CRAWFORD & CO - 10-K filing on 2016-03-10

Common Stock and (Loss) Earnings per Share

12 Months Ended

Dec. 31, 2015

Common Stock and (Loss) Earnings per Share

Shares of the Company's two classes of common stock are traded on the NYSE under the symbols CRDA and CRDB, respectively. The Company's two classes of stock are substantially identical, except with respect to voting rights and the Company's ability to pay greater cash dividends on the non-voting Class A Common Stock than on the voting Class B Common Stock, subject to certain limitations. In addition, with respect to mergers or similar transactions, holders of Class A Common Stock must receive the same type and amount of consideration as holders of Class B Common Stock, unless different consideration is approved by the holders of 75% of the Class A Common Stock, voting as a class. As described in Note 11, "Stock-Based Compensation," certain shares of CRDA are issued with restrictions under incentive compensation plans.

The Company's share repurchase authorization, approved in August 2014, provides the Company with the ability to repurchase up to 2,000,000 shares of CRDA or CRDB (or both) through July 2017 (the "2014 Repurchase Authorization"). Under the 2014 Repurchase Authorization, repurchases may be made in open market or privately negotiated transactions at such times and for such prices as management deems appropriate, subject to applicable contractual and regulatory restrictions.

During the year ended December 31, 2015, the Company reacquired 517,700 shares of CRDA at an average cost of $6.62 under the 2014 Repurchase Authorization. No shares of CRDB were repurchased during the year ended December 31, 2015. At December 31, 2015, the Company has remaining authorization to repurchase 1,455,300 shares under the 2014 Repurchase Authorization.

Net (Loss) Income Attributable to Shareholders of Crawford & Company per Common Share

The Company computes (loss) earnings per share of CRDA and CRDB using the two-class method, which allocates the undistributed (loss) earnings for each period to each class on a proportionate basis. The Company's Board of Directors has the right, but not the obligation, to declare higher dividends on the non-voting CRDA shares than on the voting CRDB shares, subject to certain limitations. In periods when the dividend is the same for CRDA and CRDB or when no dividends are declared or paid to either class, the two-class method generally will yield the same (loss) earnings per share for CRDA and CRDB. During 2015, 2014 and 2013, the Board of Directors declared a higher dividend on CRDA than on CRDB.

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



Year Ended December 31,	2015						2014				2013
	CRDA			CRDB			CRDA		CRDB		CRDA		CRDB
	(In thousands, except (loss) earnings per share)
(Loss) earnings per share - basic:
Numerator:
Allocation of undistributed (loss) earnings	$	(32,651	)	$	(26,348	)	$	10,408	$	8,499	$	23,063	$	19,075
Dividends paid	8,573			4,938			7,273		4,444		5,384		3,456
Net (loss) income available to common shareholders, basic	(24,078		)	(21,410		)	17,681		12,943		28,447		22,531
Denominator:
Weighted-average common shares outstanding, basic	30,596			24,690			30,237		24,690		29,853		24,690
(Loss) earnings per share - basic	$	(0.79	)	$	(0.87	)	$	0.58	$	0.52	$	0.95	$	0.91

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



Year Ended December 31,	2015						2014				2013
	CRDA			CRDB			CRDA		CRDB		CRDA		CRDB
	(In thousands, except (loss) earnings per share)
(Loss) earnings per share - diluted:
Numerator:
Allocation of undistributed (loss) earnings	$	(32,651	)	$	(26,348	)	$	10,522	$	8,385	$	23,407	$	18,731
Dividends paid	8,573			4,938			7,273		4,444		5,384		3,456
Net (loss) income available to common shareholders, diluted	(24,078		)	(21,410		)	17,795		12,829		28,791		22,187
Denominator:
Weighted-average common shares outstanding, basic	30,596			24,690			30,237		24,690		29,853		24,690
Weighted-average effect of dilutive securities ⁽¹⁾	—			—			746		—		1,002		—
Weighted-average number of shares outstanding, diluted	30,596			24,690			30,983		24,690		30,855		24,690
(Loss) earnings per share - diluted	$	(0.79	)	$	(0.87	)	$	0.57	$	0.52	$	0.93	$	0.90


⁽¹⁾	For the year ended December 31, 2015, the Company excluded from its loss per share calculations all common share equivalents because their inclusion would have been anti-dilutive. The weighted-average number of these common share equivalents for the year ended December 31, 2015 totaled approximately 494,000.

Listed below are the shares excluded from the denominator in the above computation of diluted (loss) earnings per share for CRDA because their inclusion would have been antidilutive:



Year Ended December 31,	2015	2014	2013
	(In thousands)
Shares underlying stock options excluded due to the options' respective exercise prices being greater than the average stock price during the period	24	—	1,212
Performance stock grants excluded because performance conditions had not been met ⁽¹⁾	1,045	1,568	1,290


⁽¹⁾	Compensation cost is recognized for these performance stock grants based on expected achievement rates; however no consideration is given for these performance stock grants when calculating earnings per share until the performance measurements have actually been achieved. As of December 31, 2015, these performance measurements had not been achieved.