Good afternoon. My name is Katrina, and I will be your conference facilitator for today. At this time, I would like to welcome everyone to the Crawford & Company fourth quarter 2012 earnings release conference call. In conjunction with this call, a supplementary financial presentation is available on our website at www.crawfordandcompany.com under the Investor Relations section. [Operator Instructions] As a reminder, ladies and gentlemen, this conference is being recorded today, Wednesday, February 13, 2013. Some of the matters to be discussed in this conference call and in the supplementary financial presentation may include forward-looking statements that involve risks and uncertainties. These statements may include, but are not limited to, statements regarding the funded status of our defined benefit pension plan; our expectations related to future revenues and expenses; our long-term liquidity requirements; and our ability to pay dividends in the future. The company's actual results achieved in future quarters could differ materially from results that may be implied by such forward-looking statements. The company undertakes no obligation to publicly release revisions to any forward-looking statements made in this conference call to reflect events or circumstances occurring after the date of the call, or to reflect the occurrence of unanticipated events. In addition, you are reminded that operating results for any historical period are not necessarily indicative of results to be expected for any future period. For a complete discussion regarding factors which could affect the company's financial performance, please refer to the company's Form 10-K for the year ended December 31, 2011, filed with the Securities and Exchange Commission, particularly the information under the headings: Business, Risk Factors, Legal Proceedings and Management Discussion and Analysis of Financial Conditions and Results of Operations as well as subsequent company filings, discussion and analysis of financial condition and results of operations. This presentation also includes certain non-GAAP financial measures as defined under SEC rules. As required, a reconciliation is provided for those measures to the most directly comparable GAAP measures. I would now like to introduce Mr. Jeffrey Bowman, President and Chief Executive Officer of Crawford & Company. Mr. Bowman, you may begin your conference.

Thank you, Katrina. A warm welcome to our investors, clients and employees this afternoon. I am Jeffrey Bowman, President and CEO of Crawford & Company. Joining me from the Global Executive Management team this afternoon are Bruce Swain, our CFO; and Allen Nelson, our General Counsel and Chief Administrative Officer. I will begin with some opening comments on our fourth quarter and full year 2012 results. Bruce will then review the fourth quarter and full year financials in more detail, which will be followed by a review of our business performance, comments on our strategic initiatives and conclude with our corporate focus and our initial 2013 guidance. I am very pleased to report that Crawford's global integrated business services produced record financial results for the full year 2012. We reported record revenues of $1.177 billion, growth of 40% and consolidated operating earnings of a record $110.2 million and our highest net income and diluted earnings per share since 1994, at $0.97 per share for CRDA and $0.94 for CRDB. We saw meaningful improvements in the operating performance of all of our business segments except the Americas where, as previously reported, lower numbers of claims affected results in the first half of the year. Nonetheless, Crawford was able to capitalize on global opportunities and events that enhanced our return to shareholders in 2012 and has positioned us well for 2013. Our fourth quarter 2012 consolidated operating earnings more than tripled last year's fourth quarter figures and were driven by our handling of claims from Superstorm Sandy, very strong results from our EMEA/AP and Legal Settlement Administration segments and a continued improvement in Broadspire's results. During the 2012 fourth quarter, we set new financial records for consolidated revenues, consolidated operating earnings and operating cash flow. The Americas segment benefited from claims activity…

Company-wide revenues before reimbursements in the 2012 fourth quarter were a record $313 million, up 18% from $265.6 million in the prior year's fourth quarter. Our handling of claims from Superstorm Sandy in the Americas segment and strong results in our Legal Settlement Administration and EMEA/AP segments drove this improvement. Our net income attributable to shareholders of Crawford & Company totaled $17.9 million in the 2012 fourth quarter, up 299% over the $4.5 million in the 2011 period. Fourth quarter 2012 diluted earnings per share were $0.33 for CRDA and $0.32 for CRDB compared to earnings per share of $0.09 for CRDA and $0.08 for CRDB in the 2011 period. Consolidated operating earnings, a non-GAAP financial measure, totaled a record $38.9 million for the 2012 fourth quarter, nearly quadrupling the $10 million reported in the 2011 fourth quarter. During the 2012 fourth quarter, the company incurred a pre-tax special charge of $8.5 million related to a loss on a property sublease and North American severance costs. These special charges decreased earnings per share by $0.10 in the 2012 fourth quarter. During the prior year fourth quarter, the company recorded a special charge of $4.6 million consisting of a write-off of deferred financing costs related to the refinancing of our credit agreement and severance expenses. We also recorded a tax benefit of $5.5 million for foreign tax credits in that quarter. The net of these items increased earnings per share by $0.05 in the 2011 fourth quarter. The company selling, general and administrative expenses or SG&A totaled $54.4 million or 17.4% of revenues in the 2012 fourth quarter, down from $54.7 million or 20.6% of revenues in the prior year quarter. During 2012, the company paid a higher dividend on its CRDA common stock than on its CRDB shares. This dividend…

Thanks, Bruce. Results for 2012 reflected a number of weather-related catastrophic events. Crawford's ability to respond rapidly and efficiently with both highly qualified people and advanced technology affirmed our leadership position in our industry and demonstrated our capabilities to handle major events globally. The events of 2012 called on all of our resources, requiring us to manage the large number of claims generated by massive flooding in Thailand as well as tackling the large and complex claims that come with an urban event like Superstorm Sandy in the U.S. The breadth of our business portfolio was very evident in the strong performance of our Legal Settlement Administration operations, which reported double-digit revenue gains and operating earnings growth primarily as a result of the responsibility to the massive Deep Water Horizon class action project. Our global reach produced significant revenue in the Asia-Pacific area, underlining the expertise that guided Crawford resources committed in response to flooding in Thailand. This increase in international revenue more than offset lower volumes in our Americas property and casualty operations, especially considering the particularly low volume of claims we experienced in the first half of the year. Crawford's advanced technology and business solutions delivered results on the BPO side as well. In our Broadspire workers compensation operations, an emphasis on delivering services that help our clients effectively manage their cost of risk produced an important improvement, as operating revenues improved from an $11.4 million loss in 2011 to a small operating profit for 2012 on a 1.8 revenue expansion. Our record consolidated revenue performance for the quarter reflected a 14.8% increase in cases over the fourth quarter of 2011. We saw cases increase in the Americas, EMEA/AP and Broadspire, with particular growth in catastrophic cases, primarily as a result of Superstorm Sandy. Now let me turn…

[Operator Instructions] Your first question comes from the line of Mark Hughes with SunTrust.

The legal settlement business, your backlog is up very sharply between Q3 and Q4. Could you give a little more detail on what's supporting that? And then I think you talked about revenue for this year being slightly reduced, perhaps. With that kind of backlog, why would we think a reduction would be in order?

Well, the -- it's Jeff, Mark. The volume has decreased within that unit. We had significant activity in the fourth quarter of last year, and that activity is slowing down over the period. So we've reflected in our guidance that decrease taking place.

The continued strength there, to what extent is that the Deep Water Horizon? How much of it is underlying assignments that -- some of what you've discussed there? How do we think about the sustainability of that going forward?

Hi, Mark. It's Bruce. Within the Deep Water Horizon case, we expect to be involved in that through the conclusion, and we think that it will be a meaningful project for us in '13, although at reduced levels as compared to '12, and ultimately, the revenues from that project, as the revenues from any project that we work on, are going to taper off and then end. We have been named on a couple of other good-sized assignments for that business that are kicking off that are going to help us in '13, and some little drift into '14 as well. So clearly, the results in that business have been driven by the mega event surrounding the Gulf, but even apart from that business -- that particular project, it's a great business with a strong reputation in the marketplace. And they are getting their fair share, or more, of the opportunities that came their way.

The EMEA/AP, the compensation expense, on a relative basis, was very low in the quarter. Were there some awards or bonuses that got paid in this quarter that boosted the profitability?

I'm not quite sure I understand the question. I mean, we had a sharp increase in revenues and relatively flat expenses. A lot of our revenue increase that we've have seen in EMEA/AP in the fourth quarter, as in the third quarter, was related to catastrophic events in the Asia-Pacific region, and we get good leverage off of those events on our existing cost base. So I think what you're seeing is the benefit that we get from large events that happen in the company if we're able to successfully hold our cost levels in line.

Yes. I guess I'm thinking -- I'm just looking, and if I've got these numbers right, revenue was relatively steady on the sequential basis in the fourth quarter, but your compensation expense was down $5 million, little less than that. So it looked like you got some very good leverage on that.

I think the issue is, when we have events happening, Mark, the contribution to the bottom line in volume situations should be at a higher margin. It's having that process set up. You don't have the fixed costs related to any of these catastrophe events, so everything becomes a variable cost, and that's something we're very focused on in the group.

The Sandy, how do you feel about the duration of those assignments? I think you've said in the past that some of these storms, they're happening in a more concentrated time period than they might have in years prior. How is Sandy playing out?

Exactly that way. We've invested a lot of time and money into the management and the operational process of not only catastrophe events, but our standard claim handling. And through the electronic management of claims coming into our corporation, the management of the command center, the logistical management of the adjustors, we have significantly reduced the time and process of the claims. At the end of the year -- well, I'll say as of really yesterday, we're about 90% closed on the assignments that we received for Sandy. And if you think that's about just over 12, 13 weeks out since the event began, that's a very significant change to what used to happen. But a lot of it is technology, a lot of it is working with our clients in advance to ensure that we have got the right processes in place to be able to effectively give the service that both the insured and our client require.

The tax rate for 2013, Bruce, what do you anticipate?

It will be in a range between, say, 32% and 35%.

And then what was the share count in the fourth quarter?

Had about 55,309,000.

And then I will ask one more question. I apologize, though. Broadspire business, how should we think about 2013, both top line and margin? I think you sort of touched on some factors, but how should we think about the growth there?

Well, I think we are winning new accounts. In the first quarter of this year, we've won 3 major accounts, which will be coming onboard February, March time. That follows on from assignments that we won in the fourth quarter of last year. So our reorganization of our sales team, our focus on global account management, cross-selling, is really beginning to start to play off. So we have fairly aggressive targets for our sales team within Broadspire. The improvement in profitability in Broadspire is down to several things: it's down to new sales, it's down to making sure the processes in the operation -- the claims operation are more efficient, and it's, therefore, making sure that we're delivering the products we need to the clients. But the key to it is new revenues, and we see a gain in the year being significant to that organization.

Your next question comes from the line of Adam Klauber with William Blair.

Couple of different questions. In legal settlement, again, you mentioned you had some new assignments. Are you winning some more class actions than you have recently?

We've won a couple of class actions recently. I mean, you'll be aware that the number of class actions being filed have been significantly down, but we are getting our fair share of those available. I mean, I can't go into individual cases, but we are winning claims.

And could you give us a sense on the duration of some of these recent wins? Are they going to be mainly 12-month events, or do you think -- and this is legal settlement again. Do they tend to be more 12-month, or will they span past 12 month?

That's a really difficult question to answer. I mean, a lot of them span multi-years, let alone individual years, and you tend to get a ramp up at the very beginning, when you win these. A great amount of activity takes place in noticing and liaison with the client. And then they sort of drift into a hold situation where it's pure maintenance. That's a difficult question. And then, if events happen during the period, they can spark up again and create additional events that we have to work on for the client. It's really, there's no one answer on that, there's many answers.

And as far as Hurricane Sandy, you mentioned you've already settled 90% of the claims. What percent of commercial claims have you settled?

Well, we've got a number of business interruption claims that are going to take a while to get through the system, obviously, depending on the format of the policies that they're insured under. But we've got -- most of the claim that are outstanding tend to be the high-value, long-term [ph] claims, where we've got our Executive General Adjustors working on them.

So those could span even more than 2013, or do you think most of them will be done in 2013?

Some could go into 2014. I mean, it depends on what the period of restatement is, et cetera, on the policy.

And then as far as your margin, if you look at the EBITDA margin, it's come up nicely over the last couple of years. Is there potential that you can still get further gains over the next 2, 3 years on that EBITDA margin?

Our goal is to have an operating earning margin in excess of 10% across the organization. I would say the answer, simply, is yes to the initial question, but we're working very hard on cost management within each of the business units, on operational efficiencies, and then obviously together with what the pricing programs that we're able to put in place, ensuring that not only we increase the number of clients, but we effectively get paid fairly within that very difficult market. But I think the key to it is that we are wining accounts and that you see the SG&A figure. In the figures that Bruce talked about, we decreased by about $300,000 our SG&A figures over the prior year, yet we increased our revenue significantly, and that is a figure we are very focused on.

Another question in Broadspire, I know you've been ramping up the medical management side to sell that on a third-party basis. Have any sales occurred in that segment?

Yes, absolutely.

And I guess, how is the pipeline looking there on the medical management side?

We have a pipeline we are working on at the moment. We won a large account recently. I can't announce who it is. We haven't finalized the details on it, but hopefully we'll be able to do that in the second quarter. But we have a number of opportunities, and we have won a number of opportunities, so we're quite excited about that.

How would you say the relative margins are on the medical management business versus overall Broadspire?

They're stronger. The medical management margins tend to be much higher than margins for day-to-day claims handling. So that said, in the unbundled market, which is how we characterize it, it's competitive as it is in most of our other markets. So stronger margin potential, but just as competitive a market.

And then you paid down a good chunk of debt in 2012. As you think about cash uses next or this year, you mentioned dividends, potential share repurchases. Are you also looking to buy back a fair amount of debt this year, maybe in similar size that you did in 2012?

We'll look at our priorities for cash, dividend and share repurchases are right up there. We'll have CapEx in call up to $32 million to $33 million range, similar to what we had in '12. We'll take excess cash and look at discretionary pension funding, repayment of debt. There could be small tuck-in acquisitions that are out there that may get paid for in cash, or we could borrow for that. We're pleased with where our leverage ratio is now. We're probably in about the 130% range, 1.3x EBITDA in debt, and that's a comfortable place for us to be. And we may delever a bit more depending on what other alternatives are for that cash. But we feel very good with the strength of our balance sheet right now, and if there are compelling opportunities that present themselves on the M&A front, we wouldn't be opposed to using the strength of our balance sheet in order to pursue them.

[Operator Instructions] And there are no further questions at this time.

Thank you for your time and questions this afternoon. I'd like to thank everyone for joining us and wish you a good rest of the day. Thank you.

Thank you for participating in today's Crawford & Company conference call. This call will be available for replay beginning at 6:00 PM today through 11:59 PM on February 25, 2013. The conference ID number for the replay is 94597751. The number to dial for the replay is 1-855-859-2056 or 404-537-3406. Thank you. You may now disconnect.