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 September 30, 2011

¨ 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 001-09148

	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 ¨

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 x No ¨

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 ¨ Non-Accelerated Filer ¨ Smaller Reporting Company ¨

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

Yes ¨ No x

As of October 25, 2011, 46,830,971 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)	2011			2010

ASSETS

Current assets:
Cash and cash equivalents	$	200.5			183.0
Accounts receivable, net		550.6			525.1
Prepaid expenses and other		134.5			121.0
Deferred income taxes		56.4			48.3
Total current assets		942.0			877.4

Property and equipment, net		717.8			698.9
Goodwill		238.0			244.3
Other intangibles		69.7			83.2
Deferred income taxes		292.1			276.0
Other		84.0			90.7

Total assets	$	2,343.6			2,270.5


LIABILITIES AND EQUITY

Current liabilities:
Short-term borrowings	$	18.6			36.5
Current maturities of long-term debt		24.2			29.0
Accounts payable		133.6			141.5
Accrued liabilities		497.4			469.0
Total current liabilities		673.8			676.0

Long-term debt		358.6			323.7
Accrued pension costs		249.2			266.8
Retirement benefits other than pensions		217.0			218.6
Deferred income taxes		39.1			30.6
Other		180.9			171.7
Total liabilities		1,718.6			1,687.4

Commitments and contingent liabilities (notes 4, 5 and 11)

Equity:
The Brink’s Company (“Brink’s”) shareholders’ equity:
Common stock		46.8			46.4
Capital in excess of par value		557.4			542.6
Retained earnings		578.4			537.5
Accumulated other comprehensive loss		(623.8	)		(610.3	)
Total Brink’s shareholders’ equity		558.8			516.2

Noncontrolling interests		66.2			66.9

Total equity		625.0			583.1

Total liabilities and equity	$	2,343.6			2,270.5

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)	2011			2010			2011			2010

Revenues	$	995.8			776.1			2,888.4			2,240.9

Costs and expenses:
Cost of revenues		807.7			626.5			2,373.9			1,840.2
Selling, general and administrative expenses		136.6			107.6			400.3			310.2
Total costs and expenses		944.3			734.1			2,774.2			2,150.4
Other operating income (expense)		11.0			2.1			5.7			8.9

Operating profit		62.5			44.1			119.9			99.4

Interest expense		(6.5	)		(4.2	)		(18.2	)		(9.0	)
Interest and other income (expense)		1.3			0.6			6.8			2.7
Income from continuing operations before tax		57.3			40.5			108.5			93.1
Provision for income taxes		20.9			15.5			37.9			46.1

Income (loss) from continuing operations		36.4			25.0			70.6			47.0

Income (loss) from discontinued operations, net of tax		(0.7	)		2.2			3.0			(0.4	)

Net income		35.7			27.2			73.6			46.6
Less net income attributable to noncontrolling interests		(4.9	)		(3.3	)		(14.9	)		(9.4	)

Net income attributable to Brink’s	$	30.8			23.9			58.7			37.2

Income (loss) attributable to Brink’s:
Continuing operations	$	31.5			21.7			55.7			37.6
Discontinued operations		(0.7	)		2.2			3.0			(0.4	)

Net income attributable to Brink’s	$	30.8			23.9			58.7			37.2

Earnings (loss) per share attributable to Brink’s common shareholders:
Basic:
Continuing operations	$	0.66			0.45			1.17			0.78
Discontinued operations		(0.02	)		0.05			0.06			(0.01	)
Net income		0.64			0.50			1.23			0.77

Diluted:
Continuing operations	$	0.66			0.45			1.16			0.77
Discontinued operations		(0.02	)		0.05			0.06			(0.01	)
Net income		0.64			0.50			1.22			0.76

Weighted-average shares
Basic		48.0			47.8			47.8			48.4
Diluted		48.1			47.9			48.1			48.7

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, 2011

(Unaudited)

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

Balance as of December 31, 2010		46.4		$	46.4			542.6			537.5			(610.3	)		66.9			583.1

Net income		-			-			-			58.7			-			14.9			73.6
Other comprehensive income (loss)		-			-			-			-			(13.5	)		(1.7	)		(15.2	)
Dividends:
Brink’s common shareholders
($0.30 per share)		-			-			-			(14.0	)		-			-			(14.0	)
Noncontrolling interests		-			-			-			-			-			(15.4	)		(15.4	)
Share-based compensation:
Stock options and awards:
Compensation expense		-			-			5.3			-			-			-			5.3
Consideration from exercise
of stock options		0.5			0.5			10.3			-			-			-			10.8
Excess tax benefit of
stock compensation		-			-			1.1			-			-			-			1.1
Other share-based benefit programs		(0.1	)		(0.1	)		(1.9	)		(3.8	)		-			-			(5.8	)
Acquisitions of new subsidiaries		-			-			-			-			-			0.9			0.9
Acquisitions of noncontrolling interests		-			-			-			-			-			(0.1	)		(0.1	)
Capital contributions		-			-			-			-			-			0.7			0.7

Balance as of September 30, 2011		46.8		$	46.8			557.4			578.4			(623.8	)		66.2			625.0


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)	2011			2010

Cash flows from operating activities:
Net income	$	73.6			46.6
Adjustments to reconcile net income to net cash provided by operating activities:
(Income) loss from discontinued operations, net of tax		(3.0	)		0.4
Depreciation and amortization		120.5			100.0
Stock compensation expense		5.3			5.1
Deferred income taxes		(29.4	)		8.8
Gains and losses:
Sales of available-for-sale securities		(4.4	)		-
Sales of property and other assets		(7.9	)		(1.2	)
Acquisitions of controlling interest of equity-method or cost-method investments		(2.5	)		-
Impairment losses		0.8			0.5
Retirement benefit funding (more) less than expense:
Pension		6.6			(4.0	)
Other than pension		8.4			11.9
Other operating		8.8			7.7
Changes in operating assets and liabilities, net of effects of acquisitions:
Accounts receivable		(25.7	)		(29.2	)
Accounts payable, income taxes payable and accrued liabilities		38.2			38.1
Prepaid and other current assets		(24.1	)		(34.6	)
Other		3.4			2.3
Discontinued operations		1.4			(9.9	)
Net cash provided by operating activities		170.0			142.5

Cash flows from investing activities:
Capital expenditures		(118.7	)		(102.5	)
Acquisitions		(3.0	)		(13.9	)
Available-for-sale securities:
Purchases		(0.5	)		(2.6	)
Sales		12.6			1.0
Cash proceeds from sale of property, equipment and investments		12.8			2.5
Short term investments		-			(10.2	)
Cash settlements of foreign currency derivatives		0.1			-
Other		-			(5.4	)
Net cash used by investing activities		(96.7	)		(131.1	)

Cash flows from financing activities:
Borrowings (repayments) of debt:
Short-term debt		(14.8	)		9.6
Long-term revolving credit facilities		(101.5	)		56.1
Other long-term debt:
Borrowings		100.0			3.6
Repayments		(21.3	)		(14.9	)
Cash proceeds from sale-leaseback transactions		14.7			1.2
Debt financing costs		(0.7	)		(2.4	)
Repurchase shares of common stock of Brink’s		-			(33.7	)
Dividends to:
Shareholders of Brink’s		(14.0	)		(14.3	)
Noncontrolling interests in subsidiaries		(15.4	)		(11.9	)
Proceeds from exercise of stock options		5.1			1.1
Excess tax benefits associated with stock compensation		1.1			0.5
Minimum tax withholdings associated with stock compensation		(2.5	)		(1.8	)
Net cash provided (used) by financing activities		(49.3	)		(6.9	)
Effect of exchange rate changes on cash		(6.5	)		1.0
Cash and cash equivalents:
Increase (decrease)		17.5			5.5
Balance at beginning of period		183.0			143.0
Balance at end of period	$	200.5			148.5

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 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, 2010.

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.

Certain prior year amounts related to the statement of cash flows have been reclassified to conform to the 2011 presentation.

Foreign Currency Translation

Our consolidated financial statements are reported in U.S. dollars. Our foreign subsidiaries maintain their records primarily in the currency of the country in which they operate.

Our accounting policy for foreign currency translation is different depending on whether the economy in which our foreign subsidiary operates has been designated as highly inflationary or not. Economies with a three-year cumulative inflation rate of more than 100% are considered highly inflationary.

Assets and liabilities of foreign subsidiaries in non-highly inflationary economies are translated into U.S. dollars using rates of exchange at the balance sheet date. Translation adjustments are recorded in other comprehensive income (loss). Revenues and expenses are translated at rates of exchange in effect during the year. Transaction gains and losses are recorded in net income.

Foreign subsidiaries that operate in highly inflationary countries must use the reporting currency (the U.S. dollar) as the functional currency. Local-currency monetary assets and liabilities are remeasured into U.S. dollars each balance sheet date, with remeasurement adjustments and other transaction gains and losses recognized in earnings. Non-monetary assets and liabilities do not fluctuate with changes in local currency exchange rates to the dollar.

Venezuela

Our Venezuelan operations accounted for $178.5 million or 6% of total Brink’s revenues in the nine months ended September 30, 2011. Our operating margins in Venezuela have varied depending on the mix of business during any year and have been up to three times our overall international segment operating margin rate.

The economy in Venezuela has had significant inflation in the last several years. 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 was not available to compute a cumulative three-year inflation rate for Venezuela using only NCPI, we used a blended NCPI and CPI rate to determine whether the three-year cumulative inflation rate had exceeded 100% at December 31, 2009.

At December 31, 2009, the blended three-year cumulative inflation rate was approximately 100.5%. As a result, beginning January 1, 2010, we designated Venezuela’s economy as highly inflationary for accounting purposes, and we consolidated our Venezuelan results using our accounting policy for subsidiaries operating in highly inflationary economies. We remeasured bolivar fuerte-denominated net monetary assets at each balance sheet date using the parallel rate until June 9, 2010, when the Venezuelan government replaced the parallel rate with a new exchange process that requires each transaction be approved by the government’s central bank (the “SITME” rate). On a daily basis, the central bank publishes ranges of prices at which it may approve transactions to purchase dollar-denominated bonds, resulting in an exchange rate range of 4.3 to 5.3 bolivar fuertes to the U.S. dollar. To date, approved transactions have been at the upper end of the range. To the extent we need to obtain U.S. dollars, we currently expect our U.S. dollar-denominated transactions to be settled at a rate of 5.3 bolivar fuertes to the U.S. dollar. We have used this rate to remeasure our bolivar fuerte-denominated monetary assets and liabilities into U.S. dollars at September 30, 2011, resulting in bolivar fuerte-denominated net monetary assets at September 30, 2011, of $44.2 million. For the nine months ended September 30, 2011, we did not recognize any remeasurement gains or losses as the SITME rate did not change.

Under the SITME process, approved transactions may not exceed $350,000 per legal entity per month. We believe that we will be able to obtain sufficient U.S. dollars to purchase imported supplies and fixed assets to operate our business in Venezuela. We believe the repatriation of cash invested in Venezuela will be limited under the SITME process in the future. If we are successful at repatriating cash through other legal channels, the rate may not be as favorable as the SITME rate.

At September 30, 2011, our Venezuelan subsidiaries held $2.8 million of cash and short-term investments denominated in U.S. dollars and $13.1 million of cash denominated in bolivar fuertes. On an equity-method basis, we had investments in our Venezuelan operations of $67.2 million at September 30, 2011.

Recently Adopted Accounting Standards

We adopted the accounting principles established by Accounting Standards Update (“ASU”) 2009-16, Transfers and Servicing: Accounting for Transfers of Financial Assets, effective January 1, 2010. This ASU 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 Financial Accounting Standards Board (“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. The adoption of this new guidance did not have a material effect on our financial statements.

We adopted the accounting principles established by ASU 2009-17, Consolidations: Improvements to Financial Reporting by Enterprises Involved with Variable Interest Entities, effective January 1, 2010. This ASU requires an ongoing reassessment and replaces the quantitative-based risks and rewards calculation for determining which reporting entity, if any, has a controlling financial interest in a variable interest entity (“VIE”) with a primarily qualitative analysis. The qualitative analysis is based on identifying the party that has both the power to direct the activities that most significantly affect the VIE’s economic performance (the “power criterion”) and the obligation to absorb losses from or the right to receive benefits of the VIE that could potentially be significant to the VIE (the “losses/benefit criterion”). The party that meets both these criteria is deemed to have a controlling financial interest. The party with the controlling financial interest is considered to be the primary beneficiary and as a result is required to consolidate the VIE. The adoption of this new guidance did not have a material effect on our financial statements.

In January 2010, the FASB issued ASU 2010-06, Improving Disclosures about Fair Value Measurements. ASU 2010-06 both expands and clarifies the disclosure requirements related to fair value measurements. Entities are required to disclose separately the amounts of significant transfers in and out of Level 1 and Level 2 of the fair value valuation hierarchy and describe the reasons for the transfers. Additionally, entities are required to disclose information about purchases, sales, issuances, and settlements on a gross basis in the reconciliation of Level 3 fair-value measurements. The new guidance also clarifies existing fair-value measurement disclosure guidance about the level of disaggregation, inputs, and valuation techniques. We adopted the new disclosures effective January 1, 2010, except for the Level 3 rollforward disclosures. We did not have any significant transfers in and out of Level 1 and Level 2 of the fair value valuation hierarchy during 2010. See note 9 for the required disclosures for a 2011 transfer of certain of our fixed-rate bonds from Level 1 to Level 2 in the fair valuation hierarchy. We adopted the Level 3 rollforward disclosures effective January 1, 2011. The adoption of the Level 3 disclosures did not have a material effect on our disclosures as the only Level 3 valuations were for investments held by our pension plans. Since these Level 3 valuations have been estimated using net asset value per share, we are not required to make these disclosures.

We adopted the accounting principles established by ASU 2010-09, Subsequent Events: Amendments to Certain Recognition and Disclosure Requirements, effective January 1, 2010. Under this amended guidance, SEC filers are no longer required to disclose the date through which subsequent events have been evaluated in originally issued and revised financial statements.

In January 2010, the FASB issued ASU 2010-02, Accounting and Reporting for Decreases in Ownership of a Subsidiary—a Scope Clarification, which clarifies the scope of the decrease in ownership provisions of Accounting Standards Codification (“ASC”) 810-10, Consolidation, and related guidance. The ASU clarified that the standard applies to a subsidiary or group of assets that is a business, a subsidiary that is a business that is transferred to an equity method investee or joint venture, or an exchange of a group of assets that constitutes a business for a noncontrolling interest in an entity (including an equity method investee or joint venture). The ASU also expands the disclosures required upon deconsolidation of a subsidiary to disclose the valuation techniques used to measure the fair value of any retained investment in the former subsidiary, the nature of continuing involvement after the former subsidiary has been deconsolidated or derecognized and whether the transaction resulting in deconsolidation was with a related party or if the deconsolidated entity will become a related party. Finally, the ASU also requires that entities disclose valuation techniques used to measure the fair value of previously held equity interests prior to acquiring control in a business combination achieved in stages. We adopted this guidance effective January 1, 2010. The adoption of this new guidance did not have a material effect on our financial statements.

In May 2010, the FASB issued ASU 2010-19, Foreign Currency Issues: Multiple Foreign Currency Exchange Rates, which codified an SEC Staff Announcement made at the March 18, 2010, Emerging Issues Task Force (“EITF”) meeting. The Staff Announcement provides the SEC staff’s view on certain exchange rates related to investments in Venezuela. The use of different rates for remeasurement and translation purposes causes Venezuelan reported balances for financial reporting purposes and the actual U.S. dollar denominated balances to be different. The SEC staff indicated that any differences between the amounts reported for financial reporting purposes and actual U.S. dollar denominated balances that may have existed prior to the application of the highly inflationary accounting requirements (January 1, 2010, for calendar year-end registrants including Brink’s) should be recognized in the income statement, unless the issuer can document that the difference was previously recognized as a cumulative translation adjustment, in which case the difference should be recognized as a currency translation adjustment. We adopted the guidance effective March, 31, 2010, and recognized these differences as a currency translation adjustment as of January 1, 2010, upon the adoption of highly inflationary accounting in Venezuela. See related disclosures above in Note 1 – Basis of Presentation – Foreign Currency Translation – Venezuela.

In December 2010, the FASB ratified EITF 10-G, Disclosure of Supplementary Pro Forma Information for Business Combinations. EITF 10-G affects public entities that have entered into material business combinations and requires that pro forma disclosures reflect the assumption that the business combination had occurred as of the beginning of the prior annual period. It also requires a description of nonrecurring pro forma adjustments. EITF 10-G is effective and should be applied prospectively for business combinations completed during periods beginning after December 15, 2010, with early adoption permitted. We were required to adopt the new rule in 2011, but we adopted this standard for acquisitions occurring in 2010. The adoption of this guidance did not have a material effect on our financial statements.

We adopted the accounting principles established by ASU 2009-13, Multiple-Deliverable Revenue Arrangements, effective 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. The adoption of this guidance did not have a material effect on our financial statements.

We adopted the accounting principles established by ASU 2009-14, Certain Revenue Arrangements that Include Software Elements, effective 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. The adoption of this guidance did not have a material effect on our financial statements.

Standards Not Yet Adopted

In May 2011, the FASB issued ASU 2011-04, Fair Value Measurement: Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRS, which will be effective for us on January 1, 2012. ASU 2011-04 changes how fair value guidance is applied in certain circumstances and expands the disclosure requirements around fair value measurements. For entities with fair value measurements classified as Level 3, required disclosures include a quantitative disclosure of the unobservable inputs and assumptions used in the measurement, a description of the valuation processes in place, a narrative description of the sensitivity of the fair value to changes in unobservable inputs and interrelationships between those inputs, and quantitative disclosures about unobservable inputs used in fair value measurements other than those valuations that use net asset value as a practical expedient. We are currently evaluating the potential effect of the amended guidance on our financial statements.

In June 2011, the FASB issued ASU 2011-05, Presentation of Comprehensive Income, which will be effective for us on January 1, 2012. Under ASU 2011-05, an entity has the option to present the components of comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. Under either method, entities must display adjustments for items that are reclassified from other comprehensive income (“OCI”) to net income in both net income and OCI. The ASU does not change the

items that must be reported in OCI. We are currently evaluating the potential effect of the amended guidance on our financial statements.

In September 2011, the FASB issued ASU 2011-08, Testing Goodwill for Impairment, which will be effective for us on January 1, 2012 with early adoption permitted. Under the revised guidance, entities testing goodwill for impairment have the option of performing a qualitative assessment before calculating the fair value of the reporting unit (i.e., step 1 of the goodwill impairment test). If entities determine, on the basis of qualitative factors, that it is more likely than not that the fair value of the reporting unit is less than the carrying amount, the two-step impairment test would be required. The ASU also requires that the same qualitative factors be considered when determining whether an interim test of goodwill impairment is necessary and for determining whether it is necessary to perform Step 2 for reporting units with zero or negative carrying amounts. The option to carry forward an entity’s detailed calculation of fair value of the reporting unit if certain conditions were met has been removed. We will early adopt this guidance for the 2011 reporting year for our annual October 1 goodwill impairment test. We are currently evaluating the potential effect of the amended guidance on our financial statements.

Note 2 – Segment information

We identify our operating segments based on how resources are allocated and operating decisions are made. Management evaluates performance and allocates resources based on operating profit or loss, excluding non-segment expenses. We have four geographic operating segments, and under the aggregation criteria set forth in FASB ASC 280, Segment Reporting, we have two reportable segments: International and North America.

The primary services of the reportable segments include:

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

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

·	Global Services – transportation of valuables globally

·	Cash Logistics – supply chain management of cash

·	Payment Services – consumers pay utility and other bills at payment locations

·	Guarding Services – including airport security


	Three Months						Nine Months
	Ended September 30,						Ended September 30,
(In millions)	2011			2010			2011			2010

Revenues:
International	$	751.3			547.4			2,158.1			1,556.1
North America		244.5			228.7			730.3			684.8
Revenues	$	995.8			776.1			2,888.4			2,240.9


	Three Months						Nine Months
	Ended September 30,						Ended September 30,
(In millions)		2011			2010			2011			2010

Operating profit:
International	$	61.4			52.6			132.8			110.9
North America		8.7			5.4			25.9			26.1
Segment operating profit		70.1			58.0			158.7			137.0
Non-segment		(7.6	)		(13.9	)		(38.8	)		(37.6	)
Operating profit	$	62.5			44.1			119.9			99.4

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)	2011		2010		2011		2010

Weighted-average shares:
Basic (a)		48.0		47.8		47.8		48.4
Effect of dilutive stock options and awards		0.1		0.1		0.3		0.3
Diluted		48.1		47.9		48.1		48.7

Antidilutive stock options and awards excluded from denominator		2.7		2.7		2.2		2.6

(a)

We have deferred compensation plans for directors and certain of our employees. Amounts owed to participants are 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 1.2 million in the three months and 1.1 million in nine months ended September 30, 2011, and 1.0 million in the three months and 0.9 million in nine months ended September 30, 2010.

Note 4 – Retirement benefits

Pension plans

We have various defined-benefit pension plans covering eligible current and former employees. Benefits under most plans are based on salary and years of service.

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)	2011			2010			2011			2010			2011			2010

Three months ended September 30,

Service cost	$	-			-			2.5			1.5			2.5			1.5
Interest cost on projected benefit obligation		11.6			11.6			4.3			3.2			15.9			14.8
Return on assets – expected		(16.2	)		(16.7	)		(3.0	)		(2.6	)		(19.2	)		(19.3	)
Amortization of losses		7.0			4.9			0.9			0.8			7.9			5.7
Settlement loss		-			-			0.7			-			0.7			-
Net periodic pension cost (credit)	$	2.4			(0.2	)		5.4			2.9			7.8			2.7

Nine months ended September 30,

Service cost	$	-			-			7.8			4.6			7.8			4.6
Interest cost on projected benefit obligation		34.7			34.9			12.9			9.8			47.6			44.7
Return on assets – expected		(48.7	)		(50.1	)		(9.1	)		(7.9	)		(57.8	)		(58.0	)
Amortization of losses		21.0			14.6			3.2			2.5			24.2			17.1
Settlement loss		-			-			1.7			-			1.7			-
Net periodic pension cost (credit)	$	7.0			(0.6	)		16.5			9.0			23.5			8.4

Based on December 31, 2010, data, assumptions and funding regulations, we are not required to make a contribution to our primary U.S. plan during 2011.

Retirement benefits other than pensions

We provide retirement healthcare benefits for eligible current and former U.S. and Canadian employees, including former employees of our former U.S. coal operation. Retirement benefits related to our former coal operation include medical benefits provided by the Pittston Coal Group Companies Employee Benefit Plan for United Mine Workers of America Represented Employees (the “UMWA plans”) 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)	2011			2010			2011		2010		2011			2010

Three months ended September 30,

Interest cost on accumulated postretirement
benefit obligations	$	5.9			6.8			0.7		0.8		6.6			7.6
Return on assets – expected		(6.4	)		(6.3	)		-		-		(6.4	)		(6.3	)
Amortization of losses (gains)		3.8			4.1			0.6		0.6		4.4			4.7
Net periodic pension cost (credit)	$	3.3			4.6			1.3		1.4		4.6			6.0

Nine months ended September 30,

Interest cost on accumulated postretirement
benefit obligations	$	17.9			20.2			2.1		2.2		20.0			22.4
Return on assets – expected		(19.2	)		(19.0	)		-		-		(19.2	)		(19.0	)
Amortization of losses (gains)		11.3			12.1			1.8		1.3		13.1			13.4
Net periodic pension cost (credit)	$	10.0			13.3			3.9		3.5		13.9			16.8

Note 5 – Income taxes

		Three Months				Nine Months
		Ended September 30,				Ended September 30,
		2011		2010		2011		2010

Continuing operations
Provision for income taxes (in millions)	$	20.9		15.5		37.9		46.1
Effective tax rate		36.5	%	38.3	%	34.9	%	49.5	%

2011 Compared to U.S. Statutory Rate

The effective income tax rate on continuing operations in the first nine months of 2011 was slightly lower than the 35% U.S. statutory tax rate largely due to a $4.4 million benefit for the release of a U.S. valuation allowance and $1.6 million in benefits for recently enacted legislation in various jurisdictions, tax claims and audit settlements. These benefits were mostly offset by higher taxes due to the geographical mix of earnings and the characterization of a French business tax as an income tax.

2010 Compared to U.S. Statutory Rate

The effective income tax rate on continuing operations in the first nine months of 2010 was higher than the 35% U.S. statutory tax rate largely due to a $13.9 million reduction in deferred tax assets as a result of recently enacted U.S. healthcare legislation, and $6.2 million in higher taxes related to non-U.S. tax jurisdictions, partially offset by a $7.9 million non-cash income tax benefit related to a tax settlement. The non-U.S. taxes were higher than 35% primarily due to the designation of Venezuela as highly inflationary for accounting purposes, the geographical mix of earnings, and the characterization of a French business tax as an income tax based upon legislative changes effective January 1, 2010.

Note 6 – Share-based compensation plans

We have share-based compensation plans to retain employees and nonemployee directors and to more closely align their interests with those of our shareholders.

The 2005 Equity Incentive Plan (the “2005 Plan”) permits grants of stock options, restricted stock, stock appreciation rights, performance stock and other share-based awards to employees. Only stock options and restricted stock units have been granted under the 2005 Plan to date.

We provide share-based awards to directors through the Non-Employee Directors’ Equity Plan (the “Directors’ Plan”). Only deferred stock units have been granted under the Directors’ Plan to date.

The fair value of options granted during the 2011 and 2010 periods was calculated using the following estimated weighted-average assumptions:

	Three Months
	Ended September 30,
Options Granted	2011						2010

Number of shares underlying options, in thousands	$				290						367
Weighted-average exercise price per share					31.47						19.05

Assumptions used to estimate fair value
Expected dividend yield (a):
Weighted-average					1.3	%					2.1	%
Range					1.3	%					2.1	%
Expected volatility (b):
Weighted-average					36	%					36	%
Range		36	%	–	37	%		35	%	–	39	%
Risk-free interest rate (c):
Weighted-average					1.2	%					1.4	%
Range		0.5	%	–	1.9	%		0.6	%	–	1.9	%
Expected term in years (d):
Weighted-average					3.8						3.8
Range		1.9		–	5.3			1.9		–	5.3

Weighted-average fair value estimates at grant date:
In millions		$			2.4						1.7
Fair value per share		$			8.17						4.65

(a)	The expected dividend yield is the calculated yield on Brink’s common stock at the time of the grant.

(b)	The expected volatility was estimated after reviewing the historical volatility of our stock using daily close prices.

(d)	The expected term of the options was based on our historical option exercise, expiration and post-vesting cancellation behaviors.

Nonvested Share Activity
	Number of Shares									Weighted-Average
	2005			Directors’						Grant-Date
(in thousands of shares, except per share amounts)	Plan			Plan			Total			Fair Value (a)

Balance as of December 31, 2010		299.5			29.1			328.6		$	22.84
Granted		143.7			15.8			159.5			30.43
Cancelled awards		(14.9	)		-			(14.9	)		23.40
Vested		(120.6	)		(29.1	)		(149.7	)		24.07
Balance as of September 30, 2011		307.7			15.8			323.5		$	25.99

(a)	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 – Supplemental cash flow information

	Nine Months
	Ended September 30,
(In millions)	2011		2010

Cash paid for:
Interest	$	17.0		7.7
Income taxes		60.0		48.7

We acquired $54.7 million of armored vehicles, CompuSafe® units and other equipment under capital lease arrangements in the first nine months of 2011, as compared to $20.4 million of armored vehicles and CompuSafe® units in the first nine months of 2010. Total assets acquired under capital lease arrangements in the first nine months of 2011 include $15.4 million in third quarter 2011 sales-leaseback transactions for previously purchased armored vehicles and other equipment.

Note 8 – Comprehensive income (loss)

	Three Months					Nine Months
	Ended September 30,					Ended September 30,
(In millions)	2011			2010		2011			2010

Amounts attributable to Brink’s:
Net income	$	30.8			23.9		58.7			37.2
Benefit plan adjustments		8.1			6.6		23.1			7.4
Benefit plan settlements		(0.5	)		-		(1.2	)		-
Foreign currency		(72.5	)		43.0		(33.8	)		0.1
Available-for-sale securities		(0.9	)		2.0		(1.6	)		2.3
Other comprehensive income (loss)		(65.8	)		51.6		(13.5	)		9.8
Comprehensive income (loss) attributable to Brink’s		(35.0	)		75.5		45.2			47.0

Amounts attributable to noncontrolling interests:
Net income		4.9			3.3		14.9			9.4
Foreign currency		(2.5	)		2.6		(1.8	)		3.9
Available-for-sale securities		-			-		0.1			0.5
Other comprehensive income (loss)		(2.5	)		2.6		(1.7	)		4.4
Comprehensive income attributable to noncontrolling interests		2.4			5.9		13.2			13.8

Comprehensive income (loss)	$	(32.6	)		81.4		58.4			60.8

Note 9 – Fair value of financial instruments

Investments in Available-for-sale Securities

We have available-for-sale securities that are carried at fair value in the financial statements. For these investments, fair value was estimated based on quoted prices categorized as a Level 1 valuation, except for non-U.S. debt securities. These securities were valued at December 31, 2010, using a discounted cash flow methodology using yields and discount rates based on management’s best estimate of rates that would approximate those that a market participant would use. Due to the high level of judgment involved in this valuation, we have categorized these investments as Level 3 (valuation levels are defined in our 2010 Form 10-K).

	September 30,		December 31,
(In millions)	2011		2010

Cost
Mutual funds	$	16.7		16.9
Non-U.S. debt securities		-		3.6
Equity securities		-		3.7
Total	$	16.7		24.2

Gross Unrealized Gains
Mutual funds	$	2.9		3.4
Non-U.S. debt securities		-		-
Equity securities		-		2.2
Total	$	2.9		5.6

Gross Unrealized Losses
Mutual funds	$	-		-
Non-U.S. debt securities		-		(0.2	)
Equity securities		-		-
Total	$	-		(0.2	)

Fair Value
Mutual funds	$	19.6		20.3
Non-U.S. debt securities		-		3.4
Equity securities		-		5.9
Total	$	19.6		29.6

Fixed-Rate Debt

The fair value estimate of our obligation related to the fixed-rate Dominion Terminal Associates (“DTA”) bonds at December 31, 2010, is based on quoted prices in an active market (a Level 1 valuation). During the third quarter of 2011, the market for these bonds was not active and we therefore transferred these bonds from Level 1 to Level 2. At September 30, 2011, the fair value estimate of these bonds is based on price information for these DTA bonds observed in a less-active market. The fair value and carrying value of our DTA bonds are as follows:

	September 30,		December 31,
(In millions)	2011		2010

DTA bonds
Carrying value	$	43.2		43.2
Fair value		43.0		42.9

Other Financial Instruments

Other financial instruments include cash and cash equivalents, short-term fixed rate deposits, 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.

Note 10 – Income from Discontinued Operations

Federal Black Lung Excise Tax (“FBLET”) refunds

The Energy Improvement and Extension Act of 2008 enabled taxpayers to file claims for FBLET refunds for periods prior to those open under the statute of limitations previously applicable to us. In 2009, we received $23.9 million of FBLET refunds and recognized the majority of these refunds as a pretax gain of $19.7 million in 2009. In the second quarter of 2011, the statute of limitations expired and we recognized a pretax gain of $4.2 million for the remaining portion of the refund.

Note 11 – Commitments and contingent matters

Operating leases

We have made residual value guarantees of approximately $30.1 million at September 30, 2011, related to operating leases, principally for trucks and other vehicles.

Bankruptcy of Brink’s Belgium

Our former cash-in-transit subsidiary in Belgium (Brink’s Belgium) filed for bankruptcy in November 2010 after a restructuring plan was rejected by local union employees and was placed into bankruptcy on February 2, 2011. We continue to operate our Global Services unit in Belgium, which provides secure transport of diamonds, jewellery, precious metals, banknotes and other commodities.

In December 2010, the court-appointed provisional administrators of Brink’s Belgium filed a claim for €20 million against a subsidiary of Brink’s. In June 2011, the Brink’s subsidiary entered into a settlement agreement related to this claim. Under the terms of the settlement agreement, the Brink’s subsidiary agreed to contribute, upon the satisfaction of certain conditions, €7 million toward social payments to former Brink’s Belgium employees in exchange for the bankruptcy receivers requesting withdrawal of the pending litigation and agreeing not to file additional claims. The conditions of the settlement agreement included a release from liability by affected employees, the Belgian tax authority and the Belgian social security authority. These conditions were satisfied and the settlement was finalized during the third quarter of 2011. We recorded a pretax charge of €7 million (approximately $10 million) in the second quarter of 2011 related to this claim.

Other

We are involved in various other 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.

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, which we refer to as cash in transit (“CIT”)

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

·	arranging secure transportation of valuables over long distances and around the world (“Global Services”)

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”)

·	providing bill payment acceptance and processing services to utility companies and other billers (“Payment Services”)

·	security and guarding services (including airport security)

We have four geographic operating segments: Europe, Middle East, and Africa (“EMEA”); Latin America; Asia Pacific; and North America, which are aggregated into two reportable segments: International and North America.

RESULTS OF OPERATIONS

Consolidated Review

Non-GAAP Results

Non-GAAP results described in this filing are financial measures that are not required by, or presented in accordance with U.S. generally accepted accounting principles (“GAAP”). The purpose of the non-GAAP results is to report financial information without certain income and expense items and to adjust the quarterly non-GAAP tax rates so that the non-GAAP tax rate in each of the quarters is equal to the full-year non-GAAP tax rate. For 2011, a forecasted full-year tax rate is used. The full year non-GAAP tax rate in both years excludes certain pretax and tax income and expense amounts. The non-GAAP information provides information to assist comparability and estimates of future performance. Brink’s believes these measures are helpful in assessing operations and estimating future results and enable period-to-period comparability of financial performance. Non-GAAP results should not be considered as an alternative to revenue, income or earnings per share amounts determined in accordance with GAAP and should be read in conjunction with their GAAP counterparts. The adjustments are described in detail and are reconciled to our GAAP results on pages 34 – 35.

	Third Quarter						%			Nine Months						%
(In millions, except per share amounts)	2011			2010			Change			2011			2010			Change

GAAP
Revenues	$	995.8			776.1			28		$	2,888.4			2,240.9			29
Segment operating profit (a)		70.1			58.0			21			158.7			137.0			16
Non-segment expense		(7.6	)		(13.9	)		(45	)		(38.8	)		(37.6	)		3
Operating profit		62.5			44.1			42			119.9			99.4			21
Income from continuing operations (b)		31.5			21.7			45			55.7			37.6