Crawford & Company (CRD-B) 8-K Crawford Reports Improvement in 2008 Fourth Quarter and Annual Results

the

STRENGTH of

WORKING

TOGETHER

SM

Fourth

Quarter

Fiscal

2008

Earnings Conference Call

Monday, February 9, 2009

Exhibit 99.2

2

Fourth Quarter Earnings Review

February 9,

2009

•

Founded in 1941, Crawford is the largest independent global

provider of claims management solutions and a fully

integrated global provider of these solutions for the growing

multi-national market.

•

Crawford is divided into four reporting segments that support

the strategic positioning of the Company in a changing

market place:

–

U.S. Property & Casualty

•

Serves the U.S. insurance company market

–

International Operations

•

Serves the global insurance industry and multinational

corporations

–

Broadspire

•

Serves large national accounts, carriers and self-insured

entities

–

Legal Settlement Administration

•

Provides administration for class action settlements and

bankruptcy matters

•

The Company’s independence, global presence and

diversified business lines are key competitive advantages

which set Crawford apart from its competitors.

3

Forward-looking Statements and Segment

Operating Earnings

Forward Looking Statements:

This

presentation

contains

forward-looking

statements,

including

statements

about

the

future

financial

condition,

results

of

operations

and

earnings

outlook

of

Crawford

&

Company.

Statements,

both

qualitative

and

quantitative,

that

are

not

historical

facts

may

be

“forward-looking”

statements

as

defined

in

the

Private

Securities

Litigation

Reform

Act

of

1995.

Forward-looking

statements

involve

a

number

of

risks

and

uncertainties

that

could

cause

actual

results

to

differ

materially

from

historical

experience

or

Crawford

&

Company’s

present

expectations.

Accordingly,

no

one

should

place

undue

reliance

on

forward-looking

statements,

which

speak

only

as

of

the

date

on

which

they

are

made.

Crawford

&

Company

does

not

undertake

to

update

forward-

looking

statements

to

reflect

the

impact

of

circumstances

or

events

that

may

arise

or

not

arise

after

the

date

the

forward-looking

statements

are

made.

For

further

information

regarding

Crawford

&

Company,

and

the

risks

and

uncertainties

involved

in

forward-looking

statements,

please

read

Crawford

&

Company

reports

filed

with

the

United

States

Securities

and

Exchange

Commission

and

available

at

www.sec.gov

or

in

the

Investor

Relations

section

of

Crawford

&

Company’s

website

at

www.crawfordandcompany.com.

Segment

Operating

Earnings:

Segment

operating

earnings

represent

earnings

before

net

corporate

interest

expense,

amortization

of

customer-relationship

intangible

assets,

stock

option

expense,

income

tax

expense,

unallocated

corporate

and

shared

costs,

and

special

credits

and

charges.

On

January

1,

2008

the

Company’s

Strategic

Warranty

Services

unit

was

moved

from

the

Legal

Settlement

Administration

segment

to

the

U.S.

Property

&

Casualty

segment.

Prior

period

results

for

both

segments

have

been

restated

to

reflect

this

transfer.

Segment

revenues

and

expenses

do

not

include

reimbursements

for

out-of-pocket

expenses.

Agenda

•

Welcome

•

Overview of Global Economy

•

Highlights of 2008 Fiscal Year

•

Fourth Quarter Financial Review

•

Segment Operating Highlights

•

Outlook for Fiscal 2009

4

5

Fiscal 2008 Overview

•

Strong performance in a difficult operating

environment

Revenue growth of 8% over 2007

Net income double 2007

•

Sustained growth internationally and in U.S.

Property & Casualty offset declines in other

businesses

U.S. Property & Casualty revenue up 12.3%

International revenue up 18.2%

•

Improved earnings per share to $0.62 from $0.32

Improved operating margins in all segments

•

Improvement in cash and financial flexibility

Operating cash flow improved by  $47.7 million

Days sales outstanding in accounts receivable

declined by 19 days

200

400

600

800

1000

1200

2008

2007

Revenue

$ in millions

0

5

10

15

20

25

30

35

2008

2007

Net Income

$ in millions

$1,048

$975

$32.3

$16.1

the

STRENGTH of

WORKING

TOGETHER

SM

Fourth Quarter 2008

Financial Review

7

Fourth Quarter 2008 Overview

•

Strong performance in a difficult operating

environment

Revenue growth of 7.2% over 2007 quarter

Net income increased 152.3% over 2007 quarter

•

Sustained growth internationally and in U.S.

Property & Casualty offset declines in other

businesses

U.S. Property & Casualty revenue up 35.2%

Catastrophe revenue at $11.3 million vs. $1.8 million

in 2007

•

Improved earnings per share to $0.16 from $0.07

Improved operating margins in U.S. Property &

Casualty and International Operations

Tax credits of $1.8 million, or $0.04 per share in 2008

Special credit of $0.01 per share in 2008

200

210

220

230

240

250

260

270

4Q 2008

4Q 2007

Revenue

$ in millions

0

1

2

3

4

5

6

7

8

4Q 2008

4Q 2007

Net Income

$ in millions

$262.9

$245.2

$8.3

$3.3

8

Fourth Quarter 2008 Financials

Quarter Ended December 31,

2008

2007

% Change

Revenues:

Revenues Before Reimbursements

$262,889

$245,224

7%

Reimbursements

17,756

21,261

-16%

Total Revenues

280,645

266,485

5%

Costs and Expenses:

Cost of Services Provided, Before Reimbursements

196,481

186,203

6%

Reimbursements

17,756

21,261

-16%

Total Cost of Services

214,237

207,464

3%

Selling, General, and Administrative Expenses

53,497

50,762

5%

Corporate Interest Expense, Net

4,216

4,154

1%

Restructuring Costs

3,300

-

nm

Total Costs and Expenses

275,250

262,380

5%

Gain on Sale of Business

2,512

-

nm

Income Before Income Taxes

7,907

4,105

93%

(Benefit) Provision for Income Taxes

(430)

801

-154%

Net Income

$8,337

$3,304

152%

Earnings Per Share -

Basic and Diluted

$0.16

$0.07

129%

CRAWFORD  &  COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

In Thousands, Except Earnings Per Share and Percentages

Unaudited

8

8.5

9

9.5

10

10.5

11

4Q 2008

4Q 2007

Operating Earnings

9

60

70

80

90

100

110

4Q 2008

4Q 2007

Revenue

$ in millions

$ in millions

Fourth Quarter 2008 Financials

$109.6

$107.3

$10.9

$9.9

Operating earnings and margin improved on revenue

gains

Revenue increased 11.6% on a constant dollar basis

Summary Results, International Operations

For the quarters ended December 31, 2008 and 2007

in thousands except percentages

Unaudited

2008

2007

% Change

Revenues

109,551

$  

107,309

$ 

2.1%

Total Operating Expenses

98,685

97,459

1.3%

Operating Earnings

10,866

$    

9,850

$     

10.3%

Operating Margin

9.9%

9.2%

-1

0

1

2

3

4

5

4Q 2008

4Q 2007

Operating Earnings

10

0

10

20

30

40

50

60

4Q 2008

4Q 2007

Revenue

$ in millions

$ in millions

Fourth Quarter 2008 Financials

$44.2

$59.8

($0.5)

$4.8

Operating earnings up significantly on revenue growth

and technology-led operating efficiencies

Catastrophe revenue up $9.5 million from hurricanes

Gustav and Ike

Cases up over 4% in quarter

Summary Results, U.S. Property & Casualty

For the quarters ended December 31, 2008 and 2007

in thousands except percentages

Unaudited

2008

2007

Revenues

59,818

$    

44,239

$   

35.2%

Total Operating Expenses

55,026

44,705

23.1%

Operating Earnings

4,792

$      

(466)

$       

nm

Operating Margin

8.0%

-1.1%

% Change

-3

-2

-1

0

1

2

4Q 2008

4Q 2007

Operating Earnings

11

40

50

60

70

80

90

4Q 2008

4Q 2007

Revenue

$ in millions

$ in millions

Fourth Quarter 2008 Financials

$75.6

$75.2

($0.4)

($1.8)

Operating margin and earnings decline due to lower

worker’s compensation claim referrals

Revenues stable despite economic conditions

Summary Results, Broadspire

For the quarters ended December 31, 2008 and 2007

in thousands except percentages

Unaudited

2008

2007

Revenues

75,552

$    

75,239

$   

0.4%

Total Operating Expenses

77,392

75,627

2.3%

Operating Earnings

(1,840)

$     

(388)

$       

nm

Operating Margin

-2.4%

-0.5%

% Change

0

0.5

1

1.5

2

2.5

3

4Q 2008

4Q 2007

Operating Earnings

12

15

15.5

16

16.5

17

17.5

18

18.5

4Q 2008

4Q 2007

Revenue

$ in millions

$ in millions

Fourth Quarter 2008 Financials

$18.0

$18.4

$2.9

$2.3

Revenue and operating earnings decrease reflects

slowdown in class action settlements

Backlog of $42.0 million

Summary Results, Legal Settlement Administration

For the quarters ended December 31, 2008 and 2007

in thousands except percentages

Unaudited

2007

Revenues

17,968

$    

18,437

$   

-2.5%

Total Operating Expenses

15,646

15,505

0.9%

Operating Earnings

2,322

$      

2,932

$     

-20.8%

Operating Margin

12.9%

15.9%

2008

% Change

13

Fourth Quarter 2008 Financials

Crawford & Company

Balance Sheet Highlights

As of December 31, 2008 and December 31, 2007

in thousands, except percentages

Unaudited

December 31,

December 31,

2008

2007

Change

Cash, cash equivalents, and short-term investments

$73,124

$50,855

$22,269

Accounts receivable, net

157,430

178,528

(21,098)

Work in process

99,115

136,652

(37,537)

Total receivables

256,545

315,180

(58,635)

Deferred revenues, net                   

95,670

111,036

(15,366)

Pension liabilities

179,542

76,977

102,565

Current portion of long-term debt, capital leases

and short-term borrowings

15,650

31,864

(16,214)

Long-term debt

181,206

183,449

(2,243)

Total debt

196,856

215,313

(18,457)

Total stockholders' equity

175,551

254,215

(78,664)

Net debt*

123,732

164,458

(40,726)

Total debt / capitalization

53%

46%

*Net debt, a non-GAAP  measure, is defined by the Company as long-term debt, capital leases and short-term borrowings,

net of cash, cash equivalents, and short-term investments.

14

Fourth Quarter 2008 Financials

Crawford & Company

Free Cash Flow (A non-GAAP financial measurement)

For the years ended December 31, 2008 and 2007

In Thousands

     December 31,

     December 31,

              2008

             2007

Variance

Net Income

$32,259

$16,116

$16,143

   Plus: Depreciation / Non-Cash Items

38,923

31,692

7,231

   Less: Special Credits

(2,512)

(8,824)

6,312

   Less: Working Capital Growth

20,221

(15,151)

35,372

   Less: U.S. Pension Contributions

(17,916)

(549)

(17,367)

Operating Cash Flow

70,975

23,284

47,691

   Less: Capital Expenditures

(19,336)

(21,553)

2,217

   Less: Internally Developed Software

(12,675)

(6,556)

(6,119)

   Less: Mandatory Principal Payments

(2,100)

(2,100)

-

Free Cash Flow (non-GAAP)

$36,864

($6,925)

$43,789

the

STRENGTH of

WORKING

TOGETHER

SM

Fourth Quarter and Fiscal 2008

Segment Highlights

16

Fourth Quarter 2008 Highlights

120

130

140

150

160

170

4Q 2008

4Q 2007

International Claims

Claims referred in 000s

144.9

167.7

•

International Operations

Strong global revenue growth of

11.6% before currency impacts

Operating margin increased to 9.9%

in 2008 from 9.2% in 2007

Claims referred decreased 13.6%

due to absence of 2007 CAT claims

Strong working capital management

FX impact on fourth quarter

revenues was negative 9.5% and for

year was a positive 2.3%

17

Fourth Quarter 2008 Highlights

•

U.S. Property & Casualty

Revenue growth of 35.2%

Operating margin increased to

8.0% in 2008 from (1.1%) in 2007

Catastrophe revenue up to $11.3

million from $1.8 million

Technology-driven efficiencies

realized

Claims referred increased 4.0%

due to increases in property and

CAT related claims

75

80

85

90

95

100

105

4Q 2008

4Q 2007

U.S. P&C Claims

Claims referred in 000s

102.9

98.9

18

Crawford U.S. Catastrophe (CAT) Activity

0

10

20

30

2008

2007

Cases

24.5

12.0

0

5

10

15

20

25

2008

2007

Revenues

$22.9

$8.3

$ in millions

Year ended Dec. 31:

In 000s

•

U.S. Catastrophe

2008 reflects benefit from

hurricanes Gustav and Ike

Strong incremental margins

generated from CAT adjuster

revenues

Technology and process

improvements

Outlook for coming year will be

conservative

40

45

50

55

60

65

70

4Q 2008

4Q 2007

Broadspire

Claims

19

Fourth Quarter 2008 Highlights

Claims referred in 000s

55.4

65.1

•

Broadspire

Revenue increase of 0.4%

Operating losses of $1.8 million in the

fourth quarter

Year to date operating earnings of $3.5

million compared with $3.1 million in

prior year

RiskTech implementation underway

93% client retention rate

Worker’s Comp market challenging as

claims referred declined 15.0%

Strong client retention and cross-selling

partially offset run-off revenue decline

20

Fourth Quarter 2008 Highlights

•

Legal Settlement Administration

Revenue declined 2.5% due to

slowdown in class action settlements

Fourth quarter operating margin

decreased to 12.9% from 15.9% in

2007

Full year operating margin increased

to 14.4% in 2008 from 12.7% in 2007

Backlog of $42.0 million

20

25

30

35

40

45

50

55

4Q 2008

4Q 2007

Backlog

Backlog in millions

$42.0

$45.0

21

2009 Guidance

•

Full Year 2009:

–

Consolidated revenue before reimbursements between $960 million

and $980 million

–

Consolidated operating earnings between $50.5 million and $55.8

million

–

After reflecting stock-based compensation expense, net corporate

interest expense, customer-relationship intangible amortization

expense, special credits and charges and income taxes,

consolidated net income on a GAAP basis between $22.0 million

and $25.0 million

–

Earnings per share of $.41 to $.47

–

Guidance reflects the expected effect of stock market declines and

economic slowing to date, which has negatively affected asset

values

in

our

defined

benefit

pension

plans.

The

effect

of

this

on

2009 guidance is estimated as a $16.9 million reduction in operating

earnings, or $0.21 per share.

–

Guidance also reflects expected strengthening of the U.S. dollar

against most major foreign currencies, resulting in a negative

exchange rate impact.  The anticipated effect of this on 2009

guidance is estimated at $93.3 million decline in revenue and $7.6

million

reduction

in

operating

earnings,

or

$0.09

per

share.

Revenue Bridge from

2008 Actual to 2009 Guidance Midpoint

22

Dollars in Millions

Not to scale

$21.3

($6.6)

($93.3)

1,050

$  

$1.048.6

1,000

$  

$970.0

950

$     

2008

Net

Sale

Foreign

Midpoint

Revenues

Organic

of  Intl.

Currency

2009

Before

Growth

Business

Impact

Revenue

Reimb.

Guidance

Operating Earnings Bridge from

2008 Actual to 2009 Guidance Midpoint

23

Dollars in Millions

(not to scale)

$8.6

($7.6)

75

$     

$69.1

($16.9)

$53.2

50

$     

35

$     

2008

Net

Foreign

Increased

Midpoint

Operating

Organic

Currency

Pension

2009

Earnings

Growth

Impact

Expense

Revenue

Guidance

Earnings Per Share Bridge from

2008 Actual to 2009 Guidance Midpoint

24

Earnings Per Share

(not to scale)

0.75

$

$0.05

($0.09)

$0.09

($0.21)

$0.62

0.50

$

($0.02)

$0.44

0.25

$

2008

Operating

Net Corp.

Foreign

Increased

Other

Midpoint

Net

Earnings

Interest

Currency

Pension

2009

Income

Increase

Reduction

Impact

Expense

EPS

Per Share

Guidance

the

STRENGTH of

WORKING

TOGETHER

SM