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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 þ
    
    Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the Quarterly Period Ended March 31, 2007
 Commission File Number 0-22280
 PHILADELPHIA CONSOLIDATED HOLDING CORP.
  PENNSYLVANIA
    
    23-2202671(State of Incorporation)
    
    (IRS Employer Identification No.)
 One Bala Plaza, Suite 100
Bala Cynwyd, Pennsylvania 19004
(610) 617-7900
 
  þ o
  þ o o
  o þ




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INDEX
 For the Quarterly Period Ended March 31, 2007
 Part I  Financial InformationItem 1. Financial Statements:Consolidated Balance Sheets March 31, 2007 and December 31, 2006
    
    
    3Consolidated Statements of Operations and Comprehensive
Income  For the three months ended March 31, 2007 and 2006
    
    
    4Consolidated Statements of Changes in Shareholders Equity  For
the three months ended March 31, 2007 and the year ended
December 31, 2006
    
    
    5Consolidated Statements of Cash Flows  For the three
months ended March 31, 2007 and 2006
    
    
    6Notes to Consolidated Financial Statements
    
    
    7-15Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    16-26Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    27Item 4. Controls and Procedures
    
    
    28Part II  Other InformationItem 1. Legal Proceedings
    
    
    29Item 1A. Risk Factors
    
    
    29Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    29Item 3. Defaults Upon Senior Securities
    
    
    29Item 4. Submission of Matters to a Vote of Security Holders
    
    
    29Item 5. Other Information
    
    
    30Item 6. Exhibits
    
    
    30Signatures
    
    
    31Florida Only Excess Catastrophe Reinsurance ContractCasualty Excess of Loss Reinsurance ContractEndorsement No. 6 to the Property Per Risk Excess of Loss Reinsurance AgreementProperty Fourth Per Risk Excess of Loss Reinsurance AgreementCertification of the Company's Chief Executive OfficerCertification of the Company's Chief Financial OfficerCertification of the Company's Chief Executive Officer, pursuant to Section 906Certification of the Company's Chief Financial Officer, pursuant to Section 906
  2




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PHILADELPHIA CONSOLIDATED HOLDING CORP. AND SUBSIDIARIES
 
 CONSOLIDATED BALANCE SHEETS
 As ofMarch 31, 2007
    
    
    December 31,(Unaudited)
    
    
    2006ASSETSINVESTMENTS:FIXED MATURITIES AVAILABLE FOR SALE AT MARKET
(AMORTIZED COST $2,286,438 AND $2,136,231)
    
    $
    2,282,135
    
    
    $
    2,129,609EQUITY SECURITIES AT MARKET (COST $277,422
AND $259,184)
    
    
    331,859
    
    
    
    304,033TOTAL INVESTMENTS
    
    
    2,613,994
    
    
    
    2,433,642CASH AND CASH EQUIVALENTS
    
    
    138,896
    
    
    
    108,671ACCRUED INVESTMENT INCOME
    
    
    22,416
    
    
    
    20,083PREMIUMS RECEIVABLE
    
    
    327,295
    
    
    
    346,836PREPAID REINSURANCE PREMIUMS AND REINSURANCE
RECEIVABLES
    
    
    261,843
    
    
    
    272,798DEFERRED INCOME TAXES
    
    
    27,575
    
    
    
    26,657DEFERRED ACQUISITION COSTS
    
    
    165,216
    
    
    
    158,805PROPERTY AND EQUIPMENT, NET
    
    
    26,498
    
    
    
    26,999OTHER ASSETS
    
    
    51,815
    
    
    
    44,046TOTAL ASSETS
    
    $
    3,635,548
    
    
    $
    3,438,537LIABILITIES AND SHAREHOLDERS EQUITYPOLICY LIABILITIES AND ACCRUALS:UNPAID LOSS AND LOSS ADJUSTMENT EXPENSES
    
    $
    1,330,657
    
    
    $
    1,283,238UNEARNED PREMIUMS
    
    
    775,859
    
    
    
    759,358TOTAL POLICY LIABILITIES AND ACCRUALS
    
    
    2,106,516
    
    
    
    2,042,596PREMIUMS PAYABLE
    
    
    67,322
    
    
    
    66,827OTHER LIABILITIES
    
    
    209,873
    
    
    
    161,847TOTAL LIABILITIES
    
    
    2,383,711
    
    
    
    2,271,270COMMITMENTS AND CONTINGENCIESSHAREHOLDERS EQUITY:PREFERRED STOCK, $.01 PAR VALUE,
10,000,000 SHARES AUTHORIZED,
NONE ISSUED AND OUTSTANDING
    
    
    
    
    
    
    COMMON STOCK, NO PAR VALUE,
100,000,000 SHARES AUTHORIZED, 71,211,963 AND
70,848,482 SHARES ISSUED AND OUTSTANDING
    
    
    386,731
    
    
    
    376,986NOTES RECEIVABLE FROM SHAREHOLDERS
    
    
    (15,968
    )
    
    
    (17,074
    )ACCUMULATED OTHER COMPREHENSIVE INCOME
    
    
    32,587
    
    
    
    24,848RETAINED EARNINGS
    
    
    848,487
    
    
    
    782,507TOTAL SHAREHOLDERS EQUITY
    
    
    1,251,837
    
    
    
    1,167,267TOTAL LIABILITIES AND SHAREHOLDERS EQUITY
    
    $
    3,635,548
    
    
    $
    3,438,537
  3




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PHILADELPHIA CONSOLIDATED HOLDING CORP. AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE INCOME
 For the Three MonthsEnded March 31,2007
    
    
    2006REVENUE:NET EARNED PREMIUMS
    
    $
    318,718
    
    
    $
    276,546NET INVESTMENT INCOME
    
    
    26,973
    
    
    
    20,062NET REALIZED INVESTMENT GAIN (LOSS)
    
    
    1,757
    
    
    
    (394
    )OTHER INCOME
    
    
    830
    
    
    
    491TOTAL REVENUE
    
    
    348,278
    
    
    
    296,705LOSSES AND EXPENSES:LOSS AND LOSS ADJUSTMENT EXPENSES
    
    
    160,519
    
    
    
    162,024NET REINSURANCE RECOVERIES
    
    
    (10,014
    )
    
    
    (18,359
    )NET LOSS AND LOSS ADJUSTMENT EXPENSES
    
    
    150,505
    
    
    
    143,665ACQUISITION COSTS AND OTHER UNDERWRITING
EXPENSES
    
    
    96,904
    
    
    
    77,017OTHER OPERATING EXPENSES
    
    
    3,155
    
    
    
    2,332TOTAL LOSSES AND EXPENSES
    
    
    250,564
    
    
    
    223,014INCOME BEFORE INCOME TAXES
    
    
    97,714
    
    
    
    73,691INCOME TAX EXPENSE (BENEFIT):CURRENT
    
    
    36,819
    
    
    
    29,124DEFERRED
    
    
    (5,085
    )
    
    
    (5,754
    )TOTAL INCOME TAX EXPENSE
    
    
    31,734
    
    
    
    23,370NET INCOME
    
    $
    65,980
    
    
    $
    50,321OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX:HOLDING INCOME (LOSS) ARISING DURING PERIOD
    
    $
    8,881
    
    
    $
    (5,894
    )RECLASSIFICATION ADJUSTMENT
    
    
    (1,142
    )
    
    
    256OTHER COMPREHENSIVE INCOME (LOSS)
    
    
    7,739
    
    
    
    (5,638
    )COMPREHENSIVE INCOME
    
    $
    73,719
    
    
    $
    44,683PER AVERAGE SHARE DATA:NET INCOME  BASIC
    
    $
    0.94
    
    
    $
    0.73NET INCOME  DILUTED
    
    $
    0.89
    
    
    $
    0.70WEIGHTED-AVERAGE COMMON SHARES
OUTSTANDING
    
    
    70,148,787
    
    
    
    69,377,774WEIGHTED-AVERAGE SHARE EQUIVALENTS
OUTSTANDING
    
    
    4,054,030
    
    
    
    2,982,230WEIGHTED-AVERAGE SHARES AND SHARE
EQUIVALENTS OUTSTANDING
    
    
    74,202,817
    
    
    
    72,360,004
  4




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PHILADELPHIA CONSOLIDATED HOLDING CORP. AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF CHANGES
IN SHAREHOLDERS EQUITY
 For the ThreeMonths EndedMarch 31, 2007
    
    
    For the Year Ended(Unaudited)
    
    
    December 31, 2006COMMON SHARES:BALANCE AT BEGINNING OF YEAR
    
    
    70,848,482
    
    
    
    69,266,016ISSUANCE (FORFEITURE) OF SHARES PURSUANT TO
STOCK PURCHASE PLANS, NET
    
    
    (1,701
    )
    
    
    613,320ISSUANCE OF SHARES PURSUANT TO STOCK
BASED COMPENSATION PLANS
    
    
    365,182
    
    
    
    969,146BALANCE AT END OF PERIOD
    
    
    71,211,963
    
    
    
    70,848,482COMMON STOCK:BALANCE AT BEGINNING OF YEAR
    
    $
    376,986
    
    
    $
    332,757ISSUANCE OF SHARES PURSUANT TO STOCK
PURCHASE PLANS
    
    
    3
    
    
    
    19,521EFFECTS OF ISSUANCE OF SHARES PURSUANT TO STOCK
BASED COMPENSATION PLANS
    
    
    9,571
    
    
    
    24,301OTHER
    
    
    171
    
    
    
    407BALANCE AT END OF PERIOD
    
    
    386,731
    
    
    
    376,986NOTES RECEIVABLE FROM SHAREHOLDERS:BALANCE AT BEGINNING OF YEAR
    
    
    (17,074
    )
    
    
    (7,217
    )NOTES RECEIVABLE (ISSUED) FORFEITURES PURSUANT TO
EMPLOYEE STOCK PURCHASE PLANS
    
    
    99
    
    
    
    (12,391
    )COLLECTION OF NOTES RECEIVABLE
    
    
    1,007
    
    
    
    2,534BALANCE AT END OF PERIOD
    
    
    (15,968
    )
    
    
    (17,074
    )ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS),
NET OF DEFERRED INCOME TAXES:BALANCE AT BEGINNING OF YEAR
    
    
    24,848
    
    
    
    (2,702
    )OTHER COMPREHENSIVE INCOME, NET OF TAXES
    
    
    7,739
    
    
    
    27,550BALANCE AT END OF PERIOD
    
    
    32,587
    
    
    
    24,848RETAINED EARNINGS:BALANCE AT BEGINNING OF YEAR
    
    
    782,507
    
    
    
    493,658NET INCOME
    
    
    65,980
    
    
    
    288,849BALANCE AT END OF PERIOD
    
    
    848,487
    
    
    
    782,507TOTAL SHAREHOLDERS EQUITY
    
    $
    1,251,837
    
    
    $
    1,167,267
  5




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PHILADELPHIA CONSOLIDATED HOLDING CORP. AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 For the Three Months Ended March 31,2007
    
    
    2006CASH FLOWS FROM OPERATING ACTIVITIES:NET INCOME
    
    $
    65,980
    
    
    $
    50,321ADJUSTMENTS TO RECONCILE NET INCOME TO NET CASH
PROVIDED BY OPERATING ACTIVITIES:NET REALIZED
INVESTMENT (GAIN) LOSS
    
    
    (1,757
    )
    
    
    394AMORTIZATION OF INVESTMENT PREMIUMS, NET OF DISCOUNT
    
    
    1,513
    
    
    
    2,905AMORTIZATION OF INTANGIBLE ASSETS
    
    
    661
    
    
    
    DEPRECIATION
    
    
    1,886
    
    
    
    1,383DEFERRED INCOME TAX BENEFIT
    
    
    (5,085
    )
    
    
    (5,754
    )CHANGE IN PREMIUMS RECEIVABLE
    
    
    19,541
    
    
    
    22,459CHANGE IN PREPAID REINSURANCE PREMIUMS AND
REINSURANCE RECEIVABLES, NET OF FUNDS HELD
PAYABLE TO REINSURER
    
    
    10,955
    
    
    
    29,074CHANGE IN OTHER RECEIVABLES
    
    
    (2,333
    )
    
    
    (34
    )CHANGE IN DEFERRED ACQUISITION COSTS
    
    
    (6,411
    )
    
    
    (5,009
    )CHANGE IN INCOME TAXES PAYABLE
    
    
    28,426
    
    
    
    19,305CHANGE IN OTHER ASSETS
    
    
    433
    
    
    
    7,196CHANGE IN UNPAID LOSS AND LOSS ADJUSTMENT
EXPENSES
    
    
    47,419
    
    
    
    24,868CHANGE IN UNEARNED PREMIUMS
    
    
    16,501
    
    
    
    10,414CHANGE IN OTHER LIABILITIES
    
    
    (5,129
    )
    
    
    1,313FAIR VALUE OF STOCK BASED COMPENSATION
    
    
    3,536
    
    
    
    2,921EXCESS TAX BENEFIT FROM ISSUANCE OF SHARES PURSUANT
TO STOCK BASED COMPENSATION PLANS
    
    
    (2,464
    )
    
    
    (4,034
    )NET CASH PROVIDED BY OPERATING ACTIVITIES
    
    
    173,672
    
    
    
    157,722CASH FLOWS FROM INVESTING ACTIVITIES:PROCEEDS FROM SALES OF INVESTMENTS IN FIXED
MATURITIES
    
    
    10,436
    
    
    
    46,246PROCEEDS FROM MATURITY OF INVESTMENTS IN FIXED
MATURITIES
    
    
    60,795
    
    
    
    71,740PROCEEDS FROM SALES OF INVESTMENTS IN EQUITY
SECURITIES
    
    
    39,042
    
    
    
    24,578COST OF FIXED MATURITIES ACQUIRED
    
    
    (204,281
    )
    
    
    (189,571
    )COST OF EQUITY SECURITIES ACQUIRED
    
    
    (46,366
    )
    
    
    (76,994
    )PURCHASE OF PROPERTY AND EQUIPMENT, NET
    
    
    (1,385
    )
    
    
    (1,393
    )PURCHASE OF INTANGIBLES
    
    
    (7,914
    )
    
    
    NET CASH USED FOR INVESTING ACTIVITIES
    
    
    (149,673
    )
    
    
    (125,394
    )CASH FLOWS FROM FINANCING ACTIVITIES:PROCEEDS FROM EXERCISE OF EMPLOYEE STOCK OPTIONS
    
    
    2,654
    
    
    
    4,224PROCEEDS FROM COLLECTION OF SHAREHOLDER NOTES
RECEIVABLE
    
    
    1,007
    
    
    
    482PROCEEDS FROM SHARES ISSUED PURSUANT TO
STOCK PURCHASE PLANS
    
    
    101
    
    
    
    26EXCESS TAX BENEFIT FROM ISSUANCE OF SHARES PURSUANT
TO STOCK BASED COMPENSATION PLANS
    
    
    2,464
    
    
    
    4,034NET CASH PROVIDED BY FINANCING ACTIVITIES
    
    
    6,226
    
    
    
    8,766NET INCREASE IN CASH AND CASH EQUIVALENTS
    
    
    30,225
    
    
    
    41,094CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR
    
    
    108,671
    
    
    
    74,385CASH AND CASH EQUIVALENTS AT END OF PERIOD
    
    $
    138,896
    
    
    $
    115,479NON-CASH TRANSACTIONS:ISSUANCE (FORFEITURES) OF SHARES PURSUANT TO
EMPLOYEE STOCK PURCHASE PLAN IN EXCHANGE FOR
NOTES RECEIVABLE
    
    $
    (99
    )
    
    $
    (118
    )
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PHILADELPHIA CONSOLIDATED HOLDING CORP. AND SUBSIDIARIES
 
 Notes to Consolidated Financial Statements
 1.
    
    Basis of Presentation
   2.
    
    Investments
    7




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Less Than 12 Months
    
    12 Months or More
    
    TotalMarch 31, 2007
    
    
    
    
    
    Unrealized
    
    
    
    
    
    Unrealized
    
    
    
    
    
    UnrealizedFixed Maturities Available for Sale
    
    Fair Value
    
    Losses
    
    Fair Value
    
    Losses
    
    Fair Value
    
    Losses(In Thousands)U.S. Treasury Securities and
Obligations of U.S. Government
Corporations and Agencies
    
    $
    443
    
    
    $
    9
    
    
    $
    10,096
    
    
    $
    165
    
    
    $
    10,539
    
    
    $
    174Obligations of States and
Political Subdivisions
    
    
    265,895
    
    
    
    1,409
    
    
    
    301,076
    
    
    
    4,517
    
    
    
    566,971
    
    
    
    5,926Corporate and Bank Debt Securities
    
    
    1,450
    
    
    
    
    
    
    
    91,228
    
    
    
    1,909
    
    
    
    92,678
    
    
    
    1,909Asset Backed Securities
    
    
    42,219
    
    
    
    36
    
    
    
    30,841
    
    
    
    299
    
    
    
    73,060
    
    
    
    335Mortgage Pass-Through Securities
    
    
    126,803
    
    
    
    798
    
    
    
    166,864
    
    
    
    4,307
    
    
    
    293,667
    
    
    
    5,105Collateralized Mortgage Obligations
    
    
    49,072
    
    
    
    88
    
    
    
    118,973
    
    
    
    1,810
    
    
    
    168,045
    
    
    
    1,898Total Fixed Maturities
Available for Sale
    
    $
    485,882
    
    
    $
    2,340
    
    
    $
    719,078
    
    
    $
    13,007
    
    
    $
    1,204,960
    
    
    $
    15,347Equity Securities
    
    
    22,965
    
    
    
    1,374
    
    
    
    
    
    
    
    
    
    
    
    22,965
    
    
    
    1,374Total Investments
    
    $
    508,847
    
    
    $
    3,714
    
    
    $
    719,078
    
    
    $
    13,007
    
    
    $
    1,227,925
    
    
    $
    16,721
           8




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Less Than 12 Months
    
    12 Months or More
    
    TotalDecember 31, 2006
    
    
    
    
    
    Unrealized
    
    
    
    
    
    Unrealized
    
    
    
    
    
    UnrealizedFixed Maturities Available for Sale
    
    Fair Value
    
    Losses
    
    Fair Value
    
    Losses
    
    Fair Value
    
    Losses(In Thousands)U.S. Treasury Securities and
Obligations of U.S. Government
Corporations and Agencies
    
    $
    1,354
    
    
    $
    19
    
    
    $
    12,707
    
    
    $
    226
    
    
    $
    14,061
    
    
    $
    245Obligations of States and
Political Subdivisions
    
    
    164,444
    
    
    
    831
    
    
    
    321,194
    
    
    
    5,020
    
    
    
    485,638
    
    
    
    5,851Corporate and Bank Debt Securities
    
    
    28,439
    
    
    
    119
    
    
    
    96,794
    
    
    
    2,574
    
    
    
    125,233
    
    
    
    2,693Asset Backed Securities
    
    
    45,478
    
    
    
    187
    
    
    
    31,654
    
    
    
    380
    
    
    
    77,132
    
    
    
    567Mortgage Pass-Through Securities
    
    
    109,877
    
    
    
    921
    
    
    
    174,327
    
    
    
    5,026
    
    
    
    284,204
    
    
    
    5,947Collateralized Mortgage Obligations
    
    
    72,686
    
    
    
    347
    
    
    
    109,789
    
    
    
    2,440
    
    
    
    182,475
    
    
    
    2,787Total Fixed Maturities
Available for Sale
    
    $
    422,278
    
    
    $
    2,424
    
    
    $
    746,465
    
    
    $
    15,666
    
    
    $
    1,168,743
    
    
    $
    18,090Equity Securities
    
    
    37,371
    
    
    
    2,626
    
    
    
    
    
    
    
    
    
    
    
    37,371
    
    
    
    2,626Total Investments
    
    $
    459,649
    
    
    $
    5,050
    
    
    $
    746,465
    
    
    $
    15,666
    
    
    $
    1,206,114
    
    
    $
    20,716
 9




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10




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3.
    
    Restricted Assets
  4.
    
    Liability for Unpaid Loss and Loss Adjustment Expenses
   Net BasisIncrease/Decrease(In millions)Accident Year 2006
    
    $
    (7.0
    )Accident Year 2005
    
    
    (4.9
    )Accident Year 2004
    
    
    (3.0
    )Accident Year 2003 and prior
    
    
    2.0Total
    
    $
    (12.9
    )
    5.
    
    Shareholders Equity
  11




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6.
    
    Earnings Per Share
  As of and For the Three MonthsEnded March 31,2007
    
    
    2006Weighted-Average Common Shares Outstanding
    
    
    70,149
    
    
    
    69,378Weighted-Average Potential Shares Issuable
    
    
    4,054
    
    
    
    2,982Weighted-Average Shares and Potential Shares Issuable
    
    
    74,203
    
    
    
    72,360Net Income
    
    $
    65,980
    
    
    $
    50,321Basic Earnings per Share
    
    $
    0.94
    
    
    $
    0.73Diluted Earnings per Share
    
    $
    0.89
    
    
    $
    0.70
 7.
    
    Income Taxes
     8.
    
    Reinsurance
  12




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(In thousands)For the Three Months Ended
    
    
    For the three Months EndedMarch 31, 2007
    
    
    March 31, 2006Written
    
    
    Earned
    
    
    Written
    
    
    EarnedDirect Business
    
    $
    393,531
    
    
    $
    376,941
    
    
    $
    326,677
    
    
    $
    316,340Reinsurance Assumed
    
    
    583
    
    
    
    673
    
    
    
    1,365
    
    
    
    1,288Reinsurance Ceded
    
    
    56,681
    
    
    
    58,896
    
    
    
    40,086
    
    
    
    41,082Net Premiums
    
    $
    337,433
    
    
    $
    318,718
    
    
    $
    287,956
    
    
    $
    276,546
 9.
    
    Commitments and Contingencies
           13




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During June 2006, the FOIR approved a 1% emergency assessment effective January 1, 2007 which
the Company is required to collect from its policyholders and remit to the FHCF beginning
January 1, 2007.10.
    
    Comprehensive IncomeComponents of comprehensive income, as detailed in the Consolidated Statements of Operations and
Comprehensive Income, are net of tax. The related tax effect of Holding Gains (Losses) arising
during the three months ended March 31, 2007 and 2006 was $4.8 million and $(3.2) million, respectively. The
related tax effect of Reclassification Adjustments for the three months ended March 31, 2007 and
2006 was $(0.6) million and $0.1 million, respectively.11.
    
    Segment InformationThe Companys operations are classified into three reportable business segments: The Commercial
Lines Underwriting Group, which has underwriting responsibility for the commercial multi-peril
package, commercial automobile, specialty property and inland marine, and antique/collector car
insurance products; The Specialty Lines Underwriting Group, which has underwriting
responsibility for the professional and management liability insurance products; and The
Personal Lines Underwriting Group, which has underwriting responsibility for personal property
insurance products for the homeowners and manufactured housing market in Florida, and the
National Flood Insurance Program for both personal and commercial policyholders. Each business
segments responsibilities include: pricing, managing the risk selection process, and monitoring
the loss ratios by product and insured. The reportable segments operate solely within the United
States and have not been aggregated.The segments follow the same accounting policies used for the Companys consolidated financial
statements as described in the summary of significant accounting policies. Management evaluates
a segments performance based upon premium production and the associated loss experience which
includes paid losses, an amount determined on the basis of claim adjusters evaluation with
respect to insured events that have occurred and an amount for losses incurred that have not
been reported. Investments and investment performance including investment income and net
realized investment gain; acquisition costs and other underwriting expenses including
commissions, premium taxes and other acquisition costs; and other operating expenses are managed
at a corporate level by the corporate accounting function in conjunction with other corporate
departments and are included in Corporate.Following is a tabulation of business segment information for the three months ended March 31,
2007 and 2006. Corporate information is included to reconcile segment data to the consolidated
financial statements (in thousands):
 14




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##### Table of Contents



Three Months Ended March 31,Commercial
    
    Specialty
    
    PersonalLines
    
    Lines
    
    Lines
    
    Corporate
    
    Total2007:Gross Written Premiums
    
    $
    311,368
    
    
    $
    60,743
    
    
    $
    22,003
    
    
    $
    
    
    
    $
    394,114Net Written Premiums
    
    $
    285,422
    
    
    $
    50,560
    
    
    $
    1,451
    
    
    $
    
    
    
    $
    337,433Revenue:Net Earned Premiums
    
    $
    271,905
    
    
    $
    45,482
    
    
    $
    1,331
    
    
    $
    
    
    
    $
    318,718Net Investment Income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    26,973
    
    
    
    26,973Net Realized Investment Gain
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,757
    
    
    
    1,757Other Income
    
    
    
    
    
    
    
    
    
    
    727
    
    
    
    103
    
    
    
    830Total Revenue
    
    
    271,905
    
    
    
    45,482
    
    
    
    2,058
    
    
    
    28,833
    
    
    
    348,278Losses and Expenses:Net Loss and Loss Adjustment Expenses
    
    
    115,467
    
    
    
    30,777
    
    
    
    4,261
    
    
    
    
    
    
    
    150,505Acquisition Costs and Other Underwriting
Expenses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    96,904
    
    
    
    96,904Other Operating Expenses
    
    
    
    
    
    
    
    
    
    
    438
    
    
    
    2,717
    
    
    
    3,155Total Losses and Expenses
    
    
    115,467
    
    
    
    30,777
    
    
    
    4,699
    
    
    
    99,621
    
    
    
    250,564Income (Loss) Before Income Taxes
    
    
    156,438
    
    
    
    14,705
    
    
    
    (2,641
    )
    
    
    (70,788
    )
    
    
    97,714Total Income Tax Expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    31,734
    
    
    
    31,734Net Income/(Loss)
    
    $
    156,438
    
    
    $
    14,705
    
    
    $
    (2,641
    )
    
    $
    (102,522
    )
    
    $
    65,980Total Assets
    
    $
    
    
    
    $
    
    
    
    $
    118,178
    
    
    $
    3,517,370
    
    
    $
    3,635,5482006:Gross Written Premiums
    
    $
    243,107
    
    
    $
    58,068
    
    
    $
    26,867
    
    
    $
    
    
    
    $
    328,042Net Written Premiums
    
    $
    228,119
    
    
    $
    45,428
    
    
    $
    14,409
    
    
    $
    
    
    
    $
    287,956Revenue:Net Earned Premiums
    
    $
    224,370
    
    
    $
    39,928
    
    
    $
    12,248
    
    
    $
    
    
    
    $
    276,546Net Investment Income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    20,062
    
    
    
    20,062Net Realized Investment Loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (394
    )
    
    
    (394
    )Other Income
    
    
    
    
    
    
    
    
    
    
    440
    
    
    
    51
    
    
    
    491Total Revenue
    
    
    224,370
    
    
    
    39,928
    
    
    
    12,688
    
    
    
    19,719
    
    
    
    296,705Losses and Expenses:Net Loss and Loss Adjustment Expenses
    
    
    110,798
    
    
    
    26,819
    
    
    
    6,048
    
    
    
    
    
    
    
    143,665Acquisition Costs and Other Underwriting
Expenses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    77,017
    
    
    
    77,017Other Operating Expenses
    
    
    
    
    
    
    
    
    
    
    248
    
    
    
    2,084
    
    
    
    2,332Total Losses and Expenses
    
    
    110,798
    
    
    
    26,819
    
    
    
    6,296
    
    
    
    79,101
    
    
    
    223,014Income (Loss) Before Income Taxes
    
    
    113,572
    
    
    
    13,109
    
    
    
    6,392
    
    
    
    (59,382
    )
    
    
    73,691Total Income Tax Expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    23,370
    
    
    
    23,370Net Income/(Loss)
    
    $
    113,572
    
    
    $
    13,109
    
    
    $
    6,392
    
    
    $
    (82,752
    )
    
    $
    50,321Total Assets
    
    $
    
    
    
    $
    
    
    
    $
    183,674
    
    
    $
    2,810,569
    
    
    $
    2,994,243
 15




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PHILADELPHIA CONSOLIDATED HOLDING CORP. AND SUBSIDIARIES
 
 Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
 General
   Critical Accounting Estimates
  Results of Operations (Three Months ended March 31, 2007 vs. March 31, 2006)
 Premiums
 Commercial Lines
    
    Specialty Lines
    
    Personal Lines
    
    Total2007 Gross Written Premiums
    
    $
    311.4
    
    
    $
    60.7
    
    
    $
    22.0
    
    
    $
    394.12006 Gross Written Premiums
    
    $
    243.0
    
    
    $
    58.1
    
    
    $
    26.9
    
    
    $
    328.0Percentage Increase (Decrease)
    
    
    28.1
    %
    
    
    4.5
    %
    
    
    (18.2
    )%
    
    
    20.2
    %2007 Gross Earned Premiums
    
    $
    297.7
    
    
    $
    56.8
    
    
    $
    23.1
    
    
    $
    377.62006 Gross Earned Premiums
    
    $
    240.8
    
    
    $
    51.5
    
    
    $
    25.3
    
    
    $
    317.6Percentage Increase (Decrease)
    
    
    23.6
    %
    
    
    10.3
    %
    
    
    (8.7
    )%
    
    
    18.9
    %
  
    
    Prospecting efforts by marketing personnel in conjunction with long term relationships
formed by the Companys marketing Regional Vice Presidents continue to result in additional
prospects and increased premium writings in existing product offerings, most notably for
the Companys condominium association, non-profit, religious organizations, real estate,
and sports leagues commercial package product lines as well as the inland marine specialty
property product line. These product offerings accounted for approximately $44.5 million of
the $68.4 million total commercial lines segment gross written premiums increase.
 16




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##### Table of Contents



PHILADELPHIA CONSOLIDATED HOLDING CORP. AND SUBSIDIARIES
Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
 
    
    The introduction of several new niche product offerings, most notably the
antique/collector vehicle product, professional sports and entertainment commercial package
product, and the camp operators product. These new product offerings accounted for
approximately $14.5 million of the $68.4 million total commercial lines segment gross
written premiums increase.
    
    Continued expansion of marketing efforts relating to commercial lines and specialty
lines products through the Companys field organization and preferred agents.
    
    A new Company branded agent program has been introduced promoting the Companys product
offerings and underwriting philosophy in producers offices through regional marketing
meetings.
    
    An increase to in-force policy counts as of March 31, 2007 versus March 31, 2006 of
76.7% for the commercial lines segment. The introduction of the antique/collector vehicle
program accounted for 38.9% of the 76.7% total policy count increase. The other factors
discussed above accounted for the remaining 37.8% increase in the policy counts.
    
    An increase to in-force policy counts as of March 31, 2007 versus March 31, 2006 of
14.8% for the Specialty Lines segment.
  
    
    A decrease in the renewal retention percentage of the personal lines segment to 69.0%
for the first quarter of 2007 compared to 93.0% renewal retention percentage for the first
quarter of 2006. The lower renewal retention is primarily attributable to the
implementation of rate increases effective September 1, 2006, resulting in part from higher
reinsurance costs. These rate increases are subject to reduction pending Florida Office of
Insurance Regulation final approval.
    
    Restriction of personal lines business production due to the significant increase in
catastrophe reinsurance rates and restricted availability of reinsurance catastrophe
coverage experienced at the June 1, 2006 catastrophe reinsurance renewal.
    
    A decrease in in-force policy counts for the personal lines segment of 27.2%, resulting
from a decrease to the in-force counts for the mobile homeowners product and the homeowners
product of 62.0% and 39.7%, respectively, due to the factors noted above.
    
    A decrease in the lawyers professional liability gross written premium of $4.4 million
as a result of non-renewing policies due to unacceptable underwriting results. For the
three months ended March 31, 2007, gross written premium for the lawyers professional
liability product was $0.1 million. The Company anticipates that it will continue to
non-renew its remaining lawyers professional liability business throughout 2007, which
approximated $7.3 million of gross written premium for the nine months ended December 31,
2006.
    
    Realized average rate decreases on renewal business approximating 1.4% and 0.1% for the
specialty lines and commercial lines segments, respectively.
    
    Increased price competition during the first quarter of 2007, particularly with respect to the following:
 
    
    Large commercial property-driven accounts located in the non-coastal areas of the country;
    
    Commercial package business with annual premiums in excess of $100,000;
    
    Professional liability accounts at all premium levels; and
    
    Personal lines homeowners policies for homes located in Florida, due to
implemented rate increases and recent changes in the regulatory environment.
 17




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PHILADELPHIA CONSOLIDATED HOLDING CORP. AND SUBSIDIARIES
Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
 The Company believes its marketing strategy is a strength in that it provides the
flexibility to quickly deploy its marketing efforts from soft market segments to market
segments with emerging opportunities. However, the Company will walk away, if
necessary, from writing business that does not meet its established underwriting
standards and pricing guidelines.
  Commercial Lines
    
    Specialty Lines
    
    Personal Lines
    
    Total2007 Net Written Premiums
    
    $
    285.4
    
    
    $
    50.6
    
    
    $
    1.4
    
    
    $
    337.42006 Net Written Premiums
    
    $
    228.2
    
    
    $
    45.4
    
    
    $
    14.4
    
    
    $
    288.0Percentage Increase (Decrease)
    
    
    25.1
    %
    
    
    11.5
    %
    
    
    (90.3
    )%
    
    
    17.2
    %2007 Net Earned Premiums
    
    $
    271.9
    
    
    $
    45.5
    
    
    $
    1.3
    
    
    $
    318.72006 Net Earned Premiums
    
    $
    224.4
    
    
    $
    39.9
    
    
    $
    12.2
    
    
    $
    276.5Percentage Increase (Decrease)
    
    
    21.2
    %
    
    
    14.0
    %
    
    
    (89.3
    )%
    
    
    15.3
    %
  
    
    The Company experienced higher property catastrophe reinsurance costs, increased
catastrophe loss retentions, and decreased catastrophe coverage limits for its annual June
1, 2006 reinsurance renewal compared to the June 1, 2005 renewal as a result of the
hardening property catastrophe reinsurance market.
    
    The Company experienced rate decreases on its annual January 1, 2007 renewals of its
casualty excess of loss and property excess of loss reinsurance agreements compared to the
rates on its January 1, 2006 renewals of these treaties.
    
    Certain of the Companys reinsurance contracts have reinstatement or additional premium
provisions under which the Company must pay reinstatement or additional reinsurance
premiums to reinstate coverage provisions upon utilization of initial reinsurance coverage.
During the three months ended March 31, 2007 and 2006, the Company accrued $1.8 million
($0.8 million for the commercial lines segment and $1.0 million for the specialty lines
segment) and $3.7 million ($1.6 million for the commercial lines segment and $2.1 million
for the specialty lines segment) respectively, of reinstatement or additional reinsurance
premium under its casualty excess of loss reinsurance treaties, as a result of changes in
ultimate loss estimates. The reinstatement premium increased ceded written and earned
premiums and reduced net written and earned premiums.
    
    Effective for the two-year period beginning March 1, 2007, the Company purchased new
Terrorism Excess of Loss reinsurance coverage for its Commercial Lines segment which
provides, on an annual basis, in the aggregate, $50.0 million of coverage for losses
arising from acts of terrorism incurred in excess of $10.0 million, after all applicable
inuring reinsurance coverages. This agreement allows one reinstatement on an annual basis
at the same cost as the initial coverage. The total cost of this reinsurance coverage is
$3.6 million for the first twelve-month term, reflecting the 100% participation by all of the
reinsurers, and $2.9 million during the second twelve-month term, reflecting the 80%
participation by the reinsurers. The Company did not purchase similar reinsurance coverage
in the prior period.
 Net Investment Income:
 18




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PHILADELPHIA CONSOLIDATED HOLDING CORP. AND SUBSIDIARIES
Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
  
    
    The portfolio duration target was increased;
    
    The targeted percentage of the fixed maturity portfolio allocated to municipal security
investments was increased; and
    
    The targeted percentage of the investment portfolio allocated to common stock
investments was increased.
   Net Realized Investment Gain (Loss):
  Other Income
 Net Loss and Loss Adjustment Expenses:
  
    
    The growth in net earned premiums.
    
    An increase of $10.3 million in weather-related case incurred property losses to $16.9
million for the three months ended March 31, 2007, compared to $6.6 million for the three
months ended March 31, 2006.
  
    
    Net reserve actions taken during the three months ended March 31, 2007 whereby net
estimated unpaid loss and loss adjustment expenses for accident years 2006 and prior were
decreased by $12.9 million as compared to net reserve actions taken during the three months
ended March 31, 2006 whereby the estimated net unpaid loss and loss adjustment expenses for
accident years 2005 and prior were increased by
 19




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PHILADELPHIA CONSOLIDATED HOLDING CORP. AND SUBSIDIARIES
Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
  Net Basisincrease (decrease)(In millions)Accident Year 2006
    
    $
    (7.0
    )Accident Year 2005
    
    
    (4.9
    )Accident Year 2004
    
    
    (3.0
    )Accident Years 2003 and prior
    
    
    2.0Total
    
    $
    (12.9
    )
     
    
    A reduction in the current accident year net ultimate loss and loss adjustment expense
ratio for the three months ended March 31, 2007, compared to the same period in 2006.
During the three months ended March 31, 2007, a net ultimate loss and loss adjustment
expense ratio estimate of 51.3% was recorded for the 2007 accident year. During the three
months ended March 31, 2006, a net ultimate loss and loss adjustment expense ratio estimate
of 51.9% was recorded for the 2006 accident year.
 Acquisition Costs and Other Underwriting Expenses:
 
    
    The growth in net earned premiums
  
    
    Higher property catastrophe reinsurance costs experienced by the Company for its June 1,
2006 reinsurance renewal, as a result of the hardening property catastrophe reinsurance
market. This resulted in lower net earned premiums without a corresponding decrease in
acquisition and other underwriting expenses, which contributed to the increase in the
expense ratio.
    
    A $1.3 million change in net charges related to assessments from Florida Citizens
Property Insurance Corporation (Citizens). During the three months ended March 31, 2007
the Company recognized a net
 20




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PHILADELPHIA CONSOLIDATED HOLDING CORP. AND SUBSIDIARIES
Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
  Other Operating Expenses
 Income Tax Expense:
 Investments
     21




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##### Table of Contents



PHILADELPHIA CONSOLIDATED HOLDING CORP. AND SUBSIDIARIES
Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
   Gross Unrealized Losses as of March 31, 2007(in millions)Fixed MaturitiesContinuous
    
    Available for Sale
    
    
    
    
    
    
    Totaltime in unrealized
    
    Excluding Interests
    
    
    Interests in
    
    
    Fixed Maturitiesloss position
    
    in Securitized Assets
    
    
    Securitized Assets
    
    
    Available for Sale
    
    
    Equity Securities
    
    
    Total Investments0  3 months
    
    $
    0.8
    
    
    $
    0.3
    
    
    $
    1.1
    
    
    $
    0.8
    
    
    $
    1.94  6 months
    
    
    0.6
    
    
    
    0.6
    
    
    
    1.2
    
    
    
    0.4
    
    
    
    1.67  9 months
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.2
    
    
    
    0.210  12 months
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    13  18 months
    
    
    0.1
    
    
    
    0.6
    
    
    
    0.7
    
    
    
    
    
    
    
    0.719  24 months
    
    
    2.0
    
    
    
    3.2
    
    
    
    5.2
    
    
    
    
    
    
    
    5.2> 24 months
    
    
    4.5
    
    
    
    2.6
    
    
    
    7.1
    
    
    
    
    
    
    
    7.1Total Gross
Unrealized Losses
    
    $
    8.0
    
    
    $
    7.3
    
    
    $
    15.3
    
    
    $
    1.4
    
    
    $
    16.7Estimated fair
value of securities
with a gross
unrealized loss
    
    $
    670.2
    
    
    $
    534.7
    
    
    $
    1,204.9
    
    
    $
    23.0
    
    
    $
    1,227.9
      22




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PHILADELPHIA CONSOLIDATED HOLDING CORP. AND SUBSIDIARIES
Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
            23




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PHILADELPHIA CONSOLIDATED HOLDING CORP. AND SUBSIDIARIES
Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
 Gross Unrealized Losses as of December 31, 2006(in millions)Fixed MaturitiesContinuous
    
    Available for Sale
    
    
    
    
    
    
    Totaltime in unrealized
    
    Excluding Interests
    
    
    Interests in
    
    
    Fixed Maturitiesloss position
    
    in Securitized Assets
    
    
    Securitized Assets
    
    
    Available for Sale
    
    
    Equity Securities
    
    
    Total Investments0  3 months
    
    $
    0.8
    
    
    $
    1.2
    
    
    $
    2.0
    
    
    $
    1.1
    
    
    $
    3.14  6 months
    
    
    
    
    
    
    0.1
    
    
    
    0.1
    
    
    
    0.6
    
    
    
    0.77  9 months
    
    
    0.1
    
    
    
    
    
    
    
    0.1
    
    
    
    0.9
    
    
    
    1.010  12 months
    
    
    0.1
    
    
    
    0.2
    
    
    
    0.3
    
    
    
    
    
    
    
    0.313  18 months
    
    
    2.1
    
    
    
    4.6
    
    
    
    6.7
    
    
    
    
    
    
    
    6.719  24 months
    
    
    2.6
    
    
    
    1.5
    
    
    
    4.1
    
    
    
    
    
    
    
    4.1> 24 months
    
    
    3.1
    
    
    
    1.7
    
    
    
    4.8
    
    
    
    
    
    
    
    4.8Total Gross
Unrealized Losses
    
    $
    8.8
    
    
    $
    9.3
    
    
    $
    18.1
    
    
    $
    2.6
    
    
    $
    20.7Estimated fair
value of securities
with a gross
unrealized loss
    
    $
    624.9
    
    
    $
    543.8
    
    
    $
    1,168.7
    
    
    $
    37.4
    
    
    $
    1,206.1
           24




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PHILADELPHIA CONSOLIDATED HOLDING CORP. AND SUBSIDIARIES
Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
        Liquidity and Capital Resources
    25




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PHILADELPHIA CONSOLIDATED HOLDING CORP. AND SUBSIDIARIES
Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
     Forward-Looking Information
  26




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PHILADELPHIA CONSOLIDATED HOLDING CORP. AND SUBSIDIARIES
 
 Item 3. Quantitative and Qualitative Disclosures About Market Risk
   Estimated
    
    Hypothetical PercentageHypothetical Change
    
    Fair Value after
    
    Increase (Decrease) inEstimated
    
    in Interest Rates
    
    Hypothetical Changes
    
    
    
    
    
    ShareholdersFair Value
    
    (bp=basis points)
    
    in Interest Rates
    
    Fair Value
    
    Equity(Dollars in Thousands)March 31, 2007:InvestmentsTotal Fixed Maturities Available For Sale
    
    $
    2,282,135
    
    
    200 bp decrease
    
    $
    2,472,159
    
    
    
    8.3
    %
    
    
    9.9
    %100 bp decrease
    
    $
    2,383,528
    
    
    
    4.4
    %
    
    
    5.3
    %50 bp decrease
    
    $
    2,334,103
    
    
    
    2.3
    %
    
    
    2.7
    %50 bp increase
    
    $
    2,228,838
    
    
    
    (2.3
    )%
    
    
    (2.8
    )%100 bp increase
    
    $
    2,175,311
    
    
    
    (4.7
    )%
    
    
    (5.6
    )%200 bp increase
    
    $
    2,070,678
    
    
    
    (9.3
    )%
    
    
    (11.0
    )%March 31, 2006:InvestmentsTotal Fixed Maturities Available For Sale
    
    $
    1,808,325
    
    
    200 bp decrease
    
    $
    1,952,480
    
    
    
    8.0
    %
    
    
    10.7
    %100 bp decrease
    
    $
    1,883,754
    
    
    
    4.2
    %
    
    
    5.6
    %50 bp decrease
    
    $
    1,846,409
    
    
    
    2.1
    %
    
    
    2.8
    %50 bp increase
    
    $
    1,770,080
    
    
    
    (2.1
    )%
    
    
    (2.9
    )%100 bp increase
    
    $
    1,732,035
    
    
    
    (4.2
    )%
    
    
    (5.7
    )%200 bp increase
    
    $
    1,658,555
    
    
    
    (8.3
    )%
    
    
    (11.2
    )%
 27




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##### Table of Contents



PHILADELPHIA CONSOLIDATED HOLDING CORP. AND SUBSIDIARIES
 
 Item 4. Controls and Procedures
    28




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##### Table of Contents



PHILADELPHIA CONSOLIDATED HOLDING CORP. AND SUBSIDIARIES
 
  
   
   
   (c) Total Number ofShares Purchased as
    
    (d) Approximate DollarPart of Publicly
    
    Value of Shares That May(a) Total Number of
    
    (b) Average Price
    
    Announced Plans or
    
    Yet Be Purchased UnderPeriod
    
    Shares Purchased
    
    Paid per Share
    
    Programs
    
    the Plans or ProgramsJanuary 1  January 31
    
    
    1,120
    (1)
    
    $
    28.40
    
    
    
    
    
    
    
    $
    45,000,000
    (2)February 1  February 28
    
    
    1,403
    (1)
    
    $
    31.23
    
    
    
    
    
    
    
    $
    45,000,000
    (2)March 1  March 31
    
    
    4,220
    (1)
    
    $
    34.36
    
    
    
    
    
    
    
    $
    45,000,000
    (2)
 
 (1)
    
    Such shares were issued under the Companys Employee Stock Purchase Plan and
Amended and Restated Employees Stock Incentive and Performance Based Compensation Plan
and were repurchased by the Company upon the employees termination.(2)
    
    The Companys total stock purchase authorization, which was publicly announced
in August 1998 and subsequently increased, amounted to $75.3 million, of which $30.3
million has been utilized. 
   
   29




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##### Table of Contents



Exhibit No.
    
    Description10.1*
    
    Florida Only Excess Catastrophe Reinsurance Contract effective June 1, 200610.2*
    
    Casualty Excess of Loss Reinsurance Contract effective January 1, 200710.3*
    
    Endorsement No. 6 to the Property Per Risk Excess of Loss Reinsurance
Agreement effective January 1, 2007  First through Third Excess Covers10.4*
    
    Property Fourth Per Risk Excess of Loss Reinsurance Agreement effective
January 1, 2007  25% Placement via Willis Re Inc.31.1*
    
    Certification of the Companys chief executive officer pursuant to Section
302 of the Sarbanes-Oxley Act of 200231.2*
    
    Certification of the Companys chief financial officer pursuant to Section
302 of the Sarbanes-Oxley Act of 200232.1*
    
    Certification of the Companys chief executive officer pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 200232.2*
    
    Certification of the Companys chief financial officer pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
 
 *
    
    Filed herewith. 30




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##### Table of Contents



SIGNATURES
  PHILADELPHIA CONSOLIDATED HOLDING CORP.
RegistrantDate May 7, 2007
    James J. Maguire, Jr.James J. Maguire, Jr.President and Chief Executive Officer
(Principal Executive Officer)Date May 7, 2007
    Craig P. KellerCraig P. KellerExecutive Vice President, Secretary,
Treasurer and Chief Financial Officer
(Principal Financial and Accounting Officer) 31