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, 2003
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
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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, 2003 and 2002
(With Report of Independent Registered Public Accounting Firm)
2
THE BRINK'S COMPANY 401(k) PLAN
Index to Financial Statements and Schedules
December 31, 2003 and 2002
Pages
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Report of Independent Registered Public Accounting Firm 4
Financial Statements
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Statements of Assets Available for Benefits
December 31, 2003 and 2002 5
Statement of Changes in Assets Available for Benefits
Year Ended December 31, 2003 6
Notes to Financial Statements 7-13
Schedules
---------
Schedule H, Line 4i, -
Schedule of Assets (Held at End of Year) -
December 31, 2003 14
Schedule H, Line 4j, -
Schedule of Reportable Transactions
Year Ended December 31, 2003 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
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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, 2003 and 2002, and
the related statement of changes in assets available for benefits for the year
ended December 31, 2003. 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, 2003 and 2002, and the changes in assets available for benefits for
the year ended December 31, 2003, in conformity with accounting principles
generally accepted in the United States of America.
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.
/s/ KPMG LLP
Richmond, Virginia
June 16, 2004
4
THE BRINK'S COMPANY 401(k) PLAN
Statements of Assets Available for Benefits
December 31,
(In thousands) 2003 2002
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Assets
Investments at fair value:
The Brink's Company common stock $ 72,781 56,333
Mutual funds 103,781 73,122
Common trust funds 20,088 15,393
Notes receivable from participants 12,674 13,206
Investments at contract value 50,242 57,262
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Total investments 259,566 215,316
Receivables:
Participant contribution $ 1,154 1,257
Employer contributions 515 699
Interest 43 56
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Total receivables 1,712 2,012
Cash and cash equivalents 74 9
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Assets available for benefits $ 261,352 217,337
===============================================================================
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) 2003
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Income:
Dividends $ 3,757
Interest 740
Net appreciation in fair value of investments:
Participant-directed 26,967
Nonparticipant-directed 13,550
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Net appreciation 40,517
Contributions:
Participant 21,107
Employer 10,747
Rollover 1,310
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Total additions 78,178
Distributions to participants or beneficiaries (34,163)
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Net increase 44,015
Assets available for benefits:
Beginning of year 217,337
------------------------------------------------------------------------------
End of year $ 261,352
==============================================================================
See accompanying notes to financial statements.
6
THE BRINK'S COMPANY 401(k) PLAN
Notes to Financial Statements
December 31, 2003 and 2002
1. Plan Information and Summary of Significant Accounting Policies
In May 2003, The Pittston Company's shareholders approved a proposal to
change its name to "The Brink's Company." The Brink's Company's shares
now trade on the New York Stock Exchange under the symbol "BCO"; shares
previously traded under the symbol "PZB."
Also, in May 2003, The Savings-Investment Plan of The Pittston Company
and its Subsidiaries was amended to change the name of the plan to The
Brink's Company 401(k) Plan (the "Plan").
Description of Plan
-------------------
The Plan is a voluntary defined contribution plan sponsored by The
Brink's Company and participating subsidiaries (the "Company").
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) are
eligible to participate on the first day of the month following thirty
days of full time service. Participants must complete six months of
service before Company matching contributions commence. 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. After each hardship
withdrawal, employee pretax contributions are suspended for
twelve 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;
(d) Any rollover contributions.
7
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 Policy
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 2003 was based on years of service as follows:
Less than 2 years None
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 nonvested 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 $711,000 in 2003.
Employer contributions receivable are net of forfeitures of $71,000 and
$31,000 at December 31, 2003 and 2002, 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.
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 notes receivable 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. Benefits are recorded
when paid.
Use of Estimates
----------------
In accordance with accounting principles generally accepted in the
United States of America, 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.
8
Risks and Uncertainties
-----------------------
The Plan provides for various investment options that may be exposed to
various risks, such as interest rates, credit 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.
2. Participant Notes Receivable
Participants can borrow, in exchange for a promissory note, up to the
lesser of $50,000 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 five years for general
purpose loans and fifteen years for principal residence loans. The
interest rate charged on a participant notes receivable is one
percentage point above the prime rate as published in the Wall Street
Journal. Interest paid by the participant is credited to the
participant's account.
3. Contributions
Employee Contributions
----------------------
In 2003, each participant could designate a contribution of up to the
lesser of 12,000 or 30% of pretax earnings. Amounts contributed are
subject to limitations under IRS non-discrimination tests. 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. 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.
Participant contributions to the Plan may be invested in one of several
investment funds managed by T. Rowe Price Trust Company ("T. Rowe
Price") and two other fund alternatives not managed by T. Rowe Price.
Prior to September 2002, participant contributions could be invested in
The Brink's Company common stock. After September 2002, no future
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.
Employer Contributions
----------------------
Company matching contributions are in the form of The Brink's Company
common stock. Participants may transfer their matching contributions in
The Brink's Company common stock to other investment options when the
matching contributions vest. Effective June 1, 2003, the Plan was
amended with respect to the rates at which the Company matches
participant contributions as follows:
June 1, 2003 January 1, 2003
to to
December 31, 2003 May 31,2003
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Brink's, Incorporated 75% 100%
Brink's Home Security, Inc. 75% 75%
BAX Global Inc. 75% 75%
Air Transport International, LLC 75% 50%
Pittston Coal Company 75% 50%
Pittston Minerals Ventures 75% 50%
Brink's Administrative Services 75% 100%
The Brink's Company 75% 100%
9
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 notes receivable.
The Plan's investments in The Brink's Company common stock at December
31, 2003 and 2002, and purchases and sales during 2003, are as follows:
(in thousands except per share amounts) Shares Fair Value Cost
-------------------------------------------------------------------------------------
Shares held at December 31, 2002 3,048,299 $ 56,333 65,852
Purchases during 2003 810,692 $ 12,893 12,893
Sales during 2003 639,999 $ 10,503 13,574
Shares held at December 31, 2003 3,218,992 $ 72,781 65,171
6. Federal Income Taxes
The Plan obtained its latest determination letter on July 2, 2003, in
which the Internal Revenue Service stated that the Plan, as designed,
was in compliance with Section 401(a) of the Internal Revenue Code
("IRC") and accordingly, the Plan is exempt from income tax under
Section 501(a) of the IRC. The letter states that the Plan complies in
form with the series of tax law changes collectively referred to as
GUST. The Company is not aware of any actions or events which could
jeopardize the tax-exempt status of the Plan.
10
7. Investments
During 2003, the Plan's investments (including investments bought, sold
and held during the year) appreciated in value as follows:
Year Ended December 31,
2003
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(In thousands)
Appreciation of investments at fair value
as determined by quoted market prices:
The Brink's Company common stock $ 14,058
Mutual funds 22,098
Common trust funds 4,361
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$ 40,517
====================================================================
In 2003 and 2002, participants had the option to invest in the T. Rowe
Price Stable Value Common Trust fund (the "Stable Value Fund")
generally investing 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. Generally,
contract value approximates fair value. If an event occurs that may
impair the ability of the contract issuer to perform in accordance with
the contract 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 fund was
approximately 4.7% and 5.6% at December 31, 2003 and 2002,
respectively. Maturities of the investment contracts held by the fund
at December 31, 2003 ranged from 2004 to 2039 (December 31, 2002 ranged
from 2003 to 2039).
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,
2003 2002
--------------------------------------------------------------------------------------------
(In thousands)
The Brink's Company common stock:
Matching contributions (see notes 3 and 8) $ 69,458 52,844
Employee contributions (see note 3) 3,323 3,489
--------------------------------------------------------------------------------------------
72,781 56,333
T. Rowe Price Stable Value Common Trust Fund 50,242 57,262
T. Rowe Price Personal Strategy Balanced Fund 25,481 19,037
T. Rowe Price Equity Index Trust 20,088 15,393
T. Rowe Price Blue Chip Growth Fund 20,355 15,931
T. Rowe Price New Horizons Fund 16,192 *
Notes receivable from participants * 13,206
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* Less than 5% of assets available for plan benefits at the end of the year.
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 nonvested matching contribution investments
cannot be separately determined, all vested and nonvested 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 2003 2002
---------------------------------------------------------------------------------
(In thousands)
Assets available for benefits:
The Brink's Company common stock:
Vested matching contributions $ 63,893 49,414
Nonvested matching contributions 5,565 3,430
---------------------------------------------------------------------------------
69,458 52,844
Employer contributions receivable to
nonparticipant-directed accounts 515 699
---------------------------------------------------------------------------------
$ 69,973 53,543
=================================================================================
12
Year Ended December 31,
Nonparticipant-directed investments (continued) 2003
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(In thousands)
Changes in Assets available for benefits:
Contributions to nonparticipant-directed accounts $ 10,747
Dividends 294
Net appreciation 13,550
Distributions to participants or beneficiaries (4,809)
Transfers to participant-directed investments (3,352)
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$ 16,430
===============================================================================
9. Reconciliation to Form 5500
The Form 5500 for the Plan reflects a reduction in assets for deemed
distributions of certain participant loans in the statements of assets
available for benefits as of December 31, 2003 and 2002, respectively.
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 from the Form 5500 to the Plan financial
statements:
December 31,
2003 2002
-------------------------------------------------------------------------------------------
(In thousands)
Assets available for benefits per the Form 5500 $ 261,231 217,228
Cumulative deemed distributions 121 109
--------------------------------------------------------------------------------------------
Assets available for benefits per the
Statements of Assets
Available for Benefits $ 261,352 217,337
============================================================================================
Year Ended December 31,
2003
-----------------------------------------------------------------------
(In thousands)
Distributions to participants per the Form 5500 $ 34,175
Changes in the amount of deemed distributions (12)
-----------------------------------------------------------------------
Distributions paid to participants per the
Statements of Changes in Assets
Available for Benefits $ 34,163
=======================================================================
13
THE BRINK'S COMPANY 401(k) PLAN
Schedule H, Line 4i, Schedule of Assets (Held at End of Year)
December 31, 2003
(In thousands, except share amounts)
Identity of Cost
Issuer, Borrower, Description of Investment Including Maturity Date, (nonparticipant- Current
Lessor or Similar Party Rate of Interest, Collateral, Par or Maturity Value directed only) Value
----------------------------------------------------------------------------------------------------------------------------
The Brink's Company* 3,218,992 shares of The Brink's Company common stock;
$1 par value $ 62,238 72,781
ING Investments, LLC 365,535 shares in the ING International Value Fund 5,523
Lord Abbett 34,321 shares in Lord Abbett Mid Cap Value Fund 646
T. Rowe Price* 50,241,775 shares in the Stable Value Common Trust Fund 50,242
T. Rowe Price* 373,129 shares in the Spectrum Income Fund 4,392
T. Rowe Price* 341,594 shares in the Equity Income Fund 8,253
T. Rowe Price* 650,720 shares in the Equity Index Trust 20,088
T. Rowe Price* 304,348 shares in the Small Cap Value Fund 8,945
T. Rowe Price* 652,912 shares in the New Horizons Fund 16,192
T. Rowe Price* 248,068 shares in the Personal Strategy Income Fund 3,440
T. Rowe Price* 1,542,423 shares in the Personal Strategy Balanced Fund 25,481
T. Rowe Price* 378,603 shares in the Personal Strategy Growth Fund 7,311
T. Rowe Price* 75,594 shares in the Mid-Cap Growth Fund 3,243
T. Rowe Price* 715,459 shares in the Blue Chip Growth Fund 20,355
Notes receivable Participant notes receivable at interest
from participants* rates ranging from 5.0% to 10.93%,
maturities not to exceed 5 years for
general purpose and 15 years for principal residence 12,674
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$ 259,566
========================================================================================================================
The cost of participant-directed investments is not required.
*Indicates a party-in-interest investment.
See accompanying Report of Independent Registered Public Accounting Firm.
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THE BRINK'S COMPANY 401(k) PLAN
Schedule H, Line 4j, Schedule of Reportable Transactions
For the Year Ended December 31, 2003
(In thousands, except number of purchase and sale amounts)
Description of Current
asset (include Expense value of
interest rate and incurred asset on
Identity of maturity in case Purchase Selling Lease with Cost of Transaction Net gain
party involved of a loan) Price Price Rental Transaction Asset Date or (loss)
-----------------------------------------------------------------------------------------------------------------------------
The Brink's Company The Brink's Company
common stock 30
purchases 10,997 N/A N/A N/A 10,997 10,997 N/A
The Brink's Company The Brink's Company
common stock 222 sales N/A 8,607 N/A N/A 11,389 8,607 (2,782)
=============================================================================================================================
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, 2002. See accompanying Report of
Independent Registered Public Accounting Firm.
15
EXHIBIT INDEX
Exhibit Number Description
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23 Consent of Independent Registered Public Accounting Firm
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-Human Resources and
Administration of The Brink's Company)
Date: June 28, 2004
16