Welcome to the Crawford and Company Fourth Quarter 2007Earnings Release Conference call. (Operator Instructions) Some of the matters to be discussed in this conference callmay include forward-looking statements that involve risk and uncertaintiesincluding statements regarding the integration of Broadspire ServicesIncorporated and our ability to pay dividends in the future. Crawford and Company faces risks that theintegration of Broadspire into the Company’s operations may not be successfulor may be more expensive than anticipated. The Company’s actual results achieved in the future quarters coulddiffer materially from these results that may be implied by suchforward-looking statements. The Companyundertakes no obligation to publicly release revisions to any forward-lookingstatements made in this conference call to reflect events or circumstancesoccurring after the date of the call or to reflect the occurrence ofunanticipated events. For a completediscussion regarding the factors, which could affect the company’s financialperformance, please refer to the Company’s Form 10-K for year ended December31, 2006 filed with the Securities and Exchange Commission particularly theinformation under the headings “Business Risk Factors, Legal Proceedings andManagement’s Discussion and Analysis of Financial Conditions and Results ofOperations.” This presentation alsoincludes certain non-GAAP financial measures as defined under SEC rules. As required, a reconciliation is provided forthose measures to most directly comparable GAAP measures which is available onour website at www.crawfordandcompany.com \quarterly releases. I would now like to introduce Mr. Jeffrey Bowman, ChiefExecutive Officer of Crawford and Company. Mr. Bowman, you may begin your conference.

A very warm welcome to our investors, clients and associatesthis afternoon for a discussion of our fourth quarter and 2007 year annualresults and expectations for 2008. I aminformed that we have a significant number of listeners today, so thankyou. I am Jeffrey Bowma, President andCEO of Crawford & Company. Joiningme from our global management team this afternoon are Bruce Swain, our CFOE andAllen Nelson, our General Counsel and Chief Administrative Officer. As you are all aware, on January 1, Tom Crawford assumed therole of Chairman of the Board and Jesse Crawford assumed the role of Chairmanof the Executive Committee of the Board of Directors. I have now been President and CEO sinceJanuary 1, just 35 days and I would like to update everyone on this call withthe initial actions, future plans and fundamental strategies that this managementteam has or are putting in place for Crawford and Company. Before I do that, I would like to acknowledgeand say thank you to Tom Crawford for the positive contribution he made toCrawford in his three past years as CEO. I personally look forward to continue working and partneringwith him in his new role as Chairman of the Board. For those of you who have not me, mybackground is 25-plus years in the financial services and claims industry. My experience at Crawford & Company wasdevelopment and management of the International Business Unit, which nowrepresents approximately 39% of our group total revenue, and recently, thecombination of the global property and casualty business unit. I am continually encouraged by the potentialthat we have in front of us which I would like to take a few minutes to discusswith you. Globally, insurance is a growth business and providing anindependent quality driven local, regional or global claims service is crucialto our client’s business propositions. In support of that…

Company-wide revenues of total reimbursements increased by7.4% in 2007 fourth quarter to $245.2 million from $228.3 million in the prioryear’s fourth quarter. This increase isattributable to $12.4 million in incremental revenues from the acquiredBroadspire Management Services, Inc business and double-digit organic growthfrom our international operations which offset declines in revenues generatedin our legal settlement administration in US property and casualty segment. Our pretax income totaled $4.1 million as compared to apretax loss of $1.2 million we reported in last year’s fourth quarter. We recognize the earnings per share of $0.07for the current quarter as compared to a net loss per share of $0.03 in lastyear’s fourth quarter. Fourth Quarter 2007 earnings per share includes $0.01related to the recognition of certain tax benefits during the quarter. The pretax loss in the 2006 fourth quarterincluded a restructuring charge and loss on early extinguishment of deathrelated to the Broadspire acquisition of $3.1 million, which after relatedincome taxes was $0.04 per share. The company’s selling, general and administrative expensesor SG&A totaled $50.8 million or 20.7% of revenues in the 2007 fourthquarter increasing $5.3 million from $45.4 million or 19.9% of revenues in theprior year quarter. The acquisition ofBroadspire added $3 million of incremental SG&A cost during the currentquarter. For the full year, theacquisition of Broadspire added $45.8 million of incremental SG&A costexcluding the effect of the Broadspire acquisitions, the company’s increases inSG&A cost are primarily due to higher self insurance expense in the US andhigher administrative cost in our international operating segment. Turning to operations, international revenues surged 15.9%in the 2007 fourth quarter on a local currency basis and by 27.1% in US dollarsto a new quarterly record of $107.3 million on a 16.1% increase in claimreferrals. This growth reflectsincreased case referrals in each of our international operating regionsresulting from new business wins during…

(Operator Instructions) Your first question will come from the line of James Kiernwith New Salem Investment. James Kiern – New Salem Investment: In looking at your third quarter release, I tried to do theadjustments since I see only your guiding for the fourth quarter, I came up with$0.09 to $0.12, would that be reasonable?

Yes, at the end of the third quarter that would have beenwhere our guidance for the fourth quarter would have been. James Kiern – New Salem Investment: And then taking out the tally, it looks like you came in at$0.06, so could you describe the one or two areas that mostly attributed tothis?

Really there are three areas that we were down on ourprojections on the fourth quarter. Thelargest one was the USproperty and casualty division which had about $0.02 miss on the quarter forthe fourth quarter just basically on the frequency decline that we saw comingin over that period. Secondly,Broadspire frequency was slightly down as well and that was a sink because ofthe increase run off claims that we have taken out and the new business thatresulted in that frequency decrease and they were the main reasons that wehad. There were some administrativeexpenses on slightly higher insurance premiums in terms of their E&O, butthey were on the administration cost. Infact, they were the major reasons for the decrease. James Kiern – New Salem Investment: I see your intangible amortization of $1.5 million for Q4and stock-based compensation of $200,000.00, is that correct? What can you people plan on going forward forthose numbers?

The amortization expense $1.5 million for the quarter andabout $6 million for the year relates to the amortization of customerrelationships, intangible assets primarily related to the Broadspireacquisition, but we also had some related to the SLS acquisition in the UnitedKingdom. Those intangible assets arebeing amortized over a period of 15 years, so you can expect for that non-cashexpense to continue for fourteen years. The stock option expense is the expense related to the stockoptions the company had granted prior to our implementation of the new stockoptions accounting standards a few years ago and we do not currently issueother stock options we have performance restricted share plans in place, butthese old historically granted stock options we have not allocated them to theoperating unit level for their corporate cost. That expense should decline over the next two to three years and itwould be probably zero in the next three or four years. James Kiern – New Salem Investment: You mentioned some significant IT upgrades, are there costsbuilt in to accomplishing those in ’08 or ’09 and how much is that and how muchcosts saves do you expect to get once it is implemented?

We do have several IT initiatives going on across theglobe. The one that has been the largestfor us is the RIS Tech project in the US which supports our self-insuredBroadspire business. We are in the midst of converting the systems that theBroadspire acquisition brought to us onto the RIS Tech platform. We do have cost we expect to incur during2008 and 2009 related primarily to internal use capitalized software. They will be capitalized and amortized overthe life of the project and the implementation costs that we will have on thedata migration and transfer cost which are not capitalized while they areconsidered in our expenses and are placed into the guidance range that Jeffmentioned earlier. James Kiern – New Salem Investment: Is that over the next year or two years?

Well, the RIS Tech project will be deployed to clients inthe fourth quarter of this year and then there will be a series of transfers ofclient data et cetera in release 1.2, they will go through for another six monthsor so, but at a lower level than the cost of the present stage. James Kiern – New Salem Investment: So can you give me a feel for how much that is kind ofholding back your earnings this year or next year?

When we put the RIS Tech, when we are fully implemented inRIS Tech in our Broadspire operations, we believe that we can achieve synergiesrelated to IT in the back office processing operations of between $15 millionand $20 million. James Kiern – New Salem Investment: Is that cost saves or revenue synergies or both?

Cost saves. James Kiern – New Salem Investment: You said $15 million to $20 million?

Correct. James Kiern – New Salem Investment: And you are recognizing any of those right now?

We are recognizing very, very little of that right now. In the Broadspire acquisition, we inheritedseveral systems with that group. We wererunning a system on our own in the Crawford Self-insured business and RIS Techis the one system that we are migrating those three platforms onto. When we accomplish that and during the callsthat we had and the disclosure that we had over the acquisition of Broadspire,we indicated that those synergies and cost savings were going to be for a longterm because systems integration always take a little bit longer than youthink. We had those pegged for 2009 and 2010, to really gettraction on that and it is a significant amount of money, but when you go frommanaging and operating multiple systems down to one platform, they should bevery dramatic. James Kiern – New Salem Investment: With that system, you hope to bring in revenue, bring incustomers because of the business quality?

Absolutely. Theconsolidation into one platform will make a significant difference, not to thecurrent data that we provide our clients with because that actually will remainand improve slightly, but on the internal efficiencies that we are able to gainthrough using one system rather than the three we have got. James Kiern – New Salem Investment: The legal segment, could I assume that basically in the pastwhere you had the revenue was kind of legacy from the ‘(inaudible) era’?

The 2005 and 2006 era and 2006 more was a record year inrevenue and in earnings for the Garden City Group. That was the combination of a number ofsignificant class actions. Weanticipated that that would be a lower number in 2007, so that was it followingon from the high number of class action securities that there were. James Kiern – New Salem Investment: There had been a confidence in saying those out here or isthere any way of knowing?

Well, you take the press on this, there is the prospect of asignificant number of class actions being filed over the forthcoming period. So we are very optimistic about the prospectsfor that particular business division. James Kiern – New Salem Investment: When you say forthcoming, you are talking about this year ornext quarter?

I think you are going to see this over a couple of years asthey come through the system. James Kiern – New Salem Investment: Can you describe your debt to me in the short term and longterm, at least the bulk of your debt and what the terms are and how much is it?

We have outstanding at the end of the year two components ofdebt, one is from over borrowings that are about $23 million and their termstypically are anywhere from 30 to 90 days and they roll over. We have long term borrowings in the form ofterm loans indicated with a group of banks of $185 million and the othercomponent of our total funded debt, all of those are in our balance sheet areour letter of credit obligations which go against our capacity under ourrevolver of about $20 million. James Kiern – New Salem Investment: I guess, what is the rate on the term loan?

The term loan is LIBOR from 275 and the revolver is LIBORplus 250 and they both have performance based pricing associated with them withthe company’s leverage ratio I guess below 2.5 the rates as the rate ofdecline. James Kiern – New Salem Investment: Are there several steps to that?

On the term loan, there is only one step. On the revolver, it continues to get down Iguess two times at 1.5%. James Kiern – New Salem Investment: What is your leverage ratio right now?

Our leverage ratio at the end of 2007 was 3.1 to 1. Under our accredited agreement, we wereallowed 3.5 to 1. James Kiern – New Salem Investment: And what is this LIBOR plus 275, what did it step down to arate below 2.5?

It steps down to, the spread is 2.5, 250-basis points. James Kiern – New Salem Investment: I think your short terms and LIBOR and coming into loan, areyou taking that into account for your guidance?

Yes, we have taken that into account for our guidance.

Your next question will come from the line of Matt Reamswith Buckhead Capitals.

I would like to be a little more specific than the firstcaller. I have got a bunch of questionsrelated from your guidance. You talkedabout amortization, what is your D&A expectations for ‘08?

Our appreciation and amortization expectation for ’08 wouldbe approximately $31 million.

So $6 million is for amortization, the remaining is fordepreciation?

Correct.

What are you assuming for interest expense for theyear? I mean, if my math is right,assuming now your cash balance is probably around $11 million a year? Unless there is a bunch of other items inthere than just interest cost?

The interest expense for 2008, we are assuming is about $17million.

Well, the debt you just went over based on the rates and Iknow you have a SWAP agreement too, but it looks like your average rate isgoing to be somewhere between around 5.5%, so what else is in that interestexpense category?

We have in the SWAP arrangement, we have got a certainamount of our debt that is fixed. So notall of the reduction in the LIBOR rate is going to be realized through lowerinterest expense. The LIBOR rate that wehave assumed when we put the budget and projections together and the guidancewas based on, I think about 4.8% to 4.9% so to the extent that it has come downlower from there, there would be some marginal improvement in interestexpense. Conversely, if it goes up, itcould be the other way. But typically, when we set our budget for interest cost inour guidance, we look at the level of debt that we have got today, projectedpayments, the rate of interest that exist today and we just run the calculationout.

Well, you just said you had $185 million in your term loan,right?

Right.

At today’s LIBOR, that is going to be under 6%, right?

Right, but we have got a $150 million swapped at 5.75%.

So that lowers the rate then?

Well it increases, it is higher than the LIBOR rate thatexists today.

Okay, so it is LIBOR plus?

Right.

So 175, it is LIBOR plus 5.75?

No, it is LIBOR plus 2.75 is our existing creditarrangement. Within our term loan fee,we have fixed $150 million of our debt at a rate of 5.75 per LIBOR.

Okay. I understandnow.

(Operator Instructions) Your next question will come from the line of Bruce Winterwith Private Investor. Bruce Winter –Private Investor: Could you please tell me your current dividend policy?

First of all, from the management team, we reiterate mysupport for our dividend and the board’s support. I think as we have indicated before, webelieve the suspension will be temporary as we integrate all of the actionsthat are taking place. At this time, weare not providing a timetable for the restoration of the dividend. The recent statement terms that we arelooking at is one that the bull board were obviously discussing the earningsare produced on a quarterly basis. Bruce Winter –Private Investor: Why was the previous timetable changed and when was itchanged?

That decision was taken in the third quarter.

Under our credit agreement, our original credit agreementand our agreement that exists today, we have to meet a leverage ratio of 3:1 inorder to declare and pay a dividend and we ended the year at 3.1 to 1, sopartly above the level that we needed to be at in order to declare and pay adividend. Bruce Winter –Private Investor: I understand now. Theonly other question I have is, why is the international claims business so muchmore profitable than the USclaims business?

That is really a good question. The issues we are dealing with in the US are verydifferent to the issues we are dealing with on the international side. And I come in from obviously theinternational side where we have really attacked technology, savings and clientpenetration. What we are doing at thispresent stage is last year, we deployed new technology which came in from theinternational group. It has been rolledout to the USoperation. We are changing our businessdistribution model at this moment to effectively get more client wins etcetera. We have won in 2007 a largenumber of new assignments, new nominations and input in technology. What we are dealing with is a frequency issuein the USwhich is very different to what is happening overseas. That has had an effect whereby we have been adjusting on aregular basis our costs to our revenue base in the US. The frequency is down in the whole of the industry at the moment. Really, if you look back and takecatastrophes as a situation and just storms that happen on a regular basis,there has been a significant decrease in that frequency and that has caused usto readjust the model to get back to the efficiencies that we need. Implementation of the technology is alsohaving some significant effects and that is something that the management teamhas been working very hard on in the past 12 months, but we have had differenttimes in our evolution on the international side, but number one is that wemust really push the new client wins that we have and then hopefully they willproduce the frequency claims. Bruce Winter –Private Investor: From a marketer’s standpoint in the US, everythingis trending in the right direction?

We are getting our costs absolutely under control. In the guidance, you will see that we havesignificant improvement in our operating earnings. Even with very little into our catastrophe orstorm revenue, we will be adjusting and have adjusted our base to ensure thatwe are producing an adequate return. Bruce Winter –Private Investor: Good. I look forwardto seeing your future progress.

We have a follow up question from James Kiern with New SalemInvestment. James Kiern – New Salem Investment: On the Broadspire business, if you look sequentially throughthe year, the revenues have been going down from almost $85 million to $75million and earnings from the first quarter which I assume we are still gettingsome cost saves and annuities have gone down with it, I know you did talk aboutthis meeting that you had some runoff, but I mean, that seems like asignificant runoff, were people going away from it because of the merger or isthere seasonality in the business, can you kind of give us some more granularitythere?

One piece of the Broadspire acquisition you touched on isthe runoff claims that we acquired from Broadspire. There is a certain number of claims thatBroadspire had that were really the result of its creation from the old KemperNational Services that were being runoff and those claims as we worked on theirdeferred revenue on the books that we have recognized and as we work thesefiles, we close them and that population of files represent a diminishingrevenue stream for us in the future. To offset that, we have to replace those revenues with newactive clients and we put new business on the books in Broadspire during 2007,but one of the things that we saw in the marketplace was any time two bigentities come together, there is somewhat of a wait and see attitude that wastaking place in the marketplace to make sure that we can get the integrationright and that we could bring the two companies together, so that puts somedownward pressure on our business.

If you looked forward to this, in 2007, we were awarded theTPA of the year award by the Business Insurance magazine. That has assisted very much in getting uspast this look and see effect and we are seeing some significant RFP’s in thesales cycle at this moment and the team is very much working on a number ofsignificant business wins as well as very targeted on the actual client RFP’sthat we have at various levels within the organization. We have also planned in 2008 to increase our unbundledservices in the organization as well, so I mean, we see some upsides comingthrough into the organization, but there is no doubt in the industry that wehave that look and wait and see how the organization came out. I think our clients have been very pleased with the way thatwe have achieved our objectives and got the organization moving in one stepwith everybody together. James Kiern – New Salem Investment: Has there been any changes in your sales force or process?

In the process, we have a fairly sophisticated RFP processwhich when we merge the two sales teams together, we took the best people thatwe had, so from that point of view, yes.

We also have a follow up question from Matt Reams withBuckhead Capital.

What are you assuming for tax rate in ’08?

We are assuming an effective rate of 35%

How about total capex for the year?

Total capex for the year, we are expecting about $33.5million.

And how much of that is for the RIS Tech and how much isjust general maintenance? Or can youbreak out the components of capex?

I do not have the amount for RIS Tech in front of me. I can do that for the US and theNational. US is approximately $21million and international would be about $12.5 million. Within our budget, just on a global basis,our capitalized software assumptions in our overall capital expenditure numberis about $15.4 million and that would be about $10.6 in the US that is notjust RIS Tech. That would be really anyproject that we have got planned for 2008 related to software development andthen in our international operations, the number would be $4.8 million.

Are you expecting any working capital improvements thisyear? I know your unbilled revenues anddeferred revenues have been a drag on working capital? Do you expect that to reverse?

Absolutely. That issignificantly coming out of our UK and European operations where we have somesignificant events that took place June-July which flow through into obviouslyAugust and September and as you are aware, the international division works onthe October yearend, so we see that flashing through in the first six to ninemonths of the year as we work off those excessive number claims that wereceive.

Do you have a target for working capital in 2008?

We do not have a target of such for working capital. What we have set as target for in ouroperations and in our incentive compensation planning through 2008 is areduction in day sales outstanding of 10%. That should drive significant amounts of cash in flows to help drive betteroperating cash flow performance. Theother part that you mentioned to drag on the current revenue side really isprimarily related to Broadspire and the challenge there is in increasing therevenue from new client arrangements in order to provide cash in flow into thatline item, so through a better management of accounts receivables in growingthe top line and replacing our runoff clients with new active clients withBroadspire, we should be able to significantly improve our operating cash flowperformance going into 2008.

Do you expect your debt levels to be down? I have not gone through all the math of theearnings, non-cash charges and capex, but do you expect, as all of those flushthrough that you will be able to pay down more debt and by how much?

We think that we will be able to pay down more debt. We are in our budget. We have put through about $12.5 million ofdebt repayment in a range between $10 million and $15 million is what we arelooking at.

Do you expect any more asset sales? You have had quite a bit of asset sales inthe last couple of years, do you expect anything else there?

Not from a business point of view. I mean, the two we made were very strategicin terms of we did a complete review of our products and there were two productlines that we absolutely found were better off partnering with two corporationsand investing large sums in getting the systems and the integration up tospeed. We have got enough emphasis onthe CMS 2 system and on the RIS Tech system without taking on another project,so we made some decisions around that which have proven to be the rightdecision until the end of the time, but they are no others that are planned.

Do you continue to have a pretty healthy cash balance fornext year?

We do and are planning as we have gone through the budgetplanning for cash which we have always quite a bit of attention to. We plan to maintain between $40 million and$45 million of cash at any one point in time with excess cash generated overthose levels to pay down our debt. Nowat the end of the year, we ended at a little bit north of $50 million, clearlyabove $40 million to $45million, as you know in the first quarter, we typicallyhave a pretty heavy cash outflow, so we wanted a little bit higher than wenormally would during a typical quarter point because we know we havesignificant cash requirement in the first quarter.

Jeff, in your opening comments, you talked about thiscommunication plan and strength of working together, can I assume that you aregoing to talk about each of your various operating units, your strategies togrow the business and ways in which you are going to continue to try to improvemargins?

Absolutely, we are finishing the whole plan, it will belinked into the annual report, it will be linked into a specific strategic planand discussion as well, but it is an overriding story board for the organizationas well as the direction of the management style that we are putting in placewith the new management team.

Okay, so we will hear more about that next quarter?

Yes, absolutely, by next quarter. We are just working out how to push that outto our clients and investors as well at the same time. But we will be making some announcements inthe next couple of weeks on that.

Okay, great. We lookforward to hearing those.

And at this time, we have no further questions. I would like to turn the call back over toMr. Bowman for closing remarks.

I would like to thank everyone for joining us this afternoonand look forward to talking to you in the near future and on the call at theend of the first quarter in May. Thankyou and have a great day.

Ladies and gentleman, thank you for participating in today’sCrawford & Company conference call. This call will be available for replay beginning at 6 p.m. to l1:59 p.m.on February 11, 2008. The conference IDnumber for the replay is 32434094. Thenumber to dial for the replay is 1-800-642-1687 or 706-645-9291. Thank you, you may now disconnect.