SEC Filing - Brink's Company

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                       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 June 30, 1995

            [ ] 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 1-9148



                              THE PITTSTON 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.) 
                                                

  P.O. Box 120070, 100 First Stamford Place, Stamford, Connecticut 06912-0070 
               (Address of principal executive offices)(Zip Code)

       Registrant's telephone number, including area code: (203) 978-5200 



     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 and (2) has been  subject to such  filing
requirements for the past 90 days.

         Yes  X    No ___ 

     Indicate the number of shares  outstanding of each of the issuer's  classes
of common stock, as of the latest practicable date.  41,577,671 shares of $1 par
value Pittston  Services Group Common Stock and 8,484,708 shares of $1 par value
Pittston Minerals Group Common Stock as of August 1, 1995.



                         Part I - Financial Information
                      The Pittston Company and Subsidiaries
                           CONSOLIDATED BALANCE SHEETS
                    (In thousands, except per share amounts)


                                                                                        June 30,               Dec. 31, 
                                                                                          1995                   1994 
===========================================================================================================================
ASSETS                                                                                (Unaudited) 
                                                                                                               
Current assets: 
Cash and cash equivalents                                                          $     38,921                     42,318 
Short-term investments, at lower of cost or market                                       26,921                     25,162 
Accounts receivable (net of estimated amount uncollectible: 
   1995 - $16,138; 1994 -$15,734)                                                       383,471                    376,792 
Inventories, at lower of cost or market                                                  47,586                     34,153 
Prepaid expenses                                                                         37,156                     27,700 
Deferred income taxes                                                                    52,796                     55,850 
- ---------------------------------------------------------------------------------------------------------------------------
Total current assets                                                                    586,851                    561,975 

Property, plant and equipment, at cost (net of                                    
  depletion and amortization: 1995 - $416,125; 1994 - $394,660)                         462,630                    445,834 
Intangibles, net of amortization                                                        331,416                    329,441 
Deferred pension assets                                                                 121,405                    118,953 
Deferred income taxes                                                                    81,299                     84,214 
Other assets                                                                            176,065                    197,361 
- ---------------------------------------------------------------------------------------------------------------------------
Total assets                                                                         $1,759,666                  1,737,778 
===========================================================================================================================


LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities: 
Short-term borrowings                                                              $     25,430                     13,323 
Current maturities of long-term debt                                                     11,217                     13,748 
Accounts payable                                                                        250,749                    252,615 
Accrued liabilities                                                                     279,640                    294,784 
- ---------------------------------------------------------------------------------------------------------------------------
Total current liabilities                                                               567,036                    574,470 

Long-term debt, less current maturities                                                 162,532                    138,071 
Postretirement benefits other than pensions                                             219,599                    218,738 
Workers' compensation and other claims                                                  130,888                    138,793 
Deferred income taxes                                                                    20,118                     19,036 
Other liabilities                                                                       188,244                    200,855 

Shareholders' equity: 
Preferred stock, par value $10 per share: Authorized: 2,000 shares 
  $31.25 Series C Cumulative Convertible Preferred Stock: 
  Issued:  1995 - 140 shares; 1994 - 153 shares                                           1,399                      1,526 
Pittston Services Group common stock, par value $1 per share: 
  Authorized: 100,000 shares; 
  Issued: 1995 - 41,571 shares; 1994 - 41,595 shares                                     41,571                     41,595 
Pittston Minerals Group common stock, par value $1 per share: 
  Authorized 20,000 shares; 
  Issued: 1995 - 8,484 shares; 1994 - 8,390 shares                                        8,484                      8,390 
Capital in excess of par value                                                          395,686                    420,470 
Retained earnings                                                                       137,650                    107,739 
Equity adjustment from foreign currency translation                                     (18,616)                   (14,276) 
Employee benefits trust, at market value                                                (94,925)                  (117,629) 
- ---------------------------------------------------------------------------------------------------------------------------
Total shareholders' equity                                                              471,249                    447,815 
- ---------------------------------------------------------------------------------------------------------------------------
Total liabilities and shareholders' equity                                           $1,759,666                  1,737,778 
===========================================================================================================================



See accompanying notes to consolidated financial statements. 


                                       2


                      The Pittston Company and Subsidiaries
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                    (In thousands, except per share amounts)
                                   (Unaudited)





                                                        Three Months                    Six Months 
                                                        Ended June 30                  Ended June 30 
- ---------------------------------------------------------------------------------------------------------
                                                     1995           1994            1995           1994 
=========================================================================================================
                                                                                        
Net sales                                      $   184,211        202,149        379,951         378,891 
Operating revenues                                 527,556        457,351      1,030,900         868,404 
- ---------------------------------------------------------------------------------------------------------
Net sales and operating revenues                   711,767        659,500      1,410,851       1,247,295 
- ---------------------------------------------------------------------------------------------------------

Costs and expenses: 
Cost of sales                                      180,860        189,044        374,800         378,825 
Operating expenses                                 441,009        369,935        870,125         716,179 
Selling, general and administrative expenses        65,063         62,906        126,621         118,156 
Restructuring and other charges                          -              -              -          90,806 
- ---------------------------------------------------------------------------------------------------------
Total costs and expenses                           686,932        621,885      1,371,546       1,303,966 
- ---------------------------------------------------------------------------------------------------------

Other operating income                              11,150          5,834         19,282          10,835 
- ---------------------------------------------------------------------------------------------------------

Operating profit (loss)                             35,985         43,449         58,587         (45,836)

Interest income                                        842            552          1,652           1,208 
Interest expense                                    (3,710)        (2,644)        (6,744)         (5,209)
Other income (expense), net                         (1,455)        (1,732)        (2,196)         (4,067)
- ---------------------------------------------------------------------------------------------------------
Income (loss) before income taxes                   31,662         39,625         51,299         (53,904)
Provision (credit) for income taxes                  7,054         11,587         12,626         (18,374)
- ---------------------------------------------------------------------------------------------------------
Net income (loss)                                   24,608         28,038         38,673         (35,530)
Preferred stock dividends, net                      (1,093)        (1,257)        (1,176)         (2,263)
- ---------------------------------------------------------------------------------------------------------
Net income (loss) attributed to common shares  $    23,515         26,781         37,497         (37,793)
=========================================================================================================

Pittston Services Group: 
Net income attributed to common shares         $    19,974         21,288         33,569          31,799 
- ---------------------------------------------------------------------------------------------------------
Net income per common share                    $       .53            .56            .89             .84 
- ---------------------------------------------------------------------------------------------------------
Cash dividend per common share                 $       .05            .05            .10             .10 
- ---------------------------------------------------------------------------------------------------------


Pittston Minerals Group: 
Net income (loss) attributed to common shares  $     3,541          5,493          3,928         (69,592)
- ---------------------------------------------------------------------------------------------------------
Net income (loss) per common share: 
Primary                                        $       .45            .72            .51           (9.20)
Fully diluted                                  $       .45            .67            .51           (9.20)
- ---------------------------------------------------------------------------------------------------------
Cash dividends per common share                $      .1625         .1625          .3250           .3250 
=========================================================================================================





See accompanying notes to consolidated financial statements. 



                                       3


                      The Pittston Company and Subsidiaries
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In thousands)
                                   (Unaudited)




                                                                                                                  Six Months 
                                                                                                                 Ended June 30 
- ---------------------------------------------------------------------------------------------------------------------------------
                                                                                                            1995            1994 
=================================================================================================================================
                                                                                                                       
Cash flows from operating activities: 
Net income (loss)                                                                                      $   38,673       (35,530) 
Adjustments to reconcile net income (loss) to net cash provided by operating activities: 
   Noncash charges and other write-offs                                                                         -        46,793 
   Depreciation, depletion and amortization                                                                51,893        47,191 
   Provision (credit) for deferred income taxes                                                             6,543       (17,389)
   Provision (credit) for pensions, noncurrent                                                             (1,730)          642 
   Provision for uncollectible accounts receivable                                                          1,999         1,766 
   Equity in earnings of unconsolidated affiliates, net of dividends received                                  (8)       (2,248)
   Other operating, net                                                                                    (1,427)        1,171 
   Change in operating assets and liabilities net of effects of acquisitions and dispositions: 
      Increase in accounts receivable                                                                      (8,678)      (38,610)
      Increase in inventories                                                                             (13,432)       (9,095)
      Increase in prepaid expenses                                                                         (9,371)       (2,619)
      (Decrease) increase in accounts payable and accrued liabilities                                     (11,337)       23,963 
      Decrease in other assets                                                                                704         4,632 
      Increase (decrease) in other liabilities                                                            (14,532)       10,661 
      Increase (decrease) in workers' compensation and other claims, noncurrent                            (7,903)       11,608 
      Other, net                                                                                           (1,120)        (314) 
- --------------------------------------------------------------------------------------------------------------------------------
Net cash provided by operating activities                                                                  30,274        42,622 
- --------------------------------------------------------------------------------------------------------------------------------
Cash flows from investing activities: 
Additions to property, plant and equipment                                                                (55,353)      (42,276)
Property, plant and equipment pending lease financing                                                         (50)        2,047 
Proceeds from disposal of property, plant and equipment                                                    10,481         1,562 
Acquisitions, net of cash acquired, and related contingent payments                                        (2,410)     (157,294)
Other, net                                                                                                  1,825         5,575 
- --------------------------------------------------------------------------------------------------------------------------------
Net cash used by investing activities                                                                     (45,507)     (190,386)
- --------------------------------------------------------------------------------------------------------------------------------
Cash flows from financing activities: 
Additions to debt                                                                                          33,940       112,737 
Reductions of debt                                                                                         (7,911)      (33,916)
Repurchase of stock of the Company                                                                         (7,808)       (2,953)
Proceeds from exercise of stock options                                                                     2,490         4,703 
Proceeds from preferred stock issuance, net of cash expenses                                                    -        77,359 
Cost of Services Stock Proposal                                                                                 -            (4)
Dividends paid                                                                                             (8,875)       (8,065)
- --------------------------------------------------------------------------------------------------------------------------------
Net cash provided by financing activities                                                                  11,836       149,861 
- --------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in cash and cash equivalents                                                       (3,397)        2,097 
Cash and cash equivalents at beginning of period                                                           42,318        32,412 
- --------------------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents at end of period                                                             $   38,921        34,509 
================================================================================================================================


See accompanying notes to consolidated financial statements. 



                                       4


                      The Pittston Company and Subsidiaries
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)
              (In thousands, except per share and employee amounts)



(1)       The Pittston Company (the "Company") prepares  consolidated  financial
          statements  in  addition  to  separate  financial  statements  for the
          Pittston  Minerals  Group  (the  "Minerals  Group")  and the  Pittston
          Services Group (the "Services Group").  The Services Group consists of
          the Burlington Air Express Inc. ("Burlington"),  Brink's, Incorporated
          ("Brink's") and Brink's Home Security,  Inc. ("BHS") operations of the
          Company.  The Minerals Group consists of the Coal and Mineral Ventures
          operations of the Company.  The Company's capital  structure  includes
          two issues of common  stock,  Pittston  Minerals  Group  Common  Stock
          ("Minerals Stock") and Pittston Services Group Common Stock ("Services
          Stock"),  which are  designed to provide  shareholders  with  separate
          securities  reflecting  the  performance  of the  Minerals  Group  and
          Services  Group,  respectively,  without  diminishing  the benefits of
          remaining  a single  corporation  or  precluding  future  transactions
          affecting either Group or the Company as a whole.  Holders of Services
          Stock and Minerals  Stock are  shareholders  of the Company,  which is
          responsible for all its liabilities.  Financial developments affecting
          the  Services  Group or the Minerals  Group that affect the  Company's
          financial  condition  could  affect  the  results  of  operations  and
          financial condition of both Groups.

(2)       The average  number of shares  outstanding  used in the  earnings  per
          share computations were as follows:

                                    Second Quarter                Six Months 
                                  1995        1994             1995      1994 
           ---------------------------------------------------------------------
           Services Stock        37,916      37,739          37,912     37,715 
           Minerals Stock: 
             Primary              7,811       7,644           7,764      7,565 
             Fully diluted        9,988      10,148          10,038      9,905 


          The average  number of shares  outstanding  used in the  earnings  per
          share  computations  do not include  the shares of Services  Stock and
          Minerals  Stock held in the Company's  Employee  Benefits  Trust which
          totaled 3,684 (3,793 in 1994) and 659 (739 in 1994), respectively,  at
          June 30, 1995.

(3)       The amounts of  depreciation,  depletion and amortization of property,
          plant and  equipment in the second  quarter and six month periods were
          $19,955 ($17,262 in 1994) and $39,334 ($34,618 in 1994), respectively.

(4)       Cash  payments  made for  interest  and  income  taxes (net of refunds
          received) were as follows:

                              Second Quarter                 Six Months 
                              1995      1994             1995         1994 
          ----------------------------------------------------------------------
          Interest          $ 4,049     2,750           7,082         5,816 
          ======================================================================
          Income taxes      $ 6,647     4,567          16,474        11,514 
          ======================================================================



          On January 14, 1994, a wholly owned indirect subsidiary of the Company
          completed  the  acquisition  of  substantially  all of the coal mining
          operations  and coal sales  contracts  of  Addington  Resources,  Inc.
          ("Addington  Acquisition") for $157,324. The acquisition was accounted
          for as a purchase;  accordingly,  the purchase  price was allocated to
          the  underlying  assets  and  liabilities  based on  their  respective
          estimated  fair values at the date of  acquisition.  The fair value of
          assets acquired was $173,959 and liabilities assumed was $138,518. The
          excess  of the  purchase  price  over  the fair  value  of the  assets
          acquired and liabilities


                                       5


          assumed was  $121,883  and is being  amortized  over a period of forty
          years.  The results of  operations  of the acquired  company have been
          included  in the  Company's  results of  operations  since the date of
          acquisition.

          The  acquisition  was  financed  by the  issuance of $80,500 of $31.25
          Series C Cumulative  Convertible Preferred Stock, which is convertible
          into  Minerals  Stock,  and  additional  debt  under  existing  credit
          facilities.  This financing has been attributed to the Minerals Group.
          In  March  1994,  the  additional  debt  incurred  for  the  Addington
          Acquisition was refinanced with a portion of a five-year term loan.

          During the six  months  ended June 30,  1995 and 1994,  capital  lease
          obligations  of $2,886 and $1,968,  respectively,  were  incurred  for
          leases of property,  plant and equipment. In addition,  during the six
          months  ended  June  30,  1994,  the  Company  assumed  capital  lease
          obligations of $16,210 as part of the Addington Acquisition.

          In June 1995,  the Company sold its rights under  certain coal reserve
          leases and the related equipment for $2,800 in cash and notes totaling
          $2,882.  The cash  proceeds  have been  included  in the  Consolidated
          Statement  of Cash  Flows as "Cash  flow  from  investing  activities:
          Proceeds from disposals of property, plant and equipment".

          In March 1995,  the Company  sold  surplus  coal  reserves for cash of
          $2,878 and a note  receivable  of $2,317.  The cash proceeds have been
          included  in the  Consolidated  Statement  of Cash Flows as "Cash flow
          from investing activities:  Proceeds from disposals of property, plant
          and equipment".

          In December  1993,  the Company sold the majority of the assets of its
          captive  mine supply  company.  Cash  proceeds of $8,400 from the sale
          were  received  on  January  2, 1994,  and have been  included  in the
          Consolidated Statement of Cash Flows under the caption "Cash flow from
          investing activities: Other, net".

(5)       Restructuring  and  other  charges  - After a review  of the  economic
          viability of certain metallurgical coal assets in the first quarter of
          1994, management determined that four underground mines were no longer
          economically  viable and  should be closed  resulting  in  significant
          economic  impairment to three related preparation plants. In addition,
          it was  determined  that one surface  steam coal mine,  the  Heartland
          mine,  which  provided coal to Alabama Power Company under a long-term
          sales  agreement,  would be  closed  due to  rising  costs  caused  by
          unfavorable geological conditions.

          As a result of these  decisions,  the Company incurred a pretax charge
          of $90,806  in the first  quarter  of 1994  ($58,116  after tax) which
          included a reduction in the carrying value of these assets and related
          accruals  for  mine  closure  costs.  These  charges  included  assets
          write-downs  of $46,487 which reduced the book carrying  value of such
          assets to what  management  believes to be their net realizable  value
          based  on  either  estimated  sales or  leasing  of such  property  to
          unrelated third parties. In addition,  the charges included $3,836 for
          required  lease  payments  owed to lessors for machinery and equipment
          that would be idled as a result of the mine and facility closures. The
          charges also  included  $19,290 for mine and plant closure costs which
          represented estimates for reclamation and other environmental costs to
          be incurred to bring the  properties  in  compliance  with federal and
          state mining and environmental  laws. This accrual was required due to
          the premature  closing of the mines. The accrual also included $21,193
          in contractually or statutorily  required employee severance and other
          benefit  costs  associated  with  termination  of  employees  at these
          facilities  and costs  associated  with  inactive  employees  at these
          facilities.   Such  employee  benefits  included  severance  payments,
          medical insurance,  workers'  compensation and other benefits and have
          been   calculated  in  accordance   with   contractually   (collective
          bargaining  agreements signed by certain coal subsidiaries included in
          the  Company)  and  legally  required  employee  severance  and  other
          benefits.

          Of the four underground mines, two have ceased coal production (one in
          the first half of 1995), while the remaining two mines are expected to
          cease coal production during the remainder of 1995. In 1994


                                       6


          the Company  reached  agreement with Alabama Power Company to transfer
          the coal sales  contract  serviced  by the  Heartland  mine to another
          location in West Virginia.  The Heartland mine ceased coal  production
          during  1994  and  final  reclamation  and  environmental  work  is in
          process.  At the  beginning  of 1994,  there  were  approximately  750
          employees  involved  in  operations  at  these  facilities  and  other
          administrative  support.  Employment  at  these  facilities  has  been
          reduced by 78% to approximately 165 employees at June 30, 1995.

(6)       As of January 1, 1992,  BHS elected to capitalize  categories of costs
          not  previously  capitalized  for  home  security  installations.  The
          additional  costs not  previously  capitalized  consisted of costs for
          installation labor and related benefits for supervisory,  installation
          scheduling,  equipment  testing and other support  personnel and costs
          incurred in  maintaining  facilities  and  vehicles  dedicated  to the
          installation   process.  The  effect  of  this  change  in  accounting
          principle was to increase operating profit for the Company and the BHS
          segment  for the  first  six  months  of 1995 and 1994 by  $1,949  and
          $2,149,  respectively  and for the second  quarter of 1995 and 1994 by
          $825 and $1,029, respectively. The effect of this change increased net
          income per common share of the Services Group for the first six months
          of 1995 and 1994 by $.03 and for the  second  quarter of 1995 and 1994
          by $.01 and $.02, respectively.

(7)       On April 15,  1994,  the Company  redeemed  all of the $27,811 of 9.2%
          Convertible  Subordinated Debentures due July 1, 2004, at a premium of
          $767.  The premium and other charges  related to the  redemption  have
          been included in the Consolidated  Statement of Operations for the six
          months ended June 30, 1994, under the caption "Other income (expense),
          net".

(8)       Certain  prior  period  amounts have been  reclassified  to conform to
          current period financial statement presentation.

(9)       All  adjustments   have  been  made  which  are,  in  the  opinion  of
          management,  necessary to a fair presentation of results of operations
          for the periods reported herein.  All such adjustments are of a normal
          recurring nature.



                                       7


                      The Pittston Company and Subsidiaries
          MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
                             AND FINANCIAL CONDITION





                                                                    Three Months                    Six Months 
                                                                    Ended June 30                  Ended June 30 
- -----------------------------------------------------------------------------------------------------------------------
                                                                 1995           1994            1995           1994 
=======================================================================================================================
Revenues:                                                                          (In thousands) 
                                                                                                    
Burlington                                                 $   341,950        302,266        665,894         563,750 
Brink's                                                        154,543        128,183        303,634         251,948 
BHS                                                             31,063         26,902         61,372          52,706 
Coal                                                           179,987        198,380        371,270         371,796 
Mineral Ventures                                                 4,224          3,769          8,681           7,095 
- -----------------------------------------------------------------------------------------------------------------------
Consolidated revenues                                      $   711,767        659,500      1,410,851       1,247,295 
=======================================================================================================================

Operating profit (loss): 
Burlington                                                 $    14,406         20,770         22,464          29,780 
Brink's                                                         10,236         10,216         17,619          16,349 
BHS                                                              9,411          7,897         18,316          15,463 
Coal                                                             5,810          8,395          7,121         (99,444)
Mineral Ventures                                                   576            314          1,491              68 
- -----------------------------------------------------------------------------------------------------------------------
Segment operating profit (loss)                                 40,439         47,592         67,011         (37,784)
General corporate expense                                       (4,454)        (4,143)        (8,424)         (8,052)
- -----------------------------------------------------------------------------------------------------------------------
Consolidated operating profit (loss)                            35,985         43,449         58,587         (45,836)
=======================================================================================================================




RESULTS OF OPERATIONS 
- ----------------------

In the second quarter of 1995, The Pittston Company (the "Company") reported net
income of $24.6 million  compared  with $28.0  million in the second  quarter of
1994. Operating profit totaled $36.0 million in the 1995 second quarter compared
with $43.4  million in the prior year second  quarter.  Net income and operating
profit in the 1994 second  quarter  benefited from  unusually  strong  operating
profits  at  Burlington  Air  Express  Inc.  ("Burlington")  due to  substantial
additional  volumes  of  freight  directed  to  Burlington  during a  nationwide
trucking  strike in the second  quarter of 1994,  which  added an  estimated  $8
million to the quarter's operating profit and $5 million to net income.

In the first six  months of 1995,  the  Company  reported  a net income of $38.7
million  compared  with a net loss of $35.5  million  in the first six months of
1994.  Operating  profit  totaled  $58.6 million in the first six months of 1995
compared to an operating loss of $45.8 million in the prior year period. The net
loss and  operating  loss in the  first  six  months  of 1994  included  charges
totaling  $58.1 million and $90.8  million,  respectively,  attributable  to the
Company's Coal operations for asset writedowns and accruals for costs related to
facility shutdowns. Net income in the first half of 1995 was positively impacted
by improved  results from the Brink's,  Incorporated  ("Brink's"),  Brink's Home
Security,  Inc.  ("BHS") and Pittston  Mineral  Ventures  businesses,  partially
offset by lower results at Burlington.  The 1995 first half was also impacted by
lower  nonoperating  expenses and higher net interest  expense compared with the
same period of last year.


                                       8

BURLINGTON
The  following  is a table  of  selected  financial  data  for  Burlington  on a
comparative basis:



(Dollars in thousands, except                                 Three Months                    Six Months 
per pound/shipment amounts)                                   Ended June 30                  Ended June 30 
- ---------------------------------------------------------------------------------------------------------------
                                                           1995           1994            1995           1994 
===============================================================================================================
                                                                                                
Revenues: 
Airfreight 
   Domestic U.S.                                     $   127,816        148,900         257,855        272,539 
   International                                         160,813        121,583         312,489        232,951 
- ---------------------------------------------------------------------------------------------------------------
Total airfreight                                         288,629        270,483         570,344        505,490 
Other                                                     53,321         31,783          95,550         58,260 
- ---------------------------------------------------------------------------------------------------------------
Total revenues                                           341,950        302,266         665,894        563,750 

Operating expenses                                       299,645        253,417         589,237        482,942 
Selling, general and administrative                       28,744         28,836          55,562         52,501 
- ---------------------------------------------------------------------------------------------------------------
Total costs and expenses                                 328,389        282,253         644,799        535,443 
- ---------------------------------------------------------------------------------------------------------------

Other operating income                                       845            757           1,369          1,473 
- ---------------------------------------------------------------------------------------------------------------
Operating profit                                     $    14,406         20,770          22,464         29,780 
===============================================================================================================

Depreciation and amortization                        $     4,907          4,161           9,702          8,233 
===============================================================================================================

Cash capital expenditures                            $     6,185          5,801          13,500         11,009 
===============================================================================================================

Airfreight shipment growth rate (a)                         6.4%          13.0%            6.2%          10.4% 

Airfreight weight growth rate (a): 
   Domestic U.S.                                          (12.5%)         39.3%           (4.1%)         21.5% 
   International                                           21.7%          20.2%           25.1%          24.5% 
   Worldwide                                                2.3%          30.3%            9.0%          22.9% 

Worldwide airfreight weight (pounds)                     322,978        315,672         644,366        591,257 
===============================================================================================================

Worldwide airfreight shipments                             1,322          1,243           2,538          2,389 
===============================================================================================================

Worldwide average airfreight yield 
   (revenue per pound)                               $     0.894          0.857           0.885          0.855 
===============================================================================================================
Worldwide average airfreight revenue per shipment    $       218            218             225            212 
===============================================================================================================
Worldwide average airfreight weight per 
   shipment (pounds)                                         244            254             254            247 
===============================================================================================================


(a)  Compared to the same period in the prior year. 


Burlington  reported  an  operating  profit of $14.4  million in the 1995 second
quarter,  a $6.4 million  decrease from the $20.8 million reported in the second
quarter  of  1994.  The  second  quarter  of 1994  benefitted  from  significant
additional domestic freight as a result of the nationwide trucking strike, which
added an  estimated  $8 million to the  quarter's  operating  profit.  Worldwide
revenues  rose 13% to $342.0  million in the current  year  quarter  from $302.3
million  in  the  prior  year  second  quarter.  Worldwide  airfreight  revenues
increased  $18.1 million or 7% to $288.6 million in the 1995 second quarter from
$270.5 million in the prior year quarter.  The increase was principally  from an
increase in international weight shipped, which more than offset the decrease in
domestic U.S. weight shipped attributable to the


                                       9


positive  impact of last year's  trucking  strike,  and an increase in worldwide
average  airfreight yields (revenue per pound).  Other revenues,  which includes
customs  clearance and other import related  services,  as well as ocean freight
services,  increased $21.5 million or 68% to $53.3 million in the second quarter
of 1995 from $31.8 million in the prior year quarter, as a result of an increase
in international shipment volume.

Total airfreight weight shipped  worldwide  increased 2% to 323.0 million pounds
in the current year quarter from 315.7 million pounds in the prior year quarter.
Worldwide average  airfreight yields increased by 4% to $.894 in the 1995 second
quarter  from  $.857  in  the  same  period  a year  earlier.  The  increase  in
international volume combined with other factors,  including favorable impact of
foreign  currency  translation,  resulted  in a 32%  increase  in  international
airfreight revenue.

Domestic  airfreight  revenues  decreased  by 14% to $127.8  million in the 1995
second  quarter  from  $148.9  million in the prior  year  second  quarter.  The
decrease was the result of a nearly 13% decrease in domestic  weight shipped and
a modest decrease in average  yields.  The second quarter of 1994 benefited from
significant  additional  domestic  freight  volume  resulting  from a nationwide
trucking strike in the U.S.  Domestic volume,  excluding the favorable impact of
last year's  trucking  strike,  declined  modestly due to the sluggish  domestic
economy.  Burlington continues to adjust its domestic dedicated lift capacity to
match  volume  requirements  and also to take  measures  to reduce its fleet and
station costs.

International airfreight revenues increased by 32% to $160.8 million in the 1995
second  quarter  from  $121.6  million in the prior  year  second  quarter.  The
increase was primarily  due to a 22% increase in weight  shipped and to a lesser
extent  increase  in  international   yields.   Improving  economic   conditions
internationally and aggressive  expansion of company-owned  operations in Europe
and Latin America were largely responsible for the rapid growth. Selective price
increases  on U.S.  exports  were  introduced  during the  quarter to  partially
mitigate  commercial  lift cost  increases.  Burlington  continued to expand its
global freight service network by establishing  company-owned  operations in the
Philippines and expansion of operations in Mexico.

Operating  profit in the first half of 1995 for Burlington was $22.5 million,  a
$7.3 million  decrease from the $29.8 million  operating  profit reported in the
first half of 1994, which benefited from significant additional domestic freight
as a result of the  nationwide  trucking  strike  which  added an  estimated  $8
million to the quarter's operating profit. Worldwide revenues rose 18% to $665.9
million in the current  year period from $563.8  million in the first six months
of 1994. The $102.1 million increase in revenues resulted  principally from a 9%
increase in worldwide airfreight pounds shipped.

Domestic  airfreight  revenues decreased by 5% or $14.7 million to $257.8 in the
first half of 1995 compared to the first half of 1994. The decrease was due to a
4%  decrease  in domestic  volume and a 1%  decrease  in  domestic  yields.  The
decrease in volume was due primarily to the impact of the U.S.  trucking  strike
in the second quarter of 1994 which added substantial additional volume.

International  airfreight  revenues of $312.5 million in the first six months of
1995 were $79.5  million or 34% higher than the $233.0  million  reported in the
prior year first half.  The  increase  was  primarily  due to a 25%  increase in
weight shipped compared to the prior year period.  The increase in volume can be
largely attributed to improved economic conditions in the international  markets
and expansion of company-owned operations.

Other revenue,  which includes import transactions such as customs clearance and
import related  services,  as well as ocean freight  services,  increased 64% or
$37.3  million  to  $95.6  million,  due  to  an  increase  in  an  increase  in
international  shipment  volume  and a  continued  expansion  of  ocean  freight
services.

                                       10

BRINK'S
The following is a table of selected financial data for Brink's on a comparative
basis:


                                                           Three Months                    Six Months 
(In thousands)                                             Ended June 30                  Ended June 30 
- --------------------------------------------------------------------------------------------------------------
                                                        1995           1994            1995           1994 
==============================================================================================================
                                                                                             
Revenues                                          $   154,543        128,183         303,634        251,948 

Operating expenses                                    125,014        101,693         248,224        204,503 
Selling, general and administrative                    19,981         18,046          38,964         34,200 
- --------------------------------------------------------------------------------------------------------------
Total costs and expenses                              144,995        119,739         287,188        238,703 
- --------------------------------------------------------------------------------------------------------------

Other operating income                                    688          1,772           1,173          3,104 
- --------------------------------------------------------------------------------------------------------------
Operating profit                                  $    10,236         10,216          17,619         16,349 
==============================================================================================================

Depreciation and amortization                     $     5,340          5,108          10,496         10,120 
==============================================================================================================

Cash capital expenditures                         $     5,685          3,738          11,476          6,733 
==============================================================================================================

Revenues: 
   North America (United States and Canada)       $    92,551         82,334         180,981        161,819 
   International subsidiaries                          61,992         45,849         122,653         90,129 
- --------------------------------------------------------------------------------------------------------------
Total revenues                                    $   154,543        128,183         303,634        251,948 
==============================================================================================================

Operating profit: 
   North America (United States and Canada)       $     7,010          5,241          12,526          9,445 
   International operations                             3,226          4,975           5,093          6,904 
- --------------------------------------------------------------------------------------------------------------
Total operating profit                            $    10,236         10,216          17,619         16,349 
==============================================================================================================



Brink's  operating  profit of $10.2  million in the  second  quarter of 1995 was
essentially unchanged from the prior year. The revenue increase of $26.4 million
or 21% in the 1995 second quarter was offset by increased operating expenses and
selling,  general and  administrative  expenses of $25.3  million and  decreased
other operating income of $1.1 million.

Revenues from North American  operations  (United  States and Canada)  increased
$10.2  million or 12% to $92.5  million in the 1995  second  quarter  from $82.3
million in the prior year quarter.  North American  operating  profit  increased
$1.8  million  or 34% to $7.0  million in the  current  year  quarter  from $5.2
million in the second quarter of 1994. The profit improvement primarily resulted
from  rising  volumes  and  increased  market  penetration  in the  armored  car
business, which includes ATM servicing.

Revenues from international subsidiaries increased $16.1 million or 35% to $62.0
million  in the 1995  second  quarter  from  $45.8  million  in the 1994  second
quarter.  The increase is primarily due to higher  revenues in Brazil as well as
the favorable impact of foreign currency  translations.  Operating  profits from
international  subsidiaries and minority owned affiliates  declined $1.7 million
to $3.2  million in the current year quarter from $5.0 million in the prior year
second  quarter.  The earnings  decline was  primarily due to lower results from
Brink's share of its Mexican  affiliate  operations,  in which Brink's has a 20%
equity  interest.  Results in Mexico decreased to a loss of $.6 million from the
profit of $1.3  million  recorded  in the second  quarter of 1994.  The  Mexican
operation  continues  to be  adversely  impacted  by  the  local  recession  and
extraordinarily  high interest rates.  Local management has begun implementing a
program  designed to restore  profitability  to what is the largest  armored car
company in Mexico.  Brink's Brazil, a wholly-owned  subsidiary,  was essentially
break-even in the 1995 second quarter compared to a $.7 million operating profit
in the 1994 second quarter  partially as a result of wage  increases  granted in
advance of price increases which were implemented in June and July of 1995.

                                       11

Brink's  operating  profit  increased $1.3 million to $17.6 million in the first
six  months of 1995 from  $16.3  million in the first six months of 1994 with an
increase  in  revenues  of $51.7  million,  partially  offset by an  increase in
operating expenses and selling,  general and administrative expenses of totaling
$48.5 million, and a decrease in other operating income of $1.9 million.

Revenue from North  American  operations  increased 12% to $181.0 million in the
first half of 1995 from $161.8 million in the prior year period.  North American
operating profit increased $3.1 million to $12.5 million from $9.4 million.  The
increase  in  operating  profit was largely  attributable  to  increases  in the
armored car business  which  includes ATM  servicing  and to a lesser  extent to
increases  in  the  diamond  and  jewelry  and  coin  and  currency   processing
businesses, partially offset by lower air courier results.

Revenue from international subsidiaries increased $32.5 million or 36% to $122.7
million,  while operating profit from international  subsidiaries and affiliates
decreased  $1.8  million or 26% to $5.1  million in the first half of 1995.  The
increase in revenue is primarily due to higher revenues in Brazil as well as the
favorable  impact of foreign  currency  translation.  The  decline in  operating
profit was primarily  attributable to operations in Mexico,  partially offset by
an increase reported in Brazil.  Brink's share of its Mexican affiliates results
was a $1.0  million  loss in the first six  months  of 1995  compared  to a $1.7
million profit  reported in the same period of 1994.  Brink's Brazil reported an
operating  profit of $.9  million  in the  first  half of 1995  compared  to $.1
million in the prior year period.

BHS 
The  following is a table of selected  financial  data for BHS on a  comparative
basis:



                                                            Three Months                    Six Months 
(Dollars in thousands)                                      Ended June 30                  Ended June 30 
- ---------------------------------------------------------------------------------------------------------------
                                                         1995           1994            1995           1994 
===============================================================================================================
                                                                                             
Revenues                                           $    31,063         26,902          61,372         52,706 
Operating expenses                                      16,350         14,825          32,664         28,734 
Selling, general and administrative                      5,302          4,180          10,392          8,509 
- ---------------------------------------------------------------------------------------------------------------
Total costs and expenses                                21,652         19,005          43,056         37,243 
- ---------------------------------------------------------------------------------------------------------------
Operating profit                                   $     9,411          7,897          18,316         15,463 
===============================================================================================================

Depreciation and amortization                      $     5,331          4,429          10,420          8,262 
===============================================================================================================

Cash capital expenditures                          $     9,214          8,125          19,141         16,664 
===============================================================================================================

Annualized service revenues (a)                                                    $   95,810         78,856 
===============================================================================================================

Number of subscribers: 
   Beginning of period                                 332,434        275,873         318,029        259,551 
   Installations                                        19,290         18,291          38,362         37,977 
   Disconnects, net                                     (5,184)        (4,546)         (9,851)        (7,910) 
- ---------------------------------------------------------------------------------------------------------------
End of period                                          346,540        289,618         346,540        289,618 
===============================================================================================================


(a) Annualized  service revenue is calculated based on the number of subscribers
at period end multiplied by the average fee per subscriber  received in the last
month of the period for monitoring, maintenance and related services.

Operating  profit of BHS  increased  $1.5  million to $9.4 million in the second
quarter of 1995 from $7.9  million in the second  quarter of 1994.  In the first
half of 1995,  operating  profit  increased  $2.8 million to $18.3  million from
$15.5  million in the first half of 1994.  The increase in operating  profit for
the second  quarter and first half of 1995  compared  to the similar  periods in
1994 reflected higher monitoring revenues due to an average subscriber base that
was approximately 20% higher for the quarter and year to date 1995,  compared to
similar periods in 1994, slightly offset

                                       12

by higher  account  servicing  and  administrative  costs.  Net new  subscribers
totaled  approximately  14,100 and 28,500 in the  second  quarter  and first six
months of 1995,  respectively,  compared with approximately 13,700 and 30,000 in
the second  quarter and first six months of 1994,  respectively.  Subscribers at
June 30, 1995 totaled 346,540.

COAL
The following is a table of selected financial data for the Coal operations on a
comparative basis:



                                                                Three Months                    Six Months 
(In thousands)                                                  Ended June 30                  Ended June 30 
- ------------------------------------------------------------------------------------------------------------------
                                                             1995           1994            1995           1994 
==================================================================================================================
                                                                                                  
Net sales                                              $   179,987        198,380         371,270        371,796 

Cost of sales                                              177,978        186,385         368,945        373,659 
Selling, general and administrative expenses                 5,622          6,742          11,702         12,963 
Restructuring and other charges                                  -              -               -         90,806 
- ------------------------------------------------------------------------------------------------------------------
Total costs and expenses                                   183,600        193,127         380,647        477,428 
- ------------------------------------------------------------------------------------------------------------------
Other operating income                                       9,423          3,142          16,498          6,188 
- ------------------------------------------------------------------------------------------------------------------
Operating profit (loss)                                $     5,810          8,395           7,121        (99,444) 
==================================================================================================================

Coal sales (tons): 
   Metallurgical                                             2,244          2,415           4,633          4,876 
   Utility and industrial                                    4,025          4,779           8,528          8,387 
- ------------------------------------------------------------------------------------------------------------------
Total coal sales                                             6,269          7,194          13,161         13,263 
==================================================================================================================

Production/purchased (tons) 
   Deep                                                        984          1,174           2,041          2,622 
   Surface                                                   3,276          3,931           7,129          7,004 
   Contract                                                    508            643           1,041          1,126 
- ------------------------------------------------------------------------------------------------------------------
                                                             4,768          5,748          10,211         10,752 
Purchased                                                    1,765          1,413           3,502          2,786 
- ------------------------------------------------------------------------------------------------------------------
Total                                                        6,533          7,161          13,713         13,538 
==================================================================================================================



Operations - Coal  operations had an operating  profit  totaling $5.8 million in
the second  quarter of 1995  compared to an operating  profit of $8.4 million in
the second quarter of 1994. Included in the current quarter results are a pretax
gain of $5.3 million from the  disposition  of surplus coal  reserves and a $2.5
million benefit from a favorable  litigation  decision which reduced  previously
expensed employee benefit costs.

Sales  volume of 6.3  million  tons in the second  quarter of 1995 was 13% or .9
million tons less than the 7.2 million tons sold in the 1994 second quarter. The
decrease  reflected  weaker steam coal  markets and the timing of  metallurgical
coal  shipments.  Steam coal sales volume declined 16% or .8 million tons to 4.0
million tons and  metallurgical  coal sales volume  declined by 6% or .1 million
tons to 2.3  million  tons  compared to the second  quarter of 1994.  Steam coal
sales represented 64% of total volume in the second quarter of 1995, compared to
67% in the prior year quarter.

Production  in the second  quarter  of 1995  totaled  4.8  million  tons,  a 17%
decrease  compared to the second  quarter of 1994,  principally  reflecting  the
scheduled  reduction in underground  mine production  during 1994 and early 1995
and the idling of surface steam coal mines  including a surface mine in Kentucky
in the second quarter.  Surface  production  accounted for  approximately 70% of
total  production in the second quarters of 1995 and 1994.  Productivity of 36.1
tons per man day  represented a 3% increase over the comparable  period in 1994.
Domestic  steam coal  markets  continue to be  depressed,  with spot  pricing at
exceptionally low levels.

Coal margin  (realization  less current  production  costs of coal sold) of $9.4
million or $1.50 per ton for the second quarter of 1995, decreased $10.4 million
or $1.26 per ton from the prior year second quarter. This was caused by a 9%

                                       13

or $2.33 per ton increase in average  current  production  costs of coal sold to
$27.13 per ton partially offset by a 4% or $1.07 per ton increase in the average
realization  to $28.63 per ton. Coal  operations  continued to incur higher than
expected  costs at several  mines during the  quarter,  thereby  increasing  the
average cost of coal mined.  The increase in average cost per ton was  primarily
caused by: (i) 17% reduction in company  production;  (ii) higher costs incurred
at mines idled or scheduled to close;  (iii) increased costs for purchased coal;
and (iv) temporarily less favorable mining and geological  conditions  occurring
at several  surface mines.  Several  remediation  efforts have been  undertaken,
including  the  closure  during  the  current  quarter  of one  surface  mine in
Virginia.

Excluding  the positive  impact from both the sale of surplus coal  reserves and
the favorable employee benefits litigation decision, Coal operations incurred an
operating  loss of $2.0  million in the second  quarter of 1995.  As part of its
strategy to achieve  positive  operating  profit on a sustainable  basis for the
long-term, the following steps are being implemented: (i) reduction of overhead;
(ii) evaluation of non-strategic assets for sale; (iii) improvement of margin at
continuing  operations;  (iv) review of unprofitable mines for possible closure;
and (v)  review  of new mine  openings  to take  advantage  of  specific  market
opportunities.

Coal operations had an operating  profit of $7.1 million in the first six months
of 1995 compared to an operating loss of $99.4 million in the prior year period.
The 1994 first six months  operating  loss included $90.8 million of charges for
asset  writedowns  and accruals for costs related to facilities  which are being
closed  (discussed  further below) and $6.7 million of operating losses incurred
during the first half related to those facilities.

Sales volume of 13.2 million tons in the first half of 1995, was .1 million tons
less than the 13.3 million tons sold in the first half of 1994. Steam coal sales
increased by .1 million tons to 8.5 million  tons and  metallurgical  coal sales
declined  by .2 million  tons to 4.6  million  tons  compared to the prior year.
Steam  coal  sales  represented  65% of total  volume in the first half of 1995,
compared to 63% in the prior year.

Production  in the first half of 1995 totaled  10.2 million  tons, a 5% decrease
compared  to the  first  half of  1994,  principally  reflecting  the  scheduled
reduction  in  underground  mine  production  during 1994 and early 1995 and the
idling of surface steam coal mines. Surface production accounted for 71% and 66%
of  total  production  in  the  first  half  of  1995  and  1994,  respectively.
Productivity  of 36  tons  per  man  day  represented  a 9%  increase  over  the
comparable period in 1994.

Coal  operations  reached  contract  agreements  with most of its  metallurgical
customers for the coal year that began April 1, 1995 calling for price increases
of  approximately  $4.00 to $5.50 per metric ton,  depending  upon coal quality.
These price  increases had the effect of realigning  pricing to levels in effect
prior to last  year's  unusually  large  decline.  Sales  volume is  expected to
decline  modestly from the level in the prior contract year. The price increases
were in effect  during a portion of the 1995  second  quarter as a result of the
timing of  metallurgical  coal shipments and were partially offset by the higher
costs of purchased coal as well as increased transportation costs.
  
Restructuring  and  Other  charges  - As a result  of the  continuing  long-term
decline  of the  metallurgical  coal  markets,  in the  first  quarter  of 1994,
management  determined that four underground  mines were no longer  economically
viable and should be closed,  resulting in  significant  economic  impairment to
three  related  preparation  plants.  In addition,  it was  determined  that one
surface steam coal mine,  the  Heartland  mine,  which  provided coal to Alabama
Power under a long-term  sales  agreement,  would be closed due to rising  costs
caused by unfavorable geological conditions.

As a result of these decisions,  the Coal operations  incurred pretax charges of
$90.8  million  ($58.1  million  after  tax) in the first  quarter of 1994 which
included a reduction in the carrying value of these assets and related  accruals
for mine closure costs. These charges included asset writedowns of $46.5 million
which reduced the book carrying value of such assets to what management believes
to be their net realizable  value based on either  estimated sales or leasing of
such property to unrelated third parties. In addition, the charges included $3.8
million for required  lease payments owed to lessors for machinery and equipment
that would be idled as a result of the mine and facility  closures.  The charges
also included  $19.3 million for mine and plant closure costs which  represented
estimates of reclamation and other  environmental  costs to be incurred to bring
the  properties  in compliance  with federal and state mining and  environmental
laws. This accrual was required due to the premature  closing of the mines.  The
accrual also included $21.2 million of  contractually  or  statutorily  required
employee severance and other benefit costs associated with

                                       14

termination of employees at these  facilities and costs associated with inactive
employees  at  these  facilities.   Such  employee  benefits  include  severance
payments,  medical insurance,  workers' compensation and other benefits and have
been  calculated  in  accordance  with  contractually   (collective   bargaining
agreements signed by certain coal subsidiaries  included in the Coal operations)
and legally required employee severance and other benefits.

Of the four underground mines, two have ceased coal production (one in the first
half of  1995),  while  the  remaining  two mines  are  expected  to cease  coal
production  during the  remainder  of 1995.  In 1994,  Coal  operations  reached
agreement  with  Alabama  Power  Company to  transfer  the coal  sales  contract
serviced  by the  Heartland  mine to  another  location  in West  Virginia.  The
Heartland mine ceased coal  production  during 1994, and final  reclamation  and
environmental  work  is  in  process.  At  the  beginning  of  1994  there  were
approximately 750 employees involved in operations at these facilities and other
administrative  support.  Employment at these facilities has been reduced by 78%
to approximately 165 employees at June 30, 1995.

After coal  production  ceases at the mines  contemplated  in the  accrual,  the
Company will continue to pay  reclamation  and  environmental  costs for several
years  to  bring  these  properties  into  compliance  with  federal  and  state
environmental laws. In addition,  employee termination and medical payments will
continue to be made for several years after the facilities have been closed. The
significant  portion of these employee  liabilities is for statutorily  provided
workers'  compensation  costs for  inactive  employees.  Such  benefits  include
indemnity and medical  payments as required  under state  workers'  compensation
laws.  The long  payment  periods  are based on  continued,  and in some  cases,
lifetime  indemnity and medical  payments to injured former  employees and their
surviving spouses.  Management believes that the charges incurred in 1994 should
be  sufficient  to provide for these  future  payments  and does not  anticipate
material  additional future charges to operating  earnings for these facilities,
although continual cash funding will be required over the next several years.

The following table analyzes the changes in liabilities during 1994 and 1995 for
facility closure costs recorded as restructuring and other charges:


                                                                          Employee 
                                                            Mine      Termination, 
                                           Leased            and           Medical 
                                        Machinery          Plant               and 
                                              and        Closure         Severance 
                                        Equipment          Costs             Costs      Total 
- ----------------------------------------------------------------------------------------------
                                                                               
Balance as of December 31, 1993 (a)      $  3,092        28,434             34,217     65,743 
Additions                                   3,836        19,290             21,193     44,319 
Payments (b)                                3,141         9,468             12,038     24,647 
- ----------------------------------------------------------------------------------------------
Balance as of December 31, 1994             3,787        38,256             43,372     85,415 
Payments (c)                                1,018         6,294              4,198     11,510 
- ----------------------------------------------------------------------------------------------
Balance as of June 30, 1995              $  2,769        31,962             39,174     73,905 
- ----------------------------------------------------------------------------------------------


(a) These amounts represent the remaining liabilities for facility closure costs
recorded as restructuring and other charges in prior years. The original charges
included  $5,094 for leased  machinery and equipment,  $52,243  principally  for
incremental  facility  closing  costs  including  reclamation  and  $54,108  for
employee benefit costs, primarily workers' compensation,  which will continue to
be paid for several years.

(b) These  amounts  represent  total cash  payments  made  during 1994 for these
charges.  Of the total payments made,  $14,494 was for  liabilities  recorded in
years prior to 1994 and $10,153 was for liabilities recorded in 1994.

(c) Payments  made in the first six months of 1995  included  $6,401  related to
pre-1994 liabilities and $5,109 for liabilities recorded in the first quarter of
1994.

During  the next  twelve  months,  expected  cash  funding  of these  charges is
approximately  $15 to $20  million.  Management  estimates  that  the  remaining
liability for leased  machinery  and equipment  will be fully paid over the next
two years.  The  liability  for mine and plant  closure  costs is expected to be
satisfied over the next ten years of which  approximately  70% is expected to be
paid over the first three years. The liability for employee related costs, which
is

                                       15


primarily  workers'  compensation,  is estimated to be 70% settled over the next
five years with the balance paid during the following five to ten years.

MINERAL VENTURES
The  following is a table of selected  financial  data for the Mineral  Ventures
operations on a comparative basis:




(Dollars in thousands,                                              Three Months                    Six Months 
except per ounce data)                                              Ended June 30                  Ended June 30 
- ---------------------------------------------------------------------------------------------------------------------
                                                                 1995           1994            1995           1994 
=====================================================================================================================
                                                                                                     
Net sales                                                    $   4,224          3,769           8,681          7,095 

Cost of sales                                                    2,882          2,659           5,855          5,166 
Selling, general and administrative costs                          960            959           1,577          1,931 
- ---------------------------------------------------------------------------------------------------------------------
Total costs and expenses                                         3,842          3,618           7,432          7,097 

Other operating income (expense)                                   194            163             242             70 
- ---------------------------------------------------------------------------------------------------------------------
Operating profit (loss)                                      $     576            314           1,491             68 
=====================================================================================================================

Stawell Gold Mine: 
PMV's 50% direct share ounces sold                              10,646          9,120          21,492         17,820 
Average realized gold price per ounce (US$)                  $     394            401             397            396 


Operating  profit of Mineral  Ventures  operations  increased $.3 million in the
1995 second  quarter to $.6 million,  from $.3 million in the second  quarter of
1994.  The Stawell gold mine in western  Victoria,  Australia,  in which Mineral
Ventures has a 67% net equity  interest,  produced  21,379 ounces in the current
quarter at an average  cost of $293 per ounce  compared to 18,879  ounces in the
second quarter of 1994 at an average cost of $282.

In the first six months of 1995,  operating profit of Mineral Ventures increased
$1.4  million to $1.5  million from $.1 million in the first six months of 1994.
The  increase  in  operating  profit  was  primarily  the  result  of  increased
production at the Stawell Gold Mine.  An operator  accident that occurred in the
1994 first quarter  hindered  production in 1994 and also  contributed to higher
operating costs for the period.  The Stawell gold mine produced 42,576 ounces in
the first six  months of 1995  compared  with  35,734  ounces in the  comparable
period of 1994.  Mineral Ventures is continuing  exploration  projects in Nevada
and Australia with its joint venture partner.

Successful  exploration  efforts  indicate an increase of  approximately  68,000
ounces of  additional  proven and probable gold reserves at the Stawell mine. At
June 30, 1995,  remaining  proven and probable  gold  reserves are  estimated at
480,000 ounces.

FOREIGN OPERATIONS 
A portion of the  Company's  financial  results is derived  from  activities  in
several  foreign  countries,  each  with a local  currency  other  than the U.S.
dollar. Since the financial results of the Company are reported in U.S. dollars,
they are affected by the changes in the value of the various foreign  currencies
in relation to the U.S.  dollar.  The  Company's  international  activity is not
concentrated  in any single  currency,  which  limits the risks of foreign  rate
fluctuations.  In addition,  foreign  currency rate  fluctuations  may adversely
affect   transactions  which  are  denominated  in  currencies  other  than  the
functional currency.  The Company routinely enters into such transactions in the
normal course of its business.  Although the diversity of its foreign operations
limits the risks  associated  with such  transactions,  the Company uses foreign
exchange   forward   contracts  to  hedge  the  risks  associated  with  certain
transactions  denominated  in  currencies  other than the  functional  currency.
Realized and  unrealized  gains and losses on these  contracts  are deferred and
recognized as part of the specific  transaction hedged. In addition,  cumulative
translation   adjustments  relating  to  operations  in  countries  with  highly
inflationary  economies are included in net income,  along with all  transaction
gains or losses for the period.  Subsidiaries in Brazil operate in such a highly
inflationary economy.



                                       16


Additionally,  the Company is subject to other risks customarily associated with
doing business in foreign countries, including economic conditions,  controls on
repatriation of earnings and capital,  nationalization,  expropriation and other
forms of restrictive action by local governments. The future effects, if any, of
such risks on the Company cannot be predicted.

OTHER OPERATING INCOME
Other operating income  primarily  includes the Company's share of net income of
unconsolidated  affiliates,  which  are  substantially  attributable  to  equity
affiliates  of Brink's,  royalty  income and gains and losses from sales of coal
assets.  The $5.4  million  increase  in other  operating  income in the  second
quarter of 1995 compared to the second quarter of 1994 is primarily attributable
to the $5.3 million gain on the sale of surplus coal reserves.  Other  operating
income for the first half of 1995  increased  $8.5 million to $19.3 million from
$10.8 million in the prior year. The $2.5 million decrease in equity in earnings
of  unconsolidated  affiliates  was more than offset by gains of $8.3 million on
the dispositions of surplus coal reserves.

CORPORATE EXPENSES
General  corporate  expenses  increased $.4 million to $4.5 million for the 1995
second  quarter from $4.1 million in the 1994 second  quarter.  In the first six
months of 1995,  general corporate  expenses were $8.4 million compared with the
$8.1 million in the prior year period.

INTEREST EXPENSE
Interest expense increased $1.1 million to $3.7 million in the second quarter of
1995 from $2.6 million in the prior year quarter.  Interest expense totaled $6.7
million in the first six months of 1995  compared with $5.2 million in the first
half of 1994.  The increase in the 1995 quarter and six month  periods is due to
higher interest rates on higher average debt balances.

OTHER INCOME (EXPENSE), NET
Other net expense for the first six months of 1995  decreased  $1.9 million to a
net expense of $2.2 million from a net expense of $4.1  million.  The 1994 first
half included expenses of $1.2 million recognized on the Company's redemption of
its 9.2% Convertible Subordinated Debentures.


FINANCIAL CONDITION 
- --------------------

CASH PROVIDED BY OPERATIONS
Cash  provided  by  operating  activities  during  the first six  months of 1995
totaled  $30.3  million  compared  with $42.6 million in the first six months of
1994.  The  decrease  in cash  provided  occurred,  despite  higher net  income,
partially as a result of additional investment in working capital at Burlington.
Such requirements  primarily reflected initial working capital needs of recently
acquired foreign subsidiaries,  a relatively larger seasonal volume increase and
increased international revenues,  which tend to have longer payment terms. Cash
provided by operating  activities in the first six months of 1994 was negatively
impacted by the integration of operating  activities of Addington which required
cash to finance  working  capital.  Net income,  noncash  charges and changes in
operating  assets and  liabilities  in the 1994  first  half were  significantly
affected by after-tax restructuring and other charges of $58.1 million which had
minimal effect in the first half on cash generated by operations.

CAPITAL EXPENDITURES
Cash  capital  expenditures  for the first  six  months  of 1995  totaled  $55.4
million.  Of that amount,  $13.5 million was spent by Burlington,  $11.5 million
was spent by Brink's,  $19.1 million was spent by BHS, $9.7 million was spent by
Coal and $1.1 million was spent by Mineral  Ventures.  Expenditures  incurred by
BHS in the  first  half of  1995  were  primarily  for  customer  installations,
representing  the  expansion  in the  subscriber  base.  For the full year 1995,
capital  expenditures are estimated to approximate  $150 million.  The foregoing
amounts  exclude  equipment  expenditures  that have been or are  expected to be
financed through capital and operating leases, and any acquisition expenditures.
Increased  expenditures  in 1995 are  expected  at  Burlington  to  support  new
airfreight  stations and  implementation of positive tracking systems and at BHS
resulting from continued expansion of the subscriber base.



                                       17



OTHER INVESTING ACTIVITIES
All other investing activities in the first six months of 1995 provided net cash
of $9.8 million which  primarily  relates to proceeds from disposal of property,
plant and  equipment.  In January  1994,  the Company  paid  approximately  $157
million  in cash  for the  acquisition  of  substantially  all the  coal  mining
operations  and coal sales  contracts of  Addington.  The purchase  price of the
acquisition  was financed  through the issuance of $80.5 million of a new series
of convertible  preferred  stock,  which is convertible  into Pittston  Minerals
Group Common Stock, and additional debt under revolving credit agreements.

FINANCING
The Company  intends to fund its  capital  expenditure  requirements  during the
remainder  of  1995  primarily  with   anticipated  cash  flows  from  operating
activities  and  through   operating   leases  if  the  latter  are  financially
attractive. Shortfalls, if any, will be financed through the Company's revolving
credit agreements,  other borrowing arrangements or borrowings from the Minerals
Group.  The  Company  has a  $350  million  revolving  credit  agreement  with a
syndicate of banks (the  "Facility").  The Facility includes a $100 million term
loan,  which  matures  in  May  2000.  The  Facility  also  permits   additional
borrowings,  repayments,  and reborrowings of up to an aggregate of $250 million
until May 2000. As of June 30, 1995, borrowings of $100 million were outstanding
under the term loan  portion of the  Facility  and $28.6  million of  additional
borrowings was outstanding under the remainder of the facility.  The Company, on
behalf of the Minerals Group,  maintains agreements with financial  institutions
whereby it has the right to sell certain coal receivables with recourse to those
institutions.  In June 1995, coal receivables of approximately  $10 million were
sold under these agreements.

DEBT
Outstanding  debt,  including  borrowings  under  revolving  credit  agreements,
aggregated  $199.2  million at June 30, 1995, up from $165.1 million at year-end
1994. Cash proceeds from operating  activities,  other investing  activities and
the proceeds  from the exercise of stock  options  were not  sufficient  to fund
capital expenditures,  the repurchase of stock and dividends payments, resulting
in additional borrowings under the Company's revolving credit agreements.

On April 15,  1994,  the  Company  redeemed  all  outstanding  9.2%  Convertible
Subordinated  Debentures due July 1, 2004. The principal amount  outstanding was
$27.8  million and the premium paid to call the debt  totaled $.8  million.  The
Company used cash provided under its revolving  credit  agreements to redeem the
debentures.  The  premium  paid in  addition  to other  charges  related  to the
redemption  are included in the Company's  Consolidated  Statement of Operations
for the six months ended June 30, 1994.

CAPITALIZATION
In January  1994,  the Company  issued $80.5 million  (161,000  shares) of a new
series of cumulative  preferred  stock,  convertible  into Minerals  Stock.  The
cumulative  convertible  preferred stock,  which is attributable to the Minerals
Group, pays an annual cumulative dividend of $31.25 per share payable quarterly,
in cash, in arrears, out of all funds of the Company legally available therefor,
when, as and if declared by the Board of Directors (the "Board") of the Company,
which  commenced  March 1, 1994, and bears a liquidation  preference of $500 per
share, plus an amount equal to accrued and unpaid dividends thereon.

In July 1994,  the Board of Directors of the Company  authorized  the repurchase
from  time  to  time  of up to $15  million  of the  new  series  of  cumulative
convertible  preferred stock. As of June 30, 1995, 21,020 shares at a total cost
of $8.4  million  were  repurchased  of which  12,670  shares  at a cost of $5.0
million were repurchased in the first half of 1995.

The Company is also authorized to repurchase up to 1,250,000  shares of Pittston
Services  Group Common Stock  ("Services  Stock") and 250,000 shares of Pittston
Minerals Group Common Stock ("Minerals Stock"), not to exceed $43 million. As of
June 30, 1995 a total of 376,100  ($9.0  million)  of Services  Stock and 38,500
shares  ($.8  million)  of  Minerals  Stock have been  acquired  pursuant to the
authorization.  During the six  months  ended June 30,  1995  120,000  shares of
Services Stock were  repurchased  at a total cost of $2.8 million.  No shares of
Minerals Stock were repurchased in the first six months of 1995.




                                       18


DIVIDENDS
The Board  intends to declare and pay  dividends on Services  Stock and Minerals
Stock  based  on  earnings,   financial   condition,   cash  flow  and  business
requirements of the Services Group and Minerals Group,  respectively.  Since the
Company remains subject to Virginia law limitations on dividends and to dividend
restrictions  in  its  public  debt  and  bank  credit   agreements,   financial
developments of one Group could affect the Company's ability to pay dividends in
respect of stock  relating to the other Group.  Dividends on Minerals  Stock are
also limited by the Available Minerals Dividend Amount, which is adjusted by net
income or losses and other  equity  transactions,  as  defined in the  Company's
Articles of  Incorporation.  At June 30, 1995 the  Available  Minerals  Dividend
Amount was at least $20.8 million.

During the 1995 and 1994 six month  periods,  the Board  declared  and paid cash
dividends  of 10 cents per share of  Services  Stock and 32.5 cents per share of
Minerals Stock.  Dividends paid on the cumulative convertible preferred stock in
the first six months of 1995 were $2.3 million.  Preferred dividends included on
the Company's  Statement of  Operations  for the six months ended June 30, 1995,
are net of $1.0  million  which  was the  excess of the  carrying  amount of the
preferred stock over the cash paid to holders of the preferred stock.


                                       19


                             Pittston Services Group
                                 BALANCE SHEETS
                                 (In thousands)





                                                                                         June 30,                Dec. 31, 
                                                                                           1995                    1994 
===========================================================================================================================
ASSETS                                                                                  (Unaudited) 
                                                                                                                
Current assets: 
Cash and cash equivalents                                                            $    34,065                  38,610 
Short-term investments, at lower of cost or market                                         2,346                   2,041 
Accounts receivable (net of estimated amount uncollectible: 
   1995 - $14,244; 1994 - $13,854)                                                       294,533                 267,869 
Receivable - Pittston Minerals Group                                                      21,324                  32,170 
Inventories, at lower of cost or market                                                    4,243                   4,006 
Prepaid expenses                                                                          27,209                  16,311 
Deferred income taxes                                                                     22,929                  25,325 
- ---------------------------------------------------------------------------------------------------------------------------
Total current assets                                                                     406,649                 386,332 

Property, plant and equipment, at cost (net of accumulated depreciation 
    and amortization: 1995 - $251,947; 1994 - $234,722)                                  254,518                 225,372 
Intangibles, net of amortization                                                         212,316                 208,792 
Deferred pension assets                                                                   43,787                  43,150 
Deferred income taxes                                                                      1,699                   1,323 
Other assets                                                                              60,778                  75,707 
- ---------------------------------------------------------------------------------------------------------------------------
Total assets                                                                         $   979,747                 940,676 
===========================================================================================================================




LIABILITIES AND SHAREHOLDER'S EQUITY 
Current liabilities: 
Short-term borrowings                                                                $    25,430                  13,323 
Current maturities of long-term debt                                                       6,541                   6,194 
Accounts payable                                                                         185,275                 175,844 
Accrued liabilities                                                                      125,220                 137,555 
- ---------------------------------------------------------------------------------------------------------------------------
Total current liabilities                                                                342,466                 332,916 

Long-term debt, less current maturities                                                   56,660                  49,896 
Postretirement benefits other than pensions                                                5,919                   5,761 
Workers' compensation and other claims                                                    10,512                   9,929 
Deferred income taxes                                                                     31,240                  34,090 
Payable - Pittston Minerals Group                                                         18,223                  23,186 
Other liabilities                                                                         30,777                  28,487 
Shareholder's equity                                                                     483,950                 456,411 
- ---------------------------------------------------------------------------------------------------------------------------
Total liabilities and shareholder's equity                                           $   979,747                 940,676 
===========================================================================================================================




See accompanying notes to financial statements. 


                                       20



    
                             Pittston Services Group
                            STATEMENTS OF OPERATIONS
                    (In thousands, except per share amounts)
                                   (Unaudited)





                                                                    Three Months                    Six Months 
                                                                    Ended June 30                  Ended June 30 
- ----------------------------------------------------------------------------------------------------------------------
                                                                 1995           1994            1995           1994 
======================================================================================================================

                                                                                                       
Operating revenues                                         $   527,556        457,351        1,030,900        868,404 

Operating expenses                                             441,009        369,935          870,125        716,179 
Selling, general and administrative expenses                    56,557         53,558          109,701         99,921 
- ----------------------------------------------------------------------------------------------------------------------
Total costs and expenses                                       497,566        423,493          979,826        816,100 
- ----------------------------------------------------------------------------------------------------------------------

Other operating income                                           1,533          2,529            2,542          4,577 
- ----------------------------------------------------------------------------------------------------------------------
Operating profit                                                31,523         36,387           53,616         56,881 

Interest income                                                  1,456            590            2,973          1,212 
Interest expense                                                (1,674)        (1,406)          (3,174)        (3,175) 
Other income (expense), net                                     (1,236)        (1,514)          (1,766)        (3,630) 
- ----------------------------------------------------------------------------------------------------------------------
Income before income taxes                                      30,069         34,057           51,649         51,288 
Provision for income taxes                                      10,095         12,769           18,080         19,489 
- ----------------------------------------------------------------------------------------------------------------------
Net income                                                 $    19,974         21,288           33,569         31,799 
======================================================================================================================

Per common share: 
Net income                                                 $       .53            .56              .89            .84 
======================================================================================================================
Cash dividends                                             $       .05            .05              .10            .10 
======================================================================================================================
Average shares outstanding                                      37,916         37,739           37,912         37,715 
======================================================================================================================




See accompanying notes to financial statements. 



                                       21


                             Pittston Services Group
                            STATEMENTS OF CASH FLOWS
                                 (In thousands)
                                   (Unaudited)




                                                                                                                Six Months Ended 
                                                                                                                     June 30 
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                                             1995             1994 
====================================================================================================================================
                                                                                                                          
Cash flows from operating activities: 
Net income                                                                                              $   33,569           31,799 
Adjustments to reconcile net income to net cash provided by operating activities: 
   Noncash charges and other write-offs                                                                          -              306 
   Depreciation and amortization                                                                            30,723           26,717 
   Provision (credit) for deferred income taxes                                                             (1,042)           1,539 
   Provision for pensions, noncurrent                                                                           23            1,467 
   Provision for uncollectible accounts receivable                                                           1,899            1,634 
   Equity in earnings of unconsolidated affiliates, net of dividends received                                  234           (2,178)
   Other operating, net                                                                                      1,323            1,314 
   Change in operating assets and liabilities: 
      Increase in accounts receivable                                                                      (28,563)         (22,031)
      Increase in inventories                                                                                 (237)            (876)
      Increase in prepaid expenses                                                                         (10,813)          (1,532)
      (Decrease) increase in accounts payable and accrued liabilities                                       (1,035)          29,202 
      Decrease (increase) in other assets                                                                     (277)           3,773 
      Decrease (increase) in other liabilities                                                                1,105            (816)
      Other, net                                                                                              (536)            (157)
- ------------------------------------------------------------------------------------------------------------------------------------
Net cash provided by operating activities                                                                   26,373           70,161 
- ------------------------------------------------------------------------------------------------------------------------------------
Cash flows from investing activities: 
Additions to property, plant and equipment                                                                 (44,331)         (34,509)
Property, plant and equipment pending lease financing                                                          (50)           2,047 
Proceeds from disposal of property, plant and equipment                                                      1,531            1,267 
Acquisitions, net of cash acquired, and related contingent payments                                         (1,688)             (63)
Other, net                                                                                                   2,066           (2,287)
- ------------------------------------------------------------------------------------------------------------------------------------
Net cash used by investing activities                                                                      (42,472)         (33,545)
- ------------------------------------------------------------------------------------------------------------------------------------
Cash flows from financing activities: 
Additions to debt                                                                                           14,740           26,171 
Reductions of debt                                                                                          (3,571)         (33,666)
Payments (to) from - Minerals Group                                                                          5,846          (28,777)
Repurchase of stock of the Company                                                                          (2,786)          (2,552)
Proceeds from exercise of stock options                                                                      1,288            3,756 
Proceeds from sale of stock to Minerals Group                                                                    -              322 
Dividends paid                                                                                              (3,963)          (3,768)
Cost of Services Stock Proposal                                                                                  -               (2)
- ------------------------------------------------------------------------------------------------------------------------------------
Net cash provided (used) by financing activities                                                            11,554          (38,516)
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in cash and cash equivalents                                                        (4,545)          (1,900)
Cash and cash equivalents at beginning of period                                                            38,610           30,271 
- ------------------------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents at end of period                                                              $   34,065           28,371 
====================================================================================================================================




See accompanying notes to financial statements. 


                                       22


                             Pittston Services Group
                          NOTES TO FINANCIAL STATEMENTS
                                   (Unaudited)
                    (In thousands, except per share amounts)

(1)       The financial statements of the Pittston Services Group (the "Services
          Group")  include the balance  sheets,  results of operations  and cash
          flows of the  Burlington  Air Express  Inc.  ("Burlington"),  Brink's,
          Incorporated  ("Brink's")  and Brink's  Home  Security,  Inc.  ("BHS")
          operations of The Pittston Company (the  "Company"),  and a portion of
          the   Company's   corporate   assets  and   liabilities   and  related
          transactions which are not separately  identified with operations of a
          specific  segment.  The  Services  Group's  financial  statements  are
          prepared  using the  amounts  included in the  Company's  consolidated
          financial   statements.   Corporate  allocations  reflected  in  these
          financial   statements  are   determined   based  upon  methods  which
          management  believes to be a reasonable  and  equitable  allocation of
          such expenses and credits.

          The Company provides  holders of Pittston  Services Group Common Stock
          ("Services Stock") separate financial  statements,  financial reviews,
          descriptions  of  business  and  other  relevant  information  for the
          Services Group in addition to  consolidated  financial  information of
          the  Company.  Holders  of  Services  Stock  are  shareholders  of the
          Company,  which is  responsible  for all its  liabilities.  Therefore,
          financial  developments  affecting  the Pittston  Minerals  Group (the
          "Minerals  Group") or the  Services  Group that  affect the  Company's
          financial  condition  could  affect  the  results  of  operations  and
          financial  condition  of  both  Groups.  Accordingly,   the  Company's
          consolidated  financial statements must be read in connection with the
          Services Group's financial statements.

(2)       As of January 1, 1992,  BHS elected to capitalize  categories of costs
          not  previously  capitalized  for  home  security  installations.  The
          additional  costs not  previously  capitalized  consisted of costs for
          installation labor and related benefits for supervisory,  installation
          scheduling,  equipment  testing and other support  personnel and costs
          incurred in  maintaining  facilities  and  vehicles  dedicated  to the
          installation   process.  The  effect  of  this  change  in  accounting
          principle was to increase operating profit for the Company and the BHS
          segment  for the  first  six  months  of 1995 and 1994 by  $1,949  and
          $2,149,  respectively  and for the second  quarter of 1995 and 1994 by
          $825 and $1,029, respectively. The effect of this change increased net
          income per common share of the Services Group for the first six months
          of 1995 and 1994 by $.03 and for the  second  quarter of 1995 and 1994
          by $.01 and $.02, respectively.

(3)       The amounts of depreciation  and  amortization of property,  plant and
          equipment  in the second  quarter and six month period of 1995 totaled
          $13,573 ($11,582 in 1994) and $26,687 ($22,306 in 1994), respectively.

(4)       Cash  payments  made for  interest  and  income  taxes (net of refunds
          received) were as follows:

                                  Second Quarter               Six Months 
                                1995          1994         1995         1994 
          ----------------------------------------------------------------------
          Interest           $  1,732        1,951        3,425         4,404 
          ======================================================================
          Income taxes       $ 19,604       12,054       28,720        18,887 
          ======================================================================


          During the six month  periods  ended June 30,  1995 and 1994,  capital
          lease  obligations of $2,886 and $1,222,  respectively,  were incurred
          for leases of property, plant and equipment.

(5)       On April 15,  1994,  the  Company  redeemed  all of the  $27,811  9.2%
          Convertible  Subordinated Debentures due July 1, 2004, at a premium of
          $767. This debt had been attributed to the Services Group. The premium
          and other charges  related to the redemption have been included in the
          Services Group Statement of Operations in Other income (expense), net.

(6)       Certain  prior  period  amounts have been  reclassified  to conform to
          current period financial statement presentation.



                                       23


(7)       All  adjustments   have  been  made  which  are,  in  the  opinion  of
          management,  necessary to a fair presentation of results of operations
          for the periods reported herein.  All such adjustments are of a normal
          recurring nature.



                                       24



                             Pittston Services Group
          MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
                             AND FINANCIAL CONDITION


The financial  statements of the Pittston  Services Group (the "Services Group")
include the balance  sheets,  results of operations and cash flows of Burlington
Air Express Inc. ("Burlington"),  Brink's,  Incorporated ("Brink's") and Brink's
Home  Security,  Inc.  ("BHS"),  and a portion of The  Pittston  Company's  (the
"Company")  corporate assets and liabilities and related  transactions which are
not separately  identified with operations of a specific  segment.  The Services
Group's  financial  statements  are prepared  using the amounts  included in the
Company's consolidated financial statements.  Corporate allocations reflected in
these financial  statements are determined  based upon methods which  management
believes  to be an  equitable  allocation  of such  expenses  and  credits.  The
accounting  policies  applicable  to the  preparation  of the  Services  Group's
financial  statements may be modified or rescinded at the sole discretion of the
Company's  Board  of  Directors  (the  "Board")  without  the  approval  of  the
shareholders, although there is no intention to do so.

The Company provides holders of Pittston  Services Group Common Stock ("Services
Stock")  separate  financial  statements,  financial  reviews,  descriptions  of
business and other  relevant  information  for the Services Group in addition to
consolidated financial information of the Company. Holders of Services Stock are
shareholders  of the  Company,  which  continues to be  responsible  for all its
liabilities.  Therefore,  financial developments affecting the Pittston Minerals
Group (the  "Minerals  Group") or the Services  Group that affect the  Company's
financial  condition  could  affect the  results  of  operations  and  financial
condition of both Groups.  Accordingly,  the  Company's  consolidated  financial
statements  must be read in  connection  with  the  Services  Group's  financial
statements.

The following  discussion is a summary of the key factors  management  considers
necessary in reviewing the Services Group's results of operations, liquidity and
capital  resources.  This  discussion  should  be read in  conjunction  with the
financial statements and related notes of the Company.


                               SEGMENT INFORMATION
                                 (In thousands)




                                              Three Months                       Six Months 
                                              Ended June 30                     Ended June 30 
- ---------------------------------------------------------------------------------------------------
                                         1995             1994              1995            1994 
===================================================================================================
                                                                                   
Revenues: 
Burlington                           $ 341 950          302,266            665,894        563,750 
Brink's                                154,543          128,183            303,634        251,948 
BHS                                     31,063           26,902             61,372         52,706 
- ---------------------------------------------------------------------------------------------------
Revenues                             $ 527,556          457,351          1,030,900        868,404 
===================================================================================================

Operating profit: 
Burlington                           $  14,406           20,770             22,464         29,780 
Brink's                                 10,236           10,216             17,619         16,349 
BHS                                      9,411            7,897             18,316         15,463 
- ---------------------------------------------------------------------------------------------------
Segment operating profit                34,053           38,883             58,399         61,592 
General corporate expense               (2,530)          (2,496)            (4,783)        (4,711) 
- ---------------------------------------------------------------------------------------------------
Operating profit                     $  31,523           36,387             53,616         56,881 
===================================================================================================









                                       25


RESULTS OF OPERATIONS 
- ----------------------

In the second  quarter of 1995,  the Services Group reported net income of $20.0
million or $.53 per share  compared  with $21.3 million or $.56 per share in the
second  quarter of 1994.  Operating  profit  totaled  $31.5  million in the 1995
second quarter compared with $36.4 million in the prior year second quarter. Net
income and operating profit in the 1994 second quarter  benefited from unusually
strong operating profits at Burlington due to substantial  additional volumes of
freight directed to Burlington during a nationwide trucking strike in the second
quarter of 1994, which added an estimated $8 million to the quarter's  operating
profit  and $5 million  to net  income.  Revenues  for the 1995  second  quarter
increased $70.2 million or 15% compared with the 1994 second  quarter,  of which
$39.7 million was from  Burlington,  $26.3 million from Brink's and $4.2 million
from BHS. Operating expenses and selling general and administrative expenses for
the 1995 second  quarter  increased  $74.1 million or 17% compared with the same
period last year, of which $46.1 million was from Burlington,  $25.3 million was
from Brink's and $2.7 million was from BHS.

In the first six months of 1995,  the  Services  Group  reported a net income of
$33.6  million of $.89 per share  compared  with net income of $31.8  million or
$.84 per share in the first six months of 1994.  Operating  profit totaled $53.6
million in the first six months of 1995 compared with $56.9 million in the first
six months of 1994. Net income and operating profit were positively  impacted by
improved  results  from the  Brink's  and BHS  businesses,  partially  offset by
decreased results at Burlington.  The 1995 first half was favorably  impacted by
lower  nonoperating and net interest  expenses  compared with the same period of
last year. Revenues for the first six months of 1995 increased $162.5 million or
19% compared with the first six months of 1994, of which $102.1 million was from
Burlington,  $51.7  million  was from  Brink's  and $8.7  million  was from BHS.
Operating expenses and selling general and administrative expenses for the first
six months of 1995  increased  $163.7  million or 20% over the same  period last
year, of which $109.4  million was from  Burlington,  $48.5 million from Brink's
and $5.8 million from BHS.



                                       26

BURLINGTON
The  following  is a table  of  selected  financial  data  for  Burlington  on a
comparative basis:




(Dollars in thousands, except                                       Three Months                    Six Months 
per pound/shipment amounts)                                         Ended June 30                  Ended June 30 
- ---------------------------------------------------------------------------------------------------------------------
                                                                 1995           1994            1995           1994 
=====================================================================================================================
                                                                                                      
Revenues: 
Airfreight 
   Domestic U.S.                                           $   127,816        148,900         257,855        272,539 
   International                                               160,813        121,583         312,489        232,951 
- ---------------------------------------------------------------------------------------------------------------------
Total airfreight                                               288,629        270,483         570,344        505,490 
Other                                                           53,321         31,783          95,550         58,260 
- ---------------------------------------------------------------------------------------------------------------------
Total revenues                                                 341,950        302,266         665,894        563,750 

Operating expenses                                             299,645        253,417         589,237        482,942 
Selling, general and administrative                             28,744         28,836          55,562         52,501 
- ---------------------------------------------------------------------------------------------------------------------
Total costs and expenses                                       328,389        282,253         644,799        535,443 
- ---------------------------------------------------------------------------------------------------------------------

Other operating income                                             845            757           1,369          1,473 
- ---------------------------------------------------------------------------------------------------------------------
Operating profit                                           $    14,406         20,770          22,464         29,780 
=====================================================================================================================

Depreciation and amortization                              $     4,907          4,161           9,702          8,233 
=====================================================================================================================

Cash capital expenditures                                  $     6,185          5,801          13,500         11,009 
=====================================================================================================================
Airfreight shipment growth rate (a)                               6.4%          13.0%            6.2%          10.4% 

Airfreight weight growth rate (a): 
   Domestic U.S.                                                (12.5%)         39.3%           (4.1%)         21.5% 
   International                                                 21.7%          20.2%           25.1%          24.5% 
   Worldwide                                                      2.3%          30.3%            9.0%          22.9% 

Worldwide airfreight weight (pounds)                           322,978        315,672         644,366        591,257 
=====================================================================================================================
Worldwide airfreight shipments                                   1,322          1,243           2,538          2,389 
=====================================================================================================================
Worldwide average airfreight yield 
   (revenue per pound)                                     $     0.894          0.857           0.885          0.855 
=====================================================================================================================
Worldwide average airfreight revenue per shipment          $       218            218             225            212 
=====================================================================================================================
Worldwide average airfreight weight per 
   shipment (pounds)                                               244            254             254            247 
=====================================================================================================================


(a)  Compared to the same period in the prior year. 


Burlington  reported  an  operating  profit of $14.4  million in the 1995 second
quarter,  a $6.4 million  decrease from the $20.8 million reported in the second
quarter  of  1994.  The  second  quarter  of 1994  benefitted  from  significant
additional domestic freight as a result of the nationwide trucking strike, which
added an  estimated  $8 million to the  quarter's  operating  profit.  Worldwide
revenues  rose 13% to $342.0  million in the current  year  quarter  from $302.3
million  in  the  prior  year  second  quarter.  Worldwide  airfreight  revenues
increased  $18.1 million or 7% to $288.6 million in the 1995 second quarter from
$270.5 million in the prior year quarter.  The increase was principally  from an
increase in international weight shipped, which more than offset the decrease in
domestic U.S. weight shipped  attributable to the positive impact of last year's
trucking strike, and an increase in worldwide average airfreight yields (revenue
per pound).

                                       27


Other  revenues,  which  includes  customs  clearance  and other import  related
services,  as well as ocean freight services,  increased $21.5 million or 68% to
$53.3 million in the second quarter of 1995 from $31.8 million in the prior year
quarter, as a result of an increase in international shipment volume.

Total airfreight weight shipped  worldwide  increased 2% to 323.0 million pounds
in the current year quarter from 315.7 million pounds in the prior year quarter.
Worldwide average  airfreight yields increased by 4% to $.894 in the 1995 second
quarter  from  $.857  in  the  same  period  a year  earlier.  The  increase  in
international volume combined with other factors,  including favorable impact of
foreign  currency  translation,  resulted  in a 32%  increase  in  international
airfreight revenue.

Domestic  airfreight  revenues  decreased  by 14% to $127.8  million in the 1995
second  quarter  from  $148.9  million in the prior  year  second  quarter.  The
decrease was the result of a nearly 13% decrease in domestic  weight shipped and
a modest decrease in average  yields.  The second quarter of 1994 benefited from
significant  additional  domestic  freight  volume  resulting  from a nationwide
trucking strike in the U.S.  Domestic volume,  excluding the favorable impact of
last year's  trucking  strike  declined  modestly due to the  sluggish  domestic
economy.  Burlington continues to adjust its domestic dedicated lift capacity to
match  volume  requirements  and also to take  measures  to reduce its fleet and
station costs.

International airfreight revenues increased by 32% to $160.8 million in the 1995
second  quarter  from  $121.6  million in the prior  year  second  quarter.  The
increase was primarily  due to a 22% increase in weight  shipped and to a lesser
extent  increase  in  international   yields.   Improving  economic   conditions
internationally and aggressive  expansion of company-owned  operations in Europe
and Latin America were largely responsible for the rapid growth. Selective price
increases  on U.S.  exports  were  introduced  during the  quarter to  partially
mitigate  commercial  lift cost  increases.  Burlington  continued to expand its
global freight service network by establishing  company-owned  operations in the
Philippines and expansion of operations in Mexico.

Operating  profit in the first half of 1995 for Burlington was $22.5 million,  a
$7.3 million  decrease from the $29.8 million  operating  profit reported in the
first  half of 1994,  which  benefitted  from  significant  additional  domestic
freight as a result of the nationwide  trucking  strike which added an estimated
$8 million to the quarter's  operating  profit.  Worldwide  revenues rose 18% to
$665.9  million in the current year period from $563.8  million in the first six
months of 1994. The $102.1  million  increase in revenues  resulted  principally
from a 9% increase in worldwide airfreight pounds shipped.

Domestic  airfreight revenues decreased by 5% or $14.7 million to $257.8 million
in the first half of 1995  compared to the first half of 1994.  The decrease was
due to a 4% decrease in  domestic  volume and a 1% decrease in domestic  yields.
The  decrease  in volume was due  primarily  to the impact of the U.S.  trucking
strike in the second quarter of 1994 which added substantial additional volume.

International  airfreight  revenues of $312.5 million in the first six months of
1995 were $79.5  million or 34% higher than the $233.0  million  reported in the
prior year first half.  The  increase  was  primarily  due to a 25%  increase in
weight shipped compared to the prior year period.  The increase in volume can be
largely attributed to improved economic conditions in the international  markets
and expansion of company-owned operations.

Other revenue,  which includes import transactions such as customs clearance and
import related  services,  as well as ocean freight  services,  increased 64% or
$37.3 million to $95.6  million,  due to an increase in  international  shipment
volume and a continual expansion of ocean freight services.


                                       28

BRINK'S 
The following is a table of selected financial data for Brink's on a comparative
basis:




                                                                    Three Months                    Six Months 
(In thousands)                                                      Ended June 30                  Ended June 30 
- ---------------------------------------------------------------------------------------------------------------------
                                                                 1995           1994            1995           1994 
=====================================================================================================================
                                                                                                      
Revenues                                                   $   154,543        128,183         303,634        251,948 

Operating expenses                                             125,014        101,693         248,224        204,503 
Selling, general and administrative                             19,981         18,046          38,964         34,200 
- ---------------------------------------------------------------------------------------------------------------------
Total costs and expenses                                       144,995        119,739         287,188        238,703 
- ---------------------------------------------------------------------------------------------------------------------

Other operating income                                             688          1,772           1,173          3,104 
- ---------------------------------------------------------------------------------------------------------------------
Operating profit                                           $    10,236         10,216          17,619         16,349 
=====================================================================================================================

Depreciation and amortization                              $     5,340          5,108          10,496         10,120 
=====================================================================================================================

Cash capital expenditures                                  $     5,685          3,738          11,476          6,733 
=====================================================================================================================

Revenues: 
   North America (United States and Canada)                $    92,551         82,334         180,981        161,819 
   International subsidiaries                                   61,992         45,849         122,653         90,129 
- ---------------------------------------------------------------------------------------------------------------------
Total revenues                                             $   154,543        128,183         303,634        251,948 
=====================================================================================================================

Operating profit: 
   North America (United States and Canada)                $     7,010          5,241          12,526          9,445 
   International operations                                      3,226          4,975           5,093          6,904 
- ---------------------------------------------------------------------------------------------------------------------
Total operating profit                                     $    10,236         10,216          17,619         16,349 
=====================================================================================================================


Brink's  operating  profit of $10.2  million in the  second  quarter of 1995 was
essentially unchanged from the prior year. The revenue increase of $26.4 million
or 21% in the 1995 second quarter was offset by increased operating expenses and
selling,  general and  administrative  expenses of $25.3  million and  decreased
other operating income of $1.1 million.

Revenues from North American  operations  (United  States and Canada)  increased
$10.2  million or 12% to $92.5  million in the 1995  second  quarter  from $82.3
million in the prior year quarter.  North American  operating  profit  increased
$1.8  million  or 34% to $7.0  million in the  current  year  quarter  from $5.2
million in the second quarter of 1994. The profit improvement primarily resulted
from  rising  volumes  and  increased  market  penetration  in the  armored  car
business, which includes ATM servicing.

Revenues from international subsidiaries increased $16.1 million or 35% to $62.0
million  in the 1995  second  quarter  from  $45.8  million  in the 1994  second
quarter.  The increase is primarily due to higher  revenues in Brazil as well as
the favorable impact of foreign currency  translations.  Operating  profits from
international  subsidiaries and minority owned affiliates  declined $1.7 million
to $3.2  million in the current year quarter from $5.0 million in the prior year
second  quarter.  The earnings  decline was  primarily due to lower results from
Brink's share of its Mexican  affiliate  operations,  in which Brink's has a 20%
equity  interest.  Results in Mexico decreased to a loss of $.6 million from the
profit of $1.3  million  recorded  in the second  quarter of 1994.  The  Mexican
operation  continues  to be  adversely  impacted  by  the  local  recession  and
extraordinarily  high interest rates.  Local management has begun implementing a
program  designed to restore  profitability  to what is the largest  armored car
company in Mexico.  Brink's Brazil, a wholly-owned  subsidiary,  was essentially
break-even in the 1995 second quarter compared to a $.7 million operating profit
in the 1994 second quarter  partially as a result of wage  increases  granted in
advance of price increases which were implemented in June and July of 1995.

                                       29

Brink's  operating  profit  increased $1.3 million to $17.6 million in the first
six  months of 1995 from  $16.3  million in the first six months of 1994 with an
increase  in  revenues  of $51.7  million,  partially  offset by an  increase in
operating  expenses and selling,  general and  administrative  expenses totaling
$48.5 million, and a decrease in other operating income of $1.9 million.

Revenue from North  American  operations  increased 12% to $181.0 million in the
first half of 1995 from $161.8 million in the prior year period.  North American
operating profit increased $3.1 million to $12.5 million from $9.4 million.  The
increase  in  operating  profit was largely  attributable  to  increases  in the
armored car business  which  includes ATM  servicing  and to a lesser  extent to
increases  in  the  diamond  and  jewelry  and  coin  and  currency   processing
businesses, partially offset by lower air courier results.

Revenue from international subsidiaries increased $32.5 million or 36% to $122.7
million,  while operating profit from international  subsidiaries and affiliates
decreased  $1.8  million or 26% to $5.1  million in the first half of 1995.  The
increase in revenue is primarily due to higher revenues in Brazil as well as the
favorable  impact of foreign  currency  translation.  The  decline in  operating
profit was primarily  attributable to operations in Mexico,  partially offset by
an increase reported in Brazil.  Brink's share of its Mexican affiliates results
was a $1.0  million  loss in the first six  months  of 1995  compared  to a $1.7
million profit  reported in the same period of 1994.  Brink's Brazil reported an
operating  profit of $.9  million  in the  first  half of 1995  compared  to $.1
million in the prior year period.

BHS 
The  following is a table of selected  financial  data for BHS on a  comparative
basis:



                                                                    Three Months                    Six Months 
(Dollars in thousands)                                              Ended June 30                  Ended June 30 
- ---------------------------------------------------------------------------------------------------------------------
                                                                 1995           1994            1995           1994 
=====================================================================================================================
                                                                                                     
Revenues                                                   $    31,063         26,902          61,372         52,706 
Operating expenses                                              16,350         14,825          32,664         28,734 
Selling, general and administrative                              5,302          4,180          10,392          8,509 
- ---------------------------------------------------------------------------------------------------------------------
Total costs and expenses                                        21,652         19,005          43,056         37,243 
- ---------------------------------------------------------------------------------------------------------------------

Operating profit                                           $     9,411          7,897          18,316         15,463 
=====================================================================================================================
Depreciation and amortization                              $     5,331          4,429          10,420          8,262 
=====================================================================================================================
Cash capital expenditures                                  $     9,214          8,125          19,141         16,664 
=====================================================================================================================
Annualized service revenues (a)                                                           $    95,810         78,856 
=====================================================================================================================
Number of subscribers: 
   Beginning of period                                         332,434        275,873         318,029        259,551 
   Installations                                                19,290         18,291          38,362         37,977 
   Disconnects, net                                             (5,184)        (4,546)         (9,851)        (7,910)
- ---------------------------------------------------------------------------------------------------------------------
End of period                                                  346,540        289,618         346,540        289,618 
=====================================================================================================================


(a) Annualized  service revenue is calculated based on the number of subscribers
at period end multiplied by the average fee per subscriber  received in the last
month of the period for monitoring, maintenance and related services.

Operating  profit of BHS  increased  $1.5  million to $9.4 million in the second
quarter of 1995 from $7.9  million in the second  quarter of 1994.  In the first
half of 1995,  operating  profit  increased  $2.8 million to $18.3  million from
$15.5  million in the first half of 1994.  The increase in operating  profit for
the second  quarter and first half of 1995  compared  to the similar  periods in
1994 reflected higher monitoring revenues due to an average subscriber base that
was approximately 20% higher for the quarter and year to date 1995,  compared to
similar  periods  in 1994,  slightly  offset by  higher  account  servicing  and
administrative  costs.  Net new  subscribers  totaled  approximately  14,100 and
28,500 in

                                       30

the second  quarter and first six months of 1995,  respectively,  compared  with
approximately  13,700 and 30,000 in the second  quarter  and first six months of
1994, respectively. Subscribers at June 30, 1995 totaled 346,540.

FOREIGN OPERATIONS 
A portion of the  Company's  financial  results is derived  from  activities  in
several  foreign  countries,  each  with a local  currency  other  than the U.S.
dollar. Since the financial results of the Company are reported in U.S. dollars,
they are affected by the changes in the value of the various foreign  currencies
in relation to the U.S.  dollar.  The  Company's  international  activity is not
concentrated  in any single  currency,  which  limits the risks of foreign  rate
fluctuations.  In addition,  foreign  currency rate  fluctuations  may adversely
affect   transactions  which  are  denominated  in  currencies  other  than  the
functional currency.  The Company routinely enters into such transactions in the
normal course of its business.  Although the diversity of its foreign operations
limits the risks  associated  with such  transactions,  the Company uses foreign
exchange   forward   contracts  to  hedge  the  risks  associated  with  certain
transactions  denominated  in  currencies  other than the  functional  currency.
Realized and  unrealized  gains and losses on these  contracts  are deferred and
recognized as part of the specific  transaction hedged. In addition,  cumulative
translation   adjustments  relating  to  operations  in  countries  with  highly
inflationary  economies are included in net income,  along with all  transaction
gains or losses for the period.  Subsidiaries in Brazil operate in such a highly
inflationary economy.

Additionally,  the Company is subject to other risks customarily associated with
doing business in foreign countries, including economic conditions,  controls on
repatriation of earnings and capital,  nationalization,  expropriation and other
forms of restrictive action by local governments. The future effects, if any, of
such risks on the Company cannot be predicted.

CORPORATE EXPENSES 
A portion of the Company's  corporate  general and  administrative  expenses and
other  shared  services  has  been  allocated  to the  Services  Group  based on
utilization  and other methods and criteria  which  management  believes to be a
reasonable  and  equitable  estimate of the costs  attributable  to the Services
Group.  These  allocations  were $2.5 million in the second  quarter of 1995 and
1994 and $4.8 million and $4.7 million in the first six months of 1995 and 1994,
respectively.

OTHER OPERATING INCOME 
Other operating income decreased $1.0 million to $1.5 million in the 1995 second
quarter from $2.5 million in the second quarter of 1994.  Other operating income
totaled $2.5 million in the first half of 1995 compared with $4.6 million in the
first six months of 1994.  Other operating  income consists  primarily of equity
earnings of foreign affiliates. These earnings, which are primarily attributable
to equity affiliates of Brink's,  amounted to $.4 million and $.9 million in the
second  quarter and first six months of 1995,  respectively,  compared with $1.8
million  and  $3.4  million  in the  second  quarter  and  first  half of  1994,
respectively.  The decrease is due in large part to the $2.7 million decrease in
Brink's  share of earnings  from its affiliate in Mexico in the first six months
of 1995 compared to 1994.

INTEREST INCOME 
Interest  income  increased $.9 million to $1.5 million in the second quarter of
1995 from $.6  million in the prior  year's  second  quarter.  The  increase  is
attributable  to  interest  earned of $.8  million and $.1 million in the second
quarter of 1995 and 1994,  respectively,  on amounts owed by the Minerals Group.
For the six months ended June 30, 1995,  interest income  increased $1.8 million
to $3.0  million  from $1.2  million in the first half of 1994.  The increase is
primarily attributed to $1.5 million of interest income earned from amounts owed
by the Minerals Group in the first six months of 1995.

INTEREST EXPENSE
Interest expense  increased $.3 million to $1.7 million in the second quarter of
1995 from $1.4  million  in the prior  year  second  quarter.  Interest  expense
totaled $3.2  million in the first six months of 1995 and 1994.  The increase in
the 1995 second  quarter was due to higher  average  interest  rates and average
debt balances.




                                       31



OTHER INCOME (EXPENSE), NET 
Other net expense for the first six months of 1995  decreased  $1.8 million to a
net expense of $1.8  million from a net expense of $3.6 million in the first six
months of 1994. 1994 included  expenses of $1.2 million  recognized in the first
quarter  on the  Company's  redemption  of  its  9.2%  Convertible  Subordinated
Debentures.


FINANCIAL CONDITION 
- --------------------

A portion of the Company's  corporate assets and liabilities has been attributed
to the Services Group based upon  utilization of the shared  services from which
assets and liabilities are generated,  which management believes to be equitable
and a reasonable estimate.

CASH PROVIDED BY OPERATIONS 
Cash  provided  by  operating  activities  during  the first six  months of 1995
totaled  $26.4  million  compared  with $70.2 million in the first six months of
1994.  The decrease in cash  provided  occurred,  despite  higher net income and
noncash  charges,  principally  as a result of additional  investment in working
capital at Burlington.  Such  requirements  primarily  reflected initial working
capital needs of recently  acquired foreign  subsidiaries,  a relatively  larger
seasonal volume  increase and increased  international  revenues,  which tend to
have longer payment terms.

CAPITAL EXPENDITURES 
Cash  capital  expenditures  for the first  six  months  of 1995  totaled  $44.3
million. Of that amount, $19.1 million was spent by BHS, $13.5 million was spent
by Burlington and $11.5 million was spent by Brink's.  Expenditures  incurred by
BHS in the  first  half of  1995  were  primarily  for  customer  installations,
representing  the  expansion  in the  subscriber  base.  For the full year 1995,
capital  expenditures are projected to approximate  $125 million.  The foregoing
amounts  exclude  equipment  expenditures  that have been or are  expected to be
financed through capital and operating leases, and any acquisition expenditures.
Increased  expenditures  in 1995 are  expected  at  Burlington  to  support  new
airfreight  stations and  implementation of positive tracking systems and at BHS
resulting from continued expansion of the subscriber base.

FINANCING 
The Services Group intends to fund its capital  expenditure  requirements during
the  remainder of 1995  primarily  with  anticipated  cash flows from  operating
activities  and  through   operating   leases  if  the  latter  are  financially
attractive. Shortfalls, if any, will be financed through the Company's revolving
credit  agreements  or other  borrowing  arrangements.  The  Company  has a $350
million  revolving credit agreement with a syndicate of banks (the  "Facility").
The Facility  includes a $100 million term loan,  which matures in May 2000. The
Facility also permits additional borrowings,  repayments, and reborrowings of up
to an aggregate of $250 million until May 2000. Of the total amount  outstanding
under the Facility at June 30, 1995 $23.4 million was attributed to the Services
Group.

DEBT 
Outstanding  debt totaled  $88.6  million at June 30, 1995 up $19.2 million from
the $69.4 million reported at year-end. The amount of the $100 million term loan
attributed to the Services Group was $23.4 million at June 30, 1995.

On April 15,  1994,  the  Company  redeemed  all  outstanding  9.2%  Convertible
Subordinated  Debentures due July 1, 2004. The principal amount  outstanding was
$27.8  million and the premium paid to call the debt  totaled $.8  million.  The
Company used cash provided under its revolving  credit  agreements to redeem the
debentures.  The  premium  paid in  addition  to other  charges  related  to the
redemption are included in the Services Group's  Statement of Operations for the
six months ended June 30, 1994.

RELATED PARTY TRANSACTIONS 
At June 30, 1995 the Minerals  Group owed the Services  Group $42.3  million,  a
decrease of $5.9 million from the $48.2 million owed at December 31, 1994.

At June 30, 1995 the Services  Group owed the Minerals  Group $39.2  million for
tax benefits, of which $21.0 million is expected to be paid within one year.



                                       32


CAPITALIZATION 
The Company is also authorized to repurchase up to 1,250,000  shares of Services
Stock and 250,000  shares of Minerals  Stock,  not to exceed $43 million.  As of
June 30, 1995 a total of 376,100  shares ($9.0  million) of Services  Stock have
been acquired  pursuant to the  authorization.  During the six months ended June
30, 1995 120,000 shares ($2.8 million) of Services Stock were repurchased.

DIVIDENDS 
The Board  intends to declare  and pay  dividends  on  Services  Stock  based on
earnings,  financial  condition,  cash  flow and  business  requirements  of the
Services Group. Since the Company remains subject to Virginia law limitations on
dividends  and to  dividend  restrictions  in its  public  debt and bank  credit
agreements,  financial  developments  of the  Minerals  Group  could  affect the
Company's  ability to pay dividends in respect of stock relating to the Services
Group.

As a result of the Company's issuance in January 1994 of 161,000 shares of a new
series of preferred stock, convertible in to Minerals Stock, the Company pays an
annual cumulative  dividend of $31.25 per share payable  quarterly,  in cash, in
arrears, out of all funds of the Company legally available therefore,  when, and
if declared by the Board which  commenced March 1, 1994. Such stock also bears a
liquidation  preference  of $500 per share,  plus an amount equal to accrued and
unpaid dividends thereon.

During the 1995 and 1994 six month  periods,  the Board  declared  and paid cash
dividends of 10 cents per share of Services Stock.



                                       33


                             Pittston Minerals Group
                                 BALANCE SHEETS
                                 (In thousands)





                                                                                                          June 30,         Dec. 31, 
                                                                                                            1995             1994 
====================================================================================================================================
ASSETS                                                                                                   (Unaudited) 
                                                                                                                           
Current assets: 
Cash and cash equivalents                                                                             $      4,856            3,708 
Short-term investments, at lower of cost or market                                                          24,575           23,121 
Accounts receivable (net of estimated amount uncollectible:  1995 - $1,894; 1994 - $1,880)                  88,938          108,923 
Inventories, at lower of cost or market: 
   Coal                                                                                                     39,022           25,518 
   Other                                                                                                     4,320            4,629 
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                                            43,342           30,147 
Prepaid expenses                                                                                             9,947           11,389 
Deferred income taxes                                                                                       29,867           30,525 
- ------------------------------------------------------------------------------------------------------------------------------------
Total current assets                                                                                       201,525          207,813 

Property, plant and equipment, at cost (net of accumulated depreciation, 
   depletion and amortization: 1995 - $164,178; 1994 - $159,938)                                           208,112          220,462 
Deferred pension assets                                                                                     77,618           75,803 
Deferred income taxes                                                                                       92,429           97,945 
Coal supply contracts                                                                                       75,385           82,240 
Intangibles, net of amortization                                                                           119,100          120,649 
Receivable - Pittston Services Group                                                                        18,223           23,186 
Other assets                                                                                                39,903           39,414 
- ------------------------------------------------------------------------------------------------------------------------------------
Total assets                                                                                          $    832,295          867,512 
====================================================================================================================================




LIABILITIES AND SHAREHOLDER'S EQUITY 

Current liabilities: 
Current maturities of long-term debt                                                                  $       4,676           7,554 
Accounts payable                                                                                             65,474          76,771 
Payable - Pittston Services Group                                                                            21,324          32,170 
Accrued liabilities                                                                                         154,420         157,229 
- ------------------------------------------------------------------------------------------------------------------------------------
Total current liabilities                                                                                   245,894         273,724 

Long-term debt, less current maturities                                                                     105,872          88,175 
Postretirement benefits other than pensions                                                                 213,680         212,977 
Workers' compensation and other claims                                                                      120,376         128,864 
Deferred income taxes                                                                                         1,707               - 
Other liabilities                                                                                           157,467         172,368 
Shareholder's equity                                                                                        (12,701)         (8,596)
- ------------------------------------------------------------------------------------------------------------------------------------
Total liabilities and shareholder's equity                                                            $     832,295         867,512 
====================================================================================================================================




See accompanying notes to financial statements. 


                                       34


                             Pittston Minerals Group
                            STATEMENTS OF OPERATIONS
                    (In thousands, except per share amounts)
                                   (Unaudited)






                                                                    Three Months                    Six Months 
                                                                    Ended June 30                  Ended June 30 
- ---------------------------------------------------------------------------------------------------------------------
                                                                 1995           1994            1995           1994 
=====================================================================================================================

                                                                                                     
Net sales                                                  $   184,211        202,149         379,951        378,891 
- ---------------------------------------------------------------------------------------------------------------------
Cost and expenses: 
Cost of sales                                                  180,860        189,044         374,800        378,825 
Selling, general and administrative expenses                     8,506          9,348          16,920         18,235 
Restructuring and other charges                                      -              -               -         90,806 
- ---------------------------------------------------------------------------------------------------------------------
Total costs and expenses                                       189,366        198,392         391,720        487,866 
- ---------------------------------------------------------------------------------------------------------------------

Other operating income                                           9,617          3,305          16,740          6,258 
- ---------------------------------------------------------------------------------------------------------------------

Operating profit (loss)                                          4,462          7,062           4,971       (102,717)
Interest income                                                    154             49             194            100 
Interest expense                                                (2,804)        (1,325)         (5,085)        (2,138)
Other income (expense), net                                       (219)           (218)          (430)          (437)
- ---------------------------------------------------------------------------------------------------------------------
Income (loss) before income taxes                                1,593          5,568            (350)      (105,192)
Provision (credit) for income taxes                             (3,041)        (1,182)         (5,454)       (37,863)
- ---------------------------------------------------------------------------------------------------------------------
Net income (loss)                                                4,634          6,750           5,104        (67,329)
Preferred stock dividends, net                                  (1,093)        (1,257)         (1,176)        (2,263)
- ---------------------------------------------------------------------------------------------------------------------
Net income (loss) attributed to common shares              $     3,541          5,493           3,928        (69,592)
=====================================================================================================================

Net income (loss) per common share: 
   Primary                                                 $       .45            .72             .51          (9.20)
   Fully diluted                                           $       .45            .67             .51          (9.20)
=====================================================================================================================

Cash dividends                                             $     .1625          .1625           .3250          .3250 
=====================================================================================================================

Average common shares outstanding: 
   Primary                                                       7,811          7,644           7,764          7,565 
   Fully diluted                                                 9,988         10,148          10,038          9,905 
=====================================================================================================================




See accompanying notes to financial statements. 



                                       35


                             Pittston Minerals Group
                            STATEMENTS OF CASH FLOWS
                                 (In thousands)
                                   (Unaudited)




                                                                                                                Six Months Ended 
                                                                                                                     June 30 
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                                             1995             1994 
====================================================================================================================================

Cash flows from operating activities: 
                                                                                                                          
Net income (loss)                                                                                      $     5,104          (67,329)
Adjustments to reconcile net income (loss) to net cash provided (used) by operating activities: 
   Noncash charges and other write-offs                                                                          -           46,487 
   Depreciation, depletion and amortization                                                                 21,170           20,474 
   Provision (credit) for deferred income taxes                                                              7,585          (18,928)
   Credit for pensions, noncurrent                                                                          (1,753)            (825)
   Provision for uncollectible accounts receivable                                                             100              132 
   Equity in (earnings) loss of unconsolidated affiliates, net of dividends received                          (242)             (70)
   Other operating, net                                                                                     (2,750)            (333)
   Change in operating assets and liabilities net of effects of acquisitions and dispositions: 
      Decrease (increase) in accounts receivable                                                            19,885          (16,579)
      Increase in inventories                                                                              (13,195)          (8,219)
      Decrease (increase) in prepaid expenses                                                                1,442           (1,087)
      Decrease in accounts payable and accrued liabilities                                                 (10,302)          (5,239)
      Decrease in other assets                                                                                 981              859 
      (Decrease) increase in other liabilities                                                             (15,637)          11,092 
      (Decrease) increase in workers' compensation and other claims, noncurrent                             (8,486)          11,636 
      Other, net                                                                                                (1)            (185)
- ------------------------------------------------------------------------------------------------------------------------------------
Net cash provided (used) by operating activities                                                             3,901          (28,114)
- ------------------------------------------------------------------------------------------------------------------------------------
Cash flows from investing activities: 
Additions to property, plant and equipment                                                                 (11,022)          (7,767)
Proceeds from disposal of property, plant and equipment                                                      8,950              295 
Acquisitions, net of cash acquired, and related contingent payments                                           (722)        (157,231)
Other, net                                                                                                    (241)           7,862 
- ------------------------------------------------------------------------------------------------------------------------------------
Net cash used by investing activities                                                                       (3,035)        (156,841)
- ------------------------------------------------------------------------------------------------------------------------------------
Cash flows from financing activities: 
Additions to debt                                                                                           19,200           86,566 
Reductions of debt                                                                                          (4,340)            (251)
Payments (to) from - Services Group                                                                         (5,846)          28,777 
Repurchase of stock of the Company                                                                          (5,022)            (401)
Proceeds from exercise of stock options                                                                      1,202              947 
Proceeds from sale of stock to Services Group                                                                    -              254 
Proceeds from the issuance of preferred stock, net of cash expenses                                              -           77,359 
Cost of Services Stock Proposal                                                                                  -               (2)
Dividends paid                                                                                              (4,912)          (4,297)
- ------------------------------------------------------------------------------------------------------------------------------------
Net cash provided by financing activities                                                                      282          188,952 
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase in cash and cash equivalents                                                                    1,148            3,997 
Cash and cash equivalents at beginning of period                                                             3,708            2,141 
- ------------------------------------------------------------------------------------------------------------------------------------

Cash and cash equivalents at end of period                                                             $     4,856            6,138 
====================================================================================================================================




See accompanying notes to financial statements. 


                                       36


                             Pittston Minerals Group
                          NOTES TO FINANCIAL STATEMENTS
                                   (Unaudited)
              (In thousands, except per share and employee amounts)


(1)       The financial statements of the Pittston Minerals Group (the "Minerals
          Group")  include the balance  sheets,  results of operations  and cash
          flows of the Coal and  Mineral  Ventures  operations  of The  Pittston
          Company  (the  "Company"),  and a portion of the  Company's  corporate
          assets  and  liabilities  and  related   transactions  which  are  not
          separately  identified  with  operations  of a specific  segment.  The
          Minerals Group's  financial  statements are prepared using the amounts
          included in the Company's consolidated financial statements. Corporate
          allocations  reflected in these  financial  statements  are determined
          based upon methods which  management  believes to be a reasonable  and
          equitable allocation of such expenses and credits.

          The Company provides  holders of Pittston  Minerals Group Common Stock
          ("Minerals Stock") separate financial  statements,  financial reviews,
          descriptions  of  business  and  other  relevant  information  for the
          Minerals Group in addition to  consolidated  financial  information of
          the  Company.  Holders  of  Minerals  Stock  are  shareholders  of the
          Company,  which continues to be responsible  for all its  liabilities.
          Therefore,  financial developments affecting the Minerals Group or the
          Pittston  Services  Group  (the  "Services  Group")  that  affect  the
          Company's  financial  condition could affect the results of operations
          and  financial  condition of both Groups.  Accordingly,  the Company's
          consolidated  financial statements must be read in connection with the
          Minerals Group's financial statements.

(2)       The amounts of  depreciation,  depletion and amortization of property,
          plant and  equipment  in the second  quarter and six month  periods of
          1995 and 1994 totaled $6,382 ($5,680 in 1994) and $12,647  ($12,312 in
          1994), respectively.

(3)       Cash  payments  made for  interest  and  income  taxes (net of refunds
          received) were as follows:

                                  Second Quarter               Six Months 
                                1995         1994           1995         1994 
          ----------------------------------------------------------------------
           Interest        $   3,085          886          5,172        1,516 
          ======================================================================
           Income taxes    $ (12,958)      (7,487)       (12,247)      (7,373)
          ======================================================================
         


          On  January  14,  1994,  a wholly  owned  indirect  subsidiary  of the
          Minerals Group completed the acquisition of  substantially  all of the
          coal  mining   operations  and  coal  sales   contracts  of  Addington
          Resources,   Inc.   ("Addington   Acquisition")   for  $157,324.   The
          acquisition was accounted for as a purchase; accordingly, the purchase
          price was allocated to the underlying  assets and liabilities based on
          their respective estimated fair values at the date of acquisition. The
          fair value of assets acquired was $173,959 and liabilities assumed was
          $138,518.  The excess of the purchase price over the fair value of the
          assets  acquired  and  liabilities  assumed was  $121,883 and is being
          amortized over a period of 40 years.  The results of operations of the
          acquired company have been included in the Minerals Group's results of
          operations since the date of acquisition.

          The  acquisition  was  financed  by the  issuance of $80,500 of $31.25
          Series C Cumulative  Convertible Preferred Stock, which is convertible
          into  Minerals  Stock,  and  additional  debt  under  existing  credit
          facilities.  This financing has been attributed to the Minerals Group.
          In  March  1994,  the  additional  debt  incurred  for  the  Addington
          Acquisition was refinanced with a portion of a five-year term loan.

          During the six months ended June 30, 1994,  capital lease  obligations
          of $746 were incurred for leases of property,  plant and equipment. In
          addition,  during the six months  ended June 30,  1994,  the  Minerals
          Group  assumed  capital  lease  obligations  of $16,210 as part of the
          Addington Acquisition.
          

                                       37


          In June 1995,  the Company sold its rights under  certain coal reserve
          leases and the related equipment for $2,800 in cash and notes totaling
          $2,882.  The cash  proceeds  have been  included  in the  Consolidated
          Statement  of Cash  Flows as "Cash  flow  from  investing  activities:
          Proceeds from disposals of property, plant and equipment".

          In March 1995,  the Minerals Group sold surplus coal reserves for cash
          of $2,878 and a note receivable of $2,317. The cash proceeds have been
          included in the  Statement of Cash Flows as "Cash flow from  investing
          activities: Proceeds from disposals of property, plant and equipment".

          In December  1993,  the Minerals Group sold the majority of the assets
          of its captive mine supply  company.  Cash proceeds of $8,400 from the
          sale were  received on January 2, 1994,  and have been included in the
          Statement  of Cash Flows under the caption  "Cash flow from  investing
          activities: Other, net".

(4)       Restructuring  and  other  charges  - After a review  of the  economic
          viability of certain metallurgical coal assets in the first quarter of
          1994, management determined that four underground mines were no longer
          economically  viable and  should be closed  resulting  in  significant
          economic  impairment to three related preparation plants. In addition,
          it was  determined  that one surface  steam coal mine,  the  Heartland
          mine,  which  provided coal to Alabama Power Company under a long-term
          sales  agreement,  would be  closed  due to  rising  costs  caused  by
          unfavorable geological conditions.

          As a result of these decisions,  the Company incurred a pre-tax charge
          of $90,806  in the first  quarter  of 1994  ($58,116  after tax) which
          included a reduction in the carrying value of these assets and related
          accruals  for  mine  closure  costs.  These  charges  included  assets
          write-downs  of $46,487 which reduced the book carrying  value of such
          assets to what  management  believes to be their net realizable  value
          based  on  either  estimated  sales or  leasing  of such  property  to
          unrelated third parties. In addition,  the charges included $3,836 for
          required  lease  payments  owed to lessors for machinery and equipment
          that would be idled as a result of the mine and facility closures. The
          charges also  included  $19,290 for mine and plant closure costs which
          represented estimates for reclamation and other environmental costs to
          be incurred to bring the  properties  in  compliance  with federal and
          state mining and environmental  laws. This accrual was required due to
          the premature  closing of the mines. The accrual also included $21,193
          in contractually or statutorily  required employee severance and other
          benefit  costs  associated  with  termination  of  employees  at these
          facilities  and costs  associated  with  inactive  employees  at these
          facilities.   Such  employee  benefits  included  severance  payments,
          medical insurance,  workers'  compensation and other benefits and have
          been   calculated  in  accordance   with   contractually   (collective
          bargaining  agreements signed by certain coal subsidiaries included in
          the  Company)  and  legally  required  employee  severance  and  other
          benefits.

          Of the four underground mines, two have ceased coal production (one in
          the first half of 1995), while the remaining two mines are expected to
          cease coal production in 1995. In 1994 the Company  reached  agreement
          with  Alabama  Power  Company  to  transfer  the coal  sales  contract
          serviced by the Heartland  mine to another  location in West Virginia.
          The  Heartland  mine  ceased  coal  production  during  1994 and final
          reclamation and environmental work is in process.  At the beginning of
          1994, there were approximately 750 employees involved in operations at
          these facilities and other administrative support. Employment at these
          facilities has been reduced by 78% to  approximately  165 employees at
          June 30, 1995.
          
(5)       Certain  prior  period  amounts have been  reclassified  to conform to
          current period financial statement presentation.

(6)       All  adjustments   have  been  made  which  are,  in  the  opinion  of
          management,  necessary to a fair presentation of results of operations
          for the periods reported herein.  All such adjustments are of a normal
          recurring nature.



                                       38


                             Pittston Minerals Group
          MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
                             AND FINANCIAL CONDITION


The financial  statements of the Pittston  Minerals Group (the "Minerals Group")
include the balance sheets, results of operations and cash flows of the Coal and
Mineral  Ventures  operations  of The Pittston  Company (the  "Company"),  and a
portion  of  the  Company's   corporate   assets  and  liabilities  and  related
transactions  which are not separately  identified with operations of a specific
segment.  The Minerals  Group's  financial  statements  are  prepared  using the
amounts included in the Company's consolidated  financial statements.  Corporate
allocations  reflected in these financial  statements are determined  based upon
methods which management believes to be an equitable allocation of such expenses
and credits.  The  accounting  policies  applicable  to the  preparation  of the
Minerals Group's  financial  statements may be modified or rescinded at the sole
discretion  of the  Company's  Board of  Directors  (the  "Board")  without  the
approval of the shareholders, although there is no intention to do so.

The Company  provides to holders of the  Pittston  Minerals  Group  Common Stock
("Minerals   Stock")   separate   financial   statements,   financial   reviews,
descriptions  of business and other relevant  information for the Minerals Group
in addition to  consolidated  financial  information of the Company.  Holders of
Minerals  Stock  are  shareholders  of  the  Company,   which  continues  to  be
responsible for all its liabilities. Therefore, financial developments affecting
the Minerals Group or the Pittston  Services  Group (the "Services  Group") that
affect the Company's  financial condition could affect the results of operations
and financial condition of both Groups. Accordingly,  the Company's consolidated
financial  statements  must be read in  connection  with  the  Minerals  Group's
financial statements.

The following  discussion is a summary of the key factors  management  considers
necessary in reviewing the Minerals Group's results of operations, liquidity and
capital  resources.  This  discussion  should  be read in  conjunction  with the
financial statements and related notes of the Company.

                               SEGMENT INFORMATION
                                 (In thousands)




                                                    Three Months                    Six Months 
                                                    Ended June 30                  Ended June 30 
- --------------------------------------------------------------------------------------------------------
                                                1995            1994           1995           1994 
- --------------------------------------------------------------------------------------------------------
                                                                                    
Net sales: 
Coal                                        $ 179,987         198,380        371,270        371,796 
Mineral Ventures                                4,224           3,769          8,681          7,095 
- --------------------------------------------------------------------------------------------------------
Net sales                                   $ 184,211         202,149        379,951        378,891 
========================================================================================================

Operating profit (loss): 
Coal                                        $   5,810           8,395          7,121        (99,444) 
Mineral Ventures                                  576             314          1,491             68 
- --------------------------------------------------------------------------------------------------------
Segment operating profit (loss)                 6,386           8,709          8,612        (99,376) 
General corporate expense                      (1,924)         (1,647)        (3,641)        (3,341) 
- --------------------------------------------------------------------------------------------------------
Operating profit (loss)                     $   4,462           7,062          4,971       (102,717) 
========================================================================================================



RESULTS OF OPERATIONS 
- ----------------------

In the second  quarter of 1995,  the Minerals  Group reported net income of $4.6
million  compared  with $6.8  million in the second  quarter of 1994.  Operating
profit  totaled  $4.5  million in the 1995  second  quarter  compared  with $7.1
million  in the prior  year  second  quarter.  The  decrease  in net  income and
operating  profit in the second  quarter was  primarily due to weaker steam coal
markets and the timing of metallurgical coal shipments.


                                       39

In the first six months of 1995,  the Minerals Group reported net income of $5.1
million compared to a net loss of $67.3 million in the first six months of 1994.
Operating  profit  totaled $5.0 million in the first six months of 1995 compared
to an  operating  loss of $102.7  million in the first six  months of 1994.  The
increase in both operating  profit and net income is primarily  attributable  to
the Coal operations whose 1994 results  included  charges for asset  writedowns,
accruals for costs related to facility  shutdowns and operating  losses incurred
related to these facilities, which in the aggregate reduced operating profit and
net income by $97.5 million and $63.4 million, respectively.

COAL
The following is a table of selected financial data for the Coal operations on a
comparative basis:



                                                                    Three Months                    Six Months 
(In thousands)                                                      Ended June 30                  Ended June 30 
- ---------------------------------------------------------------------------------------------------------------------
                                                                 1995           1994            1995           1994 
=====================================================================================================================
                                                                                                      
Net sales                                                  $   179,987        198,380         371,270        371,796 

Cost of sales                                                  177,978        186,385         368,945        373,659 
Selling, general and administrative expenses                     5,622          6,742          11,702         12,963 
Restructuring and other charges                                      -              -               -         90,806 
- ---------------------------------------------------------------------------------------------------------------------
Total costs and expenses                                       183,600        193,127         380,647        477,428 
- ---------------------------------------------------------------------------------------------------------------------
Other operating income                                           9,423          3,142          16,498          6,188 
- ---------------------------------------------------------------------------------------------------------------------
Operating profit (loss)                                    $     5,810          8,395           7,121        (99,444)
=====================================================================================================================
Coal sales (tons): 
   Metallurgical                                                 2,244          2,415           4,633          4,876 
   Utility and industrial                                        4,025          4,779           8,528          8,387 
- ---------------------------------------------------------------------------------------------------------------------
Total coal sales                                                 6,269          7,194          13,161         13,263 
=====================================================================================================================
Production/purchased (tons) 
   Deep                                                            984          1,174           2,041          2,622 
   Surface                                                       3,276          3,931           7,129          7,004 
   Contract                                                        508            643           1,041          1,126 
- ---------------------------------------------------------------------------------------------------------------------
                                                                 4,768          5,748          10,211         10,752 
Purchased                                                        1,765          1,413           3,502          2,786 
- ---------------------------------------------------------------------------------------------------------------------
Total                                                            6,533          7,161          13,713         13,538 
=====================================================================================================================


Operations - Coal  operations had an operating  profit  totaling $5.8 million in
the second  quarter of 1995  compared to an operating  profit of $8.4 million in
the second quarter of 1994. Included in the current quarter results are a pretax
gain of $5.3 million from the  disposition  of surplus coal  reserves and a $2.5
million benefit from a favorable  litigation  decision which reduced  previously
expensed employee benefit costs.

Sales  volume of 6.3  million  tons in the second  quarter of 1995 was 13% or .9
million tons less than the 7.2 million tons sold in the 1994 second quarter. The
decrease  reflected  weaker steam coal  markets and the timing of  metallurgical
coal  shipments.  Steam coal sales volume declined 16% or .8 million tons to 4.0
million tons and  metallurgical  coal sales volume  declined by 6% or .1 million
tons to 2.3  million  tons  compared to the second  quarter of 1994.  Steam coal
sales represented 64% of total volume in the second quarter of 1995, compared to
67% in the prior year quarter.

Production  in the second  quarter  of 1995  totaled  4.8  million  tons,  a 17%
decrease  compared to the second  quarter of 1994,  principally  reflecting  the
scheduled  reduction in underground  mine production  during 1994 and early 1995
and the idling of surface steam coal mines  including a surface mine in Kentucky
in the second quarter.  Surface  production  accounted for  approximately 70% of
total  production in the second quarters of 1995 and 1994.  Productivity of 36.1
tons per man day  represented a 3% increase over the comparable  period in 1994.
Domestic  steam coal  markets  continue to be  depressed,  with spot  pricing at
exceptionally low levels.

                                       40

Coal margin  (realization  less current  production  costs of coal sold) of $9.4
million or $1.50 per ton for the second quarter of 1995, decreased $10.4 million
or $1.26 per ton from the prior year second quarter.  This was caused by a 9% or
$2.33 per ton  increase  in  average  current  production  costs of coal sold to
$27.13 per ton partially offset by a 4% or $1.07 per ton increase in the average
realization  to $28.63 per ton. Coal  operations  continued to incur higher than
expected  costs at several  mines during the  quarter,  thereby  increasing  the
average cost of coal mined.  The increase in average cost per ton was  primarily
caused by: (i) 17% reduction in company  production;  (ii) higher costs incurred
at mines idled or scheduled to close;  (iii) increased costs for purchased coal;
and (iv) temporarily less favorable mining and geological  conditions  occurring
at several  surface mines.  Several  remediation  efforts have been  undertaken,
including  the  closure  during  the  current  quarter  of one  surface  mine in
Virginia.

Excluding  the positive  impact from both the sale of surplus coal  reserves and
the favorable employee benefits litigation decision, Coal operations incurred an
operating  loss of $2.0  million in the second  quarter of 1995.  As part of its
strategy to achieve  positive  operating  profit on a sustainable  basis for the
long-term, the following steps are being implemented: (i) reduction of overhead;
(ii) evaluation of non-strategic assets for sale; (iii) improvement of margin at
continuing  operations;  (iv) review of unprofitable mines for possible closure;
and (v)  review  of new mine  openings  to take  advantage  of  specific  market
opportunities.

Coal operations had an operating  profit of $7.1 million in the first six months
of 1995 compared to an operating loss of $99.4 million in the prior year period.
The 1994 first six months  operating  loss included $90.8 million of charges for
asset  writedowns  and accruals for costs related to facilities  which are being
closed  (discussed  further below) and $6.7 million of operating losses incurred
during the first half related to those facilities.

Sales volume of 13.2 million tons in the first half of 1995, was .1 million tons
less than the 13.3 million tons sold in the first half of 1994. Steam coal sales
increased by .1 million tons to 8.5 million  tons and  metallurgical  coal sales
declined  by .2 million  tons to 4.6  million  tons  compared to the prior year.
Steam  coal  sales  represented  65% of total  volume in the first half of 1995,
compared to 63% in the prior year.

Production  in the first half of 1995 totaled  10.2 million  tons, a 5% decrease
compared  to the  first  half of  1994,  principally  reflecting  the  scheduled
reduction  in  underground  mine  production  during 1994 and early 1995 and the
idling of surface steam coal mines. Surface production accounted for 71% and 66%
of  total  production  in  the  first  half  of  1995  and  1994,  respectively.
Productivity  of 36  tons  per  man  day  represented  a 9%  increase  over  the
comparable period in 1994.

Coal  operations  reached  contract  agreements  with most of its  metallurgical
customers for the coal year that began April 1, 1995 calling for price increases
of  approximately  $4.00 to $5.50 per metric ton,  depending  upon coal quality.
These price  increases had the effect of realigning  pricing to levels in effect
prior to last  year's  unusually  large  decline.  Sales  volume is  expected to
decline  modestly from the level in the prior contract year. The price increases
were in effect  during a portion of the 1995  second  quarter as a result of the
timing of  metallurgical  coal shipments and were partially offset by the higher
costs of purchased coal as well as increased transportation costs.

Restructuring  and  Other  charges  - As a result  of the  continuing  long-term
decline  of the  metallurgical  coal  markets,  in the  first  quarter  of 1994,
management  determined that four underground  mines were no longer  economically
viable and should be closed,  resulting in  significant  economic  impairment to
three  related  preparation  plants.  In addition,  it was  determined  that one
surface steam coal mine,  the  Heartland  mine,  which  provided coal to Alabama
Power under a long-term  sales  agreement,  would be closed due to rising  costs
caused by unfavorable geological conditions.

As a result of these decisions,  the Coal operations  incurred pretax charges of
$90.8  million  ($58.1  million  after  tax) in the first  quarter of 1994 which
included a reduction in the carrying value of these assets and related  accruals
for mine closure costs. These charges included asset writedowns of $46.5 million
which reduced the book carrying value of such assets to what management believes
to be their net realizable  value based on either  estimated sales or leasing of
such property to unrelated third parties. In addition, the charges included $3.8
million for required  lease payments owed to lessors for machinery and equipment
that would be idled as a result of the mine and facility  closures.  The charges
also included  $19.3 million for mine and plant closure costs which  represented
estimates of reclamation and other  environmental  costs to be incurred to bring
the properties in compliance with federal and state mining and

                                       41

environmental  laws.  This accrual was required due to the premature  closing of
the  mines.  The  accrual  also  included  $21.2  million  of  contractually  or
statutorily  required employee severance and other benefit costs associated with
termination of employees at these  facilities and costs associated with inactive
employees  at  these  facilities.   Such  employee  benefits  include  severance
payments,  medical insurance,  workers' compensation and other benefits and have
been  calculated  in  accordance  with  contractually   (collective   bargaining
agreements signed by certain coal subsidiaries  included in the Coal operations)
and legally required employee severance and other benefits.

Of the four underground mines, two have ceased coal production (one in the first
half of  1995),  while  the  remaining  two mines  are  expected  to cease  coal
production  during the  remainder  of 1995.  In 1994,  Coal  operations  reached
agreement  with  Alabama  Power  Company to  transfer  the coal  sales  contract
serviced  by the  Heartland  mine to  another  location  in West  Virginia.  The
Heartland mine ceased coal  production  during 1994, and final  reclamation  and
environmental  work  is  in  process.  At  the  beginning  of  1994  there  were
approximately 750 employees involved in operations at these facilities and other
administrative  support.  Employment at these facilities has been reduced by 78%
to approximately 165 employees at June 30, 1995.

After coal  production  ceases at the mines  contemplated  in the  accrual,  the
Company will continue to pay  reclamation  and  environmental  costs for several
years  to  bring  these  properties  into  compliance  with  federal  and  state
environmental laws. In addition,  employee termination and medical payments will
continue to be made for several years after the facilities have been closed. The
significant  portion of these employee  liabilities is for statutorily  provided
workers'  compensation  costs for  inactive  employees.  Such  benefits  include
indemnity and medical  payments as required  under state  workers'  compensation
laws.  The long  payment  periods  are based on  continued,  and in some  cases,
lifetime  indemnity and medical  payments to injured former  employees and their
surviving spouses.  Management believes that the charges incurred in 1994 should
be  sufficient  to provide for these  future  payments  and does not  anticipate
material  additional future charges to operating  earnings for these facilities,
although continual cash funding will be required over the next several years.

The following table analyzes the changes in liabilities during 1994 and 1995 for
facility closure costs recorded as restructuring and other charges:



                                                                               Employee 
                                                                 Mine      Termination, 
                                                Leased            and           Medical 
                                             Machinery          Plant               and 
                                                   and        Closure         Severance 
                                             Equipment          Costs             Costs      Total 
     ----------------------------------------------------------------------------------------------
                                                                                    
     Balance as of December 31, 1993 (a)      $  3,092        28,434             34,217     65,743 
     Additions                                   3,836        19,290             21,193     44,319 
     Payments (b)                                3,141         9,468             12,038     24,647 
     ----------------------------------------------------------------------------------------------
     Balance as of December 31, 1994             3,787        38,256             43,372     85,415 
     Payments (c)                                1,018         6,294              4,198     11,510 
     ----------------------------------------------------------------------------------------------
     Balance as of June 30, 1995              $  2,769        31,962             39,174     73,905 
     ==============================================================================================


(a) These amounts represent the remaining liabilities for facility closure costs
recorded as restructuring and other charges in prior years. The original charges
included  $5,094 for leased  machinery and equipment,  $52,243  principally  for
incremental  facility  closing  costs  including  reclamation  and  $54,108  for
employee benefit costs, primarily workers' compensation,  which will continue to
be paid for several years.

(b) These  amounts  represent  total cash  payments  made  during 1994 for these
charges.  Of the total payments made,  $14,494 was for  liabilities  recorded in
years prior to 1994 and $10,153 was for liabilities recorded in 1994.

(c) Payments  made in the first six months of 1995  included  $6,401  related to
pre-1994 liabilities and $5,109 for liabilities recorded in the first quarter of
1994.

During  the next  twelve  months,  expected  cash  funding  of these  charges is
approximately  $15 to $20  million.  Management  estimates  that  the  remaining
liability for leased machinery and equipment will be fully paid over the next

                                       42

two years.  The  liability  for mine and plant  closure  costs is expected to be
satisfied over the next ten years of which  approximately  70% is expected to be
paid over the first three years. The liability for employee related costs, which
is primarily workers' compensation, is estimated to be 70% settled over the next
five years with the balance paid during the following five to ten years.

MINERAL VENTURES 
The  following is a table of selected  financial  data for the Mineral  Ventures
operations on a comparative basis:



(Dollars in thousands,                                     Three Months                    Six Months 
except per ounce data)                                     Ended June 30                  Ended June 30 
- ------------------------------------------------------------------------------------------------------------
                                                        1995           1994            1995           1994 
============================================================================================================
                                                                                            
Net sales                                           $   4,224          3,769           8,681          7,095 

Cost of sales                                           2,882          2,659           5,855          5,166 
Selling, general and administrative costs                 960            959           1,577          1,931 
- ------------------------------------------------------------------------------------------------------------
Total costs and expenses                                3,842          3,618           7,432          7,097 

Other operating income (expense)                          194            163             242             70 
- ------------------------------------------------------------------------------------------------------------
Operating profit (loss)                             $     576            314           1,491             68 
============================================================================================================

Stawell Gold Mine: 
PMV's 50% direct share ounces sold                     10,646          9,120          21,492         17,820 
Average realized gold price per ounce (US$)         $     394            401             397            396 


Operating  profit of Mineral  Ventures  operations  increased $.3 million in the
1995 second  quarter to $.6 million,  from $.3 million in the second  quarter of
1994.  The Stawell gold mine in western  Victoria,  Australia,  in which Mineral
Ventures has a 67% net equity  interest,  produced  21,379 ounces in the current
quarter at an average  cost of $293 per ounce  compared to 18,879  ounces in the
second quarter of 1994 at an average cost of $282.

In the first six months of 1995,  operating profit of Mineral Ventures increased
$1.4  million to $1.5  million from $.1 million in the first six months of 1994.
The  increase  in  operating  profit  was  primarily  the  result  of  increased
production at the Stawell Gold Mine.  An operator  accident that occurred in the
1994 first quarter  hindered  production in 1994 and also  contributed to higher
operating costs for the period.  The Stawell gold mine produced 42,576 ounces in
the first six  months of 1995  compared  with  35,734  ounces in the  comparable
period of 1994.  Mineral Ventures is continuing  exploration  projects in Nevada
and Australia with its joint venture partner.

Successful  exploration  efforts  indicate an increase of  approximately  68,000
ounces of  additional  proven and probable gold reserves at the Stawell mine. At
June 30, 1995,  remaining  proven and probable  gold  reserves are  estimated at
480,000 ounces.

OTHER OPERATING INCOME 
Other operating income increased $6.3 million to $9.6 million in the 1995 second
quarter from $3.3 million in the second quarter of 1994.  Other operating income
totaled $16.7  million in the first six months of 1995 a $10.4 million  increase
over the $6.3 million  recorded in the first six months of 1994. Other operating
income primarily includes royalty income and gains and losses from sales of coal
assets.  The  increase  is  principally  the result of a $5.3  million  and $8.3
million gains from the sales of surplus coal reserves in the second  quarter and
six month periods of 1995, respectively.

CORPORATE EXPENSES 
A portion of the Company's  corporate  general and  administrative  expenses and
other  shared  services  has  been  allocated  to the  Minerals  Group  based on
utilization and other methods and criteria which management believes to be a

                                       43


reasonable  and  equitable  estimate of the costs  attributable  to the Minerals
Group.  These  allocations  were $1.9  million  and $1.6  million  in the second
quarter of 1995 and 1994, respectively, and $3.6 million and $3.3 million in the
first six months of 1995 and 1994, respectively.

INTEREST EXPENSE 
Interest expense increased $1.5 million to $2.8 million in the second quarter of
1995 from $1.3  million  in the prior  year  quarter.  Second  quarter  interest
expense  includes $.8 million in 1995 and $.1 million in 1994 on borrowings from
the  Services  Group.  Interest  expense  totaled  $5.1 million in the first six
months  of 1995 and $2.1  million  in the first  six  months  of 1994.  Interest
expense in the first six months of 1995 and 1994 included interest on borrowings
from the Services Group totaling $1.5 million and $.1 million, respectively. The
increase  in the 1995  quarter  and six month  periods is due to higher  average
interest rates on higher average debt balances.

INCOME TAXES 
Net income in the  second  quarter  and six month  periods  ended June 30,  1995
includes a tax credit which exceeds the amount calculated based on the statutory
federal  income tax rate of 35% as a result of the tax  benefits  of  percentage
depletion.


FINANCIAL CONDITION 
- --------------------

A portion of the Company's  corporate  assets and liabilities has ben attributed
to the Minerals Group based upon  utilization of the shared  services from which
assets and liabilities are generated,  which management believes to be equitable
and a reasonable estimate.

Cash Provided by Operations 
Cash  provided  by  operating  activities  during  the first six  months of 1995
totaled  $3.9 million  compared to a cash  requirement  of $28.1  million in the
first six months of 1994.  Cash used by  operating  activities  in the first six
months  of  1994  was  negatively  impacted  by  the  integration  of  operating
activities of Addington  which  required cash to finance  working  capital.  Net
income,  noncash charges and changes in operating  assets and liabilities in the
1994 first half were significantly affected by after-tax restructuring and other
charges  of  $58.1  million  which  had  minimal  effect  on cash  generated  by
operations.  Of the  total  $90.8  million  of the 1994  first  quarter  pre-tax
charges,  $46.5  million  was for  noncash  writedowns  of assets and  remainder
represents  liabilities,  which are  expected  to be paid over the next  several
years.

CAPITAL EXPENDITURES 
Cash capital  expenditures for the first six months of 1995 totaled $11 million,
excluding  equipment  expenditures that have been or are expected to be financed
through  operating  leases.  For the  remainder of 1995,  capital  expenditures,
excluding operating leases are projected to be approximately $15 million.

OTHER INVESTING ACTIVITIES 
All other investing activities in the first six months of 1995 provided net cash
of $8.0 million  primarily from cash proceeds  received in 1995 from the sale of
coal assets.  In January 1994,  the Company paid  approximately  $157 million in
cash for the  acquisition of  substantially  all the coal mining  operations and
coal sales  contracts of Addington.  The purchase price of the  acquisition  was
subsequently  financed  through the issuance of $80.5 million of a new series of
preferred  stock,  convertible  into Minerals  Stock,  and additional debt under
revolving credit agreements.

FINANCING
The Minerals Group intends to fund its capital  expenditure  requirements during
the  remainder of 1995  primarily  with  anticipated  cash flows from  operating
activities  and  through   operating   leases  if  the  latter  are  financially
attractive. Shortfalls, if any, will be financed through the Company's revolving
credit agreements,  other borrowing arrangements or borrowings from the Services
Group.  The  Company  has a  $350  million  revolving  credit  agreement  with a
syndicate of banks (the  "Facility").  The Facility includes a $100 million term
loan,  which  matures  in  May  2000.  The  Facility  also  permits   additional
borrowings,  repayments,  and reborrowings of up to an aggregate of $250 million
until May 2000. As of June 30, 1995, borrowings of $100 million were outstanding
under the term loan portion


                                       44


of the Facility with $28.6 million of additional  borrowings  outstanding  under
the  remainder  of the  facility.  Of the  total  amount  outstanding  under the
Facility,  $105.2 million was attributed to the Minerals Group. The Company,  on
behalf of the Minerals Group,  maintains agreements with financial  institutions
whereby it has the right to sell certain coal receivables with recourse to those
institutions.  In June 1995, coal receivables of approximately  $10 million were
sold under these agreements.

DEBT 
Outstanding  debt totaled  $110.5 million at June 30, 1995 up $14.8 million from
the  $95.7  million  reported  at  year-end.  Net  cash  provided  by  operating
activities was not sufficient to fund capital  expenditures  and share activity,
resulting  in  additional   borrowings  under  the  Company's  revolving  credit
agreements.

RELATED PARTY TRANSACTIONS 
At June 30, 1995 the Minerals  Group owed the Services  Group $42.3  million,  a
decrease of $5.9 million from the $48.2 million owed at December 31, 1995.

At June 30, 1995 the Services  Group owed the Minerals  Group $39.2  million for
tax benefits, of which $21.0 million is expected to be paid within one year.

CAPITALIZATION 
In January  1994,  the Company  issued $80.5 million  (161,000  shares) of a new
series of preferred stock, convertible into Minerals Stock, to finance a portion
of the  Addington  Acquisition.  Such stock has been  attributed to the Minerals
Group.

In 1994, the Board  authorized  the repurchase  from time to time of up to $15.0
million of the new series of cumulative  convertible preferred stock. As of June
30, 1995,  21,020  shares at a total cost of $8.4 million  were  repurchased  of
which 12,670  shares at cost of $5.0 million were  repurchased  in the first six
months of 1995.

The Company is authorized to repurchase up to 1,250,000 shares of Services Stock
and 250,000 shares of Minerals Stock, not to exceed $43 million.  As of June 30,
1995,  38,500 shares ($.8 million) of Minerals Stock have been acquired pursuant
to the authorization.  No shares of Minerals Stock were repurchased in the first
six months of 1995.

DIVIDENDS 
The Board  intends to declare and pay  dividends on Services  Stock and Minerals
Stock  based  on  earnings,   financial   condition,   cash  flow  and  business
requirements of the Services Group and the Minerals Group,  respectively.  Since
the Company  remains  subject to Virginia law  limitations  on dividends  and to
dividend  restrictions in its public debt and bank credit agreements,  financial
developments of one Group could affect the Company's ability to pay dividends in
respect of stock  relating to the other Group.  Dividends on Minerals  Stock are
also limited by the Available Minerals Dividend Amount, which is adjusted by net
income or losses and other  equity  transactions,  as  defined in the  Company's
Articles of  Incorporation.  At June 30, 1995 the  Available  Minerals  Dividend
Amount was at least $20.8 million.

As a result of the Company's issuance in January 1994 of 161,000 shares of a new
series of preferred  stock,  convertible in to Minerals Stock,  the Company pays
annual cumulative  dividends of $31.25 per share payable quarterly,  in cash, in
arrears, out of all funds of the Company legally available therefore,  when, and
if declared by the Board which  commenced March 1, 1994. Such stock also bears a
liquidation  preference  of $500 per share,  plus an amount equal to accrued and
unpaid dividends thereon.

During the 1995 and 1994 six month  periods,  the Board  declared  and paid cash
dividends  of .325  cents per share of  Minerals  Stock.  Dividends  paid on the
cumulative convertible preferred stock in the first six months of 1995 were $2.3
million.  Preferred  dividends  included on the  Minerals  Group's  Statement of
Operations  for the six months ended June 30,1995 are net of $1.0 million  which
was the excess of the carrying  amount of the preferred stock over the cash paid
to holders of the preferred stock.


                                       45




                           Part II - Other Information





Item      6. Exhibits and Reports on Form 8-K


(a)       Exhibits:

          Exhibit 
          Number  

          10*  Employment agreement dated as of 
               June 1, 1995, between the Registrant 
               and D. L. Marshall. 

          11   Statement re Computation of 
               Earnings Per Common Share. 


(b)       No reports on Form 8-K were filed during the second quarter of 1995.













- --------------------
*Management contract or compensatory plan or arrangement 


                                       46




                                    SIGNATURE


     Pursuant to the  requirements  of the Securities  Exchange Act of 1934, the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned, thereunto duly authorized.


                           THE PITTSTON COMPANY



August 11, 1995            By              G. R. Rogliano                     
                             ---------------------------------------------
                                          (G. R. Rogliano) 
                                          Vice President - 
                                      Controllership and Taxes 
                                    (Duly Authorized Officer and 
                                      Chief Accounting Officer) 



                                       47



The Pittston Company and Subsidiaries                                Exhibit 11 
Computation of Earnings Per Common Share 
(In thousands, except per share amounts) 

Fully Diluted Earnings Per Common Share: (a) 




                                                                             Three Months Ended              Six Months Ended 
                                                                                   June 30                        June 30 
- ----------------------------------------------------------------------------------------------------------------------------------
                                                                             1995            1994           1995           1994 
==================================================================================================================================
                                                                                                                
PITTSTON SERVICES GROUP: 
Net income attributed to common shares                                   $   19,974         21,288        33,569         31,799 
==================================================================================================================================

Average common shares outstanding                                            37,916         37,739        37,912         37,715 
Incremental shares of stock options                                             323            483           353            505 
- ----------------------------------------------------------------------------------------------------------------------------------
Pro forma common shares outstanding                                          38,239         38,222        38,265         38,220 
==================================================================================================================================

Fully diluted earnings per common share:                                 $      .52            .56           .88            .83 
==================================================================================================================================



PITTSTON MINERALS GROUP: 
Net income (loss) attributed to common shares                            $    3,541          5,493         3,928        (69,592) 
Preferred stock dividends, net                                                1,093          1,257         1,176          2,263 
- ----------------------------------------------------------------------------------------------------------------------------------

Fully diluted net income (loss) attributed to common shares              $    4,634          6,750         5,104        (67,329) 
==================================================================================================================================

Average common shares outstanding                                             7,811          7,577         7,764          7,565 
Incremental shares of stock options                                               2             67            28             87 
Conversion of preferred stock                                                 2,175          2,504         2,246          2,253 
- ----------------------------------------------------------------------------------------------------------------------------------

Pro forma common shares outstanding                                           9,988         10,148        10,038          9,905 
==================================================================================================================================


Fully diluted earnings (loss) per common share:                          $      .45 (a)        .67           .51          (9.20)(a) 
==================================================================================================================================




(a)  Antidilutive, therefore the same as primary. 


PRIMARY EARNINGS PER SHARE:
Primary  earnings per share can be computed from the  information on the face of
the Consolidated Statements of Operations.

                                                       Exhibit 10     
     
     
     
     
     
     
     
                                             As of June 1, 1995
     
     
     
     Mr. David L. Marshall
     28 Glenmoor Place
     Hilton Head Island
     South Carolina 29926
     
     Dear David:
     
               This will set forth the terms and conditions of
     your employment by The Pittston Company (the "Company") from
     and after the date of this agreement.
     
               1.  Employment.  The Company agrees to employ you,
     and you agree to serve in the Company's employ, on and
     subject to the terms and conditions hereinafter set forth,
     for the period commencing on the date of this agreement and
     ending on May 31, 1998 (the "Employment Period").  This
     agreement shall replace all prior and/or existing employment
     agreements between the Company and you, including, without
     limitation, the Agreement dated as of September 1, 1992, the
     Supplemental Agreement dated February 27, 1984, including
     any amendments or modifications to such agreements, the
     Agreement dated as of June 1, 1994 and the Amendment to the
     June 1, 1994 Agreement dated as of September 16, 1994
     (together, the "Prior or Existing Agreements").  As of the
     effective date of the Employment Period, all such Prior or
     Existing Agreements shall terminate to the extent they have
     not already been terminated.  It is understood that your
     employment pursuant to the terms and conditions of this
     Agreement shall continue notwithstanding your election as of 
     June 1, 1996 to retire, an Early Retirement Date under the
     Pittston Pension Plan, which election you hereby confirm.
     
               2.  Duties.  Subject to the further provisions of
     this Section 2, during the Employment Period you will, as
     and to the extent hereinafter provided, render services to
     the Company and, at its request, to one or more of its
     affiliates ("Affiliates").  All such services will be
     rendered at the request of and subject to the direction and
     control of the Chairman of the Board of the Company.  Such
     services may include, among other things, representation of
     the Company and its Affiliates in the negotiation and
     completion of mergers and acquisitions and the provision of
     advice to and consultation with members of management of the
     Company and its Affiliates with respect to various matters. 
     In addition, you agree, if nominated and elected, to serve
     as a director of the Company.      
     
               During the Employment Period you will use your
     best efforts to perform faithfully and efficiently the
     responsibilities assigned to you hereunder, except for
     temporary periods of illness or incapacity.
     
               It is understood and agreed, with respect to the
     services to the Company which you shall render pursuant to
     this Section 2, that
     
                 (i)  the Chairman of the Board will,
               insofar as reasonably practicable, consider your
               convenience in the timing of requests, and your
               failure or inability, by reason of temporary
               illness or other cause beyond your control, to
               respond to such requests during any such temporary
               period shall not be deemed to constitute a default
               on your part in the performance hereunder of such
               services; provided, however, that after June 1,
               1996, the number of hours that you will be
               required to devote to fulfilling your obligations
               under this Agreement will be fewer than forty
               hours per calendar month; and
     
                (ii)  except as and to the extent that the
               Chairman of the Board or his designee may
               otherwise prescribe in writing, you shall not have
               any authority to negotiate or conclude any
               contracts on behalf of, or otherwise to bind, the
               Company or any of its Affiliates.
     
               3.  Compensation.  (a)  During the Employment
     Period you will receive for all services to be rendered by
     you pursuant to Section 2 above (i) for the period ending
     May 31, 1996, a salary at the rate of $150,000 per year and
     (ii) thereafter a salary at the rate of $40,000 per year,
     payable in equal installments no less frequently than
     monthly.
     
               (b)  Eligibility for Certain Benefit Plans.  In
     addition to your salary, during the period ending May 31,
     1996 you will be entitled to participate in the Company's
     Pension-Retirement Plan, Savings-Investment Plan and all
     other employee benefit plans in which you participate as of
     the day prior to the Employment Period, in accordance with
     the terms and conditions of each such plan.  On and after
     June 1, 1996, you will participate in all employee benefit
     plans in which you will be eligible, but only in accordance
     with the terms and conditions of each such plan, subject to
     the provisions of Section 3(d) below.  On and after June 1,
     1996, the Company will provide you with $300,000 of group
     term life insurance.
     
               (c)  Supplemental Retirement Benefit.  You have
     been provided with a Supplemental Retirement Benefit
     pursuant to which you shall be entitled to receive a pension
     calculated in accordance with the provisions of the Pension-
     Retirement Plan of The Pittston Company and Its Subsidiaries
     (the "Pittston Pension Plan") (except that the limitations
     set forth in Section 13.01(a) thereof and in the second
     paragraph of Section 13.07 thereof shall be disregarded)
     with full credit for determining your benefit accrual for
     the period of your employment with Freeport-McMoRan Inc.,
     the Company or any of their respective Affiliates (as
     hereinafter defined) or predecessor companies.  The amount
     of such Supplemental Retirement Benefit will be offset by
     the following:
     
          --   the amount of any benefit payable to you in
                    respect to the Freeport-McMoRan Retirement Plan;
     
          --   the amount of any benefit payable to you under the
                    Pittston Pension Plan and any other pension plan
                    of the Company; and
     
          --   the amount of any general offset specifically set
                    forth in the Pittston Pension Plan (it being
                    understood and agreed that any such offset shall
                    be applied without duplication of any offset
                    (whether in respect of the Social Security taxable
                    wage base or otherwise) taken into account in
                    calculating benefits under such Plan).
     
     For purposes of determining the net Supplemental Retirement
     Benefit under this Section 3(c), the Supplemental Retirement
     Benefit before offset and the amount of the benefits which
     offset the Supplemental Retirement Benefit shall be
     calculated on an actuarially equivalent basis (i.e.,
     assuming the same frequency of payments (e.g., monthly), the
     same commencement date for payments, and to the extent
     feasible the same form of annuity (e.g., single life
     annuity)).
     
               It is the intention of the parties that payments
     under this Section 3(c) shall be made to you (or your
     beneficiary) at such time and in such manner as provided for
     under the Pittston Pension Plan and that the procedures,
     terms and provisions of that Plan, generally, shall be
     applicable hereunder.  The obligation of the Company under 
     this Section 3(c) to provide a pension and the obligations
     of the Company under Section 4 below shall continue in
     effect notwithstanding the termination (for any reason) of
     your employment with the Company and its Affiliates.
     
               As used in this Agreement, the term "affiliate"
     shall have the meaning ascribed thereto in Rule 12b-2 of the
     General Rules and Regulations under the Securities Exchange
     Act of 1934 as in effect on the date of this Agreement.
     
               (d)  Eligibility for Retiree Medical Benefits.  In
     the event that your employment shall terminate for any
     reason, or if you shall, at any time, elect to retire on an
     Early Retirement Date under the Pittston Pension Plan, you
     shall be deemed to be eligible for early retiree medical
     coverage under the Company's Comprehensive Medical Expense
     Benefits Plan (the "Medical Plan"), anything in this
     Agreement or the Medical Plan to the contrary
     notwithstanding.  The obligation of the Company under this
     Section 3(d) to provide such coverage shall continue in
     effect notwithstanding the termination of your employment
     with the Company and its Affiliates; provided, however, that
     nothing herein shall affect in any way the Company's right
     to make future changes in the Medical Plan or to terminate
     the Plan entirely; and provided, further, that any such
     change which relates to your eligibility for such coverage
     under the Plan (including the so-called "rule of 75") or
     which has the purpose or effect of discriminating against
     you or your beneficiaries as to benefits under such Plan
     shall not adversely affect such eligibility or benefits as
     applicable immediately prior to such change.
     
               (e)  Business Expenses.  During the Employment
     Period the Company shall, in accordance with policies then
     in effect with respect to payments of expenses, pay or
     reimburse you for all reasonable out-of-pocket travel and
     other expenses (other than ordinary commuting expenses)
     incurred by you in performing services hereunder.  All such
     expenses shall be accounted for in such reasonable detail as
     the Company may require.
     
               4.  Supplemental Retirement Benefits; Change in
     Control.  The provisions of this Section 4 shall be
     controlling, anything in the other provisions of this
     Agreement to the contrary notwithstanding.   
          
               (a)  In the event that a Change in Control (as
     hereinafter defined in subparagraph (b) of this Section 4
     shall occur or the Company's Board of Directors shall in its
     discretion determine that a Change in Control is anticipated
     within 90 days from the date of such determination, the
     Company shall forthwith take such action as shall be
     necessary or appropriate to activate the trust agreement
     dated as of September 16, 1994 between the Company and The
     Chase Manhattan Bank (National Association), as trustee, by
     the payment in cash to the trustee under such trust
     agreement of the aggregate amount which A. Foster Higgins &
     Co. Inc. (or another nationally recognized firm of actuaries
     selected by the Board) shall determine, on the basis of
     mortality and other assumptions at the time applicable under
     the Pittston Pension Plan, to be required to provide all
     projected benefit obligations to you (or your beneficiary)
     under Section 3(c) of this Agreement, as of the date the
     Change in Control occurs or as of the date of such
     determination, as the case may be.  All expenses and income
     and other taxes in connection with the establishment and
     operation of such trust shall be paid by the Company.
               
               (b)  For purposes of this Section 4, a Change in
     Control shall be deemed to occur if either (i) any person,
     or any two or more persons acting as a group, and all
     affiliates of such person or persons, shall own beneficially
     more than 20% of the total voting power in the election of
     directors of the Company of shares of all classes of Common
     Stock of the Company outstanding (exclusive of shares held
     by any corporation of which shares representing at least 50%
     of the ordinary voting power are owned, directly or
     indirectly by the Company) pursuant to a tender offer,
     exchange offer or series of purchases or other acquisitions,
     or any combination of those transactions, or (ii) there
     shall be a change in the composition of the Company's Board
     of Directors at any time within two years after any tender
     offer, exchange offer, merger, consolidation, share
     exchange, sale of assets or contested election, or any
     combination of those transactions (a "Transaction"), so that
     (i) the persons who were directors of the Company
     immediately before the first such Transaction cease to
     constitute a majority of the board of directors of the
     corporation which shall thereafter be in control of the
     companies or other entities that were parties to or
     otherwise involved in such first Transaction, or (ii) the
     number of persons who shall thereafter be directors of such
     corporation shall be fewer than two-thirds of the number of
     directors of the Company immediately prior to such first
     Transaction.  A Change in Control shall be deemed to take
     place upon the first to occur of the events specified in the
     foregoing clauses (i) and (ii).
          
               (c)  In addition to all other rights under
     applicable law, you shall, from and after the date on which
     a Change in Control shall occur or be anticipated as
     provided in subparagraph (b) above, have the right to bring
     an action to enforce the provisions of this Section 4 by
     seeking injunctive relief and/or damages, and the Company
     shall be obligated to pay or reimburse you to the extent
     that you prevail, in whole or in substantial part, for all
     reasonable expenses, including attorney's fees, in
     connection with such action.
                         
               (d)  The foregoing provisions of this Section 4
     shall be construed liberally to the end that accrued
     benefits under this Section 4 shall be assured to the
     fullest extent practicable; provided, however, that nothing
     in this Section 4 shall be construed in a manner that would
     subject you to current taxation on establishment of the
     trust.
     
               (e)  Nothing in this Section 4 shall of itself be
     deemed to increase the amount of any accrued benefits to
     which you shall have become entitled under Section 3(c) of
     this Agreement.  The establishment and activation of the
     trust agreement referred to in subparagraph (a) of this
     Section 4 shall not be deemed to relieve the Company of its
     obligations to you under such Section 3(c) except pro tanto
     to the extent that amounts in respect thereof are paid under
     such trust agreement to you.
               
               5.  Termination.  (a)  Death.  This agreement
     shall terminate automatically upon your death.
     
               (b)  Cause.  The Company may terminate your
     employment for Cause.  For purposes of this agreement,
     "Cause" means (i) an act or acts of dishonesty or disloyalty
     on your part which are intended to result in your
     substantial personal enrichment at the expense of the
     Company or any of its Affiliates or to adversely affect the
     business of any of them or (ii) a violation or violations by
     you of your obligations under Section 8 or Section 9 other
     than any insubstantial and inadvertent violation remedied by
     you promptly after receipt of notice thereof given by the
     Company.
     
               6.  Obligations of the Company upon Termination.  
     
               (a)  Death.  If your employment is terminated by
     reason of your death, this agreement shall terminate without
     further obligations to your legal representatives under this
     agreement other than those obligations accrued hereunder at
     the date of your death.
     
               (b)   Cause.  If your employment is terminated for
     Cause, the Company shall pay you your full salary through
     the date of such termination at the rate in effect at such
     date., and the Company shall have no further obligations to
     you under Sections 3(a), (b) or (e) of this agreement;
     provided, however, that the Company's obligations under
     Sections 3(c) and (d) shall continue notwithstanding
     termination under either Section 6(a) or (b).
     
               7.  Full Settlement.  Subject to full compliance
     by the Company with all of its obligations under this
     agreement, this agreement shall be deemed to constitute the
     settlement of such claims as you might otherwise be entitled
     to assert against the Company by reason of the termination
     of your employment for any reason during or after the
     Employment Period, including, without limitation, all claims
     for discrimination on the basis of age, sex or race or for
     any other alleged violation of public policy arising out of
     such termination.  The Company agrees to pay, to the fullest
     extent permitted by law, all expenses (including, without
     limitation, counsel fees) which you may reasonably incur as
     a result of your successful contest, by judicial proceedings
     or otherwise, of the validity or enforceability of, or
     liability under, any provision of this agreement.  The
     parties acknowledge and agree that the foregoing constitutes
     a complete release of all such claims.
     
               8.  Covenant Not to Compete.  You agree that
     during the Employment Period and during the period ending
     two years thereafter (the "Non-Compete Period"), you shall
     not compete with any business then conducted by the Company
     or any Affiliate within the Pittston Services Group (the
     "Business").  For purposes of this Agreement, the term
     "compete" shall mean engaging in a business as a more than
     ten percent (10%) stockholder, an officer, a director, an
     employee, a partner, an agent, a consultant, or any other
     individual or representative capacity if it involves:
     
                  (i)  engaging in the Business in
               competition with the Company or an Affiliate
               within the Pittston Services Group in any state of
               the United States in which the Company or any of
               such Affiliates (which shall mean for purposes of
               this Section 8 any such Affiliate in which the
               Company owns, directly or indirectly, an equity
               interest of twenty percent (20%) or more) operates
               at anytime during the Non-Compete Period; or
     
                 (ii)  rendering services or advice
               pertaining to the Business to or on behalf of any
               person, firm or corporation which is in
               competition with the Company or any Affiliate
               within the Pittston Services Group at any time
               during the Non-Compete Period in any state of the
               United States.
     
               In the event the restrictions against engaging in
     a competitive activity contained in this Section 8 shall be
     determined by any court of competent jurisdiction to be
     unenforceable by reason of its extending for too great a
     period of time or over too great a geographic area or by
     reason of its being too extensive in any other respect, it
     shall be interpreted to extend only over the maximum period
     of time for which it may be enforceable, and over the
     maximum geographic area as to which it may be enforceable
     and to the maximum extent in all other respects as to which
     it may be enforceable, all as determined by such court in
     such action.
     
               Clauses (i) and (ii), above, are intended by the
     Company as separate and divisible provisions, and if for any
     reason any one is held to be invalid or unenforceable,
     neither the validity nor the enforceability of the other
     shall thereby be affected.
     
               9.  Confidential Information.  (a) You acknowledge
     that in the course of your employment you may receive, have
     access to, or develop confidential or proprietary
     information or trade secrets relating to the business of the
     Company or its Affiliates.  You will hold in a fiduciary
     capacity for the benefit of the Company and such Affiliates
     all such confidential or proprietary information, secrets,
     knowledge or data relating to their respective businesses,
     including, without limitation, information relating to
     strategic plans, public and shareholder relations,
     marketing, pricing, purchasing of transportation (ground or
     air) arrangements, plans or programs, computer programs,
     communication systems, cost data, or customer lists,
     obtained by you prior to, during or after the Employment
     Period, and you will not, during the Employment Period or
     thereafter, communicate or divulge any such information,
     secrets, knowledge or data to any other person, firm or
     corporation without the prior written consent of the
     Chairman of the Board of the Company.  All records, files,
     drawings, documents, notes, equipment and the like relating
     to the business or activities of the Company or any of such
     Affiliates which you shall prepare or use or come into
     contact with shall be and remain the sole property of the
     Company or such Affiliates, as the case may be, and upon
     termination of your employment with the Company all of such
     property shall be returned to the Company in accordance with
     the directions given by it.
     
               (b)  Equitable Relief.  You acknowledge that the
     foregoing provisions of Sections 8 and 9 are essential to
     the Company and are reasonable and necessary to protect the
     legitimate interests of the Company and its Affiliates and
     that damages sustained by the breach of such provisions
     would cause irreparable harm to the Company because of the
     special services that have been performed by you and that
     recovery of damages at law would not be an adequate remedy. 
     You further agree that the Company and its Affiliates, in
     addition to any other remedy which any of them may have
     under this agreement or at law, shall be entitled to
     injunctive and other equitable relief to prevent to curtail
     any breach of any such provision.  If any provision of
     Sections 8 or 9 shall be deemed to be invalid, illegal or
     unenforceable as written by reason of the extent or duration
     thereof, or otherwise, the determining body or authority
     making such determination shall be empowered to reduce such
     provision so as to be enforceable to the greatest extent
     possible and, as so reduced, such provision shall then be
     deemed to be rewritten and enforced as reduced.
     
               (c)  The provisions of this Section 9 shall
     survive the termination of this agreement.
     
              10.  Successors.  (a)  This agreement is personal
     to you and without the prior written consent of the Company
     shall not be assignable by you or otherwise than by will or
     the laws of descent and distribution.  This agreement shall
     inure to the benefit of and be enforceable by your legal
     representatives.
     
               (b)  This agreement shall inure to the benefit of
     and be binding upon the Company and its successors.
     
              11.  Governing Law.  This agreement shall be
     governed by and construed in accordance with the substantive
     and procedural law of New York without reference to
     principles of conflict of laws.  The parties hereto agree
     that any dispute hereunder may be submitted to any court of
     competent jurisdiction in New York and for purposes thereof
     each party hereto submits to such jurisdiction.
     
              12.  Miscellaneous.  (a)  This agreement contains
     the entire understanding with you with respect to the
     subject matter hereof and supersedes any and all prior
     agreements or understandings, written or oral, relating to
     such subject matter.  This agreement may not be amended or
     modified otherwise than by a written agreement executed by
     the parties hereto or their respective successors and legal
     representatives.  The captions of this agreement are not
     part of the provisions hereof and shall have no force or
     effect.
     
               (b)  All notices and other communications
     hereunder shall be in writing and shall be given by hand
     delivery to the other party or by registered or certified
     mail, return receipt requested, postage prepared, addressed 
     as follows:
     
               If to you:
     
               28 Glenmoor Place
               Hilton Head Island
               South Carolina 29926
               
     
               If to the Company:
     
               100 First Stamford Place
               P. O. Box 120070
               Stamford, CT  06912-0070
     
               Attention:  Chairman of the Board
     
     or to such other address as either party shall have
     furnished to the other in writing in accordance herewith. 
     Notices and communications shall be deemed to be given when
     mailed by certified or registered mail, return receipt
     requested.
     
               (c)  The invalidity or unenforceability of any
     provision of this agreement shall not affect the validity or
     enforceability of any other provision of this agreement.
     
               (d)  The Company may withhold from any amounts
     payable under this agreement such federal, state or local
     taxes for which withholding is provided pursuant to any
     applicable law or regulation.
     
               Please confirm that the foregoing is in accordance
     with our agreement.
     
                              Very truly yours,
     
                              THE PITTSTON COMPANY
     
     
     
                              By___________________________ 
                                   Chairman of the Board
     
     
               I hereby confirm that the foregoing is in
     accordance with our agreement.
     
     
     
                                   _________________________
                                       David L. Marshall
     
     
     Dated as of June 1, 1995

  

 5

This schedule contains summary financial information from The Pittston Company
Form 10-Q for the quarterly period ended June 30, 1995, and is qualified in its
entirety by reference to such financial statements.

 1,000
       
                             
                   6-MOS
                          DEC-31-1995
                               JUN-30-1995
                                          38,921
                                    26,921
                                  355,528
                                    16,138
                                     47,586
                               586,851
                                         878,755
                                 416,125
                               1,759,666
                          567,036
                                        162,532
                                        50,055
                                0
                                      1,399
                                     419,795
                 1,759,666
                                        379,951
                             1,410,851
                                          374,800
                                1,244,925
                                     0
                                 1,999
                               6,744
                                 51,299
                                    12,626
                             38,673
                                       0
                                      0
                                            0
                                    38,673
                                        0
                                        0

Pittston Services Group - Primary - .89
Pittston Minerals Group - Primary - .51
Pittston Services Group - Diluted - .89
Pittston Minerals Group - Diluted - .51