Slide 1: Fourth Quarter and Full Year 2012 Earnings Conference Call
Crawford & Company Fourth Quarter and Full Year 2012 Earnings Conference Call February 13, 2013
Slide 2: Forward-Looking Statements and Additional Information
Crawford & Company FORWARD-LOOKING STATEMENTS AND ADDITIONAL INFORMATION 2 Forward-looking statements –This presentation contains forward-looking statements, including statements about the future financial condition, results of operations and earnings outlook of Crawford & Company. Statements, bot
Slide 3: Global Business Services Leader
Crawford & Company Global Business Services Leader The world’s largest independent provider of global claims management solutions Multiple globally recognized brand names: Crawford, Broadspire, GCG Clients include multinational insurance carriers, brokers and local insurance firms as well as 2
Slide 4: Today's Agenda
Today’s Agenda Welcome and Opening Comments Fourth Quarter and Full Year 2012 Financial Review Fourth Quarter and Full Year 2012 Operational Review Guidance and Future Operational Focus
Slide 5: Full Year 2012 Business Summary
Crawford & Company Full Year 2012 Business Summary $500 $600 $700 $800 $900 $1,000 $1,100 $1,200 $1,300 2012 2011 Revenues ($ in millions) 5 Record revenues of $1.177 billion Record consolidated operating earnings of $110.2 million Diluted earnings per share of $0.97 for CRDA and $0.94 for CRDB High
Slide 6: Fourth Quarter 2012 Business Summary
Crawford & Company Fourth Quarter 2012 Business Summary $250 $260 $270 $280 $290 $300 $310 $320 4Q 2012 4Q 2011 Revenues ($ in millions) 6 Record revenues, consolidated operating earnings and operating cash flow Legal Settlement Administration results reflect heavy activity related to Deepwater Hori
Slide 7: Fourth Quarter and Full Year 2012 Financial Review
Fourth Quarter and Full Year 2012 Financial Review
Slide 8: Crawford & Company Income Statement Highlights
Crawford & Company Fourth Quarter Financials 8 Crawford & Company Income Statement Highlights Unaudited ($ in thousands, except per share amounts) Quarters Ended December 31, 2012 2011 % Change Revenues $312,981 $265,637 18% Costs of Services 221,399 202,630 9% Selling, General, and Administrative E
Slide 9: Summary Results: Americas
Crawford & Company Fourth Quarter Financials 9 Summary Results: Americas Unaudited ($ in thousands) For the quarters ended December 31, Superstorm Sandy drove higher case volumes Exchange rate impact was not significant during the quarter $50 $60 $70 $80 $90 $100 4Q 2012 4Q 2011 Revenues ($ in m
Slide 10: Summary Results: U.S. Catastrophe Adjuster Activity
Crawford & Company Fourth Quarter Financials 10 Summary Results: U.S. Catastrophe (CAT) Adjuster Activity CAT adjuster revenues of $19.8 million in fourth quarter of 2012 compared with $9.1 million in 2011 period CAT cases numbered 33,400 in the fourth quarter of 2012 compared with 12,800 in the
Slide 11: Summary Results: EMEA/AP
Crawford & Company Fourth Quarter Financials 11 Summary Results: EMEA/AP Unaudited ($ in thousands) For the quarters ended December 31, Revenues and earnings grew quarter over quarter largely due to catastrophe activity in Thailand Effects of exchange rates reduced revenues by $2.1 million in th
Slide 12: Summary Results: Broadspire
Crawford & Company Fourth Quarter Financials 12 Summary Results: Broadspire Unaudited ($ in thousands) For the quarters ended December 31, Revenue reflects strong medical management contribution and positive workers’ compensation claims trend Broadspire was profitable for the quarter and year $4
Slide 13: Summary Results: Legal Settlement Administration
Crawford & Company Fourth Quarter Financials 13 Summary Results: Legal Settlement Administration Unaudited ($ in thousands) For the quarters ended December 31, $20 $30 $40 $50 $60 $70 4Q 2012 4Q 2011 Revenues ($ in millions) $0 $4 $8 $12 $16 $20 4Q 2012 4Q 2011 Operating Earnings ($ in millions) 39.
Slide 14: Crawford & Company Balance Sheet Highlights
Crawford & Company Fourth Quarter Financials 14 Crawford & Company Balance Sheet Highlights Unaudited ($ in thousands) December 31, December 31, 2012 2011 Change Cash and cash equivalents $71,157 $77,613 ($6,456) Accounts receivable, net 164,708 161,543 3,165 Unbilled revenues, net 124,881 107,494 1
Slide 15: Operating and Free Cash Flow
Crawford & Company Fourth Quarter Financials 15 Crawford & Company Operating and Free Cash Flow Unaudited ($ in thousands) For the years ended December 31, 2012 2011 Variance Net Income Attributable to Shareholders of Crawford & Company $52,617 $45,404 $7,213 Plus: Depreciation and Other Non-Cash Op
Slide 16: Dividends and Share Repurchase
Crawford & Company Fourth Quarter Financials 16 Dividends: During the fourth quarter, Crawford paid a regular quarterly dividend of $0.04 on CRDA and $0.03 on CRDB Crawford also paid a special dividend of $0.06 per share on both classes of stock during the fourth quarter For the year, Crawford
Slide 17: Fourth Quarter and Full Year 2012 Operational Review
Fourth Quarter and Full Year 2012 Operational Review
Slide 18: Operational Review: Fourth Quarter Business Drivers
Crawford & Company Fourth Quarter Operational Review 18 Fourth Quarter Business Drivers $240 $250 $260 $270 $280 $290 $300 $310 $320 4Q 2012 3Q 2012 2Q 2012 1Q 2012 4Q 2011 Revenues ($ in millions) 260 270 280 290 300 310 320 330 340 350 4Q 2012 3Q 2012 2Q 2012 1Q 2012 4Q 2011 Cases Received (In tho
Slide 19: Operational Review: Americas
Crawford & Company Fourth Quarter Operational Review 19 Americas $0 $10 $20 $30 $40 $50 $60 $70 U.S. Canada Latin America Revenues by Geographic Region ($ in millions) U.S. Property and Casualty Improvement over 2011 fourth quarter Actively responding to Superstorm Sandy Continued expansion of Contr
Slide 20: Operational Review: EMEA/AP
Crawford & Company Fourth Quarter Operational Review 20 EMEA/AP $0 $5 $10 $15 $20 $25 $30 $35 $40 U.K. CEMEA Asia-Pacific Revenues by Geographic Region ($ in millions) U.K. New client wins in the fourth quarter Further recruitment of Global Technical Services (GTS) adjusters U.K. transformation proj
Slide 21: Operational Review: Broadspire
Crawford & Company Fourth Quarter Operational Review 21 Broadspire $0 $5 $10 $15 $20 $25 $30 $35 Workers' Comp. Medical Mgmt. Risk Mgmt. Info. Svcs. Revenues by Service Line ($ in millions) Broadspire case volume improved 10.6% over prior year fourth quarter Medical management revenues are incre
Slide 22: Operational Review: Legal Settlement Administration
Crawford & Company Fourth Quarter Operational Review 22 Legal Settlement Administration $0 $20 $40 $60 $80 $100 $120 $140 $160 4Q 2012 4Q 2011 Backlog ($ in millions) Deepwater Horizon class action project drove results New business wins continue in both class action and bankruptcy space Recor
Slide 23: 2013 Guidance
Crawford & Company 2013 Guidance 23 Crawford and Company is providing initial full year 2013 guidance as follows: Consolidated revenues before reimbursements between $1.05 and $1.08 billion Consolidated operating earnings between $85.0 and $93.0 million Consolidated cash provided by operating activi
Slide 24: 2013 Operational Focus
Crawford & Company 2013 Operational Focus 24 Sustain Operating Performance through Improved Profitability Americas Broadspire Strengthen the Balance Sheet Manage debt levels and pension obligations Drive operating cash flow to support business growth Enhance Total Return to Shareholders Di
Slide 25: Fourth Quarter 2012 Appendix
Fourth Quarter 2012 Appendix
Slide 26: Appendix: Non-GAAP Financial Information
Crawford & Company Appendix: Non-GAAP Financial Information 26 Measurements of financial performance not calculated in accordance with GAAP should be considered as supplements to, and not substitutes for, performance measurements calculated or derived in accordance with GAAP. Any such measures are n
Slide 27: Reconciliation of Non-GAAP Items
Crawford & Company Reconciliation of Non-GAAP Items 27 Unaudited ($ in thousands) December 31, December 31, 2012 2011 Deferred Revenues, Net Deferred revenues, current 56,379$ 53,844$ Deferred revenues, noncurrent 26,438 27,856 Total deferred revenues 82,817 81,700 Less: Receivable held in trust inc
Slide 28: Reconciliation of Non-GAAP Items
Crawford & Company Reconciliation of Non-GAAP Items 28 Unaudited ($ in millions) 4Q 2011 1Q 2012 2Q 2012 3Q 2012 4Q 2012 Revenues Before Reimbursements Total Revenu s 285$ 287$ 319$ 324$ 336$ Reimburs ments (19) (19) (25) ( 2) (23) Revenues Before Reimbursements 266$ 268$ 294$ 302$ 313$ Three Months