible assets that do not qualify for separate recognition along with expected benefits from combining Arya into Brink’s operations. All of the goodwill has been assigned to the Asia-Pacific operating segment and is not expected to be deductible for tax purposes. Arya’s results of operations are included in our consolidated financial statements from the date of acquisition.

	Estimated Fair
	Value at
(In millions)	September 1, 2009

Total purchase consideration:
Cash paid for 38% of shares	$	22.2
Fair value of previously held 40% noncontrolling interest		20.0
Liability to purchase remaining 22% of shares		12.8
Fair value of purchase consideration	$	55.0

Accounts receivable	$	3.3
Other current assets		10.0
Property and equipment, net		2.4
Identifiable intangible assets		18.7
Goodwill		29.0
Current liabilities		(2.0	)
Noncurrent liabilities		(6.4	)
Total net assets acquired	$	55.0

Actual results of Sebival and Arya included in our consolidated financial statements from the dates of acquisition as well as pro forma revenue and earnings are as follows:

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

Actual results for the nine months ended September 30, 2009 (a)
Sebival	$	51.8		5.2
Arya		1.7		-
Pro forma results of The Brink’s Company (b)
Nine months ended September 30, 2009	$	2,298.5		63.8
Nine months ended September 30, 2008		2,477.7		149.8

(a)	Actual results of Sebival and Arya included in our consolidated results of operations from the dates of acquisition.

(b)	Pro forma results of The Brink’s Company, assuming the Sebival and Arya acquisitions occurred on January 1, 2008. Amounts do not include a gain on acquiring a controlling interest in Arya.

Other

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) of our International segment.

On September 4, 2009, we acquired a majority stake in ICD Limited (“ICD”), a premium provider of commercial security services in the Asia-Pacific region. ICD designs, installs, maintains and manages high-quality commercial security systems. With principal operations in China, ICD also has offices in Hong Kong, India, Singapore and Australia. ICD employs approximately 200 people and had 2008 revenue of $12 million.

Note 9 – Income from discontinued operations

	Three Months						Nine Months
	Ended September 30,						Ended September 30,
(In millions)	2009			2008			2009			2008

BHS:
Income from operations before tax (a)	$	-			31.1			-			98.0
Expense associated with the spin-off		-			(2.2	)		-			(6.5	)
Adjustments to contingencies of former operations:
Gain from FBLET refunds (see note 13)		-			-			19.7			-
BAX Global indemnification (see note 13)		(0.7	)		-			(13.2	)		-
Other		0.1			2.0			(0.1	)		5.2
Income from discontinued operations before income taxes		(0.6	)		30.9			6.4			96.7
Provision for (benefit from) income taxes		(1.6	)		12.4			0.3			43.0
Income from discontinued operations	$	1.0			18.5			6.1			53.7

(a)	BHS operations were spun off on October 31, 2008. Revenues of the operations were $135.4 million for the third quarter of 2008 and $397.1 million for the first nine months of 2008.

Note 10 – Supplemental cash flow information

	Nine Months
	Ended September 30,
(In millions)	2009			2008

Cash paid for:
Interest	$	6.9			7.7
Income taxes		15.7	(a)		56.4

(a) Payments are net of $43 million of U.S. federal income tax refunds.

Note 11 – Comprehensive income

	Three Months					Nine Months
	Ended September 30,					Ended September 30,
(In millions)	2009		2008			2009		2008

Net income	$	39.7		55.5			96.6		176.7
Other comprehensive income (loss), net of reclasses and taxes:
Benefit plan experience gain		54.4		1.9			63.2		5.8
Benefit plan prior service cost		0.3		0.4			2.2		1.1
Foreign currency translation adjustments		30.0		(50.1	)		50.4		(21.8	)
Marketable securities		0.2		(1.6	)		1.1		(2.5	)
Other comprehensive income (loss)		84.9		(49.4	)		116.9		(17.4	)
Comprehensive income	$	124.6		6.1			213.5		159.3

Comprehensive income	$	124.6		6.1		213.5		159.3
Less amounts attributable to noncontrolling interests:
Net income		(5.3	)	(7.5	)	(18.9	)	(29.9	)
Foreign currency translation adjustments		(1.4	)	2.8		(1.9	)	1.3
Marketable securities		0.2		-		0.2		-
Comprehensive income attributable to noncontrolling interests		(6.5	)	(4.7	)	(20.6	)	(28.6	)

Comprehensive income attributable to Brink’s	$	118.1		1.4		192.9		130.7

Note 12 – Fair Value

Financial assets carried at fair value at September 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.

	Fair Value of Available-for-Sale Securities
(In millions)	Level 1		Level 2		Level 3		Total

September 30, 2009

Available-for-sale:
Mutual funds	$	17.2		-		-		17.2
Non-U.S. debt securities		9.8		-		-		9.8
Equity securities		1.9		-		-		1.9
Total available-for-sale securities at fair value	$	28.9		-		-		28.9

December 31, 2008

Available-for-sale:
Mutual funds	$