UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 11-K
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2005
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____________ to _______________
Commission file number 1-9148
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THE BRINK'S COMPANY 401(k) PLAN
(Full title of the Plan)
THE BRINK'S COMPANY
(Name of the issuer of securities held pursuant to the Plan)
P.O. BOX 18100
1801 BAYBERRY COURT
RICHMOND, VIRGINIA 23226-8100
(Address of issuer's principal (Zip Code)
executive offices)
THE BRINK'S COMPANY 401(k) PLAN
Financial Statements and Schedules
December 31, 2005 and 2004
(With Report of Independent Registered Public Accounting Firm)
2
THE BRINK'S COMPANY 401(k) PLAN
Index to Financial Statements and Schedules
December 31, 2005 and 2004
Pages
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Report of Independent Registered Public Accounting Firm 4
Financial Statements
--------------------
Statements of Assets Available for Benefits
December 31, 2005 and 2004 5
Statement of Changes in Assets Available for Benefits
Year Ended December 31, 2005 6
Notes to Financial Statements 7-13
Schedules
---------
Schedule H, Line 4i, -
Schedule of Assets (Held at End of Year) -
December 31, 2005 14
Schedule H, Line 4j, -
Schedule of Reportable Transactions
for the Year Ended December 31, 2005 15
Other schedules not filed herewith are omitted because of the absence of
conditions under which they are required to be filed.
3
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
-------------------------------------------------------
The Pension Committee of the Board of Directors
The Brink's Company:
We have audited the accompanying statements of assets available for benefits of
The Brink's Company 401(k) plan (the "Plan") as of December 31, 2005 and 2004,
and the related statement of changes in assets available for benefits for the
year ended December 31, 2005. These financial statements are the responsibility
of the Plan's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the assets available for benefits of the Plan as of
December 31, 2005 and 2004, and the changes in assets available for benefits for
the year ended December 31, 2005 in conformity with U.S. generally accepted
accounting principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of assets
(held at end of year) and reportable transactions are presented for the purpose
of additional analysis and are not a required part of the basic financial
statements but are supplementary information required by the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974. These supplemental schedules are the
responsibility of the Plan's management. The supplemental schedules have been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, are fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
Richmond, Virginia
June 29, 2006
4
THE BRINK'S COMPANY 401(k) PLAN
Statements of Assets Available for Benefits
December 31,
(In thousands) 2005 2004
-------------------------------------------------------------------------------
Investments at fair value:
The Brink's Company common stock $ 113,739 112,480
Mutual funds 160,299 130,922
Common trust fund 22,303 21,685
Participant loans 16,815 15,157
Investments at contract value 59,673 52,769
-------------------------------------------------------------------------------
Total investments 372,829 333,013
Receivables:
Participant contributions 1,389 1,598
Employer contributions 578 709
Interest 48 51
-------------------------------------------------------------------------------
Total receivables 2,015 2,358
Cash and cash equivalents 347 75
-------------------------------------------------------------------------------
Assets available for benefits $ 375,191 335,446
===============================================================================
See accompanying notes to financial statements.
5
THE BRINK'S COMPANY 401(k) PLAN
Statement of Changes in Assets Available for Benefits
Year Ended December 31,
(In thousands) 2005
------------------------------------------------------------------------------
Income:
Dividends $ 8,273
Interest 814
Net appreciation in fair value of investments:
Participant-directed 6,757
Nonparticipant-directed 20,311
------------------------------------------------------------------------------
Net appreciation 27,068
Contributions:
Participant 24,379
Employer:
Cash 578
The Brink's Company common stock 10,278
Rollover 1,956
------------------------------------------------------------------------------
Total additions 73,346
Distributions to participants or beneficiaries (33,601)
------------------------------------------------------------------------------
Net increase 39,745
Assets available for benefits:
Beginning of year 335,446
------------------------------------------------------------------------------
End of year $ 375,191
==============================================================================
See accompanying notes to financial statements.
6
THE BRINK'S COMPANY 401(k) PLAN
Notes to Financial Statements
December 31, 2005 and 2004
1. Plan Information and Summary of Significant Accounting Policies
Description of Plan
-------------------
The Brink's Company 401(k) Plan (the "Plan") is a voluntary defined
contribution plan sponsored by The Brink's Company and participating
subsidiaries (the "Company"). During 2004 and 2005, full-time
employees of the Company who are not members of a collective
bargaining unit (unless the collective bargaining agreement provides
specifically for and the Administrative Committee has approved
participation) were eligible t o participate and were automatically
enrolled on the first day of the month following thirty days of full
time service. Effective January 1, 2006, the Plan was amended such
that automatic enrollment for those who are eligible occurs
immediately following thirty days of full time service. During 2005
and 2004, Company matching contributions commenced to participants
once they had completed six months of service. Effective January 1,
2006, the Plan was amended such that Company matching contributions
commence upon enrollment. The Plan is subject to the Employee
Retirement Income Security Act of 1974, as amended ("ERISA").
The following is a general description of certain provisions of the
Plan. Participants should refer to the Plan document for a more
complete description of the Plan's provisions.
Withdrawals
The Plan generally requires that pretax savings remain in the Plan
while the participant is actively employed. However, the Plan allows
two exceptions:
(a) If the participant is age 59 1/2 or older, he or she may
withdraw all or a portion of his or her pretax contributions.
After each of these withdrawals, employer matching contributions
are suspended for six months.
(b) If the participant has a "financial hardship" (as that term is
defined by Internal Revenue Service ("IRS") guidelines) it is
possible to withdraw all or a portion of his or her pretax
contributions in the Plan up to the amount needed to satisfy the
hardship, regardless of age. During 2005, after each hardship
withdrawal, employee pretax contributions were suspended for
twelve months. Effective January 1, 2006, the Plan was amended
such that after each hardship withdrawal, employee pretax
contributions are suspended for six months.
A participant may withdraw the following at any time without being
suspended from the Plan in the following order:
(a) All or a portion of after-tax contributions;
(b) All or a portion of earnings attributable to after-tax
contributions;
(c) All or a portion of Company matching contributions in respect to
after-tax contributions made prior to January 1, 1985;
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(d) Any rollover contributions.
Certain withdrawals of vested Company matching contributions made
after December 31, 1984 require the employer to suspend making
matching contributions on behalf of the participant for a period of
six months.
Vesting Schedule
A participant is 100% vested in the value of his or her pretax
contributions. Vesting in the Company matching contributions is based
on years of service. Vesting in the Company matching contributions
during 2005 and 2004 was based on years of service as follows:
Less than 2 years 0%
2 but less than 3 years 20%
3 but less than 4 years 50%
4 but less than 5 years 75%
5 or more years 100%
If a participant ends his or her employment with the Company and is
subsequently rehired, his or her prior service with the Company is
counted for vesting purposes. Once a participant reaches normal
retirement age, he or she is 100% vested in Company matching
contributions regardless of years of service.
Forfeitures by the participants of the unvested portion of their
account upon termination of employment with the Company are used to
reduce future matching contributions of the Company to the Plan.
Forfeitures reduced employer contributions by $1,121,000 in 2005.
Employer contributions receivable are net of forfeitures of $98,000
and $102,000 at December 31, 2005 and 2004, respectively.
Plan Termination
Although it has not expressed any intent to do so, the Company
reserves the right to amend, suspend, or discontinue the Plan in whole
or in part at any time by action of the Company's Board of Directors,
subject to the provisions of ERISA. In the event of Plan termination,
participants will become 100% vested in their accounts.
Basis of Presentation
---------------------
The accompanying financial statements have been prepared on the accrual
basis of accounting and present assets available for benefits and
changes in those assets available for benefits.
Investments and Investment Income
---------------------------------
The fair value of common stock, mutual fund investments and common
trust fund investments is determined by using quoted market prices.
The contract value (contributions made plus interest accrued at the
contract rate less withdrawals and fees) of certain investments
approximates fair value. Participant loans are valued at cost, which
approximates fair value. The cost of securities sold is determined
principally on the basis of average cost at the time of sale.
Purchases and sales of securities are recorded on a trade-date basis.
Dividend income is recorded on the ex-dividend date, and interest
income is recorded on the accrual basis.
Use of Estimates
----------------
In accordance with U.S. generally accepted accounting principles,
management of the Company has 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
financial statements. Actual results could differ materially from
those estimates.
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Benefit Payments
----------------
Benefits to participants or beneficiaries are recorded when paid.
Risks and Uncertainties
-----------------------
The Plan provides for various investment options that may be exposed
to various risks, such as interest rate risk, credit risk and overall
market volatility. Because of this, values of investment securities
are expected to be volatile which could adversely affect participants'
account balances and the amounts reported in the statement of assets
available for benefits.
2. Participant Loans
Participants can borrow, in exchange for a promissory note, up to the
lesser of $50,000 less the highest outstanding loan during the
previous 12 months or 50% of their aggregate vested account balance in
the Plan, including rollovers, subject to certain maximum limits
designated by the IRS. Each note is secured by a pledge of the
participant account balance in the Plan to the extent of the unpaid
balance. Repayments are generally made through level monthly payroll
deductions. The term of a loan cannot exceed four and a half years for
general purpose loans and fifteen years for principal residence loans.
The interest rate charged on a participant loan is fixed for the
duration of the loan at one percentage point above the prime rate as
published in the Wall Street Journal at the inception of the loan.
Interest paid by the participant is credited to the participant's
account.
3. Contributions
Employee Contributions
----------------------
During 2005, each participant could designate a contribution of up to
the lesser of $14,000 or 30% of pretax earnings. For purposes of
determining Plan contributions, pretax earnings are defined as regular
pay including commissions and certain bonuses, but excluding overtime,
premium pay and allowances. Amounts contributed are subject to
limitations under IRS non-discrimination tests. Employee contributions
may be divided among investment funds in multiples of 1% based upon
the participant's election. Participants have the option to change
their contribution percentages during each pay period.
Participants who reached the age of 50 on or prior to December 31,
2005 were eligible to make additional pretax catch-up contributions
during 2005. Catch-up contributions in 2005 were limited to the lesser
of $4,000 or 45% of eligible pay. Catch-up contributions are scheduled
to increase to $5,000 in 2006. After 2006, the limit will be adjusted
for inflation.
Participant contributions to the Plan may be invested in one of
several investment funds managed by an affiliate of T. Rowe Price
Trust Company ("T. Rowe Price") and two other fund alternatives not
managed by the affiliate. Prior to September 2002, participant
contributions could be invested in The Brink's Company common stock.
After September 2002, no participant contributions could be directed
into The Brink's Company common stock; however, existing
participant-directed balances in The Brink's Company common stock were
eligible to remain in The Brink's Company common stock. Any remaining
investment in The Brink's Company common stock at December 31, 2007
will be sold and reinvested in the same manner as Employee
Contributions.
9
Employer Contributions
----------------------
Employer matching contributions in 2005 were in the form of The
Brink's Company common stock. In 2005, the Company matched 75% of
participant contributions up to the first 5% of pretax earnings
contributed. Participants may transfer their matching contributions in
The Brink's Company common stock to other investment options when the
matching contributions vest. Effective January 1, 2006, the Plan was
amended such that the Company will match 125% of participant
contributions up to the first 5% of pretax earnings contributed.
Matching contributions are no longer made in the form of The Brink's
Company common stock, but are made in cash and allocated to investment
funds in the same manner as Employee Contributions.
4. Distributions
Upon leaving the Company for any reason and after a formal
disbursement request is made by the participant, the full fair value
of an employee's contributions and related investment income and all
vested Company matching contributions and related investment income
will be distributed in cash, except payouts from The Brink's Company
stock fund which will be made in shares unless cash payment is
specifically requested. The value of any fractional shares will be
distributed in cash. The Plan requires that vested balances less than
$5,000 at the date of termination are to be distributed from the Plan.
If a participant's employment with the Company terminates and he or
she has a vested account balance of more than $5,000, he or she may
elect to leave all of his or her contributions and related investment
income and the vested portion of Company contributions and related
investment income in the Plan. Participants who retire on or before
their normal retirement date may elect to defer distribution until age
70 1/2. Participants who work beyond age 70 1/2, may defer
distribution until they retire.
5. Related Party Transactions
Certain Plan investments are shares of mutual funds, common trusts,
and investment contracts managed by T. Rowe Price, the Trustee.
Additionally, the Plan invests in shares of The Brink's Company common
stock. Such transactions are deemed to be party-in-interest
transactions of the Plan as are all participant loans.
The Plan's investments in The Brink's Company common stock at December
31, 2005 and 2004, and purchases and sales during 2005, are as
follows:
(in thousands, except share amounts) Shares Fair Value Cost
-----------------------------------------------------------------------
Shares held at December 31, 2004 2,846,155 $ 112,480 60,972
Purchases 337,282 12,482 12,482
Sales (809,427) (32,342) (17,939)
Net appreciation - 21,119 -
-----------------------------------------------------------------------
Shares held at December 31, 2005 2,374,010 $ 113,739 55,515
-----------------------------------------------------------------------
6. Federal Income Taxes
The Internal Revenue Service has determined and informed the Company
by a letter dated July 2, 2003, that the Plan is designed in
accordance with applicable sections of the Internal Revenue Code
(IRC). Although the Plan has been amended since receiving the
determination letter, the Company and the Plan's tax counsel believe
that the Plan is designed and is currently being operated in
compliance with the applicable requirements of the IRC.
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7. Investments
During 2005, the Plan's investments (including investments bought, sold
and held during the year) appreciated in value as follows:
Year Ended December 31,
2005
-----------------------------------------------------------------------
(In thousands)
Net appreciation of investments at fair value as
determined by quoted market prices:
The Brink's Company common stock $ 21,119
Mutual funds 4,936
Common trust funds 1,013
-----------------------------------------------------------------------
$ 27,068
=======================================================================
In 2005 and 2004, participants had the option to invest in the T. Rowe
Price Stable Value Common Trust Fund (the "Stable Value Fund"), which
generally invests in money market funds, short-term investments and
benefit-responsive investment contracts, including synthetic
investment contracts, issued by banks, insurance companies and other
high-quality issuers. The Stable Value Fund seeks to maintain a
constant net asset value and, as a result, allows participants to
withdraw all or a portion of their investment at contract value. The
investment contracts held by the Stable Value Fund are
nontransferable, but provide for these benefit-responsive withdrawals
by Plan participants at the contract value.
The Stable Value Fund is presented in the financial statements at
contract value, as reported to the Plan by the Trustee. If an event
occurs that may impair the ability of the contract issuer to perform
in accordance with the c ontract terms, fair value may be less than
contract value.
The investments in the Stable Value Fund may have fixed rates of
interest for fixed periods of time, or may have rates of interest that
vary during the contract period based on the contract issuer's
investment experience or on another formula applicable under the
contract. The average yield on investments held by the Stable Value
Fund was approximately 4.5% at December 31, 2005 and 2004. Maturities
of the investment contracts held by the Stable Value Fund at December
31, 2005 ranged from 2006 to 2035. Crediting interest rates on
investments held by the Stable Value Fund ranged from 0% to 9% as of
December 31, 2005.
11
Investments at fair value or contract value which represent 5% or more
of the assets available for benefits at December 31 are as follows:
December 31,
2005 2004
----------------------------------------------------------------------
(In thousands)
The Brink's Company common stock:
Matching contributions (see notes 3 and 8) $ 109,395 107,872
Employee contributions (see note 3) 4,344 4,608
----------------------------------------------------------------------
113,739 112,480
T. Rowe Price Stable Value Common Trust Fund 59,673 52,769
T. Rowe Price Personal Strategy Balanced Fund 37,755 30,882
T. Rowe Price Blue Chip Growth Fund 22,934 21,671
T. Rowe Price Equity Index Trust 22,303 21,685
T. Rowe Price New Horizons Fund 22,038 19,392
----------------------------------------------------------------------
8. Nonparticipant-Directed Investments
In September 2002, the Plan was amended to allow participants to
diversify their vested matching contribution investments in The
Brink's Company common stock. As a result, the vested portion of the
matching contribution investment in The Brink's Company common stock
is considered participant-directed; however, since changes in the
components of vested and unvested matching contribution investments
cannot be separately determined, all vested and unvested matching
contribution investments in The Brink's Company common stock are
disclosed as nonparticipant-directed in the financial statements.
Information about the assets available for benefits and changes in
assets available for benefits relating to the nonparticipant-directed
investments is as follows:
December 31,
Nonparticipant-directed Investments 2005 2004
-----------------------------------------------------------------------
(In thousands)
Assets available for benefits:
The Brink's Company common stock:
Vested matching contributions $ 101,590 100,033
Unvested matching contributions 7,805 7,839
-----------------------------------------------------------------------
109,395 107,872
-----------------------------------------------------------------------
Employer contributions receivable to
nonparticipant-directed accounts - 709
-----------------------------------------------------------------------
$ 109,395 108,581
=======================================================================
12
Year Ended December 31,
Nonparticipant-directed investments (continued) 2005
-----------------------------------------------------------------------
(In thousands)
Changes in assets available for benefits:
Contributions to nonparticipant-directed accounts $ 10,278
Dividends 257
Net appreciation 20,311
Distributions to participants or beneficiaries (9,424)
Transfers to participant-directed investments (20,608)
-----------------------------------------------------------------------
$ 814
=======================================================================
9. Reconciliation to Form 5500
Assets available for benefits in the Form 5500 for the Plan reflects a
reduction in assets for deemed distributions of certain participant
loans. The accompanying financial statements do not include the
reduction for deemed distributions as the participants to which deemed
distributions relate continue to retain their assets within the Plan.
The following reconciles assets available for benefits and benefits
paid to participants or beneficiaries from the Form 5500 to the Plan
financial statements:
December 31,
2005 2004
----------------------------------------------------------------------
(In thousands)
Assets available for benefits per the Form 5500 $ 75,077 335,329
Cumulative deemed distributions 114 117
----------------------------------------------------------------------
Assets available for benefits per the
Statements of Assets
Available for Benefits $ 75,191 335,446
======================================================================
Year Ended December 31,
2005
--------------------------------------------------------------------------------------
(In thousands)
Distributions to participants or beneficiaries per the Form 5500 $ 33,604
Change in the amount of deemed distributions 3
Benefits payable to participants at end of year (6)
--------------------------------------------------------------------------------------
Distributions to participants or beneficiaries per the
Statement of Changes in Assets
Available for Benefits $ 33,601
======================================================================================
10. Subsequent Events
Effective January 31, 2006, the Company finalized the sale of BAX
Global, Inc. (BAX), a wholly owned subsidiary of the Company.
Accordingly, contributions to BAX employees' participant accounts
ceased as of December 31, 2005. BAX employees' participant accounts
totaling $125.9 million as of December 31, 2005 were transferred out
of the Plan on March 8, 2006.
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THE BRINK'S COMPANY 401(k) PLAN
Schedule H, Line 4i, Schedule of Assets (Held at End of Year)
December 31, 2005
(In thousands, except share amounts)
Identity of Issuer, Borrower, Description of Investment Including Maturity Date, Cost Current
Lessor or Similar Party Rate of Interest, Collateral, Par or Maturity Value (nonparticipant-directed only) Value
------------------------------------------------------------------------------------------------------------------------------------
*The Brink's Company 2,374,010 shares of The Brink's Company common stock; $1 par value $ 53,732 113,739
ING Investments, LLC 605,650 shares in the ING International Value Fund 10,823
Lord Abbett 227,651 shares in Lord Abbett Mid Cap Value Fund 5,102
*T. Rowe Price 59,673,129 shares in the Stable Value Common Trust Fund 59,673
*T. Rowe Price 647,955 shares in the Spectrum Income Fund 7,639
*T. Rowe Price 483,317 shares in the Equity Income Fund 12,527
*T. Rowe Price 622,801 shares in the Equity Index Trust 22,303
*T. Rowe Price 411,187 shares in the Small Cap Value Fund 15,177
*T. Rowe Price 694,319 shares in the New Horizons Fund 22,038
*T. Rowe Price 336,673 shares in the Personal Strategy Income Fund 5,074
*T. Rowe Price 2,011,453 shares in the Personal Strategy Balanced Fund 37,755
*T. Rowe Price 483,917 shares in the Personal Strategy Growth Fund 11,174
*T. Rowe Price 185,746 shares in the Mid-Cap Growth Fund 10,056
*T. Rowe Price 701,780 shares in the Blue Chip Growth Fund 22,934
*Participant Loans Participant loans at interest
rates ranging from 5% to 10.5%,
maturities not to exceed 4.5 years for
general purpose and
15 years for principal residence 16,815
------------------------------------------------------------------------------------------------------------------------------------
$ 372,829
====================================================================================================================================
The cost of participant-directed investments is not required.
*Indicates a party-in-interest investment.
See accompanying Report of Independent Registered Public Accounting Firm.
14
THE BRINK'S COMPANY 401(k) PLAN
Schedule H, Line 4j, Schedule of Reportable Transactions
For the Year Ended December 31, 2005
(In thousands, except number of purchase and sale amounts)
Description of asset Cost Current value
Identity of (include interest rate and Purchase Selling Lease Expense incurred of of asset on Net gain
party involved maturity in case of a loan) Price Price Rental with Transaction Asset Transaction Date or (loss)
------------------------------------------------------------------------------------------------------------------------------------
*The Brink's Company The Brink's Company
Common Stock 27 Purchases $ 12,471 N/A N/A N/A $ 12,471 $ 12,471 N/A
*The Brink's Company The Brink's Company
Common Stock 226 Sales N/A $ 31,259 N/A N/A $ 17,411 $ 31,259 $13,848
====================================================================================================================================
Transactions under an individual account plan that a participant or beneficiary
directed with respect to assets allocated to his or her account are not treated
for purposes of line 4j as reportable transactions. Transactions listed
represent a series of transactions in a security of the same issue in excess of
5% of the plan market value as of December 31, 2004.
* Indicates a party-in-interest investment.
See accompanying Report of Independent Registered Public Accounting Firm.
15
EXHIBIT INDEX
-------------
Exhibit Number Description
-------------- -----------
23 Consent of Independent Registered Public Accounting Firm
16
SIGNATURE
---------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees (or other persons who administer the employee benefit plan) have duly
caused this annual report to be signed on its behalf by the undersigned hereunto
duly authorized.
The Brink's Company 401(k) Plan
-------------------------------
(Name of Plan)
/s/ Frank T. Lennon
---------------------------------
(Frank T. Lennon
Vice President and Chief
Administrative Officer)
Date: June 29, 2006
17