United States

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q



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



		for the quarterly period ended September 30, ~~2017~~2019



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



		for the transition period from ____ to ____

Commission file number 1-10356

CRAWFORD & COMPANY

(Exact name of Registrant as specified in its charter)



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

	5335 Triangle Parkway
	Peachtree Corners, Georgia		30092
	(Address of principal executive offices)		(Zip Code)

(404) 300-1000

(Registrant's telephone number, including area code)

Securities Registered Pursuant to Section 12(b) of the Act:



Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A Common Stock — $1.00 Par Value	CRD-A	New York Stock Exchange, Inc.
Class B Common Stock — $1.00 Par Value	CRD-B	New York Stock Exchange, Inc.

Indicate by check mark whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes þ No o

Indicate by check mark whether the Registrant has submitted electronically ~~and posted on its corporate website, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit ~~and post~~ such files). Yes þ No o

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated ~~filer",~~filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.



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

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards pursuant to Section 13(a) of the Exchange Act. o

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

Yes o No þ

The number of shares outstanding of each class of the Registrant's common stock, as of October ~~31, 2017,~~29, 2019, was as follows:

Class A Common Stock, $1.00 par value: ~~31,252,307~~30,428,832

Class B Common Stock, $1.00 par value: ~~24,514,584~~22,694,718

CRAWFORD & COMPANY

Quarterly Report on Form 10-Q

Quarter Ended September 30, ~~2017~~2019

Table of Contents



		Page
Part I. Financial Information

Item 1.	Financial Statements:	3

	Condensed Consolidated Statements of Operations (unaudited) for the three months ended September 30, ~~2017~~2019 and ~~2016~~2018	3

	Condensed Consolidated Statements of Operations (unaudited) for the nine months ended September 30, ~~2017~~2019 and ~~2016~~2018	4

	Condensed Consolidated Statements of Comprehensive Income (unaudited) for the three months and nine months ended September 30, ~~2017~~2019 and ~~2016~~2018	5

	Condensed Consolidated Balance Sheets (unaudited) as of September 30, ~~2017~~2019 and December 31, ~~2016~~2018	6

	Condensed Consolidated Statements of Cash Flows (unaudited) for the nine months ended September 30, ~~2017~~2019 and ~~2016~~2018	8

	Condensed Consolidated Statements of Shareholders' Investment (unaudited) as of and for the three months and nine months ended September 30, ~~2017~~2019 and ~~2016~~2018	9

	Notes to Condensed Consolidated Financial Statements (unaudited)	11

	~~Review~~ Report of Independent Registered Public Accounting Firm	2529

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	2630

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	4250

Item 4.	Controls and Procedures	4350

Part II. Other Information

Item 1A.	Risk Factors	4451

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	4451

Item 6.	Exhibits	4552

Signatures		4653

Part I — Financial Information

Item 1. Financial Statements

CRAWFORD & COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Unaudited


	Three Months Ended September 30,						Three Months Ended September 30,
(In thousands, except per share amounts)	2017			2016			2019			2018
Revenues:

Revenues before reimbursements	$	270,551		$	277,286		$	254,677		$	255,029
Reimbursements	16,115			18,101			11,165			9,834
Total Revenues	286,666			295,387			265,842			264,863

Costs and Expenses:

Costs of services provided, before reimbursements	191,977			193,453			180,849			179,238
Reimbursements	16,115			18,101			11,165			9,834
Total costs of services	208,092			211,554			192,014			189,072

Selling, general, and administrative expenses	57,859			60,325			52,564			63,247

Corporate interest expense, net of interest income of $174 and $278, respectively	2,524			2,262
Corporate interest expense, net of interest income of $0 and $274, respectively							3,162			2,398

Restructuring and special charges	1,431			1,488
Arbitration and claim settlements							1,200			—

Loss on disposition of business line							—			1,201

Total Costs and Expenses	269,906			275,629			248,940			255,918

Other Income	132			197
Other (Loss) Income, net							(883		)	762

Income Before Income Taxes	16,892			19,955			16,019			9,707

Provision for Income Taxes	4,922			8,606			5,328			1,828

Net Income	11,970			11,349			10,691			7,879

Net Income Attributable to Noncontrolling Interests and Redeemable Noncontrolling Interests	(157		)	(404		)
Net Loss Attributable to Noncontrolling Interests and Redeemable Noncontrolling Interests							355			17

Net Income Attributable to Shareholders of Crawford & Company	$	11,813		$	10,945		$	11,046		$	7,896

Earnings Per Share - Basic:
Class A Common Stock	$	0.22		$	0.21		$	0.22		$	0.15
Class B Common Stock	$	0.20		$	0.19		$	0.19		$	0.13

Earnings Per Share - Diluted:
Class A Common Stock	$	0.22		$	0.20		$	0.21		$	0.15
Class B Common Stock	$	0.20		$	0.18		$	0.19		$	0.13

Weighted-Average Shares Used to Compute Basic Earnings Per Share:
Class A Common Stock	31,276			30,922			30,645			30,713
Class B Common Stock	24,550			24,690			22,831			24,446

Weighted-Average Shares Used to Compute Diluted Earnings Per Share:
Class A Common Stock	32,097			31,665			31,140			31,390
Class B Common Stock	24,550			24,690			22,831			24,446

Cash Dividends Per Share:
Class A Common Stock	$	0.07		$	0.07
Class B Common Stock	$	0.05		$	0.05

(See accompanying notes to condensed consolidated financial statements)

CRAWFORD & COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Unaudited


	Nine Months Ended September 30,						Nine Months Ended September 30,
(In thousands, except per share amounts)	2017			2016			2019			2018
Revenues:

Revenues before reimbursements	$	807,065		$	836,863		$	758,616		$	807,177
Reimbursements	43,103			47,101			31,449			41,282
Total Revenues	850,168			883,964			790,065			848,459

Costs and Expenses:

Costs of services provided, before reimbursements	570,858			595,248			533,664			574,380
Reimbursements	43,103			47,101			31,449			41,282
Total costs of services	613,961			642,349			565,113			615,662

Selling, general, and administrative expenses	175,178			178,182			171,407			188,907

Corporate interest expense, net of interest income of $581 and $498, respectively	6,674			7,553
Corporate interest expense, net of interest income of $539 and $1,446, respectively							8,346			7,402

Restructuring and special charges	8,818			7,431
Arbitration and claim settlements							12,552			—

Loss on disposition of business line							—			18,996

Total Costs and Expenses	804,631			835,515			757,418			830,967

Other Income	898			719
Other (Loss) Income, net							(2,443		)	2,644

Income Before Income Taxes	46,435			49,168			30,204			20,136

Provision for Income Taxes	16,569			20,029			11,120			6,255

Net Income	29,866			29,139			19,084			13,881

Net Income Attributable to Noncontrolling Interests and Redeemable Noncontrolling Interests	(188		)	(937		)
Net Loss Attributable to Noncontrolling Interests and Redeemable Noncontrolling Interests							713			159

Net Income Attributable to Shareholders of Crawford & Company	$	29,678		$	28,202		$	19,797		$	14,040

Earnings Per Share - Basic:
Class A Common Stock	$	0.56		$	0.54		$	0.39		$	0.28
Class B Common Stock	$	0.50		$	0.48		$	0.33		$	0.22

Earnings Per Share - Diluted:
Class A Common Stock	$	0.55		$	0.53		$	0.39		$	0.28
Class B Common Stock	$	0.49		$	0.47		$	0.33		$	0.22

Weighted-Average Shares Used to Compute Basic Earnings Per Share:
Class A Common Stock	31,359			30,731			30,701			30,829
Class B Common Stock	24,639			24,690			23,071			24,455

Weighted-Average Shares Used to Compute Diluted Earnings Per Share:
Class A Common Stock	32,156			31,200			31,116			31,451
Class B Common Stock	24,639			24,690			23,071			24,455

Cash Dividends Per Share:
Class A Common Stock	$	0.21		$	0.21
Class B Common Stock	$	0.15		$	0.15

(See accompanying notes to condensed consolidated financial statements)

CRAWFORD & COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Unaudited


	Three Months Ended September 30,						Three Months Ended September 30,
(In thousands)	2017			2016			2019			2018

Net Income	$	11,970		$	11,349		$	10,691		$	7,879

Other Comprehensive Income (Loss):
Net foreign currency translation income (loss), net of tax of $0 and $0, respectively	6,994			(4,095		)
Other Comprehensive Loss:
Net foreign currency translation loss, net of tax of $0 and $0, respectively							(3,017		)	(4,730		)

Amortization of actuarial losses for retirement plans included in net periodic pension cost, net of tax of $975 and $1,126, respectively	1,745			2,171
Amortization of actuarial losses for retirement plans included in net periodic pension cost, net of tax of $673 and $826, respectively							1,984			1,833

Other Comprehensive Income (Loss)	8,739			(1,924		)

Comprehensive Income	20,709			9,425

Comprehensive income attributable to noncontrolling interests and redeemable noncontrolling interests	(151		)	(503		)

Comprehensive Income Attributable to Shareholders of Crawford & Company	$	20,558		$	8,922



	Nine Months Ended September 30,
(In thousands)	2017			2016

Net Income	$	29,866		$	29,139

Other Comprehensive Income:
Net foreign currency translation income (loss), net of tax of $0 and $0, respectively	8,525			(648		)

Amortization of actuarial losses for retirement plans included in net periodic pension cost, net of tax of $2,954 and $3,339, respectively	5,278			6,453

Other Comprehensive Income	13,803			5,805
Other Comprehensive Loss							(1,033		)	(2,897		)

Comprehensive Income	43,669			34,944			9,658			4,982

Comprehensive loss attributable to noncontrolling interests and redeemable noncontrolling interests	502			47			900			468

Comprehensive Income Attributable to Shareholders of Crawford & Company	$	44,171		$	34,991		$	10,558		$	5,450



	Nine Months Ended September 30,
(In thousands)	2019			2018

Net Income	$	19,084		$	13,881

Other Comprehensive Income:
Net foreign currency translation loss, net of tax of $0 and $0, respectively	(2,621		)	(3,333		)

Amortization of actuarial losses for retirement plans included in net periodic pension cost, net of tax of $2,024 and $2,455, respectively	5,976			5,535

Other Comprehensive Income	3,355			2,202

Comprehensive Income	22,439			16,083

Comprehensive loss attributable to noncontrolling interests and redeemable noncontrolling interests	1,684			414

Comprehensive Income Attributable to Shareholders of Crawford & Company	$	24,123		$	16,497

(See accompanying notes to condensed consolidated financial statements)

CRAWFORD & COMPANY

CONDENSED CONSOLIDATED BALANCE SHEETS

Unaudited


			*				*
(In thousands)	September 30, 2017		December 31, 2016		September 30, 2019		December 31, 2018
ASSETS
Current Assets:
Cash and cash equivalents	$	73,289	$	81,569	$	46,101	$	53,119
Accounts receivable, less allowance for doubtful accounts of $16,122 and $14,499 respectively	164,660		153,566
Accounts receivable, less allowance for doubtful accounts of $9,786 and $9,625, respectively					131,329		131,117
Unbilled revenues, at estimated billable amounts	123,783		101,809		115,672		108,291
Income taxes receivable	3,661		3,781		4,084		4,084
Prepaid expenses and other current assets	26,483		24,006		24,253		24,237
Total Current Assets	391,876		364,731		321,439		320,848
Net Property and Equipment	32,680		29,605		32,035		34,303
Other Assets:
Operating lease right-of-use assets, net					93,610		—
Goodwill	117,362		91,750		97,152		96,890
Intangible assets arising from business acquisitions, net	99,682		86,931		76,529		85,023
Capitalized software costs, net	87,834		80,960		66,352		72,210
Deferred income tax assets	28,252		30,379		19,687		22,146
Other noncurrent assets	60,660		51,503		68,687		70,022
Total Other Assets	393,790		341,523		422,017		346,291
TOTAL ASSETS	$	818,346	$	735,859	$	775,491	$	701,442

* Derived from the audited Consolidated Balance Sheet

(See accompanying notes to condensed consolidated financial statements)

CRAWFORD & COMPANY

CONDENSED CONSOLIDATED BALANCE SHEETS — CONTINUED

Unaudited


				*						*
(In thousands, except par value amounts)	September 30, 2017			December 31, 2016			September 30, 2019			December 31, 2018
LIABILITIES AND SHAREHOLDERS' INVESTMENT
Current Liabilities:
Short-term borrowings	$	3,627		$	30		$	33,606		$	23,195
Accounts payable	49,670			51,991			31,178			37,834
Accrued compensation and related costs	71,423			74,466			66,559			66,530
Self-insured risks	12,284			14,771			14,873			15,246
Income taxes payable	8,154			3,527			2,236			3,145
Deferred rent	11,142			12,142			—			15,919
Operating lease liabilities							30,073			—
Other accrued liabilities	39,893			34,922			37,242			32,391
Deferred revenues	36,987			37,456			29,007			30,961
Current installments of long-term debt and capital leases	372			982
Current installments of finance leases							13			89
Total Current Liabilities	233,552			230,287			244,787			225,310
Noncurrent Liabilities:
Long-term debt and capital leases, less current installments	246,083			187,002
Long-term debt and finance leases, less current installments							155,761			167,126
Operating lease liabilities							78,371			—
Deferred revenues	24,443			25,884			23,839			21,713
Accrued pension liabilities	91,265			105,175			71,093			74,323
Other noncurrent liabilities	23,878			28,247			29,761			32,024
Total Noncurrent Liabilities	385,669			346,308			358,825			295,186
Redeemable Noncontrolling Interests	7,085			—			4,846			5,500
Shareholders' Investment:
Class A common stock, $1.00 par value; 50,000 shares authorized; 31,243 and 31,296 shares issued and outstanding at September 30, 2017 and December 31, 2016, respectively	31,243			31,296
Class B common stock, $1.00 par value; 50,000 shares authorized; 24,515 and 24,690 shares issued and outstanding at September 30, 2017 and December 31, 2016 respectively	24,515			24,690
Class A common stock, $1.00 par value; 50,000 shares authorized; 30,420 and 30,927 shares issued and outstanding at September 30, 2019 and December 31, 2018, respectively							30,420			30,927
Class B common stock, $1.00 par value; 50,000 shares authorized; 22,727 and 24,408 shares issued and outstanding at September 30, 2019 and December 31, 2018, respectively							22,727			24,408
Additional paid-in capital	53,138			48,108			62,716			58,793
Retained earnings	276,304			261,562			260,621			273,607
Accumulated other comprehensive loss	(197,280		)	(211,773		)	(212,122		)	(216,447		)
Shareholders' Investment Attributable to Shareholders of Crawford & Company	187,920			153,883			164,362			171,288
Noncontrolling interests	4,120			5,381			2,671			4,158
Total Shareholders' Investment	192,040			159,264			167,033			175,446
TOTAL LIABILITIES AND SHAREHOLDERS' INVESTMENT	$	818,346		$	735,859		$	775,491		$	701,442

* Derived from the audited Consolidated Balance Sheet

(See accompanying notes to condensed consolidated financial statements)

CRAWFORD & COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Unaudited


	Nine Months Ended September 30,						Nine Months Ended September 30,
(In thousands)	2017			2016			2019			2018
Cash Flows From Operating Activities:
Net income	$	29,866		$	29,139		$	19,084		$	13,881
Reconciliation of net income to net cash provided by operating activities:
Depreciation and amortization	30,648			30,643			30,086			33,284
Stock-based compensation	4,973			3,246			2,610			4,838
Changes in operating assets and liabilities, net of effects of acquisitions and dispositions:
Loss on disposition of business line							—			18,996
Changes in operating assets and liabilities:
Accounts receivable, net	(6,181		)	(7,628		)	1,108			12,811
Unbilled revenues, net	(16,996		)	(16,118		)	(8,740		)	(26,156		)
Accrued or prepaid income taxes	5,202			9,067			443			788
Accounts payable and accrued liabilities	(16,233		)	5,410			(4,361		)	(10,665		)
Deferred revenues	(2,352		)	(4,153		)	514			(2,068		)
Accrued retirement costs	(13,360		)	(7,128		)	1,545			(26,486		)
Prepaid expenses and other operating activities	(1,683		)	7,605			36			(3,196		)
Net cash provided by operating activities	13,884			50,083			42,325			16,027

Cash Flows From Investing Activities:
Acquisitions of property and equipment	(10,465		)	(5,782		)	(5,664		)	(12,406		)
Cash proceeds from disposition of business line							—			40,275
Capitalization of computer software costs	(19,906		)	(13,653		)	(7,276		)	(13,098		)
Payments for business acquisitions, net of cash acquired	(36,029		)	(3,672		)	(2,296		)	(2,500		)
Other investing activities	(2,148		)	(95		)	—			(218		)
Net cash used in investing activities	(68,548		)	(23,202		)
Net cash (used in) provided by investing activities							(15,236		)	12,053

Cash Flows From Financing Activities:
Cash dividends paid	(10,288		)	(10,162		)	(9,894		)	(10,159		)
Payments related to shares received for withholding taxes under stock-based compensation plans	(547		)	(15		)
Proceeds from shares purchased under employee stock-based compensation plans	1,048			1,208			1,909			1,301
Decrease in note payable for stock repurchase	—			(2,206		)
Repurchases of common stock	(6,066		)	—			(25,673		)	(7,715		)
Increases in short-term and revolving credit facility borrowings	82,905			79,664			65,449			89,554
Payments on short-term and revolving credit facility borrowings	(22,697		)	(95,855		)	(64,962		)	(100,895		)
Payments on capital lease obligations	(964		)	(1,119		)
Payments on finance lease obligations							(106		)	(361		)
Dividends paid to noncontrolling interests	(291		)	(381		)	(458		)	(349		)
Other financing activities	—			(12		)
Net cash provided by (used in) financing activities	43,100			(28,878		)

Net cash used in financing activities							(33,735		)	(28,624		)
Effects of exchange rate changes on cash and cash equivalents	3,284			(2,406		)	(372		)	(128		)
Decrease in cash and cash equivalents	(8,280		)	(4,403		)	(7,018		)	(672		)
Cash and cash equivalents at beginning of year	81,569			76,066			53,119			54,011
Cash and cash equivalents at end of period	$	73,289		$	71,663		$	46,101		$	53,339

(See accompanying notes to condensed consolidated financial statements)

CRAWFORD & COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' INVESTMENT

Unaudited

(In ~~thousands)~~thousands, except per share amounts)

Common Stock Accumulated Shareholders' Investment Attributable to
2017
Class A
Non-Voting

Class B
Voting

Additional
Paid-In
Capital

Retained
Earnings

Other
Comprehensive
Loss

Shareholders of
Crawford &
Company

Noncontrolling
Interests

Total
Shareholders' Investment
Balance at January 1, 2017 $ 31,296
$ 24,690
$ 48,108
$ 261,562
$ (211,773 ) $ 153,883
$ 5,381
$ 159,264
Net income ⁽¹⁾
—
—
—
7,664
—
7,664
137
7,801
Other comprehensive income (loss) —
—
—
—
3,475
3,475
(814 ) 2,661
Cash dividends paid —
—
—
(3,441 ) —
(3,441 ) —
(3,441 )
Stock-based compensation —
—
1,296
—
—
1,296
—
1,296
Cumulative-effect adjustment of ASU 2016-09 —
—
—
692
—
692
—
692
Common stock activity, net 231
—
(629 ) —
—
(398 ) —
(398 )
Acquisition of noncontrolling interests —
—
34
—
—
34
(715 ) (681 )
Balance at March 31, 2017 $ 31,527
$ 24,690
$ 48,809
$ 266,477
$ (208,298 ) $ 163,205
$ 3,989
$ 167,194
Net income ⁽¹⁾
—
—
—
10,201
—
10,201
275
10,476
Other comprehensive income —
—
—
—
2,273
2,273
130
2,403
Cash dividends paid —
—
—
(3,428 ) —
(3,428 ) —
(3,428 )
Stock-based compensation —
—
2,109
—
—
2,109
—
2,109
Repurchases of common stock (357 ) (48 ) —
(3,029 ) —
(3,434 ) —
(3,434 )
Common stock activity, net 88
—
172
—
—
260
—
260
Acquisition of noncontrolling interests —
—
424
—
—
424
—
424
Balance at June 30, 2017 $ 31,258
$ 24,642
$ 51,514
$ 270,221
$ (206,025 ) $ 171,610
$ 4,394
$ 176,004
Net income ⁽¹⁾
—
—
—
11,813
—
11,813
435
12,248
Other comprehensive income (loss) —
—
—
—
8,745
8,745
(6 ) 8,739
Cash dividends paid —
—
—
(3,419 ) —
(3,419 ) —
(3,419 )
Stock-based compensation —
—
1,568
—
—
1,568
—
1,568
Repurchases of common stock (194 ) (127 ) —
(2,311 ) —
(2,632 ) —
(2,632 )
Acquisition of noncontrolling interests —
—
(404 ) —
—
(404 ) (412 ) (816 )
Common stock activity, net 179
—
460
—
—
639
—
639
Dividends paid to noncontrolling interests —
—
—
—
—
—
(291 ) (291 )
Balance at September 30, 2017 $ 31,243
$ 24,515
$ 53,138
$ 276,304
$ (197,280 ) $ 187,920
$ 4,120
$ 192,040

~~(See accompanying notes to condensed consolidated financial statements)~~



	Common Stock												Accumulated			Shareholders' Investment Attributable to
2019	Class A Non-Voting			Class B Voting			Additional Paid-In Capital			Retained Earnings			Other Comprehensive Loss			Shareholders of Crawford & Company			Noncontrolling Interests			Total Shareholders' Investment
Balance at January 1, 2019	$	30,927		$	24,408		$	58,793		$	273,607		$	(216,447	)	$	171,288		$	4,158		$	175,446
Net income ⁽¹⁾	—			—			—			6,109			—			6,109			37			6,146
Other comprehensive income (loss)	—			—			—			—			5,073			5,073			(16		)	5,057
Cash dividends paid (Class A - $0.07 per share, Class B - $0.05 per share)	—			—			—			(3,282		)	—			(3,282		)	—			(3,282		)
Stock-based compensation	—			—			(247		)	—			—			(247		)	—			(247		)
Repurchases of common stock	(421		)	(1,377		)	—			(14,620		)	—			(16,418		)	—			(16,418		)
Common stock activity, net	115			—			(225		)	—			—			(110		)	—			(110		)
Dividends paid to noncontrolling interests	—			—			—			—			—			—			(84		)	(84		)
Balance at March 31, 2019	$	30,621		$	23,031		$	58,321		$	261,814		$	(211,374	)	$	162,413		$	4,095		$	166,508
Net income ⁽¹⁾	—			—			—			2,642			—			2,642			(12		)	2,630
Other comprehensive loss	—			—			—			—			(260		)	(260		)	(409		)	(669		)
Cash dividends paid (Class A - $0.07 per share, Class B - $0.05 per share)	—			—			—			(3,313		)	—			(3,313		)	—			(3,313		)
Stock-based compensation	—			—			1,646			—			—			1,646			—			1,646
Repurchases of common stock	(280		)	(73		)	—			(2,814		)	—			(3,167		)	—			(3,167		)
Common stock activity, net	326			—			634			—			—			960			—			960
Dividends paid to noncontrolling interests	—			—			—			—			—			—			(196		)	(196		)
Balance at June 30, 2019	$	30,667		$	22,958		$	60,601		$	258,329		$	(211,634	)	$	160,921		$	3,478		$	164,399
Net income ⁽¹⁾	—			—			—			11,046			—			11,046			(84		)	10,962
Other comprehensive loss	—			—			—			—			(488		)	(488		)	(545		)	(1,033		)
Cash dividends paid (Class A - $0.07 per share, Class B - $0.05 per share)	—			—			—			(3,299		)	—			(3,299		)	—			(3,299		)
Stock-based compensation	—			—			1,211			—			—			1,211			—			1,211
Repurchases of common stock	(402		)	(231		)	—			(5,455		)	—			(6,088		)	—			(6,088		)
Common stock activity, net	155			—			904			—			—			1,059			—			1,059
Dividends paid to noncontrolling interests	—			—			—			—			—			—			(178		)	(178		)
Balance at September 30, 2019	$	30,420		$	22,727		$	62,716		$	260,621		$	(212,122	)	$	164,362		$	2,671		$	167,033

⁽¹⁾The total net income presented in the condensed consolidated statements of shareholders' investment for the three months ended March 31, June 30 and September 30, ~~2017~~2019 excludes ~~$178, $203,~~$377, $6 and ~~$278~~$271, respectively, in net loss attributable to the redeemable noncontrolling interests.

~~CRAWFORD & COMPANY~~

~~CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' INVESTMENT-CONTINUED~~

~~Unaudited~~

~~(In thousands)~~

Common Stock Accumulated Shareholders' Investment Attributable to
2016
Class A
Non-Voting

Class B
Voting

Additional
Paid-In
Capital

Retained
Earnings

Other
Comprehensive
Loss

Shareholders of
Crawford &
Company

Noncontrolling
Interests

Total
Shareholders' Investment
Balance at January 1, 2016 $ 30,537
$ 24,690
$ 41,936
$ 239,161
$ (222,631 ) $ 113,693
$ 10,658
$ 124,351
Net income (loss) —
—
—
8,630
—
8,630
(1 ) 8,629
Other comprehensive income (loss) —
—
—
—
338
338
(614 ) (276 )
Cash dividends paid —
—
—
(3,373 ) —
(3,373 ) —
(3,373 )
Stock-based compensation —
—
729
—
—
729
—
729
Common stock activity, net 14
—
—
—
—
14
—
14
Acquisition of noncontrolling interests —
—
1,079
—
—
1,079
(4,879 ) (3,800 )
Dividends paid to noncontrolling interests —
—
—
—
—
—
(186 ) (186 )
Balance at March 31, 2016 $ 30,551
$ 24,690
$ 43,744
$ 244,418
$ (222,293 ) $ 121,110
$ 4,978
$ 126,088
Net income —
—
—
8,627
—
8,627
534
9,161
Other comprehensive income (loss) —
—
—
—
8,474
8,474
(469 ) 8,005
Cash dividends paid —
—
—
(3,389 ) —
(3,389 ) —
(3,389 )
Stock-based compensation —
—
1,228
—
—
1,228
—
1,228
Common stock activity, net 250
—
181
—
—
431
—
431
Dividends paid to noncontrolling interests —
—
—
—
—
—
(23 ) (23 )
Balance at June 30, 2016 $ 30,801
$ 24,690
$ 45,153
$ 249,656
$ (213,819 ) $ 136,481
$ 5,020
$ 141,501
Net income —
—
—
10,945
—
10,945
404
11,349
Other comprehensive (loss) income —
—
—
—
(2,023 ) (2,023 ) 99
(1,924 )
Cash dividends paid —
—
—
(3,400 ) —
(3,400 ) —
(3,400 )
Stock-based compensation —
—
1,289
—
—
1,289
—
1,289
Common stock activity, net 151
—
597
—
—
748
—
748
Acquisition of noncontrolling interests —
—
209
—
—
209
(209 ) —
Dividends paid to noncontrolling interests —
—
—
—
—
—
(172 ) (172 )
Balance at September 30, 2016 $ 30,952
$ 24,690
$ 47,248
$ 257,201
$ (215,842 ) $ 144,249
$ 5,142
$ 149,391

(See accompanying notes to condensed consolidated financial statements)



	Common Stock												Accumulated			Shareholders' Investment Attributable to
2018	Class A Non-Voting			Class B Voting			Additional Paid-In Capital			Retained Earnings			Other Comprehensive Loss			Shareholders of Crawford & Company			Noncontrolling Interests			Total Shareholders' Investment
Balance at January 1, 2018	$	31,439		$	24,502		$	53,170		$	269,686		$	(196,477	)	$	182,320		$	4,644		$	186,964
Net income ⁽¹⁾	—			—			—			8,569			—			8,569			188			8,757
Other comprehensive income	—			—			—			—			8,940			8,940			229			9,169
Cash dividends paid (Class A - $0.07 per share, Class B - $0.05 per share)	—			—			—			(3,421		)	—			(3,421		)	—			(3,421		)
Stock-based compensation	—			—			1,565			—			—			1,565			—			1,565
Repurchases of common stock	(1,012		)	(54		)	—			(7,794		)	—			(8,860		)	—			(8,860		)
Common stock activity, net	102			—			(88		)	—			—			14			—			14
Cumulative-effect adjustment of ASC 606	—			—			—			642			—			642			—			642
Balance at March 31, 2018	$	30,529		$	24,448		$	54,647		$	267,682		$	(187,537	)	$	189,769		$	5,061		$	194,830
Net loss ⁽¹⁾	—			—			—			(2,425		)	—			(2,425		)	305			(2,120		)
Other comprehensive loss	—			—			—			—			(4,037		)	(4,037		)	(33		)	(4,070		)
Cash dividends paid (Class A - $0.07 per share, Class B - $0.05 per share)	—			—			—			(3,363		)	—			(3,363		)	—			(3,363		)
Stock-based compensation	—			—			1,790			—			—			1,790			—			1,790
Common stock activity, net	69			—			240			—			—			309			—			309
Dividends paid to noncontrolling interests	—			—			—			—			—			—			(167		)	(167		)
Balance at June 30, 2018	$	30,598		$	24,448		$	56,677		$	261,894		$	(191,574	)	$	182,043		$	5,166		$	187,209
Net income ⁽¹⁾	—			—			—			7,896			—			7,896			305			8,201
Other comprehensive loss	—			—			—			—			(2,446		)	(2,446		)	(451		)	(2,897		)
Cash dividends paid	—			—			—			(3,375		)	—			(3,375		)	—			(3,375		)
Stock-based compensation	—			—			1,483			—			—			1,483			—			1,483
Acquisition of noncontrolling interest	—			—			(218		)	—			—			(218		)	—			(218		)
Repurchases of common stock	(43		)	(11		)	—			(425		)	—			(479		)	—			(479		)
Common stock activity, net	155			—			823			—			—			978			—			978
Dividends paid to noncontrolling interests	—			—			—			—			—			—			(182		)	(182		)
Balance at September 30, 2018	$	30,710		$	24,437		$	58,765		$	265,990		$	(194,020	)	$	185,882		$	4,838		$	190,720

(1) The total net income presented in the condensed consolidated statements of shareholders' investment for the three months ended March 31, June 30 and September 30, 2018 excludes $327, $308 and $322 respectively, in net loss attributable to the redeemable noncontrolling interests.

(See accompanying notes to condensed consolidated financial statements)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Unaudited

Based in Atlanta, Georgia, Crawford & Company ("Crawford" or "the Company") is the world's largest publicly listed independent provider of claims management and outsourcing solutions to the risk management and insurance industry, as well as to 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.

Shares of the Company's two classes of common stock are traded on the New York Stock Exchange ("NYSE") under the symbols CRD-A and CRD-B, respectively. 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. The Company's website is ~~www.crawfordandcompany.com~~www.crawco.com. The information contained on, or hyperlinked from, the Company's website is not a part of, and is not incorporated by reference into, this report.

1. Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with 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~~The Company's operating results for the three months and nine months ended and ~~the Company's~~ financial position as of September 30, ~~2017~~2019 are not necessarily indicative of the results or financial position that may be expected for the year ending December 31, ~~2017~~2019 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, and 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, ~~2016.~~2018 other than as disclosed herein.

Certain prior period amounts among the segments have been reclassified to conform to the current presentation. These reclassifications had no effect on the Company's reported consolidated results. Significant intercompany transactions have been eliminated in consolidation.

The Condensed Consolidated Balance Sheet information presented herein as of December 31, ~~2016~~2018 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, ~~2016.~~2018.

The Company consolidates the liabilities of its deferred compensation plan and the related assets, which are held in a rabbi trust and also 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, ~~2017~~2019 and December 31, ~~2016,~~2018, the liabilities of the deferred compensation plan were ~~$7,572,000~~$8,790,000 and ~~$9,385,000,~~$8,914,000, 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 ~~$16,462,000~~$16,634,000 and ~~$16,227,000,~~$16,402,000, 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.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Unaudited

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 consolidates LWI. Total assets and liabilities of LWI as of September 30, ~~2017~~2019 were ~~$10,163,000~~$12,468,000 and ~~$10,791,000,~~$8,261,000, respectively. Total assets and liabilities of LWI as of December 31, ~~2016~~2018 were ~~$9,300,000~~$12,232,000 and ~~$10,554,000,~~$10,423,000, respectively. Included in LWI's total liabilities is a loan from Crawford of ~~$8,756,000~~$4,217,000 and ~~$8,704,000~~$6,934,000 as of September 30, ~~2017~~2019 and December 31, ~~2016,~~2018, respectively.

Noncontrolling interests represent the minority shareholders' share of the net income or loss and shareholders' investment in consolidated subsidiaries. Noncontrolling interests are presented as a component of shareholders' investment in the unaudited Condensed Consolidated Balance Sheets and reflect the initial fair value of these investments by noncontrolling shareholders, along with their proportionate share of the income or loss of the subsidiaries, less any dividends or distributions. Noncontrolling interests that are redeemable at the option of the holder are presented outside of shareholders' investment as "Redeemable Noncontrolling Interests" and are ~~carried~~recorded at either their initial fair value plus any profits or losses or estimated redemption value if an adjustment is required.

2. ~~Business Acquisition~~

~~On January 4, 2017, the Company acquired 85% of the outstanding membership interests of WeGoLook~~^®, LLC, for cash consideration of $36,125,000. WeGoLook provides a variety of on-demand inspection, verification, and other field services for businesses and consumers through a mobile platform of independent contractors.

Based on our preliminary acquisition accounting, net tangible assets acquired totaled $1,040,000, including $96,000 of cash. The difference between the purchase price and the net assets acquired represents indefinite- and definite-lived intangible assets, goodwill and redeemable noncontrolling interests. The acquisition was funded primarily through additional borrowings under the Company's credit facility.

The purchase agreement also provides that: (a) $250,000 of the purchase price will be held in escrow to secure the net working capital post-closing adjustment; and (b) $800,000 of the purchase price will be held in escrow for a period of 15 months, and $1,000,000 of the purchase price will be held in escrow for a period of 24 months, after the closing date in each case, to secure any valid indemnification claims that the Company may assert for specified breaches of representations, warranties or covenants under the purchase agreement. As of September 30, 2017, the $250,000 net working capital post-closing adjustment escrow has been released.

The Company has an option, beginning on January 1, 2022 and expiring on December 31, 2023, to acquire the remaining 15% of the outstanding membership interests of WeGoLook. In the event the Company does not exercise the option, beginning on January 1, 2024, the minority members shall have the right to require the Company to acquire the minority members’ interests on or before December 31, 2024. In addition, at the time of the exercise of the option or the put, the minority members may be entitled to additional consideration depending on whether certain financial targets of WeGoLook are achieved between closing and December 31, 2021.

The acquisition was accounted for under the guidance of ASC 805-10, as a business combination under the acquisition method. The preliminary application of acquisition accounting to the assets acquired, and liabilities and redeemable noncontrolling interests assumed, as well as the results of operations of WeGoLook including income or loss attributable to redeemable noncontrolling interests, are reported within the Company’s U.S. Services segment.

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~Unaudited~~

As a result of the acquisition, the Company preliminarily recognized definite-lived intangible assets of $17,794,000 consisting of developed technology, customer relationships, non-compete agreements and established relationships with independent contractors. The estimated useful lives of these definite-lived intangible assets range from three to ten years. The Company recognized related amortization expense of $643,000 and $1,930,000 in its unaudited Condensed Consolidated Statements of Operations for the three months and nine months ended September 30, 2017. The Company preliminarily recognized goodwill of $23,977,000 related to the acquisition. The Company anticipates the goodwill attributable to the acquisition will be deductible for tax purposes. The Company recognized noncontrolling interests of $7,743,000 which were measured at fair value at the acquisition date. The noncontrolling interests have been recorded as "Redeemable Noncontrolling Interests" in the Company's unaudited Condensed Consolidated Balance Sheets. During the nine months ended September 30, 2017, no changes were made to the redemption value of the redeemable noncontrolling interests; the change in value was due to the loss for the period. See Note 1, “Basis of Presentation” for a discussion of noncontrolling interests and redeemable noncontrolling interests.

The business acquisition accounting is preliminary and subject to change, as the Company gathers additional information related to the assets acquired and liabilities and redeemable noncontrolling interests assumed, including intangible assets, other assets, accrued liabilities, deferred taxes, and uncertain tax positions. The Company is in the process of obtaining final third-party valuations of certain intangible assets; thus, the provisional measurements of intangible assets, goodwill, redeemable noncontrolling interests, and deferred income taxes are subject to change.

The Company does not anticipate the WeGoLook operations will have a material impact on the Company’s consolidated results of operations or its earnings per share during 2017. For the three months and nine months ended September 30, 2017, WeGoLook accounted for $2,180,000 and $6,338,000 of the Company’s consolidated revenues before reimbursements, respectively.

3. Recently Issued Accounting Standards

~~Derivatives and Hedging-Targeted Improvements to~~Adoption of New Accounting Standards

Financial Accounting for ~~Hedging Activities~~Leases

In ~~August 2017,~~February 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2017-12, "Targeted Improvements to Accounting for Hedging Activities." The ASU was issued to improve the financial reporting of hedging relationships to better portray the economic results of an entity's risk management activities in its financial statements. Additionally, the amendments in this update simplify the application of the hedge accounting guidance. The update is effective for annual periods beginning after December 15, 2018, and interim periods thereafter. Early adoption is permitted, with the effect of adoption reflected as of the beginning of the fiscal year of adoption. The Company is currently evaluating the effect this ASU may have on its results of operations, financial condition and cash flows. The Company is not party to any derivative contracts.

~~Earning Per Share-Distinguishing Liabilities from Equity-Derivatives and Hedging~~

In July 2017, the FASB issued ASU 2017-11, "Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815): (Part I) Accounting for Certain Financial Instruments with Down Round Features, (Part II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception." The ASU Part I changes the classification analysis of certain equity-linked financial instruments with down round features and the related disclosures. Part II of the amendments recharacterizes the indefinite deferral of certain provisions of Topic 480 and do not have an accounting effect. The update is effective for annual periods beginning after December 15, 2018, and interim periods thereafter. Early adoption is permitted, including adoption in an interim period. The Company is currently evaluating the effect this ASU may have on its results of operations, financial condition and cash flows.

~~Compensation-Stock Compensation: Scope of Stock Compensation Modification Accounting~~

In May 2017, the FASB issued ASU 2017-9, "Compensation-Stock Compensation: Scope of Stock Compensation Modification Accounting." The ASU was issued to provide clarity and reduce both (1) diversity in practice and (2) cost and complexity when applying the guidance in Topic 718, Compensation—Stock Compensation, to a change to the terms or conditions of a share-based payment award. The amendments in this update provide guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. The update is effective for annual periods beginning after December 15, 2017, and interim periods thereafter. Early adoption is permitted, including adoption in any interim period. The Company is currently evaluating the effect this ASU may have on its results of operations, financial condition and cash flows.

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~Unaudited~~

~~Compensation-Retirement Benefits: Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost~~

In March 2017, the FASB issued ASU 2017-7, "Compensation-Retirement Benefits: Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost." The ASU requires that an employer report the service cost component in the same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period. The other components of net benefit cost are required to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations, if one is presented. If a separate line item or items are used to present the other components of net benefit cost, that line item or items must be appropriately described. If a separate line item or items are not used, the line item or items used in the income statement to present the other components of net benefit cost must be disclosed. The amendments in this update also allow only the service cost component to be eligible for capitalization when applicable. The update is effective for annual periods beginning after December 15, 2017, and interim periods thereafter. Early adoption is permitted, including adoption in any interim period. The Company is currently evaluating the effect this ASU may have on its results of operations, financial condition and cash flows.

~~Simplifying the Test for Goodwill Impairment~~

In January 2017, the FASB issued ASU 2017-4, "Simplifying the Test for Goodwill Impairment." The ASU was issued to simplify subsequent measurement of goodwill. The update eliminates Step 2 from the goodwill impairment test. Under the amendments in this update, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. Additionally, an entity should consider income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss, if applicable. The Company elected to early adopt this ASU during the three-month period ended March 31, 2017, with no effect on its results of operations, financial condition or cash flows.

~~Clarifying the Definition of a Business~~

In January 2017, the FASB issued ASU 2017-1, "Clarifying the Definition of a Business." The ASU was issued to clarify the definition of a business for purposes of acquisitions and dispositions. The amendments in this update provide a more robust framework than prior guidance to use in determining when a set of assets and activities constitutes a business. The Company early adopted this ASU during the three-month period ended March 31, 2017, with no effect on its results of operations, financial condition or cash flows.

~~Restricted Cash~~

In November 2016, the FASB issued ASU 2016-18, "Restricted Cash." The ASU was issued to address diversity in practice in the classification and presentation of a change in restricted cash on the statement of cash flows. The amendments in this update require that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. The Company early adopted this ASU during the three-month period ended March 31, 2017, with no effect on its statement of cash flows.

~~Intra-Entity Transfers of Assets Other Than Inventory~~

In October 2016, the FASB issued ASU 2016-16, "Intra-Entity Transfers of Assets Other Than Inventory." The update was issued to improve the accounting for income tax consequences of intra-entity transfers of assets other than inventory. The initiative is designed to reduce the complexity in accounting standards. Under the amendment an entity should recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. Consequently, the amendments in this update eliminate the exception for an intra-entity transfer of an asset other than inventory. The update is effective for annual periods beginning after December 15, 2017, and interim periods thereafter. Early adoption is permitted. The Company is currently evaluating the effect this ASU may have on its results of operations, financial condition and cash flows.

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~Unaudited~~

~~Classification of Certain Cash Receipts and Cash Payments in the Statement of Cash Flows~~

In August 2016, the FASB issued ASU 2016-15, "Statement of Cash Flows Classification of Certain Cash Receipts and Cash Payments." The update addresses diversity in cash flow reporting issues. The guidance specifically addresses issues concerning debt repayment costs, settlement of zero coupon debt instruments, contingent consideration payments made after a business combination, proceeds from insurance claims and corporate owned life insurance beneficial interests in securitization transactions, and distributions from equity method investees. The guidance also clarifies how the predominant principle should be applied when cash receipts and cash payments have more than one class of cash flows. The update is effective for annual periods beginning after December 15, 2017, and interim periods thereafter. Early adoption is permitted. The Company is currently evaluating the effect this amendment may have on its statement of cash flows.

~~Measurement of Credit Losses on Financial Instruments~~

In June 2016, the FASB issued ASU 2016-13, "Measurement of Credit Losses on Financial Instruments." This update replaces the incurred loss methodology to record credit losses with a methodology that reflects the expected credit losses for financial assets not accounted for at fair value with gains and losses recognized through income. The amendment is effective for annual periods beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption is permitted for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. The Company is currently evaluating the effect this amendment may have on its results of operations, financial condition and cash flows.

~~Improvements to Employee Share-Based Payment Accounting~~

In March 2016, the FASB issued ASU 2016-09, "Improvements to Employee Share-Based Payment Accounting." This update was issued as part of a simplification effort for the accounting of share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, change in forfeiture accounting, and classification on the statement of cash flows. The Company adopted this standard prospectively effective January 1, 2017. Prior periods have not been adjusted. As a result of adoption, the Company recorded an entry to increase deferred tax assets and increased retained earnings in the amount of $692,000 for tax benefits not previously recorded related to stock compensation. The Company will record all excess tax benefits and tax deficiencies on share-based payment awards as a discrete item in the income statement as these awards vest or are exercised. Forfeitures will be recognized as they occur. The Company reflects all payments made to taxing authorities on behalf of employees by withholding shares as a financing activity in the statement of cash flows. During the quarter and nine months ended September 30, 2017, the Company recorded tax benefits of $0 and $200,000, respectively, as a result of adoption of this standard.

~~Simplifying the Transition to the Equity Method of Accounting~~

In March 2016, the FASB issued ASU 2016-07, "Simplifying the Transition to the Equity Method of Accounting." This update eliminates the requirement that when an investment qualifies for use of the equity method as a result of an increase in the level of ownership interest or degree of influence, an investor must adjust the investment, results of operations, and retained earnings retroactively on a step-by-step basis as if the equity method had been in effect during all previous periods that the investment had been held. The amendments in this update are effective for annual periods beginning after December 15, 2016, and interim periods thereafter. The Company adopted this standard effective January 1, 2017, with no impact to its results of operations, financial condition and cash flows.

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~Unaudited~~

~~Financial Accounting for Leases~~

~~In February 2016, the FASB issued ASU~~ 2016-02, "Financial Accounting for ~~Leases."~~Leases" together with its subsequent related amendments in 2018 and 2019, collectively referred to as Topic 842. Under ~~this update,~~Topic 842, a lessee ~~will be~~is required to recognize assets and liabilities for leases with lease terms of more than 12 months. Consistent with current GAAP, the recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee primarily will depend on its classification as a finance or operating lease. However, unlike current GAAP, whichTopic 842 also requires ~~only capital leases to be recognized on the balance sheet, this ASU will require both types of leases to be recognized on the balance sheet. The ASU also will require~~ disclosures to help investors and other financial statement users better understand the amount, timing, and uncertainty of cash flows arising from leases. These disclosures include qualitative and quantitative requirements, providing additional information about the amounts recorded in the financial statements. The Company adopted Topic 842 as of January 1, 2019 ("transition date") using the modified retrospective approach and as a result did not adjust the comparative period financial information or make the Topic 842 required lease disclosures for periods before the transition date. The Company elected the package of practical expedients to not reassess prior conclusions related to contracts containing leases, lease classification, lease term and initial direct costs as well as the practical expedient to choose not to separate nonlease components from lease components and instead account for each as a single lease component for all classes of its assets. As a result of adopting Topic 842, the Company recognized operating lease right-of-use assets of $107.3 million and current and noncurrent operating lease liabilities of $33.0 million and $89.3 million, respectively, and reversed deferred rents of $15.0 million on its unaudited Condensed Consolidated Balance Sheets. The adoption of Topic 842 resulted in no material impact to the Company's results of operations or cash flows and did not impact the Company's compliance with the financial covenants under its credit facility. See Note 4, "Lease Commitments" for further discussion on the Company's leases.

Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income

In February 2018, the FASB issued ASU 2018-02, "Income Statement-Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income." This update allows companies to reclassify stranded tax effects resulting from the 2017 Tax Cuts and Jobs Act ("Tax Act"), from accumulated other comprehensive income (loss) to retained earnings. This update is effective for annual periods beginning after December 15, 2018, and interim periods thereafter. The Company adopted this ASU for the period ended March 31, 2019 and elected not to reclassify the income tax effects of the Tax Act from accumulated other comprehensive loss to retained earnings.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Unaudited

Pending Adoption of Recently Issued Accounting Standards

Measurement of Credit Losses on Financial Instruments

In June 2016, the FASB issued ASU 2016-13, "Measurement of Credit Losses on Financial Instruments" together with its subsequent related amendments in 2018 and 2019, collectively referred to as Topic 326. Topic 326 replaces the incurred loss methodology to record credit losses with a methodology that reflects the expected credit losses for financial assets not accounted for at fair value, including trade receivables, with gains and losses recognized through income. The expected credit loss methodology incorporates past experience, current conditions and reasonable and supportable forecasts affecting collectability of these assets. Topic 326 is effective for annual periods beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption is permitted for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. The Company plans to adopt Topic 326 on January 1, 2020 using a modified retrospective approach. The Company is currently evaluating the effect Topic 326 may have on its results of operations, financial condition and cash flows.

Changes to the Disclosure Requirements for Fair Value Measurement

In August 2018, the FASB issued ASU 2018-13, “Fair Value Measurement (Topic 820).” This update amends the disclosure requirements on fair value measurements in Topic 820, Fair Value Measurement, by removing and modifying certain disclosure requirements and adding others. This update removes the requirement to disclose the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, the policy for timing of transfers between levels and the valuation processes for Level 3 fair value measurements. This update requires the disclosure of the changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period and the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. Further, this update clarifies that transfers into and out of Level 3 of the fair value hierarchy and purchases and issues of Level 3 assets and liabilities are required to be disclosed. These updates are effective for annual periods beginning after December 15, 2019, and interim periods thereafter. Early adoption is permitted and early adoption of any removed or modified disclosures upon issuance of this update is permitted while delaying adoption of the additional disclosures until the effective date. The Company is currently evaluating the effect this ASU will have on its Fair Value Measurements disclosure.

Compensation-Retirement Benefits: Changes to the Disclosure Requirements for Defined Benefit Plans

In August 2018, the FASB issued ASU 2018-14, "Compensation-Retirement Benefits-Defined Benefit Plans-General (Subtopic 715-20)." This update modifies the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. This update removes certain disclosure requirements including, but not limited to, the amounts in accumulated other comprehensive income expected to be recognized as components of net periodic benefit cost over the next fiscal year and the amount and timing of plan assets expected to be returned to the employer. This update requires the disclosure of the weighted-average interest crediting rates for cash balance plans and other plans with promised interest crediting rates and an explanation of the reasons for significant gains and losses related to changes in the benefit obligation for the period. This update also clarifies requirements for entities that provide aggregate disclosures for two or more plans. The update is effective for annual periods beginning after December 15, 2020, and interim periods thereafter. Early adoption is permitted. The Company ~~anticipates~~is currently evaluating the ~~impact of adopting~~effect this ~~standard~~ASU will ~~result in an increase in operating lease liabilities and right to use assets~~have on its ~~balance sheet.~~Retirement Plans disclosure.

Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract

In August 2018, the FASB issued ASU 2018-15, "Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40).” This update aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software, including hosting arrangements that include an internal-use software license. This update also requires the entity (customer) to expense the capitalized implementation costs of a hosting arrangement that is a service contract over the term of the hosting arrangement. Further, this update requires the presentation of the expense in the statement of income, the presentation of the costs on the statement of financial position and the classification of payments in the statement of cash flows related to capitalized implementation costs to be treated the same as the fees of the associated hosting arrangement. The update is effective for annual periods beginning after December 15, 2019, and interim periods thereafter. Early adoption is permitted. The Company is currently evaluating the effect this ASU will have on its results of operations, financial condition and cash flows.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Unaudited

3. Revenue Recognition

As of January 1, 2018, the Company adopted Accounting Standards Codification ("ASC") 606 using the modified retrospective method for those contracts which were not substantially completed as of the transition date. The reported results for the three and nine months ended September 30, 2019 and 2018 reflect the application of ASC 606.

Revenue from Contracts with Customers

~~In May 2014,~~Revenues are recognized when control of the ~~FASB issued ASU 2014-09, "Revenue from Contracts with Customers." Under ASU 2014-09, companies will be required~~promised services is transferred to ~~recognize revenue to depict~~ the ~~transfer of control for goods or services to~~Company's customers in ~~amounts~~an amount that ~~reflect~~reflects the consideration ~~to which~~ the ~~company~~Company expects to be entitled to in exchange for those ~~goods~~services. Revenues are recognized net of any sales, use 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,value added taxes collected from customers, which ~~deferred by one year the effective date of ASU 2014-09. The one year deferral of the effective date of this standard changed the effective date for the Company~~are subsequently remitted to January 1, 2018. Early adoption is permitted, but not before the original effective date. The FASB issued ASU 2016-08, "Principal versus Agent Considerations (Reporting Revenue Gross versus Net)" in March 2016, ASU 2016-10, "Revenue from Contracts with Customers: Identifying Performance Obligations and Licensing" in April 2016, ASU 2016-12, "Revenue from Contracts with Customers: Narrow-Scope Improvements and Practical Expedients," in May 2016, and ASU 2016-20, “Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers,” in December 2016. All of these amendments are intended to improve and clarify the implementation guidance of ASU 2014-09 and have the same effective date as the original standard.

The Company has reviewed a sample of contracts with its customers that represent approximately 50% of its consolidated annual revenues before reimbursements that the Company believes is representative of its significant revenue streams identified to date, and is performing procedures to confirm the initial assessment as applied to all revenue streams. The assessment of the impact on revenue and expenses based on these reviews to determine the impact to the Company’s results of operations, financial position and cash flows as a result of this guidance is ongoing.governmental authorities. As the Company completes its ~~overall assessment,~~performance obligations which are identified below, it has an unconditional right to consideration as outlined in the Company's contracts. Generally, the Company's accounts receivable are expected to be collected in less than two months, in accordance with the underlying payment terms.

The Company's Crawford Claims Solutions segment generates revenue for adjusting services provided to insurance companies and self-insured entities related to property, casualty and catastrophe losses caused by physical damage to commercial and residential real property and certain types of personal property. The Company charges on a fee-per-claim basis for each optional purchase of the claims management services exercised by its customer. Revenue is recognized over time as the performance obligations are satisfied through the effort expended to research, investigate, evaluate, document and report the claim and control of these services is transferred to the customer. Revenue is recognized based on historical claim closure rates and claim type for fixed fee claims applied utilizing a portfolio approach based on time elapsed for these claims. For claims billed on a time and expense incurred basis, which are considered variable consideration, the Company recognizes revenue at the amount in which it has the right to invoice for services performed. These methods of revenue recognition are the most accurate depiction of the transfer of the claims management services to the customer. The Company also generates revenue by providing on-demand inspection, verification and other task specific field services for businesses and consumers. Task assignment services are single optional purchase performance obligations which are generally satisfied at a point in time when the control of the service is transferred to the customer. Therefore, revenue is recognized when the customer receives the service requested.

The following table presents Crawford Claims Solutions revenues before reimbursements disaggregated by geography for the three months and nine months ended September 30, 2019 and 2018:



	Three Months Ended				Nine Months Ended
(in thousands)	September 30, 2019		September 30, 2018		September 30, 2019		September 30, 2018
U.S.	$	35,982	$	34,480	$	103,743	$	110,426
U.K.	15,123		15,803		47,325		47,397
Canada	12,008		11,692		36,276		38,857
Australia	11,886		11,739		35,220		33,889
Europe	7,429		7,234		21,265		23,887
Rest of World	3,822		4,384		11,743		14,432
Total Crawford Claims Solutions Revenues before Reimbursements	$	86,250	$	85,332	$	255,572	$	268,888

The Crawford TPA Solutions segment (formerly referred to as "Global TPA Solutions: Broadspire") is a third party administrator that generates revenue through its Claims Management and Medical Management service lines.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Unaudited

The Claims Management service line includes Workers' Compensation, Liability, Property and Disability Claims Management. This service line also performs additional services such as Accident & Health claims programs, including Affinity type claims, and disability and leave management services. Each claim referred by the customer is considered an additional optional purchase of claims management services under the agreement with the customer. The transaction price is specified in the contract and is fixed for each service. Revenue is recognized over time as services are provided as the performance obligations are satisfied through the effort expended to research, investigate, evaluate, document, and report the claim and control of these services is transferred to the customer. Revenue is recognized based on historical claim closure rates and claim type applied utilizing a portfolio approach based on time elapsed for these claims as the Company believes this is the most accurate depiction of the transfer of the claims management services to its customer. This service line also provides Risk Management Information Services. For non-claim services, revenue is recognized over time as services are provided and control of these services is transferred to the customer. Revenue is recognized as time elapses as this is the most accurate depiction of the transfer of the service to the customer.

The Company's obligation to manage claims under the Claims Management service line can range from less than one year, on a one- or two-year basis or for the lifetime of the claim. Under certain claims management agreements, the Company receives consideration from a customer at contract inception prior to transferring services to the customer, however, it would begin performing services immediately. The period between a customer’s payment of consideration and the completion of the promised services could be greater than one year. There is no difference between the amount of promised consideration and the cash selling price of the promised services. The fee is billed upfront by the Company in order to provide customers with simplified and predictable ways of purchasing its services and it is ~~also identifying~~customary to invoice service fees when the claim is assigned. The Company considered whether a significant financing component exists and ~~preparing~~determined that there is not a significant financing component at the contract level.

The Medical Management service line offers case managers who provide administration services by proactively managing medical treatment for claimants while facilitating an understanding of and participation in their rehabilitation process. Revenue for Medical Management services is recognized over time as the performance obligations are satisfied through the effort expended to ~~implement changes~~manage the medical treatment for claimants and control of these services is transferred to the customer. Medical Management services are generally billed based on time incurred, are considered variable consideration, and revenue is recognized at the amount in which the Company has the right to invoice for services performed. This method of revenue recognition is the most accurate depiction of the transfer of the Medical Management service to the customer. Medical bill review services provide an analysis of medical charges for clients’ claims to identify opportunities for savings. Medical bill review services revenues are recognized over time as control of the service is transferred to the customer. Revenue is recognized based upon the transfer of the results of the medical bill review service to the customer as this is the most accurate depiction of the transfer of the service to the customer.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Unaudited

The following tables present Crawford TPA Solutions revenues before reimbursements disaggregated by service line and geography for the three months and nine months ended September 30, 2019 and 2018:



	Three Months Ended September 30, 2019						Three Months Ended September 30, 2018
(in thousands)	Claims Management Services		Medical Management Services		Total		Claims Management Services		Medical Management Services		Total
U.S.	$	37,352	$	43,024	$	80,376	$	37,294	$	42,685	$	79,979
U.K.	2,730		—		$	2,730	2,863		—		2,863
Canada	8,210		—		8,210		9,081		—		9,081
Europe and Rest of World	8,179		—		8,179		8,348		—		8,348
Total Crawford TPA Solutions Revenues before Reimbursements	$	56,471	$	43,024	$	99,495	$	57,586	$	42,685	$	100,271



	Nine Months Ended September 30, 2019						Nine Months Ended September 30, 2018
(in thousands)	Claims Management Services		Medical Management Services		Total		Claims Management Services		Medical Management Services		Total
U.S.	$	109,700	$	127,691	$	237,391	$	112,616	$	128,359	$	240,975
U.K.	8,243		—		$	8,243	9,387		—		9,387
Canada	25,466		—		25,466		27,580		—		27,580
Europe and Rest of World	25,707		—		25,707		25,210		—		25,210
Total Crawford TPA Solutions Revenues before Reimbursements	$	169,116	$	127,691	$	296,807	$	174,793	$	128,359	$	303,152

The Company's Crawford Specialty Solutions segment principally generates revenues through its Global Technical Services and Contractor Connection service lines. The Garden City Group business, which was part of Crawford Specialty Solutions, was disposed of as of June 15, 2018. See Note 13, "Disposition of Business Line" for further discussion about this transaction.

The Global Technical Services service line generates revenues for claims management services provided to insurance companies and self-insured entities related to large, complex losses with technical adjusting and industry experts servicing a broad range of industries. Revenue is recognized over time as the performance obligations are satisfied through the effort expended to research, investigate, evaluate, document and report the claim and control of these services is transferred to the customer. Revenue is recognized based on historical claim closure rates and claim type for fixed fee claims, applied utilizing a portfolio approach based on time elapsed for these claims. For claims billed on a time and expense incurred basis, which are considered variable consideration, the Company recognizes revenue at the amount in which it has the right to invoice for services performed. These methods of revenue recognition are the most accurate depiction of the transfer of the claims management services to the customer.

The Contractor Connection service line generates revenue through its independently managed contractor network. Contractor Connection primarily generates revenue by receiving a fee for each project that is sold by its network of contractors. Revenue is recognized at a point in time once the consumer accepts the contractor's proposal as Contractor Connection’s performance obligation of referring projects to its ~~accounting policies~~contractors has been completed and ~~disclosure requirements.~~the Company is entitled to consideration at that time. The contractor takes control of the service upon the consumer’s acceptance of the contractor’s proposal.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Unaudited

The following table presents Crawford Specialty Solutions revenues before reimbursements disaggregated by service line and geography for the three months and nine months ended September 30, 2019:



	Three Months Ended September 30, 2019						Three Months Ended September 30, 2018
(in thousands)	Global Technical Services		Contractor Connection		Total		Global Technical Services		Contractor Connection		Total
U.S.	$	10,202	$	19,617	$	29,819	$	10,003	$	18,682	$	28,685
U.K.	11,728		1,263		12,991		11,931		2,034		13,965
Canada	6,294		1,838		8,132		6,117		2,268		8,385
Australia	5,935		222		6,157		6,494		240		6,734
Europe	5,141		2		5,143		5,277		1		5,278
Rest of World	6,690		—		6,690		6,379		—		6,379
Total Crawford Specialty Solutions Revenues before Reimbursements	$	45,990	$	22,942	$	68,932	$	46,201	$	23,225	$	69,426



	Nine Months Ended September 30, 2019								Nine Months Ended September 30, 2018
(in thousands)	Global Technical Services		Contractor Connection		Garden City Group		Total		Global Technical Services		Contractor Connection		Garden City Group		Total
U.S.	$	30,888	$	60,270	$	—	$	91,158	$	29,607	$	56,706	$	28,827	$	115,140
U.K.	34,444		3,955		—		38,399		34,446		6,308		—		40,754
Canada	19,522		5,773		—		25,295		18,761		6,208		1,048		26,017
Australia	16,881		608		—		17,489		17,833		999		—		18,832
Europe	14,793		3		—		14,796		16,356		3		—		16,359
Rest of World	19,100		—		—		19,100		18,035		—		—		18,035
Total Crawford Specialty Solutions Revenues before Reimbursements	$	135,628	$	70,609	$	—	$	206,237	$	135,038	$	70,224	$	29,875	$	235,137

In the normal course of business, the Company's operating segments incur certain out-of-pocket expenses that are thereafter reimbursed by its customers. The Company controls the promised good or service before it is transferred to its customer, therefore it is a principal in the transaction. These out-of-pocket expenses and associated reimbursements are reported on a gross basis within expenses and revenues, respectively, in the Company's unaudited Condensed Consolidated Statements of Operations.

Arrangements with Multiple Performance Obligations

For claims management services, the Company typically has one performance obligation; however, it also provides the customer with an option to acquire additional services. The Company sells multiple lines of claims processing and different levels of processing depending on the complexity of the claims. The Company typically provides a menu of offerings from which the customer chooses to purchase at its option. The price of each service is separate and distinct and provides a separate and distinct value to the customer. Pricing is consistent for each service irrespective of the other services or quantities requested by the customer. For example, if the ~~ASU requires increased disclosure,~~Company provides claims processing for both auto and general liability, those services are priced and delivered independently.

Contract Balances

The timing of revenue recognition, billings and cash collections result in billed accounts receivables, contract assets (reported as "Unbilled revenues at estimated billable amounts") and contract liabilities (reported as "Deferred revenues") on the Company’s unaudited Condensed Consolidated Balance Sheets. Unbilled revenues is a contract asset for revenue that has been recognized in advance of billing the customer, resulting from professional services delivered that the Company expects and is entitled to receive as consideration under certain contracts. Billing requirements vary by contract but substantially all unbilled revenues are billed within one year.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Unaudited

When the Company receives consideration from a customer prior to transferring services to the customer under the terms of certain claims management agreements, it records deferred revenues on the Company’s unaudited Condensed Consolidated Balance Sheets, which ~~in turn~~represents a contract liability. These fixed-fee service agreements typically result from the Crawford TPA Solutions segment and require the Company to handle claims on either a one- or two-year basis, or for the lifetime of the claim. In cases where it handles a claim on a non-lifetime basis, the Company typically receives an additional fee on each anniversary date that the claim remains open. For service agreements where it provides services for the life of the claim, the Company is ~~expected~~paid one upfront fee regardless of the duration of the claim. The Company recognizes deferred revenues as revenues as it performs services and transfers control of the services to ~~require certain new processes~~the customer and ~~system changes.~~ satisfies the performance obligation which it determines utilizing a portfolio approach.

The Company's ~~evaluation indicated~~deferred revenues for claims handled for one or two years are not as sensitive to changes in claim closing rates since the performance obligations are satisfied within a fixed length of time. Deferred revenues for lifetime claim handling are more sensitive to changes in claim closing rates since the Company is obligated to handle these claims to conclusion with no additional fees received for long-lived claims. For all fixed fee service agreements, revenues are recognized over the expected service periods by type of claim. Based upon its historical averages, the Company closes approximately 98% of all cases referred to it under lifetime claim service agreements within five years from the date of referral. Also, within that ~~process~~five-year period, the percentage of cases remaining open in any one particular year has remained relatively consistent from period to period. Each quarter the Company evaluates its historical case closing rates by type of claim utilizing a portfolio approach and ~~system~~makes adjustments to deferred revenues as necessary. As a portfolio approach is utilized to recognize deferred revenues, any changes ~~are required to capture~~in estimates will impact the ~~amounts and expected~~ timing of revenue recognition and any changes in estimates are recognized in the period in which they are determined.

The table below presents the deferred revenues ~~to be recognized from~~balance as of January 1, 2019 and the significant activity affecting deferred revenues during the nine months ended September 30, 2019:



(In Thousands)
Customer Contract Liabilities	Deferred Revenue
Balance at January 1, 2019	$	52,673
Quarterly additions	20,790
Revenue recognized from the prior periods	(13,871		)
Revenue recognized from current quarter additions	(5,485		)
Balance as of March 31, 2019	54,107
Quarterly additions	18,536
Revenue recognized from the prior periods	(12,640		)
Revenue recognized from current quarter additions	(6,322		)
Balance as of June 30, 2019	53,681
Quarterly additions	20,411
Revenue recognized from the prior periods	(16,597		)
Revenue recognized from current quarter additions	(4,649		)
Balance as of September 30, 2019	$	52,846

Remaining Performance Obligations

As of September 30, 2019, the Company had $92.0 million of remaining performance obligations ~~during~~related to claims and non-claims services in which the price is fixed. Remaining performance obligations consist of deferred revenues as ~~of each reporting period and the Company has completed a majority of these process and system changes at this time.~~well as certain unbilled receivables that are considered contract assets. The Company expects to ~~adopt this new standard~~recognize approximately 70% of our remaining performance obligations as ~~of January 1, 2018 using~~revenues within one year and the ~~modified retrospective method that may result~~remaining balance thereafter.

Costs to Obtain a Contract

The Company has a sales incentive compensation program where remuneration is based on the revenues recognized in the period and does not represent an incremental cost to the Company which provides a future benefit expected to be longer than one year and would meet the criteria to be capitalized and presented as a contract asset on the Company's unaudited Condensed Consolidated Balance Sheets.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Unaudited

Practical Expedients Elected

As a practical expedient, the Company does not adjust the consideration in a ~~cumulative effect adjustment as~~contract for the effects of a significant financing component it expects, at contract inception, when the ~~date~~period between a customer’s payment of ~~adoption.~~consideration and the transfer of promised services to the customer will be one year or less.

For claims management services that are billed on a time and expense incurred or per unit basis and revenue is recognized over time, the Company recognizes revenue at the amount to which it has the right to invoice for services performed.

The Company does not disclose the value of remaining performance obligations for (i) contracts for which it recognizes revenue at the amount to which it has the right to invoice for services performed, and (ii) contracts with variable consideration allocated entirely to a single performance obligation.

4. Lease Commitments

The Company determines if an arrangement is a lease at inception. The Company's and its subsidiaries' leases include office space, computer equipment, and automobiles under operating and finance leases. These lease agreements have remaining lease terms of 1 to 11 years. Some of these lease agreements include options to extend the leases for up to 5 years, options to terminate the leases within 1 year, rental escalation clauses and periodic adjustments for inflation, all of which are considered in the determination of lease payments. These lease agreements do not contain any material residual value guarantees or material restrictive covenants.

For leases with terms greater than 12 months, the Company records the related right-of-use asset and lease liability at the present value of the fixed lease payments over the term. Variable lease payments are not included in the calculation of the right-of-use asset and lease liability. The Company does not separate nonlease components from lease components and instead accounts for each as a single lease component for all classes of its assets. The Company applies a portfolio approach to effectively account for the right-of-use asset and lease liability for certain equipment leases.

When available, the Company uses the rate implicit in the lease to discount lease payments to present value; however, most of the Company's leases do not provide a readily determinable implicit rate. Therefore, the Company must estimate its incremental borrowing rate to discount the lease payments based on information available at lease commencement.

The Company, as sublessor, subleases certain office space which mostly consists of a two-building office complex in Plantation, Florida in which the terms of the primary lease and the related subleases end in December 2021. Under all of its executed sublease arrangements, the sublessees are obligated to pay the Company sublease payments of $1.1 million during the remainder of 2019, $4.3 million in 2020, $4.2 million in 2021 and $0.2 million in 2022.

The Company's finance leases are not material for the three months or nine months ended or as of September 30, 2019 and are excluded from the disclosures below. The following table presents the lease-related assets and liabilities recorded on the Company's unaudited Condensed Consolidated Balance Sheets related to its operating leases:



(in thousands)	Classification on Balance Sheet	September 30, 2019
Assets:
Operating lease	Operating lease right-of-use assets, net	$	93,610
Liabilities:
Current operating lease liabilities	Current operating lease liabilities	30,073
Noncurrent operating lease liabilities	Noncurrent operating lease liabilities	78,371
Total operating lease liabilities		$	108,444

Weighted-Average Remaining Lease Term		5.43 years
Weighted-Average Discount Rate⁽¹⁾		5.6		%

⁽¹⁾ Upon adoption of Topic 842, discount rates used for existing leases were established at the transition date.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Unaudited

The components of operating lease costs within the Company's unaudited Condensed Consolidated Statements of Operations consisted of the following for the three months and nine months ended September 30, 2019:



	Three Months Ended		Nine Months Ended
(in thousands)	September 30, 2019		September 30, 2019
Operating lease cost	$	9,298	$	28,410
Variable lease cost	2,078		5,849
Sublease income	1,114		3,086

Supplemental cash flow information related to operating leases for the three months and nine months ended September 30, 2019 were as follows:



	Three Months Ended		Nine Months Ended
(in thousands)	September 30, 2019		September 30, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases	$	9,806	$	29,220

Right-of-use assets obtained in exchange for lease obligations ⁽¹⁾	$	1,294	$	13,310

⁽¹⁾The nine months ended September 30, 2019 amount excludes $122.3 million of right-of-use assets recognized upon adoption of Topic 842.

Future undiscounted operating lease payments reconciled to total operating lease liabilities are as follows:



(in thousands)	September 30, 2019
2019	$	9,398
2020	32,187
2021	25,827
2022	14,876
2023	10,875
Thereafter	33,540
Total undiscounted lease payments	126,703
Less imputed interest	(18,259		)
Present value of future lease payments	$	108,444

The Company has entered into operating lease agreements that have not yet commenced as of September 30, 2019 with legally binding minimum lease payments of $4.5 million. The leases are expected to commence during the three months ended December 31, 2019, and have lease terms between 3 years and 10 years.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Unaudited

5. 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. The Company estimates that its effective income tax rate for 2017 will be approximately 30% after considering known discrete items. The decrease in rate is due to certain non-recurring benefits in 2017 and changes in the mix of income. The provision for income taxes on consolidated income before income taxes totaled ~~$4.9~~$5.3 million and ~~$8.6~~$1.8 million for the three months ended September 30, ~~2017~~2019 and ~~2016,~~2018, respectively. The provision for income taxes on consolidated income before income taxes totaled ~~$16.6~~$11.1 million and ~~$20.0~~$6.3 million for the nine months ended September 30, ~~2017~~2019 and ~~2016,~~2018, respectively. The overall effective tax rate ~~decreased~~increased to ~~35.7%~~36.8% for the nine months ended September 30, ~~2017~~2019 compared with ~~40.7%~~31.1% for the ~~2016~~2018 period primarily due to ~~changes~~a one-time tax planning benefit in ~~non-recurring items~~2018 related to the voluntary contribution of $10.0 million to the Company's U.S. defined benefit pension plan, the impact of the sale of the Garden City Group business (the “GCG Business”) in 2018, and ~~mix~~the arbitration and claim settlements in 2019. See Note 13, "Disposition of ~~income year over year.~~Business Line" and Note 11, "Commitments and Contingencies" for further discussion of these items.

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~Unaudited~~

5.6. Defined Benefit Pension Plans

Net periodic ~~benefit~~ cost (benefit) 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, ~~2017~~2019 and ~~2016~~2018 included the following components:


	Three months ended						Nine months ended						Three Months Ended						Nine Months Ended
(in thousands)	September 30, 2017			September 30, 2016			September 30, 2017			September 30, 2016			September 30, 2019			September 30, 2018			September 30, 2019			September 30, 2018
Service cost	$	333		$	167		$	980		$	825		$	332		$	355		$	1,004		$	1,099
Interest cost	5,656			6,726			16,829			23,298			5,565			5,282			16,763			16,017
Expected return on assets	(8,608		)	(8,024		)	(25,623		)	(28,782		)	(7,371		)	(8,718		)	(22,214		)	(26,478		)
Amortization of actuarial loss	2,782			2,911			8,297			9,729			2,689			2,696			8,073			8,117
Net periodic benefit cost	$	163		$	1,780		$	483		$	5,070
Net periodic cost (benefit)													$	1,215		$	(385	)	$	3,626		$	(1,245	)

For the ~~nine-month~~three months ended September 30, 2019 and 2018, the non-service components of net periodic pension costs of $883,000 of expense and $740,000 of income, respectively, are included in "Other (Loss) Income, net" on the unaudited Condensed Consolidated Statement of Operations. For the nine months ended September 30, 2019 and 2018, the non-service components of net periodic pension costs of $2,622,000 of expense and $2,344,000 of income, respectively, are included in "Other (Loss) Income, net" on the unaudited Condensed Consolidated Statement of Operations. For the nine month period ended September 30, ~~2017,~~2019, the Company made no contributions to the U.S. defined benefit pension plan and contributions of ~~$9,000,000~~ ~~and $4,038,000~~$527,000 to ~~its U.S. and~~the U.K. defined benefit pension plans, ~~respectively,~~ compared with contributions of ~~$9,000,000~~$19,000,000 and ~~$4,564,000~~,$4,168,000, respectively, in the comparable ~~2016~~ periods. The Company is not required to make any additional contributions to its U.S. or U.K. defined benefit pension plans for the remainder of 2017; however, the Company expects to make additional contributions of approximately $1,327,000 to its U.K. plan during the remainder of 2017. No additional contributions are expected to be made to the U.S. plan during the remainder of 2017.2018 period.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

6.Unaudited

7. Net Income Attributable to Shareholders of Crawford & Company per Common Share

The Company computes earnings per share of its non-voting Class A Common Stock ("CRD-A") and voting Class B Common Stock ("CRD-B") using the two-class method, which allocates the undistributed 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 CRD-A shares than on the CRD-B shares, subject to certain limitations. In periods when the dividend is the same for CRD-A and CRD-B or when no dividends are declared or paid to either class, the two-class method generally will yield the same earnings per share for CRD-A and CRD-B. During the first three quarters of ~~each of 2017~~2019 and ~~2016,~~2018, the Board of Directors declared a higher dividend on CRD-A than on CRD-B.

The computations of basic net income attributable to shareholders of Crawford & Company per common share were as follows:

Three months ended Nine months ended
September 30,
2017 September 30,
2016 September 30,
2017 September 30,
2016
(in thousands, except per share amounts) CRD-A CRD-B CRD-A CRD-B CRD-A CRD-B CRD-A CRD-B
Earnings per share - basic:
Numerator: ��
Allocation of undistributed earnings $ 4,703
$ 3,691
$ 4,195
$ 3,350
$ 10,858
$ 8,532
$ 10,003
$ 8,037
Dividends paid 2,193
1,226
2,166
1,234
6,593
3,695
6,459
3,703
Net income attributable to common shareholders, basic $ 6,896
$ 4,917
$ 6,361
$ 4,584
$ 17,451
$ 12,227
$ 16,462
$ 11,740

Denominator:

Weighted-average common shares outstanding, basic 31,276
24,550
30,922
24,690
31,359
24,639
30,731
24,690
Earnings per share - basic $ 0.22
$ 0.20
$ 0.21
$ 0.19
$ 0.56
$ 0.50
$ 0.54
$ 0.48

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~Unaudited~~



	Three Months Ended								Nine Months Ended
	September 30, 2019				September 30, 2018				September 30, 2019				September 30, 2018
(in thousands, except per share amounts)	CRD-A		CRD-B		CRD-A		CRD-B		CRD-A		CRD-B		CRD-A		CRD-B
Earnings per share - basic:
Numerator:
Allocation of undistributed earnings	$	4,439	$	3,308	$	2,518	$	2,004	$	5,654	$	4,249	$	2,165	$	1,717
Dividends paid	2,157		1,142		2,152		1,223		6,449		3,445		6,491		3,668
Net income attributable to common shareholders, basic	$	6,596	$	4,450	$	4,670	$	3,227	$	12,103	$	7,694	$	8,656	$	5,385

Denominator:
Weighted-average common shares outstanding, basic	30,645		22,831		30,713		24,446		30,701		23,071		30,829		24,455
Earnings per share - basic	$	0.22	$	0.19	$	0.15	$	0.13	$	0.39	$	0.33	$	0.28	$	0.22

The computations of diluted net income attributable to shareholders of Crawford & Company per common share were as follows:


	Three months ended								Nine months ended								Three Months Ended								Nine Months Ended
	September 30, 2017				September 30, 2016				September 30, 2017				September 30, 2016				September 30, 2019				September 30, 2018				September 30, 2019				September 30, 2018
(in thousands, except per share amounts)	CRD-A		CRD-B		CRD-A		CRD-B		CRD-A		CRD-B		CRD-A		CRD-B		CRD-A		CRD-B		CRD-A		CRD-B		CRD-A		CRD-B		CRD-A		CRD-B
Earnings per share - diluted:
Numerator:
Allocation of undistributed earnings	$	4,756	$	3,638	$	4,239	$	3,306	$	10,978	$	8,412	$	10,071	$	7,969	$	4,470	$	3,277	$	2,542	$	1,980	$	5,687	$	4,216	$	2,184	$	1,698
Dividends paid	2,193		1,226		2,166		1,234		6,593		3,695		6,459		3,703		2,157		1,142		2,152		1,223		6,449		3,445		6,491		3,668
Net income attributable to common shareholders, diluted	$	6,949	$	4,864	$	6,405	$	4,540	$	17,571	$	12,107	$	16,530	$	11,672	$	6,627	$	4,419	$	4,694	$	3,203	$	12,136	$	7,661	$	8,675	$	5,366

Denominator:
Weighted-average common shares outstanding, basic	31,276		24,550		30,922		24,690		31,359		24,639		30,731		24,690		30,645		22,831		30,713		24,446		30,701		23,071		30,829		24,455
Weighted-average effect of dilutive securities	821		—		743		—		797		—		469		—		495		—		677		—		415		—		622		—
Weighted-average common shares outstanding, diluted	32,097		24,550		31,665		24,690		32,156		24,639		31,200		24,690		31,140		22,831		31,390		24,446		31,116		23,071		31,451		24,455
Earnings per share - diluted	$	0.22	$	0.20	$	0.20	$	0.18	$	0.55	$	0.49	$	0.53	$	0.47	$	0.21	$	0.19	$	0.15	$	0.13	$	0.39	$	0.33	$	0.28	$	0.22

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Unaudited

Listed below are the shares excluded from the denominator in the ~~above~~preceding computation of diluted earnings per share for CRD-A because their inclusion would have been antidilutive:


	Three months ended		Nine months ended		Three Months Ended		Nine Months Ended
(in thousands)	September 30, 2017	September 30, 2016	September 30, 2017	September 30, 2016	September 30, 2019	September 30, 2018	September 30, 2019	September 30, 2018
Shares underlying stock options excluded	729	50	692	70	572	1,230	592	1,172
Performance stock grants excluded because performance conditions have not been met ⁽¹⁾	201	895	201	895	1,094	778	1,041	778


⁽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 diluted earnings per share until the performance measurements have been achieved.

The following table details shares issued during the three ~~months~~ and nine months ended September 30, ~~2017~~2019 and September 30, ~~2016.~~2018. These shares are included from their dates of issuance in the weighted-average common shares used to compute basic and diluted earnings per share for CRD-A in the table above. There were no shares of CRD-B issued during any of these periods.

Three months ended Nine months ended
(in thousands) September 30,
2017 September 30,
2016 September 30,
2017 September 30,
2016
CRD-A issued under Non-Employee Director Stock Plan 9
2
99
121
CRD-A issued under the Employee Stock Purchase Plan 102
119
102
119
CRD-A issued under the U.K. ShareSave Scheme 4
10
63
151
CRD-A issued under the International Employee Stock Purchase Plan 8
7
8
7
CRD-A issued under the Executive Stock Bonus Plan —
13
107
17
CRD-A issued under the 2016 Omnibus Stock and Incentive Plan 75
—
137
—

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~Unaudited~~



	Three Months Ended		Nine Months Ended
(in thousands)	September 30, 2019	September 30, 2018	September 30, 2019	September 30, 2018
CRD-A issued under Non-Employee Director Stock Plan	2	7	87	114
CRD-A issued under the Employee Stock Purchase Plan	131	144	131	144
CRD-A issued under the U.K. ShareSave Scheme	14	3	280	57
CRD-A issued under International Plan	4	9	4	9
CRD-A issued under Executive Stock Bonus Plan	—	—	30	—
CRD-A issued under 2016 Omnibus Stock and Incentive Plan	3	—	62	—

The Company's share repurchase authorization, approved in ~~August 2014,~~July 2017 (the ~~"2014~~"2017 Repurchase Authorization"), provided the Company with the ability to repurchase up to 2,000,000 shares of CRD-A or CRD-B (or both). The ~~2014~~2017 Repurchase Authorization was terminated on ~~July 28, 2017.~~May 8, 2019.

Effective ~~July 29, 2017,~~May 9, 2019, the Company's Board of Directors authorized the repurchase of up to 2,000,000 shares of CRD-A or CRD-B (or ~~both)~~a combination of the two) through ~~July~~December 31, 2020 (the ~~"2017~~"2019 Repurchase Authorization"). Under the ~~2017~~2019 Repurchase Authorization, repurchases may be made for cash, in the open market or privately negotiated transactions at such times and for such prices as management deems appropriate, subject to applicable contractual and regulatory restrictions. At September 30, ~~2017,~~2019, the Company had remaining authorization to repurchase ~~1,829,263~~1,014,541 shares under the ~~2017~~2019 Repurchase Authorization.

During the three months ended September 30, ~~2017,~~2019, the Company repurchased ~~193,527~~401,892 shares of CRD-A ~~of which 75,000 shares were repurchased prior to July 29, 2017, under the 2014 Repurchases Authorization~~ and ~~127,100~~231,137 shares of CRD-B ~~of which 74,890 shares were repurchased under the 2014 Repurchase Authorization prior to July 29, 2017,~~ at an average cost of ~~$7.77~~$9.72 and ~~$8.87,~~$9.43, respectively. During the three months ended September 30, ~~2016 the Company did not repurchase any shares of CRD-A or CRD-B. During the nine months ended September 30, 2017,~~2018, the Company repurchased ~~549,847~~43,190 shares of CRD-A and ~~175,588~~10,867 shares of CRD-B at an average cost of ~~$8.19~~$8.86 and ~~$8.89,~~$8.87, respectively.

During the nine months ended September 30, ~~2016~~2019, the Company ~~did not repurchase any~~repurchased 1,103,398 shares of CRD-A ~~or CRD-B.~~and 1,680,377 shares of CRD-B at an average cost of $9.33 and $9.16, respectively, of which 421,427 shares of CRD-A and 1,376,889 shares of CRD-B were purchased pursuant to a stock purchase agreement authorized by the Board of Directors separate from the 2017 Repurchase Authorization and the 2019 Repurchase Authorization. During the nine months ended September 30, 2018, the Company repurchased 1,055,148 shares of CRD-A and 64,755 shares of CRD-B at an average cost of $8.30 and $8.95, respectively.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

7.Unaudited

8. Accumulated Other Comprehensive Loss

Comprehensive income (loss) for the Company consists of the total of net 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, 2017 Nine months ended September 30, 2017
(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 $ (31,234 ) $ (174,791 ) $ (206,025 ) $ (33,449 ) $ (178,324 ) $ (211,773 )
Other comprehensive income before reclassifications 7,000
—
7,000
9,215
—
9,215
Amounts reclassified from accumulated other comprehensive income —
1,745
1,745
—
5,278
5,278
Net current period other comprehensive income 7,000

1,745

8,745
9,215
5,278
14,493
Ending balance $ (24,234 )
$ (173,046 )
$ (197,280 ) $ (24,234 ) $ (173,046 ) $ (197,280 )

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~Unaudited~~



	Three Months Ended September 30, 2019									Nine Months Ended September 30, 2019
(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	$	(35,531	)	$	(176,103	)	$	(211,634	)	$	(36,352	)	$	(180,095	)	$	(216,447	)
Other comprehensive loss before reclassifications	(2,472		)	—			(2,472		)	(1,651		)	—			(1,651		)
Amounts reclassified from accumulated other comprehensive income	—			1,984			1,984			—			5,976			5,976
Net current period other comprehensive (loss) income	(2,472		)	1,984			(488		)	(1,651		)	5,976			4,325
Ending balance	$	(38,003	)	$	(174,119	)	$	(212,122	)	$	(38,003	)	$	(174,119	)	$	(212,122	)


	Three months ended September 30, 2016									Nine months ended September 30, 2016									Three Months Ended September 30, 2018									Nine Months Ended September 30, 2018
(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			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	$	(19,817	)	$	(194,002	)	$	(213,819	)	$	(24,347	)	$	(198,284	)	$	(222,631	)	$	(25,119	)	$	(166,455	)	$	(191,574	)	$	(26,320	)	$	(170,157	)	$	(196,477	)
Other comprehensive (loss) income before reclassifications	(4,194		)	—			(4,194		)	336			—			336
Other comprehensive loss before reclassifications																			(4,279		)	—			(4,279		)	(3,078		)	—			(3,078		)
Amounts reclassified from accumulated other comprehensive income	—			2,171			2,171			—			6,453			6,453			—			1,833			1,833			—			5,535			5,535
Net current period other comprehensive (loss) income	(4,194		)	2,171			(2,023		)	336			6,453			6,789			(4,279		)	1,833			(2,446		)	(3,078		)	5,535			2,457
Ending balance	$	(24,011	)	$	(191,831	)	$	(215,842	)	$	(24,011	)	$	(191,831	)	$	(215,842	)	$	(29,398	)	$	(164,622	)	$	(194,020	)	$	(29,398	)	$	(164,622	)	$	(194,020	)


⁽¹⁾	Retirement liabilities reclassified to net income are related to the amortization of actuarial losses and are included in ~~"Selling, general, and administrative expenses"~~"Other (Loss) Income, net" in the Company's unaudited Condensed Consolidated Statements of Operations. See Note 5,6, "Defined Benefit Pension Plans" for additional details.

The other comprehensive loss amounts attributable to noncontrolling interests ~~shown~~presented in the Company's unaudited Condensed Consolidated Statements of Shareholders' Investment are foreign currency translation adjustments.

8.NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Unaudited

9. Fair Value Measurements

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

Fair Value Measurements at September 30, 2017
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⁾
$ 10,127
$ 10,127
$ —
$ —



			Fair Value Measurements at September 30, 2019
					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⁾	$	10,031	$	10,031	$	—	$	—

Liabilities:
Contingent earnout liability ⁽²⁾	697		—		—		697


⁽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 contingent earnout liability relates to recent business acquisitions by the Crawford Specialty Solutions operating segment. The fair value of the contingent earnout liability was estimated using internally-prepared revenue projections, which is Level 3 data, with the maximum possible earnout of $1,152,000. As such, the fair value is not expected to vary materially. The fair value of the contingent earnout liability is included in "Other accrued liabilities" and "Other noncurrent liabilities" on the Company's unaudited Condensed Consolidated Balance Sheets, based upon the term of each contingent earnout agreement.

Fair Value Disclosures

There were no transfers of assets between fair value levels during the three months orand nine months ended September 30, ~~2017.~~2019. 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~~recorded value approximates fair value. These assets and liabilities are measured within Level 2 of the fair value hierarchy.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Unaudited

9.10. Segment Information

Financial information for the three months and nine months ended September 30, ~~2017~~2019 and ~~2016~~2018 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						Three Months Ended						Nine Months Ended
(in thousands)	September 30, 2017			September 30, 2016			September 30, 2017			September 30, 2016			September 30, 2019			September 30, 2018			September 30, 2019			September 30, 2018
Revenues:
U.S. Services	$	63,052		$	56,530		$	184,843		$	173,969
International	110,784			120,950			331,019			360,425
Broadspire	76,683			76,676			231,544			227,975
Garden City Group	20,032			23,130			59,659			74,494
Crawford Claims Solutions													$	86,250		$	85,332		$	255,572		$	268,888
Crawford TPA Solutions													99,495			100,271			296,807			303,152
Crawford Specialty Solutions													68,932			69,426			206,237			235,137
Total segment revenues before reimbursements	270,551			277,286			807,065			836,863			254,677			255,029			758,616			807,177
Reimbursements	16,115			18,101			43,103			47,101			11,165			9,834			31,449			41,282
Total revenues	$	286,666		$	295,387		$	850,168		$	883,964		$	265,842		$	264,863		$	790,065		$	848,459

Segment Operating Earnings (Loss):
U.S. Services	$	9,537		$	9,354		$	26,187		$	27,943
International	10,165			13,460			29,682			31,867
Broadspire	8,240			8,263			24,235			23,497
Garden City Group	188			2,152			(2,267		)	5,982
Segment Operating Earnings
Crawford Claims Solutions													$	2,661		$	(135	)	$	4,058		$	5,110
Crawford TPA Solutions													9,347			8,055			21,106			24,014
Crawford Specialty Solutions													13,301			14,363			38,108			34,423
Total segment operating earnings	28,130			33,229			77,837			89,289			25,309			22,283			63,272			63,547

Deduct:
Unallocated corporate and shared (costs) and credits, net	(4,078		)	(6,947		)	(6,333		)	(17,454		)
Unallocated corporate and shared costs, net													(1,649		)	(5,798		)	(2,393		)	(7,316		)
Net corporate interest expense	(2,524		)	(2,262		)	(6,674		)	(7,553		)	(3,162		)	(2,398		)	(8,346		)	(7,402		)
Stock option expense	(468		)	(176		)	(1,342		)	(403		)	(450		)	(393		)	(1,348		)	(1,355		)
Amortization of customer-relationship intangible assets	(2,737		)	(2,401		)	(8,235		)	(7,280		)	(2,829		)	(2,786		)	(8,429		)	(8,342		)
Restructuring and special charges	(1,431		)	(1,488		)	(8,818		)	(7,431		)
Arbitration and claim settlements													(1,200		)	—			(12,552		)	—
Loss on disposition of business line													—			(1,201		)	—			(18,996		)
Income before income taxes	$	16,892		$	19,955		$	46,435		$	49,168		$	16,019		$	9,707		$	30,204		$	20,136

~~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~~three operating segments and make resource allocation and certain compensation decisions. The Company believes this measure is useful to ~~others~~investors 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 and credits, net corporate interest expense, stock option expense, amortization of customer-relationship intangible assets, goodwill and intangible asset impairment charges, restructuring and special charges, arbitration and claim settlements, loss on disposition of business line, income taxes, and net income or loss attributable to noncontrolling interests and redeemable 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~~three operating segments, prior period amounts presented in the current period financial statements are adjusted to conform to the current allocation process.

During the 2019 first quarter, the Company realigned certain operations within Canada from the Crawford Claims Solutions segment to the Crawford Specialty Solutions segment to be consistent with current operating segment responsibilities. Previously reported amounts have been reclassified to reflect these changes. No other changes in operating responsibilities occurred. These transfers are not material to the Company's financial statements.

Intersegment transactions are not material for any period presented.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Unaudited

The Company has a global service line reporting structure consisting of Crawford Claims Solutions, Crawford TPA Solutions (formerly referred to as "Crawford TPA Solutions: Broadspire") and Crawford Specialty Solutions, which is comprised of the Global Technical Services and Contractor Connection service lines, and the Garden City Group prior to its disposal on June 15, 2018.

Revenues before reimbursements by major service line in the ~~U.S. Services~~Crawford TPA Solutions segment, which trades under the Broadspire brand globally, and the ~~Broadspire~~Crawford Specialty Solutions segment are shown in the following table. ~~It is not practicable to provide revenues by service line for the International segment.~~ The Company considers all ~~Garden City Group~~Crawford Claims Solutions revenues to be derived from one service line.

Three months ended Nine months ended
(in thousands) September 30,
2017 September 30,
2016 September 30,
2017 September 30,
2016
U.S. Services
Claims Field Operations $ 22,596
$ 21,657
$ 65,965
$ 62,363
Technical Services 7,990
7,127
22,123
21,056
Catastrophe Services 12,016
9,198
33,806
35,153
Subtotal U.S. Claims Services 42,602
37,982
121,894
118,572
Contractor Connection 18,270
18,548
56,611
55,397
WeGoLook 2,180
—
6,338
—
Total Revenues before Reimbursements--U.S. Services $ 63,052
$ 56,530
$ 184,843
$ 173,969

Broadspire
Medical Management Services 40,395
41,149
121,754
121,433
Workers' Compensation, Disability and Liability Claims Management 32,656
32,028
99,245
95,910
Risk Management Information Services 3,632
3,499
10,545
10,632
Total Revenues before Reimbursements--Broadspire $ 76,683
$ 76,676
$ 231,544
$ 227,975



	Three Months Ended				Nine Months Ended
(in thousands)	September 30, 2019		September 30, 2018		September 30, 2019		September 30, 2018
Crawford TPA Solutions
Claims Management Services	$	56,471	$	57,586	$	169,116	$	174,793
Medical Management Services	43,024		42,685		127,691		128,359
Total Revenues before Reimbursements--Crawford TPA Solutions	$	99,495	$	100,271	$	296,807	$	303,152
Crawford Specialty Solutions
Global Technical Services	$	45,990	$	46,201	$	135,628	$	135,038
Contractor Connection	22,942		23,225		70,609		70,224
Garden City Group	—		—		—		29,875
Total Revenues before Reimbursements--Crawford Specialty Solutions	$	68,932	$	69,426	$	206,237	$	235,137

~~10.~~11. 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, ~~2017,~~2019, the aggregate committed amount of letters of credit outstanding under the credit facility was ~~$14,470,000.~~$11,636,000.

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~~laws. From time to time the Company faces claims and investigations by employees, former employees, and governmental entities under such ~~laws.~~laws or employment contracts with such employees or former employees. 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.

~~11. Restructuring and Special Charges~~

~~Total restructuring and special charges for~~During the three months ended June 30, 2019, the Company recognized an expense in the amount of $11.4 million related to an arbitration panel awarding three of four former executives of the Company's former Garden City Group business unit additional payments associated with their departure from the Garden City Group on December 31, 2015. In August 2019, the Company received a claim from the fourth former executive of the Garden City Group. This claim was settled in October for $1.2 million, which is reflected in the three months ended September 30, 2019 as "Arbitration and claim settlements" on the unaudited Condensed Consolidated Statements of Operations. The total for the nine months ended September 30, ~~2017 were $1,431,000~~2019 is $12.6 million, and ~~$8,818,000, respectively.~~is presented as "Arbitration and claim settlements" on the unaudited Condensed Consolidated Statements of Operations. There are no other potential claimants related to this matter.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Unaudited

12. Restructuring Charges

~~Restructuring~~There were no restructuring charges for the three months and nine months ended September 30, ~~2017 of $1,431,000~~2019 and $8,818,000 were incurred for the implementation and phase in of the Company's Global Business Services Center in Manila, Philippines and Global Technology Services Center in Pune, India (the "Centers"), restructuring and integration costs related to reductions of administrative costs and consolidation of management layers in certain operations, and other restructuring charges for asset impairments and lease termination costs.2018.

~~The following table shows the restructuring charges incurred by type of activity:~~

Three months ended Nine months ended
(in thousands) September 30,
2017 September 30,
2016 September 30,
2017 September 30,
2016
Implementation and phase-in of the Centers $ 91
$ 775
$ 314
$ 3,177
Restructuring and integration costs 741
586
7,457
2,189
Asset impairments and lease termination costs 599
—
1,047
1,165
Total restructuring charges $ 1,431
$ 1,361
$ 8,818
$ 6,531

Costs associated with the Centers were primarily for professional fees and severance costs. Costs associated with the restructuring and integration activities were primarily in U.S. administrative areas and the International segment and were predominantly for severance costs. Asset impairments and lease termination costs were incurred for obsolete software and the exiting of certain leased facilities.

As of September 30, ~~2017~~,2019, the following liabilities remained on the Company's unaudited Condensed Consolidated Balance Sheets related to restructuring ~~charges~~.charges. The rollforward of these ~~costs~~liabilities toSeptember 30, ~~2017~~2019 were as follows:


	Three months ended September 30, 2017																Three Months Ended September 30, 2019
(in thousands)	Deferred rent				Accrued compensation and related costs			Accounts payable			Other accrued liabilities			Total			Deferred rent		Accrued compensation and related costs			Other accrued liabilities			Total
Beginning balance, June 30, 2017	$	2,241			$	5,196		$	—		$	1,069		$	8,506
Beginning balance, June 30, 2019																	$	—	$	401		$	486		$	887
Additions	348			—	734			101			248			1,431			—		—			—			—
Adjustments to accruals	(300		)		—			—			—			(300		)	—		—			—			—
Cash payments	—				(2,733		)	(81		)	(545		)	(3,359		)	—		(19		)	(8		)	(27		)
Ending balance, September 30, 2017	$	2,289			$	3,197		$	20		$	772		$	6,278

Ending balance, September 30, 2019																	$	—	$	382		$	478		$	860


	Nine months ended September 30, 2017																Nine Months Ended September 30, 2019
(in thousands)	Deferred rent				Accrued compensation and related costs			Accounts payable			Other accrued liabilities			Total			Deferred rent			Accrued compensation and related costs			Other accrued liabilities			Total
Beginning balance, December 31, 2016	$	3,066			$	1,525		$	617		$	1,949		$	7,157
Beginning balance, December 31, 2018																	$	1,302		$	477		$	486		$	2,265
Additions	348			—	7,567			195			708			8,818			—			—			—			—
Adjustments to accruals(1)	(1,125		)		—			—			(431		)	(1,556		)	(1,302		)	—			—			(1,302		)
Cash payments	—				(5,895		)	(792		)	(1,454		)	(8,141		)	—			(95		)	(8		)	(103		)
Ending balance, September 30, 2017	$	2,289			$	3,197		$	20		$	772		$	6,278

Ending balance, September 30, 2019																	$	—		$	382		$	478		$	860

~~Special Charges~~⁽¹⁾The deferred rent adjustment relates to the Company's adoption of Topic 842 as of the transition date in which the deferred rent liabilities were reclassed against the right-of-use assets to which the liabilities relate.

13. Disposition of Business Line

On June 15, 2018, the Company completed the sale of its GCG Business which was a component of the Crawford Specialty Services segment. The ~~Company recorded no special charges~~disposal of this business did not represent a strategic shift in the Company's operations. Pretax losses for the ~~three months and~~GCG Business, inclusive of retained corporate overhead, of $3,932,000 are included in the unaudited Condensed Consolidated Statements of Operations for the nine months ended September 30, 2017 and $127,000 and $900,000 for the three months and nine months ended September 30, 2016, respectively. The special charges for the three months and nine months ended September 30, 2016 consisted of legal and professional fees.2018.

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~Unaudited~~

Report of Independent Registered Public Accounting Firm

~~12. Subsequent Event~~

~~On October 11, 2017,~~To the Company, its subsidiaries Crawford & Company Risk Services Investments Limited, Crawford & Company (Canada) Inc. and Crawford & Company (Australia) Pty. Ltd. (the Company, together with such subsidiaries, as borrowers (the "Borrowers")), Wells Fargo Bank, National Association, as administrative agent and a lender ("Wells Fargo"), Bank of America, N.A., as syndication agent and a lender, Citizens Bank, N.A., as documentation agent and a lender, and the other lenders party thereto, entered into an Amended and Restated Credit Agreement (the "Amended and Restated Credit Agreement"), which amended and restated that certain Credit Agreement, dated as of December 8, 2011, by and among, inter alia, the Borrowers, Wells Fargo and the other lenders from time to time party thereto (as previously amended, the "Original Credit Agreement"). In connection with the Amended and Restated Credit Agreement, the Company, the Company’s guarantor subsidiaries party thereto and Wells Fargo entered into an Amended and Restated Pledge and Security Agreement (the "Amended and Restated Pledge and Security Agreement") and an Amended and Restated Guaranty Agreement ( the "Amended and Restated Guaranty Agreement"), each dated as of the date of the Amended and Restated Credit Agreement.

The Amended and Restated Credit Agreement: (i) increases the aggregate commitments under the Original Credit Agreement from $400.0 million to $450.0 million, without impacting the Company’s ability, subject to the satisfaction of certain conditions and its receipt of additional commitments, to exercise its option to further increase the revolving loan commitments by up to $200.0 million (previously $100.0 million under the Original Credit Agreement); (ii) extends the maturity date under the Amended and Restated Credit Agreement to November 23, 2022 (the maturity date was November 25, 2018 under the Original Credit Agreement); (iii) reduces the interest margin ranges to 1.30% to 2.10% for LIBOR loans (previously 1.50% to 2.25%) and 0.30% to 1.10% for Base Rate loans (previously 0.50% to 1.25%); (iv) reduces the minimum required fixed charge coverage ratio to 1.10 to 1.00 (previously 1.25 to 1.00); and (v) amends the leverage ratio tests to set a maximum permitted senior secured leverage ratio of 3.25 to 1.00 and set a maximum permitted total leverage ratio of 4.25 to 1.00, among other things.

The obligations of the Borrowers under the Amended and Restated Credit Agreement are guaranteed by each existing material domestic subsidiary of the Company, certain other domestic subsidiaries of the Company and certain existing material foreign subsidiaries of the Company that are disregarded entities for U.S. income tax purposes (each such foreign subsidiary, a "Disregarded Foreign Entity"), and such obligations are required to be guaranteed by each subsequently acquired or formed material domestic subsidiary and Disregarded Foreign Entity (each, a "Guarantor"), and the obligations of the Borrowers other than the Company ("Foreign Borrowers") for which the Company is not the primary obligor are also guaranteed by the Company. In addition, (i) the Borrowers’ obligations under the Amended and Restated Credit Agreement are secured by a first priority lien (subject to liens permitted by the Amended and Restated Credit Agreement) on substantially all of the personal property of the Company and the Guarantors as set forth in the Amended and Restated Pledge and Security Agreement and (ii) the obligations of the Foreign Borrowers are secured by a first priority lien on 100% of the capital stock of the Foreign Borrowers.

~~REVIEW REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM~~

~~The~~ Shareholders and Board of Directors of

Crawford & Company

Results of Review of Interim Financial Statements

We have reviewed the accompanying condensed consolidated balance sheet of Crawford & Company (the Company) as of September 30, ~~2017, and~~2019, the related condensed consolidated statements of operations, comprehensive income, and ~~shareholders'~~shareholders’ investment for the three-month and nine-month periods ended September 30, ~~2017~~2019 and ~~2016, and~~2018, the condensed consolidated statements of cash flows for the nine-month periods ended September 30, ~~2017~~2019 and ~~2016. These~~2018, and the related notes (collectively referred to as the “condensed consolidated interim financial statements”). Based on our reviews, we are not aware of any material modifications that should be made to the condensed consolidated interim financial statements ~~are the responsibility of the Company's management.~~for them to be in conformity with U.S. generally accepted accounting principles.

We ~~conducted our review~~have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States). (PCAOB), the consolidated balance sheet of the Company as of December 31, 2018, and the related consolidated statements of operations, comprehensive income, cash flows, and shareholders’ investment for the year then ended, and the related notes (not presented herein); and in our report dated February 25, 2019, we expressed an unqualified audit opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of December 31, 2018, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

Basis for Review Results

These financial statements are the responsibility of the Company's management. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the SEC and the PCAOB. We conducted our review in accordance with the standards of the PCAOB. A review of interim financial ~~information~~statements consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the ~~Public Company Accounting Oversight Board (United States),~~PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

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

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheet of Crawford & Company as of December 31, 2016, and the related consolidated statements of operations, comprehensive income (loss), cash flows, and shareholders' investment for the year then ended (not presented herein) and we expressed an unqualified audit opinion on those consolidated financial statements in our report dated February 27, 2017. In our opinion, the accompanying condensed consolidated balance sheet of Crawford & Company as of December 31, 2016, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

/s/ Ernst & Young LLP

~~Atlanta, Georgia~~November 4, 2019

~~November 6, 2017~~

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

Cautionary Statement Concerning Forward-Looking Statements

This report contains forward-looking statements within the meaning of that term in the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934. Statements contained in this report that are not statements of historical fact are forward-looking statements made pursuant to the "safe harbor" provisions thereof. These statements may relate to, among other things, our expected future operating results and financial condition, our ability to grow our revenues and reduce our operating expenses,expectations regarding our anticipated contributions to our underfunded defined benefit pension plans, collectability of our billed and unbilled accounts receivable, financial results from our recently completed acquisitions, our continued compliance with the financial and other covenants contained in our financing agreements, ~~expectations regarding the timing, costs and synergies from our global business and technology services centers~~ and our other long-term capital resource and liquidity requirements. These statements may also relate to our business strategies, goals and expectations concerning our market position, future operations, margins, case and project volumes, profitability, contingencies, liquidity position, and capital resources. The words "anticipate", "believe", "could", "would", "should", "estimate", "expect", "intend", "may", "plan", "goal", "strategy", "predict", "project", "will" and similar terms and phrases, or the negatives thereof, identify forward-looking statements contained in this report.

Although we believe the assumptions upon which these forward-looking statements are based are reasonable, any of these assumptions could prove to be inaccurate and the forward-looking statements based on these assumptions could be incorrect. Our operations and the forward-looking statements related to our operations involve risks and uncertainties, many of which are outside our control, and any one of which, or a combination of which, could materially adversely affect our financial condition and results of operations, and whether the forward-looking statements ultimately prove to be correct. Included among the risks and uncertainties we face are risks related to the following:

a decline in cases referred to us for any reason, including changes in the degree to which property and casualty insurance carriers outsource their claims handling functions,

~~the project-based nature of our Garden City Group segment, including associated fluctuations in revenue,~~

changes in global economic conditions,

changes in interest rates,

changes in foreign currency exchange rates,

changes in regulations and practices of various governmental authorities,

changes in our competitive environment,

changes in the financial condition of our clients,

the loss of any material customer,

our ability to successfully integrate the operations of acquired businesses,

our ability to achieve projected levels of efficiencies and cost savings from our Global Business Services Center in Manila, Philippines and our Global Technology Services Center in Pune, India (the "Centers"),

regulatory changes related to funding of defined benefit pension plans,

our U.S., U.K. and ~~U.K.~~other international defined benefit pension plans and our future funding obligations thereunder,

our ability to complete any transaction involving the acquisition or disposition of assets on terms and at times acceptable to us,

our ability to identify new revenue sources not tied to the insurance underwriting cycle,

our ability to develop or acquire information technology resources to support and grow our business,

our ability to attract and retain qualified personnel,

our ability to renew existing contracts with clients on satisfactory terms,

our ability to collect amounts due from our clients and others,

continued availability of funding under our financing agreements,

general risks associated with doing business outside the U.S.,including changes in tax rates,

our ability to comply with the covenants in our financing or other agreements,

~~changes in market conditions or legislation (including judicial interpretation thereof) relating to class actions, which may make it more difficult for plaintiffs to bring such actions,~~

changes in the frequency or severity of man-made or natural disasters,

the ability of our third-party service providers, used for certain aspects of our internal business functions, to meet expected service levels,

our ability to prevent or detect cybersecurity breaches and cyber incidents,

our ability to achieve targeted integration goals with the consolidation and migration of multiple software platforms,

risks associated with our having a controlling shareholder, and

impairments of goodwill or our other indefinite-lived intangible assets.

As a result, undue reliance should not be placed on any forward-looking statements. Actual results and trends in the future may differ materially from those expressed or implied by the forward-looking statements. Forward-looking statements speak only as of the date they are made and we undertake no obligation to publicly update any of these forward-looking statements in light of new information or future events.

The following Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") should be read in conjunction with 1)(i) our unaudited condensed consolidated financial statements and accompanying notes thereto for the three months and nine months ended September 30, ~~2017~~2019 and ~~2016~~2018, and as of September 30, ~~2017~~2019, and December 31, ~~2016~~2018, contained in Item 1 of this Quarterly Report on Form 10-Q, and 2)(ii) our Annual Report on Form 10-K for the year ended December 31, ~~2016.~~2018. As described in Note 1, "Basis of Presentation," the financial results of our operations outside of the U.S., Canada, the Caribbean, and certain subsidiaries in the Philippines are included in our consolidated financial statements on a two-month delayed basis (fiscal year-end of October 31) as permitted by U.S. generally accepted accounting principles ("GAAP") in order to provide sufficient time for accumulation of their results.

Business Overview

Based in Atlanta, Georgia, Crawford & Company (~~www.crawfordandcompany.com~~www.crawco.com) is the world's largest publicly listed independent provider of claims management and outsourcing solutions to the risk management and insurance industry, as well as to 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.

Shares of the Company's two classes of common stock are traded on the New York Stock Exchange under the symbols CRD-A and CRD-B, respectively. 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.

The Company delivers services to its clients through a global service line reporting structure consisting of three operating segments: (i) Crawford Claims Solutions; (ii) Crawford TPA Solutions (formerly referred to as "Crawford TPA Solutions: Broadspire"), which trades under the Broadspire brand globally; and (iii) Crawford Specialty Solutions. Crawford Claims Solutions serves the global property and casualty insurance company markets. Crawford TPA Solutions serves the global casualty, disability and self-insurance marketplace worldwide. Crawford Specialty Solutions serves the global property and casualty insurance company markets, and prior to the sale of the Garden City Group business line on June 15, 2018, the class action, regulatory, mass tort, bankruptcy, and other legal settlement markets.

As discussed in more detail in subsequent sections of this MD&A, ~~we have four operating segments: U.S. Services; International; Broadspire; and Garden City Group. Our four~~our three operating segments represent components of our Company for which separate financial information is available, and which is evaluated regularly by our chief operating decision maker ("CODM") in deciding how to allocate resources and in assessing operating performance. ~~U.S. Services primarily serves~~

During the ~~property and casualty insurance company markets~~2019 first quarter, the Company realigned certain operations within Canada from the Crawford Claims Solutions segment to the Crawford Specialty Solutions segment. Previously reported amounts have been conformed to reflect these changes. No other changes in operating responsibilities occurred. These transfers are not material to the U.S. International serves the property and casualty insurance company and self-insurance markets outside the U.S. Broadspire serves the self-insurance marketplace, primarily in the U.S. Garden City Group serves the class action, regulatory, mass tort, bankruptcy, and other legal settlement markets, primarily in the U.S.Company's financial statements.

Insurance companies rely on us for certain services such as field investigation and the evaluation of property and casualty insurance claims. ~~We continue to experience increased utilization by insurance companies of the managed repair network provided by our Contractor Connection division.~~

Self-insured entities typically rely on us for a broader range of services. In addition to field investigation and claims evaluation, we may also provide initial loss reporting services for their claimants, loss mitigation services such as medical bill review, medical case management and vocational rehabilitation, risk management information services, and trust fund administration to pay their claims.

~~We also perform~~ Our Contractor Connection service line provides a managed contractor network to insurance carriers and consumer markets. Prior to the June 15, 2018 sale, the Garden City Group service line provided legal settlement administration services related to class action settlements, mass tort claims and bankruptcies, including identifying and qualifying class members, determining and dispensing settlement payments, and administering settlement funds.

The global claims management services market is highly competitive and comprised of a large number of companies ~~of varying~~that vary in size and that offer a varied scope of services. The demand from insurance companies and self-insured entities for services provided by independent claims service firms like us is largely dependent on industry-wide claims volumes, which are affected by, among other things, the insurance underwriting cycle, ~~weather-related~~weather related events, general economic activity, overall employment levels and workplace injury rates. Demand is also impacted by decisions insurance companies and self-insured entities make with respect to the level of claims outsourced to independent claim service firms as opposed to those handled by their own in-house claims adjusters. In addition, our ability to retain clients and maintain or increase case referrals is also dependent in part on our ability to continue to provide high-quality, competitively priced services and effective sales efforts.

We typically earn our revenues on an individual fee-per-claim basis for claims management services that we provide to insurance companies and self-insured entities. Accordingly, the volume of claim referrals to us is a key driver of our revenues. Generally, fees are earned on cases as services are provided, which generally occurs in the period the case is assigned to us, although sometimes a portion or substantially all of the revenues generated by a specific case assignment will be earned in subsequent periods. We cannot predict the future trend of case volumes for a number of reasons, including the frequency and severity of ~~weather-related~~weather related cases and the occurrence of natural and man-made disasters, which are a significant source of cases for us and are not subject to accurate forecasting.

The legal settlement administration market within which our Garden City Group segment operates is also highly competitive but is comprised of a limited number of specialized entities. The demand for legal settlement administration services is generally not directly tied to or affected by the insurance underwriting cycle. The demand for these services is largely dependent on the volume of class action settlements, the volume of bankruptcy filings and the resulting settlements, volume of mass torts and general economic conditions. Our revenues for legal settlement administration services are largely project-based and we earn these revenues as we perform individual tasks and deliver the outputs as outlined in each project.

Results of Operations

Executive Summary

Consolidated revenues before reimbursements ~~decreased $6.7 million or 2.4%~~ for the three months ended September 30, ~~2017 and $29.8~~2019 was slightly below the same period of 2018. For the nine months ended September 30, 2019, revenues decreased $48.6 million, or ~~3.6%~~6.0%, compared to 2018 primarily due to the disposition of the Garden City Group service line as of June 15, 2018, which represents a $29.9 million variance in the year-to-date period compared to 2018. In addition, changes in foreign exchange rates decreased our consolidated revenues by $7.3 million, or 2.9%, for the three months ended September 30, 2019 and $19.5 million, or 2.5%, for the nine months ended September 30, ~~2017~~2019 as compared ~~with~~to the ~~same periods~~prior year periods. To illustrate the impact of ~~2016. The decreases in~~these two factors, segment revenues are presented below, using a constant exchange rate, for the three months and nine months ended September 30, 2019, while segment revenues for ~~both~~ the ~~third quarter and nine-month periods were due to decreases in~~nine months ended September 30, 2018 are presented excluding the revenues ~~in our International and~~from the Garden City Group ~~segments, partially offset by increases in~~service line:



	Three Months Ended						Three Months Ended
							Based on exchange rates for three months ended September, 2018
(in thousands, except percentages)	September 30, 2019		September 30, 2018		% Change		September 30, 2019		September 30, 2018		% Change
Revenues:
Crawford Claims Solutions	$	86,250	$	85,332	1.1	%	$	89,830	$	85,332	5.3	%
Crawford TPA Solutions	99,495		100,271		(0.8	)%	100,655		100,271		0.4	%
Crawford Specialty Solutions	68,932		69,426		(0.7	)%	71,514		69,426		3.0	%
Total revenues before reimbursements	254,677		255,029		(0.1	)%	261,999		255,029		2.7	%
Reimbursements	11,165		9,834		13.5	%	11,708		9,834		19.1	%
Total Revenues	$	265,842	$	264,863	0.4	%	$	273,707	$	264,863	3.3	%



	Nine Months Ended						Nine Months Ended
							Based on exchange rates for nine months ended September, 2018 and exclusion of Garden City Group from June 30, 2018
(in thousands, except percentages)	September 30, 2019		September 30, 2018		% Change		September 30, 2019		September 30, 2018		% Change
Revenues:
Crawford Claims Solutions	$	255,572	$	268,888	(5.0	)%	$	264,983	$	268,888	(1.5	)%
Crawford TPA Solutions	296,807		303,152		(2.1	)%	300,239		303,152		(1.0	)%
Crawford Specialty Solutions	206,237		235,137		(12.3	)%	212,895		205,262		3.7	%
Total revenues before reimbursements	758,616		807,177		(6.0	)%	778,117		777,302		0.1	%
Reimbursements	31,449		41,282		(23.8	)%	32,978		30,748		7.3	%
Total Revenues	$	790,065	$	848,459	(6.9	)%	$	811,095	$	808,050	0.4	%

Excluding the Garden City Group business and foreign currency implications, consolidated revenues in our U.S. Services and Broadspire segments. The decrease in revenues in the International segment was primarily due to a change in the operating model in the U.K. contractor repair business where we are acting in an agency role instead of principal in certain relationships with clients related to our Contractor Connection service line, which represents a $5.9before reimbursements increased $7.0 million, ~~reduction~~or 2.7%, for the three months ended September 30, ~~2017~~2019, and ~~$10.4~~increased $0.8 million, ~~reduction~~or 0.1%, for the nine months ended September 30, ~~2017 as compared~~2019. See Note 13, "Disposition of Business Line" of our accompanying unaudited condensed consolidated financial statements included in Item 1 of this Quarterly Report on Form 10-Q for further discussion about the Garden City Group disposition.

Revenues from the Crawford Claims Solutions segment increased in the three months ended September 30, 2019 primarily due to an increase in new clients in the U.S. and an increase in Australia. Excluding the effects of foreign currency, revenues from the Crawford TPA Solutions segment increased slightly due to an increase in cases received in the U.S. Revenues from the Crawford Specialty Solutions segment increased due to an increase in the Global Technical Services service line.

To illustrate exposure to the ~~prior year periods. Changes~~impact of changes in foreign ~~exchange rates reduced~~currencies, revenues inbefore reimbursements are presented below by denominated currency for the ~~International segment by $1.0~~three months and nine months ended September 30, 2019:



		Three Months Ended								Nine Months Ended
		September 30, 2019				September 30, 2018				September 30, 2019				September 30, 2018
(in thousands)		USD equivalent		% of total		USD equivalent		% of total		USD equivalent		% of total		USD equivalent		% of total
U.S.	USD	$	146,177	57.4%		$	143,144	56.1	%	$	432,292	57.0	%	$	466,541	57.8	%
U.K.	GBP	30,844		12.1	%	32,631		12.8	%	93,967		12.4	%	97,538		12.0	%
Canada	CAD	28,350		11.1	%	29,158		11.4	%	87,037		11.5	%	92,454		11.5	%
Australia	AUD	18,648		7.3	%	18,859		7.4	%	54,223		7.1	%	53,838		6.7	%
Europe	EUR	13,816		5.4	%	14,034		5.5	%	40,002		5.3	%	42,764		5.3	%
Rest of World		16,842		6.6	%	17,203		6.7	%	51,095		6.7	%	54,042		6.7	%
Total Revenues, before reimbursements		$	254,677			$	255,029			$	758,616			$	807,177

Costs of services provided, before reimbursements, increased $1.6 million, or 0.9%, for the three months ended September 30, ~~2017~~2019, and ~~$12.7~~$40.7 million, or 7.1%, for the nine months ended September 30, ~~2017 as compared to the prior year periods.~~

~~Costs of services provided, before reimbursements, decreased $1.5 million or 1% for the three months ended September 30, 2017 and $24.4 million or 4.1% for the nine months ended September 30, 2017~~2019, compared with the same periods of ~~2016. These decreases were~~2018. The increase in the third quarter was primarily due to ~~decreases~~increases in ~~professional fees~~Crawford Claims Solutions and ~~compensation costs~~Crawford Specialty Solutions to support new client growth. The decrease in ~~our International and~~the nine month period was due to the Garden City Group ~~segments~~disposition referenced above, lower expenses in Crawford Claims Solutions to support the decrease in weather related activity, and ~~decreases~~changes in non-employee labor costs in our International, Broadspire, and Garden City Group segments, partially offset by an increase in costs in our U.S. Services segment resulting from the acquisition of WeGoLook and start-up costs in the three months ended September 30, 2017 to mobilize staff in areas affected by hurricane activityforeign exchange rates.

Selling, general, and administrative ("SG&A") expenses were 4%16.9% lower in the ~~third quarter of 2017~~three months ended September 30, 2019 and ~~1.7%~~9.3% lower in the nine months ended September 30, ~~2017~~2019 compared with the same periods of ~~2016.~~2018. The decrease in ~~expense for~~the third quarter was due to a decrease in professional fees, non-employee labor and other administrative costs. The decrease in the nine month period was due to the Garden City Group disposition, changes in foreign exchange rates, and a decrease in non-employee labor, professional fees and other administrative costs in 2019.

During the three months ended September 30, ~~2017 was due~~2019, we recognized a pretax charge in the amount of $1.2 million related to ~~lower professional fees. The decrease for~~a settlement with the ~~nine~~fourth former executive of our former Garden City Group. In the three months ended ~~September~~June 30, ~~2017 was due~~2019, we recorded a pretax charge of $11.4 million related to ~~a reduction in professional fees, partially offset by a branding campaign in our U.S. Services segment compared~~an arbitration panel awarding three former executives of the Company’s former Garden City Group additional payments associated with their departure from the ~~2016 period.~~

~~Restructuring and Special Charges~~Garden City Group on December 31, 2015. There are no other potential claimants related to this matter.

During the three months and nine months ended September 30, ~~2017,~~2018, we recorded ~~$1.4~~a pretax loss on the disposal of the Garden City Group business line of $1.2 million and ~~$8.8~~$19.0 million, ~~in restructuring and special charges, and for the same periods of 2016 we recorded $1.5 million and $7.4 million,~~ respectively. Restructuring charges were incurred for the implementation and phase in of our Global Business Services Center in Manila, Philippines and Global Technology Services Center in Pune, India (the "Centers"), restructuring and integration costs related to reductions of administrative costs and consolidation of management layers in certain operations, and other restructuring charges for asset impairments and lease termination costs. The 2017 restructuring costs were primarily due to severance costs associated with restructuring activities in U.S. administrative areas and the International segment.

~~Included in these totals are restructuring charges for the three months and nine months ended September 30, 2017 and 2016 as summarized below:~~

Restructuring Charges Three months ended Nine months ended
(in thousands) September 30,
2017 September 30,
2016 September 30,
2017 September 30,
2016
Implementation and phase-in of the Centers $ 91
$ 775
$ 314
$ 3,177
Restructuring and integration costs 741
586
7,457
2,189
Asset impairments and lease termination costs 599
—
1,047
1,165
Total restructuring charges $ 1,431
$ 1,361
$ 8,818
$ 6,531

~~The Company recorded no special charges for the three months and nine months ended September 30, 2017 and $127,000 and $900,000 for the comparable 2016 periods.~~

The Company expects to incur restructuring and special charges in 2017 totaling approximately $13.0 million pretax, after inclusion of $8.8 million in restructuring and special charges recorded for the nine months ended September 30, 2017. This is expected to be comprised of $3.0 million related to the Centers and $10.0 million related to other restructuring activities. The Centers provide us a venue for global consolidation of certain business functions, shared services, and currently outsourced processes. The Centers, which are expected to be phased in through 2018, are expected to allow us to continue to strengthen our client service, realize additional operational efficiencies, and invest in new capabilities for growth. No assurances can be provided of our ability to timely or cost-effectively complete and ramp up operations at the Centers, or to achieve expected cost savings on a timely basis or at all.

Operating Earnings of our Operating Segments

We believe that a discussion and analysis of the segment operating earnings of our ~~four~~three operating segments is helpful in understanding the results of our operations. Operating earnings is our segment measure of profitability presented in conformity with the Financial Accounting Standards Board's ("FASB") Accounting Standards Codification ("ASC") Topic 280 "Segment Reporting." Operating earnings is the primary financial performance measure used by our senior management and CODM to evaluate the financial performance of our operating segments and make resource allocation and certain compensation decisions.

We believe operating earnings is a measure that is useful to others in that it allows them to evaluate segment operating performance using the same criteria used by our senior management and CODM. Segment operating earnings represent segment earnings, including the direct and indirect costs of certain administrative functions required to operate our business, but excludes unallocated corporate and shared costs and credits, net corporate interest expense, stock option expense, amortization of customer-relationship intangible assets, goodwill and intangible asset impairment charges, restructuring and special charges, arbitration and claim settlements, loss on disposition of business line, income taxes, and net income or loss attributable to noncontrolling interests and redeemable noncontrolling ~~interests.~~interests.

~~For most of our international operations and for Garden City Group, many administrative~~Administrative functions such as finance, human resources, information technology, quality and compliance, ~~are embedded~~exist in ~~those locations and are considered direct costs of those operations. For our domestic operations (primarily Broadspire and the U.S. Services segments), we have~~both a centralized ~~shared-services~~shared-service arrangement ~~for most~~and within certain operations. Each of these ~~administrative~~ functions is managed by centralized management and we allocate the costs of those services to the segments as indirect costs based on usage. ~~Although some of the~~

Gross profit is defined as segment revenues, less segment direct costs, which exclude centralized indirect administrative ~~services in our shared-services center benefit, and are~~support costs allocated to the ~~other operating segments, the majority of these shared services are allocated to the Broadspire and U.S. Services segments.~~business.

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 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, affecting the Company as a whole. Stock option expense represents the non-cash costs generally related to stock options 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.

Unallocated corporate and shared costs and credits include expenses and credits 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 unallocated professional fees, and certain self-insurance costs and recoveries that are not allocated to our individual operating segments.

Restructuring and special charges arise from time to time from events (such as internal restructurings, losses on subleases, establishment of new operations, and asset impairments) that are not allocated to any particular segment since they historically have not regularly impacted our performance and are not expected to impact our future performance on a regular basis.

Additional discussion and analysis of our income taxes, net corporate interest expense, stock option expense, amortization of customer-relationship intangible assets, unallocated corporate and shared costs and credits, arbitration and ~~restructuring~~claim settlements, and ~~special charges~~loss on disposition of business line follows the discussion and analysis of the results of operations of our ~~four~~three operating segments.

Segment Revenues

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~~reported on a gross basis when reporting revenues and expenses, respectively, in our ~~consolidated results~~unaudited Condensed Consolidated Statements of ~~operations.~~Operations. In the discussion and analysis of results of operations which follows, we do not include a gross up of 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 or operating earnings. 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.

Our ~~International~~ segment results are impacted by changes in foreign exchange rates. We believe that a non-GAAP discussion and analysis of segment revenues before reimbursements by major region, based on actual exchange rates and using a constant exchange rate, is helpful in understanding the results of our ~~operations~~segment operations. Revenues in ~~this segment.~~our Crawford Specialty Solutions segment are also impacted by the disposition of the Garden City Group service line as of June 15, 2018.

Segment Operating Expenses

Our discussion and analysis of segment operating expenses is comprised of two components: "Direct Compensation, Fringe Benefits & Non-Employee Labor" and "Expenses Other Than Direct Compensation, Fringe Benefits & Non-Employee Labor."

"Direct Compensation, Fringe Benefits & Non-Employee Labor" includes direct compensation, payroll taxes, and benefits provided to the employees of each segment, as well as payments to outsourced service providers that augment our staff in each segment. As a service company, these costs represent our most significant and variable operating expenses. ~~As noted above, in our International and Garden City Group segments, these costs include~~

Costs of administrative functions, including direct compensation, payroll taxes, and benefits, ~~of certain administrative functions that~~ are ~~embedded in those locations~~managed centrally and ~~are~~ considered ~~direct operating~~indirect costs. The allocated indirect costs of ~~those locations. In~~ our ~~U.S. Services~~shared-services infrastructure are allocated to each segment based on usage and Broadspire operations, certain administrative functions are performed by centralized shared-services staff. These costs are considered indirect and are not included in "Direct Compensation, Fringe Benefits & Non-Employee Labor." Accordingly, the "Direct Compensation, Fringe Benefits & Non-Employee Labor" andreflected within "Expenses Other Than Direct Compensation, Fringe Benefits & Non-Employee Labor" ~~components are not comparable across segments, but are comparable within~~of each ~~segment across periods.~~segment.

~~The allocated indirect costs of our shared-services infrastructure are included in "Expenses Other Than Direct Compensation, Fringe Benefits & Non-Employee Labor."~~ In addition to allocated corporate and shared costs, "Expenses Other Than Direct Compensation, Fringe Benefits & Non-Employee Labor" includes travel and entertainment, office rent and occupancy costs, automobile expenses, office operating expenses, data processing costs, cost of risk, professional fees, and amortization and depreciation expense other than amortization of customer-relationship intangible assets.

In addition, we believe that a non-GAAP discussion and analysis of segment gross profit is helpful in understanding the

results of our segment operations, excluding indirect centralized administrative support costs. Our discussion and analysis of

segment gross profit includes the revenues and direct expenses of each segment.

Unless noted in the following discussion and analysis, revenue amounts exclude reimbursements for out-of-pocket expenses and expense amounts exclude reimbursed out-of-pocket expenses.

Operating results for our ~~U.S. Services, International, Broadspire,~~Crawford Claims Solutions, Crawford TPA Solutions, and ~~Garden City Group~~Crawford Specialty Solutions segments reconciled to net income before income taxes and net income attributable to shareholders of Crawford & Company were as follows:


	Three months ended						Nine months ended						Three Months Ended						Nine Months Ended
(in thousands, except percentages)	September 30, 2017			September 30, 2016			September 30, 2017			September 30, 2016			September 30, 2019			September 30, 2018			September 30, 2019			September 30, 2018
Revenues:
U.S. Services	$	63,052		$	56,530		$	184,843		$	173,969
International	110,784			120,950			331,019			360,425
Broadspire	76,683			76,676			231,544			227,975
Garden City Group	20,032			23,130			59,659			74,494
Total revenues, before reimbursements	270,551			277,286			807,065			836,863
Crawford Claims Solutions													$	86,250		$	85,332		$	255,572		$	268,888
Crawford TPA Solutions													99,495			100,271			296,807			303,152
Crawford Specialty Solutions													68,932			69,426			206,237			235,137
Total Revenues before reimbursements													254,677			255,029			758,616			807,177
Reimbursements	16,115			18,101			43,103			47,101			11,165			9,834			31,449			41,282
Total Revenues	$	286,666		$	295,387		$	850,168		$	883,964		$	265,842		$	264,863		$	790,065		$	848,459

Direct Compensation, Fringe Benefits & Non-Employee Labor:
U.S. Services	$	39,051		$	32,608		$	111,352		$	100,613
Crawford Claims Solutions													$	56,985		$	56,306		$	168,951		$	176,778
% of related revenues before reimbursements	61.9		%	57.7		%	60.1		%	57.8		%	66.1		%	66.0		%	66.1		%	65.7		%
International	72,472			75,829			215,049			229,396
Crawford TPA Solutions													58,594			59,146			177,911			177,706
% of related revenues before reimbursements	65.5		%	62.7		%	65.0		%	63.6		%	58.9		%	59.0		%	59.9		%	58.6		%
Broadspire	42,061			41,891			128,314			125,753
% of related revenues before reimbursements	54.9		%	54.6		%	55.4		%	55.2		%
Garden City Group	14,003			14,975			41,830			48,795
Crawford Specialty Solutions													35,993			34,758			106,003			120,821
% of related revenues before reimbursements	69.9		%	64.7		%	70.1		%	65.5		%	52.2		%	50.1		%	51.4		%	51.4		%
Total	$	167,587		$	165,303		$	496,545		$	504,557		$	151,572		$	150,210		$	452,865		$	475,305
% of Revenues before reimbursements	61.9		%	59.6		%	61.5		%	60.3		%	59.5		%	58.9		%	59.7		%	58.9		%

Expenses Other than Direct Compensation, Fringe Benefits & Non-Employee Labor:
U.S. Services	$	14,464		$	14,568		$	47,304		$	45,413
Crawford Claims Solutions													$	26,604		$	29,161		$	82,563		$	87,000
% of related revenues before reimbursements	23.0		%	25.8		%	25.7		%	26.1		%	30.8		%	34.2		%	32.3		%	32.4		%
International	28,147			31,661			86,288			99,162
Crawford TPA Solutions													31,554			33,070			97,790			101,432
% of related revenues before reimbursements	25.3		%	26.2		%	26.0		%	27.6		%	31.7		%	33.0		%	32.9		%	33.5		%
Broadspire	26,382			26,522			78,995			78,725
% of related revenues before reimbursements	34.4		%	34.6		%	34.1		%	34.5		%
Garden City Group	5,841			6,003			20,096			19,717
Crawford Specialty Solutions													19,638			20,305			62,126			79,893
% of related revenues before reimbursements	29.2		%	26.0		%	33.7		%	26.5		%	28.5		%	29.2		%	30.1		%	34.0		%
Total before reimbursements	74,834			78,754			232,683			243,017			77,796			82,536			242,479			268,325
% of Revenues before reimbursements	27.7		%	28.4		%	28.8		%	29.0		%	30.5		%	32.4		%	32.0		%	33.2		%
Reimbursements	16,115			18,101			43,103			47,101			11,165			9,834			31,449			41,282
Total	$	90,949		$	96,855		$	275,786		$	290,118		$	88,961		$	92,370		$	273,928		$	309,607
% of Revenues	31.7		%	32.8		%	32.4		%	32.8		%	33.5		%	34.9		%	34.7		%	36.5		%
Operating Earnings (Loss):
U.S. Services	$	9,537		$	9,354		$	26,187		$	27,943
Segment Operating Earnings:
Crawford Claims Solutions													$	2,661		$	(135	)	$	4,058		$	5,110
% of related revenues before reimbursements	15.1		%	16.5		%	14.2		%	16.1		%	3.1		%	(0.2		)%	1.6		%	1.9		%
International	10,165			13,460			29,682			31,867
Crawford TPA Solutions													9,347			8,055			21,106			24,014
% of related revenues before reimbursements	9.2		%	11.1		%	9.0		%	8.8		%	9.4		%	8.0		%	7.1		%	7.9		%
Broadspire	8,240			8,263			24,235			23,497
Crawford Specialty Solutions													13,301			14,363			38,108			34,423
% of related revenues before reimbursements	10.7		%	10.8		%	10.5		%	10.3		%	19.3		%	20.7		%	18.5		%	14.6		%
Garden City Group	188			2,152			(2,267		)	5,982
% of related revenues before reimbursements	0.9		%	9.3		%	(3.8		)%	8.0		%
Add (Deduct):
Unallocated corporate and shared (costs) and credits, net	(4,078		)	(6,947		)	(6,333		)	(17,454		)
Deduct:
Unallocated corporate and shared costs, net													(1,649		)	(5,798		)	(2,393		)	(7,316		)
Net corporate interest expense	(2,524		)	(2,262		)	(6,674		)	(7,553		)	(3,162		)	(2,398		)	(8,346		)	(7,402		)
Stock option expense	(468		)	(176		)	(1,342		)	(403		)	(450		)	(393		)	(1,348		)	(1,355		)
Amortization of customer-relationship intangible assets	(2,737		)	(2,401		)	(8,235		)	(7,280		)	(2,829		)	(2,786		)	(8,429		)	(8,342		)
Restructuring and special charges	(1,431		)	(1,488		)	(8,818		)	(7,431		)
Arbitration and claim settlements													(1,200		)	—			(12,552		)	—
Loss on disposition of business line													—			(1,201		)	—			(18,996		)
Income before income taxes	16,892			19,955			46,435			49,168			16,019			9,707			30,204			20,136
Provision for income taxes	(4,922		)	(8,606		)	(16,569		)	(20,029		)	(5,328		)	(1,828		)	(11,120		)	(6,255		)
Net income	11,970			11,349			29,866			29,139			10,691			7,879			19,084			13,881
Net income attributable to noncontrolling interests and redeemable noncontrolling interests	(157		)	(404		)	(188		)	(937		)
Net loss attributable to noncontrolling interests and redeemable noncontrolling interests													355			17			713			159
Net income attributable to shareholders of Crawford & Company	$	11,813		$	10,945		$	29,678		$	28,202		$	11,046		$	7,896		$	19,797		$	14,040

~~U.S. SERVICES SEGMENT~~

~~Operating earnings~~The table below, read together with the reconciliation on the previous page, represents gross profit for our U.S. Services segment were $9.5 million, or 15.1% of revenues before reimbursements, in the third quarter of 2017, compared with $9.4 million, or 16.5% of revenues before reimbursements, in the third quarter of 2016. For the nine months ended September 30, 2017,segments reconciled to Segment operating earnings decreased to $26.2 million, or 14.2% of revenues before reimbursements, from $27.9 million, or 16.1% of revenues before reimbursements for the 2016 comparable period. The increase in operating earnings in the 2017 third quarter compared with 2016 was due to increased revenues as a result of hurricane activity which was mostly offset by start-up costs to mobilize staff in areas affected by the hurricanes and the operating losses attributable to WeGoLook. The decrease in operating earnings for the 2017 nine-month period compared with 2016 was also impacted by a branding campaign in the 2017 first quarter to further expand the presence of Contractor Connection in the consumer repair market and the year-to-date operating losses attributable to WeGoLook.earnings.

~~Revenues before Reimbursements~~

U.S. Services revenues are primarily generated from the property and casualty insurance markets in the U.S. U.S. Services revenues before reimbursements by major service line for the three months and nine months ended September 30, 2017 and ~~2016~~ ~~were as follows:~~

Three months ended Nine months ended
(in thousands, except percentages) September 30,
2017 September 30,
2016 Variance September 30,
2017 September 30,
2016 Variance
Claims Field Operations $ 22,596
$ 21,657
4.3 % $ 65,965
$ 62,363
5.8 %
Technical Services 7,990
7,127
12.1 % 22,123
21,056
5.1 %
Catastrophe Services 12,016
9,198
30.6 % 33,806
35,153
(3.8 )%
Subtotal U.S. Claims Services 42,602
37,982
12.2 % 121,894
118,572
2.8 %
Contractor Connection 18,270
18,548
(1.5 )% 56,611
55,397
2.2 %
WeGoLook 2,180
—
nm
6,338
—
nm
Total U.S. Services Revenues before Reimbursements $ 63,052
$ 56,530
11.5 % $ 184,843
$ 173,969
6.3 %



	Three Months Ended						Nine Months Ended
(in thousands, except percentages)	September 30, 2019			September 30, 2018			September 30, 2019			September 30, 2018
Revenues Before Reimbursements:
Crawford Claims Solutions	$	86,250		$	85,332		$	255,572		$	268,888
Crawford TPA Solutions	99,495			100,271			296,807			303,152
Crawford Specialty Solutions	68,932			69,426			206,237			235,137
Total Revenues before reimbursements	$	254,677		$	255,029		$	758,616		$	807,177
Direct Expenses:
Crawford Claims Solutions	$	66,498		$	67,635		$	199,190		$	211,725
% of related revenues before reimbursements	77.1		%	79.3		%	77.9		%	78.7		%
Crawford TPA Solutions	72,785			73,738			220,956			223,681
% of related revenues before reimbursements	73.2		%	73.5		%	74.4		%	73.8		%
Crawford Specialty Solutions	44,130			43,503			133,771			155,583
% of related revenues before reimbursements	64.0		%	62.7		%	64.9		%	66.2		%
Total segment direct expenses	$	183,413		$	184,876		$	553,917		$	590,989
% of related revenues before reimbursements	72.0		%	72.5		%	73.0		%	73.2		%
Segment Gross Profit:
Crawford Claims Solutions	$	19,752		$	17,697		$	56,382		$	57,163
% of related revenues before reimbursements	22.9		%	20.7		%	22.1		%	21.3		%
Crawford TPA Solutions	26,710			26,533			75,851			79,471
% of related revenues before reimbursements	26.8		%	26.5		%	25.6		%	26.2		%
Crawford Specialty Solutions	24,802			25,923			72,466			79,554
% of related revenues before reimbursements	36.0		%	37.3		%	35.1		%	33.8		%
Total segment gross profit	$	71,264		$	70,153		$	204,699		$	216,188
% of related revenues before reimbursements	28.0		%	27.5		%	27.0		%	26.8		%
Segment Indirect Costs:
Crawford Claims Solutions	$	17,091		$	17,832		$	52,324		$	52,053
% of related revenues before reimbursements	19.8		%	20.9		%	20.5		%	19.4		%
Crawford TPA Solutions	17,363			18,478			54,745			55,457
% of related revenues before reimbursements	17.5		%	18.4		%	18.4		%	18.3		%
Crawford Specialty Solutions	11,501			11,560			34,358			45,131
% of related revenues before reimbursements	16.7		%	16.7		%	16.7		%	19.2		%
Total segment indirect costs	$	45,955		$	47,870		$	141,427		$	152,641
% of related revenues before reimbursements	18.0		%	18.8		%	18.6		%	18.9		%
Segment Operating Earnings:
Crawford Claims Solutions	$	2,661		$	(135	)	$	4,058		$	5,110
% of related revenues before reimbursements	3.1		%	(0.2		)%	1.6		%	1.9		%
Crawford TPA Solutions	9,347			8,055			21,106			24,014
% of related revenues before reimbursements	9.4		%	8.0		%	7.1		%	7.9		%
Crawford Specialty Solutions	13,301			14,363			38,108			34,423
% of related revenues before reimbursements	19.3		%	20.7		%	18.5		%	14.6		%

~~nm = not meaningful~~

Overall, there were increases in revenues in the U.S. Services segment in both the third quarter and nine months ended September 30, 2017 compared with the 2016 periods. These increases were primarily due to the acquisition of WeGoLook, representing a 3.9% positive variance in the third quarter and 3.6% for the nine-month period, and an increase in weather-related activity in the 2017 third quarter. There was an increase in segment unit volume, measured principally by cases received, of 50.2% and 38.8% for the three months and nine months ended September 30, 2017, compared with the 2016 periods. Excluding the impact of high-frequency, low-complexity cases received from the WeGoLook acquisition, there were increases in segment unit volume of 21.8% and 10.2% for the three months and nine months ended September 30, 2017, respectively, compared with the 2016 periods. Changes in the overall mix of services provided and rates charged for those services decreased revenues by approximately 7.2% in the three months and approximately 3.0% in the nine months ended September 30, 2017 compared with the 2016 periods.

There was an increase in revenues in U.S. Claims Services in the third quarter and nine months ended September 30, 2017 due to an increase in weather-related activity in the third quarter of 2017, compared to the 2016 periods. These increases were the result of hurricane activity present in the 2017 third quarter which impacted all of our U.S. Claims Services service lines.

Revenues in our Catastrophe Services service line include revenues from an outsourcing project for a major U.S. insurance carrier, which resulted in $2.4 million and $19.1 million of revenues in the three months and nine months ended September 30, 2017, compared with $6.3 million and $27.2 million in the comparable 2016 periods, representing negative variances of 6.9% and 4.6%, respectively. The services provided to this customer are primarily project-based and are covered by the terms of multiple contractual arrangements which expire at various times in the future. In the event we are not able to retain these relationships, or replace any lost revenues from these projects as they reach their respective end dates, segment revenues and operating earnings would be negatively impacted.

Contractor Connection revenues decreased in the 2017 third quarter compared to the prior year period due to lower average case values in areas impacted by the hurricane activity. Revenues increased for the nine months ended September 30, 2017 compared with the same period of 2016 due to the ongoing expansion of our contractor network and the continued trend of insurance carriers moving high-frequency, low-complexity property cases directly to our contractor managed repair networks.

~~Reimbursed Expenses included in Total Revenues~~

Reimbursements for out-of-pocket expenses incurred in our U.S. Services segment, which are included in total Company revenues, were $2.8 million and $2.2 million for the three-month periods ended September 30, 2017 and 2016, respectively. Reimbursements were $6.7 million and $6.2 million for the nine-month periods ended September 30, 2017 and 2016, respectively. The 2017 increases were due to the increased revenues, primarily in the third quarter, resulting from the hurricane activity.

~~Case Volume Analysis~~

~~U.S. Services unit volumes by underlying case category, as measured by cases received, for the three months and nine months ended September 30, 2017 and~~ ~~2016~~ ~~were as follows:~~

Three months ended Nine months ended
(whole numbers, except percentages ) September 30,
2017 September 30,
2016 Variance September 30,
2017 September 30,
2016 Variance
Claims Field Operations 43,538
39,279
10.8 % 122,452
116,571
5.0 %
Technical Services 2,864
2,410
18.8 % 7,622
6,766
12.7 %
Catastrophe Services 18,643
2,927
536.9 % 26,089
13,221
97.3 %
Subtotal U.S. Claims Services 65,045
44,616
45.8 % 156,163
136,558
14.4 %
Contractor Connection 55,831
54,660
2.1 % 167,685
157,327
6.6 %
WeGoLook 28,234
—
nm
84,015
—
nm
Total U.S. Services Cases Received 149,110
99,276
50.2 % 407,863
293,885
38.8 %

~~nm = not meaningful~~

Overall, there were increases in cases received of 50.2% and 38.8% for the 2017 third quarter and nine-month periods, respectively, compared to the 2016 periods. These increases were primarily due to the WeGoLook acquisition, which accounted for 28.4% and 28.6% of the increases in U.S. Services cases in the quarter and nine-month periods. Absent the WeGoLook acquisition, total cases received increased by 21.8% in the quarter and 10.2% in the nine-month period compared to the 2016 periods.

The increase in U.S. Claims Services cases for the three months ended September 30, 2017 compared with the 2016 period was due to an increase in weather-related case activity in all service lines, as a result of cases received from hurricanes in the 2017 period. Revenues associated with many of these cases are expected to benefit future periods. The increase in the nine-month period was also due to an increase in weather-related activity primarily in our Catastrophe Services service line. The increases in Contractor Connection cases were due to the ongoing expansion of our contractor network and the continued trend of insurance carriers moving high-frequency, low-complexity property cases directly to our contractor managed repair networks.

~~Direct Compensation, Fringe Benefits & Non-Employee Labor~~

The most significant expense in our U.S. Services segment is the compensation of employees, including related payroll taxes and fringe benefits, and the payments to outsourced service providers that augment the functions performed by our employees. For the quarter ended September 30, 2017, U.S. Services direct compensation, fringe benefits, and non-employee labor expense, as a percentage of segment revenues before reimbursements, was 61.9% compared with 57.7% for the comparable period in 2016. For the nine months ended September 30, 2017, U.S. Services direct compensation, fringe benefits, and non-employee labor expense, as a percentage of segment revenues before reimbursements, was 60.1%, compared with 57.8% for the comparable period in 2016. These increases were due to incremental costs in the 2017 period to mobilize staff in areas affected by the hurricanes.

The dollar amount of these expenses increased in the 2017 three-month period to $39.1 million from $32.6 million in the comparable 2016 period, and also in the nine months ended September 30, 2017 to $111.4 million from $100.6 million in the comparable 2016 period. These increases were due to incremental costs in the 2017 quarter to mobilize staff in areas affected by the hurricanes, and an increase in incentive compensation in the 2017 periods. There was an average of 1,474 full-time equivalent employees (including 344 catastrophe adjusters) in this segment during the first nine months of ~~2017, compared with an average of~~ ~~1,360~~ ~~employees (including 344 catastrophe adjusters) during the 2016 period. The WeGoLook acquisition resulted in an increase of 111 employees in the 2017 period.~~

~~Expenses Other than Reimbursements, Direct Compensation, Fringe Benefits & Non-Employee Labor~~

U.S. Services segment expenses other than reimbursements, direct compensation, fringe benefits, and non-employee labor were $14.5 million, or 23.0% of segment revenues before reimbursements for the quarter ended September 30, 2017, compared with $14.6 million, or 25.8% of segment revenues before reimbursements, for the comparable 2016 quarter. The decrease in the amount and the expense as a percent of revenues was due to an increase in revenues and a decrease in administrative support costs in the 2017 period. For the nine months ended September 30, 2017, these expenses were $47.3 million, or 25.7% of segment revenues before reimbursements, compared with $45.4 million, or 26.1% of segment revenues before reimbursements for the comparable 2016 period. The increase in the amount was due to a branding campaign to expand the presence of Contractor Connection in the consumer repair market. The decrease in expense as a percent of revenues was due to the higher revenues in the 2017 period.

~~INTERNATIONAL~~CRAWFORD CLAIMS SOLUTIONS SEGMENT

Operating earnings in our ~~International~~Crawford Claims Solutions segment ~~decreased~~increased to ~~$10.2~~$2.7 million, or ~~9.2%~~3.1% of revenues before reimbursements, for the three months ended September 30, ~~2017~~2019, compared with ~~2016 third quarter~~an operating ~~earnings~~loss in 2018 of ~~$13.5~~$0.1 million, or ~~11.1%~~0.2% of revenues before reimbursements. ~~Operating earnings in our International segment decreased to $29.7 million, or 9.0% of revenues before reimbursements for~~For the nine months ended September 30, ~~2017, compared with~~2019, operating earnings ~~of $31.9~~decreased to $4.1 million, or ~~8.8%~~1.6% of revenues before reimbursements, ~~for the nine months ended September 30, 2016.~~compared with 2018 operating earnings of $5.1 million, or 1.9% of revenues before reimbursements. The ~~decreases~~increase in operating earnings in the ~~2017~~ third quarter was due to an increase in new clients in the U.S. and ~~nine-month periods~~expense reductions. The decrease in operating earnings for the year-to-date period resulted primarily from ~~lower~~an overall decrease in weather related claim activity and revenues in the U.S. and ~~associated~~Canada, and lower earnings in ~~the U.K.,~~ Canada and ~~Asia primarily~~Europe. There was also an increase in centralized administrative support costs to expand technology and sales efforts, as compared to 2018.

Excluding centralized indirect support costs, gross profit increased from $17.7 million, or 20.7% of revenues before reimbursements in 2018, to $19.8 million, or 22.9% of revenues before reimbursements, in the three months ended September 30, 2019, for the reasons referenced above. For the nine month periods, gross profit decreased from $57.2 million, or 21.3% of revenues before reimbursements, in 2018, to $56.4 million, but as a percent of revenues increased to 22.1% of revenues before reimbursements in 2019, due to ~~flooding activity~~the absence of hurricane runoff revenues present in the ~~U.K. and Australia, and Ft. McMurray wildfire activity in Canada in the 2016 third quarter.~~prior year.

Revenues before Reimbursements

~~International~~Crawford Claims Solutions segment revenues are primarily derived from the global property and casualty insurance company ~~market, with additional revenues from the self-insured~~ markets in the U.S., U.K., Canada, ~~Asia-Pacific (which includes~~ Australia, ~~and New Zealand, as well as the Middle East and Africa) and~~ Europe and Rest of ~~World (which together consist of continental Europe and Latin America).~~World. Revenues before reimbursements by major region, based on actual exchange rates and using a constant exchange rate, for the three ~~months~~ and nine months ended September 30, ~~2017~~2019 and ~~2016~~2018 were as follows:


	Three months ended										Three Months Ended
	Based on actual exchange rates						Based on exchange rates for three months ended September 30, 2016				Based on actual exchange rates						Based on exchange rates for three months ended September 30, 2018
(in thousands, except percentages)	September 30, 2017		September 30, 2016		Variance		September 30, 2017		Variance		September 30, 2019		September 30, 2018		Variance		September 30, 2019		Variance
U.S.											$	35,982	$	34,480	4.4	%	$	35,982	4.4	%
U.K.	$	31,944	$	43,160	(26.0	)%	$	34,443	(20.2	)%	15,123		15,803		(4.3	)%	16,354		3.5	%
Canada	27,292		27,446		(0.6	)%	26,188		(4.6	)%	12,008		11,692		2.7	%	12,308		5.3	%
Asia-Pacific	29,174		27,350		6.7	%	28,880		5.6	%
Europe and Rest of World	22,374		22,994		(2.7	)%	22,280		(3.1	)%
Total International Revenues before Reimbursements	$	110,784	$	120,950	(8.4	)%	$	111,791	(7.6	)%
Australia											11,886		11,739		1.3	%	13,120		11.8	%
Europe											7,429		7,234		2.7	%	8,082		11.7	%
Rest of World											3,822		4,384		(12.8	)%	3,984		(9.1	)%
Total Crawford Claims Solutions Revenues before Reimbursements											$	86,250	$	85,332	1.1	%	$	89,830	5.3	%


	Nine months ended										Nine Months Ended
	Based on actual exchange rates						Based on exchange rates for nine months ended September 30, 2016				Based on actual exchange rates						Based on exchange rates for nine months ended September 30, 2018
(in thousands, except percentages)	September 30, 2017		September 30, 2016		Variance		September 30, 2017		Variance		September 30, 2019		September 30, 2018		Variance		September 30, 2019		Variance
U.S.											$	103,743	$	110,426	(6.1	)%	$	103,743	(6.1	)%
U.K.	$	105,236	$	134,134	(21.5	)%	$	119,229	(11.1	)%	47,325		47,397		(0.2	)%	50,445		6.4	%
Canada	79,466		78,484		1.3	%	78,836		0.4	%	36,276		38,857		(6.6	)%	37,443		(3.6	)%
Asia-Pacific	79,417		78,739		0.9	%	78,339		(0.5	)%
Europe and Rest of World	66,900		69,068		(3.1	)%	67,309		(2.5	)%
Total International Revenues before Reimbursements	$	331,019	$	360,425	(8.2	)%	$	343,713	(4.6	)%
Australia											35,220		33,889		3.9	%	38,206		12.7	%
Europe											21,265		23,887		(11.0	)%	22,974		(3.8	)%
Rest of World											11,743		14,432		(18.6	)%	12,172		(15.7	)%
Total Crawford Claims Solutions Revenues before Reimbursements											$	255,572	$	268,888	(5.0	)%	$	264,983	(1.5	)%

Revenues before reimbursements from our ~~International~~Crawford Claims Solutions segment totaled ~~$110.8~~$86.3 million in the three months ended September 30, ~~2017~~2019, compared with ~~$121.0~~$85.3 million in the ~~2016~~comparable 2018 period. This increase was due to an increase in new client growth in the U.S. and U.K., and an increase in cases received in Australia. Changes in foreign exchange rates resulted in a decrease of our ~~International~~Crawford Claims Solutions segment revenues by approximately ~~0.8%~~4.2%, or ~~$1.0~~$3.6 million, for the three months ended September 30, ~~2017~~2019 as compared with the ~~2016~~2018 period. Absent foreign exchange rate fluctuations, ~~International~~Crawford Claims Solutions segment revenues would have been ~~$111.8~~$89.8 million for the three months ended September 30, ~~2017. Overall case volumes decreased 8.6%~~2019. There was a decrease in segment unit volume, measured principally by cases received, of 8.9% for the three months ended September 30, ~~2017~~2019, compared with the ~~same period of 2016. The change in U.K. contractor repair business operating model accounted for a 4.9% decrease, and changes~~2018 period. Changes in product mix and in the rates charged for those services accounted for a ~~5.9%~~14.2% revenue increase for the three months ended September 30, ~~2017~~2019 compared with the same period in ~~2016~~.2018 due primarily to a reduction in high-frequency, low-complexity cases.

~~Revenues~~For the nine months ended September 30, 2019, revenues before reimbursements from our ~~International~~Crawford Claims Solutions segment totaled ~~$331.0~~$255.6 million, compared with $268.9 million in the ~~first nine months~~2018 period. This decrease was primarily due to a decrease in weather related activity in the U.S., as the 2018 period included the runoff of 2017 ~~compared with $360.4~~hurricane claims activity, which negatively impacted revenues by $13.9 million, ~~in the 2016 period.~~or 5.2% of Crawford Claims Solutions segment revenues. Changes in foreign exchange rates resulted in a decrease of our ~~International~~Crawford Claims Solutions segment revenues by approximately ~~3.6%~~3.5%, or ~~$12.7~~$9.4 million, for the nine months ended September 30, ~~2017~~2019 as compared with the ~~2016~~2018 period. Absent foreign exchange rate fluctuations, ~~International~~Crawford Claims Solutions segment revenues would have been ~~$343.7~~$265.0 million for the nine months ended September 30, ~~2017. Overall case volumes decreased 2.7%~~2019. There was a decrease in segment unit volume, measured principally by cases received, of 7.7% for the nine months ended September 30, ~~2017~~2019, compared with the ~~same period of 2016. The change in U.K. contractor repair business operating model accounted for a 2.9% decrease, and changes~~2018 period. Changes in product mix and in the rates charged for those services accounted for a ~~1.0%~~11.4% revenue increase for the nine months ended September 30, ~~2017~~2019 compared with the same period in ~~2016.~~2018.

The ~~decrease~~increase in revenues in the ~~U.K.~~U.S. for the three months ended September 30, ~~2017 compared with the 2016 period~~2019 was primarily due to a change in the operating model in the U.K. contractor repair business where we are acting in an agency role instead of principal in certain relationships with clients related to our Contractor Connection service line, which represents a $5.9 million reduction, and a decrease in weather related activity. Revenues in Canada decreased in the third quarter compared with the 2016 period due to an increase in ~~cases received~~new clients, although there was a decrease for the nine months ended September 30, 2019 due to a reduction in weather related activity referenced above. Based on constant foreign exchange rates, there were increases in revenues in the ~~2016 third quarter from the Fort McMurray wildfires. There was a revenue increase in Asia-Pacific~~U.K. for 2019 compared with 2018 due to an increase in ~~weather-related~~new clients and expanding new services. Revenues in Canada increased in the third quarter of 2019, although decreased in the year-to-date period due to a reduction in weather related case activity resulting from Ontario windstorms in the 2018 period. There were revenue increases in Australia due to an increase in weather related case activity in ~~Australia~~the 2019 periods. The revenue increase in Europe in the ~~current year. The revenue decrease in Europe and Rest of World for the three months ended September 30, 2017 compared with the same period in 2016~~third quarter was due to a change in the mix of services provided in Scandinavia, ~~partially offset by an increase~~although there was a decrease in ~~weather-related~~Europe for the year-to-date period due to a reduction in cases received in ~~Peru.~~

Germany, Poland and the Netherlands. The decrease in revenues in the U.K. for the nine months ended September 30, 2017 compared with the 2016 period was due to a change in the operating model in the U.K. contractor repair business where we are acting in an agency role instead of principal in certain relationships with clients related to our Contractor Connection service line, which represents a $10.4 million reduction, and a decrease in weather-related activity in 2017 compared with the number of cases received from flooding in that region in 2016. Revenues in Canada increased in the nine months ended September 30, 2017 compared with the 2016 period due primarily to an increase in high-volume, low-complexity case volumes from existing clients, partially offset by a reduction in weather-related case volumes. The revenue increase in Asia-Pacific was due to a change in exchange rates; absent the change in exchange rates there was a slight reduction in revenues due to a decrease in high-volume, low-complexity motor cases in China and Singapore where we have exited that product line in those countries. The revenue decrease in Europe and Rest of World for the current three month and nine ~~months ended September 30, 2017~~month periods compared with the ~~same period in 2016~~2018 periods was primarily due to ~~changes~~a reduction in ~~the mix of services provided~~weather related case activity in ~~Scandinavia, partially offset by an increase in Peru due to an increase in weather-related activity.~~Asia.

Reimbursed Expenses included in Total Revenues

Reimbursements for out-of-pocket expenses incurred in our ~~International~~Crawford Claims Solutions segment, ~~decreased to $9.1~~which are included in total Company revenues, were $5.6 million and ~~$23.7~~$4.9 million for the three months ended September 30, 2019 and 2018, respectively. Reimbursements were $15.4 million and $14.3 million for the nine months ended September 30, ~~2017, respectively, from $10.3 million~~2019 and ~~$24.0 million~~2018, respectively. The increase in reimbursed expenses was due to an increased use of third parties in the ~~comparable 2016 periods. These decreases were the result of the lower revenues~~U.K. in ~~the 2017 periods.~~2019 compared to 2018.

Case Volume Analysis

~~International~~Crawford Claims Solutions segment unit volumes by geographic region, measured by cases received, for the three months and nine months ended September 30, ~~2017~~2019 and ~~2016~~2018 were as follows:


	Three months ended				Nine months ended				Three Months Ended				Nine Months Ended
(whole numbers, except percentages)	September 30, 2017	September 30, 2016	Variance		September 30, 2017	September 30, 2016	Variance		September 30, 2019	September 30, 2018	Variance		September 30, 2019	September 30, 2018	Variance
U.S.									72,463	81,628	(11.2	)%	218,124	235,080	(7.2	)%
U.K.	28,027	32,004	(12.4	)%	86,526	102,032	(15.2	)%	13,312	13,265	0.4	%	40,589	41,466	(2.1	)%
Canada	43,419	46,621	(6.9	)%	130,873	125,709	4.1	%	8,911	11,034	(19.2	)%	29,302	32,746	(10.5	)%
Asia-Pacific	18,718	26,151	(28.4	)%	66,066	74,519	(11.3	)%
Europe and Rest of World	69,051	69,433	(0.6	)%	214,620	209,877	2.3	%
Total International Cases Received	159,215	174,209	(8.6	)%	498,085	512,137	(2.7	)%
Australia									7,887	7,492	5.3	%	29,721	25,247	17.7	%
Europe									10,067	10,757	(6.4	)%	27,326	38,053	(28.2	)%
Rest of World									4,656	4,603	1.2	%	13,210	15,706	(15.9	)%
Total Crawford Claims Solutions Cases Received									117,296	128,779	(8.9	)%	358,272	388,298	(7.7	)%

Overall, ~~case volumes~~there were ~~8.6% lower~~decreases in cases received of 8.9% and 7.7% for the three months and nine months ended September 30, ~~2017~~2019, respectively, compared ~~with~~to the ~~same~~2018 periods. The decrease in U.S. case volumes in the third quarter was due to a reduction in high frequency, low complexity cases and a change in the mix of services provided, and for the year-to-date period due to a decrease in ~~2016.~~weather related activity. The U.K. case volumes were ~~lower~~higher in the third quarter ~~2017~~due to an increase in weather related activity, but lower in the 2019 year-to-date period. The decreases in Canada were due to a reduction in ~~weather-related~~weather related cases, ~~received~~due to Ontario windstorms that were present in ~~2016.~~the prior year. The ~~decrease~~increase in ~~Canada~~cases in Australia was due to an increase in ~~cases received~~weather related activity in ~~the 2016 third quarter from the Fort McMurray wildfires. The decrease in Asia-Pacific cases in the third quarter was due primarily to a decrease~~2019. There were reductions in cases received in ~~Australia~~Europe in ~~the quarter. There was a slight decrease in cases in Europe and Rest of World~~2019 due to a ~~decrease~~reduction in high-frequency, low-complexity cases in ~~Spain.~~

~~Overall case volumes were 2.7% lower~~Germany and Poland. There was a slight increase in cases received in Rest of World in the third quarter, although there was a decrease in the nine months ended September 30, 2017 compared with the same period in 2016. The U.K. case volumes were lower in the 2017 period due to flooding-related cases received in 2016. The increase in Canada was due to an increase in high-frequency, low-complexity vehicle appraisals in the 2017 period. The decrease in Asia-Pacific cases was2019 due to a decline in high-frequency, low-complexity ~~motor~~property cases in Singapore and China where we have exited that product line in these countries. The increase in cases in Europe and Rest of World was due to an increase in high-frequency, low-complexity cases in Germany and an increase in Peru due to weather-related activity.Asia.

Direct Compensation, Fringe Benefits & Non-Employee Labor

The most significant expense in our ~~International~~Crawford Claims Solutions segment is the compensation of employees, including related payroll taxes and fringe benefits, and the payments to outsourced service providers that augment the functions performed by our employees. As a percentage of revenues before reimbursements, direct compensation, fringe benefits, and non-employee labor expenses were ~~65.5%~~66.1% for the three months ended September 30, ~~2017~~2019 compared ~~with 62.7%~~to 66.0% for the ~~comparable period in 2016, and were 65.0% for~~2018 period. For the nine months ended September 30, ~~2017~~2019, direct compensation, fringe benefits, and non-employee labor expenses, as a percent of revenues before reimbursements, were 66.1%, compared with ~~63.6%~~65.7% for the comparable period in ~~2016. These increases~~2018. The increase in expenses as a percent of revenues ~~were~~before reimbursements is due to lower ~~revenues and lower staff~~employee utilization in ~~the 2017 periods.~~Canada and Europe. The total dollar amount of these expenses ~~decreased~~increased to ~~$72.5~~$57.0 million for the three months ended September 30, ~~2017~~2019 from ~~$75.8~~$56.3 million for the comparable ~~2016~~2018 period, ~~and $215.0 million for~~but decreased in the nine months ended September 30, ~~2017~~2019 to $169.0 million from ~~$229.4~~$176.8 million ~~for~~in 2018, as a result of the ~~comparable 2016 period. These decreases were due to the impact of cost reduction initiatives, a reduction in employees,~~lower revenues and the ~~impact of~~change in foreign exchange rates. There was an average of ~~4,202~~2,908 full-time equivalent employees in this segment in the nine months ended September 30, ~~2017~~2019 compared with an average of ~~4,260~~2,980 in the ~~2016~~2018 period.

Expenses Other than Reimbursements, Direct Compensation, Fringe Benefits & Non-Employee Labor

~~Expenses~~Crawford Claims Solutions expenses other than reimbursements, direct compensation, fringe benefits, and non-employee labor were were 25.3% of International segment revenues before reimbursements for the three months ended September 30, 2017 compared with 26.2% for the comparable period in 2016, and were 26.0% of International segment revenues before reimbursements for the nine months ended September 30, 2017 compared with 27.6% for the comparable period in 2016. The amount of these expenses decreased to $28.1$26.6 million for the three months ended September 30, ~~2017,~~2019 compared with ~~$31.7~~$29.2 million infor the ~~comparable 2016 period,~~2018 period. As a percentage of revenues before reimbursements, expenses other than direct compensation, fringe benefits, and ~~to $86.3 million~~non-employee labor expenses were 30.8% for the three months ended September 30, 2019 compared with 34.2% for the 2018 period. For the nine months ended September 30, ~~2017, decreasing from $99.2~~2019, these expenses were $82.6 million, inor 32.3% of segment revenues before reimbursements, compared with $87.0 million, or 32.4% of segment revenues before reimbursements, for the comparable ~~2016~~2018 period. The decrease in ~~amounts was due~~cost is related to expense reductions in 2019 and the ~~impact of cost reduction initiatives and changes~~change in foreign exchange ~~rates.~~rates in the 2019 periods. The decrease ~~in expenses~~ as a percent of revenues was ~~primarily due~~a result of improved expense reductions, partially offset by an increase in centralized administrative support costs related to investments in technology and expanding sales efforts in the ~~impact of cost reduction initiatives.~~2019 period.

~~BROADSPIRE~~CRAWFORD TPA SOLUTIONS SEGMENT

Our Crawford TPA Solutions segment, which operates under the Broadspire ~~segment~~brand globally, reported operating earnings of ~~$8.2~~$9.3 million, or ~~10.7%~~9.4% of revenues before reimbursements, for the third quarter of ~~2017,~~2019 as compared ~~with $8.3~~to $8.1 million, or ~~10.8%~~8.0% of revenues before reimbursements, for the third quarter of ~~2016.~~2018. This increase was due to a reduction in administrative expenses. For the nine months ended September 30, ~~2017, Broadspire~~2019, operating earnings were ~~$24.2~~$21.1 million, or ~~10.5%~~7.1% of revenues before reimbursements, as compared ~~with $23.5~~to $24.0 million, or ~~10.3%~~7.9% of revenues before reimbursements, for ~~the comparable 2016 period. Operating~~2018. The decrease in operating earnings ~~increased~~ for the ~~nine month~~2019 year-to-date period ~~due primarily to an increase in~~resulted from lower revenues, ~~operational efficiency gains, and a reduction in administrative~~which were not fully offset by lower expenses.

Excluding centralized indirect support costs, third quarter gross profit increased from $26.5 million, or 26.5% of revenues before reimbursements, in 2018 to $26.7 million, or 26.8% of revenues before reimbursements, in 2019. For the ~~2017 period.~~year-to-date period, gross profit decreased from $79.5 million, or 26.2% of revenues before reimbursements, in 2018 to $75.9 million, or 25.6% of revenues before reimbursements, in 2019, with lower direct expenses not fully offsetting the lower revenues.

Revenues before Reimbursements

~~Broadspire segment~~Crawford TPA Solutions revenues are ~~primarily~~ derived from ~~medical management services, such as medical bill review, medical case management~~the global casualty and ~~vocational rehabilitation for workers' compensation; workers' compensation,~~ disability insurance and ~~liability claims management; and risk management information services provided to~~self-insured markets in the U.S. ~~self-insured marketplace. Broadspire revenues~~, U.K., Canada and Europe and Rest of World. Revenues before reimbursements by major ~~service line~~region, based on actual exchange rates and using a constant exchange rate, for the three ~~months~~ and nine months ended September 30, ~~2017~~2019 and ~~2016~~2018 were as follows:

Three months ended Nine months ended
(in thousands, except percentages) September 30,
2017 September 30,
2016 Variance September 30,
2017 September 30,
2016 Variance
Medical Management Services $ 40,395
$ 41,149
(1.8 )% $ 121,754
$ 121,433
0.3 %
Workers' Compensation, Disability and Liability Claims Management 32,656
32,028
2.0 % 99,245
95,910
3.5 %
Risk Management Information Services 3,632
3,499
3.8 % 10,545
10,632
(0.8 )%
Total Broadspire Revenues before Reimbursements $ 76,683
$ 76,676
— % $ 231,544
$ 227,975
1.6 %



	Three Months Ended
	Based on actual exchange rates						Based on exchange rates for three months ended September 30, 2018
(in thousands, except percentages)	September 30, 2019		September 30, 2018		Variance		September 30, 2019		Variance
U.S.	$	80,376	$	79,979	0.5	%	$	80,376	0.5	%
U.K.	2,730		2,863		(4.6	)%	2,955		3.2	%
Canada	8,210		9,081		(9.6	)%	8,415		(7.3	)%
Europe and Rest of World	8,179		8,348		(2.0	)%	8,909		6.7	%
Total Crawford TPA Solutions Revenues before Reimbursements	$	99,495	$	100,271	(0.8	)%	$	100,655	0.4	%



	Nine Months Ended
	Based on actual exchange rates						Based on exchange rates for nine months ended September 30, 2018
(in thousands, except percentages)	September 30, 2019		September 30, 2018		Variance		September 30, 2019		Variance
U.S.	$	237,391	$	240,975	(1.5	)%	$	237,391	(1.5	)%
U.K.	8,243		9,387		(12.2	)%	8,785		(6.4	)%
Canada	25,466		27,580		(7.7	)%	26,280		(4.7	)%
Europe and Rest of World	25,707		25,210		2.0	%	27,783		10.2	%
Total Crawford TPA Solutions Revenues before Reimbursements	$	296,807	$	303,152	(2.1	)%	$	300,239	(1.0	)%

Revenues ~~for~~before reimbursements from our Crawford TPA Solutions segment totaled $99.5 million in the ~~2017 third quarter were consistent with 2016. The increase in revenues for the nine-month period~~three months ended September 30, ~~2017~~2019 compared with $100.3 million in the 2018 period. Changes in foreign exchange rates resulted in a decrease of our Crawford TPA Solutions segment revenues by approximately 1.2%, or $1.2 million, as compared with the ~~same period in 2016 was due primarily to an increase in Medical Management and Disability cases in 2017 resulting from new clients in the 2017 periods.~~

2018 period. Revenues were positively impacted by an increase in unit volumes, measured principally by cases received, ~~which increased revenues by 10.4% in~~of 3.8% for the three ~~months and 6.4% in the nine~~ months ended September 30, ~~2017~~2019 compared with the same ~~periods~~period of 2018. Changes in ~~2016. These increases were partially offset by changes in the~~product mix ~~of services provided~~ and in the rates charged for those services ~~which decreased~~accounted for a 3.4% revenue decrease for the 2019 third quarter compared with the 2018 period.

For the nine months ended September 30, 2019, revenues before reimbursements from our Crawford TPA Solutions segment totaled $296.8 million, compared with $303.2 million in the 2018 period. Changes in foreign exchange rates resulted in a decrease of our Crawford TPA Solutions segment revenues by approximately ~~10.4% from the 2016 third quarter to the 2017 third quarter, and 4.8%~~1.1%, or $3.4 million, for the nine months ended September 30, ~~2017~~2019 as compared with the 2018 period. Revenues were also negatively impacted by a decrease in unit volumes, measured principally by cases received, of 2.8% for the nine months ended September 30, 2019 compared with the same period of 2018. Changes in ~~2016. This change is~~product mix and in the rates charged for those services, however, accounted for a 1.8% revenue increase for the nine months ended September 30, 2019 compared with the 2018 period.

The slight increase in revenues in the U.S. for the three months ended September 30, 2019 was due to an increase in ~~cases~~new clients. The decrease in revenues in the US for the nine months ended September 30, 2019, as compared with the 2018 period was primarily due to a decrease in new Claims Management and Medical Management clients, partially offset by an increase in Disability ~~service line which has lower average~~clients. Based on constant foreign exchange rates, there was an increase in revenues in the U.K. in the third quarter, although there was a decrease in revenues in the U.K. for the nine months ended September 30, 2019, due to client case ~~values than Workers' Compensation~~volume decreases and ~~Liability cases.~~a change in the mix of services provided. Revenues in Canada decreased in the current year due to a change in the mix of services provided and a reduction in case volumes. Revenues increased in Europe and Rest of World in the third quarter and for the nine months primarily due to growth from both new and existing clients.

Reimbursed Expenses included in Total Revenues

Reimbursements for out-of-pocket expenses incurred in our ~~Broadspire~~Crawford TPA Solutions segment were ~~$1.0 million and~~ $3.1 million for the three months ~~and~~ended September 30, 2019, compared with $2.7 million in the comparable 2018 period. Reimbursements were $8.7 million for the nine months ended September 30, ~~2017~~2019, compared with ~~$1.1 million and $3.3~~$7.7 million in the ~~2016~~comparable 2018 period. The changes in reimbursed expenses was consistent with the revenue and case volume activity between periods.

Case Volume Analysis

~~Broadspire~~Crawford TPA Solutions unit volumes by ~~major underlying case category,~~geographic region, as measured by cases received, for the three months and nine months ended September 30, ~~2017~~2019 and ~~2016~~2018 were as follows:

Three months ended Nine months ended
(whole numbers, except percentages) September 30,
2017 September 30,
2016 Variance September 30,
2017 September 30,
2016 Variance
Workers' Compensation 44,778
46,378
(3.4 )% 131,848
136,281
(3.3 )%
Casualty 31,580
40,347
(21.7 )% 96,175
112,596
(14.6 )%
Medical Management, Disability and Other 47,868
25,819
85.4 % 123,133
81,113
51.8 %
Total Broadspire Cases Received 124,226
112,544
10.4 % 351,156
329,990
6.4 %



	Three Months Ended				Nine Months Ended
(whole numbers, except percentages)	September 30, 2019	September 30, 2018	Variance		September 30, 2019	September 30, 2018	Variance
U.S.	130,718	117,896	10.9	%	369,751	367,138	0.7	%
U.K.	10,411	10,746	(3.1	)%	28,474	33,690	(15.5	)%
Canada	17,817	23,942	(25.6	)%	56,975	72,197	(21.1	)%
Europe and Rest of World	54,082	52,637	2.7	%	156,535	156,561	—	%
Total Crawford TPA Solutions Cases Received	213,028	205,221	3.8	%	611,735	629,586	(2.8	)%

Overall case volumes were ~~10.4%~~3.8% higher infor the three months ended September 30, ~~2017~~2019, compared with ~~the same period in 2016. This was~~2018, due to ~~an increase~~client growth in ~~Medical Management and Disability cases resulting from new clients, partially offset by declines in Workers' Compensation and Casualty cases from existing clients. There was a 6.4% increase in case~~the U.S. Case volumes were 2.8% lower for the nine months ended September 30, ~~2017~~2019, compared with the same period in ~~2016. This was also~~2018, primarily due to ~~an increase~~a reduction in cases in Canada. The increases in the U.S. were due to new client growth in Claims Management, Medical Management, and Disability ~~cases, partially offset by~~cases. There was a decrease in ~~Workers' Compensation~~the 2019 periods in the U.K. due to client business declines impacting both the three months and ~~Casualty cases from existing clients.~~nine months ended September 30, 2019. The reduction in ~~Casualty cases~~Canada was due to a ~~decrease~~reduction in ~~high-frequency, low-complexity affinity claims.~~

weather related cases that were present in the prior year, along with lower carrier volumes as more cases were handled internally. The increase in cases received in Europe and Rest of World was due to a change in the mix of cases received in Europe in the third quarter, although cases were consistent for the year-to-date period.

Direct Compensation, Fringe Benefits & Non-Employee Labor

The most significant expense in our ~~Broadspire~~Crawford TPA Solutions segment is the compensation of employees, including related payroll taxes and fringe benefits, and the payments to outsourced service providers that augment the functions performed by our employees. For the three months ended September 30, direct compensation, fringe benefits, and non-employee labor, as a percent of the related revenues before reimbursements, ~~increased~~decreased from ~~54.6%~~59.0% in ~~2016~~2018 to ~~54.9%~~58.9% in ~~2017.~~2019. The amount of these expenses ~~increased~~decreased from ~~$41.9~~$59.1 million for the three months ended September 30, ~~2016~~2018 to ~~$42.1~~$58.6 million for the ~~2017~~2019 comparable ~~period. The increase in both the amounts and the percent of revenues was~~period, due to ~~an increase in compensation and related benefits, and the increase in employees in 2017.~~

improved employee utilization. For the nine months ended September 30, 2019, direct compensation, fringe benefits, and non-employee labor, as a percent of the related revenues before reimbursements, increased ~~slightly~~ from ~~55.2%~~58.6% in ~~2016~~2018 to ~~55.4%~~59.9% in ~~2017.~~2019. The amount of these expenses increased slightly from ~~$125.8~~$177.7 million for the nine months ended September 30, ~~2016~~2018 to ~~$128.3~~$177.9 million for the ~~2017~~2019 comparable period. The increase in ~~both~~ the ~~amount and the~~nine months as a percent of revenues ~~was due~~before reimbursements relates to an increase in ~~employees.~~employees in 2019 and the decline in revenues compared to the 2018 period.

Average full-time equivalent employees in this segment totaled ~~2,048~~3,176 in the first nine months of ~~2017~~,2019, up from ~~1,994~~3,136 in the comparable ~~2016~~2018 period. ~~The increase in employees was due to conversion of outsourced contractors to full time employees in the Global Business Services Center and the increase in work supporting the increased revenues.~~

Expenses Other than Reimbursements, Direct Compensation, Fringe Benefits & Non-Employee Labor

~~Broadspire~~Crawford TPA Solutions segment expenses other than reimbursements, direct compensation, fringe benefits, and non-employee labor as a percent of revenues before reimbursements were ~~34.4%~~31.7% and ~~34.1%~~32.9% for the three months and nine months ended September 30, ~~2017,~~2019, respectively, compared with ~~34.6%~~33.0% and ~~34.5%~~33.5% in the comparable ~~2016 periods, respectively.~~2018 periods. The decrease in expenses as a ~~percentage~~percent of revenues in the ~~2017 periods~~third quarter was due to ~~operational efficiency gains and reductions~~expense controls implemented in ~~administrative support costs in 2017.~~2019. The amount of these expenses decreased from $33.1 million for the three months ended September 30, 2018 to $31.6 million in 2019, and from $101.4 million for the nine months ended September 30, 2018 to $97.8 million in 2019, due to the lower revenues and expense controls implemented in 2019.

CRAWFORD SPECIALTY SOLUTIONS SEGMENT

Our Crawford Specialty Solutions segment reported operating earnings of $13.3 million for the nine months ended September 30, 2019, as compared with operating earnings of $14.4 million in the comparable 2018 period. The related segment operating margin decreased from 20.7% for the quarter ended September 30, 2018, to 19.3% in the comparable 2019 period. This decrease was due to an increase in employees and related compensation expense. Operating earnings for the nine months ended September 30, 2019 totaled $38.1 million, as compared with operating earnings of $34.4 million in the comparable 2018 period. The related segment operating margin increased from 14.6% for the nine months ended September 30, 2018 to 18.5% in the comparable 2019 period. The improvement in the year-to-date period was primarily due to the absence of the Garden City Group business which was disposed in June 2018.

Excluding indirect support costs, gross profit in the third quarter decreased from $25.9 million, or 37.3% of revenues before reimbursements, in 2018 to $24.8 million, or 36.0% of revenues before reimbursements, in 2019, due to an increase in employees to support client growth. For the nine months, gross profit decreased from $79.6 million, or 33.8% of revenues before reimbursements, in 2018 to $72.5 million, but increased as a percent of revenues to 35.1% of revenues before reimbursements, in 2019, due primarily to the absence of the Garden City Group business.

Unless otherwise noted, all amounts presented below for 2018 reflect activity of the Garden City Group service line through June 15, 2018, due to the disposal of that business as of that date.

Revenues before Reimbursements

Crawford Specialty Solutions segment revenues are primarily derived from the global property and casualty insurance company markets in the U.S., U.K., Canada, Australia, Europe and Rest of World, and, prior to the disposition of the Garden City Group business line in June 2018, the legal settlement administration market primarily in the U.S. and Canada. Revenues before reimbursements by major region, based on actual exchange rates, using a constant exchange rate and, in each case, excluding activity from the Garden City Group service line, for the three and nine months ended September 30, 2019 and 2018 were ~~$26.5~~as follows:



	Three Months Ended
	Based on actual exchange rates						Based on exchange rates for three months ended September 30, 2018
(in thousands, except percentages)	September 30, 2019		September 30, 2018		Variance		September 30, 2019		September 30, 2018		Variance
U.S.	$	29,819	$	28,685	4.0	%	$	29,819	$	28,685	4.0	%
U.K.	12,991		13,965		(7.0	)%	14,055		13,965		0.6	%
Canada	8,132		8,385		(3.0	)%	8,337		8,385		(0.6	)%
Australia	6,157		6,734		(8.6	)%	6,794		6,734		0.9	%
Europe	5,143		5,278		(2.6	)%	5,546		5,278		5.1	%
Rest of World	6,690		6,379		4.9	%	6,963		6,379		9.2	%
Total Crawford Specialty Solutions Revenues before Reimbursements	$	68,932	$	69,426	(0.7	)%	$	71,514	$	69,426	3.0	%



	Nine Months Ended
	Based on actual exchange rates						Based on exchange rates for nine months ended September 30, 2018 and exclusion of Garden City Group from September 30, 2018
(in thousands, except percentages)	September 30, 2019		September 30, 2018		Variance		September 30, 2019		September 30, 2018		Variance
U.S.	$	91,158	$	115,140	(20.8	)%	$	91,158	$	86,313	5.6	%
U.K.	38,399		40,754		(5.8	)%	40,934		40,754		0.4	%
Canada	25,295		26,017		(2.8	)%	26,110		24,969		4.6	%
Australia	17,489		18,832		(7.1	)%	18,974		18,832		0.8	%
Europe	14,796		16,359		(9.6	)%	15,847		16,359		(3.1	)%
Rest of World	19,100		18,035		5.9	%	19,872		18,035		10.2	%
Total Crawford Specialty Solutions Revenues before Reimbursements	$	206,237	$	235,137	(12.3	)%	$	212,895	$	205,262	3.7	%

Revenues before reimbursements from our Crawford Specialty Solutions segment totaled $68.9 million in the three months ended September 30, ~~2016 and $26.4 million for the comparable 2017 period. The amount of these expenses increased slightly from $78.7~~2019, compared with $69.4 million in the ~~nine months ended September 30, 2016 to $79.0 million for the 2017 comparable period, due to the increased revenues.~~

~~GARDEN CITY GROUP SEGMENT~~

~~Our Garden City Group~~2018 period. Changes in foreign exchange rates resulted in a decrease of our Crawford Specialty Solutions segment ~~reported operating earnings of $0.2~~revenues by approximately 3.7%, or $2.6 million, for the three months ended September 30, ~~2017 and an operating loss~~2019, as compared with 2018. Absent foreign exchange rate fluctuations, Crawford Specialty Solutions segment revenues would have been $71.5 million for the three months ended September 30, 2019. For the nine months ended September 30, 2019, revenues before reimbursements from our Crawford Specialty Solutions segment totaled $206.2 million, compared with $235.1 million in the 2018 period. Changes in foreign exchange rates resulted in a decrease of ~~$(2.3)~~our Crawford Specialty Solutions segment revenues by approximately 3.2%, or $6.7 million, for the nine months ended September 30, ~~2017,~~2019, as compared with ~~operating earnings of $2.2~~the 2018 period. Absent foreign exchange rate fluctuations, Crawford Specialty Solutions segment revenues would have been $212.9 million and $6.0 million in the comparable 2016 periods, respectively. The related segment operating margin decreased from 9.3% for the quarter ended September 30, 2016 to 0.9% in the comparable 2017 period, and from 8.0% for the nine months ended September 30, ~~2016 to (3.8)%~~2019.

The Garden City Group service line, which was disposed in June 2018, represents a $29.9 million negative variance, or 12.7% of Crawford Specialty Solutions revenues, in the ~~comparable 2017~~nine months ended September 30, 2019, compared to the 2018 period. ~~Operating earnings decreased~~

Overall case volumes were 8.8% lower for the three months ended September 30, 2019 and 6.9% for the nine months ended September 30, 2019, compared with the same periods of 2018. Changes in product mix and in the rates charged for those services accounted for an 11.8% and 10.6% revenue increase for the three months and nine months ended September 30, ~~2017~~2019, respectively, compared towith the ~~2016~~same periods ~~primarily due to the continued winding down of the Deepwater Horizon class action settlement project and a reduction~~ in ~~employee utilization.~~2018.

~~Revenues before Reimbursements~~

~~Garden City Group~~The increase in revenues ~~are primarily derived from legal settlement administration services related to class action settlements, mass tort, and bankruptcies, primarily~~ in the U.S. ~~Garden City Group revenues before reimbursements decreased 13.4% to $20.0 million in the third quarter of 2017, compared with $23.1 million~~ for the same period in 2016. For the nine-month period ended September 30, 2017, Garden City Group revenues before reimbursements decreased 19.9% to $59.7 million, compared with $74.5 million for the same period in 2016.

~~Garden City Group revenues in~~ the three months and nine months ended September 30, ~~2017 declined~~2019 was due to an increase in new clients in our Global Technical Services and Contractor Connection service lines, compared with the ~~same prior year period primarily because of lower revenues from the Deepwater Horizon class action settlement project and a lower volume of case administration work on projects~~2018 period. The decrease in the ~~2017 periods. We expect activity on this special project~~U.S. in the year-to-date period was due to ~~continue through~~ the ~~remainder of 2017, although at further reduced rates as compared with 2016.~~ Garden City Group ~~revenues are project-based~~disposal. On a constant currency basis, there was a revenue increase in the U.K. in the 2019 third quarter and ~~can fluctuate significantly~~year-to-date period primarily due to an increase in our Global Technical Services service line. Revenues in Canada increased in the ~~timing of projects awarded.~~

~~At September 30, 2017 we had a backlog of projects awarded totaling approximately $66.0 million,~~2019 year-to-date period compared with ~~$94.0 million at September 30, 2016. Of~~2018 due to an increase in clients in Global Technical Services. There was a slight increase in revenues in Australia due to an increase in weather related activity in the ~~$66.0 million backlog at September 30, 2017,~~current year. There was a revenue increase in Europe in the third quarter resulting from an ~~estimated $16.0 million is expected~~acquisition in Belgium, although a decrease in revenues in the year-to-date period due to ~~be recognized as~~decreased revenues ~~over the remainder~~in Italy. The increase in revenues in Rest of ~~2017.~~World was primarily due to increased weather related activity in Hong Kong.

Reimbursed Expenses included in Total Revenues

Reimbursements for out-of-pocket expenses incurred in our ~~Garden City Group~~Crawford Specialty Solutions segment can vary materially from period to period depending on the amount and types of projects, primarily in the Garden City Group service line, and were ~~$3.2~~$2.5 million and $7.3 million for the three and nine months ended September 30, 2019, respectively, compared with $2.3 million and $19.2 million, respectively, in the comparable 2018 periods. The decrease in the 2019 year-to-date period was primarily due to the absence of the Garden City Group service line previously referenced, which had reimbursements of $13.0 million in the ~~2017 third quarter compared with $4.5 million in~~2018 year-to-date period.

Case Volume Analysis

Crawford Specialty Solutions unit volumes by geographic region, as measured by cases received, for the ~~comparable period in 2016. For the nine-month period~~three months and nine months ended September 30, ~~2017, Garden City Group reimbursements decreased to $9.7 million~~2019 and 2018 were as follows:



	Three Months Ended				Nine Months Ended
(whole numbers, except percentages)	September 30, 2019	September 30, 2018	Variance		September 30, 2019	September 30, 2018	Variance
U.S.	53,420	58,870	(9.3	)%	162,737	170,006	(4.3	)%
U.K.	3,613	5,217	(30.7	)%	9,889	12,741	(22.4	)%
Canada	16,418	16,215	1.3	%	52,528	56,336	(6.8	)%
Australia	1,262	1,514	(16.6	)%	4,294	5,768	(25.6	)%
Europe	2,033	2,894	(29.8	)%	7,225	11,338	(36.3	)%
Rest of World	5,584	5,594	(0.2	)%	15,694	14,919	5.2	%
Total Crawford Specialty Solutions Cases Received	82,330	90,304	(8.8	)%	252,367	271,108	(6.9	)%

Overall case volumes were 8.8% lower in the three months ended September 30, 2019 and 6.9% lower in the nine months ended September 30, 2019, compared with ~~$13.6 million for~~ the ~~comparable period~~same periods in ~~2016.~~2018. The ~~decreases were~~decrease in U.S. case volumes in the three months and nine months ended September 30, 2019 was due to a ~~lower volume of~~decrease in weather related cases in Contractor Connection, compared to the 2018 periods. The U.K. case ~~administration work on specific projects~~volumes were lower in the ~~2017 periods.~~

~~Transaction Volume~~2019 periods due to a decrease in high-frequency, low-complexity property cases in the Contractor Connection service line. There was a slight increase in cases received in Canada in the third quarter, although a decrease in Canada for the year-to-date period due to a decrease in weather related activity in the current year as Contractor Connection received additional cases from the Ontario windstorms in 2018. The decrease in Australia cases was due to a reduction in high-frequency, low-complexity property cases in the current period. The decrease in cases in Europe was primarily due to a decrease in Global Technical Services in Italy. Cases received in Rest of World was slightly lower in the third quarter, although there was an increase in the year-to-date period due to an increase in weather related cases in Asia.

Garden City Group services ~~are~~were generally project based and not denominated by individual ~~claims. Depending upon~~claims and therefore not included in the ~~nature of projects and their respective stages of completion,~~table above for the ~~volume of transactions or tasks performed by us in any period can vary, sometimes significantly.~~nine months ended September 30, 2018.

Direct Compensation, Fringe Benefits & Non-Employee Labor

~~Garden City Group~~Crawford Specialty Solutions direct compensation, fringe benefits, and non-employee labor expenses as a percent of revenues before reimbursements were ~~69.9%~~52.2% in the ~~2017~~2019 third quarter compared ~~with 64.7%~~to 50.1% in the ~~2016~~2018 third quarter. The dollar amount of these expenses was ~~$14.0~~$36.0 million for the ~~2017~~2019 third quarter and ~~$15.0~~$34.8 million for the comparable ~~2016~~2018 period. This increase was due to increased staffing to support client growth. For the ~~nine-months ended September 30, these~~nine months, direct compensation, fringe benefits, and non-employee labor expenses as a percent of revenues before reimbursements were ~~70.1% for 2017 compared with 65.5% for 2016. The~~51.4% in both periods, and the dollar amount of these expenses was ~~$41.8~~$106.0 million ~~for the 2017 nine-month period~~in 2019 compared to ~~$48.8~~$120.8 million for the comparable ~~2016~~2018 period. The ~~declines~~decrease in the dollar ~~values were primarily~~amount in the 2019 year-to-date period was due to the ~~winding down~~Garden City Group disposal referenced above. Excluding the impact of the ~~Deepwater Horizon special project. The increases in~~Garden City Group service line, direct compensation expenses, fringe benefits, and non-employee labor ~~expense~~ as a percent of Crawford Specialty Solutions segment revenues before reimbursements ~~were~~would have been $103.6 million, or 50.5%, in the nine months ended September 30, 2018. The increase in the percentage of revenues before reimbursements was due to ~~excess capacity resulting from a decrease~~increased compensation expense and an increase in ~~employee utilization~~employees in ~~the 2017 periods.~~2019. There was an average of ~~478~~1,488 full-time equivalent employees in Crawford Specialty Solutions in the ~~2017 nine-month~~2019 nine month period, compared with an average of ~~525 in~~1,259, which excludes the ~~2016 period, decreasing as a result of decreased activity from~~375 full-time equivalent employees within the ~~special project referenced above.~~Garden City Group, for the comparable 2018 nine month period.

Expenses Other than Reimbursements, Direct Compensation, Fringe Benefits & Non-Employee Labor

~~Garden City Group expenses~~Expenses other than reimbursements, direct compensation, fringe benefits, and non-employee labor ~~as a percent~~were 28.5% and 30.1% of ~~related~~Crawford Specialty Solutions revenues before reimbursements ~~were 29.2% and 33.7%~~ for the three months and nine months ended September 30, ~~2017,~~2019, respectively, compared with ~~26.0%~~29.2% and ~~26.5%~~34.0% for the comparable ~~2016~~periods ~~respectively.~~in 2018. The dollar amount of these expenses decreased to ~~$5.8~~$19.6 million in the ~~2017~~2019 third quarter as compared with ~~$6.0 million in the 2016 third quarter, but increased to $20.1 million in the first nine months of 2017 compared with $19.7~~$20.3 million in the comparable ~~2016~~2018 period, and decreased to $62.1 million in the nine months ended September 30, 2019 as compared to $79.9 million in the comparable 2018 period. The ~~increases~~decrease in ~~both~~ the ~~dollar amounts~~third quarter is due to the lower revenues, and the ~~percent of revenues~~decrease for the year-to-date period ~~were~~was primarily due to ~~an increase in professional fees and other administrative costs in 2017 compared to~~ the ~~2016 periods. The slight decrease in the amount~~Garden City Group disposal referenced above, which had $17.4 million of expenses in the ~~third quarter was due to cost reductions implemented in 2017. The increase in percentage of revenues for the third quarter was due to the decrease in revenues.~~nine month 2018 period.

EXPENSES AND CREDITS EXCLUDED FROM SEGMENT OPERATING EARNINGS

Income Taxes

Our consolidated effective income tax rate ~~for financial reporting purposes changes~~may change periodically due to changes in enacted tax rates, fluctuations in the mix of income earned from our various domestic and international operations, which are subject to income taxes at ~~varied~~different rates, our ability to utilize net operating loss and tax credit carryforwards, ~~changes in~~and amounts related to uncertain income tax ~~positions, and changes in enacted tax rates.~~positions. We estimate that our effective income tax rate for ~~2017~~2019 will be approximately ~~30%~~32% after considering known discrete ~~items. The decrease in rate is due to certain non-recurring benefits in 2017 and changes in the mix~~items as of ~~income.~~ September 30, 2019.

The provision for income taxes on consolidated income totaled ~~$4.9~~$5.3 million and ~~$8.6~~$1.8 million for the three months ended September 30, ~~2017~~2019 and ~~2016,~~2018, respectively. The ~~provision for income taxes on consolidated income totaled $16.6 million and $20.0 million~~overall effective tax rate increased to 36.8% for the nine months ended September 30, ~~2017 and 2016, respectively. The overall effective tax rate decreased to 35.7%~~2019 compared with 31.1% for the ~~nine months ended September 30, 2017 compared with 40.7% for the 2016~~2018 period primarily due to ~~changes~~a one-time tax planning benefit in ~~non-recurring items~~2018 related to the voluntary contribution of $10.0 million to the Company's U.S. defined benefit pension plan, the impact of the sale of the Garden City Group business in 2018 and ~~mix of income year over year.~~the arbitration and claim settlements in 2019.

Net Corporate Interest Expense

Net corporate interest expense consists of interest expense that we incur on our short- and long-term borrowings, partially offset by any interest income we earn on available cash balances and short-term investments. These amounts vary based on interest rates, borrowings outstanding and the amounts of invested cash. Corporate interest expense totaled ~~$2.7~~$3.2 million and ~~$2.5~~$2.7 million for the three months ended September 30, ~~2017~~2019 and ~~2016,~~2018, respectively. ~~Interest~~There was no interest income ~~totaled $174,000 and $278,000~~during the three months ended September 30, 2019, compared to $0.3 million for the three months ended September 30, ~~2017 and 2016, respectively.~~2018. Corporate interest expense totaled ~~$7.3~~$8.9 million and ~~$8.1~~$8.8 million for the nine months ended September 30, ~~2017~~2019 and ~~2016,~~2018, respectively. Interest income totaled ~~$581,000~~$0.5 million and ~~$498,000~~$1.4 million for the nine months ended September 30, ~~2017~~2019 and ~~2016,~~2018, respectively. ~~The decrease in interest expense in 2017 compared with the 2016 period was due to the exchange rate impact on the U.K borrowings and lower average borrowing rates.~~

Stock Option Expense

Stock option expense, a component of stock-based compensation, is comprised of non-cash expenses related to stock options granted under our various stock option and employee stock purchase plans. Stock option expense is not allocated to our operating segments. Stock option expense ~~of $468,000 was recognized during~~totaled $0.5 million and $0.4 million for the three months ended September 30, ~~2017, compared with $176,000 for the comparable period in 2016.~~2019 and 2018, respectively. Stock option expense ~~of $1,342,000 was recognized during~~totaled $1.3 million and $1.4 million for the nine months ended September 30, 2017, compared with $403,000 for the comparable period in 2016. The increase in the 2017 periods was due to a higher proportion of options having been granted in 2017 as a component of our Long Term Incentive Plans.2019 and 2018, respectively.

Amortization of Customer-Relationship Intangible Assets

Amortization of customer-relationship intangible assets represents the non-cash amortization expense for finite-lived customer-relationship and trade name intangible assets. Amortization expense associated with these intangible assets totaled ~~$2.7~~$2.8 million for each of the three months ended September 30, ~~2017~~2019 and ~~$2.4~~2018. Amortization expense associated with these intangible assets totaled $8.4 million ~~for the three months ended September 30, 2016,~~ and ~~$8.2~~$8.3 million for the nine months ended September 30, ~~2017~~2019 and ~~$7.3 million for the nine months ended September 30, 2016. The increases in the 2017 periods over 2016 were due to the acquisition of WeGoLook discussed in Note 2, "Business Acquisition."~~2018, respectively. This amortization expense is included in "Selling, general, and administrative expenses" in our unaudited Condensed Consolidated Statements of Operations.

Unallocated Corporate and Shared Costs, ~~and Credits,~~ Net

Certain unallocated corporate and shared costs are excluded from the determination of segment operating earnings. For the three months ~~and nine months~~ ended September 30, ~~2017~~2019 and ~~2016,~~2018, unallocated corporate and shared costs and credits represented costs of our frozen U.S. defined benefit pension plan, expenses for our chief executive officer and our Board of Directors, certain adjustments to our self-insured liabilities, certain unallocated legal costs and professional fees, ~~costs of our cross currency swap in 2016,~~ and certain adjustments and recoveries to our allowances for doubtful accounts receivable.

Unallocated corporate and shared costs were ~~$4.1~~$1.6 million and ~~$6.9~~$5.8 million for the three months ended September 30, ~~2017~~2019 and ~~2016,~~2018, respectively. The decrease for the three months ended September 30, ~~2017~~2019 was due to a decrease in professional fees, self-insurance expenses and other administrative costs, partially offset by an increase in defined benefit pension ~~expense and professional fees.~~expense. Unallocated corporate and shared costs were ~~$6.3~~$2.4 million and ~~$17.5~~$7.3 million for the nine months ended September 30, ~~2017~~2019 and ~~2016.~~2018, respectively. The decrease for the nine months ended September 30, ~~2017~~2019 was due to a ~~reduction~~decrease in professional fees and other administrative costs, partially offset by an increase in defined benefit pension expense ~~self-insured expenses,~~ and ~~unallocated professional fees.~~self-insurance expenses.

~~Restructuring~~

Arbitration and ~~Special Charges~~Claim Settlements

During the three months ended June 30, 2019, we recognized an expense in the amount of $11.4 million related to an arbitration panel awarding three of four former executives of our former Garden City Group business unit additional payments associated with their departure from the Garden City Group on December 31, 2015. In August 2019, we received a claim from the fourth former executive of the Garden City Group. This claim was settled in October for $1.2 million, which is reflected in the three months ended September 30, 2019. Total ~~restructuring~~arbitration and ~~special charges~~claim settlements for the nine months ended September 30, 2019 is $12.6 million. There are no other potential claimants related to this matter.

Loss on Disposition of Business Line

During the three months and nine months ended September 30, ~~2017 were $1.4~~2018, we recorded a loss on the disposal of a business line of $1.2 million and ~~$8.8~~$19.0 million, respectively. ~~There were $1.5 million and $7.4 million~~The loss on the sale of ~~restructuring and special charges during~~ the ~~three months and nine months ended September 30, 2016. See "Restructuring and Special Charges"~~Garden City Group business was presented in the ~~"Results~~unaudited Condensed Consolidated Statements of ~~Operations" section~~Operations as a separate charge "Loss on disposition of ~~this Item 2 where these charges are discussed.~~business line."

LIQUIDITY, CAPITAL RESOURCES, AND FINANCIAL CONDITION

At September 30, ~~2017,~~2019, our working capital balance (current assets less current liabilities) was approximately ~~$158.3~~$76.7 million, ~~an increase~~a decrease of ~~$23.9~~$18.9 million from the working capital balance at December 31, ~~2016.~~2018. Our cash and cash equivalents were ~~$73.3~~$46.1 million at September 30, ~~2017,~~2019, compared with ~~$81.6~~$53.1 million at December 31, ~~2016.~~

2018.

Cash and cash equivalents as of September 30, ~~2017~~2019 consisted of ~~$19.0~~$16.4 million held in the U.S. and ~~$54.3~~$29.7 million held in our foreign subsidiaries. All of the cash and cash equivalents held by our foreign subsidiaries is available for general corporate purposes. The Company generally does not provide for additional U.S. and foreign income taxes on undistributed earnings of foreign subsidiaries because they are considered to be indefinitely reinvested. The Company's current expectation is that such earnings will be reinvested by the subsidiaries or will be repatriated only when it would be tax effective or otherwise strategically beneficial to the Company such as if a very unusual event or project generated profits significantly in excess of ongoing business reinvestment needs. If such an event were to occur, we would analyze the potential tax impact and our anticipated investment needs in that region and provide for U.S. taxes for earnings that are not expected to be indefinitely reinvested. Other historical earnings and future foreign earnings necessary for business reinvestment are expected to remain indefinitely reinvested and will be used to provide working capital for these operations, fund defined benefit pension plan obligations, repay non-U.S. debt, fund capital improvements, and fund future acquisitions.

We currently believe that funds expected to be generated from our U.S. operations, along with potential borrowing capabilities in the U.S., will be sufficient to fund our U.S. operations and other obligations, including our funding obligations under our U.S. defined benefit pension plan, for the foreseeable future and, therefore, except in limited circumstances such as those described above, we do not foresee a need to repatriate cash held by our foreign subsidiaries in a taxable transaction to fund our U.S. operations. However, if at a future date or time these funds are necessary for our operations in the U.S. or we otherwise believe it is in our best interests to repatriate all or a portion of such funds, we may be required to accrue and pay U.S. taxes to repatriate these funds. No assurances can be provided as to the amount or timing thereof, the tax consequences related thereto, or the ultimate impact any such action may have on our results of operations or financial condition.

No additional income or withholding taxes have been provided for any undistributed foreign earnings, nor have any taxes been provided for outside basis difference inherent in these entities as these amounts continue to be indefinitely reinvested in foreign operations. Additionally, due to withholding tax, basis computations, and other related tax considerations, it is not practicable to estimate any taxes to be provided on outside basis differences at this time.

Cash Provided by Operating Activities

Cash provided by operating activities was ~~$13.9~~$42.3 million for the nine months ended September 30, ~~2017~~,2019, compared with ~~$50.1~~$16.0 million of cash provided ~~for~~in the comparable period of ~~2016.~~2018. The ~~decrease~~increase in cash provided by operating activities was primarily due to ~~an increase~~a decrease in ~~accrued compensation~~discretionary U.S. and ~~bonus payments, changes~~U.K. pension contributions in 2019 compared to 2018, better accounts receivable management and lower working capital requirements, including the positive cash flow impact of the Garden City Group disposal in June 2018. The Company made a one-time discretionary contribution of $10.0 million to its U.S. defined benefit pension ~~cost, and increases~~plan in ~~tax and self insurance payments. During~~ the ~~nine months ended September 30, 2016, the Company settled a cross currency swap for $4.9 million, increasing cash from operations for the period.~~2018 third quarter.

Cash Used inin/Provided by Investing Activities

Cash used in investing activities, primarily for acquisitions of ~~businesses,~~ property and equipment and capitalized software, was ~~$68.5~~$15.2 million for the nine months ended September 30, ~~2017~~2019, compared with ~~$23.2~~$12.1 million provided in the first nine months of ~~2016. This increase was~~2018. The 2018 activity included proceeds from the disposal of the Garden City Group business line. Capital expenditures were higher in the 2018 period due to the ~~acquisition~~costs incurred for the consolidation and relocation of ~~WeGoLook as discussed~~our Atlanta Service Center and other investments in ~~Note 2, "Business Acquisition."~~technology, including Garden City Group expenditures.

Cash ~~Provided by/~~Used in Financing Activities

Cash ~~provided by~~used in financing activities was ~~$43.1~~$33.7 million for the nine months ended September 30, ~~2017~~2019, compared with ~~$28.9~~$28.6 million used in financing activities for the ~~2016~~2018 period. We paid ~~$10.3~~$9.9 million and $10.2 million in dividends in the ~~nine-month periods~~nine months ended September 30, ~~2017~~2019 and ~~2016,~~2018, respectively. During the first nine months of ~~2017,~~2019, we increased our short-term borrowings and book overdraft, net, by ~~$60.2~~$0.5 million,, compared with a decrease during the first nine months of ~~2016~~2018 of ~~$16.2 million. The increase~~$11.3 million, to fund working capital requirements. Share repurchases totaled $25.7 million in the ~~2017~~2019 period, ~~was primarily due~~compared to ~~borrowings to fund~~$7.7 million for the ~~WeGoLook acquisition and increased working capital requirements.~~first nine months of 2018.

Other Matters Concerning Liquidity and Capital Resources

As a component of our credit facility, we maintain a letter of credit facility to satisfy certain contractual obligations. Including ~~$14.5~~$11.6 million of undrawn letters of credit issued under the letter of credit facility, the available balance under our credit facility totaled ~~$135.3~~$247.5 million at September 30, ~~2017.~~2019. Our short-term debt obligations typically peak during the first half of each year due to the annual payment of incentive compensation, contributions to retirement plans, working capital fluctuations, and certain other recurring payments, and generally decline during the balance of the year. The balance of short-term borrowings represents amounts under our credit facility that we expect, but are not required, to repay in the next twelve months. Long- and short-term borrowings outstanding, including current installments and ~~capital~~finance leases, totaled ~~$250.1~~$189.4 million as of September 30, ~~2017~~2019 compared with ~~$188.0~~$190.4 million at December 31, ~~2016.~~2018.

Defined Benefit Pension Funding and Cost

We sponsor a qualified defined benefit pension plan in the U.S. (the "U.S. Qualified Plan"), three defined benefit plans in the U.K., and defined benefit pension plans in the Netherlands, Norway, Germany, and the Philippines. Effective December 31, 2002, we froze our U.S. Qualified Plan. Our frozen U.S. Qualified Plan and U.K. plans were underfunded by ~~$103.5~~$72.5 million and overfunded by ~~$21.6~~$32.7 million, respectively, at December 31, ~~2016~~2018, based on accumulated benefit obligations of ~~$479.2~~$420.2 million and ~~$243.7~~$234.8 million for the U.S. Qualified Plan and the U.K. plans, respectively.

For the ~~nine-month period~~nine months ended September 30, ~~2017,~~2019, the Company made no contributions ~~of $9.0 million~~to its U.S. defined benefit pension plan and ~~$4.0~~$0.5 million to its ~~U.S. and~~ U.K. defined benefit pension plans, respectively, compared with contributions of ~~$9.0~~$19.0 million and ~~$4.6~~$4.2 million, respectively, in the comparable ~~periods of 2016.~~2018 period. The Company isdoes not ~~required~~expect to make any additional contributions to its U.S. orand U.K. ~~defined benefit pension~~ plans ~~for the remainder of 2017; however, the Company expects to make additional contributions of approximately $1.3 million to its U.K. plan~~ during the remainder of ~~2017. No additional contributions are expected to be made~~2019. Anticipated funding for the ~~U.S. plan during the remainder of 2017.~~other international plans is not significant.

Dividend Payments

Our Board of Directors makes dividend decisions from time to time based in part on an assessment of current and projected earnings and cash flows. During the nine months ended September 30, ~~2017,~~2019, we paid ~~$10.3~~$9.9 million in dividends. Our ability to pay future dividends could be impacted by many factors including the funding requirements of our defined benefit pension plans, repayments of outstanding borrowings, levels of cash expected to be generated by our operating activities, and covenants and other restrictions contained in any credit facilities or other financing agreements. The covenants in our existing credit facility limit dividend payments to shareholders.

Financial Condition

Other significant changes on our unaudited Condensed Consolidated Balance Sheet as of September 30, ~~2017~~2019, compared with our unaudited Condensed Consolidated Balance Sheet as of December 31, ~~2016~~2018 were as follows:

Accounts receivable increased $11.1 million, or $6.2 million excluding foreign currency exchange impacts and other adjustments. This increase was largely due to increased receivables in the U.S. Services segment related to the hurricane activity when compared with December 31, 2016 balances.

Unbilled revenues increased ~~$22.0 million, or $17.0~~$8.7 million excluding foreign currency exchange impacts. This increase was primarily due to ~~increased unbilled revenues~~the Crawford Claims Solutions segment, which had increases due to weather related activity in Australia and other increases in the ~~International~~U.S. and ~~Garden City Group segments when compared with December 31, 2016 balances.~~Canada.

Accounts payable and accrued liabilities decreased ~~$10.8 million, or $16.2~~$4.4 million excluding foreign exchange ~~impacts and other adjustments.~~impacts. The decrease ~~was due~~related to ~~lower accrued compensation~~changes in our self insurance liabilities and ~~incentive compensation~~timing of payments within accounts payable. Included in this amount is the net change for the ~~2017 period, accrued self insurance,~~inclusion of "Operating lease right-of-use assets, net" and ~~accounts payable.~~"Operating lease liabilities" as well as the removal of "Deferred rent", as discussed further below.

At September 30, ~~2017,~~2019, we were not a party to any off-balance sheet arrangements ~~other than operating leases,~~ which we believe could materially impact our operations, financial condition, or cash flows.

As disclosed in our Annual Report on Form 10-K for the year ended December 31, ~~2016,~~2018, we have certain material obligations under operating lease agreements to which we are a party. ~~In accordance with GAAP, these~~As discussed in Note 4, "Lease Commitments" of our accompanying unaudited condensed consolidated financial statements included in Item 1 of this Quarterly Report on Form 10-Q, the Company adopted Topic 842 as of January 1, 2019, which resulted in recording operating ~~lease obligations~~lease-related assets and ~~the related leased assets are not reported~~liabilities on our ~~consolidated balance sheet.~~unaudited Condensed Consolidated Balance Sheet as of September 30, 2019.

We also maintain funds in various trust accounts to administer claims for certain clients. These funds are not available for our general operating activities and, as such, have not been recorded in the accompanying unaudited Condensed Consolidated Balance Sheets. We have concluded that we do not have a material off-balance sheet risk related to these funds.

APPLICATION OF CRITICAL ACCOUNTING POLICIES AND ESTIMATES

~~There~~Except as set forth below, there have been no material changes to our critical accounting policies and estimates from those disclosed in our Annual Report on Form 10-K for the year ended December 31, ~~2016.~~2018.

New Accounting Standards Adopted

Additional information related to adoption of accounting standards is provided in ~~Note 3~~Notes 2 and 4 to the accompanying unaudited condensed consolidated financial statements contained in this Quarterly Report on Form 10-Q.

Pending Adoption of New Accounting Standards

Additional information related to pending adoption of recently issued accounting standards is provided in Note 32 to the accompanying unaudited condensed consolidated financial statements contained in this Quarterly Report on Form 10-Q.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

For a discussion of quantitative and qualitative disclosures about the Company's market risk, see Item 7A, "Quantitative and Qualitative Disclosures About Market Risk," of our Annual Report on Form 10-K for the year ended December 31, ~~2016.~~2018. Our exposures to market risk have not changed materially since December 31, ~~2016.~~2018.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and that such information is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Management necessarily applies its judgment in assessing the costs and benefits of such controls and procedures, which, by their nature, can provide only reasonable assurance regarding management's control objectives. The Company's management, including the Chief Executive Officer and the Chief Financial Officer, does not expect that our disclosure controls and procedures can prevent all possible errors or fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within the Company have been detected. There are inherent limitations in all control systems, including the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple errors or mistakes. Additionally, controls can be circumvented by the individual acts of one or more persons. The design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and, while our disclosure controls and procedures are designed to be effective under circumstances where they should reasonably be expected to operate effectively, there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Because of the inherent limitations in any control system, misstatements due to possible errors or fraud may occur and not be detected.

As of the end of the period covered by this report, we performed an evaluation, under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and ~~operations~~operation of our disclosure controls and procedures pursuant to Exchange Act Rules 13a-15(b) and 15d-15(b). Based upon the foregoing, the Chief Executive Officer along with the Chief Financial Officer concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were effective at providing reasonable assurance that all information relating to the Company (including its consolidated subsidiaries) required to be disclosed in our Exchange Act reports is recorded, processed, summarized, and reported in a timely manner.

Changes in Internal Control over Financial Reporting

We have identified no ~~material~~ changes in our internal control over financial reporting that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II — OTHER INFORMATION

Item 1A. Risk Factors

In addition to the other information set forth in this report, the factors discussed in Part I, "Item 1A. Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, ~~2016~~2018 could materially affect our business, financial condition, or results of operations. The risks described in this report and in our Annual Report on Form 10-K are not the only risks facing our Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition, or results of operations.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

The Company's share repurchase authorization, approved in ~~August 2014,~~July 2017, provided the Company with the ability to repurchase up to 2,000,000 shares of CRD-A or CRD-B (or both) through July ~~28, 2017~~2020 (the ~~"2014~~"2017 Repurchase Authorization"). Under the ~~2014~~2017 Repurchase Authorization, repurchases could be made for cash, in the open market or privately negotiated transactions at such times and for such prices as management ~~deems~~deemed appropriate, subject to applicable contractual and regulatory restrictions. The ~~2014~~2017 Repurchase Authorization had 427,883 shares available for repurchase when it was terminated on ~~July 28, 2017.~~May 8, 2019.

~~The table below sets forth the repurchases of CRD-A and CRD-B by~~ Since December 31, 2018, the Company ~~during each month in~~has purchased 985,459 shares pursuant to the ~~quarter ended September 30, 2017.~~2019 Repurchase Authorization. As of September 30, ~~2017,~~2019, the Company was authorized to repurchase ~~1,829,263~~1,014,541 shares under the ~~2017~~2019 Repurchase ~~Authorization after repurchasing 170,737 shares since July 29, 2017.~~Authorization.


Period	Total Number of Shares Purchased	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Number of Shares That May be Purchased Under the Plans or Programs	Total Number of Shares Purchased	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Number of Shares That May be Purchased Under the Plans or Programs
Balance as of June 30, 2017					1,050,492
July 1, 2017 - July 31, 2017
Balance as of June 30, 2019										1,647,570
July 1, 2019 - July 31, 2019
CRD-A	75,000	$	7.46	75,000		11,089	$	10.00	11,089
CRD-B	75,000	$	8.90	75,000		75,000	$	9.35	75,000
Totals as of July 31, 2017					1,999,890
August 1, 2017 - August 31, 2017
Totals of July 31, 2019										1,561,481
August 1, 2019 - August 31, 2019
CRD-A	75,000	$	7.42	75,000		304,115	$	9.65	304,115
CRD-B	52,100	$	8.82	52,100		75,000	$	9.50	75,000
Totals as of August 31, 2017					1,872,790
September 1, 2017 - September 30, 2017
Totals of August 31, 2019										1,182,366
September 1, 2019 - September 30, 2019
CRD-A	43,527	$	8.92	43,527		86,688	$	9.95	86,688
CRD-B	—			—		81,137	$	9.44	81,137
Totals as of September 30, 2017	320,627			320,627	1,829,263
Totals as of September 30, 2019						633,029			633,029	1,014,541

Item 5. Other Information

On October 30, 2019, the Company, its subsidiaries Crawford & Company Risk Services Investments Limited, Crawford & Company (Canada) Inc. and Crawford & Company (Australia) Pty. Ltd. (the Company, together with such subsidiaries, as borrowers (the “Borrowers”)), the Company’s guarantor subsidiaries party thereto, Wells Fargo Bank, National Association, as administrative agent and a lender (“Wells Fargo”), and the other lenders party thereto (together with Wells Fargo, the “Lenders”), entered into a Second Amendment to Amended and Restated Credit Agreement (the “Amendment”) which amended that certain Amended and Restated Credit Agreement, dated as of October 11, 2017, by and among the Borrowers and the Lenders (as amended, the “Agreement”). Pursuant to the Amendment, the expenses paid or incurred in connection with the arbitration with three former executives of our Garden City Group relating to additional payments associated with their departure from the Garden City Group on December 31, 2015 are excluded from the calculation of Consolidated EBITDA for purposes of the financial covenants in the Agreement. Additionally, the Amendment made certain administrative changes to the Agreement. The foregoing description of the Amendment is qualified in its entirety by reference to the Amendment, a copy of which is filed as Exhibit 10.1 to this Report and is incorporated herein by reference.

Item 6. Exhibits



Exhibit
No.		Description
3.1		Restated Articles of Incorporation of the Registrant (incorporated by reference to Exhibit 3.1 to the Registrant's Current Report on Form 8-K filed with the Securities and Exchange Commission on May 14, 2007)

3.2		Restated By-laws of the Registrant, as amended (incorporated by reference to Exhibit 3.1 of the Registrant's Current Report on Form 8-K filed with the Securities and Exchange Commission on December 22, 2008)

10.1		Second Amendment to amended and Restated Credit Agreement, dated as of October 30, 2019, by and among Crawford & Company, Crawford & Risk Services Investments Limited, Crawford & Company (Canada) Inc. and Crawford & Company (Australia) Pty. Ltd., and the guarantor subsidiaries party thereto, Wells Fargo Bank, National Association, as administrative agent and a lender ("Wells Fargo"), and the other lenders party thereto

15		Letter of Ernst & Young LLP

31.1		Certification of principal executive officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2		Certification of principal financial officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1		Certification of principal executive officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2		Certification of principal financial officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101		XBRL Documents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



		Crawford & Company (Registrant)

Date:	November ~~6, 2017~~4, 2019	/s/ Harsha V. Agadi
		Harsha V. Agadi
		President and Chief Executive Officer (Principal Executive Officer)


Date:	November ~~6, 2017~~4, 2019	/s/ W. Bruce Swain
		W. Bruce Swain
		Executive Vice President and Chief Financial Officer (Principal Financial Officer)

4653



Restructuring Charges	Three months ended				Nine months ended
(in thousands)	September 30, 2017		September 30, 2016		September 30, 2017		September 30, 2016
Implementation and phase-in of the Centers	$	91	$	775	$	314	$	3,177
Restructuring and integration costs	741		586		7,457		2,189
Asset impairments and lease termination costs	599		—		1,047		1,165
Total restructuring charges	$	1,431	$	1,361	$	8,818	$	6,531



	Three months ended				Nine months ended
(whole numbers, except percentages )	September 30, 2017	September 30, 2016	Variance		September 30, 2017	September 30, 2016	Variance
Claims Field Operations	43,538	39,279	10.8	%	122,452	116,571	5.0	%
Technical Services	2,864	2,410	18.8	%	7,622	6,766	12.7	%
Catastrophe Services	18,643	2,927	536.9	%	26,089	13,221	97.3	%
Subtotal U.S. Claims Services	65,045	44,616	45.8	%	156,163	136,558	14.4	%
Contractor Connection	55,831	54,660	2.1	%	167,685	157,327	6.6	%
WeGoLook	28,234	—	nm		84,015	—	nm
Total U.S. Services Cases Received	149,110	99,276	50.2	%	407,863	293,885	38.8	%