Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2015 | Oct. 30, 2015 | |
Document Information | ||
Entity Registrant Name | CRAWFORD & CO | |
Entity Central Index Key | 25,475 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2015 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q3 | |
Current Fiscal Year End Date | --12-31 | |
Entity Well-known Seasoned Issuer | No | |
Entity Voluntary Filers | No | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Common Class A | ||
Document Information | ||
Entity Common Stock, Shares Outstanding | 30,377,402 | |
Common Class B | ||
Document Information | ||
Entity Common Stock, Shares Outstanding | 24,690,172 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Revenues: | ||||
Revenues before reimbursements | $ 293,335 | $ 293,831 | $ 885,510 | $ 857,396 |
Reimbursements | 16,649 | 21,079 | 55,506 | 53,925 |
Total revenues | 309,984 | 314,910 | 941,016 | 911,321 |
Costs and Expenses: | ||||
Costs of services provided, before reimbursements | 211,106 | 213,442 | 662,537 | 625,584 |
Reimbursements | 16,649 | 21,079 | 55,506 | 53,925 |
Total costs of services | 227,755 | 234,521 | 718,043 | 679,509 |
Selling, general, and administrative expenses | 61,738 | 59,348 | 179,346 | 179,980 |
Corporate interest expense, net of interest income of $227 and $142 for the three months ended September 30, 2015 and 2014, respectively, and $587 and $497 for the nine months ended September 30, 2015 and 2014, respectively | 2,332 | 1,680 | 6,238 | 4,532 |
Restructuring and special charges | 11,078 | 0 | 16,383 | 0 |
Total Costs and Expenses | 302,903 | 295,549 | 920,010 | 864,021 |
Other Income | 217 | 83 | 701 | 574 |
Income Before Income Taxes | 7,298 | 19,444 | 21,707 | 47,874 |
Provision for Income Taxes | 8,385 | 9,244 | 15,335 | 20,494 |
Net (Loss) Income | (1,087) | 10,200 | 6,372 | 27,380 |
Net Loss (Income) Attributable to Noncontrolling Interests | 230 | (8) | (189) | (72) |
Net (Loss) Income Attributable to Shareholders of Crawford & Company | $ (857) | $ 10,192 | $ 6,183 | $ 27,308 |
Common Class A | ||||
(Loss) Earnings Per Share - Basic: | ||||
(Loss) Earnings Per Share - Basic (usd per share) | $ (0.01) | $ 0.19 | $ 0.14 | $ 0.52 |
(Loss) Earnings Per Share - Diluted: | ||||
(Loss) Earnings Per Share - Diluted (usd per share) | $ (0.01) | $ 0.19 | $ 0.14 | $ 0.51 |
Weighted-Average Shares Used to Compute Basic (Loss) Earnings Per Share: | ||||
Weighted Average Shares Used to Compute Basic (Loss) Earnings Per Share (shares) | 30,807 | 30,355 | 30,668 | 30,178 |
Weighted-Average Shares Used to Compute Diluted (Loss) Earnings Per Share: | ||||
Weighted Average Shares Used to Compute Diluted (Loss) Earnings Per Share (shares) | 30,807 | 30,988 | 31,156 | 30,957 |
Cash Dividends Per Share: | ||||
Cash Dividends Per Share (usd per share) | $ 0.07 | $ 0.07 | $ 0.21 | $ 0.17 |
Common Class B | ||||
(Loss) Earnings Per Share - Basic: | ||||
(Loss) Earnings Per Share - Basic (usd per share) | (0.03) | 0.17 | 0.08 | 0.48 |
(Loss) Earnings Per Share - Diluted: | ||||
(Loss) Earnings Per Share - Diluted (usd per share) | $ (0.03) | $ 0.17 | $ 0.08 | $ 0.47 |
Weighted-Average Shares Used to Compute Basic (Loss) Earnings Per Share: | ||||
Weighted Average Shares Used to Compute Basic (Loss) Earnings Per Share (shares) | 24,690 | 24,690 | 24,690 | 24,690 |
Weighted-Average Shares Used to Compute Diluted (Loss) Earnings Per Share: | ||||
Weighted Average Shares Used to Compute Diluted (Loss) Earnings Per Share (shares) | 24,690 | 24,690 | 24,690 | 24,690 |
Cash Dividends Per Share: | ||||
Cash Dividends Per Share (usd per share) | $ 0.05 | $ 0.05 | $ 0.15 | $ 0.13 |
Condensed Consolidated Stateme3
Condensed Consolidated Statements of Operations (Parentheticals) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Income Statement [Abstract] | ||||
Interest income | $ 227 | $ 142 | $ 587 | $ 497 |
Condensed Consolidated Stateme4
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Comprehensive Income (Loss), Net of Tax, Including Portion Attributable to Noncontrolling Interest [Abstract] | ||||
Net (Loss) Income | $ (1,087) | $ 10,200 | $ 6,372 | $ 27,380 |
Other Comprehensive (Loss) Income: | ||||
Net foreign currency translation loss, net of tax benefit of $0 and $3 for the three months ended September 30, 2015 and 2014, respectively, and $0 and $106 for the nine months ended September 30, 2015 and 2014, respectively | (5,975) | (1,325) | (17,233) | (1,245) |
Amortization of actuarial losses for retirement plans included in net periodic pension cost, net of tax of $2,447 and $928 for the three months ended September 30, 2015 and 2014, respectively, and $4,518 and $2,772 for the nine months ended September 30, 2015 and 2014, respectively | 7,823 | 1,952 | 12,624 | 5,452 |
Other Comprehensive (Loss) Income | 1,848 | 627 | (4,609) | 4,207 |
Comprehensive Income | 761 | 10,827 | 1,763 | 31,587 |
Comprehensive loss (income) attributable to noncontrolling interests | 20 | (26) | 330 | 101 |
Comprehensive Income Attributable to Shareholders of Crawford & Company | $ 781 | $ 10,801 | $ 2,093 | $ 31,688 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Comprehensive Income (Parentheticals) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Statement of Comprehensive Income [Abstract] | ||||
OCI, Tax on foreign currency translation losses | $ 0 | $ 3 | $ 0 | $ 106 |
OCI, Tax on amortization of actuarial losses on retirement plans included in net periodic pension cost | $ 2,447 | $ 928 | $ 4,518 | $ 2,772 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 | [1] |
Current Assets: | |||
Cash and cash equivalents | $ 58,329 | $ 52,456 | |
Accounts receivable, less allowance for doubtful accounts of $12,381 and $10,960, respectively | 178,571 | 180,096 | |
Unbilled revenues, at estimated billable amounts | 112,073 | 103,163 | |
Income taxes receivable | 2,779 | 2,779 | |
Prepaid expenses and other current assets | 26,070 | 29,089 | |
Total Current Assets | 377,822 | 367,583 | |
Property and Equipment: | |||
Property and equipment | 147,881 | 143,273 | |
Less accumulated depreciation | (106,752) | (102,414) | |
Net Property and Equipment | 41,129 | 40,859 | |
Other Assets: | |||
Goodwill | 142,762 | 131,885 | |
Intangible assets arising from business acquisitions, net | 108,391 | 75,895 | |
Capitalized software costs, net | 79,819 | 75,536 | |
Deferred income tax assets | 68,658 | 66,927 | |
Other noncurrent assets | 35,605 | 30,634 | |
Total Other Assets | 435,235 | 380,877 | |
TOTAL ASSETS | 854,186 | 789,319 | |
Current Liabilities: | |||
Short-term borrowings | 6,566 | 2,002 | |
Accounts payable | 45,853 | 48,597 | |
Accrued compensation and related costs | 63,494 | 82,151 | |
Self-insured risks | 15,381 | 14,491 | |
Income taxes payable | 11,860 | 2,618 | |
Deferred income taxes | 13,924 | 14,523 | |
Deferred rent | 11,629 | 13,576 | |
Other accrued liabilities | 41,117 | 35,784 | |
Deferred revenues | 46,725 | 45,054 | |
Current installments of long-term debt and capital leases | 1,808 | 763 | |
Total Current Liabilities | 258,357 | 259,559 | |
Noncurrent Liabilities: | |||
Long-term debt and capital leases, less current installments | 250,519 | 154,046 | |
Deferred revenues | 27,066 | 26,706 | |
Self-insured risks | 9,301 | 10,041 | |
Accrued pension liabilities | 115,122 | 142,343 | |
Other noncurrent liabilities | 17,000 | 17,271 | |
Total Noncurrent Liabilities | 419,008 | 350,407 | |
Shareholders' Investment: | |||
Additional paid-in capital | 41,813 | 38,617 | |
Retained earnings | 294,193 | 301,091 | |
Accumulated other comprehensive loss | (226,048) | (221,958) | |
Shareholders' Investment Attributable to Shareholders of Crawford & Company | 164,995 | 172,937 | |
Noncontrolling interests | 11,826 | 6,416 | |
Total Shareholders' Investment | 176,821 | 179,353 | |
TOTAL LIABILITIES AND SHAREHOLDERS' INVESTMENT | 854,186 | 789,319 | |
Common Class A | |||
Shareholders' Investment: | |||
Class A common stock, $1.00 par value; 50,000 shares authorized; 30,347 and 30,497 shares issued and outstanding at September 30, 2015 and December 31, 2014, respectively. Class B common stock, $1.00 par value; 50,000 shares authorized; 24,690 shares issued and outstanding | 30,347 | 30,497 | |
Common Class B | |||
Shareholders' Investment: | |||
Class A common stock, $1.00 par value; 50,000 shares authorized; 30,347 and 30,497 shares issued and outstanding at September 30, 2015 and December 31, 2014, respectively. Class B common stock, $1.00 par value; 50,000 shares authorized; 24,690 shares issued and outstanding | $ 24,690 | $ 24,690 | |
[1] | Derived from the audited Consolidated Balance Sheet |
Condensed Consolidated Balance7
Condensed Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 | [1] |
Current Assets: | |||
Allowance for doubtful accounts | $ 12,381 | $ 10,960 | |
Common Class A | |||
Shareholders' Investment: | |||
Par or stated value per share (usd per share) | $ 1 | $ 1 | |
Shares authorized (shares) | 50,000,000 | 50,000,000 | |
Shares issued (shares) | 30,347,000 | 30,497,000 | |
Shares outstanding (shares) | 30,347,000 | 30,497,000 | |
Common Class B | |||
Shareholders' Investment: | |||
Par or stated value per share (usd per share) | $ 1 | $ 1 | |
Shares authorized (shares) | 50,000,000 | 50,000,000 | |
Shares issued (shares) | 24,690,000 | 24,690,000 | |
Shares outstanding (shares) | 24,690,000 | 24,690,000 | |
[1] | Derived from the audited Consolidated Balance Sheet. |
Condensed Consolidated Stateme8
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | ||
Cash Flows From Operating Activities: | |||
Net income | $ 6,372 | $ 27,380 | |
Reconciliation of net income to net cash provided by (used in) operating activities: | |||
Depreciation and amortization | 32,219 | 28,102 | |
Stock-based compensation | 2,369 | 1,931 | |
Changes in operating assets and liabilities, net of effects of acquisitions and dispositions: | |||
Accounts receivable, net | 14,190 | (28,566) | |
Unbilled revenues, net | (8,604) | (23,083) | |
Accrued or prepaid income taxes | 9,838 | 9,777 | |
Accounts payable and accrued liabilities | (31,247) | (36,470) | |
Deferred revenues | 1,064 | 1,831 | |
Accrued retirement costs | (14,952) | (20,334) | |
Prepaid expenses and other operating activities | 9,890 | (4,816) | |
Net cash provided by (used in) operating activities | 21,139 | (44,248) | |
Cash Flows From Investing Activities: | |||
Acquisitions of property and equipment | (10,296) | (9,207) | |
Proceeds from disposals of property and equipment | 0 | 1,289 | |
Capitalization of computer software costs | (16,182) | (12,204) | |
Cash surrendered in sale of business | 0 | (1,554) | |
Payments for business acquisitions, net of cash acquired | (68,259) | (3,324) | |
Net cash used in investing activities | (94,737) | (25,000) | |
Cash Flows From Financing Activities: | |||
Cash dividends paid | (10,151) | (8,353) | |
Payments related to shares received for withholding taxes under stock-based compensation plans | (2) | (1,361) | |
Proceeds from shares purchased under employee stock-based compensation plans | 1,196 | 1,268 | |
Repurchases of common stock | (137) | (3,157) | |
Increases in short-term and revolving credit facility borrowings | 126,032 | 118,777 | |
Payments on short-term and revolving credit facility borrowings | (31,645) | (67,295) | |
Payments on capital lease obligations | (1,586) | (661) | |
Dividends paid to noncontrolling interests | (186) | 0 | |
Other financing activities | (4) | (410) | |
Net cash provided by financing activities | 83,517 | 38,808 | |
Effects of exchange rate changes on cash and cash equivalents | (4,046) | (771) | |
Increase (decrease) in cash and cash equivalents | 5,873 | (31,211) | |
Cash and cash equivalents at beginning of year | 52,456 | [1] | 75,953 |
Cash and cash equivalents at end of period | $ 58,329 | $ 44,742 | |
[1] | Derived from the audited Consolidated Balance Sheet |
Condensed Consolidated Stateme9
Condensed Consolidated Statements of Shareholders' Investment - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||||
Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Beginning Balance | $ 181,109 | $ 177,595 | $ 179,353 | [1] | $ 219,844 | $ 205,027 | $ 207,533 | $ 179,353 | [1] | $ 207,533 |
Net (Loss) Income | (1,087) | 4,178 | 3,281 | 10,200 | 10,594 | 6,586 | 6,372 | 27,380 | ||
Other comprehensive income (loss) | 1,848 | 1,411 | (7,868) | 627 | 6,452 | (2,872) | (4,609) | 4,207 | ||
Cash dividends paid | (3,394) | (3,384) | (3,373) | (3,362) | (2,502) | (2,489) | ||||
Stock-based compensation | 1,089 | 876 | 404 | 1,188 | 1,192 | (449) | ||||
Common stock activity, net | (2,558) | 433 | (128) | 488 | (919) | (2,502) | ||||
Increase in value of noncontrolling interest due to acquisition | 5,926 | |||||||||
Decrease in value of noncontrolling interest due to sale of controlling interest | (638) | |||||||||
Dividends paid to noncontrolling interests | (186) | (225) | (142) | |||||||
Ending Balance | 176,821 | 181,109 | 177,595 | 228,760 | 219,844 | 205,027 | 176,821 | 228,760 | ||
Shareholders' Investment Attributable to Shareholders of Crawford & Company | ||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Beginning Balance | 169,077 | 165,381 | 172,937 | 213,023 | 198,504 | 199,805 | 172,937 | 199,805 | ||
Net (Loss) Income | (857) | 4,054 | 2,986 | 10,192 | 10,464 | 6,652 | ||||
Other comprehensive income (loss) | 1,638 | 1,717 | (7,445) | 609 | 6,284 | (2,513) | ||||
Cash dividends paid | (3,394) | (3,384) | (3,373) | (3,362) | (2,502) | (2,489) | ||||
Stock-based compensation | 1,089 | 876 | 404 | 1,188 | 1,192 | (449) | ||||
Common stock activity, net | (2,558) | 433 | (128) | 488 | (919) | (2,502) | ||||
Ending Balance | 164,995 | 169,077 | 165,381 | 222,138 | 213,023 | 198,504 | 164,995 | 222,138 | ||
Additional Paid-In Capital | ||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Beginning Balance | 40,113 | 38,977 | 38,617 | 38,720 | 37,365 | 39,285 | 38,617 | 39,285 | ||
Stock-based compensation | 1,089 | 876 | 404 | 1,188 | 1,192 | (449) | ||||
Common stock activity, net | 611 | 260 | (44) | 616 | 163 | (1,471) | ||||
Ending Balance | 41,813 | 40,113 | 38,977 | 40,524 | 38,720 | 37,365 | 41,813 | 40,524 | ||
Retained Earnings | ||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Beginning Balance | 301,254 | 300,584 | 301,091 | 294,837 | 288,110 | 285,165 | 301,091 | 285,165 | ||
Net (Loss) Income | (857) | 4,054 | 2,986 | 10,192 | 10,464 | 6,652 | ||||
Cash dividends paid | (3,394) | (3,384) | (3,373) | (3,362) | (2,502) | (2,489) | ||||
Common stock activity, net | (2,810) | 0 | (120) | (322) | (1,235) | (1,218) | ||||
Ending Balance | 294,193 | 301,254 | 300,584 | 301,345 | 294,837 | 288,110 | 294,193 | 301,345 | ||
Accumulated Other Comprehensive Loss | ||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Beginning Balance | (227,686) | (229,403) | (221,958) | (175,439) | (181,723) | (179,210) | (221,958) | (179,210) | ||
Other comprehensive income (loss) | 1,638 | 1,717 | (7,445) | 609 | 6,284 | (2,513) | ||||
Ending Balance | (226,048) | (227,686) | (229,403) | (174,830) | (175,439) | (181,723) | (226,048) | (174,830) | ||
Noncontrolling Interests | ||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Beginning Balance | 12,032 | 12,214 | 6,416 | 6,821 | 6,523 | 7,728 | 6,416 | 7,728 | ||
Net (Loss) Income | (230) | 124 | 295 | 8 | 130 | (66) | ||||
Other comprehensive income (loss) | 210 | (306) | (423) | 18 | 168 | (359) | ||||
Increase in value of noncontrolling interest due to acquisition | 5,926 | |||||||||
Decrease in value of noncontrolling interest due to sale of controlling interest | (638) | |||||||||
Dividends paid to noncontrolling interests | (186) | (225) | (142) | |||||||
Ending Balance | 11,826 | 12,032 | 12,214 | 6,622 | 6,821 | 6,523 | 11,826 | 6,622 | ||
Common Class A | Common Stock | ||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Beginning Balance | 30,706 | 30,533 | 30,497 | 30,215 | 30,062 | 29,875 | 30,497 | 29,875 | ||
Common stock activity, net | (359) | 173 | 36 | 194 | 153 | 187 | ||||
Ending Balance | 30,347 | 30,706 | 30,533 | 30,409 | 30,215 | 30,062 | 30,347 | 30,409 | ||
Common Class B | Common Stock | ||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Beginning Balance | 24,690 | 24,690 | 24,690 | 24,690 | 24,690 | 24,690 | 24,690 | 24,690 | ||
Common stock activity, net | 0 | 0 | 0 | 0 | 0 | 0 | ||||
Ending Balance | $ 24,690 | $ 24,690 | $ 24,690 | $ 24,690 | $ 24,690 | $ 24,690 | $ 24,690 | $ 24,690 | ||
[1] | Derived from the audited Consolidated Balance Sheet |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with U.S. 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. Operating results for the three months and nine months ended, and the Company's financial position as of, September 30, 2015 are not necessarily indicative of the results or financial position that may be expected for the year ending December 31, 2015 or for other future periods. The financial results from the Company's operations outside of the U.S., Canada, the Caribbean, and certain subsidiaries in the Philippines, are reported and consolidated on a two-month delayed basis (fiscal year-end of October 31) as permitted by GAAP in order to provide sufficient time for accumulation of their results. The preparation of financial statements in conformity with GAAP 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. In the opinion of management, all adjustments (consisting only of normal recurring accruals and adjustments) considered necessary for a fair presentation have been included. There have been no material changes to our significant accounting policies and estimates from those disclosed in the Company's Annual Report on Form 10-K for the year ended December 31, 2014 . Certain prior period amounts within the EMEA/AP segment have been reclassified to conform to the current presentation. These reclassifications had no effect on the Company's reported segment or consolidated results. Significant intercompany transactions have been eliminated in consolidation. The Condensed Consolidated Balance Sheet information presented herein as of December 31, 2014 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, 2014 . The Company consolidates the liabilities of its deferred compensation plan and the related assets, which are held in a rabbi trust and considered a variable interest entity ("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 September 30, 2015 and December 31, 2014 , the liabilities of the deferred compensation plan were $9,750,000 and $11,051,000 , respectively, which represented obligations of the Company rather than of the rabbi trust, and the values of the assets held in the related rabbi trust were $15,787,000 and $15,519,000 , respectively. These liabilities and assets are included in "Other noncurrent liabilities" and "Other noncurrent assets," respectively, on the Company's unaudited Condensed Consolidated Balance Sheets. The Company owns 51% of the capital stock of Lloyd Warwick International Limited ("LWI"). The Company has also agreed to provide financial support to LWI of up to approximately $10,000,000 . Because of this controlling financial interest, and because Crawford has the obligation to absorb certain of LWI's losses through the additional financial support that LWI may require, LWI is considered a VIE of the Company. LWI also does not meet the business scope exception, as Crawford provides more than half of its financial support, and because LWI lacks sufficient equity at risk to permit it to carry on its activities without this additional financial support. Creditors of LWI have no recourse to Crawford's general credit. Accordingly, Crawford is considered the primary beneficiary and is consolidating LWI. Total assets and liabilities of LWI as of September 30, 2015 were $9,040,000 and $11,408,000 , respectively. Included in LWI's total liabilities is a loan from Crawford of $9,914,000 . |
Business Acquisition
Business Acquisition | 9 Months Ended |
Sep. 30, 2015 | |
Business Combinations [Abstract] | |
Business Acquisition | Business Acquisition On December 1, 2014, the Company acquired 100% of the capital stock of GAB Robins Holdings UK Limited ("GAB Robins"), a U.K. based international loss adjusting and claims management provider, for cash consideration of $71,812,000 . During the third quarter 2015, the Company paid an additional $2,182,000 related to net debt and net working capital adjustments under the terms of the acquisition agreement which increased the purchase price to $73,994,000 . Because the financial results of certain of the Company's international subsidiaries, including those in the U.K. through which GAB Robins reports, are included in the Company's consolidated financial statements on a two-month delayed basis, the results of operations of GAB Robins, and the preliminary application of purchase accounting to the assets acquired, and liabilities and noncontrolling interests assumed, in that acquisition have been reflected in the Company's unaudited condensed consolidated results for the three months and nine months ended September 30, 2015 . As a result, comparability to prior periods' results and financial condition may be limited. The purchase was accounted for under the guidance of Accounting Standards Codification ("ASC") 805-10 as a business combination under the acquisition method. As a requirement of accounting under the acquisition method, all identifiable assets acquired and liabilities assumed and noncontrolling interests were recognized using fair value measurements. Based upon the timing of the acquisition, the allocation of the purchase price is preliminary and subject to change, as the Company gathers additional information related to, among other things, unbilled accounts receivable, intangible assets, deferred taxes, other assets, accrued liabilities, noncontrolling interests, and uncertain tax positions. During the measurement period since the acquisition, adjustments have been made to the preliminary purchase accounting for receivables, prepaid and other current assets acquired, other current liabilities assumed, and a payment for adjustments to net debt and net working capital based on additional information gathered. These measurement period adjustments did not affect amounts recorded to the income statement during the nine months ended September 30, 2015. The purchase price included $6,329,000 placed in escrow for up to two years related to certain acquired contingencies per the terms of the acquisition agreement. As of September 30, 2015 , $1,600,000 of the previously escrowed amount has been released. The acquisition was funded primarily through borrowings in the U.K. under the Company's credit facility. The following table summarizes the preliminary purchase price allocation to the tangible and intangible assets acquired and liabilities assumed and noncontrolling interests in the GAB Robins acquisition included in the Company's condensed consolidated financial statements on the two-month delayed basis as discussed above: (in thousands) Opening Balance Sheet, Adjusted as of September 30, 2015 Assets Cash and cash equivalents $ 5,735 Accounts receivable 19,182 Unbilled revenues, at estimated billable amounts 7,169 Prepaid expenses and other current assets 7,443 Property and equipment 4,083 Goodwill 16,358 Intangible assets 40,535 Other noncurrent assets 1,933 Deferred income tax assets 4,833 Total Assets $ 107,271 Liabilities Other current liabilities $ 22,771 Noncurrent liabilities 4,580 Total Liabilities 27,351 Net Assets Acquired, Before Noncontrolling Interests 79,920 Noncontrolling interests 5,926 Net Assets Acquired, Net of Noncontrolling Interests $ 73,994 Intangible assets acquired include customer relationships, trademarks, internally developed software and non-compete agreements. The intangibles acquired are made up largely of customer relationships of $38,210,000 being amortized over a preliminary estimated life of 18 years, and the remaining assets listed above are being amortized over periods ranging from two to five years. For the three months and nine months ended September 30, 2015 , the Company recognized amortization expense of $783,000 and $2,074,000 , respectively, in its unaudited condensed consolidated financial statements related to these intangibles. Goodwill is attributable to the synergies of the work force in place and business resources as a result of the combination of the companies. The Company does not expect that goodwill attributable to the acquisition will be deductible for tax purposes. For the three months and nine months ended September 30, 2015 , GAB Robins accounted for $19,647,000 and $57,743,000 of the Company's consolidated revenues before reimbursements, respectively. The results of GAB Robins are reported in the EMEA/AP segment. For the three months and nine months ended September 30, 2015 , GAB Robins contribution to the Company's earnings and earnings per share were not material to the unaudited condensed consolidated financial statements and as such, no pro forma information is required to be presented. |
Recently Issued Accounting Stan
Recently Issued Accounting Standards | 9 Months Ended |
Sep. 30, 2015 | |
Accounting Changes and Error Corrections [Abstract] | |
Recently Issued Accounting Standards | Recently Issued Accounting Standards Business Combinations-Simplifying the Accounting for Measurement-Period Adjustments In September 2015, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2015-16, "Simplifying the Accounting for Measurement-Period Adjustments." Under ASU 2015-16, in accounting for adjustments made to provisional amounts recognized in a business combination the requirement to retrospectively account for those adjustments is eliminated. The amendments in this update are effective for public companies for fiscal years beginning after December 15, 2015, with early adoption permitted. The Company adopted the standard effective in the third quarter 2015, although it had no impact on the Company's results of operations, financial condition and cash flows for the nine months ended September 30, 2015. Revenue from Contracts with Customers In May 2014, the FASB issued ASU 2014-09, "Revenue from Contracts with Customers." Under ASU 2014-09, companies will be required to recognize revenue to depict the transfer of goods or services to customers in amounts that reflect the consideration (that is, payment) to which the company expects to be entitled in exchange for those goods or services. The new standard also will result in enhanced disclosures about revenue, provide guidance for transactions that were not previously addressed comprehensively (for example, service revenue and contract modifications) and modify guidance for multiple-element arrangements. In August 2015, the FASB issued ASU 2015-14, which deferred by one year the effective date of ASU 2014-09. The one year deferral of the effective date of this standard changes the effective date for the Company to January 1, 2018. Early adoption is permitted, but not before the original effective date. The Company is currently evaluating the effect this standard may have on its results of operations, financial condition and cash flows. Simplifying the Presentation of Debt Issuance Costs In April 2015, the FASB issued ASU 2015-03, "Interest-Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs." The new standard is intended to simplify the presentation of debt issuance costs by requiring that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The standard is effective for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Early adoption is permitted. At the Emerging Issues Task Force ("EITF") meeting held in June 2015, the EITF clarified that fees incurred to secure revolving debt arrangements were not addressed by ASU 2015-03 and the SEC observer at the EITF meeting stated that the SEC would not object to an entity deferring and presenting debt issuance costs as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the revolving debt agreement. Following this announcement, management determined that adoption of this standard is not expected to have any impact on the financial statements of the Company. Accounting for Fees Paid in a Cloud Computing Arrangement In April 2015, the FASB issued ASU 2015-05, "Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40), Customer's Accounting for Fees Paid in a Cloud Computing Arrangement." This ASU amended guidance on internal use software to clarify how customers in cloud computing arrangements should determine whether the arrangement includes a software license. The new guidance specifies that these licenses should be accounted for as licenses of intangible assets. The guidance is effective for annual periods, including interim periods within those annual periods beginning after December 15, 2015. The Company is currently evaluating the effect this standard may have on its results of operations, financial condition and cash flows. Amendments to the Consolidation Analysis In February 2015, FASB issued ASU 2015-02, "Consolidation (topic 810): Amendments to the Consolidation Analysis." ASU 2015-02 focuses on the consolidation evaluation for reporting organizations (public and private companies) that are required to evaluate whether they should consolidate certain legal entities. The standard is effective for fiscal years beginning after December 15, 2016, and interim periods within those years. Early adoption is permitted. The Company is currently evaluating the effect this standard may have on its results of operations, financial condition and cash flows. Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity In April 2014, FASB issued ASU 2014-08, "Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity." Under ASU 2014-8, only disposals that represent a strategic shift that has (or will have) a major effect on the entity's results and operations would qualify as discontinued operations. In addition, the ASU (1) expands the disclosure requirements for disposals that meet the definition of a discontinued operation, (2) requires entities to disclose information about disposals of individually significant components, and (3) defines "discontinued operations" similarly to how it is defined under International Financial Reporting Standards 2, "Non-current Assets Held for Sale and Discontinued Operations." The standard became effective in the first quarter of 2015 for public organizations with calendar year-ends. The Company adopted the standard effective in the first quarter 2015, although it had no impact on the Company's results of operations, financial condition and cash flows for the nine months ended September 30, 2015. |
Derivative Instruments
Derivative Instruments | 9 Months Ended |
Sep. 30, 2015 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments | Derivative Instruments In February 2011, the Company entered into a U.S. dollar and Canadian dollar ("CAD") cross currency basis swap with an initial notional amount of CAD 34,749,000 as an economic hedge to an intercompany note payable to the U.S. parent by a Canadian subsidiary. The cross currency basis swap requires the Canadian subsidiary to deliver quarterly payments of CAD 589,000 to the counterparty and entitles the U.S. parent to receive quarterly payments of U.S. $593,000 . The Canadian subsidiary also makes interest payments to the counterparty based on 3-month Canada Bankers Acceptances plus a spread, and the U.S. parent receives payments based on U.S. 3-month LIBOR. The cross currency basis swap expires on September 30, 2025. The Company has elected to not designate this swap as a hedge of the intercompany note from the Canadian subsidiary. Accordingly, changes in the fair value of this swap, as well as changes in the value of the intercompany note, are recorded as gains or losses in "Selling, general, and administrative expenses" in the Compan y's unaudited Condensed Consolidated Statements of Operations over the term of the swap and are expected to substantially offset one another. The changes in the fair value of the cross currency basis swap will not exactly offset changes in the value of the intercompany note, as the fair value of this swap is determined based on forward rates while the value of the intercompany note is determined based on end of period spot rates. The net gains and losses for the three months and nine months ended September 30, 2015 and 2014 were not significant. The Company believes there have been no material changes in the creditworthiness of the counterparty to this cross currency basis swap agreement and believes the risk of nonperformance by such party is minimal. This swap agreement contains a provision providing that if the Company is in default under its credit facility, the Company may also be deemed to be in default under the swap agreement. If there were such a default, the Company could be required to contemporaneously settle some or all of the obligation under the swap agreement at values determined at the time of default. At September 30, 2015 , no such default existed, and the Company had no assets posted as collateral under its swap agreement. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 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 September 30, 2015 , the Company estimates that its effective income tax rate for 2015 will be approximately 83% after considering known discrete items. The Company's effective tax rate is higher in the 2015 period primarily due to the overall low level of taxable income, fluctuations in the mix of income earned, changes in enacted tax rates, and current year losses in certain operations, including losses due to restructuring and special charges, in jurisdictions with lower tax rates or in jurisdictions where the losses are unable to be benefited. |
Defined Benefit Pension Plans
Defined Benefit Pension Plans | 9 Months Ended |
Sep. 30, 2015 | |
Defined Benefit Pension Plans and Defined Benefit Postretirement Plans Disclosure [Abstract] | |
Defined Benefit Pension Plans | Defined Benefit Pension Plans Net periodic benefit cost related to all of the Company's defined benefit pension plans recognized in the Company's unaudited Condensed Consolidated Statements of Operations for the three months and nine months ended September 30, 2015 and 2014 included the following components: Three months ended Nine months ended (in thousands) September 30, September 30, September 30, September 30, Service (benefit) cost $ (208 ) $ 694 $ 1,224 $ 2,098 Interest cost 8,187 8,937 24,459 26,851 Expected return on assets (10,604 ) (11,498 ) (31,428 ) (34,560 ) Amortization of actuarial loss 3,396 3,123 9,660 8,967 Net periodic benefit cost $ 771 $ 1,256 $ 3,915 $ 3,356 For the nine -month period ended September 30, 2015 , the Company made contributions of $9,000,000 and $4,945,000 to its underfunded U.S. and U.K. defined benefit pension plans, respectively, compared with contributions of $14,850,000 and $5,204,000 , respectively, in the comparable period in 2014 . The Company is not required to make any additional contributions to its U.S. defined benefit pension plan or to the U.K. plans for the remainder of 2015; however, the Company expects to make additional contributions of approximately $3,000,000 and $1,700,000 to its U.S. and U.K. plans, respectively, during the remainder of 2015 . During the three months and nine months ended September 30, 2015 , a majority of the employees covered under the defined benefit pension plan in the Netherlands elected to convert to a newly created defined contribution plan effective January 1, 2015. This was accounted for as a curtailment of the defined benefit pension plan which resulted in the reduction of the projected benefit obligation in the amount of $5,500,000 , reduction of the deferred tax asset of $1,400,000 , and a reduction in accumulated other comprehensive loss of $4,100,000 . This change resulted in a reduction in Net Periodic Pension Costs for the three months and nine months ended September 30, 2015 of $673,000 . This reduction was substantially offset by an increase in defined contribution expense. |
Net (Loss) Income Attributable
Net (Loss) Income Attributable to Shareholders of Crawford & Company per Common Share | 9 Months Ended |
Sep. 30, 2015 | |
Earnings Per Share [Abstract] | |
Net (Loss) Income Attributable to Shareholders of Crawford & Company per Common Share | Net (Loss) Income Attributable to Shareholders of Crawford & Company per Common Share The Company computes (loss) earnings per share of its non-voting Class A Common Stock ("CRDA") and voting Class B Common Stock ("CRDB") using the two-class method, which allocates the undistributed (loss) earnings in each period to each class on a proportionate basis. The Company's Board of Directors has the right, but not the obligation, to declare higher dividends on the CRDA shares than on the CRDB shares, subject to certain limitations. In periods when the dividend is the same for CRDA and CRDB or when no dividends are declared or paid to either class, the two-class method generally will yield the same (loss) earnings per share for CRDA and CRDB. During the first, second, and third quarters of 2015 and 2014 the Board of Directors declared a higher dividend on CRDA than on CRDB. The computations of basic net (loss) income attributable to shareholders of Crawford & Company per common share were as follows: Three months ended Nine months ended September 30, September 30, September 30, September 30, (in thousands, except per share amounts) CRDA CRDB CRDA CRDB CRDA CRDB CRDA CRDB (Loss) earnings per share - basic: Numerator: Allocation of undistributed (loss) earnings $ (2,360 ) $ (1,891 ) $ 3,766 $ 3,064 $ (2,198 ) $ (1,770 ) $ 10,425 $ 8,530 Dividends paid 2,160 1,234 2,128 1,234 6,447 3,704 5,144 3,209 Net (loss) income available to common shareholders, basic $ (200 ) $ (657 ) $ 5,894 $ 4,298 $ 4,249 $ 1,934 $ 15,569 $ 11,739 Denominator: Weighted-average common shares outstanding, basic 30,807 24,690 30,355 24,690 30,668 24,690 30,178 24,690 (Loss) earnings per share - basic $ (0.01 ) $ (0.03 ) $ 0.19 $ 0.17 $ 0.14 $ 0.08 $ 0.52 $ 0.48 The computations of diluted net (loss) income attributable to shareholders of Crawford & Company per common share were as follows: Three months ended Nine months ended September 30, September 30, September 30, September 30, (in thousands, except per share amounts) CRDA CRDB CRDA CRDB CRDA CRDB CRDA CRDB (Loss) earnings per share - diluted: Numerator: Allocation of undistributed (loss) earnings $ (2,360 ) $ (1,891 ) $ 3,801 $ 3,029 $ (2,214 ) $ (1,754 ) $ 10,545 $ 8,410 Dividends paid 2,160 1,234 2,128 1,234 6,447 3,704 5,144 3,209 Net (loss) income available to common shareholders, diluted $ (200 ) $ (657 ) $ 5,929 $ 4,263 $ 4,233 $ 1,950 $ 15,689 $ 11,619 Denominator: Weighted-average common shares outstanding, basic 30,807 24,690 30,355 24,690 30,668 24,690 30,178 24,690 Weighted-average effect of dilutive securities — — 633 — 488 — 779 — 30,807 24,690 30,988 24,690 31,156 24,690 30,957 24,690 (Loss) earnings per share - diluted $ (0.01 ) $ (0.03 ) $ 0.19 $ 0.17 $ 0.14 $ 0.08 $ 0.51 $ 0.47 Listed below are the shares excluded from the denominator in the above computation of diluted (loss) earnings per share for CRDA because their inclusion would have been antidilutive: Three months ended Nine months ended (in thousands) September 30, September 30, September 30, September 30, Shares underlying stock options excluded due to the options' respective exercise prices being greater than the average stock price during the period 15 — 32 — Performance stock grants excluded because performance conditions had not been met (1) 1,819 2,267 1,969 2,267 ________________________________________________ (1) Compensation cost is recognized for these performance stock grants based on expected achievement rates; however, no consideration is given to these performance stock grants when calculating (loss) earnings per share until the performance measurements have been achieved. As of September 30, 2015 , the Company does not expect these performance measurements to be achieved by December 31, 2015 . The following table details shares issued during the three months and nine months ended September 30, 2015 and September 30, 2014 . These shares are included from their dates of issuance in the weighted-average common shares used to compute basic (loss) earnings per share for CRDA in the table above. There were no shares of CRDB issued during any of these periods. Three months ended Nine months ended (in thousands) September 30, September 30, September 30, September 30, CRDA issued under non-employee director stock plan 4 2 59 62 CRDA issued under the Employee Stock Purchase Plan 107 155 107 155 CRDA issued under the U.K. ShareSave Scheme 5 3 101 264 CRDA issued under the International Employee Stock Purchase Plan 7 12 7 12 CRDA issued under the Executive Stock Bonus Plan 20 66 94 317 CRDA issued upon stock option plan exercises — — — 106 Effective August 16, 2014, the Company's then existing stock repurchase authorization was replaced with a new authorization pursuant to which the Company has been authorized to repurchase up to 2,000,000 shares of CRDA or CRDB (or both) through July 2017 (the "2014 Repurchase Authorization"). Under the 2014 Repurchase Authorization, repurchases may be made in open market or privately negotiated transactions at such times and for such prices as management deems appropriate, subject to applicable contractual and regulatory restrictions. During the three months and nine months ended September 30, 2015 , the Company repurchased 500,000 shares and 517,700 shares of CRDA, respectively, at an average cost of $6.62 and $6.66 per share, respectively. The non-cash repurchase of 500,000 shares during the three months and nine months ended September 30, 2015 was made pursuant to a note payable agreement for $3,310,000 . During the three months and nine months ended September 30, 2014 , the Company repurchased 44,254 and 382,192 shares of CRDA, respectively, at an average cost of $8.27 and $8.26 per share, respectively. The Company did not repurchase any shares of CRDB during any of these periods. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 9 Months Ended |
Sep. 30, 2015 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss Comprehensive (loss) income for the Company consists of the total of net (loss) income, foreign currency translation adjustments, and accrued pension and retiree medical liability adjustments. The changes in components of "Accumulated other comprehensive loss" ("AOCL"), net of taxes and noncontrolling interests, included in the Company's unaudited condensed consolidated financial statements were as follows: Three months ended September 30, 2015 Nine months ended September 30, 2015 (in thousands) Foreign currency translation adjustments Retirement liabilities (1) AOCL attributable to shareholders of Crawford & Company Foreign currency translation adjustments Retirement liabilities (1) AOCL attributable to shareholders of Crawford & Company Beginning balance $ (15,188 ) $ (212,498 ) $ (227,686 ) $ (4,659 ) $ (217,299 ) $ (221,958 ) Other comprehensive loss before reclassifications (6,185 ) — (6,185 ) (16,714 ) — (16,714 ) Amounts reclassified from accumulated other comprehensive income — 7,823 7,823 — 12,624 12,624 Net current period other comprehensive (loss) income (6,185 ) 7,823 1,638 (16,714 ) 12,624 (4,090 ) Ending balance $ (21,373 ) $ (204,675 ) $ (226,048 ) $ (21,373 ) $ (204,675 ) $ (226,048 ) Three months ended September 30, 2014 Nine months ended September 30, 2014 (in thousands) Foreign currency translation adjustments Retirement liabilities (1) AOCL attributable to shareholders of Crawford & Company Foreign currency translation adjustments Retirement liabilities (1) AOCL attributable to shareholders of Crawford & Company Beginning balance $ 3,815 $ (179,254 ) $ (175,439 ) $ 3,544 $ (182,754 ) $ (179,210 ) Other comprehensive loss before reclassifications (1,343 ) — (1,343 ) (1,072 ) — (1,072 ) Amounts reclassified from accumulated other comprehensive income — 1,952 1,952 — 5,452 5,452 Net current period other comprehensive income (1,343 ) 1,952 609 (1,072 ) 5,452 4,380 Ending balance $ 2,472 $ (177,302 ) $ (174,830 ) $ 2,472 $ (177,302 ) $ (174,830 ) ________________________________________________ (1) Retirement liabilities reclassified to net income are related to the amortization of actuarial losses and are included in "Selling, general, and administrative expenses" in the Company's unaudited Condensed Consolidated Statements of Operations. See Note 6, "Defined Benefit Pension Plans" for additional details. As discussed in Note 6, "Defined Benefit Pension Plans," during the three months ended September 30, 2015 , there was a curtailment of the defined benefit pension plan in the Netherlands which resulted in the reduction of the projected benefit obligation in the amount of $5,500,000 , reduction of the deferred tax asset of $1,400,000 , and a reduction in accumulated other comprehensive loss of $4,100,000 . The other comprehensive loss amounts attributable to noncontrolling interests shown in the Company's unaudited Condensed Consolidated Statements of Shareholders' Investment are foreign currency translation adjustments. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2015 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 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: Fair Value Measurements at September 30, 2015 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) $ 11 $ 11 $ — $ — Derivative not designated as hedging instrument: Cross currency basis swap (2) 5,603 — 5,603 — Liabilities: Contingent earnout liability (3) 1,253 — — 1,253 ________________________________________________ (1) The fair values of the money market funds were based on recently quoted market prices and reported transactions in an active marketplace. Money market funds are included in the Company's unaudited Condensed Consolidated Balance Sheets as "Cash and cash equivalents." (2) The fair value of the cross currency basis swap was derived from a discounted cash flow analysis based on the terms of the swap and the forward curves for foreign currency rates and interest rates adjusted for the counterparty's credit risk. The fair value of the cross currency basis swap is included in "Other noncurrent assets" on the Company's unaudited Condensed Consolidated Balance Sheets, based upon the term of the cross currency basis swap. (3) The fair value of the contingent earnout liability for the 2014 acquisition of Buckley Scott Holdings Limited ("Buckley Scott") was e stimated using an internally-prepared probability-weighted discounted cash flow analysis. The fair value analysis relied upon both Level 2 data (publicly observable data such as market interest rates and capital structures of peer companies) and Level 3 data (internal data such as the Company's operating projections). As such, the liability is a Level 3 fair value measurement. The valuation is sensitive to Level 3 data, with a maximum possible earnout of $2,048,000 . As such, the fair value is not expected to vary materially from the balance recorded. The fair value of the contingent earnout liability is included in "Other noncurrent liabilities" on the Company's unaudited Condensed Consolidated Balance Sheets, based upon the term of the contingent earnout agreement. The fair value of the earnout was $1,153,000 at December 31, 2014 . The change in the Level 3 fair value at September 30, 2015 was due to foreign currency translation adjustments and inputed interest. Fair Value Disclosures There were no transfers of assets between fair value levels during the three months or nine months ended September 30, 2015 . The categorization of assets and liabilities within the fair value hierarchy and the measurement techniques are reviewed quarterly. Any transfers between levels are deemed to have occurred at the end of the quarter. The fair values of accounts receivable, unbilled revenues, accounts payable and short-term borrowings approximate their respective carrying values due to the short-term maturities of the instruments. The interest rate on the Company's variable rate long-term debt resets at least every 90 days ; therefore, the carrying value approximates fair value. These assets and liabilities are measured within Level 2 of the hierarchy. |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2015 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information Financial information for the three months and nine months ended September 30, 2015 and 2014 related to the Company's reportable segments, including a reconciliation from segment operating earnings to income before income taxes, the most directly comparable GAAP financial measure, is presented below. Three months ended Nine months ended (in thousands) September 30, September 30, September 30, September 30, Revenues: Americas $ 92,007 $ 92,181 $ 280,664 $ 273,673 Europe, Middle East, Africa and Asia-Pacific ("EMEA/AP") 98,271 86,173 286,725 253,755 Broadspire 74,225 68,242 217,590 199,706 Legal Settlement Administration 28,832 47,235 100,531 130,262 Total segment revenues before reimbursements 293,335 293,831 885,510 857,396 Reimbursements 16,649 21,079 55,506 53,925 Total revenues $ 309,984 $ 314,910 $ 941,016 $ 911,321 Segment Operating Earnings: Americas $ 12,163 $ 7,036 $ 27,035 $ 22,112 EMEA/AP 6,652 4,225 9,286 10,435 Broadspire 7,429 4,422 16,972 9,140 Legal Settlement Administration 1,141 7,668 9,813 18,335 Total segment operating earnings 27,385 23,351 63,106 60,022 Deduct: Unallocated corporate and shared costs, net (4,297 ) (500 ) (11,639 ) (2,190 ) Net corporate interest expense (2,332 ) (1,680 ) (6,238 ) (4,532 ) Stock option expense (30 ) (184 ) (357 ) (680 ) Amortization of customer-relationship intangible assets (2,350 ) (1,543 ) (6,782 ) (4,746 ) Restructuring and special charges (11,078 ) — (16,383 ) — Income before income taxes $ 7,298 $ 19,444 $ 21,707 $ 47,874 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 ("CODM") to evaluate the financial performance of the Company's four operating segments and make resource allocation decisions. The Company believes this measure is useful to others in that it allows them to evaluate segment operating performance using the same criteria used by the Company's senior management and CODM. Operating earnings will differ from net income computed in accordance with GAAP since operating earnings represent segment earnings before certain unallocated corporate and shared costs, net corporate interest expense, stock option expense, amortization of customer-relationship intangible assets, restructuring and special charges, income taxes, and net income or loss attributable to noncontrolling interests. Segment operating earnings includes allocations of certain corporate and shared costs. If the Company changes its allocation methods or changes the types of costs that are allocated to its four operating segments, prior period amounts presented in the current period financial statements are adjusted to conform to the current allocation process. Revenues by major service line in the U.S. and by area for other regions in the Americas segment and by major service line for the Broadspire segment are shown in the following table. It is not practicable to provide revenues by service line for the EMEA/AP segment. The Company considers all Legal Settlement Administration revenues to be derived from one service line. Three months ended Nine months ended (in thousands) September 30, September 30, September 30, September 30, Americas U.S. Claims Field Operations $ 19,332 $ 23,843 $ 59,312 $ 75,798 U.S. Technical Services 7,642 6,044 21,708 19,069 U.S. Catastrophe Services 19,461 12,301 60,166 30,098 Subtotal U.S. Claims Services 46,435 42,188 141,186 124,965 U.S. Contractor Connection 15,646 12,637 44,498 39,767 Subtotal U.S. Property & Casualty 62,081 54,825 185,684 164,732 Canada--all service lines 27,042 33,575 85,283 98,083 Latin America/Caribbean--all service lines 2,884 3,781 9,697 10,858 Total Revenues before Reimbursements--Americas $ 92,007 $ 92,181 $ 280,664 $ 273,673 Broadspire Workers' Compensation and Liability Claims Management $ 30,583 $ 28,109 $ 90,120 $ 84,113 Medical Management 39,983 36,257 116,301 104,103 Risk Management Information Services 3,659 3,876 11,169 11,490 Total Revenues before Reimbursements--Broadspire $ 74,225 $ 68,242 $ 217,590 $ 199,706 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies As part of the Company's credit facility, the Company maintains a letter of credit facility to satisfy certain of its own contractual requirements. At September 30, 2015 , the aggregate committed amount of letters of credit outstanding under the credit facility was $17,211,000 . In the normal course of its business, the Company is sometimes named as a defendant or responsible party in suits or other actions 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, claims for indemnification on the basis of alleged actions by the Company, its agents, or its employees in rendering services to clients. The majority of these claims are of the type covered by insurance maintained by the Company. However, the Company is responsible for the deductibles and self-insured retentions under various insurance coverages. In the opinion of Company management, adequate provisions have been made for such known and foreseeable risks. The Company is subject to numerous federal, state, and foreign labor, employment, worker health and safety, antitrust and competition, environmental and consumer protection, import/export, anti-corruption, and other laws, and from time to time the Company faces claims and investigations by employees, former employees, and governmental entities under such laws. Such claims, investigations, and any litigation involving the Company 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. In the opinion of Company management, adequate provisions have been made for any items that are probable and reasonably estimable. The 2014 acquisition of Buckley Scott contains an earnout provision based on Buckley Scott achieving certain financial results during the two -year period following the completion of the acquisition, with a current estimated fair value of $1,253,000 . The maximum potential earnout is $2,048,000 . Effective June 24, 2015 , the Company entered into 10 -year operating leases for approximately 16,000 square feet of office space in London, England , for its EMEA/AP segment as a replacement and consolidation of certain of its London facilities. The Company has future total lease payments associated with the leases of approximately $15,230,000 subject to market rate adjustments on the fifth anniversary of the lease commitment date. Additionally, the Company is responsible for certain value-added taxes and operating expenses. The Company has voluntarily self-reported to the Securities and Exchange Commission (the "SEC") and the Department of Justice (the "DOJ") certain potential violations of the Foreign Corrupt Practices Act discovered by the Company during the course of its regular internal audit process. Upon discovery, the Company, with the oversight of the Audit Committee and the Board of Directors, proactively initiated an investigation into this matter with the assistance of external legal counsel and external forensic accountants. The Company has been cooperating fully, and expects to continue to cooperate fully, with the SEC and the DOJ in this matter. The Company cannot currently predict when or what, if any, action may be taken by the SEC or the DOJ, or other governmental authorities, or the effect any such actions may have on the Company's results of operations, cash flows or financial position. |
Restructuring and Special Charg
Restructuring and Special Charges | 9 Months Ended |
Sep. 30, 2015 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Special Charges | Restructuring and Special Charges Restructuring Charges Restructuring charges incurred for the three months and nine months ended September 30, 2015 of $6,100,000 and $11,405,000 respectively were related to the establishment of the Company's Global Business Services Center ("the Center") in Manila, Philippines, integration costs related to the GAB Robins acquisition and EMEA/AP restructuring and other restructuring activities in the Americas segment. The following table shows the costs incurred by type of restructuring activity: Restructuring Charges Three months ended Nine months ended (in thousands) September 30, September 30, Establishment of the Center in Manila, Philippines $ 1,604 $ 3,863 Integration costs related to the GAB Robins acquisition and EMEA/AP restructuring 4,177 5,224 Other restructuring activities in the Americas segment 319 2,318 Total restructuring charges $ 6,100 $ 11,405 Costs associated with the Center were primarily for professional fees and severance costs. Integration costs related to the GAB acquisition and EMEA/AP restructuring were predominantly made up of severance and to a lesser extent professional fees and other costs. The restructuring charges in the Americas segment were for severance. As of September 30, 2015 , the following liabilities remained on the Company's unaudited Condensed Consolidated Balance Sheets related to restructuring charges recorded in 2012 and 2015. The rollforwards of these costs to September 30, 2015 were as follows: Restructuring Charges Three months ended September 30, 2015 (in thousands) Deferred rent Accrued compensation and related costs Accounts payable Other accrued liabilities Total Beginning balance, June 30, 2015 $ 1,061 $ 590 $ 1,293 $ 308 $ 3,252 Additions — 4,926 1,174 — 6,100 Adjustments to accruals (39 ) — — — (39 ) Cash payments — (4,153 ) (1,561 ) (211 ) (5,925 ) Ending balance, September 30, 2015 $ 1,022 $ 1,363 $ 906 $ 97 $ 3,388 Restructuring Charges Nine months ended September 30, 2015 (in thousands) Deferred rent Accrued compensation and related costs Accounts payable Other accrued liabilities Total Beginning balance, January 1, 2015 $ 1,431 $ 131 $ — $ 308 $ 1,870 Additions — 7,524 3,881 — 11,405 Adjustments to accruals (409 ) — — — (409 ) Cash payments — (6,292 ) (2,975 ) (211 ) (9,478 ) Ending balance, September 30, 2015 $ 1,022 $ 1,363 $ 906 $ 97 $ 3,388 Special Charges The Company recorded special charges for the three months and nine months ended September 30, 2015, of $4,978,000 . The special charges were comprised of two components: (1) $1,627,000 in expenses related to the separation of the Company's former president and chief executive officer, and (2) legal and professional fees of $3,351,000 related to the ongoing investigation of potential violations of the Foreign Corrupt Practices Act disclosed in Note 11 "Commitments and Contingencies." At September 30, 2015, $1,674,000 of liabilities for costs related to the investigation remained on the Company's Condensed Consolidated Balance Sheets in "Other accrued liabilities." Total restructuring and special charges for the three months and nine months ended September 30, 2015 were $11,078,000 and $16,383,000 respectively. There were no restructuring and special charges during the three months and nine months ended September 30, 2014 . |
Subsequent Event
Subsequent Event | 9 Months Ended |
Sep. 30, 2015 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Event Effective November 5, 2015, Crawford & Company, certain of its subsidiaries, Wells Fargo Bank, National Association, as agent and a lender, and the other signatories thereto, entered into the Fifth Amendment to the Credit Agreement (the "Amendment"). Pursuant to the Amendment, among other things, the definition of Consolidated EBITDA was revised to exclude certain restructuring charges, not to exceed $27,000,000 in 2015 and $13,000,000 in 2016, and $38,000,000 in the aggregate. Additionally, the maximum leverage ratio, with which the Company is required to comply, was increased from 3.25 to 1.00 to 3.75 to 1.00 for fiscal quarters ending December 31, 2015 through September 30, 2016, with step-downs to 3.50 to 1.00 thereafter for fiscal quarters ending December 31, 2016 through September 30, 2017 and to 3.25 to 1.00 for fiscal quarters thereafter. In addition, the minimum fixed charge coverage ratio as of the last day of any fiscal quarter was decreased to be 1.25 to 1.00 from 1.50 to 1.00. The Amendment also allows for the disposition of immaterial foreign subsidiaries with a book value not to exceed $15,000,000 in the aggregate. The Amendment did not change availability under or the maturity date of the credit facility. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 9 Months Ended |
Sep. 30, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Consolidation, variable interest entity, policy | The Company consolidates the liabilities of its deferred compensation plan and the related assets, which are held in a rabbi trust and considered a variable interest entity ("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 . |
New accounting pronouncements, policy | Business Combinations-Simplifying the Accounting for Measurement-Period Adjustments In September 2015, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2015-16, "Simplifying the Accounting for Measurement-Period Adjustments." Under ASU 2015-16, in accounting for adjustments made to provisional amounts recognized in a business combination the requirement to retrospectively account for those adjustments is eliminated. The amendments in this update are effective for public companies for fiscal years beginning after December 15, 2015, with early adoption permitted. The Company adopted the standard effective in the third quarter 2015, although it had no impact on the Company's results of operations, financial condition and cash flows for the nine months ended September 30, 2015. Revenue from Contracts with Customers In May 2014, the FASB issued ASU 2014-09, "Revenue from Contracts with Customers." Under ASU 2014-09, companies will be required to recognize revenue to depict the transfer of goods or services to customers in amounts that reflect the consideration (that is, payment) to which the company expects to be entitled in exchange for those goods or services. The new standard also will result in enhanced disclosures about revenue, provide guidance for transactions that were not previously addressed comprehensively (for example, service revenue and contract modifications) and modify guidance for multiple-element arrangements. In August 2015, the FASB issued ASU 2015-14, which deferred by one year the effective date of ASU 2014-09. The one year deferral of the effective date of this standard changes the effective date for the Company to January 1, 2018. Early adoption is permitted, but not before the original effective date. The Company is currently evaluating the effect this standard may have on its results of operations, financial condition and cash flows. Simplifying the Presentation of Debt Issuance Costs In April 2015, the FASB issued ASU 2015-03, "Interest-Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs." The new standard is intended to simplify the presentation of debt issuance costs by requiring that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The standard is effective for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Early adoption is permitted. At the Emerging Issues Task Force ("EITF") meeting held in June 2015, the EITF clarified that fees incurred to secure revolving debt arrangements were not addressed by ASU 2015-03 and the SEC observer at the EITF meeting stated that the SEC would not object to an entity deferring and presenting debt issuance costs as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the revolving debt agreement. Following this announcement, management determined that adoption of this standard is not expected to have any impact on the financial statements of the Company. Accounting for Fees Paid in a Cloud Computing Arrangement In April 2015, the FASB issued ASU 2015-05, "Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40), Customer's Accounting for Fees Paid in a Cloud Computing Arrangement." This ASU amended guidance on internal use software to clarify how customers in cloud computing arrangements should determine whether the arrangement includes a software license. The new guidance specifies that these licenses should be accounted for as licenses of intangible assets. The guidance is effective for annual periods, including interim periods within those annual periods beginning after December 15, 2015. The Company is currently evaluating the effect this standard may have on its results of operations, financial condition and cash flows. Amendments to the Consolidation Analysis In February 2015, FASB issued ASU 2015-02, "Consolidation (topic 810): Amendments to the Consolidation Analysis." ASU 2015-02 focuses on the consolidation evaluation for reporting organizations (public and private companies) that are required to evaluate whether they should consolidate certain legal entities. The standard is effective for fiscal years beginning after December 15, 2016, and interim periods within those years. Early adoption is permitted. The Company is currently evaluating the effect this standard may have on its results of operations, financial condition and cash flows. Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity In April 2014, FASB issued ASU 2014-08, "Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity." Under ASU 2014-8, only disposals that represent a strategic shift that has (or will have) a major effect on the entity's results and operations would qualify as discontinued operations. In addition, the ASU (1) expands the disclosure requirements for disposals that meet the definition of a discontinued operation, (2) requires entities to disclose information about disposals of individually significant components, and (3) defines "discontinued operations" similarly to how it is defined under International Financial Reporting Standards 2, "Non-current Assets Held for Sale and Discontinued Operations." The standard became effective in the first quarter of 2015 for public organizations with calendar year-ends. The Company adopted the standard effective in the first quarter 2015, although it had no impact on the Company's results of operations, financial condition and cash flows for the nine months ended September 30, 2015. |
Earnings per share, policy | The Company computes (loss) earnings per share of its non-voting Class A Common Stock ("CRDA") and voting Class B Common Stock ("CRDB") using the two-class method, which allocates the undistributed (loss) earnings in each period to each class on a proportionate basis. The Company's Board of Directors has the right, but not the obligation, to declare higher dividends on the CRDA shares than on the CRDB shares, subject to certain limitations. In periods when the dividend is the same for CRDA and CRDB or when no dividends are declared or paid to either class, the two-class method generally will yield the same (loss) earnings per share for CRDA and CRDB. During the first, second, and third quarters of 2015 and 2014 the Board of Directors declared a higher dividend on CRDA than on CRDB. |
Business Acquisition (Tables)
Business Acquisition (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Business Combinations [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table summarizes the preliminary purchase price allocation to the tangible and intangible assets acquired and liabilities assumed and noncontrolling interests in the GAB Robins acquisition included in the Company's condensed consolidated financial statements on the two-month delayed basis as discussed above: (in thousands) Opening Balance Sheet, Adjusted as of September 30, 2015 Assets Cash and cash equivalents $ 5,735 Accounts receivable 19,182 Unbilled revenues, at estimated billable amounts 7,169 Prepaid expenses and other current assets 7,443 Property and equipment 4,083 Goodwill 16,358 Intangible assets 40,535 Other noncurrent assets 1,933 Deferred income tax assets 4,833 Total Assets $ 107,271 Liabilities Other current liabilities $ 22,771 Noncurrent liabilities 4,580 Total Liabilities 27,351 Net Assets Acquired, Before Noncontrolling Interests 79,920 Noncontrolling interests 5,926 Net Assets Acquired, Net of Noncontrolling Interests $ 73,994 |
Defined Benefit Pension Plans (
Defined Benefit Pension Plans (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Defined Benefit Pension Plans and Defined Benefit Postretirement Plans Disclosure [Abstract] | |
Schedule of defined benefit plans disclosures | Net periodic benefit cost related to all of the Company's defined benefit pension plans recognized in the Company's unaudited Condensed Consolidated Statements of Operations for the three months and nine months ended September 30, 2015 and 2014 included the following components: Three months ended Nine months ended (in thousands) September 30, September 30, September 30, September 30, Service (benefit) cost $ (208 ) $ 694 $ 1,224 $ 2,098 Interest cost 8,187 8,937 24,459 26,851 Expected return on assets (10,604 ) (11,498 ) (31,428 ) (34,560 ) Amortization of actuarial loss 3,396 3,123 9,660 8,967 Net periodic benefit cost $ 771 $ 1,256 $ 3,915 $ 3,356 |
Net (Loss) Income Attributabl26
Net (Loss) Income Attributable to Shareholders of Crawford & Company per Common Share (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Earnings Per Share [Abstract] | |
Schedule of (loss) earnings per share, basic | The computations of basic net (loss) income attributable to shareholders of Crawford & Company per common share were as follows: Three months ended Nine months ended September 30, September 30, September 30, September 30, (in thousands, except per share amounts) CRDA CRDB CRDA CRDB CRDA CRDB CRDA CRDB (Loss) earnings per share - basic: Numerator: Allocation of undistributed (loss) earnings $ (2,360 ) $ (1,891 ) $ 3,766 $ 3,064 $ (2,198 ) $ (1,770 ) $ 10,425 $ 8,530 Dividends paid 2,160 1,234 2,128 1,234 6,447 3,704 5,144 3,209 Net (loss) income available to common shareholders, basic $ (200 ) $ (657 ) $ 5,894 $ 4,298 $ 4,249 $ 1,934 $ 15,569 $ 11,739 Denominator: Weighted-average common shares outstanding, basic 30,807 24,690 30,355 24,690 30,668 24,690 30,178 24,690 (Loss) earnings per share - basic $ (0.01 ) $ (0.03 ) $ 0.19 $ 0.17 $ 0.14 $ 0.08 $ 0.52 $ 0.48 |
Schedule of (loss) earnings per share, diluted | The computations of diluted net (loss) income attributable to shareholders of Crawford & Company per common share were as follows: Three months ended Nine months ended September 30, September 30, September 30, September 30, (in thousands, except per share amounts) CRDA CRDB CRDA CRDB CRDA CRDB CRDA CRDB (Loss) earnings per share - diluted: Numerator: Allocation of undistributed (loss) earnings $ (2,360 ) $ (1,891 ) $ 3,801 $ 3,029 $ (2,214 ) $ (1,754 ) $ 10,545 $ 8,410 Dividends paid 2,160 1,234 2,128 1,234 6,447 3,704 5,144 3,209 Net (loss) income available to common shareholders, diluted $ (200 ) $ (657 ) $ 5,929 $ 4,263 $ 4,233 $ 1,950 $ 15,689 $ 11,619 Denominator: Weighted-average common shares outstanding, basic 30,807 24,690 30,355 24,690 30,668 24,690 30,178 24,690 Weighted-average effect of dilutive securities — — 633 — 488 — 779 — 30,807 24,690 30,988 24,690 31,156 24,690 30,957 24,690 (Loss) earnings per share - diluted $ (0.01 ) $ (0.03 ) $ 0.19 $ 0.17 $ 0.14 $ 0.08 $ 0.51 $ 0.47 |
Schedule of antidilutive securities excluded from computation of (loss) earnings per share | Listed below are the shares excluded from the denominator in the above computation of diluted (loss) earnings per share for CRDA because their inclusion would have been antidilutive: Three months ended Nine months ended (in thousands) September 30, September 30, September 30, September 30, Shares underlying stock options excluded due to the options' respective exercise prices being greater than the average stock price during the period 15 — 32 — Performance stock grants excluded because performance conditions had not been met (1) 1,819 2,267 1,969 2,267 ________________________________________________ (1) Compensation cost is recognized for these performance stock grants based on expected achievement rates; however, no consideration is given to these performance stock grants when calculating (loss) earnings per share until the performance measurements have been achieved. As of September 30, 2015 , the Company does not expect these performance measurements to be achieved by December 31, 2015 . |
Schedule of shares issued under stock plans used in weighted average calc | The following table details shares issued during the three months and nine months ended September 30, 2015 and September 30, 2014 . These shares are included from their dates of issuance in the weighted-average common shares used to compute basic (loss) earnings per share for CRDA in the table above. There were no shares of CRDB issued during any of these periods. Three months ended Nine months ended (in thousands) September 30, September 30, September 30, September 30, CRDA issued under non-employee director stock plan 4 2 59 62 CRDA issued under the Employee Stock Purchase Plan 107 155 107 155 CRDA issued under the U.K. ShareSave Scheme 5 3 101 264 CRDA issued under the International Employee Stock Purchase Plan 7 12 7 12 CRDA issued under the Executive Stock Bonus Plan 20 66 94 317 CRDA issued upon stock option plan exercises — — — 106 |
Accumulated Other Comprehensi27
Accumulated Other Comprehensive Loss (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Schedule of accumulated other comprehensive income (loss) | The changes in components of "Accumulated other comprehensive loss" ("AOCL"), net of taxes and noncontrolling interests, included in the Company's unaudited condensed consolidated financial statements were as follows: Three months ended September 30, 2015 Nine months ended September 30, 2015 (in thousands) Foreign currency translation adjustments Retirement liabilities (1) AOCL attributable to shareholders of Crawford & Company Foreign currency translation adjustments Retirement liabilities (1) AOCL attributable to shareholders of Crawford & Company Beginning balance $ (15,188 ) $ (212,498 ) $ (227,686 ) $ (4,659 ) $ (217,299 ) $ (221,958 ) Other comprehensive loss before reclassifications (6,185 ) — (6,185 ) (16,714 ) — (16,714 ) Amounts reclassified from accumulated other comprehensive income — 7,823 7,823 — 12,624 12,624 Net current period other comprehensive (loss) income (6,185 ) 7,823 1,638 (16,714 ) 12,624 (4,090 ) Ending balance $ (21,373 ) $ (204,675 ) $ (226,048 ) $ (21,373 ) $ (204,675 ) $ (226,048 ) Three months ended September 30, 2014 Nine months ended September 30, 2014 (in thousands) Foreign currency translation adjustments Retirement liabilities (1) AOCL attributable to shareholders of Crawford & Company Foreign currency translation adjustments Retirement liabilities (1) AOCL attributable to shareholders of Crawford & Company Beginning balance $ 3,815 $ (179,254 ) $ (175,439 ) $ 3,544 $ (182,754 ) $ (179,210 ) Other comprehensive loss before reclassifications (1,343 ) — (1,343 ) (1,072 ) — (1,072 ) Amounts reclassified from accumulated other comprehensive income — 1,952 1,952 — 5,452 5,452 Net current period other comprehensive income (1,343 ) 1,952 609 (1,072 ) 5,452 4,380 Ending balance $ 2,472 $ (177,302 ) $ (174,830 ) $ 2,472 $ (177,302 ) $ (174,830 ) ________________________________________________ (1) Retirement liabilities reclassified to net income are related to the amortization of actuarial losses and are included in "Selling, general, and administrative expenses" in the Company's unaudited Condensed Consolidated Statements of Operations. See Note 6, "Defined Benefit Pension Plans" for additional details. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Fair Value Disclosures [Abstract] | |
Schedule of fair value, assets and liabilities measured on recurring basis | 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: Fair Value Measurements at September 30, 2015 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) $ 11 $ 11 $ — $ — Derivative not designated as hedging instrument: Cross currency basis swap (2) 5,603 — 5,603 — Liabilities: Contingent earnout liability (3) 1,253 — — 1,253 ________________________________________________ (1) The fair values of the money market funds were based on recently quoted market prices and reported transactions in an active marketplace. Money market funds are included in the Company's unaudited Condensed Consolidated Balance Sheets as "Cash and cash equivalents." (2) The fair value of the cross currency basis swap was derived from a discounted cash flow analysis based on the terms of the swap and the forward curves for foreign currency rates and interest rates adjusted for the counterparty's credit risk. The fair value of the cross currency basis swap is included in "Other noncurrent assets" on the Company's unaudited Condensed Consolidated Balance Sheets, based upon the term of the cross currency basis swap. (3) The fair value of the contingent earnout liability for the 2014 acquisition of Buckley Scott Holdings Limited ("Buckley Scott") was e stimated using an internally-prepared probability-weighted discounted cash flow analysis. The fair value analysis relied upon both Level 2 data (publicly observable data such as market interest rates and capital structures of peer companies) and Level 3 data (internal data such as the Company's operating projections). As such, the liability is a Level 3 fair value measurement. The valuation is sensitive to Level 3 data, with a maximum possible earnout of $2,048,000 . As such, the fair value is not expected to vary materially from the balance recorded. The fair value of the contingent earnout liability is included in "Other noncurrent liabilities" on the Company's unaudited Condensed Consolidated Balance Sheets, based upon the term of the contingent earnout agreement. The fair value of the earnout was $1,153,000 at December 31, 2014 . The change in the Level 3 fair value at September 30, 2015 was due to foreign currency translation adjustments and inputed interest. |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Segment Reporting [Abstract] | |
Reconciliation of operating profit from segments to consolidated | Financial information for the three months and nine months ended September 30, 2015 and 2014 related to the Company's reportable segments, including a reconciliation from segment operating earnings to income before income taxes, the most directly comparable GAAP financial measure, is presented below. Three months ended Nine months ended (in thousands) September 30, September 30, September 30, September 30, Revenues: Americas $ 92,007 $ 92,181 $ 280,664 $ 273,673 Europe, Middle East, Africa and Asia-Pacific ("EMEA/AP") 98,271 86,173 286,725 253,755 Broadspire 74,225 68,242 217,590 199,706 Legal Settlement Administration 28,832 47,235 100,531 130,262 Total segment revenues before reimbursements 293,335 293,831 885,510 857,396 Reimbursements 16,649 21,079 55,506 53,925 Total revenues $ 309,984 $ 314,910 $ 941,016 $ 911,321 Segment Operating Earnings: Americas $ 12,163 $ 7,036 $ 27,035 $ 22,112 EMEA/AP 6,652 4,225 9,286 10,435 Broadspire 7,429 4,422 16,972 9,140 Legal Settlement Administration 1,141 7,668 9,813 18,335 Total segment operating earnings 27,385 23,351 63,106 60,022 Deduct: Unallocated corporate and shared costs, net (4,297 ) (500 ) (11,639 ) (2,190 ) Net corporate interest expense (2,332 ) (1,680 ) (6,238 ) (4,532 ) Stock option expense (30 ) (184 ) (357 ) (680 ) Amortization of customer-relationship intangible assets (2,350 ) (1,543 ) (6,782 ) (4,746 ) Restructuring and special charges (11,078 ) — (16,383 ) — Income before income taxes $ 7,298 $ 19,444 $ 21,707 $ 47,874 |
Schedule of revenues by major service line | Revenues by major service line in the U.S. and by area for other regions in the Americas segment and by major service line for the Broadspire segment are shown in the following table. It is not practicable to provide revenues by service line for the EMEA/AP segment. The Company considers all Legal Settlement Administration revenues to be derived from one service line. Three months ended Nine months ended (in thousands) September 30, September 30, September 30, September 30, Americas U.S. Claims Field Operations $ 19,332 $ 23,843 $ 59,312 $ 75,798 U.S. Technical Services 7,642 6,044 21,708 19,069 U.S. Catastrophe Services 19,461 12,301 60,166 30,098 Subtotal U.S. Claims Services 46,435 42,188 141,186 124,965 U.S. Contractor Connection 15,646 12,637 44,498 39,767 Subtotal U.S. Property & Casualty 62,081 54,825 185,684 164,732 Canada--all service lines 27,042 33,575 85,283 98,083 Latin America/Caribbean--all service lines 2,884 3,781 9,697 10,858 Total Revenues before Reimbursements--Americas $ 92,007 $ 92,181 $ 280,664 $ 273,673 Broadspire Workers' Compensation and Liability Claims Management $ 30,583 $ 28,109 $ 90,120 $ 84,113 Medical Management 39,983 36,257 116,301 104,103 Risk Management Information Services 3,659 3,876 11,169 11,490 Total Revenues before Reimbursements--Broadspire $ 74,225 $ 68,242 $ 217,590 $ 199,706 |
Restructuring and Special Cha30
Restructuring and Special Charges (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Related Costs | The following table shows the costs incurred by type of restructuring activity: Restructuring Charges Three months ended Nine months ended (in thousands) September 30, September 30, Establishment of the Center in Manila, Philippines $ 1,604 $ 3,863 Integration costs related to the GAB Robins acquisition and EMEA/AP restructuring 4,177 5,224 Other restructuring activities in the Americas segment 319 2,318 Total restructuring charges $ 6,100 $ 11,405 As of September 30, 2015 , the following liabilities remained on the Company's unaudited Condensed Consolidated Balance Sheets related to restructuring charges recorded in 2012 and 2015. The rollforwards of these costs to September 30, 2015 were as follows: Restructuring Charges Three months ended September 30, 2015 (in thousands) Deferred rent Accrued compensation and related costs Accounts payable Other accrued liabilities Total Beginning balance, June 30, 2015 $ 1,061 $ 590 $ 1,293 $ 308 $ 3,252 Additions — 4,926 1,174 — 6,100 Adjustments to accruals (39 ) — — — (39 ) Cash payments — (4,153 ) (1,561 ) (211 ) (5,925 ) Ending balance, September 30, 2015 $ 1,022 $ 1,363 $ 906 $ 97 $ 3,388 Restructuring Charges Nine months ended September 30, 2015 (in thousands) Deferred rent Accrued compensation and related costs Accounts payable Other accrued liabilities Total Beginning balance, January 1, 2015 $ 1,431 $ 131 $ — $ 308 $ 1,870 Additions — 7,524 3,881 — 11,405 Adjustments to accruals (409 ) — — — (409 ) Cash payments — (6,292 ) (2,975 ) (211 ) (9,478 ) Ending balance, September 30, 2015 $ 1,022 $ 1,363 $ 906 $ 97 $ 3,388 |
Basis of Presentation (Details)
Basis of Presentation (Details) - Primary beneficiary - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Variable Interest Entity | ||
Liabilities of the deferred compensation plan | $ 9,750 | $ 11,051 |
Assets held in the related rabbi trust | $ 15,787 | $ 15,519 |
Basis of Presentation (Acquisit
Basis of Presentation (Acquisition) (Details) - Lloyd Warwick International | 9 Months Ended |
Sep. 30, 2015USD ($) | |
Business Acquisition | |
Ownership percentage (percent) | 51.00% |
Variable interest entity, reporting entity involvement, maximum loss exposure, amount | $ 10,000,000 |
Asset carrying amount | 9,040,000 |
Liability carrying amount | 11,408,000 |
Financial or other support | $ 9,914,000 |
Business Acquisition (Details)
Business Acquisition (Details) - USD ($) $ in Thousands | Dec. 01, 2014 | Sep. 30, 2015 | Sep. 30, 2015 | Dec. 31, 2014 | [1] |
Business Acquisition | |||||
Business combination, indemnification period | 2 years | ||||
Business combination, preacquisition contingency, amounts released from escrow | $ 1,600 | $ 1,600 | |||
Assets | |||||
Goodwill | 142,762 | 142,762 | $ 131,885 | ||
GAB Robins | |||||
Business Acquisition | |||||
Business acquisition, percentage of voting interests acquired | 100.00% | ||||
Payments to acquire businesses, preliminary gross | $ 71,812 | ||||
Business combination, provisional information, initial accounting incomplete, adjustment, consideration transferred | 2,182 | ||||
Payments to acquire businesses, gross | 73,994 | ||||
Business combination, indemnification assets, amount as of acquisition date | $ 6,329 | ||||
Amortization of intangible assets | 783 | 2,074 | |||
Revenue of acquiree since acquisition date | 19,647 | 57,743 | |||
Assets | |||||
Cash and cash equivalents | 5,735 | 5,735 | |||
Accounts receivable | 19,182 | 19,182 | |||
Unbilled revenues, at estimated billable amounts | 7,169 | 7,169 | |||
Prepaid expenses and other current assets | 7,443 | 7,443 | |||
Property and equipment | 4,083 | 4,083 | |||
Goodwill | 16,358 | 16,358 | |||
Intangible assets | 40,535 | 40,535 | |||
Other noncurrent assets | 1,933 | 1,933 | |||
Deferred income taxes | 4,833 | 4,833 | |||
Total Assets | 107,271 | 107,271 | |||
Liabilities | |||||
Other current liabilities | 22,771 | 22,771 | |||
Noncurrent liabilities | 4,580 | 4,580 | |||
Total Liabilities | 27,351 | 27,351 | |||
Net Assets Acquired, Before Noncontrolling Interests | 79,920 | 79,920 | |||
Noncontrolling interests | 5,926 | 5,926 | |||
Net Assets Acquired, Net of Noncontrolling Interests | 73,994 | $ 73,994 | |||
GAB Robins | Customer relationships | |||||
Business Acquisition | |||||
Finite-lived intangible asset, useful life | 18 years | ||||
Assets | |||||
Intangible assets | $ 38,210 | $ 38,210 | |||
GAB Robins | Intangible assets not including customer relationships | Minimum | |||||
Business Acquisition | |||||
Finite-lived intangible asset, useful life | 2 years | ||||
GAB Robins | Intangible assets not including customer relationships | Maximum | |||||
Business Acquisition | |||||
Finite-lived intangible asset, useful life | 5 years | ||||
[1] | Derived from the audited Consolidated Balance Sheet |
Derivative Instruments (Details
Derivative Instruments (Details) - 1 months ended Feb. 28, 2011 - Not designated as hedging instrument - Currency swap | CAD | USD ($) |
Derivative | ||
Notional amount of derivative | CAD 34,749,000 | |
Periodic payment on derivative instrument | CAD 589,000 | |
Periodic receivable on derivative instrument | $ | $ 593,000 |
Income Taxes (Details)
Income Taxes (Details) | 12 Months Ended |
Dec. 31, 2015 | |
Scenario, Forecast | |
Income Tax Contingency [Line Items] | |
Effective annual income tax rate (percent) | 83.00% |
Defined Benefit Pension Plans36
Defined Benefit Pension Plans (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Defined Benefit Pension Plans and Defined Benefit Postretirement Plans Disclosure [Abstract] | ||||
Service (benefit) cost | $ (208) | $ 694 | $ 1,224 | $ 2,098 |
Interest cost | 8,187 | 8,937 | 24,459 | 26,851 |
Expected return on assets | (10,604) | (11,498) | (31,428) | (34,560) |
Amortization of actuarial loss | 3,396 | 3,123 | 9,660 | 8,967 |
Net periodic benefit cost | $ 771 | $ 1,256 | $ 3,915 | $ 3,356 |
Defined Benefit Pension Plans37
Defined Benefit Pension Plans (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2015 | Sep. 30, 2014 | |
U.S. pension plans | |||
Defined Benefit Plan Disclosure | |||
Contributions by employer | $ 9,000 | $ 14,850 | |
Defined benefit plan, estimated future employer contributions | 3,000 | ||
U.K. pension plans | |||
Defined Benefit Plan Disclosure | |||
Contributions by employer | 4,945 | $ 5,204 | |
Defined benefit plan, estimated future employer contributions | 1,700 | ||
U.K. pension plans | NETHERLANDS | |||
Defined Benefit Plan Disclosure | |||
Defined benefit plan, curtailments | $ 5,500 | 5,500 | |
Defined benefit plan, effect of curtailments on deferred tax assets | 1,400 | 1,400 | |
Other comprehensive income (loss), finalization of pension and other postretirement benefit plan valuation, before tax | 4,100 | 4,100 | |
Defined benefit plan, recognized net gain (loss) due to curtailment | $ 673 | $ 673 |
Net (Loss) Income Attributabl38
Net (Loss) Income Attributable to Shareholders of Crawford & Company per Common Share (Schedule of (Loss) Earnings Per Share, Basic) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Common Class A | ||||
Numerator: | ||||
Allocation of undistributed (loss) earnings | $ (2,360) | $ 3,766 | $ (2,198) | $ 10,425 |
Dividends paid | 2,160 | 2,128 | 6,447 | 5,144 |
Net (loss) income available to common shareholders, basic | $ (200) | $ 5,894 | $ 4,249 | $ 15,569 |
Denominator: | ||||
Weighted-average common shares outstanding, basic (shares) | 30,807 | 30,355 | 30,668 | 30,178 |
(Loss) earnings per share - basic (usd per share) | $ (0.01) | $ 0.19 | $ 0.14 | $ 0.52 |
Common Class B | ||||
Numerator: | ||||
Allocation of undistributed (loss) earnings | $ (1,891) | $ 3,064 | $ (1,770) | $ 8,530 |
Dividends paid | 1,234 | 1,234 | 3,704 | 3,209 |
Net (loss) income available to common shareholders, basic | $ (657) | $ 4,298 | $ 1,934 | $ 11,739 |
Denominator: | ||||
Weighted-average common shares outstanding, basic (shares) | 24,690 | 24,690 | 24,690 | 24,690 |
(Loss) earnings per share - basic (usd per share) | $ (0.03) | $ 0.17 | $ 0.08 | $ 0.48 |
Net (Loss) Income Attributabl39
Net (Loss) Income Attributable to Shareholders of Crawford & Company per Common Share (Schedule of (Loss) Earnings Per Share, Diluted) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Common Class A | ||||
Numerator: | ||||
Allocation of undistributed (loss) earnings | $ (2,360) | $ 3,801 | $ (2,214) | $ 10,545 |
Dividends paid | 2,160 | 2,128 | 6,447 | 5,144 |
Net (loss) income available to common shareholders, diluted | $ (200) | $ 5,929 | $ 4,233 | $ 15,689 |
Denominator: | ||||
Weighted-average common shares outstanding, basic (shares) | 30,807 | 30,355 | 30,668 | 30,178 |
Weighted-average number of dilutive securities (shares) | 0 | 633 | 488 | 779 |
Weighted-average number of shares outstanding, diluted (shares) | 30,807 | 30,988 | 31,156 | 30,957 |
(Loss) earnings per share - diluted (usd per share) | $ (0.01) | $ 0.19 | $ 0.14 | $ 0.51 |
Common Class B | ||||
Numerator: | ||||
Allocation of undistributed (loss) earnings | $ (1,891) | $ 3,029 | $ (1,754) | $ 8,410 |
Dividends paid | 1,234 | 1,234 | 3,704 | 3,209 |
Net (loss) income available to common shareholders, diluted | $ (657) | $ 4,263 | $ 1,950 | $ 11,619 |
Denominator: | ||||
Weighted-average common shares outstanding, basic (shares) | 24,690 | 24,690 | 24,690 | 24,690 |
Weighted-average number of dilutive securities (shares) | 0 | 0 | 0 | 0 |
Weighted-average number of shares outstanding, diluted (shares) | 24,690 | 24,690 | 24,690 | 24,690 |
(Loss) earnings per share - diluted (usd per share) | $ (0.03) | $ 0.17 | $ 0.08 | $ 0.47 |
Net (Loss) Income Attributabl40
Net (Loss) Income Attributable to Shareholders of Crawford & Company per Common Share (Antidilutive Securities) (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | ||
Shares underlying stock options excluded due to the options' respective exercise prices being greater than the average stock price during the period | |||||
Antidilutive Securities Excluded from Computation of (Loss) Earnings Per Share | |||||
Shares excluded from diluted (loss) earnings per share (shares) | 15 | 0 | 32 | 0 | |
Performance stock grants excluded because performance conditions had not been met | |||||
Antidilutive Securities Excluded from Computation of (Loss) Earnings Per Share | |||||
Shares excluded from diluted (loss) earnings per share (shares) | [1] | 1,819 | 2,267 | 1,969 | 2,267 |
[1] | Compensation cost is recognized for these performance stock grants based on expected achievement rates; however, no consideration is given to these performance stock grants when calculating (loss) earnings per share until the performance measurements have been achieved. As of September 30, 2015, the Company does not expect these performance measurements to be achieved by December 31, 2015. |
Net (Loss) Income Attributabl41
Net (Loss) Income Attributable to Shareholders of Crawford & Company per Common Share (Weighted Average Shares Issued) (Details) - Common Class A - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
CRDA issued under non-employee director stock plan | ||||
Share-based Compensation Arrangement | ||||
Stock issued during period (shares) | 4 | 2 | 59 | 62 |
Employee Stock | ||||
Share-based Compensation Arrangement | ||||
Stock issued during period (shares) | 107 | 155 | 107 | 155 |
CRDA issued under the U.K. ShareSave Scheme | ||||
Share-based Compensation Arrangement | ||||
Stock issued during period (shares) | 5 | 3 | 101 | 264 |
International Stock Based Compensation Plan | ||||
Share-based Compensation Arrangement | ||||
Stock issued during period (shares) | 7 | 12 | 7 | 12 |
CRDA issued under the Executive Stock Bonus Plan | ||||
Share-based Compensation Arrangement | ||||
Stock issued during period (shares) | 20 | 66 | 94 | 317 |
CRDA issued upon stock option plan exercises | ||||
Share-based Compensation Arrangement | ||||
Stock issued during period (shares) | 0 | 0 | 0 | 106 |
Net (Loss) Income Attributabl42
Net (Loss) Income Attributable to Shareholders of Crawford & Company per Common Share (Narrative) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Aug. 16, 2014 | |
Equity, Class of Treasury Stock | |||||
Notes issued for repurchase of stock | $ 3,310 | ||||
Common Class A | |||||
Equity, Class of Treasury Stock | |||||
Shares repurchased (shares) | 500,000 | 44,254 | 517,700 | 382,192 | |
Average cost (usd per share) | $ 6.62 | $ 8.27 | $ 6.66 | $ 8.26 | |
Repurchase Authorization 2014 | Common Stock | |||||
Equity, Class of Treasury Stock | |||||
Number of shares authorized to be repurchased (shares) | 2,000,000 |
Accumulated Other Comprehensi43
Accumulated Other Comprehensive Loss (Rollforward of Accumulated Other comprehensive Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | ||||
Changes in Accumulated Other Comprehensive Income Loss [Roll Forward] | |||||||
Beginning balance | $ (227,686) | $ (175,439) | $ (221,958) | [1] | $ (179,210) | ||
Other comprehensive loss before reclassifications | (6,185) | (1,343) | (16,714) | (1,072) | |||
Amounts reclassified from accumulated other comprehensive income | 7,823 | 1,952 | 12,624 | 5,452 | |||
Net current period other comprehensive (loss) income | 1,638 | 609 | (4,090) | 4,380 | |||
Ending balance | (226,048) | (174,830) | (226,048) | (174,830) | |||
Foreign currency translation adjustments | |||||||
Changes in Accumulated Other Comprehensive Income Loss [Roll Forward] | |||||||
Beginning balance | (15,188) | 3,815 | (4,659) | 3,544 | |||
Other comprehensive loss before reclassifications | (6,185) | (1,343) | (16,714) | (1,072) | |||
Amounts reclassified from accumulated other comprehensive income | 0 | 0 | 0 | 0 | |||
Net current period other comprehensive (loss) income | (6,185) | (1,343) | (16,714) | (1,072) | |||
Ending balance | (21,373) | 2,472 | (21,373) | 2,472 | |||
Retirement Liabilities | |||||||
Changes in Accumulated Other Comprehensive Income Loss [Roll Forward] | |||||||
Beginning balance | (212,498) | (179,254) | (217,299) | [2] | (182,754) | [2] | |
Other comprehensive loss before reclassifications | 0 | 0 | 0 | [2] | 0 | [2] | |
Amounts reclassified from accumulated other comprehensive income | 7,823 | 1,952 | 12,624 | [2] | 5,452 | [2] | |
Net current period other comprehensive (loss) income | [2] | 7,823 | 1,952 | 12,624 | 5,452 | ||
Ending balance | [2] | $ (204,675) | $ (177,302) | $ (204,675) | $ (177,302) | ||
[1] | Derived from the audited Consolidated Balance Sheet | ||||||
[2] | Retirement liabilities reclassified to net income are related to the amortization of actuarial losses and are included in "Selling, general, and administrative expenses" in the Company's unaudited Condensed Consolidated Statements of Operations. See Note 6, "Defined Benefit Pension Plans" for additional details. |
Accumulated Other Comprehensi44
Accumulated Other Comprehensive Loss Defined Benefit Pension Plan (Details) - NETHERLANDS - U.K. pension plans - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2015 | Sep. 30, 2015 | |
Defined Benefit Plan Disclosure | ||
Defined benefit plan, curtailments | $ 5,500 | $ 5,500 |
Defined benefit plan, effect of curtailments on deferred tax assets | 1,400 | 1,400 |
Other comprehensive income (loss), finalization of pension and other postretirement benefit plan valuation, before tax | $ 4,100 | $ 4,100 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2015 | Dec. 31, 2014 | ||
Liabilities: | |||
Debt instrument, variable interest rate duration between resets | 90 days | ||
Buckley Scott | |||
Liabilities: | |||
Maximum contingent consideration liability | $ 2,048 | ||
Cash and cash equivalents | Measured on a recurring basis | |||
Assets: | |||
Money market funds | [1] | 11 | |
Cash and cash equivalents | Level 1 | Measured on a recurring basis | |||
Assets: | |||
Money market funds | [1] | 11 | |
Other noncurrent assets | Measured on a recurring basis | Currency swap | |||
Assets: | |||
Derivative instruments not designated as hedging instruments, cross currency basis swap | [2] | 5,603 | |
Other noncurrent assets | Level 2 | Measured on a recurring basis | Currency swap | |||
Assets: | |||
Derivative instruments not designated as hedging instruments, cross currency basis swap | [2] | 5,603 | |
Other noncurrent liabilities | Measured on a recurring basis | |||
Liabilities: | |||
Contingent earnout liability | [3] | 1,253 | |
Other noncurrent liabilities | Level 3 | Measured on a recurring basis | |||
Liabilities: | |||
Contingent earnout liability | [3] | $ 1,253 | $ 1,153 |
[1] | The fair values of the money market funds were based on recently quoted market prices and reported transactions in an active marketplace. Money market funds are included in the Company's unaudited Condensed Consolidated Balance Sheets as "Cash and cash equivalents." | ||
[2] | The fair value of the cross currency basis swap was derived from a discounted cash flow analysis based on the terms of the swap and the forward curves for foreign currency rates and interest rates adjusted for the counterparty's credit risk. The fair value of the cross currency basis swap is included in "Other noncurrent assets" on the Company's unaudited Condensed Consolidated Balance Sheets, based upon the term of the cross currency basis swap. | ||
[3] | The fair value of the contingent earnout liability for the 2014 acquisition of Buckley Scott Holdings Limited ("Buckley Scott") was estimated using an internally-prepared probability-weighted discounted cash flow analysis. The fair value analysis relied upon both Level 2 data (publicly observable data such as market interest rates and capital structures of peer companies) and Level 3 data (internal data such as the Company's operating projections). As such, the liability is a Level 3 fair value measurement. The valuation is sensitive to Level 3 data, with a maximum possible earnout of $2,048,000. As such, the fair value is not expected to vary materially from the balance recorded. The fair value of the contingent earnout liability is included in "Other noncurrent liabilities" on the Company's unaudited Condensed Consolidated Balance Sheets, based upon the term of the contingent earnout agreement. The fair value of the earnout was $1,153,000 at December 31, 2014. The change in the Level 3 fair value at September 30, 2015 was due to foreign currency translation adjustments and inputed interest. |
Segment Information (Details)
Segment Information (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | Sep. 30, 2015USD ($)segment | Sep. 30, 2014USD ($) | |
Segment Reporting, Reconciling Item for Operating Profit from Segment to Consolidated | ||||
Revenues | $ 293,335 | $ 293,831 | $ 885,510 | $ 857,396 |
Reimbursements | 16,649 | 21,079 | 55,506 | 53,925 |
Total revenues | 309,984 | 314,910 | 941,016 | 911,321 |
Net corporate interest expense | (2,332) | (1,680) | (6,238) | (4,532) |
Restructuring and special charges | (11,078) | 0 | (16,383) | 0 |
Income before income taxes | 7,298 | 19,444 | $ 21,707 | 47,874 |
Number of operating segments (segments) | segment | 4 | |||
Operating Segments | ||||
Segment Reporting, Reconciling Item for Operating Profit from Segment to Consolidated | ||||
Total segment operating earnings | 27,385 | 23,351 | $ 63,106 | 60,022 |
Segment Reconciling Items | ||||
Segment Reporting, Reconciling Item for Operating Profit from Segment to Consolidated | ||||
Unallocated corporate and shared costs, net | (4,297) | (500) | (11,639) | (2,190) |
Net corporate interest expense | (2,332) | (1,680) | (6,238) | (4,532) |
Stock option expense | (30) | (184) | (357) | (680) |
Amortization of customer-relationship intangible assets | (2,350) | (1,543) | (6,782) | (4,746) |
Restructuring and special charges | 11,078 | 0 | 16,383 | |
Americas | ||||
Segment Reporting, Reconciling Item for Operating Profit from Segment to Consolidated | ||||
Revenues | 92,007 | 92,181 | 280,664 | 273,673 |
Americas | Operating Segments | ||||
Segment Reporting, Reconciling Item for Operating Profit from Segment to Consolidated | ||||
Total segment operating earnings | 12,163 | 7,036 | 27,035 | 22,112 |
Europe, Middle East, Africa and Asia-Pacific (EMEA/AP) | ||||
Segment Reporting, Reconciling Item for Operating Profit from Segment to Consolidated | ||||
Revenues | 98,271 | 86,173 | 286,725 | 253,755 |
Europe, Middle East, Africa and Asia-Pacific (EMEA/AP) | Operating Segments | ||||
Segment Reporting, Reconciling Item for Operating Profit from Segment to Consolidated | ||||
Total segment operating earnings | 6,652 | 4,225 | 9,286 | 10,435 |
Broadspire | ||||
Segment Reporting, Reconciling Item for Operating Profit from Segment to Consolidated | ||||
Revenues | 74,225 | 68,242 | 217,590 | 199,706 |
Broadspire | Operating Segments | ||||
Segment Reporting, Reconciling Item for Operating Profit from Segment to Consolidated | ||||
Total segment operating earnings | 7,429 | 4,422 | 16,972 | 9,140 |
Legal Settlement Administration | ||||
Segment Reporting, Reconciling Item for Operating Profit from Segment to Consolidated | ||||
Revenues | 28,832 | 47,235 | 100,531 | 130,262 |
Legal Settlement Administration | Operating Segments | ||||
Segment Reporting, Reconciling Item for Operating Profit from Segment to Consolidated | ||||
Total segment operating earnings | $ 1,141 | $ 7,668 | $ 9,813 | $ 18,335 |
Segment Information (Revenues B
Segment Information (Revenues By Major Service Line) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Revenue from External Customer | ||||
Revenues before reimbursements | $ 293,335 | $ 293,831 | $ 885,510 | $ 857,396 |
Americas | ||||
Revenue from External Customer | ||||
Revenues before reimbursements | 92,007 | 92,181 | 280,664 | 273,673 |
Broadspire | ||||
Revenue from External Customer | ||||
Revenues before reimbursements | 74,225 | 68,242 | 217,590 | 199,706 |
Canada--all service lines | Americas | ||||
Revenue from External Customer | ||||
Revenues before reimbursements | 27,042 | 33,575 | 85,283 | 98,083 |
Latin America/Caribbean--all service lines | Americas | ||||
Revenue from External Customer | ||||
Revenues before reimbursements | 2,884 | 3,781 | 9,697 | 10,858 |
Subtotal U.S. Property & Casualty | U.S. Property and Casualty | Americas | ||||
Revenue from External Customer | ||||
Revenues before reimbursements | 62,081 | 54,825 | 185,684 | 164,732 |
U.S. Contractor Connection | U.S. Property and Casualty | Americas | ||||
Revenue from External Customer | ||||
Revenues before reimbursements | 15,646 | 12,637 | 44,498 | 39,767 |
Subtotal U.S. Claims Services | U.S. Property and Casualty | Americas | ||||
Revenue from External Customer | ||||
Revenues before reimbursements | 46,435 | 42,188 | 141,186 | 124,965 |
U.S. Claims Field Operations | U.S. Property and Casualty | Americas | ||||
Revenue from External Customer | ||||
Revenues before reimbursements | 19,332 | 23,843 | 59,312 | 75,798 |
U.S. Technical Services | U.S. Property and Casualty | Americas | ||||
Revenue from External Customer | ||||
Revenues before reimbursements | 7,642 | 6,044 | 21,708 | 19,069 |
U.S. Catastrophe Services | U.S. Property and Casualty | Americas | ||||
Revenue from External Customer | ||||
Revenues before reimbursements | 19,461 | 12,301 | 60,166 | 30,098 |
Workers' Compensation and Liability Claims Management | Broadspire | ||||
Revenue from External Customer | ||||
Revenues before reimbursements | 30,583 | 28,109 | 90,120 | 84,113 |
Medical Management | Broadspire | ||||
Revenue from External Customer | ||||
Revenues before reimbursements | 39,983 | 36,257 | 116,301 | 104,103 |
Risk Management Information Services | Broadspire | ||||
Revenue from External Customer | ||||
Revenues before reimbursements | $ 3,659 | $ 3,876 | $ 11,169 | $ 11,490 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2014 | Sep. 30, 2015 | ||
Loss Contingencies | |||
Letters of credit outstanding amount | $ 17,211 | ||
Buckley Scott | |||
Loss Contingencies | |||
Period of contingent earnout provision | 2 years | ||
Business Combination, Contingent Consideration, Liability | [1] | 1,253 | |
Maximum contingent consideration liability | $ 2,048 | ||
[1] | The fair value of the contingent earnout liability for the 2014 acquisition of Buckley Scott Holdings Limited ("Buckley Scott") was estimated using an internally-prepared probability-weighted discounted cash flow analysis. The fair value analysis relied upon both Level 2 data (publicly observable data such as market interest rates and capital structures of peer companies) and Level 3 data (internal data such as the Company's operating projections). As such, the liability is a Level 3 fair value measurement. The valuation is sensitive to Level 3 data, with a maximum possible earnout of $2,048,000. As such, the fair value is not expected to vary materially from the balance recorded. The fair value of the contingent earnout liability is included in "Other noncurrent liabilities" on the Company's unaudited Condensed Consolidated Balance Sheets, based upon the term of the contingent earnout agreement. The fair value of the earnout was $1,153,000 at December 31, 2014. The change in the Level 3 fair value at September 30, 2015 was due to foreign currency translation adjustments and inputed interest. |
Commitments and Contingencies O
Commitments and Contingencies Operating Lease Commitment (Details) - Europe, Middle East, Africa and Asia-Pacific (EMEA/AP) ft² in Thousands, $ in Thousands | Jun. 24, 2015ft² | Sep. 30, 2015USD ($) |
Operating Leased Assets | ||
Term of lease | 10 years | |
Area of real estate property (square feet) | 16 | |
Future minimum payments due | $ | $ 15,230 |
Restructuring and Special Cha50
Restructuring and Special Charges (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Restructuring and Special Charges | ||||
Additions | $ 6,100 | $ 11,405 | ||
Special charges | 4,978 | 4,978 | ||
Restructuring and special charges | 11,078 | $ 0 | 16,383 | $ 0 |
Other accrued liabilities | ||||
Restructuring and Special Charges | ||||
Additions | 0 | 0 | ||
Pending litigation | Other accrued liabilities | ||||
Restructuring and Special Charges | ||||
Loss contingency, accrual, current | 1,674 | 1,674 | ||
Establishment of Global Business Services Center | ||||
Restructuring and Special Charges | ||||
Additions | 1,604 | 3,863 | ||
EMEA/AP restructuring and GAB Robins acquisition integration | ||||
Restructuring and Special Charges | ||||
Additions | 4,177 | 5,224 | ||
Americas restructuring | ||||
Restructuring and Special Charges | ||||
Additions | 319 | 2,318 | ||
Special charges | ||||
Restructuring and Special Charges | ||||
Severance costs | 1,627 | 1,627 | ||
Legal fees | $ 3,351 | $ 3,351 |
Restructuring and Special Cha51
Restructuring and Special Charges (Rollforward of accrued liabilities) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2015 | Sep. 30, 2015 | |
Restructuring Reserve [Roll Forward] | ||
Beginning balance | $ 3,252 | $ 1,870 |
Additions | 6,100 | 11,405 |
Adjustments to accruals | (39) | (409) |
Cash payments | (5,925) | (9,478) |
Ending balance | 3,388 | 3,388 |
Deferred rent | ||
Restructuring Reserve [Roll Forward] | ||
Beginning balance | 1,061 | 1,431 |
Additions | 0 | 0 |
Adjustments to accruals | (39) | (409) |
Cash payments | 0 | 0 |
Ending balance | 1,022 | 1,022 |
Accrued compensation and related costs | ||
Restructuring Reserve [Roll Forward] | ||
Beginning balance | 590 | 131 |
Additions | 4,926 | 7,524 |
Adjustments to accruals | 0 | 0 |
Cash payments | (4,153) | (6,292) |
Ending balance | 1,363 | 1,363 |
Accounts payable | ||
Restructuring Reserve [Roll Forward] | ||
Beginning balance | 1,293 | 0 |
Additions | 1,174 | 3,881 |
Adjustments to accruals | 0 | 0 |
Cash payments | (1,561) | (2,975) |
Ending balance | 906 | 906 |
Other accrued liabilities | ||
Restructuring Reserve [Roll Forward] | ||
Beginning balance | 308 | 308 |
Additions | 0 | 0 |
Adjustments to accruals | 0 | 0 |
Cash payments | (211) | (211) |
Ending balance | $ 97 | $ 97 |
Subsequent Event (Details)
Subsequent Event (Details) - Wells Fargo Bank, National Association - Fifth Amendment to Credit Agreement - Revolving Credit Facility - Subsequent Event | Nov. 05, 2015USD ($) | Nov. 04, 2015 |
Debt Instrument [Line Items] | ||
Debt instrument, covenant, maximum allowable exclusions from EBITDA in remainder of fiscal year | $ 27,000,000 | |
Debt instrument, covenant, maximum allowable exclusions from EBITDA in year two | 13,000,000 | |
Debt instrument, covenant, maximum aggregate allowable exclusions from EBITDA | $ 38,000,000 | |
Debt instrument, covenant, leverage ratio in period one | 3.75 | 3.25 |
Debt instrument, covenant, leverage ratio in period two | 3.50 | |
Debt instrument, covenant, leverage ratio in period three | 3.25 | |
Debt instrument, covenant, coverage ratio | 1.25 | 1.50 |
Debt instrument, covenant, allowable disposition of immaterial foreign subsidiaries, maximum | $ 15,000,000 |