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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2000
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
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Commission file number 1-10356.
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CRAWFORD & COMPANY
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(Exact name of Registrant as specified in its charter)
Georgia 58-0506554
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(State or other jurisdiction of incorporation (I.R.S. Employer
or organization) Identification Number)
5620 Glenridge Dr., N.E., Atlanta, Georgia 30342
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (404) 256-0830
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Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
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Class A Common Stock - $1.00 Par Value New York Stock Exchange
Class B Common Stock - $1.00 Par Value New York Stock Exchange
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Securities registered pursuant to Section 12(g) of the Act:
None
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(Title of Class)
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 [X] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
The aggregate market value of the voting stock held by nonaffiliates* of the
Registrant was $119,912,600 as of March 2, 2001, based upon the closing price as
reported on NYSE on such date. *All shareholders, other than Directors,
Executive Officers, and 10% beneficial owners.
The number of shares outstanding of each of the Registrant's classes of common
stock, as of March 2, 2001, was:
Class A Common Stock - $1.00 Par Value - 23,754,704 Shares
Class B Common Stock - $1.00 Par Value - 24,697,172 Shares
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Documents incorporated by reference:
(1) Annual Report to Shareholders for the Year Ended December 31, 2000, Part I -
Item 2; Part II - Items 5, 6, 7, 7A and 8; Part IV - Item 14, and
(2) Proxy Statement for the Annual Meeting of Shareholders to be held April 24,
2001, Part III -Items 10, 11, 12, and 13.
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PART I
ITEM 1. BUSINESS
Crawford & Company (the "Registrant") is the world's largest independent
provider of diversified services to insurance companies, self-insured
corporations and governmental entities. A few of the many services provided are
claims management, loss adjustment, healthcare management, risk management
services, class action administration and risk information services.
The Registrant is not owned by or affiliated with any insurance company.
DESCRIPTION OF SERVICES
The percentages of consolidated revenues derived from the Registrant's domestic
and international operations are shown in the following schedule:
Years Ended December 31,
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2000 1999 1998
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Domestic Operations 72.9% 74.6% 74.8%
International Operations 27.1% 25.4% 25.2%
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100.0% 100.0% 100.0%
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DOMESTIC OPERATIONS. Domestic claims services are provided by the Registrant to
two different markets. Insurance companies, which represent the major source of
revenues, customarily manage their own claims administration function, but
require limited services which the Registrant provides. The Registrant also
services clients which are self-insured or commercially insured through
alternative loss funding methods, and provides them with a more complete range
of services, including the supervision of field locations, information services
and medical cost-containment.
The major elements of domestic claims administration services (which include the
limited services required by most property and casualty insurance company
clients as well as the expanded services required by self-insured clients) are
as follows:
- Initial Reporting - the Registrant's XPressLink(SM) service
provides 24-hour receipt, acknowledgement, and distribution of
claims information through Electronic Data Interchange,
customized reporting and referral programs, call center
reporting, and facsimile receipt and distribution.
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- Investigation - the development of information necessary to
determine the cause and origin of loss.
- Evaluation - the determination of the extent and value of
damage incurred and the coverage, liability, and
compensability relating to the parties involved.
- Disposition - the resolution of the claim, whether by
negotiation and settlement, by denial, or by other means.
Expanded services provided primarily, but not exclusively, to Registrant's
self-insured clients include the following:
- Information Services - through the Registrant's information
system, SISDAT(SM), it provides reports of detailed claims
information of both a statistical and financial nature to
self-insured corporations, governmental entities and insurance
companies.
- Management - the coordination and supervision of all parties
involved in the claims settlement process, including the
adjusting personnel directly involved in handling the claim.
Typically, this management function is performed by an
independent administrative unit within the Registrant which is
not involved in the initial investigation of a claim.
- Auditing Services - the Registrant's provider and hospital
bill audit programs assist clients in controlling medical
costs associated with workers compensation and liability
claims by comparing fees charged by health care providers and
hospitals with maximum fee schedules prescribed by statutory
regulations as well as usual and customary charges in
non-fee-schedule states. The Registrant also provides a PPO
network through First Health Group.
- Managed Care Services - provides a broad range of cost
containment and utilization review services to insurance
companies, service organizations and self-insured
corporations. These services, which are designed to both
control the cost and enhance the efficient delivery of medical
benefits, include pre-admission review of hospitalizations,
second surgical opinions, concurrent hospital utilization
review, and discharge planning. Early intervention services
seek to actively control medical and indemnity costs at the
onset of a claim through nurse screening for severity as
claims are received from XPressLink(SM) or directly from the
client.
- Vocational Services - provides vocational evaluation in order
to assess an injured employee's potential to return to work.
These services involve diagnostic testing and occupational,
personal and motivational counseling of the employee.
Vocational, medical and employment consultants assist in the
re-employment and preparation of injured
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individuals to return to work.
- Medical Case Management Services - are typically provided by
rehabilitation nurses who work closely with attending
physicians and other medical personnel in order to expedite
the injured person's physical recovery and rehabilitation and
maximize the opportunity for the person to return to work.
These services also involve coordinating and monitoring
treatment plans and related costs to insure that such
treatment is appropriate and necessary in the circumstances.
- Long-Term Care - offers a full menu of long-term care services
including comprehensive on-site assessments, complete care
coordination, and on-going care monitoring. These services are
provided through experienced health care professionals with an
insight to local quality care needs and are offered primarily
to senior citizens and their children, attorneys, and trust
officers.
The claims administration services described above are provided to clients for a
variety of different referral assignments which generally are classified as to
the underlying insured risk categories used by insurance companies. The major
categories are described below:
- Automobile - relates to all types of losses involving use of
the automobile. Such losses include bodily injury, physical
damage, medical payments, collision, fire, theft, and
comprehensive liability.
- Property - relates to losses caused by physical damage to
commercial or residential real property and certain types of
personal property. Such losses include those arising from
fire, windstorm, or hail damage to commercial and residential
property, burglary, robbery or theft of personal property, and
damage to property under inland marine coverage.
- Workers Compensation - relates to claims arising under state
and federal workers compensation laws.
- Public Liability - relates to a wide range of non-automobile
liability claims such as product liability; owners',
landlords' and tenants' liabilities; and comprehensive general
liability.
- Catastrophe - covers all types of natural disasters, such as
hurricanes, earthquakes and floods, and man-made disasters
such as oil spills, chemical releases, and explosions, where
the Registrant provides specially trained catastrophe teams to
handle claims, as well as to manage the recovery efforts.
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- Class Action Support - relates to the administration and field
inspection requirements with respect to product liability
class action settlements.
ADDITIONAL RISK MANAGEMENT AND OTHER SERVICES. The Registrant provides the
following additional risk management and other related services, which support
and supplement the claims and risk management services offered:
- RISK SCIENCES GROUP, INC. - is a software applications and
consulting firm which is a wholly-owned subsidiary of the
Registrant. Risk Sciences Group ("RSG") provides customized
computer-based information systems and analytical forecasting
services to the risk management and insurance industry. It
manages the Registrant's basic information systems,
SISDAT(SM), and has developed the SIGMA(SM) system, an on-line
risk management information system which supports multiple
sources of claims, locations, risk control, medical,
litigation, exposure, and insurance policy information. RSG
serves a variety of clients with specialized computer programs
for long-term risk management planning, data and systems
integration, development of historical claims/loss databases,
claims administration and management, regulatory reporting,
insurance and risk management cost control, and actuarial and
financial analysis required for loss forecasting, reserve
estimation and financial reporting.
- THE GARDEN CITY GROUP, INC. - is a class action settlement
administration company which was acquired by the Registrant in
January of 1999. The Garden City Group ("GCG") handles the
administrative functions related to class action settlements,
including qualifying class members, dispensing payments, and
administering the settlement funds. With the field operations
of the Registrant, GCG and the Registrant offer comprehensive
programs to integrate the field inspection and administrative
functions in a single source for product liability class
action settlements.
- THE PRISM NETWORK, INC. - is a subsidiary of the Registrant,
acquired in August of 1999, which contracts with a network of
contractors ("repairNet(R)") to provide property damage repair
services at agreed contract rates for property damage losses.
The Registrant and The PRISM Network, Inc. market repairNet to
property insurance companies to facilitate faster, more
economical resolution of smaller property damage claims under
home-owner policies.
- EDUCATION SERVICES - are provided by the Registrant's Crawford
University. The primary purpose of the University is to
provide education and certification for professionals engaged
in service delivery for all lines of business to assure
consistent quality in our
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work products. In addition, the University provides continuing
education in support of career paths, management and
supervisory training, and the opportunity to obtain
professional certification through IIA/CPCU. Clients have the
opportunity to attend Crawford University education programs
and access the Crawford University continuing education
curriculum in a variety of risk management subjects.
INTERNATIONAL OPERATIONS. In December 1996, an English subsidiary of the
Registrant (renamed Crawford-THG Limited) acquired all of the non-United States
operations of the Thomas Howell Group, a London, England based international
loss adjusting enterprise owned by a subsidiary of Swiss Reinsurance Company
("Swiss Re") of Zurich, Switzerland, which received stock in Crawford-THG
Limited as consideration for the transfer. Concurrently, all of the Registrant's
non-U.S. subsidiaries were transferred to Crawford-THG Limited, in which the
Registrant retained a sixty percent (60%) interest and Swiss Re's subsidiary
received a forty percent (40%) interest. In June 1998, Swiss Re's subsidiary
exchanged its forty percent (40%) interest in Crawford-THG for 1,900,000 shares
of the Registrant's Class A Common Stock. All of the Registrant's principal
international operations are now wholly-owned by the Registrant. On July 13,
1998, the Registrant, through a wholly-owned subsidiary, acquired all of the
outstanding shares in Adjusters Canada Incorporated, a Canadian loss adjusting
company. On December 31, 1998, Adjusters Canada Incorporated and Crawford-THG
(Canada) Limited were amalgamated into Crawford Adjusters Canada Incorporated.
Revenues and expenses outside of North America and the Caribbean are reported on
a two-month delayed basis and, accordingly, the Registrant's December 31, 2000,
1999 and 1998 consolidated financial statements reflect the non-North American
financial position as of October 31, 2000, 1999, and 1998 and the results of
non-North American operations and cash flows for the 12-month periods ended
October 31, 2000, 1999, and 1998.
The major services offered by the Registrant through its international
operations doing business outside of the U.S. are listed below:
- Property and Casualty - provides loss adjusting services for
property, general liability, professional indemnity for
directors and officers, product liability and medical
malpractice.
- Oil, Energy & Engineering - provides loss adjusting for oil,
gas, petrochemicals, other energy risks, utilities and mining
industries, as well as marine and off-shore risks.
- Environmental Pollution - provides cost-containment and claims
management services with respect to environmental related
losses.
- Construction - provides loss adjusting services under
contractors' all risk, engineering all risk, and contractors'
liability coverages. Additionally evaluates machinery
breakdown claims and provides
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peripheral services including plant valuation and loss
prevention surveys.
- Catastrophe - organizes major loss teams to provide claims
management and cost containment services through proprietary
information systems.
- Marine - provides loss adjusting services for freight carriers
liability, loss investigations, recoveries, salvage disposal,
yacht and small craft, cargo, container, discharge, draft,
general average, load, trailer and on/off live surveys, ship
repairer liability and port stevedore liability.
- Specie and Fine Art - provides loss adjusting services under
fine art dealers' block and jewelry and furriers' block
policies.
- Entertainment Industry - provides a broad range of loss
adjusting services for television, commercial and educational
film production, and theater and live events.
- Aviation - manages salvage removal and sale and provides loss
adjusting services for hull related risks, as well as cargo
and legal liability, hangar and airport owners'/operators'
liability policies.
- Banking, Financial and Political Risks - performs loss
adjusting functions under bankers blanket bond, political
risk, and financial contingency policies.
- Livestock - performs loss adjusting on bloodstock, and
liability/equestrian activity.
- Security Consultancy - performs loss prevention and bank
surveys and adjusts cash-in-transit losses.
- Reinsurance - provides external audits, portfolio analyses,
and management and marketing research. Additionally provides
underwriting review, cash control and management of
discontinued operations.
- Medical and Vocational Case Management Services - provides
specialized return to work and expert testimony services in
the employer liability and auto liability markets.
SERVICE DELIVERY - The Registrant's claims management services are offered
primarily through its more than 400 branch offices throughout the United States
and approximately 300 offices in 65 countries throughout the rest of the world.
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The Registrant has a branch profit-sharing compensation policy covering most of
its branch managers in the United States, under which those managers participate
in the profits of their respective branches. This policy provides a formula for
the determination of branch office profits and pays the manager a percentage,
generally forty percent (40%), of those profits.
COMPETITION, EMPLOYMENT AND OTHER FACTORS
The claims services markets, both domestically and internationally, are highly
competitive and are composed of a large number of companies of varying size and
scope of services. These include large insurance companies and insurance
brokerage firms which, in addition to their primary services of insurance
underwriting or insurance brokerage, also provide services such as claims
administration, health and disability management, and risk management
information systems, which compete with services offered by the Registrant. Many
of these companies are larger than the Registrant in terms of annual revenues
and total assets; however, based on experience in the market, the Registrant
believes that few, if any, such organizations derive revenues from independent
claims administration activities which equal those of the Registrant.
The majority of property and casualty insurance companies maintain their own
staffs of salaried adjusters, with field adjusters located in those areas in
which the volume of claims justifies maintaining a salaried staff. These
companies utilize independent adjusters to service claims when the volume of
claims exceeds the capacity of their staffs and when claims arise in areas not
serviced by staff adjusters. The volume of property claim assignments referred
to the Registrant fluctuates primarily depending on the occurrence of severe
weather.
The United States insurance industry generally uses internal adjusting personnel
to make automobile claims adjustments by telephone and assigns the limited
function of appraising physical damage to outside service organizations, such as
the Registrant. The Registrant believes that such limited assignments from
automobile insurers may continue, reflecting a perception by insurance companies
that they can reduce adjusting expenses in amounts greater than the higher
losses associated with telephone adjusting. In certain instances, however,
insurers have attempted to reduce the fixed cost of their claims departments by
increasing outside assignments to independent firms such as the Registrant.
When insurance premiums have increased and corporate risk management personnel
have become more aware of alternative methods of financing losses, there has
been a trend toward higher retention levels of risk insurance or implementation
of self-insurance programs by large corporations and governmental entities.
These programs generally utilize an insurance company which writes specialized
policies that permit each client to select its own level of risk retention, and
may permit certain risk management services to be provided to the client by
service companies independent of the insurance company or broker. In addition to
providing full claims administration services for such clients, the Registrant
generally provides statistical data such as loss experience analysis. The
services are usually the subject of a contractual agreement with the specialty
insurance company or the self-insured client that specifies the claims to be
administered by the Registrant and the fee to be paid for its services
(generally a fixed rate per assignment within the various risk classifications).
These programs are sensitive to changes in premiums charged for full coverage
insurance. In softer insurance markets, as have been experienced in recent
years, these alternative risk programs tend
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to be less attractive to potential clients and are replaced by full traditional
insurance and, accordingly, reduce the number of alternative risk programs in
which the Registrant can participate.
In addition to the large insurance companies and insurance brokerage firms, the
Registrant competes with a great number of smaller local and regional risk
management services firms located throughout the United States and
internationally. Many of these smaller firms have rate structures that are lower
than the Registrant's, but do not offer the broad spectrum of risk management
services which the Registrant provides and, although such firms may secure
business which has a local or regional source, the Registrant believes its
broader scope of services and its large number of geographically dispersed
offices provide it with a competitive advantage in securing business from
national and international clients.
At December 31, 2000, the total number of full-time employees was 7,825 compared
with 7,684 at December 31, 1999. In addition, Registrant employs a significant
number of part-time employees as and when the demand for services requires. The
Registrant, through its Crawford University, provides many of its employees with
formal classroom training in basic and advanced skills relating to claims
administration and healthcare management services. Such training is generally
provided at the Registrant's education facility in Atlanta, Georgia, although
much of the material is also available through correspondence courses. In many
cases, employees are required to complete these or other professional courses in
order to qualify for promotion from their existing positions.
In addition to this technical training, the Registrant also provides ongoing
professional education for certain of its management personnel on general
management, marketing, and sales topics. These programs involve both in-house
and external resources.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS AND ANALYSTS' REPORTS
Certain written and oral statements made or incorporated by reference from time
to time by the Registrant in this report, other reports, filings with the
Securities and Exchange Commission, press releases, conferences, or otherwise,
are "forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. Forward-looking statements include, without
limitation, any statement that may predict, forecast, indicate or imply future
results, performance or achievements. Forward-looking statements may be
identified, without limitation, by the use of such words as "anticipates",
"estimates", "expects", "intends", "plans", "predicts", "projects", "believes",
or words or phrases of similar meaning.
Forward-looking statements include risks and uncertainties which could cause
actual results or outcomes to differ materially from those expressed in the
forward-looking statements. In addition to other factors and matters discussed
elsewhere herein, some of the important factors that could cause actual results
to differ materially from those discussed in the forward-looking statements
include the following:
- - Changes in general economic conditions in the Registrant's major
markets, which include the United States, the United Kingdom, and
Canada, as well as, to a lesser extent, the other areas throughout the
world in which the Registrant does business;
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- - Occurrences of weather related, natural and man-made disasters;
- - Changes in the degree to which property and casualty insurance carriers
outsource their claims handling functions;
- - Decisions by major insurance carriers and underwriters and brokers to
expand their activities as third party administrators and adjusters,
which would directly compete with the Registrant's business;
- - Continued growth in product liability class actions and the possibility
that legislation may curtail or limit that growth;
- - The growth of the alternative risk market and the use of independent
third party administrators such as the Registrant, as opposed to
administrators affiliated with brokers or insurance carriers;
- - Ability to develop or acquire information technology resources to
support and grow the Registrant's businesses;
- - The ability to recruit, train, and retain qualified personnel;
- - The renewal of existing major contracts with clients and the
Registrant's ability to obtain such renewals and new contracts on
satisfactory financial terms;
- - Changes in accounting principles or application of such principles to
the Registrant's business;
- - General risks associated with doing business outside the United States,
including without limitation, restrictions on foreign-owned or
controlled entities conducting loss adjusting activities in those
jurisdictions and currency restrictions; and
- - Any other factors referenced or incorporated by reference in this
report and any other report.
The risks included above are not exhaustive. Other sections of this report may
include additional factors which could adversely impact the Registrant's
business and financial performance. Moreover, the Registrant operates in a very
competitive and rapidly changing environment. New risk factors emerge from time
to time, and it is not possible for management to predict all such risk factors,
nor can it assess the impact of known risk factors on the Registrant's business
or the extent to which any factor or combination of factors may cause actual
results to differ materially from those contained in any forward-looking
statement. The Registrant undertakes no obligation to revise or publicly release
the results of any revisions to forward-looking statements or to identify any
new risk factors which may arise. Given these risks and uncertainties, investors
should not place undue reliance on forward-looking statements as a prediction of
actual future results.
Investors should also be aware that while the Registrant does, from time to
time, communicate with securities analysts, it is against the Registrant's
policy to disclose to them any material, non-public
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information or other confidential commercial information. Accordingly, investors
should not assume that the Registrant agrees with any statement or report issued
by any analyst irrespective of the content of the statement or report.
Furthermore, the Registrant has a policy against issuing or confirming financial
forecasts or projections issued by others. Thus, to the extent that the reports
issued by securities analysts contain any projections, forecasts, or opinions,
such reports are not the responsibility of the Registrant.
ITEM 2. PROPERTIES
The Registrant's home office and educational facilities are owned by the
Registrant and located in Atlanta, Georgia. As of December 31, 2000, the
Registrant leased approximately 598 office locations under leases with remaining
terms ranging from a few months to ten years. The remainder of its office
locations are occupied under various short-term rental arrangements. The
Registrant also leases certain computer equipment. See Note 4 of Notes to
Consolidated Financial Statements included in the Registrant's 2000 Annual
Report to Shareholders filed herewith as Exhibit 13.1, which notes are
incorporated herein by reference.
As of December 31, 2000, the Registrant owned or leased approximately 1,538
automobiles which are used by the Registrant's field adjusters and certain of
its management personnel in the United States. Additional vehicles are owned or
leased by the Registrant's foreign subsidiaries for use by field and management
personnel.
ITEM 3. LEGAL PROCEEDINGS
In the normal course of the claims administration services business, the
Registrant is named as a defendant in suits by insureds or claimants contesting
decisions by the Registrant or its clients with respect to the settlement of
claims. Additionally, clients of the Registrant have brought actions for
indemnification on the basis of alleged negligence on the part of the
Registrant, its agents or employees in rendering service to clients. The
majority of these claims are of the type covered by insurance maintained by the
Registrant; however, the Registrant is self-insured for the deductibles under
its various insurance coverages. In the opinion of the Registrant, adequate
reserves have been provided for such self-insured risks.
The Registrant has been served with federal grand jury subpoenas for company
records related primarily to its claims management and healthcare management
businesses dating back to 1992. It has been advised by government attorneys that
the subject of the investigation is the billing practices of the Registrant. The
Registrant is cooperating fully in the investigation and has undertaken an
internal review of these matters by independent outside legal counsel and
forensic accountants. Given the preliminary and prospective nature of the
governments investigation and the Registrant's internal review, the Registrant
can not now predict when the investigation or its review will be completed,
their respective ultimate outcomes, the costs of the investigation and internal
review, nor the effect thereof on the Registrant's financial condition or
results of operations. Government civil or criminal fines or sanctions, as well
as potential reimbursements to clients and loss of existing or prospective
business opportunities, could have a material adverse effect on the Registrant's
financial condition and results of operations.
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ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to security holders for a vote during the fourth
quarter of 2000.
EXECUTIVE OFFICERS OF THE REGISTRANT
The following are the names, positions held, and ages of each of the executive
officers of the Registrant:
Name Office Age
---- ------ ---
A. L. Meyers, Jr. Chairman and Chief Executive Officer 63
G. L. Davis President and Chief Operating Officer 49
S. V. Festa Executive Vice President - Risk Management Services 41
J. F. Giblin Executive Vice President - Finance 44
Victoria Holland Executive Vice President - Healthcare Management Services 56
J. A. McGee Executive Vice President - Claims Management Services 50
J. F. Osten Executive Vice President-General Counsel & Corporate Secretary 59
H. L. Rogers Executive Vice President - Technical Services 44
W. L. Beach Senior Vice President - Human Resources 56
G. P. Hodson Executive Vice President - Crawford & Company International, Inc. - European, 54
African & Asia-Pacific Operations
J. T. Bowman Senior Vice President - Crawford & Company International, Inc. Regional 47
Managing Director - Americas
Mr. Meyers was appointed to his present position effective July 27, 1999. From
September 28, 1998 to July 27, 1999 he served as President and Chief Operating
Officer. He served as President - Claims Management Services from August 1995
until March 1998. He had previously retired from the Company in April 1994,
after having served as Manager of the Registrant's Washington, D. C. branch
office since 1977. During the period between his retirement in 1994 and
appointment as President - Claims Management Services in 1995, he served as a
consultant and operations supervisor for the Registrant.
Mr. Davis was appointed to his present position effective July 27, 1999. From
November 1, 1998 to July 27, 1999 he was Senior Vice President of the Claims
Management Services business unit, a position he also held from August 1, 1997
to April 1, 1998. From April, 1998 to October 31, 1998 Mr. Davis was Manager of
the Registrant's Dallas Service Center. From May of 1996 to August of 1997 he
was Vice President - National Sales Manager for Claims Management Services and
from July 1994 to May of 1996 he was a Regional Manager in Claims Management
Services operations, first as an Assistant Vice President and then Vice
President.
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Mr. Festa was appointed to his present position with the Registrant on July 27,
1999. Prior to July 1999 and from November 1998 he was Senior Vice President -
Risk Management Services. From April 1998 to November 1998, he was a Vice
President and Director of the Registrant's Service Centers. Prior to April 1998
and for more than five years Mr. Festa was involved in the operations of the
Registrant's Risk Management Services business unit first as an Operations
Supervisor, then in June of 1996 as an Assistant Vice President and in August of
1997 as a Vice President.
Mr. Giblin has been with the Registrant for more than five years, serving as
Controller until his appointment to his present position in June 1998.
Ms. Holland was appointed to her present position with the Registrant on July
27, 1999. From August 1, 1997 to July 27, 1999, she was a Senior Vice President
in the Healthcare Management business unit. Prior to August 1997 and for more
than five years, Ms. Holland was a Vice President in the Healthcare Management
business unit.
Mr. McGee was appointed to his present position with the Registrant July 27,
1999. From November, 1994 to April, 1999 Mr. McGee was Executive Vice President
with GAB Robins responsible for the Claims Services Business Unit. GAB Robins is
a competitor of the Registrant's.
Mr. Osten has served in his present position with the Registrant for more then
five years.
Mr. Rogers was appointed to his present position with the Registrant on July 27,
1999. Prior to July 1999 and from November 1998 he was Senior Vice President -
Property & Catastrophe Services. From February 1, 1997 to November 1, 1998, he
was a Vice President in Catastrophe Services operations and from April 1, 1996
to February, 1997 he was an Assistant Vice President in Catastrophe Services
operations. From March 1995 to April 1996 he served as Manager of the
Registrant's Nashville, Tennessee branch office and from March 1994 to February
1995 he was Manager of the Registrant's Florence, Alabama branch office.
Mr. Beach was hired by the Registrant as its Chief Learning & Resources Officer
in September 1996 and was appointed Senior Vice President - Human Resources in
October of 1997. For more than five years prior to that, he was a partner of
Southern Consulting Group in Atlanta, Georgia.
Mr. Hodson was appointed to his present position with the Registrant April 27,
2000. Prior to this appointment he was Senior Vice President of the Strategic
Planning Office. In 1997 he was promoted to Senior Vice President of Project
Office and in 1998 was Senior Vice President of Claims Management Services,
Field Operations. In 1995 he became Vice President Regional Manager of the
Southeast Region for the Registrant and in 1996 was promoted to Vice President
of Casualty Operations.
Mr. Bowman was appointed to his present position August 1997, first as a Vice
President and then in August 1999 as a Senior Vice President. From January 1,
1996 to August, 1997 he was Vice President in charge of International Strategic
Planning and from January 1, 1995 to December 31, 1995 he was the Registrant's
International Director of Finance.
Officers of the Registrant are appointed annually by the Board of Directors of
Registrant, except for Messrs. Hodson and Bowman, who are appointed by the Board
of Directors of Crawford & Company International, Inc.
13
14
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED SHAREHOLDER
MATTERS
The information required by this Item is included on page 40 of the Registrant's
Annual Report to Shareholders for the year ended December 31, 2000, under the
caption "Quarterly Financial Data (Unaudited), Dividend Information and Common
Stock Quotations" and is incorporated herein by reference.
ITEM 6. SELECTED FINANCIAL DATA
The information required by this Item is included on page 39 of the Registrant's
Annual Report to Shareholders for the year ended December 31, 2000, under the
caption "Selected Financial Data" and is incorporated herein by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The information required by this Item is included on pages 18-22 of the
Registrant's Annual Report to Shareholders for the year ended December 31, 2000,
under the caption "Management's Discussion and Analysis of Financial Condition
and Results of Operations" and is incorporated herein by reference.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
The information required by this Item is included on page 22 of the Registrant's
Annual Report to Shareholders for the year ended December 31, 2000, under the
caption "Market Risks" and is incorporated herein by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The information required by this Item is included on pages 23-40 of the
Registrant's Annual Report to Shareholders for the year ended December 31, 2000,
under the captions "Consolidated Statements of Income", "Consolidated Balance
Sheets", "Consolidated Statements of Shareholders' Investment", "Consolidated
Statements of Cash Flows", "Notes to Consolidated Financial Statements", and
"Quarterly Financial Data (Unaudited), Dividend Information and Common Stock
Quotations", and is incorporated herein by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
Not applicable.
14
15
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information required by this Item is included on page 2 under the caption
"Nominee Information" of the Registrant's Proxy Statement for the Annual Meeting
of Shareholders to be held April 24, 2001, and is incorporated herein by
reference. For other information required by this Item, see "Executive Officers
of the Registrant" on pages 12-13 herein.
ITEM 11. EXECUTIVE COMPENSATION
The information required by this Item is included on pages 4-8 under the
captions "Executive Compensation and Other Information" and "Report of the
Senior Compensation and Stock Option Committee of the Board of Directors on
Executive Compensation" and on page 12 under the caption "Five Year Comparative
Stock Performance Graph" of the Registrant's Proxy Statement for the Annual
Meeting of Shareholders to be held April 24, 2001, and is incorporated herein by
reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information required by this Item is included on pages 9-11 under the
caption "Stock Ownership Information" of the Registrant's Proxy Statement for
the Annual Meeting of Shareholders to be held April 24, 2001, and is
incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information required by this item is included on page 11 under the caption
"Information with Respect to Certain Business Relationships" of the Registrant's
Proxy Statement for the Annual Meeting of Shareholders to be held April 24,
2001, and is incorporated herein by reference.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) The following documents are filed as part of this report:
1. Financial Statements
The Registrant's 2000 Annual Report to Shareholders contains
the consolidated balance sheets as of December 31, 2000 and
1999, the related consolidated statements of income,
shareholders' investment and cash flows for each of the three
years in the period ended December 31, 2000, and the related
report of Arthur Andersen LLP on the financial statements.
These financial statements and the report of Arthur Andersen
LLP are incorporated herein by reference and included as
Exhibit 13.1 to this Form 10-K. The financial statements,
incorporated by reference, include the following:
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16
- Consolidated Balance Sheets -- December 31, 2000 and
1999
- Consolidated Statements of Income for the Years Ended
December 31, 2000, 1999, and 1998
- Consolidated Statements of Shareholders' Investment
for the Years Ended December 31, 2000, 1999, and 1998
- Consolidated Statements of Cash Flows for the Years
Ended December 31, 2000, 1999, and 1998
- Notes to Consolidated Financial Statements - December
31, 2000, 1999, and 1998
2. Financial Statement Schedule
- Report of Independent Public Accountants as to
Schedule
Schedule
Number
--------
II Valuation and Qualifying Accounts for the Years Ended
December 31, 2000, 1999, and 1998
Schedules I and III through V not listed above have
been omitted because they are not applicable.
3. Exhibits filed with this report.
Exhibit No. Document
----------- --------
3.1 Restated Articles of Incorporation of the Registrant,
as amended (incorporated by reference to Exhibit 19.1
to the Registrant's quarterly report on Form 10-Q for
the quarter ended June 30, 1991).
3.2 Restated By-laws of the Registrant, as amended.
10.1 * Crawford & Company 1987 Stock Option Plan
(incorporated by reference to Exhibit 28(a) to the
Registration Statement on Form S-8, Registration No.
33-22595).
10.2 * Amendment to Crawford & Company 1987 Stock Option
Plan (incorporated by reference to Appendix C on page
C-1 of the Registrant's Proxy Statement for the
Special Meeting of Shareholders held on July 24,
1990).
16
17
10.3 * Crawford & Company 1990 Stock Option Plan, as amended
(incorporated by reference to Exhibit 10.5 to the
Registrant's annual report on Form 10-K for the year
ended December 31, 1992).
10.4 * Crawford & Company 1997 Key Employee Stock Option
Plan, as amended (incorporated by reference to
Appendix A on page A-1 of the Registrant's Proxy
Statement for the Annual Meeting of Shareholders held
on April 25, 2000).
10.5 * Crawford & Company 1997 Non-Employee Director Stock
Option Plan (incorporated by reference to Appendix B
on page B-1 of the Registrant's Proxy Statement for
the Annual meeting of Shareholders held on April 22,
1997).
10.6 * Amended and Restated Supplemental Executive
Retirement Plan.
10.7 * Crawford & Company 1996 Employee Stock Purchase Plan
(incorporated by reference to Appendix A on page A-1
of Registrant's Proxy Statement for the Annual
Meeting of Shareholders held on April 18, 1996).
10.8 * Amended and Restated Crawford & Company Medical
Reimbursement Plan (incorporated by reference to
Exhibit 10.9 to the Registrant's Annual Report on
Form 10-K for the year ended December 31, 1994).
10.9 * Discretionary Allowance Plan (incorporated by
reference to Exhibit 10.10 to the Registrant's Annual
Report on Form 10-K for the year ended December 31,
1994).
10.10 * Deferred Compensation Plan (incorporated by reference
to Exhibit 10.11 to the Registrant's Annual Report on
Form 10-K for the year ended December 31, 1994).
10.11 * Crawford & Company 1996 Incentive Compensation Plan,
as amended (incorporated by reference to Exhibit
10.11 to the Registrant's Annual Report on Form 10-K
for the year ended December 31, 1999).
13.1 The Registrant's Annual Report to Shareholders for
the year ended December 31, 2000 (only those portions
incorporated herein by reference).
21.1 Subsidiaries of Crawford & Company.
23.1 Consent of Arthur Andersen LLP.
24.1-8 Powers of Attorney.
* Management contract or compensatory plan required to be filed as an
exhibit pursuant to Item 601 of Regulation S-K.
17
18
(b) The following reports on Form 8-K were filed during the last quarter of
the year ended December 31, 2000:
Form 8-K dated December 21, 2000 regarding write-down of
carrying value of internal use software.
(c) The Registrant has filed the Exhibits listed in Item 14(a)(3).
(d) Separate financial statements of Crawford & Company have been omitted
since it is primarily an operating company. All subsidiaries included
in the consolidated financial statements are wholly-owned.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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
Date March 21, 2001 By /s/ Archie Meyers, Jr.
-------------- -----------------------------------
ARCHIE MEYERS, JR., Chairman
and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities and on the dates indicated.
NAME AND TITLE
Date March 21, 2001 /s/ Archie Meyers, Jr.
-------------- -----------------------------------
ARCHIE MEYERS, JR., Chairman and
Chief Executive Officer (Principal
Executive Officer) and Director
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19
NAME AND TITLE
--------------
Date March 21, 2001 /s/ J. F. Giblin
-------------- -----------------------------------
J. F. GIBLIN, Executive Vice
President-Finance (Principal
Financial Officer)
Date March 21, 2001 /s/ W. B. Swain
-------------- -----------------------------------
W. B. SWAIN, Senior Vice President
and Controller (Principal
Accounting Officer)
Date March 21, 2001 /s/ Grover L. Davis
-------------- -----------------------------------
GROVER L. DAVIS, Director
Date March 21, 2001 *
-------------- -----------------------------------
F. L. MINIX, Director
Date March 21, 2001 *
-------------- -----------------------------------
J. HICKS LANIER, Director
Date March 21, 2001 *
-------------- -----------------------------------
CHARLES FLATHER, Director
Date March 21, 2001 *
-------------- -----------------------------------
LINDA K. CRAWFORD, Director
Date March 21, 2001 *
-------------- -----------------------------------
JESSE C. CRAWFORD, Director
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20
NAME AND TITLE
--------------
Date March 21, 2001 *
-------------- -----------------------------------
LARRY L. PRINCE, Director
Date March 21, 2001 *
-------------- -----------------------------------
JOHN A. WILLIAMS, Director
Date March 21, 2001 *
-------------- -----------------------------------
E. JENNER WOOD, III, Director
Date March 21, 2001 By /s/ Judd F. Osten
-------------- -----------------------------------
JUDD F. OSTEN - As attorney-in-fact
for the Directors above whose name
an asterisk appears.
20
21
EXHIBIT INDEX
Sequential
Page Number
Exhibit No. Description of Exhibit of Exhibit
- ----------- ---------------------- -----------
3.1 Restated Articles of Incorporation of the Registrant, as
amended (incorporated by reference to Exhibit 19.1 to the
Registrant's quarterly report on Form 10-Q for the quarter
ended June 30, 1991).
3.2 Restated By-laws of the Registrant, as amended. 25-33
10.1 Crawford & Company 1987 Stock Option Plan (incorporated by
reference to Exhibit 28(a) to the Registration Statement on
Form S-8, Registration No. 33-22595).
10.2 Amendment to Crawford & Company 1987 Stock Option Plan
(incorporated by reference to Appendix C on page C-1 of the
Registrant's Proxy Statement for the Special Meeting of
Shareholders held on July 24, 1990).
10.3 Crawford & Company 1990 Stock Option Plan, as amended
(incorporated by reference to Exhibit 10.5 to the Registrant's
annual report on Form 10-K for the year ended December 31,
1992).
10.4 Crawford & Company 1997 Key Employee Stock Option Plan, as
amended (incorporated by reference to Appendix A on page A-1
of the Registrant's Proxy Statement for the Annual Meeting of
Shareholders held on April 25, 2000).
10.5 Crawford & Company 1997 Non-Employee Director Stock Option
Plan (incorporated by reference to Appendix B on page B-1 of
the Registrant's Proxy Statement for the Annual meeting of
Shareholders held on April 22, 1997).
10.6 Amended and Restated Supplemental Executive Retirement
Plan. 34-38
10.7 Crawford & Company 1996 Employee Stock Purchase Plan
(incorporated by reference to Appendix A on page A-1 of
Registrant's Proxy Statement for the Annual Meeting of
Shareholders held on April 18, 1996).
21
22
EXHIBIT INDEX
Sequential
Page Number
Exhibit No. Description of Exhibit of Exhibit
- ----------- ---------------------- -----------
10.8 Amended and Restated Crawford & Company Medical Reimbursement
Plan (incorporated by reference to Exhibit 10.9 to the
Registrant's annual report on Form 10-K for the year ended
December 31, 1994).
10.9 Discretionary Allowance Plan (incorporated by reference to
Exhibit 10.10 to the Registrant's annual report on Form 10-K
for the year ended December 31, 1994).
10.10 Deferred Compensation Plan (incorporated by reference to
Exhibit 10.11 to the Registrant's annual report on Form 10-K
for the year ended December 31, 1994).
10.11 Crawford & Company 1996 Incentive Compensation Plan, as
amended (incorporated by reference to Exhibit 10.11 to the
Registrant's Annual Report on Form 10-K for the year ended
December 31, 1999).
13.1 The Registrant's Annual Report to Shareholders for the year
ended December 31, 2000 (only those portions incorporated
hereby by reference). 39-62
21.1 Subsidiaries of Crawford & Company. 63
23.1 Consent of Arthur Andersen LLP. 64
24.1-8 Powers of Attorney. 65-72
22
23
ARTHUR ANDERSEN LLP
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Crawford & Company:
We have audited in accordance with auditing standards generally accepted in the
United States, the consolidated financial statements included in Crawford &
Company's annual report to shareholders incorporated by reference in this Form
10-K, and have issued our report thereon dated January 26, 2001. Our audit was
made for the purpose of forming an opinion of those statements taken as a whole.
The schedule listed in Item 14(a)2 is the responsibility of the Company's
management and is presented for purposes of complying with the Securities and
Exchange Commission's rules, and is not part of the basic consolidated financial
statements. This schedule has been subjected to the auditing procedures applied
in the audit of the basic financial statements and, in our opinion, fairly
states in all material respects the financial data required to be set forth
therein in relation to the basic financial statements taken as a whole.
/s/ ARTHUR ANDERSEN LLP
Atlanta, Georgia
January 26, 2001
24
SCHEDULE II
CRAWFORD & COMPANY AND SUBSIDIARIES
VALUATION AND QUALIFYING ACCOUNTS
ALLOWANCE FOR DOUBTFUL ACCOUNTS RECEIVABLE
FOR THE YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998
(In Thousands of Dollars)
Col. A Col. B Col. C Col. D Col. E
- ------ ------ ------ ------ ------
Balance at Additions Deductions Balance
Period Beginning from at End
of Period Allowances(2) of
Charged Charged Period
to Costs to Other
and Accounts
Expenses (1)
2000
Deducted in
consolidated balance
sheets from accounts
receivable $ 20,182 $ 918 $ 202 $ (3,967) $ 17,335
======== ======== ====== ======== ========
1999
Deducted in
consolidated balance
sheets from accounts
receivable $ 19,346 $ 2,789 $ 228 $ (2,181) $ 20,182
======== ======== ====== ======== ========
1998
Deducted in
consolidated balance
sheets from accounts
receivable $ 16,802 $ 2,780 $ 746 $ (982) $ 19,346
======== ======== ====== ======== ========
(1) Represents adjustments to allowance for doubtful accounts receivable arising
from acquisitions.
(2) Represents uncollectible accounts written off, net of recoveries.