Crawford & Company · NYSE:CRD.A
Crawford & — Q4 2010 Earnings Presentation
27 slides from Crawford &'s earnings presentation, Feb 7, 2011
Slide 1: Fourth Quarter 2010 Earnings Conference Call
OO Fourth Quarter 2010 Earnings Conference Call Monday, February 7, 2011
Slide 2: International Operations and U.S. Property & Casualty
_— International Operations Serves the global insurance 4 ge na Cm industry and multi-national u sarriers and self: Crawford corporations e n B BROADSPIRE U.S. Property & Casualty Serves the U.S. insurance GCG: company market
Slide 3: Forward Looking Statements
Segment Operating Earnings Forward Looking Statements: This presentation contains forward-looking statements, including staternents about the future financial condition, results of operations and earnings outlook of Crawford & Company. Statements, both qualitative and quantitative, that are not stat
Slide 4: Welcome and opening comments
Welcome and opening comments : —Highlights of 2010.4" quarter and year : Business segment operating results | 2010 achievements 2011 focus and guidance
Slide 5: Business Summary
usiness Summary § in millions « Revenue reflected strong performance in Legal Settlement Administration and organic growth in International Operations 200 $301.5 * Substantial improvement in operating cash aa vee flow over 2010 third quarter levels 50 + Accelerated funding to U.S. frozen defined ® 4
Slide 6: GAAP EPS to Adjusted Non-GAAP EPS
Fourth Quarter and Full Year 2010 GAAP EPS to Adjusted Non-GAAP EPS Fourth Quarter Full Year 2010) 2009) 2010) 2009 Reported diluted GAAP earnings {loss) per share $ 028|$ ai7| |$ as3|$ (223) Add: Goodwill impairment charge Oa - 0.15) 271 Adjusted diluted eamings per share on a non-GAAP basis $ 033|
Slide 7: Fourth Quarter 2010 Financial Review
OO Fourth Quarter 2010 Financial Review
Slide 8: Income Statement Highlights
CRAWFORD & COMPANY Income Statement Highlights Unaudited (in Thousands, Baxpt Eamings Per Share Amounts and Percentages} Quarter Ended December 31 Revenues: Revenues Before Reimbursements Costs of Services Selling, General, and Administrative Expenses Corporate Interest Expense, Net Goodall impairme
Slide 9: 2009 to 2010 Fourth Quarter Bridge
2009 to 2010 Fourth Quarter Bridge Net Income {Loss} Revenues before| Attributable to Diluted in millions, except per share amounts Reimbursements| Crawford & Company| EPS Fourth quarter 2009 results $ 233.4| $ 39/8 017 {Less}/Add: Foreign currency impact in 2010 oO7 01 - Decrease in pension expense
Slide 10: Summary Results, International Operations
Summary Results, International Operations For the quarters ended December 31, 2010. and 2005 Jn thousands, excep! percentages: Unausied Proforma 2a10* 2o19** Revenues $ 114,096 $1428 Total Operating Expenses 100,987 101,608 Operating Earnings $ 13,108] _$ 73710 Operating Margin 11.5%| 115% Revenue g
Slide 11: Summary Results, U.S. Property & Casualty
ancials Summary Results, U.S. Property & Casualty For the quarters ended December 31, 2010. and 2009 Jn thousands, except percentages Unaudited 2010 2009. © % Change Revenues $45,172 $44,906 0.6% Total Operating Expenses 45,624 43,309 5.3% Operating Eamings $ (452) $$ 1597 -128.3% Operating Margin “
Slide 12: U.S. Catastrophe
U.S. Catastrophe > CAT revenue of $5.2 million in fourth quarter of 2010 compared to $3.7 million in 2009 period CAT cases numbered 6,200 in the fourth quarter of 2010 compared to 4,700 in the fourth quarter of 2009 Despite increase in 4Q 2010, claims frequency in terms of catastrophic events has be
Slide 13: Summary Results, Broadspire
als Summary Results, Broadspire For the quarters ended December 31, 2010 and 2009 Jn thousands, except percentages: Unaudited 2010 2009 «= % Change Revenues $60,670 $70,563 -14.0% Total Operating Expenses 67,618 68,434 -1.2% Operating Loss $ (6,948) $ 2,129 426.4% Operating Margin -1L5% 30% Revenues
Slide 14: Summary Results, Legal Settlement Administration
als Summary Results, Legal Settlement Adiinistration § in millions For the quarters ended December 31, 2010 and 2009 nn in fhousands, except percentages 00. thaxtited roo 0D. 200 2009 - % Change 5a Revenues $30,317 $19,183 321.3% 400 30. 700 Total Operating Expenses 52,973 15,964 231.8% 100 oo Opera
Slide 15: Balance Sheet Highlights
(Crawford & Company Balance Sheet Highlights ‘sof Receraber 31, 2010 and Decerber 31, 2009 naemed Desemier 31, December 3, zap 2009" Change Cash and cash equivalents Sasa OSH SST] Acme: sesm S335 ait revenues, met ae 9376 29157 Total receivables 25a OTE] oem msm sae 255 ferred revemmes, et T56 mst (
Slide 16: Free Cash Flow
Crawford & Company Free Cash Flow For the year ended December 31, 2010 and 2009 als fe Timsencs) December 31, December 31, 2010 2008 Variance Net Income (Loss) Attributable to Crawford & Company $23,328 ($115,683) $144,011 Plus: Goodhwill and intangible Asset impairment Charges 10,788 140,945 (130,1
Slide 17: Operational Review
OO Operational Review
Slide 18: International Operations
nternationa + Grow revenue and market share Continued success in new client acquisition International expansion of TPA offerings + U.K. and Australia Surge events in U.K. and in Australia Executing work in progress reduction plan and improving DSO Tasmania acquisition * Canada Claim volume improving
Slide 19: U.S. Property & Casualty
roper * Grow market share Casualty Revenues by service line (in millions) + Continued expansion of Global * Technical Services * Growth in Contractor Connection sid + Extension of networks in vehicle [| services i + Strengthen US Casualty offering in Transportation, Consulting Services rr Er I and L
Slide 20: Broadspire
roadspire Claims volume improved over Q3 2010 Q4 2010 non-recurring costs affected operating earnings “Jobless recovery” continues to affect business performance Further cost reduction anticipated in Q1 and Q2 2011 Stabilization of revenue during 2011 as our pipeline of new business is realized Reve
Slide 21: Legal Settlement Administration
ministration « Engagement in the Gulf Coast Claims Facility (GCCF) drives revenue and operating earnings through the first half of 2011 Backlog (in millions) B8Se8838 88 + Increase focus on class action market share in 2011 $90.0 ¢ Record backlog at $90 million $55.0 4Q 2010 4Q 2009
Slide 22: 2010 Key Achievements
2010 Key Achievements \ Revenue and operating earnings improved \ Near-term pension funding is significantly reduced, and financial flexibility is improved \ Board of Directors declared quarterly dividend of $0.02 per share beginning in first quarter of 2011
Slide 23: Deliver on Our Strategy
" iu o Deliver on Our Strategy” Attract new business and retain customers Key account management/cross-selling through the “System” Grow Business Process Outsourcing Expansion of Global Technical Services (GTS) and Contractor Connection Expansion of TPA offerings internationally Support existing bus
Slide 24: Full Year 2011 Guidance
nce Full Year 2011 Guidance: Consolidated revenue before reimbursements between $990 million and $1.02 billion Consolidated operating earnings between $58.0 million and $63.0 million Consolidated cash provided by operating activities between $30.0 and $35.0 ion After reflecting stock-based compensat
Slide 25: Fourth Quarter 2010 Earnings Conference Call
OO Fourth Quarter 2010 Earnings Conference Call Monday, February 7, 2011
Slide 26: Crawford & Company
Gueford & Company
Slide 27: Reconciliation of Non-GAAP Items (cont.)