CRAWFORD & COMPANY REPORTS SUBSTANTIALLY IMPROVED 2016 RESULTS

U.S. Services

U.S. Services revenues before reimbursements were $57.4 million in the fourth quarter of 2016, increasing 1% from $56.8 million in the fourth quarter of 2015. Operating earnings were $7.7 million in the 2016 fourth quarter, compared with $7.9 million in the fourth quarter of 2015, representing operating margins of 13% in the 2016 period and 14% in the 2015 period.

For the year, U.S. Services revenues before reimbursements decreased 5% to $231.2 million in 2016 compared with $242.5 million in 2015. Operating earnings increased to $35.7 million in 2016, from $32.7 million in 2015, representing operating margins of 15% and 13% in 2016 and 2015, respectively.

International

Fourth quarter 2016 revenues before reimbursements for the International segment totaled $117.5 million, compared with $124.9 million in the 2015 fourth quarter. This decrease was primarily due to changes in foreign exchange rates which negatively impacted revenues by approximately 4%, or $6.1 million, in the period. International segment operating earnings were $11.3 million in the 2016 fourth quarter, compared with $7.3 million in the 2015 fourth quarter. The segment's operating margin was 10% in the 2016 period compared with 6% in the 2015 period.

For the year, revenues before reimbursements in our International segment totaled $479.9 million in 2016, compared with $506.7 million in 2015. The decrease in revenue was the result of changes in foreign exchange rates of 6% or $29.6 million in 2016 compared with 2015. International segment operating earnings were $42.5 million in 2016, compared with $18.8 million in 2015, representing operating margins of 9% in 2016 compared with 4% in 2015.

Broadspire

Broadspire segment revenues before reimbursements were $74.0 million in the 2016 fourth quarter, down from $75.4 million in the 2015 fourth quarter. Broadspire recorded operating earnings of $6.5 million in the fourth quarter of 2016, representing an operating margin of 9%, compared with $7.0 million, or 9% of revenues, in the 2015 fourth quarter.

For the year, Broadspire segment revenues before reimbursements increased 3% to $302.0 million in 2016 compared with $293.0 million in 2015. Broadspire recorded operating earnings of $30.0 million in 2016, or 10% of revenues, compared with $24.0 million, or 8% of revenues, in 2015.

Garden City Group

Garden City Group revenues before reimbursements were $23.6 million in the fourth quarter of 2016, compared with $27.7 million in the same period of 2015. Operating earnings were $1.3 million in the 2016 fourth quarter compared with $1.7 million in the 2015 period. The segment's operating margin for the 2016 quarter was 6% in both the 2016 and 2015 periods.

For the year, Garden City Group revenues before reimbursements were $96.2 million in 2016, compared with $128.2 million in 2015. Operating earnings were $7.8 million in 2016, compared with $11.5 million in 2015, with the related operating margin decreasing to 8% in 2016 from 9% in 2015. At December 31, 2016 there was a backlog of projects awarded totaling approximately $81.0 million, the same as at December 31, 2015.

Unallocated Corporate and Shared Costs, Net

Unallocated corporate costs were $6.5 million in the fourth quarter of 2016, compared with $5.0 million in the same period of 2015. The increased costs for the fourth quarter of 2016 were due to an increase in professional fees and defined benefit pension expense, partially offset by a decrease in self-insured expenses.

Unallocated corporate costs were $24.0 million in 2016, compared with $16.6 million in 2015. The increase in 2016 compared with 2015 was due to an increase in U.S. defined benefit plan expense, unallocated professional fees, and incentive compensation.

Goodwill Impairment, Restructuring and Special Charges

The Company recorded restructuring and special charges of $2.1 million and $18.0 million in the 2016 and 2015 fourth quarters, respectively. Restructuring costs of $2.0 million in the 2016 quarter were comprised of costs associated with the ongoing implementation of our Global Business Services Center and Global Technology Services Center (the "Centers"), integration costs related to the GAB Robins acquisition, cease use charges and asset impairment charges. Special charges in the 2016 quarter were for certain legal and professional fees.

The Company recorded restructuring and special charges of $9.5 million and $34.4 million in the 2016 and 2015 full year periods, respectively. Restructuring costs of $8.6 million in 2016 were comprised of costs associated with the ongoing implementation of the Centers, integration costs related to the GAB Robins acquisition, cease use charges and asset impairment charges. Special charges of $0.9 million in 2016 were for certain legal and professional fees.

The Company recognized goodwill impairment charges in the amount of $49.3 million in the 2015 fourth quarter and 2015 full year. The noncash goodwill impairment charges were not reflected in segment operating earnings. No goodwill impairment charges were recorded in 2016.

Balance Sheet and Cash Flow

The Company's consolidated cash and cash equivalents position as of December 31, 2016 totaled $81.6 million compared with $76.1 million at December 31, 2015.

The Company's operations provided a record $98.9 million of cash during 2016, compared with $61.7 million in 2015. The 60% improvement in cash provided by operating activities in 2016 compared with 2015 was primarily due to increased net income and a decrease in working capital requirements.

2017 Guidance

Crawford & Company is issuing its initial guidance for 2017 as follows:

• Consolidated revenues before reimbursements between $1.10 and $1.13 billion;
• After expected restructuring and special charges, net income attributable to shareholders of Crawford & Company between $34.0 and $39.0 million, or $0.63 to $0.73 diluted earnings per CRD-A share, and $0.55 to $0.65 diluted earnings per CRD-B share;
• Consolidated operating earnings between $90.0 and $100.0 million;
• Consolidated adjusted EBITDA between $130.0 and $140.0 million;
• Before expected restructuring and special charges, net income attributable to shareholders of Crawford & Company on a non-GAAP basis between $43.0 and $48.0 million, or $0.78 to $0.88 diluted earnings per CRD-A share, and $0.71 to $0.81 diluted earnings per CRD-B share.

The Company expects to incur restructuring and special charges in 2017 totaling approximately $13.0 million pretax. This is expected to be comprised of $3.0 million related to the Centers and $10.0 million related to other restructuring activities.

To a significant extent, Crawford's business depends on case volumes. The Company cannot predict the future trend of case volumes for a number of reasons, including the fact that the frequency and severity of weather-related claims and the occurrence of natural and man-made disasters, which are a significant source of claims and revenue for the Company, are generally not subject to accurate forecasting.

Conference Call

As previously announced, Crawford & Company will host a conference call today, February 27, 2017 at 4:30 p.m. Eastern Time to discuss its fourth quarter and full year 2016 results. The conference call can be accessed live by dialing 1-800-374-2518 and using passcode 6371106. A presentation for today's call can also be found on the investor relations portion of the Company's website, http://www.crawfordandcompany.com. The call will be recorded and available for replay through March 27, 2017. You may dial 1-855-859-2056 to listen to the replay. The access code is 6371106.

Non-GAAP Presentation

In the normal course of business, our operating segments incur certain out-of-pocket expenses that are thereafter reimbursed by our clients. Under GAAP, these out-of-pocket expenses and associated reimbursements are required to be included when reporting expenses and revenues, respectively, in our consolidated results of operations. In the foregoing discussion and analysis of segment results of operations, we do not include a gross up of segment expenses and revenues for these pass-through reimbursed expenses. The amounts of reimbursed expenses and related revenues offset each other in our results of operations with no impact to our net income (loss) or operating earnings (loss). A reconciliation of revenues before reimbursements to consolidated revenues determined in accordance with GAAP is self-evident from the face of the accompanying unaudited condensed consolidated statements of operations.

Operating earnings is the primary financial performance measure used by our senior management and chief operating decision maker ("CODM") to evaluate the financial performance of our Company and operating segments, and make resource allocation and certain compensation decisions. Unlike net income, segment operating earnings is not a standard performance measure found in GAAP. We believe this measure is useful to others in that it allows them to evaluate segment and consolidated operating performance using the same criteria used by our senior management and CODM. Consolidated operating earnings represent segment earnings including certain unallocated corporate and shared costs, but before net corporate interest expense, stock option expense, amortization of customer-relationship intangible assets, goodwill impairment charges, restructuring and special charges, income taxes, and net income or loss attributable to noncontrolling interests. The reconciliation of operating earnings to net income attributable to shareholders of the Company on a GAAP basis is presented below.

Adjusted EBITDA is not a term defined by GAAP and as a result our measure of adjusted EBITDA might not be comparable to similarly titled measures used by other companies. However, adjusted EBITDA is used by management to evaluate, assess and benchmark our operational results and the Company believes that adjusted EBITDA is relevant and useful information widely used by analysts, investors and other interested parties. Adjusted EBITDA is defined as net income attributable to shareholders of the Company with adjustments for depreciation and amortization, net corporate interest expense, income taxes, goodwill impairment charges, restructuring and special charges, and stock-based compensation expense.

Unallocated corporate and shared costs represent expenses related to our chief executive officer and Board of Directors, certain provisions for bad debt allowances or subsequent recoveries such as those related to bankrupt clients, defined benefit pension costs or credits for our frozen U.S. pension plan, certain self-insurance costs and recoveries, and professional fees for corporate level projects that are not allocated to our individual operating segments but are included in our financial performance measure of consolidated operating earnings. Restructuring and special charges are non-core items not directly related to our normal business or operations, or our future performance.

Income taxes, net corporate interest expense, stock option expense, and amortization of customer-relationship intangible assets are recurring components of our net income, but they are not considered part of our consolidated or segment operating earnings because they are managed on a corporate-wide basis. Income taxes are calculated for the Company on a consolidated basis based on statutory rates in effect in the various jurisdictions in which we provide services, and vary significantly by jurisdiction. Net corporate interest expense results from capital structure decisions made by senior management and the Board of Directors and affecting the Company as a whole. Stock option expense represents the non-cash costs generally related to equity awards and employee stock purchase plan expenses which are not allocated to our operating segments. Amortization expense is a non-cash expense for finite-lived customer-relationship and trade name intangible assets acquired in business combinations. None of these costs relate directly to the performance of our services or operating activities and, therefore, are excluded from segment operating earnings in order to better assess the results of each segment's operating activities on a consistent basis.

Income taxes are calculated for the non-GAAP presentation of net income before goodwill, restructuring and special charges based on statutory rates in effect in the various jurisdictions in which charges exist, and vary by jurisdiction.

Following is a reconciliation of segment and consolidated operating earnings to net income attributable to shareholders of Crawford & Company on a GAAP basis. The reconciliation of 2017 guidance is to the midpoint of the guidance range.

Following is a reconciliation of net income attributable to shareholders of Crawford & Company on a GAAP basis to adjusted EBITDA. The reconciliation of 2017 guidance is to the midpoint of the guidance range.

Following is information regarding the weighted average shares used in the computation of basic and diluted earnings per share.

Further information regarding the Company's operating results for the quarter and year ended December 31, 2016, financial position as of December 31, 2016, and cash flows for the year ended December 31, 2016 is shown on the attached unaudited condensed consolidated financial statements.

About Crawford & Company

Based in Atlanta, Georgia, Crawford & Company (www.crawfordandcompany.com) is the world's largest publicly traded independent provider of claims management solutions to insurance companies and self-insured entities, with an expansive global network serving clients in more than 70 countries. The Crawford Solution® offers comprehensive, integrated claims services, business process outsourcing and consulting services for major product lines including property and casualty claims management; workers' compensation claims and medical management; and legal settlement administration.

The Company's shares are traded on the NYSE under the symbols CRD-A and CRD-B. The Company's two classes of stock are substantially identical, except with respect to voting rights and the Company's ability to pay greater cash dividends on the non-voting Class A Common Stock than on the voting Class B Common Stock, subject to certain limitations. In addition, with respect to mergers or similar transactions, holders of Class A Common Stock must receive the same type and amount of consideration as holders of Class B Common Stock, unless different consideration is approved by the holders of 75% of the Class A Common Stock, voting as a class.

Earnings per share may be different between CRD-A and CRD-B due to the payment of a higher per share dividend on CRD-A than CRD-B, and the impact that has on the earnings per share calculation according to generally accepted accounting principles.

FOR FURTHER INFORMATION REGARDING THIS PRESS RELEASE, PLEASE CALL BRUCE SWAIN AT (404) 300-1051.

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