[Part I. Financial Information](index=3&type=section&id=Part%20I.%20Financial%20Information) [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) The company's Q1 2022 financial statements show increased revenues to $287.8 million, but decreased net income to $5.1 million, diluted EPS of $0.10, and negative operating cash flow [Condensed Consolidated Statements of Operations](index=3&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q1 2022 total revenues increased to **$287.8 million**, but net income attributable to shareholders declined to **$5.1 million**, with diluted EPS at **$0.10** Consolidated Statements of Operations (Unaudited) | Indicator (In thousands, except per share) | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :--- | :--- | :--- | | **Total Revenues** | $287,789 | $262,155 | | **Income Before Income Taxes** | $7,582 | $8,505 | | **Net Income Attributable to Shareholders** | $5,096 | $6,064 | | **Diluted EPS (Class A & B)** | $0.10 | $0.11 | [Condensed Consolidated Statements of Comprehensive Income (Loss)](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)) Q1 2022 comprehensive income attributable to shareholders significantly decreased to **$1.8 million**, primarily due to a **($5.0) million** net foreign currency translation loss Comprehensive Income (Loss) (Unaudited) | Indicator (In thousands) | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :--- | :--- | :--- | | **Net Income** | $5,156 | $6,034 | | **Other Comprehensive (Loss) Income** | ($3,276) | $12,576 | | **Comprehensive Income Attributable to Shareholders** | $1,806 | $18,654 | [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2022, total assets slightly decreased to **$845.6 million**, total liabilities increased to **$650.2 million**, and total shareholders' investment decreased to **$195.5 million** Consolidated Balance Sheet Highlights (Unaudited) | Account (In thousands) | March 31, 2022 | December 31, 2021 | | :--- | :--- | :--- | | **Total Current Assets** | $349,510 | $345,920 | | **Total Assets** | $845,634 | $852,639 | | **Total Current Liabilities** | $281,261 | $303,855 | | **Total Liabilities** | $650,158 | $641,242 | | **Total Shareholders' Investment** | $195,476 | $211,397 | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Q1 2022 net cash used in operating activities was **($15.3) million**, investing activities used **($25.9) million**, and financing activities provided **$37.6 million** from increased borrowings Consolidated Cash Flows (Unaudited) | Cash Flow Activity (In thousands) | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :--- | :--- | :--- | | **Net cash (used in) provided by operating activities** | ($15,253) | $1,577 | | **Net cash used in investing activities** | ($25,856) | ($5,704) | | **Net cash provided by financing activities** | $37,608 | $610 | [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Key notes include the realignment of operating segments, details on recent acquisitions like Praxis Consulting and edjuster Inc., and an increased effective tax rate of **32.0%** - In January 2022, the Company realigned its operating segments into a new geographic reporting structure: **North America Loss Adjusting, International Operations, Broadspire, and Platform Solutions**[25](index=25&type=chunk)[61](index=61&type=chunk) - The company completed several acquisitions in 2021, including **edjuster Inc. and Praxis Consulting Inc.**, and continued to finalize the accounting for these business combinations[70](index=70&type=chunk)[72](index=72&type=chunk) - The effective income tax rate increased to **32.0%** for Q1 2022 from **29.1%** in Q1 2021, primarily due to losses in certain international operations[44](index=44&type=chunk) - On April 1, 2022, the Company acquired assets of **R.P. van Dijk B.V.**, a bodily injury loss adjusting company in the Netherlands, for an initial cash consideration of **$4.4 million**[77](index=77&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=25&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management reported a **10.2%** increase in consolidated revenues to **$279.0 million**, with operating earnings rising to **$15.5 million**, and strong liquidity of **$249.6 million** [Business Overview](index=26&type=section&id=Business%20Overview) Crawford & Company, a leading claims management provider, realigned its segments into **North America Loss Adjusting, International Operations, Broadspire, and Platform Solutions** in January 2022 - The company is the **world's largest** publicly listed independent provider of claims management and outsourcing solutions, serving clients in **over 70 countries**[88](index=88&type=chunk) - In January 2022, the company realigned its operating segments to a geographic structure: **North America Loss Adjusting, International Operations, Broadspire, and Platform Solutions**[89](index=89&type=chunk) [Results of Operations](index=27&type=section&id=Results%20of%20Operations) Q1 2022 consolidated revenues grew **10.2%** to **$279.0 million**, with total segment operating earnings increasing to **$15.5 million**, despite a decline in income before taxes Q1 2022 vs Q1 2021 Revenue Before Reimbursements by Segment | Segment (in thousands) | Q1 2022 | Q1 2021 | Variance | Constant Currency Variance | | :--- | :--- | :--- | :--- | :--- | | North America Loss Adjusting | $64,438 | $56,298 | 14.5% | 14.5% | | International Operations | $89,272 | $86,467 | 3.2% | 6.5% | | Broadspire | $76,454 | $74,276 | 2.9% | 2.9% | | Platform Solutions | $48,861 | $36,140 | 35.2% | 35.2% | | **Total** | **$279,025** | **$253,181** | **10.2%** | **11.3%** | - Total cases received increased by **18.8%** in Q1 2022 compared to Q1 2021, with recent acquisitions contributing **3.3%** of the total cases[94](index=94&type=chunk) Q1 2022 vs Q1 2021 Segment Operating Earnings | Segment (in thousands) | Q1 2022 | Q1 2021 | | :--- | :--- | :--- | | North America Loss Adjusting | $4,135 | $4,361 | | International Operations | ($3,067) | ($673) | | Broadspire | $6,434 | $6,734 | | Platform Solutions | $8,038 | $4,018 | | **Total** | **$15,540** | **$14,440** | [Liquidity, Capital Resources, and Financial Condition](index=39&type=section&id=Liquidity%2C%20Capital%20Resources%2C%20and%20Financial%20Condition) As of March 31, 2022, total liquidity was **$249.6 million**, with cash used in operations at **($15.3) million**, and financing activities providing **$37.6 million** from increased borrowings - Total liquidity was **$249.6 million** at March 31, 2022, consisting of **$49.2 million** in cash and **$200.4 million** in available borrowing capacity[155](index=155&type=chunk) Q1 2022 vs Q1 2021 Cash Flow Summary | Cash Flow Activity (in millions) | Q1 2022 | Q1 2021 | | :--- | :--- | :--- | | Cash from Operating Activities | ($15.3) | $1.6 | | Cash from Investing Activities | ($25.9) | ($5.7) | | Cash from Financing Activities | $37.6 | $0.6 | - Share repurchases totaled **$16.1 million** in Q1 2022, compared to **$1.2 million** in Q1 2021[154](index=154&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=41&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company reports no material changes in its market risk exposures since December 31, 2021 - There have been **no material changes** in the Company's market risk exposures since December 31, 2021[162](index=162&type=chunk) [Controls and Procedures](index=42&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective, with no material changes to internal control over financial reporting during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures were **effective** as of March 31, 2022[164](index=164&type=chunk) - **No material changes** to the internal control over financial reporting occurred during the quarter[165](index=165&type=chunk) [Part II. Other Information](index=43&type=section&id=Part%20II.%20Other%20Information) [Risk Factors](index=43&type=section&id=Item%201A.%20Risk%20Factors) The company refers to its 2021 Annual Report on Form 10-K for risk factors, indicating no new material risks in this quarter - The company directs investors to the risk factors detailed in its 2021 Annual Report on Form 10-K, implying **no material updates** for the current quarter[167](index=167&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=43&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company repurchased **2,217,958 shares** in March 2022 under an increased authorization, with **3,195,359 shares** remaining authorized - On February 11, 2022, the Board of Directors added **5,000,000 shares** to the existing repurchase authorization[168](index=168&type=chunk) Share Repurchases in Q1 2022 | Period | Class | Shares Purchased | Average Price Paid | | :--- | :--- | :--- | :--- | | March 2022 | CRD-A | 1,498,084 | $7.23 | | March 2022 | CRD-B | 719,874 | $7.31 | | **Total** | | **2,217,958** | | - As of March 31, 2022, the company was authorized to repurchase an additional **3,195,359 shares**[168](index=168&type=chunk)[169](index=169&type=chunk) [Exhibits](index=44&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including CEO and CFO certifications and Inline XBRL data files - Exhibits filed include **certifications** from the principal executive and financial officers (Sections 302 and 906 of Sarbanes-Oxley) and **XBRL data files**[171](index=171&type=chunk)

Financial Performance - Consolidated revenues before reimbursements were $1.102 billion in 2021, an increase of 12.2% compared to $982.5 million in 2020[136] - Net income attributable to Crawford & Company was $30.7 million in 2021, compared to $28.3 million in 2020[136] - Total revenues for the year ended December 31, 2021, were $1,139.2 million, a 12.1% increase from $1,016.2 million in 2020[178] - Revenues from Crawford Loss Adjusting increased by 8.5% to $475.6 million, while Crawford TPA Solutions grew by 7.2% to $398.0 million, and Crawford Platform Solutions surged by 32.4% to $228.5 million[138] - The company recognized a pretax gain on disposal of $13.8 million related to the sale of the Lloyd Warwick International business in 2020[158] - Net income attributable to shareholders of Crawford & Company was $30.7 million, an 8.5% increase from $28.3 million in 2020[180] Operating Earnings - Operating earnings in Crawford Loss Adjusting decreased to $23.0 million, or 4.8% of revenues, primarily due to losses in international operations and increased compensation expenses[145] - Operating earnings in Crawford TPA Solutions decreased to $17.6 million, or 4.4% of revenues, impacted by the ongoing effects of COVID-19 in Canada and Europe[146] - Operating earnings in Crawford Platform Solutions increased to $36.3 million, or 15.9% of revenues, due to revenue growth[147] - Operating earnings for the Crawford Loss Adjusting segment decreased to $23.0 million, or 4.8% of revenues before reimbursements, compared to $41.1 million, or 9.4% in 2020, due to losses in international operations and increased compensation expenses[181] - Operating earnings for Crawford TPA Solutions decreased to $17.6 million in 2021, or 4.4% of revenues before reimbursements, down from $20.5 million, or 5.5%, in 2020[194] - Operating earnings for Crawford Platform Solutions were $36.3 million in 2021, representing 15.9% of revenues before reimbursements, compared to $27.7 million or 16.0% in 2020[211] Expenses - Cost of services provided increased by $106.6 million, or 15.2%, primarily due to higher compensation expenses and recent acquisitions[148] - Selling, general, and administrative expenses rose by $25.9 million, or 11.8%, attributed to increased compensation and centralized data processing costs[149] - Direct compensation, fringe benefits, and non-employee labor expenses increased from $269.8 million in 2020 to $315.2 million in 2021, representing 66.3% of segment revenues before reimbursements[192] - Total expenses other than reimbursements in Crawford TPA Solutions increased from $116.7 million in 2020 to $123.6 million in 2021, but decreased as a percentage of revenues from 31.5% to 31.0%[207] Acquisitions - The company acquired BosBoon Expertise Group B.V. for an initial cash consideration of $2.1 million, with a potential maximum of $1.9 million based on performance goals over two years[151] - The acquisition of Praxis Consulting, Inc. was completed for a total purchase price of $21.5 million, including a deferred payment of $20.0 million due in February 2022, and a maximum of $10.0 million based on revenue performance goals[152] - The company acquired edjuster Inc. for an initial cash payment of $20.9 million, with an earn-out potential of up to $13.3 million based on EBITDA performance goals over two years[154] - The acquisition of HBA Group was for an initial cash payment of $4.0 million, with a maximum of $3.2 million payable over four years based on revenue and EBITDA performance goals[155] - The acquisition of Crawford Carvallo included an initial cash payment of $11.6 million, with a maximum of $11.7 million payable over six years based on EBITDA performance goals[156] Cash Flow and Liquidity - Cash provided by operating activities decreased to $54.3 million in 2021 from $93.2 million in 2020, primarily due to increased accounts receivable and higher tax payments[290] - Cash used in investing activities increased to $70.8 million in 2021 from $27.0 million in 2020, driven by acquisitions including HBA Group for $3.8 million and Praxis for $22.2 million[292] - As of December 31, 2021, the company had a working capital balance of approximately $42.1 million, down from $59.2 million in 2020, attributed to increased short-term borrowings and accrued compensation[287] - The company had total outstanding debt of $175.0 million as of December 31, 2021, with an available borrowing capacity of $260.2 million under its Credit Facility[278] - Total liquidity at December 31, 2021, was $313.5 million, consisting of $53.2 million in cash on hand and $260.2 million in additional borrowing capacity based on trailing twelve month EBITDA[298] Case Volumes and Market Activity - Total cases received increased by 5.8% in 2021, totaling 1,653,050 cases, driven by Hurricane Ida activity in the U.S.[140] - The U.S. market contributed $158.5 million to Crawford Loss Adjusting revenues, reflecting a 23.5% increase from $128.3 million in 2020[185] - Case volumes increased by 18.9% in 2021, with the U.S. seeing a 17.9% rise in cases received[217] - Total Crawford Loss Adjusting cases received increased by 7.0% in 2021, with U.S. case volumes rising by 3.1% and U.K. case volumes increasing by 21.2%[188][190] Tax and Compliance - The effective income tax rate for the company was 30.7% in 2020, with an anticipated range of 29% to 31% for 2022[261] - The company expects to remain in compliance with all required covenants throughout 2022, with sensitivity to changes in EBITDA affecting compliance[299] Deferred Revenues and Claims - As of December 31, 2021, deferred revenues related to lifetime claim handling arrangements approximated $38.0 million[324] - The company closes approximately 99% of all cases referred under lifetime claim service arrangements within five years[323] - A 1.0% decrease in claim closing rates for lifetime claims would have resulted in the deferral of additional revenues of approximately $1.3 million for the years ended December 31, 2021, 2020, and 2019[324] - The competitive environment may limit the company's ability to raise prices to offset expenses associated with handling longer-lived claims[324]

United States SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the quarterly period ended September 30, 2021 OR ☐ 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 1-10356 CRAWFORD & COMPANY (Exact name of Registrant as specified in its charter) Georgia 58-0506554 (State or other jurisdiction ...

United States SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the quarterly period ended June 30, 2021 OR ☐ 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 1-10356 CRAWFORD & COMPANY (Exact name of Registrant as specified in its charter) Georgia 58-0506554 (State or other jurisdiction of i ...

Table of Contents United States SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the quarterly period ended March 31, 2021 OR ☐ 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 1-10356 CRAWFORD & COMPANY (Exact name of Registrant as specified in its charter) Georgia 58-0506554 (State or other jurisdic ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 Form 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2020 ☐ 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 1-10356 CRAWFORD & COMPANY (Exact name of Registrant as specified in its charter) Georgia (State or other jurisdiction of incorporat ...

United States SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the quarterly period ended September 30, 2020 OR ☐ 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 1-10356 CRAWFORD & COMPANY (Exact name of Registrant as specified in its charter) Georgia 58-0506554 (State or other jurisdiction ...

United States SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the quarterly period ended June 30, 2020 OR ☐ 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 1-10356 CRAWFORD & COMPANY (Exact name of Registrant as specified in its charter) Georgia 58-0506554 (State or other jurisdiction of i ...

United States 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 March 31, 2020 OR o 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 1-10356 CRAWFORD & COMPANY (Exact name of Registrant as specified in its charter) Georgia 58-0506554 (State or other jurisdiction of ...

[PART I](index=4&type=section&id=PART%20I) [Item 1. Business](index=4&type=section&id=Item%201.%20Business) Crawford & Company is a global independent provider of claims management and outsourcing solutions, reporting **$1.006 billion** in 2019 revenues across three segments - Crawford & Company is the world's largest publicly listed independent provider of claims management and outsourcing solutions, operating globally in over **70 countries**[14](index=14&type=chunk) 2019 Total Revenues Before Reimbursements | Metric | Amount (USD) | | :--------------------------- | :----------- | | Total Revenues Before Reimbursements | $1.006 billion | - The Company's services are delivered through three operating segments: Crawford Claims Solutions, Crawford TPA Solutions (Broadspire brand), and Crawford Specialty Solutions[16](index=16&type=chunk)[17](index=17&type=chunk) - Crawford Claims Solutions accounted for **33.8%** of revenues before reimbursements in 2019, providing global claims management for property, casualty, and catastrophe losses[18](index=18&type=chunk) - Crawford TPA Solutions (Broadspire) accounted for **39.2%** of revenues before reimbursements in 2019, offering third-party administration for workers' compensation, auto/liability, disability, and medical management[21](index=21&type=chunk)[22](index=22&type=chunk) - Crawford Specialty Solutions accounted for **27.0%** of revenues before reimbursements in 2019, providing services through Global Technical Services (complex losses) and Contractor Connection (managed repair network)[25](index=25&type=chunk)[26](index=26&type=chunk)[27](index=27&type=chunk) - No single customer accounted for **10%** or more of consolidated revenues in 2019, 2018, or 2017, but the Crawford Specialty Solutions segment derived over **10%** of its revenue from one customer in each of those years[28](index=28&type=chunk) - The global claims management services market is highly competitive, with demand influenced by industry-wide claims volumes, insurance underwriting cycles, weather events, economic activity, and outsourcing decisions by clients[32](index=32&type=chunk) - As of December 31, 2019, the Company had approximately **9,000** full-time equivalent employees (FTEs) and also utilizes temporary employees and independent contractors for peak demand[35](index=35&type=chunk) [Item 1A. Risk Factors](index=8&type=section&id=Item%201A.%20Risk%20Factors) The Company faces diverse risks including unpredictable claim volumes, client concentration, cybersecurity threats, international operational complexities, and pension underfunding - Dependence on claim volumes for a significant portion of revenues, which are not accurately forecastable, poses a material risk to financial condition and results of operations[40](index=40&type=chunk)[41](index=41&type=chunk) - A limited number of clients contribute a material portion of revenues, particularly in the Crawford Specialty Solutions segment, and loss of these clients could materially adversely affect the segment[42](index=42&type=chunk)[43](index=43&type=chunk)[44](index=44&type=chunk) - Managing highly sensitive and confidential consumer information exposes the Company to risks of unauthorized access, alteration, or disclosure, potentially leading to business loss, legal liability, or reputational harm[46](index=46&type=chunk)[47](index=47&type=chunk) - Increased frequency and complexity of cybersecurity attacks, coupled with evolving data privacy regulations (e.g., GDPR, CCPA), could impact business models and increase liability[48](index=48&type=chunk)[49](index=49&type=chunk)[50](index=50&type=chunk) - International operations in over **70 countries** subject the Company to political, legal, operational, and exchange rate risks, including discriminatory regulation, nationalization, and compliance with diverse laws like FCPA[60](index=60&type=chunk)[61](index=61&type=chunk)[62](index=62&type=chunk) - The U.K.'s departure from the EU ('Brexit') introduces uncertainty and potential negative impacts on operations in the region due to regulatory, contractual, and supply chain issues[63](index=63&type=chunk)[64](index=64&type=chunk) - The U.S. Qualified Defined Benefit Pension Plan is underfunded by **$63.5 million** as of December 31, 2019, requiring significant future contributions that could restrict cash available for other operating, financing, and investing needs[70](index=70&type=chunk)[71](index=71&type=chunk) - Debt covenants in the credit facility, including maximum leverage ratio and minimum fixed charge coverage ratio, require compliance; failure to meet these could result in outstanding debt becoming immediately due and payable[74](index=74&type=chunk)[75](index=75&type=chunk) - The Company operates in highly competitive markets and faces challenges in recruiting, training, and retaining qualified personnel, including on-call claims adjusters for catastrophic events and case management professionals in healthcare[80](index=80&type=chunk)[84](index=84&type=chunk)[85](index=85&type=chunk)[86](index=86&type=chunk) - Control by a principal shareholder (Jesse C. Crawford, beneficially owning **~57%** of Class B Common Stock) could delay or prevent a change in control and impact decisions[78](index=78&type=chunk) [Item 1B. Unresolved Staff Comments](index=15&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The Company has no unresolved staff comments from the SEC - There are no unresolved staff comments[91](index=91&type=chunk) [Item 2. Properties](index=15&type=section&id=Item%202.%20Properties) The Company owns one office and leases approximately 250 global locations, deeming current facilities sufficient for operations - As of December 31, 2019, the Company owned one office in Kitchener, Ontario, and leased approximately **250** other office locations[92](index=92&type=chunk) - The Company believes its current office locations are sufficient and that additional or different locations would be available on commercially reasonable terms if necessary[92](index=92&type=chunk) [Item 3. Legal Proceedings](index=15&type=section&id=Item%203.%20Legal%20Proceedings) The Company faces lawsuits from insureds and clients, and is subject to various labor and anti-corruption laws, incurring **$12.6 million** in 2019 arbitration charges - The Company is periodically named as a defendant in lawsuits by insureds or claimants contesting settlement decisions and may face indemnification claims from clients[93](index=93&type=chunk) - Most claims are covered by insurance, but the Company is responsible for deductibles and self-insured retentions[93](index=93&type=chunk) - The Company is subject to numerous federal, state, and foreign laws (labor, employment, anti-corruption, etc.) and may face claims and investigations from employees, former employees, and governmental entities[94](index=94&type=chunk) Arbitration and Claim Settlement Charges | Year | Amount (USD) | | :--- | :----------- | | 2019 | $12.6 million | [Item 4. Mine Safety Disclosures](index=16&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the Company - Mine Safety Disclosures are not applicable to the Company[97](index=97&type=chunk) [PART II](index=16&type=section&id=PART%20II) [Item 5. Market for the Registrant's Common Equity, Related Shareholder Matters, and Issuer Purchases of Equity Securities](index=16&type=section&id=Item%205.%20Market%20for%20the%20Registrant%27s%20Common%20Equity%2C%20Related%20Shareholder%20Matters%2C%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Crawford & Company's Class A and B common stocks trade on the NYSE, with recent share repurchase authorizations and activity - Crawford & Company's Class A (CRD-A) and Class B (CRD-B) common stocks are traded on the NYSE, with CRD-A having non-voting rights but potentially higher cash dividends[99](index=99&type=chunk) Record Holders of Common Stock (December 31, 2019) | Class | Number of Record Holders | | :---- | :----------------------- | | CRD-A | 2,923 | | CRD-B | 390 | - The 2017 Repurchase Authorization (up to **2,000,000 shares**) was terminated on May 8, 2019[102](index=102&type=chunk) - A new 2019 Repurchase Authorization was approved on May 9, 2019, allowing the repurchase of up to **2,000,000 shares** of CRD-A or CRD-B through December 31, 2020[103](index=103&type=chunk) Share Repurchases (Through December 31, 2019) | Class | Shares Repurchased | Average Cost (USD) | | :---- | :----------------- | :----------- | | CRD-A | 1,103,398 | $9.33 | | CRD-B | 1,736,011 | $9.17 | - As of December 31, 2019, **958,907 shares** remained authorized for repurchase under the 2019 Repurchase Authorization[104](index=104&type=chunk) Comparison of Cumulative Five Year Total Return (Indexed to $100 at Dec 31, 2014) | Company / Index | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | | :---------------------------------- | :----- | :----- | :----- | :----- | :----- | :----- | | Crawford & Company (Class B) | 100.00 | 53.18 | 128.94 | 100.79 | 96.45 | 111.06 | | S&P 500 Index | 100.00 | 101.38 | 113.51 | 138.29 | 132.23 | 173.86 | | S&P Property-Casualty Insurance Index | 100.00 | 109.53 | 126.73 | 155.10 | 147.83 | 186.07 | [Item 6. Selected Financial Data](index=19&type=section&id=Item%206.%20Selected%20Financial%20Data) This section provides a five-year financial summary, highlighting a decline in 2019 revenues and net income, alongside segment operating earnings trends Selected Financial Data (2015-2019) | Metric | 2019 (USD) | 2018 (USD) | 2017 (USD) | 2016 (USD) | 2015 (USD) | | :------------------------------------------------------------------- | :---------- | :---------- | :---------- | :---------- | :---------- | | Revenues before Reimbursements | $1,005,802 | $1,070,971 | $1,105,832 | $1,109,286 | $1,170,385 | | Total Revenues | $1,047,627 | $1,122,979 | $1,163,709 | $1,177,588 | $1,241,520 | | Total Costs of Services | $752,773 | $808,005 | $842,167 | $850,112 | $940,352 | | Crawford Claims Solutions Operating Earnings | $7,630 | $11,308 | $18,541 | $14,371 | $5,708 | | Crawford TPA Solutions Operating Earnings | $27,173 | $36,909 | $38,224 | $36,520 | $33,915 | | Crawford Specialty Solutions Operating Earnings | $49,321 | $49,564 | $52,404 | $65,641 | $49,956 | | Net Income Attributable to Shareholders of Crawford & Company | $12,485 | $25,978 | $27,665 | $35,966 | $(45,488) | | Earnings Per Share - Basic (CRD-A) | $0.27 | $0.51 | $0.53 | $0.68 | $(0.79) | | Earnings Per Share - Basic (CRD-B) | $0.19 | $0.43 | $0.45 | $0.60 | $(0.87) | | Total Assets | $760,013 | $701,442 | $787,936 | $735,859 | $783,406 | | Total Debt | $176,954 | $190,410 | $225,672 | $188,014 | $247,282 | | Shareholders' Investment Attributable to Shareholders of Crawford & Company | $159,317 | $171,288 | $182,320 | $153,883 | $113,693 | | Cash Provided by Operating Activities | $75,216 | $52,419 | $40,757 | $98,864 | $61,655 | | Cash Dividends Per Share (CRD-A) | $0.28 | $0.28 | $0.28 | $0.28 | $0.28 | | Cash Dividends Per Share (CRD-B) | $0.20 | $0.20 | $0.20 | $0.20 | $0.20 | - Net income attributable to shareholders decreased by **51.9%** from **$25.978 million** in 2018 to **$12.485 million** in 2019[167](index=167&type=chunk) - Total revenues before reimbursements decreased by **6.1%** from **$1,070.971 million** in 2018 to **$1,005.802 million** in 2019[166](index=166&type=chunk) - Operating earnings for Crawford Claims Solutions decreased by **32.5%** in 2019, Crawford TPA Solutions by **26.4%**, and Crawford Specialty Solutions by **0.5%**[166](index=166&type=chunk) [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=22&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section analyzes financial performance, liquidity, and critical accounting policies, detailing revenue declines, goodwill impairment, and pension obligations [Business Overview](index=22&type=section&id=Business%20Overview) Crawford & Company is a global claims management provider, with 2019 impacted by **$12.6 million** arbitration and **$17.5 million** goodwill impairment charges - Crawford & Company is a global provider of claims management and outsourcing solutions, serving clients in over **70 countries** through its three operating segments[120](index=120&type=chunk)[121](index=121&type=chunk) - The global claims management market is highly competitive, with demand dependent on industry-wide claim volumes, insurance underwriting cycles, weather events, and outsourcing decisions[123](index=123&type=chunk) - Revenues are typically earned on a fee-per-claim basis, making claim referral volume a key driver, though future trends are difficult to predict due to factors like natural disasters[125](index=125&type=chunk) Significant Charges and Events (2019) | Event | Amount (USD) | | :---------------------------------- | :----------- | | Arbitration and Claim Settlement Charges | $12.6 million | | Non-cash Goodwill Impairment Charge | $17.5 million | - In 2018, the Company completed the sale of its Garden City Group business for **$42.6 million**, recognizing a pre-tax loss on disposal of **$20.3 million**[128](index=128&type=chunk) - In 2017, the Company acquired **85%** of WeGoLook®, LLC for **$36.1 million** and was impacted by the Tax Cuts and Jobs Act, which significantly changed U.S. federal income tax law[128](index=128&type=chunk)[129](index=129&type=chunk) [Results of Operations](index=24&type=section&id=Results%20of%20Operations) Consolidated revenues decreased by **6.1%** in 2019 to **$1.006 billion**, with net income down **51.9%** due to charges and segment declines Consolidated Revenues and Net Income (2019 vs. 2018) | Metric | 2019 (USD) | 2018 (USD) | % Change | | :---------------------------------------------- | :------------ | :------------ | :------- | | Consolidated Revenues before Reimbursements | $1,005,802,000 | $1,070,971,000 | (6.1)% | | Net Income Attributable to Crawford & Company | $12,485,000 | $25,978,000 | (51.9)% | - Changes in foreign exchange rates decreased segment revenues by approximately **$21.6 million (2.0%)** in 2019 compared to 2018[134](index=134&type=chunk) - Excluding the Garden City Group business and foreign exchange rate changes, consolidated revenues before reimbursements decreased by **$13.7 million (1.3%)** in 2019[134](index=134&type=chunk) Segment Revenues Before Reimbursements (2019 vs. 2018) | Segment | 2019 (USD) | 2018 (USD) | % Change | | :--------------------------- | :--------- | :--------- | :------- | | Crawford Claims Solutions | $339,837 | $361,053 | (5.9)% | | Crawford TPA Solutions | $393,856 | $405,335 | (2.8)% | | Crawford Specialty Solutions | $272,109 | $304,583 | (10.7)% | - The decrease in Crawford Specialty Solutions revenues was primarily due to the disposition of the Garden City Group business, representing a **$29.9 million** reduction in 2019[135](index=135&type=chunk) - Crawford Claims Solutions revenue decrease was due to the absence of catastrophic weather activity in the U.S. in 2018, while Crawford TPA Solutions saw a decrease in case volumes in the U.S. and Canada[138](index=138&type=chunk) - Segment operating earnings and gross profit decreased across all operating segments, mainly due to lower revenues not fully offset by reduced direct operating expenses[139](index=139&type=chunk) Segment Operating Earnings (2019 vs. 2018) | Segment | 2019 (USD) | 2018 (USD) | % Change | | :--------------------------- | :--------- | :--------- | :------- | | Crawford Claims Solutions | $7,630 | $11,308 | (32.5)% | | Crawford TPA Solutions | $27,173 | $36,909 | (26.4)% | | Crawford Specialty Solutions | $49,321 | $49,564 | (0.5)% | - Cost of services provided, before reimbursements, decreased by **$45.0 million (6.0%)** in 2019, mainly due to the Garden City Group disposition, lower weather-related activity support costs, and foreign exchange rates[145](index=145&type=chunk) - Selling, general and administrative (SG&A) expenses decreased by **$15.3 million (6.3%)** in 2019, attributed to lower non-employee labor, professional fees, and the Garden City Group disposition[146](index=146&type=chunk) [YEAR ENDED DECEMBER 31, 2019 COMPARED WITH YEAR ENDED DECEMBER 31, 2018](index=31&type=section&id=YEAR%20ENDED%20DECEMBER%2031%2C%202019%20COMPARED%20WITH%20YEAR%20ENDED%20DECEMBER%2031%2C%202018) In 2019, all segments experienced revenue and operating earnings declines, driven by reduced claim activity and the Garden City Group disposal - Crawford Claims Solutions operating earnings decreased by **32.5%** to **$7.6 million** in 2019, primarily due to decreased weather-related claim activity in the U.S. and Canada, and increased centralized administrative support costs[174](index=174&type=chunk) - Crawford Claims Solutions revenues before reimbursements decreased by **5.9%** to **$339.8 million** in 2019, with a **$13.4 million** negative impact from lower U.S. weather-related activity and a **$10.7 million** decrease due to foreign exchange rates[176](index=176&type=chunk) - Overall, Crawford Claims Solutions experienced a **9.0%** decrease in cases received in 2019, driven by lower weather-related activity in the U.S., U.K., Canada, Europe, and Rest of World[182](index=182&type=chunk) - Crawford TPA Solutions operating earnings decreased by **26.4%** to **$27.2 million** in 2019, resulting from lower revenues not fully offset by reduced direct expenses[188](index=188&type=chunk) - Crawford TPA Solutions revenues before reimbursements decreased by **2.8%** to **$393.9 million** in 2019, with foreign exchange rates decreasing revenues by **$3.7 million (0.9%)**[190](index=190&type=chunk) - Overall case volumes for Crawford TPA Solutions were **2.6%** lower in 2019, with decreases in the U.S., U.K., and Canada, partially offset by growth in Europe and Rest of World[194](index=194&type=chunk) - Crawford Specialty Solutions operating earnings slightly decreased by **0.5%** to **$49.3 million** in 2019, primarily due to increased compensation expense[198](index=198&type=chunk) - Crawford Specialty Solutions revenues before reimbursements decreased by **10.7%** to **$272.1 million** in 2019, largely due to a **$29.9 million** reduction from the Garden City Group disposal in June 2018[202](index=202&type=chunk)[203](index=203&type=chunk) - Excluding the Garden City Group and foreign exchange impacts, Crawford Specialty Solutions revenues increased by **1.7%** due to growth in Global Technical Services[203](index=203&type=chunk) - Overall case volumes for Crawford Specialty Solutions decreased by **8.5%** in 2019, with declines across most regions due to reduced weather-related cases and property cases[208](index=208&type=chunk) [YEAR ENDED DECEMBER 31, 2018 COMPARED WITH YEAR ENDED DECEMBER 31, 2017](index=37&type=section&id=YEAR%20ENDED%20DECEMBER%2031%2C%202018%20COMPARED%20WITH%20YEAR%20ENDED%20DECEMBER%2031%2C%202017) In 2018, segment operating earnings decreased due to lower U.S. hurricane activity and the Garden City Group disposal, despite some revenue growth - Crawford Claims Solutions operating earnings decreased by **39.0%** to **$11.3 million** in 2018, primarily due to lower U.S. revenues from reduced hurricane activity and increased centralized administrative support costs[213](index=213&type=chunk) - Crawford Claims Solutions revenues before reimbursements decreased by **1.1%** to **$361.1 million** in 2018, mainly due to decreased weather-related activity in the U.S. (post-2017 hurricanes)[214](index=214&type=chunk)[215](index=215&type=chunk) - Overall, Crawford Claims Solutions experienced a **3.1%** decrease in cases received in 2018, largely due to lower weather-related activity in the U.S. compared to 2017[221](index=221&type=chunk) - Crawford TPA Solutions operating earnings decreased by **3.4%** to **$36.9 million** in 2018, attributed to increased compensation expense and indirect administrative support costs[226](index=226&type=chunk) - Crawford TPA Solutions revenues before reimbursements increased by **3.8%** to **$405.3 million** in 2018, driven by an increase in new Claims Management clients in the U.S. and new clients in Canada[228](index=228&type=chunk)[229](index=229&type=chunk) - Overall case volumes for Crawford TPA Solutions were **0.9%** higher in 2018, with increases in Canada and the U.K. offsetting decreases in the U.S. and Europe/Rest of World[232](index=232&type=chunk) - Crawford Specialty Solutions operating earnings decreased by **5.4%** to **$49.6 million** in 2018, primarily due to increased compensation and centralized indirect administrative support costs[236](index=236&type=chunk) - Crawford Specialty Solutions revenues before reimbursements decreased by **13.0%** to **$304.6 million** in 2018, with a **$46.3 million (13.2%)** negative variance from the Garden City Group disposal and an **$11.0 million (3.1%)** reduction from a change in the U.K. contractor repair business operating model[239](index=239&type=chunk)[240](index=240&type=chunk)[241](index=241&type=chunk) - Overall case volumes for Crawford Specialty Solutions increased by **5.5%** in 2018, driven by increases in U.S. Contractor Connection, U.K. property cases, and Canadian weather-related cases[246](index=246&type=chunk) [EXPENSES AND CREDITS EXCLUDED FROM SEGMENT OPERATING EARNINGS](index=43&type=section&id=EXPENSES%20AND%20CREDITS%20EXCLUDED%20FROM%20SEGMENT%20OPERATING%20EARNINGS) Corporate-wide expenses in 2019 included a **59.7%** effective tax rate, increased interest expense, and **$17.5 million** goodwill impairment Income Tax Provisions and Effective Tax Rates (2017-2019) | Year | Income Tax Provision (USD) | Effective Tax Rate | | :--- | :------------------------- | :----------------- | | 2019 | $14.1 million | 59.7% | | 2018 | $18.5 million | 42.0% | | 2017 | $15.0 million | 35.6% | - The 2019 effective tax rate was impacted by goodwill impairment charges, arbitration and claim settlements, and valuation allowances on state net operating loss carryforwards and foreign tax credits[251](index=251&type=chunk) Net Corporate Interest Expense and Weighted Average Interest Rates (2017-2019) | Year | Corporate Interest Expense (USD) | Corporate Interest Income (USD) | Weighted Average Interest Rate | | :--- | :------------------------------- | :------------------------------ | :----------------------------- | | 2019 | $11.5 million | $0.7 million | 4.0% | | 2018 | $11.4 million | $1.3 million | 3.7% | | 2017 | $9.9 million | $0.8 million | 2.8% | Stock Option Expense (2017-2019) | Year | Stock Option Expense (USD) | | :--- | :------------------------- | | 2019 | $1.9 million | | 2018 | $1.7 million | | 2017 | $1.7 million | Amortization of Customer-Relationship Intangible Assets (2017-2019) | Year | Amortization Expense (USD) | | :--- | :------------------------- | | 2019 | $11.3 million | | 2018 | $11.2 million | | 2017 | $11.0 million | Unallocated Corporate and Shared Costs and Credits, Net (2017-2019) | Year | Amount (USD) | | :--- | :----------- | | 2019 | $6.5 million | | 2018 | $9.3 million | | 2017 | $13.5 million | - The decrease in unallocated costs in 2019 was due to lower professional fees and administrative costs, partially offset by an increase in U.S. defined benefit plan expense[257](index=257&type=chunk) Goodwill and Intangible Asset Impairment Charges (2017-2019) | Year | Goodwill Impairment (USD) | Intangible Asset Impairment (USD) | | :--- | :------------------------ | :-------------------------------- | | 2019 | $17.5 million | $0 | | 2018 | $0 | $1.1 million | | 2017 | $19.6 million | $0 | Arbitration and Claim Settlements (2019) | Year | Amount (USD) | | :--- | :----------- | | 2019 | $12.6 million | Loss on Disposition of Business Line (2018) | Year | Amount (USD) | | :--- | :----------- | | 2018 | $20.3 million | [Liquidity, Capital Resources, and Financial Condition](index=44&type=section&id=Liquidity%2C%20Capital%20Resources%2C%20and%20Financial%20Condition) Liquidity is supported by operating cash and a **$450.0 million** credit facility, with working capital decreasing due to ASC 842 adoption - The Company's liquidity is supported by net cash from operating activities and a **$450.0 million** revolving credit facility, which matures on November 23, 2022[264](index=264&type=chunk)[267](index=267&type=chunk) Credit Facility Status (December 31, 2019) | Metric | Amount (USD) | | :----------------------------------- | :----------- | | Total Debt Outstanding | $176.9 million | | Undrawn Letters of Credit | $11.6 million | | Available Borrowing Capacity | $265.3 million | - At December 31, 2019, the Company was in compliance with its financial covenants under the Credit Facility, with a leverage ratio of **1.53** and a fixed charge coverage ratio of **1.46**[276](index=276&type=chunk) Working Capital and Cash & Cash Equivalents (December 31, 2019 vs. 2018) | Metric | 2019 (USD) | 2018 (USD) | Change (USD) | | :------------------------- | :------------ | :------------ | :----------- | | Working Capital | $78.9 million | $95.5 million | $(16.6) million | | Cash & Cash Equivalents | $51.8 million | $53.1 million | $(1.3) million | - The decrease in working capital was primarily due to the incremental operating lease liability recorded from ASC 842 implementation[280](index=280&type=chunk) Cash Flow Summary (2019 vs. 2018) | Activity | 2019 (USD) | 2018 (USD) | Change (USD) | | :------------------------- | :------------ | :------------ | :----------- | | Operating Activities | $75.2 million | $52.4 million | $22.8 million | | Investing Activities | $(23.4) million | $6.4 million | $(29.8) million | | Financing Activities | $(53.4) million | $(58.7) million | $5.3 million | - Cash provided by operating activities increased due to decreased discretionary U.S. and U.K. pension contributions, improved accounts receivable management, and the positive cash flow impact of the Garden City Group disposal[284](index=284&type=chunk) - Cash used in investing activities increased in 2019, as 2018 included **$42.6 million** in proceeds from the Garden City Group disposal[286](index=286&type=chunk) - The U.S. Qualified Defined Benefit Pension Plan was underfunded by **$63.5 million** at December 31, 2019, with planned discretionary contributions of **$9.0 million** per annum for the next five fiscal years[306](index=306&type=chunk)[307](index=307&type=chunk) Contractual Obligations (December 31, 2019) | Type of Obligation | One Year or Less (USD) | 1 to 3 Years (USD) | 3 to 5 Years (USD) | After 5 Years (USD) | Total (USD) | | :---------------------------------- | :--------------------- | :----------------- | :----------------- | :------------------ | :---------- | | Operating Lease Commitments | $35,595 | $47,802 | $21,859 | $33,043 | $138,299 | | Long-term Debt (incl. current) | $28,531 | $148,346 | $0 | $0 | $176,877 | | Finance Lease Obligations | $15 | $35 | $27 | $0 | $77 | | Estimated Interest Payments | $11,091 | $21,020 | $0 | $0 | $32,111 | | **Total Contractual Obligations** | **$75,232** | **$217,203** | **$21,886** | **$33,043** | **$347,364**| [Critical Accounting Policies and Estimates](index=51&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) Key policies involve revenue recognition, doubtful accounts, goodwill impairment, defined benefit plans, and income taxes, all requiring significant judgment - Revenue recognition for claims processing and program administration fees is based on transferring control of services, with fixed-fee services recognized over time using historical claim closure rates[320](index=320&type=chunk)[321](index=321&type=chunk) - Deferred revenues for lifetime claim handling are sensitive to changes in claim closing rates; a **1.0%** decrease in rates would have deferred an additional **$1.4 million** in revenue in 2019[323](index=323&type=chunk) - Allowances for doubtful accounts are estimated based on historical write-off data, client creditworthiness, and industry conditions; a **1.0%** change in the allowance would impact pretax income by approximately **$1.4 million** in 2019[326](index=326&type=chunk) - Goodwill and indefinite-lived intangible assets are tested for impairment annually using a combination of income and market approaches; a **$17.5 million** goodwill impairment was recognized in 2019 for the Crawford Claims Solutions segment[327](index=327&type=chunk)[329](index=329&type=chunk)[333](index=333&type=chunk) - Key assumptions for goodwill valuation include discount rates (**13.0%-14.5%** in 2019) and a terminal growth rate of **2.0%**[334](index=334&type=chunk) - Defined benefit pension plans involve significant estimates for discount rates, expected long-term return on plan assets, and mortality expectations, which can cause volatility in financial results[337](index=337&type=chunk)[341](index=341&type=chunk)[343](index=343&type=chunk)[345](index=345&type=chunk) - Income tax provisions are affected by temporary differences between financial reporting and tax purposes, changes in enacted tax rates, tax law, and the composition of taxable income from various countries[353](index=353&type=chunk)[356](index=356&type=chunk) - The effective tax rate for financial reporting purposes was **59.7%** in 2019, influenced by goodwill impairment, arbitration settlements, and valuation allowances[357](index=357&type=chunk) - Self-insured risks (professional liability, auto liability, employee medical, disability, workers' compensation) are provisioned based on estimates of aggregate liabilities, historical claim payment experience, and expected claim life[366](index=366&type=chunk) [Item 7A. Quantitative and Qualitative Disclosures about Market Risk](index=57&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The Company faces market risks from foreign currency fluctuations and interest rate changes, impacting pretax income and pension obligations - The Company's international operations expose it to foreign currency exchange rate changes, impacting translations of foreign-denominated assets, liabilities, and future earnings[371](index=371&type=chunk) International Revenues as % of Total Revenues Before Reimbursements | Year | % of Consolidated Revenues Before Reimbursements | | :--- | :----------------------------------------------- | | 2019 | 43.4% | | 2018 | 42.5% | | 2017 | 40.5% | - A hypothetical **10.0%** change in foreign currency exchange rates would have increased or decreased consolidated pretax income by approximately **$2.7 million** in 2019[371](index=371&type=chunk) - Borrowings under the Credit Facility bear variable interest rates (LIBOR or Base Rate), exposing the Company to interest rate risk[372](index=372&type=chunk) - A hypothetical **100 basis point** increase or decrease in market interest rates would have changed pretax interest expense by **$1.8 million** in 2019[372](index=372&type=chunk) - Changes in interest rates also significantly impact the projected benefit obligations of defined benefit pension plans; a **0.25%** change in discount rates would alter obligations by approximately **$20.9 million**[373](index=373&type=chunk) - The Company does not incur significant credit risk when processing claims settlements for clients, as the liability for settlement costs remains with the client[375](index=375&type=chunk) [Item 8. Financial Statements and Supplementary Data](index=59&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents audited consolidated financial statements for 2017-2019, prepared under GAAP, with an unqualified auditor's opinion - The consolidated financial statements include the Consolidated Statements of Operations, Comprehensive Income, Balance Sheets, Cash Flows, and Shareholders' Investment for the years ended December 31, 2019, 2018, and 2017[379](index=379&type=chunk)[694](index=694&type=chunk) - The financial statements are prepared in conformity with U.S. Generally Accepted Accounting Principles (GAAP)[651](index=651&type=chunk) - The independent auditor, Ernst & Young LLP, expressed an unqualified opinion on the consolidated financial statements and the effectiveness of internal control over financial reporting as of December 31, 2019[651](index=651&type=chunk)[652](index=652&type=chunk)[677](index=677&type=chunk)[678](index=678&type=chunk) - The Company adopted ASU No. 2016-02, Leases (Topic 842), in 2019, which required recognizing operating lease right-of-use assets and liabilities on the balance sheet[653](index=653&type=chunk)[450](index=450&type=chunk) [Consolidated Statements of Operations](index=60&type=section&id=Consolidated%20Statements%20of%20Operations) Total revenues decreased to **$1.048 billion** in 2019, with net income significantly declining to **$12.5 million** due to impairment and settlements Consolidated Statements of Operations Summary (2017-2019) | Metric | 2019 (USD) | 2018 (USD) | 2017 (USD) | | :------------------------------------------------------------------- | :------------ | :------------ | :------------ | | Revenues before reimbursements | $1,005,802 | $1,070,971 | $1,105,832 | | Total Revenues | $1,047,627 | $1,122,979 | $1,163,709 | | Total Costs of Services | $752,773 | $808,005 | $842,167 | | Selling, general, and administrative expenses | $227,170 | $242,421 | $239,840 | | Corporate interest expense, net | $10,774 | $10,109 | $9,062 | | Goodwill and intangible asset impairment charges | $17,484 | $1,056 | $19,598 | | Arbitration and claim settlements | $12,552 | $0 | $0 | | Loss on disposition of business line | $0 | $20,270 | $0 | | Income Before Income Taxes | $23,637 | $44,131 | $42,262 | | Provision for Income Taxes | $14,111 | $18,542 | $15,039 | | Net Income Attributable to Shareholders of Crawford & Company | $12,485 | $25,978 | $27,665 | | Earnings Per Share - Basic (CRD-A) | $0.27 | $0.51 | $0.53 | | Earnings Per Share - Diluted (CRD-A) | $0.26 | $0.50 | $0.52 | [Consolidated Statements of Comprehensive Income](index=61&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) Net income decreased to **$9.5 million** in 2019, while other comprehensive income improved to **$8.9 million** due to pension plan gains Consolidated Statements of Comprehensive Income Summary (2017-2019) | Metric | 2019 (USD) | 2018 (USD) | 2017 (USD) | | :------------------------------------------------------------------- | :------------ | :------------ | :------------ | | Net Income | $9,526 | $25,589 | $27,223 | | Net foreign currency translation (loss) gain | $(180) | $(10,830) | $6,323 | | Amounts reclassified into net income for defined benefit pension plans | $8,002 | $8,076 | $7,501 | | Net unrealized gain (loss) on defined benefit plans arising during the year | $1,036 | $(18,014) | $666 | | Other Comprehensive Income (Loss) | $8,858 | $(20,768) | $14,490 | | Comprehensive Income Attributable to Shareholders of Crawford & Company | $22,025 | $6,008 | $42,961 | - Other comprehensive income (loss) significantly improved from a loss of **$20.8 million** in 2018 to an income of **$8.9 million** in 2019, largely due to a net unrealized gain on defined benefit plans[387](index=387&type=chunk) [Consolidated Balance Sheets](index=62&type=section&id=Consolidated%20Balance%20Sheets) Total assets increased to **$760.0 million** in 2019 due to ASC 842 lease recognition, while shareholders' investment decreased Consolidated Balance Sheets Summary (December 31, 2019 vs. 2018) | Metric | 2019 (USD) | 2018 (USD) | | :------------------------------------------------------------------- | :------------ | :------------ | | Cash and cash equivalents | $51,802 | $53,119 | | Accounts receivable, net | $128,217 | $131,117 | | Unbilled revenues | $103,894 | $108,291 | | Total Current Assets | $315,209 | $320,848 | | Operating lease right-of-use asset, net | $102,354 | $0 | | Goodwill | $80,642 | $96,890 | | Intangible assets arising from business acquisitions, net | $75,083 | $85,023 | | Total Assets | $760,013 | $701,442 | | Short-term borrowings | $28,531 | $23,195 | | Operating lease liability (current) | $30,765 | $0 | | Total Current Liabilities | $236,265 | $225,310 | | Long-term debt and finance leases, less current installments | $148,408 | $167,126 | | Operating lease liability (noncurrent) | $87,064 | $0 | | Total Noncurrent Liabilities | $358,871 | $295,186 | | Shareholders' Investment Attributable to Shareholders of Crawford & Company | $159,317 | $171,288 | | Total Liabilities and Shareholders' Investment | $760,013 | $701,442 | - The increase in total assets and liabilities in 2019 was largely due to the adoption of Topic 842, which resulted in the recognition of operating lease right-of-use assets and corresponding operating lease liabilities[390](index=390&type=chunk)[394](index=394&type=chunk)[450](index=450&type=chunk) [Consolidated Statements of Cash Flows](index=64&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Operating cash flow increased to **$75.2 million** in 2019, while investing activities shifted to a net use due to the Garden City Group disposal Consolidated Statements of Cash Flows Summary (2017-2019) | Activity | 2019 (USD) | 2018 (USD) | 2017 (USD) | | :-------------------------------------------------------------------- | :------------ | :------------ | :------------ | | Net income | $9,526 | $25,589 | $27,223 | | Depreciation and amortization | $40,513 | $44,079 | $41,658 | | Goodwill and intangible asset impairment charges | $17,484 | $1,056 | $19,598 | | Loss on disposition of business line | $0 | $20,270 | $0 | | Net cash provided by operating activities | $75,216 | $52,419 | $40,757 | | Net cash (used in) provided by investing activities | $(23,420) | $6,449 | $(81,866) | | Net cash (used in) provided by financing activities | $(53,406) | $(58,739) | $10,343 | | Decrease in Cash and Cash Equivalents | $(1,317) | $(892) | $(27,558) | | Cash and Cash Equivalents at End of Year | $51,802 | $53,119 | $54,011 | - Net cash provided by operating activities increased by **$22.8 million** in 2019, from **$52.4 million** in 2018 to **$75.2 million** in 2019[284](index=284&type=chunk) - Cash used in investing activities increased by **$29.8 million** in 2019, from **$6.4 million** provided in 2018 to a use of **$23.4 million**, primarily due to the absence of proceeds from the Garden City Group disposal in 2018[286](index=286&type=chunk) - Cash used in financing activities decreased by **$5.3 million** in 2019, from **$58.7 million** in 2018 to **$53.4 million**, reflecting changes in short-term borrowings and common stock repurchases[288](index=288&type=chunk) [Consolidated Statements of Shareholders' Investment](index=65&type=section&id=Consolidated%20Statements%20of%20Shareholders%27%20Investment) Shareholders' investment decreased to **$159.3 million** in 2019, primarily due to share repurchases and dividends, partially offset by net income Shareholders' Investment Summary (December 31, 2019 vs. 2018) | Metric | 2019 (USD) | 2018 (USD) | | :------------------------------------------------------------------- | :------------ | :------------ | | Class A common stock | $30,610 | $30,927 | | Class B common stock | $22,671 | $24,408 | | Additional paid-in capital | $63,392 | $58,793 | | Retained earnings | $249,551 | $273,607 | | Accumulated other comprehensive loss | $(206,907) | $(216,447) | | Shareholders' Investment Attributable to Shareholders of Crawford & Company | $159,317 | $171,288 | | Noncontrolling interests | $3,250 | $4,158 | | Total Shareholders' Investment | $162,567 | $175,446 | - Shareholders' investment attributable to Crawford & Company decreased by **$11.9 million** in 2019, primarily due to **$26.2 million** in common stock repurchases and **$13.2 million** in cash dividends paid[402](index=402&type=chunk) - Net income attributable to shareholders was **$12.5 million** in 2019, contributing positively to shareholders' investment[402](index=402&type=chunk) - Accumulated other comprehensive loss improved from **$(216.4) million** in 2018 to **$(206.9) million** in 2019, reflecting a net current period other comprehensive income of **$9.5 million**[402](index=402&type=chunk)[573](index=573&type=chunk) [Notes to Consolidated Financial Statements](index=67&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) These notes detail accounting policies, segment information, debt, leases, and pension plans, including the **$17.5 million** goodwill impairment in 2019 - The Company consolidates its majority-owned subsidiaries and variable interest entities (VIEs), including Lloyd Warwick International Limited (LWI) and a rabbi trust for its deferred compensation plan[410](index=410&type=chunk)[413](index=413&type=chunk)[414](index=414&type=chunk)[415](index=415&type=chunk) - Revenue recognition follows ASC 606, with revenues recognized when control of promised services is transferred to customers, primarily on a fee-per-claim basis or over time for claims management services[418](index=418&type=chunk)[457](index=457&type=chunk)[458](index=458&type=chunk) - In 2019, the Company recognized a non-cash goodwill impairment charge of **$17.5 million** related to the Crawford Claims Solutions segment due to lower forecasts[430](index=430&type=chunk)[493](index=493&type=chunk) - The Company adopted Topic 842 (Leases) on January 1, 2019, recognizing **$107.3 million** in operating lease right-of-use assets and **$122.3 million** in operating lease liabilities, with no material impact on results of operations or cash flows[450](index=450&type=chunk) - The Credit Facility consists of a **$450.0 million** revolving credit facility, with **$176.9 million** outstanding at December 31, 2019, and **$265.3 million** in available borrowing capacity[502](index=502&type=chunk)[504](index=504&type=chunk) - The Company's effective income tax rate in 2019 was **59.7%**, impacted by goodwill impairment, arbitration settlements, and valuation allowances on state net operating losses[523](index=523&type=chunk) - The U.S. Qualified Defined Benefit Pension Plan was underfunded by **$63.5 million** at December 31, 2019, with expected annual discretionary contributions of **$9.0 million** per annum for the next five years[548](index=548&type=chunk)[541](index=541&type=chunk) - Total stock-based compensation expense was **$4.1 million** in 2019, primarily from stock options, performance-based stock grants, and restricted shares[576](index=576&type=chunk) - The Company's three reportable segments are Crawford Claims Solutions, Crawford TPA Solutions, and Crawford Specialty Solutions, with financial performance evaluated using operating earnings[619](index=619&type=chunk)[620](index=620&type=chunk) [Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=113&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The Company reported no changes or disagreements with its accountants regarding financial disclosure - There were no changes in or disagreements with accountants on accounting and financial disclosure[665](index=665&type=chunk) [Item 9A. Controls and Procedures](index=113&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that disclosure controls and internal control over financial reporting were effective as of December 31, 2019 - Management concluded that the Company's disclosure controls and procedures were effective as of December 31, 2019[668](index=668&type=chunk) - Management is responsible for establishing and maintaining adequate internal control over financial reporting, designed to provide reasonable assurance regarding financial reporting reliability[669](index=669&type=chunk) - The Company maintained effective internal control over financial reporting as of December 31, 2019, based on the COSO (2013 framework) criteria[672](index=672&type=chunk)[677](index=677&type=chunk) - No material changes in internal control over financial reporting occurred during the quarter ended December 31, 2019[674](index=674&type=chunk) [PART III](index=116&type=section&id=PART%20III) [Item 10. Directors, Executive Officers and Corporate Governance](index=116&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information on directors, executive officers, and corporate governance is incorporated by reference from the 2020 Proxy Statement - Information on directors, executive officers, and corporate governance is incorporated by reference from the 2020 Proxy Statement[686](index=686&type=chunk) - The Company has adopted a Code of Business Conduct and Ethics for all officers, directors, and employees, available on its website[687](index=687&type=chunk) [Item 11. Executive Compensation](index=116&type=section&id=Item%2011.%20Executive%20Compensation) Executive compensation details are incorporated by reference from the Registrant's Proxy Statement - Information on executive compensation is incorporated by reference from the Registrant's Proxy Statement[688](index=688&type=chunk) [Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters](index=116&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Shareholder%20Matters) Security ownership and equity compensation plan information is incorporated by reference from the Registrant's Proxy Statement - Information on security ownership and equity compensation plans is incorporated by reference from the Registrant's Proxy Statement[689](index=689&type=chunk) [Item 13. Certain Relationships and Related Transactions, and Director Independence](index=116&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information on related transactions and director independence is incorporated by reference from the Registrant's Proxy Statement - Information on certain relationships, related transactions, and director independence is incorporated by reference from the Registrant's Proxy Statement[690](index=690&type=chunk) [Item 14. Principal Accountant Fees and Services](index=116&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) Principal accountant fees and services information is incorporated by reference from the Registrant's Proxy Statement - Information regarding principal accountant fees and services is incorporated by reference from the Registrant's Proxy Statement[691](index=691&type=chunk) [PART IV](index=117&type=section&id=PART%20IV) [Item 15. Exhibits, Financial Statement Schedules](index=117&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists financial statements, schedules, and a comprehensive array of exhibits filed with the report - The report includes Consolidated Balance Sheets, Statements of Operations, Comprehensive Income, Cash Flows, and Shareholders' Investment, along with Notes to Consolidated Financial Statements[694](index=694&type=chunk) - Schedule II (Valuation and Qualifying Accounts) information is incorporated by reference from Note 1 and Note 7 of the Consolidated Financial Statements[695](index=695&type=chunk) - A comprehensive list of exhibits is provided, including various agreements (e.g., Membership Interest Purchase Agreements, Credit Agreements), corporate documents (Articles of Incorporation, By-laws), and compensation plans[697](index=697&type=chunk)[698](index=698&type=chunk)[699](index=699&type=chunk) [Item 16. Form 10-K Summary](index=119&type=section&id=Item%2016.%20Form%2010-K%20Summary) The Company states that there is no Form 10-K Summary - There is no Form 10-K Summary[699](index=699&type=chunk)