United States
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

Form 10-Q

þ		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

		for the quarterly period ended June 30, 2010

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 (State or other jurisdiction of incorporation or organization)		58-0506554 (I.R.S. Employer Identification No.)

1001 Summit Boulevard Atlanta, Georgia (Address of principal executive offices)		30319 (Zip Code)

(404) 300-1000
(Registrant’s telephone number, including area code)

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 (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit and post such files).

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o		Accelerated filer þ		Non-accelerated filer o		Smaller reporting company o
				(Do not check if a smaller reporting company)

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

The number of shares outstanding of each of the Registrant’s classes of common stock as of July 30, 2010 was as follows:

 

 

CRAWFORD & COMPANY
Quarterly Report on Form 10-Q
Quarter Ended June 30, 2010

Index

						Page
Part I. Financial Information
Item 1.				Financial Statements:
				Condensed Consolidated Statements of Operations (unaudited) Three months ended June 30, 2010 and 2009			3
				Condensed Consolidated Statements of Operations (unaudited) Six months ended June 30, 2010 and 2009			4
				Condensed Consolidated Balance Sheets (unaudited) June 30, 2010 and December 31, 2009			5
				Condensed Consolidated Statements of Cash Flows (unaudited) Six months ended June 30, 2010 and 2009			7
				Condensed Consolidated Statements of Shareholders’ Investment and Noncontrolling Interests (unaudited) As of and for the three-month and six-month periods ended June 30, 2010 and 2009			8
				Notes to Condensed Consolidated Financial Statements (unaudited)			9
				Report of Independent Registered Public Accounting Firm			24
Item 2.				Management’s Discussion and Analysis of Financial Condition and Results of Operations			25
Item 3.				Quantitative and Qualitative Disclosures about Market Risk			45
Item 4.				Controls and Procedures			45
Part II. Other Information
Item 1.				Legal Proceedings			46
Item 1.A.				Risk Factors			46
Item 6.				Exhibits			47
Signatures							48
EX-15
EX-31.1
EX-31.2
EX-32.1
EX-32.2
EX-99.1
EX-99.2
EX-101 INSTANCE DOCUMENT
EX-101 SCHEMA DOCUMENT
EX-101 CALCULATION LINKBASE DOCUMENT
EX-101 LABELS LINKBASE DOCUMENT
EX-101 PRESENTATION LINKBASE DOCUMENT
EX-101 DEFINITION LINKBASE DOCUMENT

Part 1 — Financial Information

Item 1. Financial Statements

CRAWFORD & COMPANY

Unaudited
(In thousands, except per share amounts)

		Three months ended June 30,
		2010				2009
Revenues:
Revenues before reimbursements		$	238,151			$	249,664
Reimbursements			17,835				21,979
Total Revenues			255,986				271,643
Costs and Expenses:
Costs of services provided, before reimbursements			176,424				183,884
Reimbursements			17,835				21,979
Total costs of services			194,259				205,863
Selling, general, and administrative expenses			50,411				54,414
Corporate interest expense, net of interest income of $193 and $486, respectively			3,672				3,640
Restructuring and other costs			1,987				—
Goodwill impairment charge			7,303				94,000
Total Costs and Expenses			257,632				357,917
Loss before Income Taxes			(1,646	)			(86,274	)
Provision for Income Taxes			865				1,615
Net Loss			(2,511	)			(87,889	)
Less: Net Income Attributable to Noncontrolling Interests			16				235
Net Loss Attributable to Crawford & Company		$	(2,527	)		$	(88,124	)
Loss Per Share, Based on Net Loss Attributable to Crawford & Company:
Basic and Diluted		$	(0.05	)		$	(1.70	)
Average Number of Shares Used to Compute:
Basic Loss Per Share			52,619				51,877
Diluted Loss Per Share			52,619				51,877

(See accompanying notes to condensed consolidated financial statements)

CRAWFORD & COMPANY

Unaudited
(In thousands, except per share amounts)

		Six months ended June 30,
		2010				2009
Revenues:
Revenues before reimbursements		$	474,417			$	485,747
Reimbursements			33,622				36,179
Total Revenues			508,039				521,926
Costs and Expenses:
Costs of services provided, before reimbursements			352,970				359,046
Reimbursements			33,622				36,179
Total costs of services			386,592				395,225
Selling, general, and administrative expenses			99,378				105,902
Corporate interest expense, net of interest income of $296 and $1,066, respectively			7,809				7,125
Restructuring and other costs			4,650				1,815
Goodwill impairment charge			7,303				94,000
Total Costs and Expenses			505,732				604,067
Income (Loss) before Income Taxes			2,307				(82,141	)
Provision for Income Taxes			1,758				2,735
Net Income (Loss)			549				(84,876	)
Less: Net Income Attributable to Noncontrolling Interests			22				166
Net Income (Loss) Attributable to Crawford & Company		$	527			$	(85,042	)
Earnings (Loss) Per Share, Based on Net Income (Loss) Attributable to Crawford & Company:
Basic and Diluted		$	0.01			$	(1.65	)
Average Number of Shares Used to Compute:
Basic Earnings (Loss) Per Share			52,504				51,625
Diluted Earnings (Loss) Per Share			52,949				51,625

(See accompanying notes to condensed consolidated financial statements)

CRAWFORD & COMPANY

Unaudited
(In thousands)

		June 30,				* December 31,
		2010				2009
ASSETS
Current Assets:
Cash and cash equivalents		$	38,234			$	70,354
Accounts receivable, less allowance for doubtful accounts of $10,747 and $11,983, respectively			150,489				139,215
Unbilled revenues, at estimated billable amounts			104,034				93,796
Prepaid expenses and other current assets			24,851				22,350
Total current assets			317,608				325,715
Property and Equipment:
Property and equipment			142,467				144,254
Less accumulated depreciation			(102,274	)			(102,108	)
Net property and equipment			40,193				42,146
Other Assets:
Goodwill			122,162				123,169
Intangible assets arising from business acquisitions, net			100,979				104,409
Capitalized software costs, net			52,841				50,463
Deferred income tax assets			68,072				69,504
Other noncurrent assets			26,460				27,499
Total other assets			370,514				375,044
TOTAL ASSETS		$	728,315			$	742,905

(See accompanying notes to condensed consolidated financial statements)

CRAWFORD & COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS — CONTINUED
Unaudited
(In thousands except par value amounts)

						*
		June 30,				December 31,
		2010				2009
LIABILITIES AND SHAREHOLDERS’ INVESTMENT
Current Liabilities:
Short-term borrowings		$	17,914			$	32
Accounts payable			34,205				35,449
Accrued compensation and related costs			59,842				70,871
Self-insured risks			16,807				18,475
Other accrued liabilities			56,208				47,318
Deferred revenues			50,071				53,664
Mandatory company contributions due to pension plan			15,900				25,000
Current installments of long-term debt and capital leases			2,265				8,189
Total current liabilities			253,212				258,998
Noncurrent Liabilities:
Long-term debt and capital leases, less current installments			171,920				173,061
Deferred revenues			31,864				33,524
Self-insured risks			15,957				14,824
Accrued pension liabilities, less current mandatory contributions			180,128				187,507
Other noncurrent liabilities			14,390				13,705
Total noncurrent liabilities			414,259				422,621
Shareholders’ Investment:
Class A common stock, $1.00 par value; 50,000 shares authorized; 27,767 and 27,355 shares issued and outstanding in 2010 and 2009, respectively			27,767				27,355
Class B common stock, $1.00 par value; 50,000 shares authorized; 24,697 shares issued and outstanding in 2010 and 2009, respectively			24,697				24,697
Additional paid-in capital			29,891				29,570
Retained earnings			140,990				140,463
Accumulated other comprehensive loss			(167,339	)			(165,403	)
Total Crawford & Company Shareholders’ Investment			56,006				56,682
Noncontrolling interests			4,838				4,604
Total shareholders’ investment			60,844				61,286
TOTAL LIABILITIES AND SHAREHOLDERS’ INVESTMENT		$	728,315			$	742,905

(See accompanying notes to condensed consolidated financial statements)

CRAWFORD & COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Unaudited
(In thousands)

		Six months ended June 30,
		2010				2009
Cash Flows From Operating Activities:
Net income (loss)		$	549			$	(84,876	)
Reconciliation of net income (loss) to net cash (used in) provided by operating activities:
Depreciation and amortization			15,155				15,568
Goodwill impairment charge			7,303				94,000
Stock-based compensation			1,436				2,841
Loss on disposals of property and equipment, net			137				40
Changes in operating assets and liabilities, net of effects of acquisitions and dispositions:
Accounts receivable, net			(12,753	)			8,645
Unbilled revenues, net			(12,600	)			(2,593	)
Accrued or prepaid income taxes			(837	)			(2,723	)
Accounts payable and accrued liabilities			(6,617	)			(13,409	)
Deferred revenues			(4,826	)			(6,189	)
Accrued retirement costs			(14,311	)			(6,124	)
Prepaid expenses and other operating activities			(2,268	)			(1,504	)
Net cash (used in) provided by operating activities			(29,632	)			3,676
Cash Flows From Investing Activities:
Acquisitions of property and equipment			(4,973	)			(4,630	)
Proceeds from sales of property and equipment			31				16
Capitalization of computer software costs			(7,249	)			(6,780	)
Other investing activities			—				(1,089	)
Net cash used in investing activities			(12,191	)			(12,483	)
Cash Flows From Financing Activities:
Shares used to settle withholding taxes under stock-based compensation plans			(703	)			(1,888	)
Increases in short-term borrowings			22,108				15,086
Payments on short-term borrowings			(2,688	)			(15,444	)
Payments on long-term debt and capital lease obligations			(7,053	)			(1,213	)
Capitalized loan costs			—				(944	)
Other financing activities			(39	)			26
Net cash provided by (used in) financing activities			11,625				(4,377	)
Effect of exchange rate changes on cash and cash equivalents			(1,922	)			(1,840	)
Decrease in cash and cash equivalents			(32,120	)			(15,024	)
Cash and cash equivalents at beginning of year			70,354				73,124
Cash and cash equivalents at end of period		$	38,234			$	58,100

(See accompanying notes to condensed consolidated financial statements)

CRAWFORD & COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ INVESTMENT AND NONCONTROLLING INTERESTS
Unaudited
(In thousands)

																						Shareholders’
																		Accumulated				Investment
		Common Stock								Additional								Other				Attributable to								Total
		Class A				Class B				Paid-In				Retained				Comprehensive				Crawford &				Noncontrolling				Shareholders’
		Non-Voting				Voting				Capital				Earnings				Loss				Company				Interests				Investment
Balance at January 1, 2010		$	27,355			$	24,697			$	29,570			$	140,463			$	(165,403	)		$	56,682			$	4,604			$	61,286
Comprehensive income (loss) — Note 4			—				—				—				3,054				(286	)			2,768				(3	)			2,765
Stock-based compensation			—				—				777				—				—				777				—				777
Dividends paid to noncontrolling interests			—				—				—				—				—				—				(39	)			(39	)
Common stock activity, net			412				—				(1,115	)			—				—				(703	)			—				(703	)
Balance at March 31, 2010			27,767				24,697				29,232				143,517				(165,689	)			59,524				4,562				64,086
Comprehensive income (loss) — Note 4			—				—				—				(2,527	)			(1,650	)			(4,177	)			276				(3,901	)
Stock-based compensation			—				—				659				—				—				659				—				659
Common stock activity, net							—								—				—				—				—				—
Balance at June 30, 2010		$	27,767			$	24,697			$	29,891			$	140,990			$	(167,339	)		$	56,006			$	4,838			$	60,844

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ INVESTMENT AND NONCONTROLLING INTERESTS

																						Shareholders’
																		Accumulated				Investment
		Common Stock								Additional								Other				Attributable to								Total
		Class A				Class B				Paid-In				Retained				Comprehensive				Crawford &				Noncontrolling				Shareholders’
		Non-Voting				Voting				Capital				Earnings				Loss				Company				Interests				Investment
Balance at January 1, 2009		$	26,523			$	24,697			$	26,342			$	256,146			$	(158,157	)		$	175,551			$	4,808			$	180,359
Comprehensive income (loss) — Note 4			—				—				—				3,082				(13,833	)			(10,751	)			(653	)			(11,404	)
Stock-based compensation			—				—				1,595				—				—				1,595				—				1,595
Common stock activity, net			626				—				(2,512	)			—				—				(1,886	)			—				(1,886	)
Balance at March 31, 2009			27,149				24,697				25,425				259,228				(171,990	)			164,509				4,155				168,664
Comprehensive (loss) income — Note 4			—				—				—				(88,124	)			13,368				(74,756	)			394				(74,362	)
Stock-based compensation			—				—				1,246				—				—				1,246				—				1,246
Common stock activity, net			70				—				(59	)			—				—				11				—				11
Balance at June 30, 2009		$	27,219			$	24,697			$	26,612			$	171,104			$	(158,622	)		$	91,010			$	4,549			$	95,559

(See accompanying notes to condensed consolidated financial statements)

CRAWFORD & COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

Based in Atlanta, Georgia, Crawford & Company (the “Company”) is the world’s largest independent provider of claims management solutions to the risk management and insurance industries as well as self-insured entities, with a global network of more than 700 locations in 63 countries. The Crawford System of Claims Solutions^sm offers comprehensive, integrated claims services, business process outsourcing and consulting services for major product lines including property and casualty claims management, workers’ compensation claims and medical management, and legal settlement administration. Shares of the Company’s two classes of common stock are traded on the New York Stock Exchange under the symbols CRDA and CRDB, respectively. The Company’s website is www.crawfordandcompany.com. The information contained on the Company’s website is not a part of, and is not incorporated by reference into, this report.

1. Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X promulgated by the United States Securities and Exchange Commission (the “SEC”). Accordingly, these unaudited condensed consolidated financial statements do not include all of the information and footnotes required by GAAP for complete financial statements.

The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. There have been no material changes to our critical accounting policies and estimates from those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2009. Operating results for the three months and six months ended June 30, 2010 are not necessarily indicative of the results that may be expected for the year ending December 31, 2010 or for other future periods.

In the opinion of management, all adjustments (consisting of normal recurring accruals and adjustments) considered necessary for a fair presentation have been included. Certain prior period amounts have been reclassified to conform to the current presentation. Significant intercompany transactions have been eliminated in consolidation.

The Condensed Consolidated Balance Sheet information presented herein as of December 31, 2009 has been derived from the audited consolidated financial statements as of that date, but does not include all of the information and footnotes required by GAAP for complete financial statements. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2009.

CRAWFORD & COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

For variable interest entities (“VIE”), the Company determines when it should include the assets, liabilities, and results of operations of a VIE in its consolidated financial statements. The Company consolidates the assets of a rabbi trust, which is considered a VIE of the Company. The rabbi trust was created to fund the liabilities of the Company’s deferred compensation plan. The Company is considered the primary beneficiary of the rabbi trust because the Company directs the activities of the trust and can use the assets of the trust to satisfy the liabilities of the Company’s deferred compensation plan. At June 30, 2010 and December 31, 2009, the liabilities of the deferred compensation plan were $8,980,000 and $8,570,000, respectively, and the values of the assets held in the related rabbi trust were $13,795,000 and $13,551,000, respectively. These assets and liabilities are included in Other Noncurrent Assets and Other Noncurrent Liabilities on the Company’s Condensed Consolidated Balance Sheets.

2. Adoption of New Accounting Standards in 2010

Variable Interest Entities

On January 1, 2010, the Company adopted the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Update (“ASU”) 2009-17, “Improvements to Financial Reporting by Enterprises Involved With Variable Interest Entities” (“ASU 2009-17”), which amended Accounting Standards Codification (“ASC”) 810, “Consolidations,” and other related guidance. ASU 2009-17 made certain changes to the guidance used to determine when an entity should consolidate a variable interest entity in its consolidated financial statements. Based on the status of the entities that are evaluated for consolidation in the Company’s consolidated financial statements, the adoption of ASU 2009-17 did not impact the Company’s results of operations, financial condition, or cash flows.

Fair Value Disclosures

On January 21, 2010, the FASB issued ASU 2010-06, “Improving Disclosures About Fair Value Measurements,” (“ASU 2010-06”) which amends ASC 820, “Fair Value Measurements and Disclosures,” to add new requirements for disclosures about transfers into and out of Levels 1 and 2 of the fair value hierarchy and separate disclosures about purchases, sales, issuances, and settlements relating to Level 3 measurements within the fair value hierarchy. This ASU also clarifies existing fair value disclosures about the level of disaggregation and about inputs and valuation techniques used to measure fair value. This ASU was effective for the Company beginning January 1, 2010, except for the requirements to provide the Level 3 activity of purchases, sales, issuance, and settlements, if any, which will be effective for the Company beginning January 1, 2011.

Since ASU 2010-06 is a disclosure-only standard, its adoption had no impact on the Company’s results of operations, financial condition, or cash flows. For the three-month and six-month periods ended June 30, 2010 and 2009, the Company had no transactions requiring disclosure under ASU 2010-06.

CRAWFORD & COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

3. Pending Adoption of Recently Issued Accounting Standards

Multiple-Deliverable Revenue Arrangements

On October 7, 2009, the FASB issued ASU 2009-13, “Multiple Revenue Arrangements – a consensus of the FASB Emerging Issues Task Force” (“ASU 2009-13”), which will supersede certain guidance in ASC 605-25, “Revenue Recognition-Multiple Element Arrangements,” (“ASC 605-25”) and will require an entity to allocate arrangement consideration to all of its deliverables at the inception of an arrangement based on their relative selling prices (i.e., the relative-selling-price method). The use of the residual method of allocation will no longer be permitted in circumstances in which an entity recognized revenue for an arrangement with multiple deliverables subject to ASC 605-25. ASU 2009-13 will also require additional disclosures. The Company will adopt the provisions of ASU 2009-13 on January 1, 2011. Based on the Company’s current revenue arrangements, the adoption of ASU 2009-13 is not expected to have a material impact on the Company’s financial condition, results of operations, or cash flows.

Stock-Based Compensation

In April 2010, the FASB issued ASU 2010-13, “Compensation-Stock Compensation (Topic 718) — Effect of Denominating the Exercise Price of a Share-Based Payment Award in the Currency of the Market in Which the Underlying Equity Security Trades — a consensus of the FASB Emerging Issues Task Force” (“ASU 2010-13”). ASU 2010-13 addresses whether an entity should classify a share-based payment award as equity or a liability if the award’s exercise price is denominated in the currency in which the underlying security trades and that currency is different from the 1) entity’s functional currency, 2) functional currency of the foreign operation for which the employee provides services, and 3) payroll currency of the employee. Under the existing guidance in ASC 718-10, “Compensation-Stock Compensation,” the Company does not classify any of its stock-based compensation as liabilities. ASU 2010-13 is effective for the Company on January 1, 2011. However, the adoption of ASU 2010-13 is not expected to change the Company’s current accounting for its stock-based compensation plans as equity awards since ASU 2010-13’s application contains an exception for share-based payments that, like the Company’s, use exercise prices denominated in the currency of the market in which substantial portions of the entity’s equity securities trade.

CRAWFORD & COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

4. Comprehensive (Loss) Income

Comprehensive (loss) income for the three months ended June 30, 2010 and 2009 was as follows:

		Three months ended June 30, 2010
		Shareholders of				Noncontrolling
(in thousands)		Crawford & Company				Interests				Total
Net (Loss) Income		$	(2,527	)		$	16			$	(2,511	)
Other Comprehensive (Loss) Income:
Net foreign currency translation (loss) gain			(4,205	)			260				(3,945	)
Interest rate swap agreement, net of taxes:
Loss reclassified into income			367				—				367
Gain recognized during period			214				—				214
Amortization of cost of retirement plans, net of taxes			1,974				—				1,974
Total Comprehensive (Loss) Income		$	(4,177	)		$	276			$	(3,901	)

		Three months ended June 30, 2009
		Shareholders of				Noncontrolling
(in thousands)		Crawford & Company				Interests				Total
Net (Loss) Income		$	(88,124	)		$	235			$	(87,889	)
Other Comprehensive Income (Loss):
Net foreign currency translation gain			11,433				159				11,592
Interest rate swap agreement, net of taxes:
Loss reclassified into income			896				—				896
Loss recognized during period			(201	)			—				(201	)
Amortization of cost of retirement plans, net of taxes			1,240				—				1,240
Total Comprehensive (Loss) Income		$	(74,756	)		$	394			$	(74,362	)

CRAWFORD & COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Comprehensive (loss) income for the six months ended June 30, 2010 and 2009 was as follows:

		Six months ended June 30, 2010
		Shareholders of				Noncontrolling
(in thousands)		Crawford & Company				Interests				Total
Net Income		$	527			$	22			$	549
Other Comprehensive (Loss) Income:
Net foreign currency translation (loss) gain			(5,778	)			251				(5,527	)
Interest rate swap agreement, net of taxes:
Loss reclassified into income			1,046				—				1,046
Loss recognized during period			(712	)			—				(712	)
Amortization of cost of retirement plans, net of taxes			3,508				—				3,508
Total Comprehensive (Loss) Income		$	(1,409	)		$	273			$	(1,136	)

		Six months ended June 30, 2009
		Shareholders of				Noncontrolling
(in thousands)		Crawford & Company				Interests				Total
Net (Loss) Income		$	(85,042	)		$	166			$	(84,876	)
Other Comprehensive (Loss) Income:
Net foreign currency translation loss			(3,927	)			(425	)			(4,352	)
Interest rate swap agreement, net of taxes:
Loss reclassified into income			1,664				—				1,664
Loss recognized during period			(682	)			—				(682	)
Amortization of cost of retirement plans, net of taxes			2,480				—				2,480
Total Comprehensive Loss		$	(85,507	)		$	(259	)		$	(85,766	)

Both classes of the Company’s common stock, Common Stock Class A (“CRDA”) and Common Stock Class B (“CRDB”) , share equally in the Company’s earnings for purposes of computing (loss) earnings per share (“EPS”).

The computations of basic and diluted net (loss) income per common share attributable to Crawford & Company were as follows:

CRAWFORD & COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

		Three months ended								Six months ended
		June 30,				June 30,				June 30,				June 30,
(in thousands, except (loss) earnings per share)		2010				2009				2010				2009
Net (loss) income attributable to Crawford & Company		$	(2,527	)		$	(88,124	)		$	527			$	(85,042	)
Weighted average common shares used to compute basic (loss) earnings  per share			52,619				51,877				52,504				51,625
Dilutive effects of shares issuable under stock-based compensation plans			—				—				445				—
Weighted-average common share equivalents used to compute diluted (loss) earnings  per share			52,619				51,877				52,949				51,625
Basic (loss) earnings per share		$	(0.05	)		$	(1.70	)		$	0.01			$	(1.65	)
Diluted (loss) earnings per share		$	(0.05	)		$	(1.70	)		$	0.01			$	(1.65	)

For the quarter ended June 30, 2010, weighted-average common share equivalents of 355,000 shares were not included in the calculation of diluted loss per share since the Company recorded a net loss. For the quarter and six-month periods ended June 30, 2009, weighted-average common share equivalents of 610,000 and 933,000 shares, respectively, were not included in the calculation of diluted loss per share since the Company recorded a net loss for these periods. The inclusion of these shares would have been anti-dilutive.

Weighted-average outstanding stock options to purchase approximately 1,742,000 and 2,496,000 shares of CRDA were excluded from the computation of diluted EPS for the three months ended June 30, 2010 and 2009, respectively, because their inclusion would have been anti-dilutive based on the average price of CRDA during those periods. Weighted-average outstanding stock options to purchase approximately 1,992,000 and 2,527,000 shares of CRDA were excluded from the computation of diluted EPS for the six months ended June 30, 2010 and 2009, respectively, because their inclusion would have been anti-dilutive based on the average price of CRDA during those periods. In addition, performance stock grants of approximately 746,000 and 766,000 shares of CRDA were excluded from the computation of EPS for the respective periods because the expected performance conditions had not been met as of June 30, 2010 and 2009, respectively. Compensation cost is recognized for these performance stock grants based on expected achievement rates, however no consideration is given for these performance stock grants when calculating EPS until the performance measurements have actually been achieved. The performance goals for approximately 316,000 of these performance stock grants are expected to be achieved at the end of 2010.

6. Interest Rate Swap Agreements

The Company attempts to manage a portion of its exposure to the impact of interest rate changes by entering interest rate swap agreements.

In May 2007, the Company entered into a three-year interest rate swap agreement that effectively converted the LIBOR-based portion of the interest rate under the Company’s Credit Agreement for a portion of its floating-rate debt to a fixed rate of 5.25%. The Company initially

CRAWFORD & COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

designated this interest rate swap as a cash flow hedge of exposure to changes in cash flows due to changes in interest rates on an equivalent amount of debt. The notional amount of the swap was reduced over its three-year term. The swap agreement expired May 31, 2010.

In connection with the Fifth Amendment to the Company’s Credit Agreement entered into in October 2009, this interest rate swap was discontinued as a cash flow hedge of exposure to changes in cash flows due to changes in interest rates. Accordingly, subsequent changes in the fair value of this swap agreement were recorded by the Company as an expense adjustment rather than as a component of the Company’s accumulated other comprehensive loss. Such amount was not material for the quarter or six months ended June 30, 2010. Because it was still probable that the forecasted transactions that were hedged would occur, the amount in accumulated other comprehensive loss related to the interest rate swap agreement was reclassified into earnings as an increase to interest expense over the remaining life of the interest rate swap agreement as the forecasted transactions occurred. As of June 30, 2010, all amounts had been reclassified from accumulated other comprehensive loss into earnings and the associated liability was reduced to zero upon expiration and settlement of the swap agreement.

In November 2009, the Company entered into a two-year forward-starting interest rate swap agreement that was effective beginning on June 30, 2010. This swap agreement effectively converts the LIBOR-based portion of the interest rate on an initial notional amount of $90,000,000 of the Company’s floating-rate debt to a fixed rate of 3.05% plus the applicable credit spread. The Company designated this interest rate swap as a cash flow hedge of exposure to changes in cash flows due to changes in interest rates on an equivalent amount of debt. The notional amount of the swap will be reduced to $85,000,000 on March 31, 2011 to match the expected repayment of the Company’s outstanding debt. The Company does not believe there have been any material changes in the creditworthiness of the counterparties to this interest-rate swap agreement and believes the risk of nonperformance by such parties is minimal.

At June 30, 2010 and December 31, 2009, the fair value of the interest rate swaps was a liability of $1,645,000 and $2,067,000, respectively. The amount of gain/loss recognized in income/expense, respectively, on the Company’s interest rate hedge contract (with the ineffective portion excluded from any effectiveness testing) were not material for the three months or six months ended June 30, 2010 or 2009. The pretax amount expected to be reclassified from accumulated other comprehensive loss into earnings during the twelve months subsequent to June 30, 2010 is approximately $941,000.

The effective portions of the pretax losses on the Company’s interest-rate swap derivative instruments are categorized in the tables below:

CRAWFORD & COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

		Gain (Loss) Recognized in
		Other Comprehensive Loss								Loss Reclassified from
		(“OCL”) on Derivative -								Accumulated OCL into Income -
(in thousands)		Effective Portion								Effective Portion (1)
Three Months Ended June 30,		2010				2009				2010				2009
Cash Flow Hedging Relationship:
Interest rate hedge		$	346			$	(266	)		NA				$	(1,273	)
Interest Rate Swap Discontinued as a Cash Flow Hedge		NA				NA				$	(593	)		NA
										Loss Reclassified from
		Loss Recognized in OCL on								Accumulated OCL into Income -
(in thousands)		Derivative - Effective Portion								Effective Portion (1)
Six Months Ended June 30,		2010				2009				2010				2009
Cash Flow Hedging Relationship:
Interest rate hedge		$	(1,245	)		$	(789	)		NA				$	(2,458	)
Interest Rate Swap Discontinued as a Cash Flow Hedge		NA				NA				$	(1,593	)		NA

The balances and changes in accumulated OCL related to the effective portions of the Company’s interest rate hedges for the three-month and six-month periods ended June 30, 2010 and 2009 were as follows:

CRAWFORD & COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

		Three months ended
		June 30,				June 30,
(in thousands)		2010				2009
Amount in accumulated OCL at beginning of period for effective portion of interest rate hedges, net of tax		$	(1,601	)		$	(2,998	)
Loss reclassified into income, net of tax			367				896
Gain (loss) recognized during period, net of tax			214				(201	)
Amount in accumulated OCL at end of period for effective portion of interest rate hedges, net of tax		$	(1,020	)		$	(2,303	)

		Six months ended
		June 30,				June 30,
(in thousands)		2010				2009
Amount in accumulated OCL at beginning of period for effective portion of interest rate hedges, net of tax		$	(1,354	)		$	(3,285	)
Loss reclassified into income, net of tax			1,046				1,664
Loss recognized during period, net of tax			(712	)			(682	)
Amount in accumulated OCL at end of period for effective portion of interest rate hedges, net of tax		$	(1,020	)		$	(2,303	)

The Company’s interest rate swap agreement contains provisions providing that if the Company is in default under its Credit Agreement, the Company may also be deemed to be in default under its interest rate swap agreement. If there was such a default, the Company could be required to contemporaneously settle some or all of the obligations under the interest rate swap agreement at values determined at the time of default. At June 30, 2010, no such default existed, and the Company was not required to have assets posted as collateral under its interest rate swap agreement.

7. Fair Value Measurements

The following table presents the Company’s assets and liabilities that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy:

CRAWFORD & COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

						Fair Value Measurements at June 30, 2010
										Significant Other				Significant
						Quoted Prices in				Observable				Unobservable
						Active Markets				Inputs				Inputs
(in thousands)		Total				(Level 1)				(Level 2)				(Level 3)
Assets:
Money market funds (1)		$	1,590			$	1,590			$	—			$	—
Liabilities:
Derivative designated as hedging instrument:
Interest rate swap (2)			(1,645	)			—				(1,645	)			—

Fair Value Disclosures

The fair value of accounts payable and short-term borrowings approximates their respective carrying values due to the short-term maturities of these instruments.

The carrying value of the Company’s term note payable was $173,750,000 at June 30, 2010. The Company’s term note payable is held by a small number of lenders, and thus it trades infrequently. The Company estimates the fair value of its term note payable based on trading activity for the term note and estimates provided by the administrative agent under its credit facility. At June 30, 2010, the Company estimated the value of its term note payable to be approximately $169,800,000.

CRAWFORD & COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

8. Defined Benefit Pension Plans

Net periodic benefit cost related to the Company’s defined benefit pension plans for the three months and six months ended June 30, 2010 and 2009 included the following components:

		Three months ended								Six months ended
		June 30,				June 30,				June 30,				June 30,
(in thousands)		2010				2009				2010				2009
Service cost		$	584			$	390			$	1,204			$	795
Interest cost			8,898				8,670				17,967				17,453
Expected return on assets			(8,801	)			(7,132	)			(17,788	)			(14,373	)
Amortization of transition asset			11				52				22				107
Recognized net actuarial loss			2,766				1,843				5,423				3,702
Net periodic benefit cost		$	3,458			$	3,823			$	6,828			$	7,684

For the three- and six-month periods ended June 30, 2010, the Company made contributions of $6,984,000 and $18,214,000, respectively, to its underfunded U.S. and U.K. defined benefit pension plans compared with contributions of $3,711,000 and $7,395,000, respectively, for the comparable periods in 2009.

9. Income Taxes

The Company’s consolidated effective income tax rate may change periodically due to changes in enacted tax rates, fluctuations in the mix of income earned from the Company’s various domestic and international operations which are subject to income taxes at different rates, the Company’s ability to utilize net operating loss and tax credit carryforwards, and amounts related to uncertain income tax positions. At June 30, 2010, the Company estimates that its effective annual income tax rate for 2010 will be approximately 22% before considering discrete items.

The decrease in the Company’s income tax expense in the first six months of 2010 compared to the same period in 2009 was due primarily to an internal restructuring of certain international operations in the second quarter of 2009 that resulted in an ongoing reduction in foreign taxes, which was partially offset by the expiration of a research and development tax credit and changes in discrete items.

CRAWFORD & COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

10. Segment Information

Financial information for the three months and six months ended June 30, 2010 and 2009 related to the Company’s reportable segments, including a reconciliation from segment operating earnings to (loss) income before income taxes, the most directly comparable GAAP financial measure, is presented below:

		Three months ended								Six months ended
		June 30,				June 30,				June 30,				June 30,
(in thousands)		2010				2009				2010				2009
Revenues:
U.S. Property & Casualty		$	46,954			$	54,789			$	96,148			$	110,083
International Operations			105,751				95,885				210,202				186,515
Broadspire			61,180				73,056				123,143				147,657
Legal Settlement Administration			24,266				25,934				44,924				41,492
Total Segment Revenues before Reimbursements			238,151				249,664				474,417				485,747
Reimbursements			17,835				21,979				33,622				36,179
Total Revenues		$	255,986			$	271,643			$	508,039			$	521,926
Operating Earnings (Loss):
U.S. Property & Casualty		$	3,271			$	6,201			$	8,367			$	12,362
International Operations			7,321				8,471				13,873				15,877
Broadspire			(1,772	)			(606	)			(4,105	)			(2,560	)
Legal Settlement Administration			5,566				4,287				8,849				5,814
Total Segment Operating Earnings			14,386				18,353				26,984				31,493
Add/(deduct):
Unallocated corporate and shared costs, net			(1,384	)			(5,294	)			(1,525	)			(7,270	)
Restructuring and other costs			(1,987	)			—				(4,650	)			(1,815	)
Goodwill impairment charge			(7,303	)			(94,000	)			(7,303	)			(94,000	)
Net corporate interest expense			(3,672	)			(3,640	)			(7,809	)			(7,125	)
Amortization of customer-relationship intangible assets			(1,499	)			(1,496	)			(2,999	)			(2,994	)
Stock option expense			(187	)			(197	)			(391	)			(430	)
(Loss) Income before Income Taxes		$	(1,646	)		$	(86,274	)		$	2,307			$	(82,141	)

Intersegment transactions are not material for any period presented.

Operating earnings is the primary financial performance measure used by the Company’s senior management and chief operating decision maker to evaluate the financial performance of the Company’s four operating segments. The Company believes this measure is useful to investors in that it allows investors to evaluate segment operating performance using the same criteria used by the Company’s senior management. Operating earnings will differ from net income computed in accordance with GAAP since operating earnings exclude income tax expense, net corporate interest expense, amortization of customer-relationship intangible assets, stock option expense, certain other gains and expenses, and certain unallocated corporate and shared costs. Net income or loss attributable to noncontrolling interests has also been removed from segment operating earnings.

Segment operating earnings include allocations of certain corporate overhead and shared costs. If the Company changes its allocation methods

CRAWFORD & COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

or changes the types of costs that are allocated to its four operating segments, prior period results are adjusted to reflect the current allocation process.

Revenue by major service line for the U.S. Property & Casualty and Broadspire segments is shown in the following table. It is not practicable to provide revenue by service line for the International Operations segment. Legal Settlement Administration considers all of its revenue to be derived from one service line.

		Three months ended								Six months ended
		June 30,				June 30,				June 30,				June 30,
(in thousands)		2010				2009				2010				2009
U.S. Property & Casualty
Claims Field Operations		$	32,096			$	36,042			$	65,298			$	74,315
Catastrophe Services			2,786				7,178				6,020				12,086
Technical Services			7,455				7,594				14,705				15,370
Contractor Connection			4,617				3,975				10,125				8,312
		$	46,954			$	54,789			$	96,148			$	110,083
Broadspire
Claims Management Services		$	25,465			$	32,527			$	53,746			$	66,014
Medical Management Services			30,970				35,868				59,981				72,232
Risk Management Information Services			4,745				4,661				9,416				9,411
		$	61,180			$	73,056			$	123,143			$	147,657

11. Commitments and Contingencies

The Company’s and its subsidiary guarantors’ obligations under the Credit Agreement are secured by liens on all of their respective personal property and mortgages over certain of their owned and leased properties.

As part of the Company’s Credit Agreement, the Company maintains a letter of credit facility to satisfy certain of its own contractual requirements. At June 30, 2010, the aggregate committed amount of letters of credit outstanding under the Credit Agreement was $19,319,000.

In the normal course of the claims administration services business, the Company is sometimes named as a defendant in suits by insureds or claimants contesting decisions made by the Company or its clients with respect to the settlement of claims. Additionally, certain clients of the Company have, in the past brought, and may in the future bring, actions for indemnification on the basis of alleged negligence by the Company, its agents, or its employees in rendering service to clients. The majority of these known claims are of the type covered by insurance maintained by the Company. However, the Company is responsible for the deductibles and any self-insured retentions under various insurance coverages. In the opinion of Company management, adequate provisions have been made for such known and foreseeable risks.

CRAWFORD & COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

The Company is subject to numerous federal, state, and foreign employment laws, and from time to time the Company faces claims by its employees and former employees under such laws. In addition, the Company has become aware that certain employers are becoming subject to an increasing number of claims involving alleged violations of wage and hour laws. The outcome of any of these allegations is expected to be highly fact specific, and there has been a substantial amount of recent legislative and judicial activity pertaining to employment-related issues. Such claims or litigation involving the Company or any of the Company’s current or former employees could divert management’s time and attention from the Company’s business operations and could potentially result in substantial costs of defense, settlement or other disposition, which could have a material adverse effect on the Company’s results of operations, financial position, and cash flows.

As previously disclosed, on October 31, 2006, the Company completed its acquisition of Broadspire Management Services, Inc. (“BMSI”) from Platinum Equity, LLC (“Platinum”). BMSI and Platinum are together engaged in certain legal proceedings against the former owners of certain entities acquired by BMSI prior to the Company’s acquisition of BMSI. Pursuant to the agreement under which the Company acquired BMSI (the “Stock Purchase Agreement”), Platinum has full responsibility to resolve all of these matters and is obligated to fully indemnify BMSI and the Company for all monetary payments that BMSI may be required to make as a result of any unfavorable outcomes related to these pre-existing legal proceedings. Pursuant thereto, Platinum has also agreed to indemnify the Company for any additional payments required under any purchase price adjustment mechanism, earnout, or similar provision in any of BMSI’s purchase and sale agreements entered into prior to the Company’s acquisition of BMSI. In the event of an unfavorable outcome in which Platinum does not indemnify the Company under the terms of the Stock Purchase Agreement, the Company may be responsible for funding any such unfavorable outcomes. At this time, the Company’s management does not believe the Company will be responsible for the funding of any of these matters. The Company has not recognized any loss contingencies for these matters in its consolidated financial statements.

Separately, the Company and Platinum previously agreed to, and have been engaged in an arbitration regarding the application of the purchase price adjustment mechanism contained in the Stock Purchase Agreement (the “Purchase Price Arbitration”). Pursuant to the Stock Purchase Agreement, any amounts payable resulting from such arbitration are considered to be adjustments to the purchase price, and will accrue interest at the prime rate from October 31, 2006. As described in more detail in Note 13, a decision and contingent determination in this arbitration was rendered on July 30, 2010. Separately, the Company has asserted claims for damages from Platinum due to breaches in the representations and warranties contained in the Stock Purchase Agreement, which claims are in arbitration (the “Representations and Warranties Arbitration”). Any damages awarded by the arbitration panel in connection with the Representations and Warranties Arbitration are limited by the Stock Purchase Agreement to $15.0 million. The Company does not expect this arbitration to be completed in 2010 and is unable to determine any possible outcome of this arbitration. Any payments made or to be made, or recoveries resulting from the Purchase Price Arbitration or the Representations and Warranties Arbitration could result in additional goodwill impairment charges or gains, as applicable, and will be recorded in the period in which the settlement is reached.

CRAWFORD & COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

12. Restructuring Charges and Losses on Sublease

During the second quarter of 2010, the Company recorded a pretax charge of $1,987,000 for severance costs related to reductions in administrative staff. Approximately $556,000 of this charge was paid prior to June 30, 2010, with the remainder expected to be paid during the third quarter of 2010. For the six months ended June 30, 2010, the total restructuring and other costs was $4,650,000, which included this restructuring charge plus a pretax loss of approximately $2,663,000 on the Plantation sublease recorded in the first quarter of 2010, discussed below.

The restructuring charge recorded in the six months ended June 30, 2009 was $1,815,000 for professional fees incurred in connection with an internal realignment of certain of the Company’s legal entities in the U.S. and internationally. The realignment of these legal entities did not impact segment financial reporting. These realignment activities commenced in the fourth quarter of 2008.

During October 2009, the Company entered into a sublease agreement with respect to a portion of a leased office building in Plantation, Florida, that was utilized by its Broadspire operations. At that time, the Company realized a pretax loss of $1,810,000 on that phase of the sublease. This sublease agreement provides the sublessor with options to sublease all or a portion of the remainder of the building at various dates in 2010. In February 2010, the sublessor exercised one of its options for additional space in the building, and the Company recognized a pretax loss of approximately $2,663,000 on that phase of the sublease which is included in Restructuring and Other Costs on the Company’s Condensed Consolidated Statement of Operations for the six months ended June 30, 2010. For the space subleased in February 2010, the Company expects to receive approximately $9,318,000 in additional sublease payments from the sublessor over the life of the sublease. If the sublessor exercises its remaining option, the Company would record an additional loss of approximately $658,000 in 2010 on that phase of the sublease, and the Company would receive additional sublease payments of approximately $5,323,000 over the life of the sublease. These sublease losses are not reported within the operating results for the Broadspire segment, but instead are reported as a corporate charge. Due to the subleases, during the first quarter of 2010 the Company relocated its Broadspire operations in Broward County Florida to another leased building.

13. Subsequent Event

On July 30, 2010, the independent auditor arbitrating the Purchase Price Arbitration issued a decision and contingent determination in connection therewith. This decision and contingent determination purports to resolve certain issues being arbitrated thereunder, and provides certain additional guidance with respect to other issues, subject to further determinations. Although the Company is reserving all of its rights with respect to the issues purported to be resolved and has asked the arbitrator to reconsider certain aspects of the decision and contingent determination, the Company made a payment of $6,099,000 plus interest on August 6, 2010, to Platinum in connection therewith representing additional purchase price consideration for the October 31, 2006 acquisition of BMSI. All of the goodwill in the Broadspire segment was previously impaired and the fair value of the Broadspire segment does not support additional goodwill. Accordingly, the Company recorded an additional goodwill impairment charge of $7,303,000 for the quarter and six months ended June 30, 2010. All but the interest portion of the charge is nondeductible for tax purposes. The charge recorded in the second quarter of 2010 does not impact the Company’s Credit Agreement.

At the present time, the Company is unable to determine any further possible outcome of this arbitration, or the timing thereof, although the Company expects that an unfavorable result in all remaining portions of the Purchase Price Arbitration could result in the Company being required to pay to Platinum up to an additional $6,619,000, plus interest, fees and expenses. No assurances can be provided that any future required payments would not materially adversely affect the Company’s liquidity, financial condition or results of operations.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and Board of Directors of
Crawford & Company:

We have reviewed the condensed consolidated balance sheet of Crawford & Company as of June 30, 2010, and the related condensed consolidated statements of operations for the three-month and six-month periods ended June 30, 2010 and 2009, and the condensed consolidated statements of cash flows for the six-month periods ended June 30, 2010 and 2009. These financial statements are the responsibility of the Company’s management.

We conducted our review in accordance with the standards of the Public Company Accounting Oversight Board (United States). A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the Public Company Accounting Oversight Board, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material modifications that should be made to the condensed consolidated financial statements referred to above for them to be in conformity with U.S. generally accepted accounting principles.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheet of Crawford & Company as of December 31, 2009, and the related consolidated statements of operations, shareholders’ investment, noncontrolling interests, and comprehensive income (loss), and cash flows for the year then ended (not presented herein) and in our report dated March 5, 2010, we expressed an unqualified opinion on those consolidated financial statements and included an explanatory paragraph for the adoption of Financial Accounting Standards Board No. 160, Noncontrolling Interests in Consolidated Financial Statements (codified in FASB Accounting Standards Codification ASC 810, Consolidation).

In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of December 31, 2009, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

/s/ Ernst & Young LLP

Atlanta, Georgia
August 9, 2010

Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations

Cautionary Statement Concerning Forward-Looking Statements

This report contains and incorporates by reference forward-looking statements within the meaning of that term in the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934. Statements contained in this report that are not statements of historical fact are forward-looking statements made pursuant to the “safe harbor” provisions. These statements are included throughout this report and relate to, among other things, discussions regarding reduction of our operating expenses in our Broadspire segment, anticipated contributions to our underfunded defined benefit pension plans, collectability of our billed and unbilled accounts receivable, projections regarding payments under existing earnout agreements, discussions regarding our continued compliance with the financial and other covenants contained in our financing agreements, and other long-term liquidity requirements. These statements also relate to our business strategies, goals and expectations concerning our market position, future operations, margins, case volumes, profitability, contingencies, and capital resources. The words “anticipate”, “believe”, “could”, “would”, “should”, “estimate”, “expect”, “intend”, “may”, “plan”, “goal”, “strategy”, “predict”, “project”, “will” and similar terms and phrases identify forward-looking statements in this report.

Although we believe the assumptions upon which these forward-looking statements are based are reasonable, any of these assumptions could prove to be inaccurate and the forward-looking statements based on these assumptions could be incorrect. Our operations and the forward-looking statements related to our operations involve risks and uncertainties, many of which are outside our control, and any one of which, or a combination of which, could materially affect our financial condition, results of operations and whether the forward-looking statements ultimately prove to be correct. Included among, but not limited to, the risks and uncertainties we face are:

	•		declines in the volume of cases referred to us for many of our service lines,
	•		changes in global economic conditions,
	•		changes in interest rates,
	•		changes in foreign currency exchange rates,
	•		changes in regulations and practices of various governmental authorities,
	•		changes in our competitive environment,
	•		changes in the financial condition of our clients,
	•		the performance of sublessors under certain subleases related to our leased properties,
	•		regulatory changes related to funding of defined benefit pension plans,
	•		the fact that our U.S. and U.K. defined benefit pension plans are significantly underfunded and our future funding obligations thereunder,
	•		changes in the degree to which property and casualty insurance carriers outsource their claims handling functions,
	•		changes in overall employment levels and associated workplace injury rates in the U.S.,
	•		unfavorable outcomes in any current or future legal proceedings, including our various arbitration proceedings relating to the acquisition of BMSI,
	•		our ability to identify new revenue sources not tied to the insurance underwriting cycle,
	•		our ability to develop or acquire information technology resources to support and grow our business,

	•		our ability to attract and retain qualified personnel,
	•		renewal of existing major contracts with clients on satisfactory terms,
	•		our ability to collect amounts recoverable from our clients and others,
	•		continued availability of funding under our financing agreements,
	•		general risks associated with doing business outside the U.S.,
	•		our ability to comply with any applicable debtor or other covenant in our financing or other agreements,
	•		possible legislation or changes in market conditions that may curtail or limit growth in product liability and securities class actions,
	•		man-made disasters and natural disasters,
	•		our failure to complete the implementation of RiskTech on schedule,
	•		impairment of goodwill or our other indefinite-lived intangible assets, and