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HomeMy WebLinkAboutAgenda General Pension 021207City. of Palm Beach.Gardens 10500 N. Military Trail Palm Beach, :Garden's; FL 334.10 GENERAL EMPLOYEES PENSION FUND NOTICE OF ME`T`ING AND AGENDA- Please take notice that the Board of. Trustees of the City, of Palm Beach Gardens will r conduct a meeting of the board at the above location on February 12;, 2007`at. 2:00PM in' . Council Chambers. Old Business: Approval of 11/13/06 minutes,,' New Business: Report from Rockwood Capital'Advisors Report from Bogdahn Consulting Report_ from Scott Christiansen Approval :of.Commission'Recapture Network Pricing Approval of Chnstiarisen'& Dehner's PriceIncrease , a Approval o'-Bills Adjournment DISABILITY INFORMATION In accordance with the .Disabilities Act and' F:S.S.286.26, persons with. disabilities needing special accommodation to participate m,, this " di should' ;contact the Human Resource. Department no 'later then .seven .days.. subs.equent •to the proceeding at. (561) 799 — 4223 for assistance, if heanng unpaired; telephone theflonda Relay'Service" Numbe & 800 - ,955 =.8770 (VOICE) for assistance APPEAL NOTICE If a person decides to. appeal any decision: made by the Board, with .respect to any matter-, , considered at such meeting or hearing, fie; 'Will need -to ensure, that, a yerbatim record. of the proceedings is made,, which record includes the testimony: and, evidence upon which the appeal is to be based. ,�,tj-��I-- ,.I � """. — 1� - I I- z � ,P'�,,` ll�'! , . 1 - — - -,��- ., "I � ... , ,, j l I, , - � ", , � .-. , . � I ,i I ,. " , -, ,� ��: � � - ,- , 1� �. ,'�,;� `t (n1 4" , 1.--,� ,,, - ; 7, �, ,31I . ,I4 ,k�--lil<, , I'll I'...-,- �, ,. 'l'.l'­.j;,j. - , It I , � 4,-�- , I ,,-'- '-,-,�— � � - �,-,, ;' , — i'I." , "" � ...... . - I. . -- . , 1, ,� � - -, � � I'. , , , . 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" - � .� � �7 -� . � I I , , , I . , , -� I �l 7" �­- �. - 1, " ,� "';,.'-':'*-: -� ..... -,.� .I ,'--,, --�' "". - , , -'� . " I , , , � I 1". � ,. ', " -,,,-�' "", , �,l , .. 1�1 ---aI, — - I ---:� 8289 � - I - I'll, ' - � . , , � , ", �� - �, - ' "' � .I ��,Z" � , :, I .' e ev one (863119X82 - �87 ;? "-'r,"', � , - - , ,-":, �'l �.t I I � i " - , - J, 1, 1; �l ,. , , - I , , , - I ;l "�� ", - E I �� !.%,,.,, ", ". , � ,,- ': ;Telephone - I lhi�. -1 894L','fa� - (80)192— �17-;�, ,,- --',,, , �';, , ` 5 , " ' 'U� "`� �L--�� "�� I , - ". - - '�;- - -., - " , -�. . .1 � I%-.1 I I . " ,. - I I �;., , . � , �� -, . 1. , , *!"I. �:�,4, , , -"', " L !�' "�' I -' ' ," , ;'I ' , - , . - L , � I I , , ', �. ;, , , � � " : I - ., , ., - , ':,, - , � � , , , - , . I 1� I . I �� —, - � � , , ,,�:`�- - '� . Z-.;,�,� " : " - - , " ) - , , -, " -� , , .� - I" I I , , ,� � �� I � , ' L , :� " , . - � � � , , Y , , I , 'r * -11 �l - I I. - - - - �� � . '. �,� , . , , '. I � � ,� I � I , . . I I -- -'� , .11 - .� ' .. '.. ; . ,� - " , - ',� _� -, 11 , - , . , . I , , � I . I , I I - �.I �­�% -!"�" �:'�'� . . "' , , � , O , - " .. ,-� , , -, , , , . , � OW t rr. Performance Evaluation A for Palm Beach Gardens General Employees Pension Plan; -: Rockwood & Sawgrass a For the Period "Ending December 31 2006 J • Presented b,y :... Bogda'hn Consulting,'LLC r .a t 1 1 i 'j F { r i C , Palm Beach Gardens General Employees'. General Employees Pension Plan Executive Summary Report Explanation The Executive Summary provides an overview of the fund's performance. It shows the performance in dollars, percent, and relative to the investment policy. These are provided over different time periods including up and down markets. All rates of return are annualized if the period for which they are calculated exceeds one year._ Account Reconciliation: This section shows the performance of the account in dollars, during the most recent quarter, the calendar year, and since the inception date. The Beginning Value is the value at the start of each period. The Ending Value shows the value as of the date of the report. Net contributions are the total contributions less the total withdrawals during the period. The Investment G /L. is the gain or loss resulting from the investments. It is the difference between the beginning and ending values that cannot be explained by the net contributions. Positive investment G/L figures represent a profit, and negative values represent a loss. Investment Policy: This section defines the benchmark against which the fund is being compared. Generally, this is the most important objective for a fund to achieve. The performance of the fund relative to this measure over longer periods of time, such as market cycles, is the strongest indicator of the success or failure of the investment.strategy. This objective should be reasonable, and the performance of the fund should. be measured against the investment,policy after adjusting for risk. Trailing Returns: This section shows the cumulative time weighted' returns over the last 1 year, 2 years, and so on up through 10 years if available, as well as since the inception date.,A positive difference indicates the fund has exceeded the policy's returns. The investor would prefer that this difference be positive for all time periods; however, it is more important for it to be positive for the longer periods rather than the shorter periods. Calendar Year Returns: This section gauges the consistency of performance over one year time periods. Each calendar year of performance represents the return from January 1 st through December 31 st. Watch out for a trend of declining relative performance in recent periods. Returns In Up /Down Markets: This section shows how the fund performed in both up and down markets. The methodology is to segregate the performance for each time period into the quarters in which the market, as defined by the policy, was positive and negative. Quarters with negative policy returns are treated as down markets, and quarters with positive policy returns are treated as up markets. Thus, in a 3 year or 12.'quarter, period, there might be 4 down quarters and 8 up quarters. Up market returns are calculated for the fund and the policy based on the up quarters. Down market returns are calculated for the fund and the policy based on the down quarters. The ratio of the fund's return in "up markets to the policy's is the up market capture ratio. The ratio of the fund's return in, down markets to the policy's is the down market capture ratio. Ideally, the fund.would have a greater up market capture ratio than down market capture ratio. 1 1 I --mss y •: kx•' Palm Beach Gardens General Employees' General Employees Pension Plan Executive Summary Account Reconciliation 1 101111 ILy MUM f 1, Lf If UUYI I LJCL:CI I IUGI J 1, GUUV ICalendar Year Returns i 3 '. ■ 3 Yr 4 Yr Investment Policy Index 12/31/2006 2006 09/30/1994 ....................................................... t:dn'�'�'�.'A� �: r� •'•'�te B ...roan .. gg.. �..':.....'....•..'... - '..•.'.....'.'..'...'...•.... Qtr YTD Incept :IYwn : >:::::: ::::2:5`: : :'? :: :: :L'1:3:: :::::' ?13:3:::.:: Qtr = }'filet Mows:::: ?:;:;> :::::::::: ::::::3g: >::::`:::= 83:::.' 8': eStfi:eti� iGf 1 8 2000• 285 . ...... ..... Milk[ni4.......�.r.-.•...•. - ...... .. - ...•.•.•.7fi- iiVVi:v.•i:•. . >a.....•.•.•.•.•.•.... 21 1 101111 ILy MUM f 1, Lf If UUYI I LJCL:CI I IUGI J 1, GUUV ICalendar Year Returns i 3 '. ■ 3 Yr 4 Yr Investment Policy Index Weight ._....R.... ........... o .... .......... ...........•.... :;:::::::6 ............. ....................................................... t:dn'�'�'�.'A� �: r� •'•'�te B ...roan .. gg.. �..':.....'....•..'... - '..•.'.....'.'..'...'...•.... 40.00 - .....'.. . 10 Yr Incept 5. Yr 6 Yr ` 7 Yr u�.......:.. :07...... 09/30/1994 8 Yr 9 Yr 10 Yr Incept 4 $ ... ;::5:62:...;:... x:1:3.:. > ...:....•.....x.915. 2 Returns in Down Markets 12/31 /2006 2006 09/30/1994 3 Yr 5 Yr 10 Yr Incept :IYwn : >:::::: ::::2:5`: : :'? :: :: :L'1:3:: :::::' ?13:3:::.:: Qtr YTD 2005 2004 2003 2002 2001 2000• 1999 1998' 1997 ........................... . $4: »:< - x:66:::::::;::.:$:9$.:: ?:::: &33- :::::1: ; ...:.•. �?. i:................... . : �4.... 7;$1:: :: ::# ... C Y .......... 4.43 .•:.:.... ............................•.. .1.2..•.•.•..:•.:9:7::::::::' ..- ....... :.....:........::.:.:..::_ 8,25 .'8.7:. ........76......$. ...::...._ 53......3.67 .:.:......: :..... -:::. , .,::.:: q.J2..... .:...::.....:. ,,...,:;.......:.. •:: h.1, a ... 2T,3a•...•23.68•. ...•....-.-.-.-._.-,-.•.•.•.•.•.•.•.-- D. GS.•.•.•.-.•.-- �, 46• .•.•.•.•.•.b.>5:�- .•.•.•.•..•.� Qs�..- .•.:..•. �. 99.•.-.•.•.•.- fl. 3�.•..-..•.-.•.? �. 51 .. .. .. .. .. .. .6.�i6- .- .- . -.•.•- 3,59. -. -.- .fib.;.•.•.•.•- �•.�� -. 2 Returns in Down Markets 09/30/1994 3 Yr 5 Yr 10 Yr Incept :IYwn : >:::::: ::::2:5`: : :'? :: :: :L'1:3:: :::::' ?13:3:::.:: . : 1:.... ;' .::::.:.::::.:.::::g3::. ;:.:.:.:':! 91:; 2:•:::.::;::: $;iD::;::::.;:;:::;::::::8$;Q:: Palm Beach,Gardens General Employees Pension Plan Asset Allocation-Through December 31, 2006 At Market Cash & Equiv 2% Equi 66° Equit 62% At Cost Cash & Equiv 3% 3 ixed Income 32% =fixed Income 35% Equity Limitations 65 @ Cost 70 @ Market Palm Beach Gardens General Employees' r General Employees Pension Plan Universe Comparison Report Explanation The universe compares the fund's returns to a group of other investment portfolios, called a universe. Ideally the universe is comprised of many other investment funds with similar investment profiles. Comparisons are provided over many different time periods. Trailing Returns: This section focuses on longer term returns. It shows the cumulative time weighted returns and percentile rankings for the last 1 year, 2 years, 3 years, and so on up through 10 years if available. The returns for the fund, the policy and the universe percentiles are displayed. A percentile ranking of 1 is the best, and 100 is the worst. For example, a ranking of 50 means that the fund outperformed half of the universe. A ranking of 25 means the fund was in the top 25% of the universe, outperforming 75 %. Above 50 is acceptable., Above 25 is excellent. High rankings over all time periods are ideal; however, it is more important to rank highly over the longer periods rather;:than the shorter periods. Calendar Year Returns: This section focuses on shorter periods and gauges the consistency of performance overtime. It shows the calendar year returns for the fund, the investment policy and the universe percentiles: Each fuli.year of performance represents the return from January 1st through December 31st. Ideally the fund has performed well in the earlier years and in the most recent years. Watch out for a trend toward underperformance in recent periods. Note the performance in different market environments. A high policy return indicate_ s a bull market, and a low.policyreturn indicates a bear market. All rates of return are annualized if the period for which theyare calculated exceeds one year. f i I 4 Palm Beach Gardens General Employees' a General Employees Pension Plan. Universe Comparisons 60% Pure L 9 "Cap Core & 40% High Quality Bond I railing Keturns tnrougn uecemoer a 1, /-uuo Calendar Year Returns 5 Yr 1 Yr 2 Yr L 3 Yr 4 Yr tt d .::::::::::::::..........:: : Return 9.66 6.78 7.29 9.14 % -tile 75 76 66 83 3.62 38 Return 11.12 7.49 7:74 10.39 -tile 45 47 46 42 .,;: >: . ... I�t. . 5th % -tile 14.52 9.30, 9.60 11.89 25th % -tile 11.67 8.06 8.35 10.89 50th 6/.-tile 10.97 7.42 7.64 10.23 75th %-tile 9.60 6.83 7:00 9.62 95th % -tile 419 4.58 4.75 7.79 Calendar Year Returns 5 Yr 6 Yr 7 Yr 8 Yr 9 Yr 10 Yr - 2002 5.04 72 4.32 34 4.53 24 4.93 27 5.62 51 7.13 50 3.84 6.09 a 33 4.39 - 33 3.62 38 4.56 34 6.30 19 7.92 12: 5.74 7.90 6.47 5.60 4.90 2.72 6.98 4.82 3.89 3.23 0.40 7.20 4.40 3.22 2.64 0.19 ' 6.57 -5.06 4.19 .3.72 1.95 7.03 6.10 5.62 5.18 3.57 8.30 7.56 7.12 6.53 4.57. Returns are in percent: "% -tile" is the percentile ranking within the universe. Returns for periods exceeding one year are annualized. Incept is September 30, 1994 to December 31, 2006 Index change effective 1/1/06 from LB Gov /Credit to LB Aggregate 5 Qtr YTD 2005 2004- 2003 - 2002 ' 2001 2000 1999 1998 .................... .....• ....... ...............I......... ............. ...................... . ......... ....... , iaiid .............. ..:: :::,.:.:;:.:::: <.:::: >:::..:.: ......... . ......... .. ............- ...... . Return 3.84 9.66 3.98 8.33 14.87 -9.90 0.84 5.74 7.81 11.27 % -tile 84 75 49 28 .90 45 9 16 84 92 .... Return 4.49 11.12 3.97 8.25 18.76 -9.53 -3.67 -0.92 11.40 21.35 % -tile 43 45 49 30 38 36 38 53 57 • 14 .. ...................... ........ .... ....... :... .:.:.: :: :.. ... .:...:...: >:........... ....<. Un xers ..... ..........:.................... ,...... ............................... . 5th 9/6=tile 5.49 14.52 7.78 10.61 22.15 -6.02 2.49 12.89 21.77 23.85 25th %o -tile 4.70 11.67 5.07 8.43 19.57 -8.97 -2.72 3.21 13.94 20.05 50th %4ile 4.43 10.97 195 7.53 18.17 -10.15 -4.10 -0.70 11.87 18.01 75th.% -tile 4.13 9.60 3.31 6.43 16.73 -11.58 -5.12 . -2.41 9.72. 14.49 95th %o -tile 3.05 4.79 1.46 4.31 13.99 -13.58 -8.55 -5.23 3.84 10.59 Returns are in percent: "% -tile" is the percentile ranking within the universe. Returns for periods exceeding one year are annualized. Incept is September 30, 1994 to December 31, 2006 Index change effective 1/1/06 from LB Gov /Credit to LB Aggregate 5 Palm Beach Gardens General Employees' i, Total Fixed Income Executive Summary Account Reconciliation Investment Policy_ i Y i t I fdilillly. r JLU1115 L111UU1y.11 LJCGGIIIUCI 0I, Gvvv } Returns in Up Markets 09/30/1994 3 Yr 5 Yr 10 Yr Incept I e} PQlieji: ::::: .:.:.:`:.:.:. :.: 1::4 :.:.::.. - - • - •iD....- .- ..•....- ....1..,- . . R .....:.....::: ::: 5:3:.. .. 84:J Sb i= : :. :. :: :::. :.:::::86:8:: $- . Returns in Down Markets ° 09/30/1994, 3 Yr .. 5 Yr 10 Yr Incept ...tired :':'::::::'::":::" ......... .....3............3............. 09/30/1994 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr'; 6 Yr 7 Yr. 8 Yr 9 Yr 10 Yr Incept .iti .: .:.:.:.:.:.:.:.:�i 32�:.:.:.:.:.:. 3`3:' f2:::::::::::: 4: �. �:::::::: ...._...... ::::5:;1:�:;:::::::::53g::�::.. = - , ....................... ::::4:95 ::::::b:::= , ......... : =: =:: - - " - - ..... . -. :'-'-- �- :4-�-'� : � --'- >.' • :33: ":.'.':':'3:6`2: ".'... . Qtr .. s5.:..:.:< ::...8:::::94::::':9:: 5.5. 2004• =:: >: :93 =: ................�.....:.:::= 2000 Q440 ::::: x#: 77.. ..:.- ...•.0.9$...:.:.:.:....... - .. -..1.. .- : -'.•. -.- ; .:.:.. :.: 4:99...........0. 8..:.:..:.::..... :0:9;z =: - .... . } Returns in Up Markets 09/30/1994 3 Yr 5 Yr 10 Yr Incept I e} PQlieji: ::::: .:.:.:`:.:.:. :.: 1::4 :.:.::.. - - • - •iD....- .- ..•....- ....1..,- . . R .....:.....::: ::: 5:3:.. .. 84:J Sb i= : :. :. :: :::. :.:::::86:8:: $- . Returns in Down Markets ° 09/30/1994, 3 Yr .. 5 Yr 10 Yr Incept ...tired :':'::::::'::":::" ......... .....3............3............. 3 .. ... Calendar Year Returns . ::98:x::::= ........... ....Q. .-.....- .................. :91:9::::::::= :::91_A' ..... .- ... -. - -. 12/31/2006 2006 Qtr YTO 2005 2004• 2003 2002 2001 2000 1999 1998 1997 i ` . •":::": ":':':': ":::'::':: ": ":':':....: - ": -•:.:":'....'..• : Fund:.9;?..�.•. ..•.' ... .......... "-- '.- .'- •::':'...... • ' .......:..:. - ..:.:....... -. -.• -.. �4.-....,. 1-. 3,-.. ..•.- .- .- . -:.•- 1 '.':'.'.•.-.'.'.'.'.•.'.-.•..-.'.'.'.'.'..'.':' :'- •.'.'.•.'.'- •.'.'- '.":'.'.'r .•r.'.•.'.': .......• ...... }.'.•_ '.-_"r.'.'.'- ................ .'.•.�.�.- .•.- .- '.'.'j.- '.-- ••' ':' .'.�.'. --. •." -'. •.".' :'. •�- : r :• : {' ..... :-� :.: :' 215 ..•.•.'..�:..- r: 9 T - .. . :# ail f' :.:.:.:.:.:.:.:.:.:.:.:.:.:.:.:::.:. := 0.:?1�:.:.::. :.:�:�9i:�:�:. : b - - - .......... - - •:- - ....... - ... �_ ......•.-.-.•.-..--•.•.--•.•-'.'-•.-.'. .... -= '.•.•.- ':•.- - . ......... - ...... .•.•:•.' .•.•- .'.•.-- .•.•.': } Returns in Up Markets 09/30/1994 3 Yr 5 Yr 10 Yr Incept I e} PQlieji: ::::: .:.:.:`:.:.:. :.: 1::4 :.:.::.. - - • - •iD....- .- ..•....- ....1..,- . . R .....:.....::: ::: 5:3:.. .. 84:J Sb i= : :. :. :: :::. :.:::::86:8:: $- . Returns in Down Markets ° Inception date. is September. 30,1-994 All dollar values are shown in thousands. -Returns for periods exceeding one year are annualized. Returns are net of fees. Sawgrass assumed fixed- 10 -26-05 $1,043,932.60 - Index change effective 1/1/06 from LB Gov /Credit to LB Aggregate i F - 6 09/30/1994, 3 Yr .. 5 Yr 10 Yr Incept ...tired :':'::::::'::":::" ......... .....3............3............. 3 .. ... . ::98:x::::= ........... ....Q. .-.....- .................. :91:9::::::::= :::91_A' ..... .- ... -. - -. Inception date. is September. 30,1-994 All dollar values are shown in thousands. -Returns for periods exceeding one year are annualized. Returns are net of fees. Sawgrass assumed fixed- 10 -26-05 $1,043,932.60 - Index change effective 1/1/06 from LB Gov /Credit to LB Aggregate i F - 6 1 1. Palm Beach Gardens General Employees' Fixed Income & Cash - Sawgrass Executive Summary Account Reconciliation Investment Policy I I Will ly MUM LII 11 uwkGwlIIVCI J 1, GVVV Calendar Year Returns IRCLUIIIti 111 Up WWIKCL, 12/31/2006 2006 10/26/2005 d............... 4. 2.......... ............................... ....................................... ............................... ...................................... ............................... Qtr YTD Incept 13. :.:,:.:::;: filet:Igws :::::::::::::::::::: := 24::::::::::= 65 #48:: Investment Policy I I Will ly MUM LII 11 uwkGwlIIVCI J 1, GVVV Calendar Year Returns IRCLUIIIti 111 Up WWIKCL, Inception date is October 26, 2005 All .dollar values are shown in thousands. Returns for periods exceeding one year are annualized. Returns are net of fees. Index change effective 1/1/2006 from LB Gov /Credit to LB Aggregate 7 Returns in Down Markets 10/26/2005 1 Yr Incept, d............... 4. 2.......... ............................... ....................................... ............................... ...................................... ............................... .....•............ ... .... ................ .. ......... . .. to .............81..?9 .................... ........8g.3 Inception date is October 26, 2005 All .dollar values are shown in thousands. Returns for periods exceeding one year are annualized. Returns are net of fees. Index change effective 1/1/2006 from LB Gov /Credit to LB Aggregate 7 Returns in Down Markets 10/26/2005 1 Yr Incept 1=ti.d ........ ... 0. 3 ........ ...........................0... ....................................... ............:.........:....... ......... aE!,.::......:.. 0 7 .:.... .....:........ .... Q.7. :Ratio : '::::: :::4r ?t .::.:.:.:.:.: `:.:.....:..:.::....> :::::::::::4+ : 1 1 1 1 r �i i f i i' !'f r4f i7t .I =1 i� I { 'f 1. 1 Ij Account Reconciliation j rae11 ly r-tciul 1 w u u vuy1 I I ivui %J I, wvv investment Index _ 12/31/2006 2006 09/3011994 ..'....'..' .......... . ......................... Qtr YTD Incept ....' ..'.'.'.'.'..'...:' ........................... 09/30/1994 . _filet: Flaws::.:':: >> : :::.............. .. : =:•: "33•:•::•:•:: ':- ::::::::: 4 - 3U5 =: 6 Yr ....:1...0: >:.: ::. • 8 Yr ..:.1.. ^ 5 `�:: 6 . 10 Yr Incept ... ...... raid ::::::::::....2 ......: 3 :. 9 �. j rae11 ly r-tciul 1 w u u vuy1 I I ivui %J I, wvv investment Index _ Weight S..-.... Qtt.....'.'.' ..:............. ..............:.................. ..'....'..' .......... . ......................... . •:•::' 0. 0910 Calendar Year Returns 12/3112006 2006 09/30/1994 3 Yr 5 Yr 10 Yr Incept' ...d :. :::•...5. 7::.•:•::: ... ::: •::::•: 22.. 09/30/1994 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr • 8 Yr 9 Yr 10 Yr Incept ... ...... raid ::::::::::....2 ......: :: ::::8:66::::: "::::: :9:58: :: :::: •..... :: :1 :.....: :... u'......... 3....................._....-.'.•.'.'.-.'..-.'..-.'.'..'.'.'. : : >:42::_:::;:.= .......: •:-: 7 ••: :: : :: 5. 2 : : : :: : :7 8......: ..'...'...'.'.'..'.'.'......... : ::•:: :10 2 'I: :: . ........................................................................................................ ::•: :: ......4.7.. :•:•:•:28:8$::•::':22 6 4 :: :: `4 :•:: • >: <$:98...: ..................:............ ::• ....... $ ......... :: >: :1:1•:$1 >: ;.:...'....•....• : Iii f: •:•:•: ::::: ::- ': :�.t��:�:::.: :: > 1: :�6;...- .::':_: ...- ..i7�.86::.:.... -.- .1;.90;.,-.;..-. 1-, 3�..•.::.::>:# ..'..'.'. 3; 43:;:.:.:::.' .'..'..'.'.'..'.'.'.'...'..'.'. �: �#::`:.:_>: �< 49;;...:.;... 4. 0. 2.......- ..'.'.'..'.'.'.'.'.'. : ::: ..�Qi��! ::.:::.:.:::... . .. ... ... .x.,36 -. Calendar Year Returns 12/3112006 2006 09/30/1994 3 Yr 5 Yr 10 Yr Incept' ...d :. :::•...5. 7::.•:•::: ... ::: •::::•: 22.. :: :::. .•: ::: 2 ..............2.... Qtr YTD 2005 2004 2003 2002 2001 2000 1999 1998 1997 : tmd:»>:::•:•<: a•:::<::•:< 0:. 4fl:>:.:::: 12:: 9:::•.•:•:• �i ;32.'.':.' >14.:,':2s$$..'.'.'. X21:; E3$:>:= : : >:42::_:::;:.= ��::29 >:'.:•: :'IMF•= 26::•: :: .12:.39::: : ::2�3.:!$' Roli` :::::::::=- >: :: :: ::? ::.: :: > <: 7 : 1:5:8Q %•: =' •::4: • :•:•:•:28:8$::•::':22 ......:.........•: :: 4 8 3 . ....: ::•:•:•:= := : ::•:•:•: :: : >:: •: ::• ::............�:$5 ::•: :: :::0:39 :•:: >;:�:6G :: :: ": :: :'a:85:•: . :' : 7: :::::•: :• ': 6 :<: ::.7 4 {: :14:40 :: : :: :' =6::7$ ... 6. 9.... -4.28. Returns in Up Markets Inception date is September 30-1994 All dollar values are -shown in thousands. Returns for periods exceeding one year are. annualized. Returns are net of fees. Returns in Down.Markets 09/30/1994 3 Yr 5 Yr 10 Yr Incept' ...d :. :::•...5. 7::.•:•::: ... ::: •::::•: 22.. :: :::. .•: ::: 2 ..............2.... 26 2 . t• .' .:...................... .'�'- ............ ._. .- t. ....... "...'.'.: .': : -: : :. : ..:: -. .. :.. :€tatio:• >:::: :::•: ::: >: ; 94..........86: t:.::::::? »:•Sb 3 :• :: :::: >:?: BGA:: Inception date is September 30-1994 All dollar values are -shown in thousands. Returns for periods exceeding one year are. annualized. Returns are net of fees. Returns in Down.Markets Rockwood assumed account 10 -26-05 $1,565,898.88 international bought 11/9/2006, will be added to Policy 12/31/06 93 09/30/1994 3 Yr 5 Yr 10 Yr Incept ...d :. :::•...5. 7::.•:•::: ... ::: •::::•: 22.. :: :::. .•: ::: 2 ..............2.... :: :: ::•:•: :: ::• '.::� :: 4'.. `o: < :: >:;::•:' : :1:06:5:•: :: ::93x :•:::'`:83::T :::::.:.:::.:.::::Sf:8•: Rockwood assumed account 10 -26-05 $1,565,898.88 international bought 11/9/2006, will be added to Policy 12/31/06 93 11 I i. . ., I Palm Beach Gardens General Employees' Total Equity Universe Comparisons Pure Large Cap Core i railing Keturns tnrougn uecemaer s5i, zuuo Calendar Year Returns 1 Yr 2 Yr 3 Yr. 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr 9 Yr 10 Yr fl.. Return 12.95 8.66 9.58 12.75 5.00 3.37 3.64 4.91 5.72 7.85 % -tile 75 78 72 81 77 36' 25 26 46 56' t ..:.....:..::...:.. .:.:.:.:.:.::.:...::..::.:.:. :. ..:.:.:..:.:.:.::.:...:::...... ....::...::.:: ::.:. ::.....;:.::;::::.::...:..... ,:::_:::::::::::::.:::.:.: PQ.ICY... ..:.:............................... ....... Return 15.80 10.22 10.44 14.74 6.19 2.94 1.13 3.42 5.96 8.42 % -tile 30 40 41 39 41: 40 `49 46 34 X28' .............................. .................................. ............................... n" s >: 5th % -tile 20.97 12:97 13.41 16.91 '9.70, -7.73 7.67 7.21 7.76 9.69. 25th % -tile 16.19 10.97 11.39 15:55 7.48 4.25 3.44 4.98 6.33 8.51 ,50th % -tile 15.48 10.02 10.29 14.47 5:99: 2.74 1.00 3.26 5.66 8.08. .75th % -tile 12.74 8.98 9.33 13.54 5.12 2.02 0.47 2.66 4.93 6.88. 95th % -tile 4.79 5.22 5.38 10.43 1.42 -3.03 -3.92 -0.39 2.09. 3.56 Calendar Year Returns Returns are in percent. "% -tile" is the percentile ranking within the universe. Returns for periods exceeding one year are annualized. Incept is September 30, 1994 to December 31, 2006 Rockwood assumed account 10 -26 -05 $ 1,565,898.88 International bought 11/9/2006, will be added to Policy 12/31/06 E Qtr YTD 2005. 2004 2003: 200211. .2001 2000 1999 1998 :::::.:.:.....:::.:........... . :.......... :< :.:.:.::. >;:.::::..... .. ......... :: : >::.' :...:: .: . .......:.::.........................`.......•.............•.....• ..•:......:.•:............::.:; ...•.................. .................:......•...... . .............................................................................................................. ............................... Return 5.40 12.95,- 4.52.. 11.44 22.83 -21:03 - -4.42 5.29 14.26 12.39 %o -tile 85 75 67 26 .. ; 87 ; 34 9 12 81 97 f?bE Gy ... ............ .. ... .. Return. 6.70 15.80 4.91 10.88. 28.68 - 22.10 -11.88 -9.11 21.04 28.58 % -tile 38 30 55 34. 29 46 48 60 38 24 Unvere ........:..........:... .... ...............:.........................:.............. ..... ..................... ..... ........ ..... . 5th % -tile 8.29 20.97 11.33' 15:14 33.34 -15.55 -1.49 13.61 35.03 34.74 25th % -tile 7.00 16.19. 7.20 11.51 28.99 4 - 20.13 -9:35 -0.20 22.80 28.47 50th % -tile 6.61 15.48 5.09 10.39, 27.83 -22.23 - 12.08 -7.39 20.27 25.44 76th % =tile 6.03 12.74 4:22 - 8.38 24.97' 723.39 ' -13.51 -9.63 16:39 18.85. 95th % -tile 4.29 4.79 1.07 5.14 20.58: -26.60 719.10 , 714.67 6.13 .13.04 Returns are in percent. "% -tile" is the percentile ranking within the universe. Returns for periods exceeding one year are annualized. Incept is September 30, 1994 to December 31, 2006 Rockwood assumed account 10 -26 -05 $ 1,565,898.88 International bought 11/9/2006, will be added to Policy 12/31/06 E Palm Beach Gardens General Employees' Equity & Cash - Rockwood Executive Summary Account Reconciliation Investment Policy U Calendar Year Returns `Returns in Up Markets 12/31/2006 2006 10/26/2005 I iiiid? .:::::::::::14:9 ::..... Qtr YTD Incept :#3e.iix iii: Valu ..... 8:::�: <�f�� f`slet:Flgws:::: ::':::::::::= 4A; ::: = 90 :::::::::::......' ir..... tni:en :G ..... .:..: :.: :9 :.: > ;. ... . . . ............ $2 : :1:::I Investment Policy U Calendar Year Returns `Returns in Up Markets Inception date is October 26, 2005 All dollar values are shown in thousands. Returns for periods exceeding one'year are annualized. Returns are net of fees. Returns in Down Markets 10/26/2005 1 Yr Incept I iiiid? .:::::::::::14:9 ::..... ..:...........: ...... ............... PiitiCy :......: .:............... . . . : ,... ,....1,! . Ratiei= : • • ::::: 85 4 . ....:.:::::.::::::::::::::::104:x:: Inception date is October 26, 2005 All dollar values are shown in thousands. Returns for periods exceeding one'year are annualized. Returns are net of fees. Returns in Down Markets 10 10/26/2005 1 Yr Incept . . Poficy:: ?:........... 1 ... ............................... . . : ,... ,....1,! . a txf............................... ............................... 10 n u Palm Beach Gardens General Employees' Equity & Cash - Rockwood Universe Comparisons Pure Large Cap Core Ii railing rceturns through umx1fluci 0 1, cvw Calendar Year Returns 2 Qtrs 3 Qtrs 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr ..und.... Return 9.73 7.75 12.81 % -tile 86 79 75 QIC .......... ........ .......... ........ ....... Return 12.74 11.12 15.80 % -tile 28 30 30 .......................................... ............................... ......................................... ............................... ........................ ............................... er . ..:.: : :: :.::.:.:.:.:.:.. >:. ;:.::.:.: ;>:;:.:.:.»:.:.:::.:.:.:.:.:.:.: ;:.:.:.:.::.:.:.:..:...:. >::::; :;.::;::::::.::::.:::;:.:,:::::.::;:.<:::: »:;:::;>:::::::::::::>....;::;: : Jniai 's` 5th % -tile 14.83 15.10 20.97 12.97 13.41 16.91 9:70 7.73 7.67 7.21 25th % -tile 12.79 11.62 16.19 10.97 11.39 15.55 7.48 4.25 3.44 4.98 50th % -tile 12.51 10:75 15.48 10A2 `10.29 14.47 5.99 2.74 1.00 3.26 76th % -tile 11.15 8.68 12.74 8.98 9.33 13.54 5.12 2.02 0.47 2.66 95th % -tile 7.26 2.18 4.79 5.22 5.38 10.43 1.42 1 -3.03 -3.92 -0.39 Calendar Year Returns Returns are in percent. "% -tile" is the percentile ranking within the universe. Returns for periods exceeding one year are annualized. Incept is October 26, 2005 to December 31, 2006 11 Qtr YTD 2005 2004 2003 2002 2001 1 2000 1999 1998 Return 5.26 12.81 % -tile 87 75 Return 6.70 15.80 % -tile- 38 30 :..: j ............ ..... ............... ; ..............:.. ....:.. . ; ..... ...... . ; ;:::::::::::: ::`::::::::::::::::::;:: ":::':: `: .............. :'::'`' t1n verse .. . . 5th % -tile 8.29 20.97 11.33 15.14 33.34 - 15.55 -1.49 13.61 35.03 34.74 25th % -tile 7.00 16.19 7.20 11.51 28.99 - 20:13 -9.35 -0.20 22.80 28.47 50th % -tile 6.61 1.5.48 5.09 10.39 -27.83 -22.23 -12.08 -7.39 20.27 25.44 75th % -tile 6.03 12.74 4.22 8.38 24.97 -23.39 713.51 -9.63 1639; 18.85 95th % -tile 4.29 4.79 1.07` 5.14 20.58 -26.60 -19.10 -14.67 6.13. 13.04 Returns are in percent. "% -tile" is the percentile ranking within the universe. Returns for periods exceeding one year are annualized. Incept is October 26, 2005 to December 31, 2006 11 Palm Beach Gardens General Employees' General Employees Pension-Plan, QUp Market Returns 25.00% 20.00% ------------------------=------ - - - - -- 15.00% - - - - -- -- -' _- '- - 10.00% - -- - - 5.00% - -- -- - -- - 0.00% 3 Yr 5 Yr 10 Yr Incept Fund ( %) 11.08 12.91 16.70 16.66 Policy ( %) 11.78 15.13 18.92 19.06 Difference ( %) Ratio -0.70 94.06 -2.22 85.33 -2.22 88:27 -2.40 87.41 # Up Qtrs 9.00 14:00 28,00 37.00 Down Market Returns a 0.00% O -5.00% ---- - - - = -- - -= 6+J - 10.00% --- .- - - - - -- - - -- - - 15.00% 3 Yr .5 Yr 10.Yr Incept Fund ( %) -2.49 -11.26 -12.27 -12.27 Policy. (%) -2.66 -12.35 -13.94 -13.94 Difference ( %) 0.17 1.09 .1,67 1.67 Ratio 93.61 91.17 88.02 88:02 # Down Qtrs 3.00 6.00 `12.00 12.00 [I Fund ( %) CJ-Policy ( %) Index change effective 1/1/06 from LB Gov /credit to LB Aggregate 12 v a I u e Palm Beach Gardens General Employees' General Employees Pension Plan Objective Comparison VV 1 IVIVL JVG JVG vvc rvivv .+VV .�vV vvv rviv� .,vim v..� .+..� .. .... ...... ...... _ -- •.• -- - -- _ -- - -- Quarter Ending ❑ Fund - LCP icy $ Nominal 8% - ❑ 41%/, Inception date is September 30, 1994 All dollar values are shown in thousands. Index change effective 1/1/06 from LB Gov /Credit to LB Aggregate 13 xtry Palm Beach Gardens General Employees' General Employees Pension Plan .. Attributions of Returns Report . Explanation ' Performance attribution concentrates on evaluating the effect of the manager's decisions on asset allocation and security selection. This allows the investor to see whether the manager is adding value by adjusting the actual asset allocation or by picking individual securities. This information is valuable in" helping determine the amount of freedom that might be ' given to the manager in regard to asset allocation ranges. The result of these skills are shown for multiple time periods. The top section shows the returns for both the account and the investment policy and the results of the manager's contribution. The fund's return is thus attributed to the policy and the manager. The bottom section divides the manager's contribution into two components: asset allocation and security selection. The asset allocation effect measures the value that was added by varying the actual'asset allocation from the target allocation. This is done by assuming investments, in.amounts equal to the actual asset allocation weights, were made in the policy's indices so that security.selection has no effect.. The difference between this return and the policy's return is the asset allocation effect. The security selection is the remainder of the manager's contribution that is not explained by asset ' allocation. ' 14 ■ Palm Beach Gardens General Employees' General Employees Pension_ Plan Attribution of Returns Attribution of Performance to show Manager Contribution >: Policy + Manager Contribution = Fund Attribution of Manager Contribution between Asset Allocation and Security Selection Policy iager:an #rittfioi` Fund, Current Quarter 4.49 :: := 0;85:: :: 3.84 Year to Date 11.12 :.*. ::< 1:;1#6:: .:.:.` 9.66 3 Years 7.74 ::::: ....... : : `:.:. 7.29 5 Years 6.09 ::.:::::.:.::: : :.:::'::;:;:.:.:.::.?::- �.:QS:: 5.04 10 Years 7.92 :: ::= 0:79:: :: 7.13 Incept 9.96 :.............. - �I..17:: 8.79 Policy + Manager Contribution = Fund Attribution of Manager Contribution between Asset Allocation and Security Selection Asset Allocation + Security Selection = Manager Contribution Index change effective 1/1/06 from LB Gov /Credit to LB Aggregate 15 Asset Allocation Security Selection .......... Current Quarter -1.65 1.00 :: : =Q65' Year to Date -4:63 3:17 .:.:.` : ? ..:.:.:.:..:.`:..::: i :.:..: 3 Years -3.30 2.85 : `:.:. ::: >::.:.:.:.:.: >:.?':: >:Q;S: 5 Years -2.76 1.71 .: 10 Years -3.49 2.70 :: :: <- Incept -4.41 3.24 Asset Allocation + Security Selection = Manager Contribution Index change effective 1/1/06 from LB Gov /Credit to LB Aggregate 15 - - - -- - -- - -- Quarter Ending Security Selection Effect ' 15'.00% e 10.00% r 10.00% 1 r C C e e n n. t 5.00% t 5.00% . : E f f e '. f a 0.00% c t t - 5.00% - 5.00% - - - -- - -- - -- Quarter Ending Security Selection Effect ' 15.00% P e, 10.00% 1 r C e n. t 5.00% E f e o 0.00 /o C t - 5.00% Quarter Ending M Quarterly Effect � Cumulative Effect Index change effective 1/1/06 from LB Gov /Credit to LB Aggregate ' 16 ' ° M02 J02 S02 D02 M03 J03 S03 D03 M04 J04 SO4 D04 M05 JO5 S05 D05 M06 -J06 S06 D06 Quarter Ending ❑ f=ixed Income, - Target Index change effective 1/1/06 from LB Gov /Credit to LB Aggregate 17 80.00 /o 70.00% Palm Beach Gardens General Employees' 50.00% 40.00% 30.00% General Employees Pension. Plan 10.00% Asset Allocation vs Targets 0 00°/ 80.00% 70.00% ---------------------------------- - - - - -- ------------------------------ - - - - -- ------------------------------=-------------------- - - - - -- --------==------------ - - - - -- - - -- 60.00% ------------------------------------------------------------------------------------------------------------------------------------ - - - - -- -------------------------- = ----- ' 50.00% ----------------------------------------------------------------------------------------------------------------------------------------------------------- - - - - -- ----------- - - - - -; ----- - - - - -- - - - - -- --------------------- - - - - -- - - - - - -- -------- - - - - -- 40.00% ------------------------------------------------------------------------------------------------- 30.00% ----------------------------------- - - - - -- ----------------------------------- - - - - -- ----------------------- - - - - -- -A5D ---------------------------=--------- ------------------------------------ 20.00% ---------------------------------------------------------------------------------------- 10.00% ------------------------------------------------------------------------------------------------ - - - - -- ----- - - - - -- -- - -- ------------------------- - - - - -- 0.00% 02 J2 S2 WON J 1466 J6 S6 66 D2 3 J3 S3 D3 4 J4 S4 D4 5 Quarter Ending ® Cash & Equiv - Target 80.00% 70.00% - ------------------------------------------ - ----- - - - - --- - - - -- - - -- - - - -- - -- - -- - - - - - -- - - - - - -- 60.00% _---- n .. A 50.00% - - 40.00% -- - -- -- -- 30.00% i 20.00% - 10.00 i 0.00% M02 J02 • 'S02 D02 M03 J03 S03 D03 M04' J04 SO4 D04 M05 J05 S05 D05 _ M06 J06 . S06 D06 Quarter Ending o Fa Equity -�K— Target - ' ° M02 J02 S02 D02 M03 J03 S03 D03 M04 J04 SO4 D04 M05 JO5 S05 D05 M06 -J06 S06 D06 Quarter Ending ❑ f=ixed Income, - Target Index change effective 1/1/06 from LB Gov /Credit to LB Aggregate 17 80.00 /o 70.00% 60.00% 50.00% 40.00% 30.00% 20.00% 10.00% 0 00°/ ' ° M02 J02 S02 D02 M03 J03 S03 D03 M04 J04 SO4 D04 M05 JO5 S05 D05 M06 -J06 S06 D06 Quarter Ending ❑ f=ixed Income, - Target Index change effective 1/1/06 from LB Gov /Credit to LB Aggregate 17 Palm Beach Gardens General Employees' General Employees Pension Plan Asset Allocation vs Targets 80.00% 70.006/6 -------------------------------------- ----------------------- -------------------------------------- 60.00% --------------------------------- ------------ ---------- - ---------------------------------------- ----- ------------- ------------------------------------------------- 50.00% -------------------------------- --------------------------------------------------------------------- - - -- ------------------ ----------------------------------------------- I 40.00% ------------------------------------------------------------------------------- - - - -- --- - - -- --- -- 30.00% ------------------------------------------------------------------------------- ---------------------- ------------ - 20.00% ------------------------------------------- - --------------------------------- ------------------------------- ----------- --- -------------------------------------- ----- 10.00% ---------------------------------------------------------------------------------------------------- 0-00% it, J& St A t S1 D6 A it A3 St Dt3 M& J64 504 D& k5 W5 Mb6 r, A5 St J66 I I Quarter Ending Foreign Fnds —)K— Target Index change effective 1/1/06 from LB Gov/Credit to LB Aggregate 18 Palm Beach Gardens General Employees General Employees Pension Plan manager Contribution Quarter. Ending Quarterly Cumulative Growth of $100 Fund VS Policy: $150 $140 - - ------------------------------------------------------------------ --------------------------- -------------------------------- $130 ------------------------------------------------ ----------------------------- ----------------- ------------------- -------- - V$120 ---------------------------------------------------------------------------------------------------- ------------------------------ -- -- ----- — ---------- a I u$110 ------------------------------------------------------------------------------ ---- -- e $100 =ID� ------------------------------------ - -- ----- -- -- -- -- -- --- 1 $9nV. -- ---- $80 M06 J06 S06 D06 D01 M02 J02 S02 D02 M03 J03 S03 D03 M04 J04 SO4' D04 M05 J05 SW D05 Quarter Ending F[:] Fund Policy Index change effective 111/06 from LB Gov/Credit to LB Aggregate 13 4.00% 3.00% 2.00% R 1.00% e t u r 0.00% n _1.00% .72.00% -3.00% Quarter. Ending Quarterly Cumulative Growth of $100 Fund VS Policy: $150 $140 - - ------------------------------------------------------------------ --------------------------- -------------------------------- $130 ------------------------------------------------ ----------------------------- ----------------- ------------------- -------- - V$120 ---------------------------------------------------------------------------------------------------- ------------------------------ -- -- ----- — ---------- a I u$110 ------------------------------------------------------------------------------ ---- -- e $100 =ID� ------------------------------------ - -- ----- -- -- -- -- -- --- 1 $9nV. -- ---- $80 M06 J06 S06 D06 D01 M02 J02 S02 D02 M03 J03 S03 D03 M04 J04 SO4' D04 M05 J05 SW D05 Quarter Ending F[:] Fund Policy Index change effective 111/06 from LB Gov/Credit to LB Aggregate 13 Palm Beach Gardens General Employees' General Employees Pension Plan Quarterly Comparison Analysis ($) Period Fund Policy Diff Nominal 8% Diff CPI + 4% . Diff End ng Sep 1994 1,079 1,079 0 1,079 0 1,079 0 Dec 1994 1,059 1,078 -20 1,098 -39 1;090 -31 Mar 1995 1,211 1,240 -29 .1,194 17 1,188 .23 Jun 1995 1,369 1,421 -51 .1,294 75 1,286 84 Sep 1995 1,432 1,495 -63 1,316 116 1,301 131 Dec 1995 1,533 1,600 -67 1,365 168 1,338 195 Mar 1996 1,634 1,697 -62 1,452, 182 1,431 203 Jun 1996 1,688. 1,752 -64 1,486 202 1,461 227 Sep 1996 1,728 1,800 -72 1,518 210 . 1,488 240 Dec 1996 1,820 1,916 =96 1,551 270 1,51,4 306 Mar 1997 1,927 2,045 -118 . 1,685 242 1,647 280 Jun 1997 1 2,141 2,284 -144 1,717 424 1,664 ,477 Sep 1997 2,328. 2,423 -94 .1,752 576 1,691 637 Dec 1997 2,375 2,530 � -155 1,820 556 1,741 635 Mar 1998 2,568 2,756 -188 1,856 712 1,769 799 Jun 1998 2,550 2,842 -291 1,893 657 1,797 753 Sep 1998 2,385 2,730 -345 1,928' 456 1,818 566 Dec 1998 2,679 3,106 -427 21001 678 1,874 805 Mar 1999 2,642 3,168 -526 2,025 617 1,888 753 Jun 1999 2,790 3,256 466. 2,033 757 1,890 900 Sep 1999 2,647 3,131 - -484 2,063 584 1,917 730 Dec 1999 2,821 3,391 -570 a 2,095 726 1,934 887 Mar 2000 2,907 3,490 -583 2,149 758 1,999.' 907 Jun-2000 2,843 3,432 -589 2,167 675 2,010 833 Sep 2000 2,926 3,436 -510 2,192 734 2,027 899 Dec 2000 2,945- 3,324 -380.. 2,225 719 2,042 903 Mar 2001 2,846 3,104 -258 2,243 603 2,061 785 Jun 2001 2,927 3,183 -256 2,251 ... 676 2,068 859 Sep 2001 2,675 2,893 -218, 2;229 446 21028 648 Dec 2001 2,827 3,062 -234 2,256. 571 2,013 814 Mar 2002 2,824 3,046 -222 2,283' 541 2,040 783 Jun 2002 2,621 2,805 -184 2,290 331 2,038 583 Sep 2002 2,397 2,540.. -144 2,305 92 2,041 '356 Dec 2002 2,434 2,655 -221 2,313 121 2,024 410 Mar 2003 2,385 2,609 -224 2,345 41 2,068' 318 Jun 2003 1 2,5341 2,8521 -317 2,358 176 2,050 484 . Sep 2003 2,533 2,861 -329 , 2,373.1 160 2,056 477 All dollar values are shown in thousands. Index change effective 1/1/06 from LB Gov /Credit to LB Aggregate 20 Palm Beach Gardens General Employees' ' General Employees Pension Plan Quarterly Comparison Analysis ($} Period Fund Policy Diff Nominal 8% Diff CPI + 4% Diff Ending Dec 2003 2,680 3,036 -356 2,388 292 2,035 645 Mar 2004 2,741 3,094 -352 2,424 317 2,077 664 Jun 2004 2,717„ 3,068 -351 2,453 263' 2,105 611 Sep 2004 2,674 3,045 -371 2,469 205 2,096 .578 Dec 2004 2,805 3,188 -383 2,483 321 2,088 717 Mar 2005 2,745 3,112 -367 2,504 240 M1 21115 630 Jun 2005 2,717 3,117 -400 2,490 228 21087 630 Sep 2005 2,740 3,148 -408 2,513 227 2,129 611 Dec 2005 2,779 3,177 -398 2,541 238 2,109 671 Mar 2006 2,812 3,206 -394 2,549 264 2,121 691 Jun 2006 2,765 3;162 -396 2,581 184 2,159 .606' Sep 2006 2,834 21,276-1.. -442 2,591 242, 2,141 692 Dec 2006 2,906 3,386 -481 2;605 300' 2,116 790 1 1 1 1 1 1 1 �1 1 1 1 1 1 1 1 Palm Beach Gardens General Employees' General Employees Pension Plan Quarterly Comparison Analysis ( %) Period Fund Policy Diff Nominal 8% Diff CPI + 4% Diff End ng Dec 1994 -1.67 0.16 -1.83 1.94 -3.61 1.22 -2.89 Mar 1995 7.15 7.82 -0.67 1.94 5.21 2.12 5.03 Jun 1995 6.68 8.32 -1.64 1.94 4.74 1.71 4.97 Sep 1995 4.85 5.52 -0.67 1.94 2.91 1.45 3.40 Dec 1995 5.46 5.49 -0.03 1.94 3.52 1.08 4.38 Mar 1996 2.64 2.24 0.40 1.94 0.70 2.39 0.25 Jun 1996 2.91 2.88 0.03 1.94 0.97 1.69 1.22 Sep 1996 2.22 2.61 -0.39 1.94 0.28 1.69 0.53 Dec 1996 5.12 6.23 -1.11 1.94 3.18 1.49 3.63 Mar 1997 0.17 1.30 -1.13 1.94 -1.77 1.89 -1.72 Jun 1997 11.16 11.79 -0.63 1.94 9.22 1.09 10.07 Sep' 1997 8.66 5.95 2.71 1.94 6.72 1.49 7.17 Dec 1997 0.59 3.06 -2.47 1.94 -1.35 0.99 -0.40 Mar 1998 8.07 8.90 -0.83 1.94 6.13 1.59 6.48 Jun 1998 -0.75 3.05 -3.80 1.94 -2.69 1.49 -2.24 Sep 1998 -6.44 -3.89 -2.55 1.94 -8.38 1.29 -7.73 Dec 1998 10.89 12.51 -1.62 1.94 8.95 1.09 9.80 Mar 1999 -0.83 2.50 -3.33 1.94 -2.77 1.59 -2.42 Jun 1999 6.80 3.77 3.03 1.94 4.86 1.69 5.11 Sep 1999 -4.78 -3.56 -1.22 1.94 -6.72 1.99 -6.77 Dec 1999 6.89 8.60 -1.71 1.94 4.95 1.29 5.60 Mar 2000 2.62 2.57 0.05 1.94 0.68 2.69 -0.07 Jun 2000 -1.42 -1.02 -0.40 1.94 -3.36 1.69 -3.11 Sep 2000 3.54 0.63 2.91 1.94 1.60 1.69 1.85 Dec 2000 0.95 -3.01 3.96 1.94 -0.99 1.19 -0.24 Mar 2001 -2.54 -5.93 3.39 1.94 -4.48 2.19 -4.73 Jun 2001 4.11 3.69 0.42 1.94 2.17 2.09 2.02 Sep 2001 -6.53 -7.20 0.67 1.94 -8.47 1.18 -7.71 Dec 2001 6.32 6.41 -0.09 1.94 4.38 0.09 '6.23 Mar 2002 0.47 0.03 0.44 1.94 -1.47 2.19 -1.72 Jun 2002 -5.93 -6.75. 0.82 1.94 -7.87 1.69 -7.62 Sep 2002 -7.51 -8.45 0.94 1.94 -9.45 1.59 -9.10 Dec 2002 3.08 5.95 -2.87 1.94 1.14 0.98 2.10 Mar 2003 -1.47 4.24 -0.23 1.94 -3.41 2.80 -4.27 Jun 2003 7.62 10.56 -2.94 1.94 5.68 0.69 6.93 Sep 2003 1.16 1.44 -0.28 1.94 -0.78 1.79 -0.63 Dec 2003 7.081 7.21 -0.13 1.94 5.14 0.49 6.59 Returns for periods exceeding one year are annualized. Index change effective 1/1/06 from LB Gov /Credit to LB Aggregate 22 Palm Beach Gardens General Employees' General Employees Pension Plan ' Quarterly Comparison Com Analysis %) P Y � Period Fund Policy Diff Nominal 8% Diff CPI + 4W Diff Ending Mar 2004 2.67 2.25 0.42 1.94 0.73 159, 0:08 Jun 2004 -0.24 -0.25 0.01 1.94 -2.18 2.19 --2.43 Sep 2004 -0.38 0.30 : -0.68 1.94 =2:32 1.08- -1.46 Dec 2004 6.17 5.82 0.35 1.94 4.23 1:18 4.99 Mar 2005 -1.19 -1.54 0.35 1.94 -3.13 2.59 -3.78 Jun 2005 1.32 2.21 -0.89 1.94. -0.62 _ 1.69. -0.37 Sep 2005 1.75 1.79 -0.04 1.04 -0.19 3:20 -1.45 Dec 2005 2.07 1.50. 0.57 1.94 % . 0:13 .-Q.01 2.08 Mar 2006 2.71 2.25 _ 0.46 1.94 0.7Z, 2:59 0.12 Jun 2006 -1.09 -0.89 -0.20 1.94 -3.03 2.59 -3.68 Sep 2006 3.95 4.92 =0,97 1.94 2:01 1 0.98 2.97 Dec 2006 3.84 4.49 -0.65 1.94` 1:90 • 0.49 ' 3 ;35 Incept. 8.79 9.96 :A. 17 8.00. - 0:79, 6.481 2.31 . Palm Beach Gardens General .Employees' General Employees Pension Plan Risk Measures Report Explanation ' The evaluation of a fund's performance should extend beyond return to encompass measures of risk. The next two pages are used to determine the level of risk to which the fund has been exposed, and whether the return has been commensurate with the risk taken. All measures are calculated for both the fund and the policy as well as the difference ' between the two. Up to four time periods are evaluated depending on the age of the fund: # Of Negative Qtrs /# Of Positive Qtrs: Number of negative quarters shows the number-of quarters in which the return ' was less than zero, and the number of positive quarters is the number of quarterly returns which were greater or equal to zero. Batting Average: The batting average is a measure of consistency. It shows the percent of the quarters the fund has beaten the policy and the percent of the quarters. the policy has beat the fund. A high average for the fund (e.g. over 50) is desirable, indicating the fund has beaten the policy frequently.' Worst Quarter /Best Quarter /Range: The worst quarter is the lowest . quarterly return experienced during the period, a measure of downside risk. The best quarter is the highest quarterly return, and the range is the difference of the high and low, and indicates dispersion. Standard Deviation: Standard deviation measures the total volatility of the fund, by measuring dispersion. Higher standard deviation indicates higher risk. If the quarterly or monthly returns are allthe same the standard deviation will be zero. The more they vary from one another, the higher the standard deviation. Thus, it measures uncertainty, which is a measure of risk. Alpha/Beta/R- Squared: If the policy is appropriate, then the alpha should be'positive, the beta close to one, and the r- squared should be high. Beta measures risk relative to the policy. A beta of�1 suggests risk equivalent to the policy. Higher betas indicate higher relative risk. A.beta of 1.2 indicates 20% more risk than the policy. The alpha measures the return adjusting for beta. The higher the alpha, the better. R- squared measures the relationship between the policy and the fund. A high r- squared means the returns of the fund can largely be explained by movements of the policy. The higher the r- squared, the more reliable the alpha and the beta. R- squared may range from 0 to 100. Beta, alpha and r- squared are derived from regression analysis using the fund and policy returns as the dependent and independent variables.-respectively. Roughly, one would expect the.fund's performance to equal the return of the policy multiplied by the beta plus the alpha. Sharpe Ratio/Treynor Ratio: The Sharpe and Treynor ratios are similar. The Sharpe ratio is the excess return per unit of total risk as measured by standard deviation. The Treynor ratio is the excess return per unit of market risk as measured by beta. Both of these should be compared against the corresponding value for the policy. Higher numbers are better, indicating more return for the level of risk that was experienced. . 24 Palm Beach Gardens General Employees' General Employees Pension Plan Risk Measures . Yr ::::::::::::::::::::::::::::: t =id ::::: pol Di > # of Negative Qtrs 4.00 3.00 1.00 # of Positive Qtrs 8.00 9.00 -1.00 Batting Average 50.00 50.00 0.00 Worst Qtr -1.19 -1.54 0.35 Best Qtr 6.17 5.82 0.35 Range 7.36 7.36 0.00 Worst 4 Qtrs 3.98 3.97 0.01 Standard Deviation 5.11 4.43 0.68 Beta 1.07 1.00 0.07 Annualized Alpha -0.72 0.00 -0.72 R- Squared 0.86 1.00 -0.14 Sharpe Ratio 0.84 1.07. -0.23 Treynor Ratio 4.02 4.75 -0.73 Tracking Error 1.96 0.00 1.96 Information Ratio -0.23 :1 U: ?r! r :tiri:::::Qi# ::: ` ::::Ft�fic :::...:.:. Di > # of Negative Qtrs 14.00 12.00 2.00 # of Positive Qtrs 26.00 28.00 -2.00 Batting Average 42.50 57.50 -15.00 Worst Qtr -7.51 -8.45 0.94 Best Qtr 11.16 12.51 -135 Range 18.67 20.96 -2.29 Worst 4 Qtrs -11.63 -12.21 0.58 Standard Deviation 8.15 9.17 -1.02 Beta 0.81 1.00 M -0.19. Annualized Alpha -0.01 0.00 -0.01 R- Squared 0.84 1.00 -0.16 Sharpe Ratio 0.42 0.46 -0.04 Treynor Ratio 427 415 0.02 Tracking Error 3.63 0.00 3.63 Information Ratio -0.22 Index change effective 1/1/06 from LB Gov /Credit to LB Aggregate 25 ::: ` ::::Ft�fic :::...:.:. Di > # of Negative Qtrs 7.00 6.00 1.00 # of Positive Qtrs 13.00 14.00 -1.00 Batting Average 45.00 55.00 -10.00 Worst Qtr -7.51 -8.45 0.94 Best Qtr 7.62 10.56 -2.94 Range 15.13 .19.01 -3.88 Worst 4 Qtrs -11.63 -10.68 -0.95 Standard Deviation 6.25 7.14 -0.89 Bed 0.82 1.00 -0.18 Annualized Alpha -0.35 0.00 -0.35 R- Squared 0.87 1.00 -0.13. Sharpe Ratio 0.43 0.52 -0.09 Treynor Ratio 3.28 3.74 -0.46 Tracking Error' 2.61 0.00 2.61 Information Ratio -0.40 ::: ` ::::Ft�fic :::...:.:. Di > # of Negative Qtrs 15.00 12.00 3.00 # of Positive Qtrs 34.00 37.00 -3.00 Batting Average 38.78 61.22 - 22.44 Worst Qtr -7.51 -8.45 0.94 Best Qtr 11.16 12.51 -1.35 Range 18.67. 20.96 -2.29 Worst 4 Qtrs -11.63 -12.21 0.58 Standard Deviation 7.80 8.78 -0.98 Beta 0.80 1.00 -0.20 Annualized Alpha 0.02 0.00 0.02 R- Squared 0.82 1.00 -0.18 Sharpe Ratio 0.61 0.68 -0.07 Treynor Ratio 5.99 5.96 0.03 'Tracking Error 3.68 0.00 3.68 Information Ratio -0.32 Palm Beach Gardens General Employees' General Employees Pension . 'Plan Return vs Risk through December 31, 2006 ' 8.00% 5.00% 10.00% 15.00% Risk (Annualized Std Dev) 1-4— Policy Index change effective 1/1/06 from LB Gov /Credit to LB Aggregate { ' 26 ZU.UU% 13.00% ' 12.00% 11..00% 10.00% A n. u.. 9.00% a .L. I z s.0o °i° e d R e 7.00% t ' U r n 6.00% ' 5.00 %. 4.00% 3 00 °/ Palm Beach Gardens General Employees' General Employees Pension . 'Plan Return vs Risk through December 31, 2006 ' 8.00% 5.00% 10.00% 15.00% Risk (Annualized Std Dev) 1-4— Policy Index change effective 1/1/06 from LB Gov /Credit to LB Aggregate { ' 26 ZU.UU% 12.00% 11.00% 10.00% 9.00% R 8.00% e t 7.00% � 6.00% n 5.00% S 4.00% 3.00% 2 0 °/ Palm Beach Gardens General Employees' General Employees Pension Plan Return vs Risk through December 31, 2006 4.voorc 5 Years 500 0 0 1.00% 3.00% 5.00% 7.00% . 0.00% 2.00% 4.00% 6.00% 8.00 % Risk (Annualized Std Dev) 7.00% 6.50% 6.00% 5.50% R 5.00% e t 4.50% U. r 4.00% n S 13 rr%O .00% .50% .00 h S &P-500 r LEA M orp �)K 3 Mo Mill no/ 5_nn% 10.00% 15A0 %o 20.0 Risk (Annualized Std Dev) 10 Years Inception 10.00% 13 00 °/ 9.00% 8.00% R 7.00% e t u 6.00% r n s 5.00% 4.00% 3 00 °/ S &P X Fund � LB Gov /Corp 3 Mo TBill Corp 500 0 0 1.00% 3.00% 5.00% 7.00% . 0.00% 2.00% 4.00% 6.00% 8.00 % Risk (Annualized Std Dev) 7.00% 6.50% 6.00% 5.50% R 5.00% e t 4.50% U. r 4.00% n S 13 rr%O .00% .50% .00 h S &P-500 r LEA M orp �)K 3 Mo Mill no/ 5_nn% 10.00% 15A0 %o 20.0 Risk (Annualized Std Dev) 10 Years Inception 10.00% 13 00 °/ 9.00% 8.00% R 7.00% e t u 6.00% r n s 5.00% 4.00% 3 00 °/ 0% S &P 500 111.00% X LB GovX and LB Go Corp 3 Mo TBill 9.00% 0% 0 112.00% 111.00% X LB GovX orp 3 Mo Mill 10:00% R 9.00% e t 8.00% u r 7.00% . n. s 6;00% 5.00% 4.00% 0% ° 5.00% 15.00% 25.00% 3.00 ° / 0.00% 10.00% 20.00% I 8.00% 5.00% 10.00% 15.00% 20.00% Annualized Std Dev Risk (Annualized Std Dev) i Risk ( ) j 1-j-Policy s Index change effective 1/1/06 from LB Gov /Credit to LB Aggregate 27 S &P 500 and X LB GovX orp 3 Mo Mill ° 5.00% 15.00% 25.00% 3.00 ° / 0.00% 10.00% 20.00% I 8.00% 5.00% 10.00% 15.00% 20.00% Annualized Std Dev Risk (Annualized Std Dev) i Risk ( ) j 1-j-Policy s Index change effective 1/1/06 from LB Gov /Credit to LB Aggregate 27 i Policy: 1 First Objective: Second Objective: Universe Data: i 1 1 1 1 1. Palm Beach Gardens General Employees' General Employees Pension Plan 09/30/1994- 12/31/2005 60.00 S &P 500 40.00 Lehman Gov /Credit Bond 01/01/2006- 12/31/2006 60.00 S &P 500 40.00 Lehman Aggregate Bond 09/30/1994 - 12/31/2006 Annual Return of 8.00% 09/30/1994- 12/31/2006 100.00 US Consumer Price Index + 4.00 annual adder , 60% Pure Lg Cap Core & 40% High Quality Bond 09/30/1994 - 12/31/2006 _ 40.00 High Quality Bond 60.00 Pure Large Cap Core 1 28 Y 5y ttal{.•TMs 28 Bogdahn Consulting, LLC. CONTRIBUTIONSMTHDRAWALS - Palm Beach. Garden General EmplOees' Combined Account From 10 -01 -06 To 12 -31 -06 Tran Trade Settle Broker- Code Date Date Security Amount Quantity Code Commission _ CONTRIBUTIONS li 10 -02 -06 10 -02 -06 Cash 11,259:11 li 10 -02 -06 10 -02 -06 Cash 7,506.07 Transfer from investment accounts ' li 10 -10 -06 1040 -06 Cash 584.67 EE li 10 -10 -06 10 -10-06 Cash 350.95 Transfer from R &D account li 10 -10 -06 10 -10 -06 Cash 233.96 Y Transfer from R &D account li 10 -13 -06 10 -13 -06 Cash 1,200.00 li 10 -13 -06 10 -13 -06 Cash 800.00 Transfer to R &D account to covet invoice payments ' li 10 -20 -06 10 -20 -06 Cash 610.05 EE li 10 -23 -06 10 -23 -06 Cash 366.03 Transfer from R &D account li 10 -23 -06 10 -23 -06 Cash 244.02 Transfer from R &D account li 11 -01 -06 11- 01=06 Cash 11,259.11 ' E 11 -01 -06 11 -01 -06 Cash 7,506.07 Received from investment accounts to pay benefits li 11 -03 -06 11 -03 -06 Cash 785.35 EE Ii. 11 -06 -06 11 -06 -06 Cash 471.55 Transfer from R &D account li 11 -06 -06 11'06 -06 Cash 314.36 Transfer from R &D account li 11 -07 -06 11 -07 -06 Cash 104,000.00, Transfer from Rockwood account li 11 -17 -06 11 -17 -06 Cash « 625.71 EE li 12 -01 -06 12 -01 -06 Cash 10,883,68 G' 12 -01 -06 12 -01 -06 Cash 7,255.79 t Transfers in from investment accounts to cover benefit payments li 12 -01 -06 12 -01-06 Cash 665.19 EE li 12 -04 -06 12 -04=06 Cash 2,342.66 li 12 -04 -06 12 -04 -06 Cash 1,561.77 Transfers in from investment accounts to cover mvioce payments li 12 -15 -06 12 -15 -06 Cash 776.45 li 12 -29 -06 12 -29 -06 Cash 23,002.01 . ER li 12 -29 -06 12 -29 -06 Cash 744.00 EE 195,348.56 ' WITHDRAWALS to 10 -02 -06 10 -02 -06 Cash 16,971;88 Benefit payments ' 10 10 -02 -06 10 -02 -06 Cash 1,793.30 W/H tax on benefit payments 1 Bogdahn Consulting, LLC. CONTRIBUTIONSMTHIDRAWALS Palm Beach Garden General Employees' Combined Account From 10 -01 -06 To 12 -31 -06 Tran Trade Settle Code Date Date Security Amount Quantity to 10 -02 -06 10 -02 -06 Cash 11,259.11 Transfer to R &D account to 10 -02 -06 10 -02 -06 Cash 7,506.07 Transfer to R &D account to 10 -10 -06 10 -10 -06 Cash 350.95 to 10 -10 -06 10 -10 -06 Cash 233.96 Transfer to investment accounts to 10 -10 -06 10 -10 -06 Cash 496:50. Custodial market value fee 10 10 -11 -06 10 -11 -06 Cash 253.50 Custodial market value fee to 10 -13 -06 10 -13 -06 Cash 2,000.00 BC for period ending 9/30/06 to 10 -13 -06 10 -13 -06 Cash 1,200.00 Transfer to R &D account to 10 -13 -06 10 -13 -06 Cash 800.00 Transfer to R &D account to 10 -23 -06 10 -23 -06 Cash 366.03 to 10 -23 -06 10- 23 -06. Cash 244.02 10 10 -31 -06 10 -31 -06 Cash 26.04 Foreign tax on Canadian Pacific Railway.dividend to 11 -01 -06 11 -01 -06 Cash 16,971.88 Benefit payments to 11 -01 -06 11 -01 -06 Cash ¢4 1,793.30 W/H tax on benefit payments to 11 -01 -06 11 -01 -06 Cash 11,259.11 Transfer to R &D account to 11 -01 -06 11 -01 -06 Cash 7,506.07 To R &D account to 11 -06 -06 11 -06 -06 Cash 471.55 Transfer to Rockwood account to 11 -06 -06 11 -06 -06 Cash 314.36 Transfer to Sawgrass account to 11 -07 -06 11 -07 -06 Cash 104,000.00 Transfer to set up Rockwood International account to 12 -01 -06 12 -01 -06 Cash 16,946.88 Benefit payments to 12 -01 -06 12 -01 -06 Cash 1,818.30 W/H tax on benefit payments to 12 -01 -06 12 -01 -06 Cash 10,883.68 Transfer to R &D account to 12 -01 -06 12 -01 -06 Cash 7,255.79 Transfer to R &D account to 12 -01 -06 12 -01 -06 Cash 1,561.77 Transfer to R &D account to 12 -04 -06 12 -04 -06 Cash 511.74 C &D to 12 -04 -06 12 -04 -06 Cash 4,059.00 F &F to 12 -04 -06 12 -04 -06 Cash 2,342.66 Transfer to R &D account 231,197.45 2 Broker Code Commission Bogdahn Consulting, LLC. CONTRIBUTIONS /WITHDRAWALS Palm Beach Garden General Employees' Combined Account From 10 -01 -06 To 12 -31 -06 Tran Trade Settle Broker Code Date Date Security Amount _ Quantity Code Commission ' EXPENSE ACCOUNTS 0.00 AFTER FEE PERFORMANCE EXPENSE ACCOUNTS dp 10 -11 -06 10 -11 -06 Administration Fee 836.00 Quarterly management fee to Sawgrass Asset Management dp 10 -17 -06 10 -17 -06 Administration Fee 3,273.37 ' Quarterly management fee to Rockwood Capital Advisors 4,109.37 EXPENSE ACCOUNTS PAID BY CLIENT ' 0.00 AFTER FEE PERFORMANCE EXPENSE ACCOUNTS PAID BY CLIENT 0.00 GRAND TOTAL`: . ` �.. r .`. •' 39,58;26 • 3 1 - -,RwqrTl 7W Bogdahn Consulting, LLC. PORTFOLIO APPRAISAL Palm Beach Garden General Employees' Combined Account December 31, 2006 (Excluding Reinvested Divs.) Unit Total Market Pa. Quantity Security Cost Cost Price Value Gain/Loss Assets DOMESTIC EQUITIES Common Stock Urge Cap 900.000 Anheuser-Busch Cos. 46.99 42,295.05 49.20 44,280.00 1,984.95 1.5 Inc. 520.060 BOEING CO COM 64.33 33,556.42 88.84 46,196.80 12,640.38 1.6 624.000 Colgate Palmolive 64.86 40,471.83 05.24 140,709.76 1 237.93 1.4 1,134.000 ECHOSTAR 36.37 41,246.19 38.03 43,126.02, 1,879.83 1.5 COMMNTNS NEW CL A 1,024.000 Federated Dept. Stores 41.34: 42,328.78 38.13 39,045.12 -3,283.66 1.3 1,015.000 Heinz H J Company 42.21 .42,842.34 45.01 45,68515 2,842.81 1.6 1,345.000 Hewlett Packard Co 32:33 43,477.39 41.19 55,400.55 11,923.16 1.9 900.000 J.P. Morgan & Co. 42,277.77 .48.30 43,470:00 1,192.23 1.5 1,265.000 Kraft Foods .46.98 32.61 41,248.74 300 45,160.50 3,911.76 1.6 510.000 Lockheed Martin Corp. 60.12 30,662.63 92.07 4,955.70 16,293.07 1.6 1,275.000 Loews Corp. 29.94 38,172.27 41.47 52,874.25 14,701.98 1.8 1,075.000 PG & E Corp. 35.89 38,583.19 47.33 50,979.75 12,295.96 1.8 675.000 Praxair Inc. 62.52 42,�00.80 59.33 40,047.75 -2,153.05 1.4' 1,720.000 Safeway Inc. COM 22.29 38,341.72 34.56 59,443.20 21,101.48 2.0: 1,340.000 Texas Instruments 33.48 44,859.98 28.80 38,592.00 -6,267.98 1.3 602,565.70 691,866.55 89,300.85 23.8 Mid Cap 1,034.000 Alliant Energy Corp 38.94 40,259.72 37.77 39,054.18 -1,205.54 1.3 1,040.000 Apartment Inventory 8c 36.9 .1 '38,390.98 56.02 58,260.80 19,869.82 2.0 Management Co - Reit 600.000 BRE Properties 57.15 34,289.46 65.02 39,012.00 4,722.54 1.3 590.000 Brown Forman Corp. 74.52' 4.3,967.27 66.24 30,081.60 -4,885.67 1.3 Class B 3,240.000 El Paso Corp 11.72 37,972.80 15.28 49,507.20 11,534.40 1.7 920.000 FISERV INC COM 43.76 40,259.57 52.42 48,226.40 7,966.83 1.7 1,355.000 HCC Insurance 28.00 37,945.69 32.09 43,481.95 5,536.26 1.5 Holdings hie Com 970.000 Henry Schein Inc. 45.52 44,158.09 48.98 47,510.60 3,352.51 1.6 1,000.000 INTERNATIONAL 42.28 42,277.80 46.20 46,200.00 3,922.20 1.6 GAME TEC COM 1,170.000 McCormick & Co Inc 35.29 41,292.11 38.56 45,115.20 3,823.09 1.6 515.000 NYSE Group Inc, 66.09, 34,036.66 97.20 50,058.00 16,021.34 1.7 1,192.000 PP&LRES INC COM 33.44 39,857.62 35.84 42,721.28 2,863.66 1.5 1,150.000 Price T Rowe Assoc Inc 33.76 38,819.00 43.77 50,335.50 11,516.50 1.7' Cont 284.000 Sears Holdings Corp 151.84 43,122.84 167.93 47,692.12 4,569.28 1.6 560.000 Simon PPTY Group hie. 68.08 38,124.80, 101.29 56,722.40. 18,597.60 2.0 655.000 Stericycle Inc 6144 41,554.44 75.50 49,452.50 7,898.06 1.7 1,300.000 Wendys� Intl, Inc COM 34.02 -44;229.51 33.09 43,017.00 -1,212.51 1.5 680,558.36 795,448.73 114,890.37 27.4 Small Cap 1,580.000 J2 Global 23.18 36,617.53 27.25- 43,055.00 6,437.47 1.5 Communications Inc. 815.000 Precision Castparts 46.02 37,510.29 78.28 63,798.20 26,287.91 2.2 Corp. Bogdahn Consulting, LLC. PORTFOLIO APPRAISAL Palm Beach Garden General Employees' ' a - Combined Account December 31, 2006 Reinvested Divs.) (Excluding Unit Total Market Pct. Quantity Security Cost Cost Price Value Gain/Loss Assets 1,445.000 VCA Antech Inc 28.86 41,707.04 115,834.86 32.19 46,514:55 4,807.51 37,532.89 1.6 5.3 153,367.75 1,398,958.91 1,640,683.03 241,724.12 56.5 1,398,958.91 1,640,683.03 241,724.12 56.5. INTERNATIONAL EQUITIES Global Funds ' Foreign' 195.000 ]Shares MSCI Emerging 106.79 20,824.05 114:17 22,263.15.. ' 1,439.10 0.8 770.000 Markets • ]Shares MSCI Japan: , 13'.57 10,447.98 14.21 10,941.70. 493,72 ' 0.4 ' 172.000 Index Fund_ . . IShares MSC] Pacific 121:00. 20;812.00 125.24 , 21,541.28 729.28 0.7 65.000 Ex - Japan IShares S&P Latin 160.75, 10,448.75 169:93 11,045.45 59b.70 Q.4 580.000 American 40 . Ishares MSCI FAFE 71.22 41,305.80 7312 42,467. 60 1,161.80 1.5 Index Fund :. 103;838:58 - 108,259.18 4,420.60 3.7 103,838:58 108,259.18 4,420.60 3.7 - Foreign Stock Foreign 800,000 Bayer AG SA ADR " 52.86 42,284.88 '1 53.36 `y 42,688.00 403.12 1.5 815.000 Ryanair Holdings 55.22 ' . 451006.91- 81.50 66,422.50 21,415.59 2:3 ' 915.000 PLC -SP. ADR Volvo Aktiebolaget 40.65 37,194.02, r. 6835 62,906.25 25,712.23 2.2 ADR CL B ' 124,485.81. 14 124,485.81 172,016.75 47,530.94 5.9 5.9 47,530.94 ,. 172,016.75 228,324.39 280,275.93 51,951.54 9.6 FUMD INCOME Corporate Bonds 25,000 Chase Manhattan Corp 102.76 25,688.75 100.12 25,036.05 - 658.70 0.9. 7.125% Due 02 -01 -07 ' 50,000 Caterpillar Financial 99.99 49;992.50 99.80' 49,900.85 -91.65 1.7 Services 4.875% Due 06 -15 -07 45,000 Merrill Lyncb & Co. 103.41 46,536.30 101.09 45,490.19 - 1,046.12 1.6 ' 25,000 6.560% Due 12 -16 -07 Wells Fargo & Co 97.50 24,375.25 97.96 24,489.53 114.28 0.$ 4.000% Due 08 -15 -08 25,000 IBM 96.51 24,126.50 97.89 24,471.73 345.23 0.8 4.250% Due 09 -15 -09 k 35,000 John Deere Cap Corp 100:10 35,036.05 101.10 35,384.41 348.36 1.2 Ser MTN 5.650% Due 07 -25 -11 25,000 Lehman Brothers 105.39 .. 26,348.25 105.66: 26,414.70 66.45' 0.9 ' Holdings 6.625% Due 01 -18 -12 2 - 7:• Bogdahn Consulting, LLC. ' Palm PORTFOLIO APPRAISAL Beach Garden General Employees' Combined Account ' December 31, 2006 (Excluding Reinvested Divs.) Unit Total Market Pct, Quantity Security Cost Cost Price Value Gain/Loss Assets ' 20,000 J P Morgan Chase & Co 101.46 20,291.00 101.77 20,354.10 63.10 0.7 Sub Note 5.750% Due 0 1 -02-13 40,000 Morgan Stanley 94.42 37,769.60 95.61 38,245.08 475.48 1.3 ._ 25,000 4.750% Due 04 -01 -14 Goldman Sachs Group 94.23 23,558.50 97.71 24,426.93 868.43 0.8 Inc 5.125% Due 01 -15 -15 40,000 First Union Corp 107.09. 42,834.40 106.08 42,431.96 - 402.44 1.5 6.180% Due 02 -15 -36 25,000 Lowes Companies Ser 120.20 30,051.00 117.54 29,385.43 - 665.58 1.0 MTNB 7.110% Due 05 -15 -37 386,608.10 386,024.93 - 583.17 13.3 Accrued Interest 6,441.49 0.2 386,608.10 392,466.42 - 583.17 13.5 Government Bonds 40,000 FNMA 96.95 T 381780.80 98.16 39262.50 481.70 1.4 .:' 25,000 3.875% Due 08 -15 -08 US Treasury Note 99.73 24,931.64 99.63 24,906.25 -25.39 0.9 4.625% Due 11 -30 -08 :: „ 50,000 FHLLMC Series MTN 98.86 49,431.00 99.95 49,977.20 546.20 1.7 5.250% Due 02 -24 -11 100,000 FHLB 99.89 • 99,894.00 99.94 99,942.20 48.20 3.4 5.400% Due 02 -28 -11 50,000 US Treasury Note 9519 47,945.32 96.77 48,382.80 437:48 1.7 4.250% Due 08 -15 -15 25,000 UNITED STATES 114.72 28,679.69 113.41. 28,353.53 - 326.17 1.0 TREAS BDS 6.000% Due 02 -15 -26 50,000 Tennessee Valley 1.l 1.11 .55,556.00 109.95 54,975.55 - 580.45 1.9 Authority . . 5.880% Due 04- 01 -36' } 345,218:45 345,800.03 581.58 11.9 n. Accrued Interest 5,530.52 0.2 .' 345,218.45 351,330.54 581.58 12.1 FHLMC 51,853 FHI-MC Pool 002621 98.86 51,261.18 98.25 50,946.23 - 314.95 1.8 5.000% Due 10 -0 1 -20 Accrued Interest 216.05 0.0 51,261.18 _ 51,162.28 - 314.95 1.8 FNMA 44,276 FNMA Pool #256060, 101:39 44,891.29 100.70 44,585.04 - 306.25 1.5 6.000% Due 01 -01 -36 3 Bogdahn Consulting, LLC. PORTFOLIO APPRAISAL Palm Beach Garden General Employees' Combined Account December 31, 2006 (Excluding Reinvested Divs.) , Unit Total Market pet. Quantity Security Cost Cost Price Value - Gain/Loss Assets ,^ 74,691 FNMA Pool #896494 100.14 74,795:90 100,68 75,196.58 400.68 2.6 t 6.000% Due 0&0 1-36 . 119,687.18 119,781.62 94.44 4.1 Accrued Interest 594.83 0.0 119,687,18 120,376,45 94.44 4.1 902,774.92 915,335.70 - 222.11 31.5 CASH & EQUIV. F Money Markets 69,488 Goldman Sachs 1.00 69,487.77 1.00 69,487.77 0.00 2.4 Fin.Sq.Treasury Oblib: ' Admin 69,487.77 ,. � 69,487.77 .0.00 2.4 69;487.77 69,487.77 0.00 2.4 TOTAL:PORTFOLIO`. 2,99;545 99 , . ' `2,905782 43 ' 293,453x55 zs 100:0 ' •., 4 BOGDAHN CONSULTING� LLC% ' simplifying your investment & fiduciary decisions FIRM UPDATE JANUARY 2007 MESSAGE FROM JOE BOGDAHN ' 2006 was an exciting year for our firm, and I would like to take this opportunity to update you on our progress and thank you for your support. Thanks to your kind referrals and references, we are growing steadily. In addition, many of your fellow trustees are beginning to recognize the value of a truly independent consultant, an awareness t highlighted by several of our competitor's business practices corning under regulatory and legal scrutiny. I believe that the childhood jingle of `make new friends, but keep the old — for one is silver and the other gold' applies in our business today as well, and in order to represent additional boards we must expand our firm so that we do not ' dilute the service we provide to our current accounts. Our goal remains to provide our clients with the highest level of objective, unbiased investment consulting services possible, and we know that the key to achieving this is having bright and ethical people working together toward this common goal., As a result, my top priority is assembling the best team possible to serve our clients. I am well pleased with our progress. Most of you have met my partner Mike Welker. Mike has provided excellent leadership for our clients and the firm. Mike is a CFA charter holder and has his MBA in Finance. He also teaches advanced classes at the FPPTA ' schools. As we added new clients, Mike and I faced a dilemma common to growing organizations - expand our client servicing capabilities or bolster our support staff. I am pleased that we have been able to do both. Last year Celeste Richardville joined our office team, assisting Bill Stark and Donna Sullivan in reviewing and generating reports, as well as providing administrative support. Bryan Bakardjiev joined our team as our Senior Portfolio Analyst and Investment Consultant. Bryan is inthe CFA program and has six years investment experience, and is coordinating our efforts to streamline our data "gathering operations. He will also oversee the updating of our information technology programs, and will workclosely with me serving our public clients. ' This past January, we purchased Sentinel Fiduciary Services, an independent registered investment advisory firm serving the defined contribution market. In addition to diversifying our service offerings and our client base, the acquisition also brought into the company several outstanding people, including Rob Little. A veteran of the ' consulting industry, Rob is both a CFA charter holder and a CPA, and serves our firm as Director of Research, heading up investment manager due diligence and authors our investment overviews. In conjunction with the Sentinel acquisition, we added Dave West and Herb Whitehouse to our team, significantly strengthening our capabilities. Dave, a CFA charter holder, brings over 20 years of investment management and consulting experience to the firm. He serves as our Chief Investment Officer and Senior Consultant, and co- chairs our Investment Committee with Rob. Dave also teaches at FPPTA. Herb serves as our Chief Fiduciary Officer and Director of Compliance. Herb is an attorney who led the team at JW in the late seventies when they `created' the first 401(k) plan. He has also served as Secretary to the named fiduciaries at Chase. A Master Pension Fiduciary, Herb works closely with the attorneys serving our ERISA clients. Mike and I are excited to announce that Rob, Dave and Herb are now partners in the firm. ' While my primary focus remains the Florida municipal pension market, we have expanded into the Midwest, with offices in Chicago and Milwaukee. (Crazy as it seems, some people actually enjoy the snow and ice!) Our Midwest operations are anchored by Mike Bostler, Dick Boggs and John Mellinger. With a client mix of endowment, foundation, association and Taft - Hartley clients, they add a fresh perspective to our approach to serving our clients. These three consultants have over 65 combined years of consulting experience, and are a tremendous resource to our Florida team. ' Our firm now has eight talented consultants supported by a seasoned team of nine operations folks - a diverse group of individuals bringing together their unique talents working toward a common objective - simplifying our client's investment & fiduciary decisions. We' are currently interviewing for an additional consultant to assist us ' with our growth, and are looking to enhance out reporting capabilities by hiring a senior level portfolio analyst mid year. I am proud of our team, and am honored to be associated with each of them. Thank you again for being part of our progress. I encourage you to visit our offices if you find yourself in the Winter Haven area. Please let me know if you have any suggestions or comments, as we are always looking for additional ways to better serve our clients. I look forward to seeing you soon, and Happy New Year! 340 West Central Avenue 0 Suite 300 a Winter Haven, Florida 33880 ' Telephone (863)293 -8289 ® Facsimile (863) 292 -8717 rs , •.ri,'• i, BOGDAHN CONSULTING, LLCM, simplifying your investment decisions PRIVACY NOTICE As. required by the Securities and Exchange Commission Regulation S -P, this is a notification; regarding the collection, use, and protection of personal information furnished to`us by our clients. OUR COMMITMENT TO YOUR PRIVACY BOGDAHN CONSULTING is committed to protecting the confidentiality of the information provided to us by our clients. To the extent that we may., collect nonpublic personal information about our clients. or their plan participants, we will not share this information with third parties except as described below. HOW WE PROTECT. INFORMATION ; Our employees are required to protect the confidentiality -of information and to comply with our established policies. We also maintain physical, electronic and procedural safeguards to .protect information. DISCLOSURE OF INFORMATION We may disclose information when we- believe. it necessary for the conduct of our business, or where disclosure is required by law.. For example, information may be disclosed for audit or research purposes, to attorneys or other professionals, or, to law enforcement and ;regulatory .agencies; for example, to help us prevent fraud.. In addition,, we may disclose information to third party service providers to enable them to provide - business services for'us, such as�.performing computer related or data maintenance /processing services,' or to facilitate the processing of-. transactions requested by you. Information may also be disclosed to other professional advisors engaged by you, such as accountants, actuaries, custodians and attorneys. Except in these specific, limited situations, we will not make any disclosures of information to other companies who may want to sell their products or services to you. For example, we do not sell client lists and we will not sell your name. ACCESS TO INFORMATION If you desire to review any file we maintain for your information, .please contact our office.. Our Form ADV is available upon request. Please contact us for a free copy. 340 West.CentralAvenue * Suite 300 • Winter Haven,'Florida 33880 Telephone (863)293 -8289 • Facsimile (863) 292 -8717 Palm Beach Gardens General Employees' Pension Plan Fourth Quarter 2006 Strategy Review Presented by: Andy Holtgrieve Managing Partner & COO hoitgrievea@rockwoodcapital.com ROCKW OOD CAPITAL ADVISORS 1401 S. Brentwood Blvd. Suite 400 • St. Louis, Missouri 63144 ■ (888) 962 -8336 (toll -free) (314) 962 -1254 (fax) The Fed: Too Concerned About Inflation? Q WO ROCKW OOD CAPITAL ADVISORS Palm Beach Gardens General Em Fourth Quarter 2006 Total Fund Portfolio Summary Pension Plan I Equities 100% Change this Quarter: - $46,200 Change in Market Value Net Dividends /Interest Contributions Disbursements ($104,000 INTL Funding) Net Realized & Unrealized (G /L) Portfolio Summary Short -Term Funds 0% $6,541 $1,188 ($144,740) $90,811 Total Fund Performance Palm Beach Gardens GE 5.4% Policy (S &P 500) 6.7% Diff +/- -1.3% ROCKWOOD CAPITAL ADVISORS 2 Palm Beach Gardens General E Equity - Fourth Quarter 2006 Market Environment A Year of Transition Pension Plan The cornerstone to the long -term success of Rockwood Capital's sub - adviser, Contravisory, has been the strength in identifying, reacting to, and capitalizing on changing themes in the equity marketplace. Over the years there have been many such theme (or leadership) changes. The speculation and subsequent collapse of energy in the late seventies and early eighties, and the highly speculative technology boom and bust of the late nineteen nineties are two of the more dramatic examples. For the past twelve months, our research has been pointing towards another, perhaps less dramatic, theme (or leadership) shift. As a result, the equity portfolio is being transitioned to benefit from this new environment. After several years of historic positive market breadth and out - performance by small /mid capitalization stocks, in 2006 we noticed breadth deterioration and relative price erosion in the small /mid -cap segment of the market. A comparison of the average market cap in the equity portfolio today versus January 2006 demonstrates our response to this changing dynamic. One year ago the average market cap was $9 billion. Today the average market cap in the equity portfolio exceeds $23 billion. In addition to changing market cap themes, we have also witnessed significant theme changes in sector and industry groups. Many of the once - dominant industry groups for the current decade are now lagging. In particular, many of the economically sensitive areas, such as Homebuilding, Energy Service, Commodities, and Industrial Cyclical, which performed so well during the prior five years, have shown significant deterioration over the past twelve months. In response, we have gradually reduced and /or eliminated exposure in each of these areas. So far, new leadership is emerging in traditionally more defensive areas such as Consumer Staples, Utilities, Pharmaceuticals and interest rate sensitive industry groups. In true opportunistic fashion, Contravisory has initiated, or increased, it's exposure in each of these emerging themes (predominantly through large cap issues). In particular, our current portfolio has significant exposure to Consumer Staples (Packaged Foods, Beverages, and Brewers), Consumer Discretionary (Restaurants, Department Stores), Financials (REITs, Investment Management, and Insurance) as well as Utilities (Electric and Natural Gas). Contravisory Research & Management Corp. is a registered investment adviser and equity sub - adviser to Rockwood Capital Advisors, LLC. 21% 18% 15% 12% 9% 6% 3% 0% Performance 4th Qtr. One Year 2006 0 Palm Beach Gardens GE R 0 C K W 0 0 D CAPITAL A D V I S 0 R S I not 17.1% Since Inception (10/25/05) ❑ S&P 500 Equity Portfolio Fourth Quarter 2006 Characteristics Top Ten Holdings 1. Ryanair Holdings Plc 3.6% 2. Precision Castparts 3.5% 3. Volvo 3.5% 4. Safeway Inc. 3.3% 5. Apartment Invt & Mgmt 3.2% 6. Simon Ppty Group Inc. 3.1% 7. Hewlett Packard Co. 3.0% 8. Loews Corp. 2.9% 9. PG &E Corp. 2.8% 10. T. Rowe Price Group 1 2.8% Five Best Impact 1. NYSE Group Inc. +30.0% 2. Ryanair Holdings Plc. +28.8% 3. Precision Castparts +24.0% 4. Volvo +15.3% 5. PG &E Corp +14.4% Style Box Val Cr Grw Large Cap - 52.5% Mid Cap -45.1% Small Cap - 2.4% Average Market Cap $22.7 billion Median Market Cap $12.5 billion Cons. Staples 18% Sector Allocation Health Care Finance 8% 24% 12% ADR's 9% Materials 6% Energy 3% Producer Durables 5% Technology 8% 7% Five Worst Impact 1. Texas Instruments Inc. -13.3% 2. Brown Forman Dst'b' -13.2% 3. VCA Antech Inc. -10.7% 4. T. Rowe Price Group 1 -8.2% 5. Wendy,s Intl Inc. -4.1% -�&R0CKW00D CAPITAL ADVISORS 4 Equity Transactions Fourth Quarter 2006 Sold Oct Chesapeake Energy Corp. Oct Canadian Pacific Railway Oct Prudential Financial I Nov Caterpillar Inc. Nov Landstar System Inc. Nov Seagate Technology Nov Pacer International Inc. Dec Protective Life Corp. Dec AFLAC Inc. Dec McKesson Corp. Bought Oct Anheuser -Busch Cos. Inc. Oct International Game Technology Oct JP Morgan Chase & Co. Oct Wendy's International Inc. Nov PPL Corp. Nov EchoStar Communications Corp. Nov Alliant Energy Corp. Nov Colgate- Palmolive Co. Dec Federated Department Stores Inc. Dec Bayer AG Dec Praxair Inc. I ROCxw 0 0 D CAPITAL ADVISORS 5 Proxy Voting Record NYSE Group Inc. NYX Seagate Technology STX Ballot Rec Cast • -• Meeting for Holders of ADRs For For 2,265 10/26/06 Elect Directors For For 2,265 10/26/06 Approve an increase in shares eligible for issuance under 2004 stock For For 2,265 10/26/06 compensation plan Approve an increase in the issuable shares for purchase under employee For For 2,265 10/26/06 stock purchase plan Ratify the appointment of Ernst & Young LLP to serve as independent For For 2,265 10/26/06 registered accounting firm. J& R0CKW00D CAPITAL ADVISORS G Equity Holdings - Fourth Quarter 2006 Exchange Company , Annual Avg Total S&P Olty ISS Ticker Value -- Cash 8,171 1.00 8,171 0.4 4.8 392 1.00 8,171 NA LNT Alliant Corp 1,034 37.77 39,054 2.1 3.0 1,086 38.94 40,260 B 0.77 BUD Anheuser Busch Cos 900 49.20 44,280 2.4 2.4 972 47.00 42,296 A+ 0.37 AIV Apartment Invt & Mgm 1,040 56.02 58,261 3.2 4.3 3,120 36.91 38,391 B- 0.49 BAY Bayer A G 800 53.36 42,688 2.3 1.8 446 52.86 42,285 NA NA BA Boeing Co 520 88.84 46,197 2.5 1.6 624 64.47 33,525 A- 0.89 BRE Bre Properties Inc 600 65.02 39,012 2.1 3.2 1,200 57.15 34,289 B 0.93 BF.B Brown Forman Dst'b' 590 66.24 39,082 2.1 1.8 - 74.52 43,967 A 0.03 CL Colgate Palmolive Cc 624 65.24 40,710 2.2 2.0 724 64.86 40,472 A+ 0.98 DISH EchostarCommunicati 1,134 38.03 43,126 2.4 0.0 - 36.37 41,246 B- 0.03 EP El Paso Corp 3,240 15.28 49,507 2.7 1.1 518 11.72 37,973 B- 0.68 FD Federated Dept Store 1,024 38.13 39,045 2.1 1.3 512 41.34 42,329 B 0.33 FISV Fisery Inc 920 52.42 48,226 2.6 0.0 - 43.76 40,259 B+ 0.41 HCC Hoc Ins Hldgs Inc 1,355 32.09 43,482 2.4 1.3 407 28.00 37,945 B+ 0.83 HNZ Heinz H J Cc 1,015 45.01 45,685 2.5 3.1 1,218 42.21 42,842 B 0.94 HPO Hewlett Packard Co 1,345 41.19 55,401 3.0 0.8 430 32.33 43,477 B+ 0.85 IGT International Game 1,000 46.20 46,200 2.5 1.1 500 42.28 42,278 B+ 0.33 JPM J P Morgan Chase & C 900 48.30 43,470 2.4 2.8 1,224 46.98 42,278 B 0.92 JCOM J2 Global Communicat 1,580 27.25 43,055 2.4 0.0 - 23.18 36,618 NR 0.21 KFT Kraft Foods Inc 1,265 35.70 45,161 2.5 2.8 1,164 32.61 41,249 NR 0.53 LMT Lockheed Martin Corp 510 92.07 46,956 2.6 1.5 612 60.12 30,663 B 0.35 LTR Loews Corp 1,275 41.47 52,874 2.9 0.6 255 29.94 38,172 B- 0.17 MKC Mccormick & Co Inc 1,170 38.56 45,115 2.5 2.1 749 35.29 41,292 A+ 0.39 NYX Nyse Group Inc 515 97.20 50,058 2.7 0.0 - 66.09 34,037 NR NA PCG Pg &E Corp 1,075 47.33 50,880 2.8 2.8 1,419 35.89 38,584 B 0.88 PPL Ppl Corp 1,192 35.84 42,721 2.3 3.1 1,192 33.44 39,858 B 0.57 PX Praxair Inc 675 59.33 40,048 2.2 1.7 486 62.52 42,201 A 0.61 PCP Precision Castparts 815 78.28 63,798 3.5 0.2 98 46.03 37,510 8 0.64 RYAA.Y Ryanair Hldgs Plc 815 81.50 66,423 3.6 0.0 - 55.22 45,007 NR NA SWY Safeway Inc 1,720 34.56 59,443 3.3 0.7 344 22.29 38,342 B 0.87 HSIC Schein Henry Inc 970 48.98 47,511 2.6 0.0 - 45.52 44,158 B+ 0.92 SHLD Sears Hldgs Corp 284 167.93 47,692 2.6 0.0 - 151.84 43,123 NR 0.18 SPG Simon Ppty Group Inc 560 101.29 56,722 3.1 3.0 1,568 68.08 38,125 B+ 0.13 SRCL Stericycle Inc 655 75.50 49,453 2.7 0.0 63.44 41,555 8 0.31 TROW T.Rowe Price Group 1 1,150 43.77 50,336 2.8 1.6 644 33.76 38,819 A 0.03 TXN Texas Instrs Inc 1,340 28.80 38,592 2.1 0.6 161 33.48 44,861 B 0.45 WOOF Vca Antech Inc 1,445 32.19 46,515 2.6 0.0 - 28.86 41,707 NR 0.07 VOLV VolvoAktiebolaget 915 68.82 62,970 3.5 2.7 2,046 40.65 37,194 NR NA WEN Wendy§ Intl Inc 1,300 1 33.09 43,017 2.4 1 1.0 884 34.02 44,230 1 A- 1 0.04 Portfolio Total r rr r 1.4 S24,994 S1.531.587 R 0 C K W 0 0 D CAPITAL A D V I S 0 R S Economic Environment & Outlook Fourth Quarter 2006 A The Fed refrained from hiking the funds rate for the second quarter in succession in Q4 2006. The federal funds rate target ended the year at 5.25 %, a 1% increase from year end 2005. Many analysts are expecting substantial easing by the Fed in 2007. However, the economy will have to decelerate and inflation must ease before the Fed will begin dropping the funds rate. A Employment growth averaged 153,000 jobs per month in 2006. The unemployment rate reached a cycle -low of 4.4% in October, but finished the year at 4.5 %. The job market has not been this tight since 2001. At least one Fed governor believes that, due to decreases in the size of the labor force, monthly job growth in excess of only 100,000 will push the unemployment rate lower. A A tightening labor market has put upward pressure on wages. In September 2005, average hourly earnings were rising at a modest annual rate of 2.7 %. However, as of December 2006 the rate has climbed to 4.2 %, the highest since early 2001. A While core CPI inflation has fallen over the past couple of months, the Fed remains concerned about the prospect of rising inflation pressures. The Median CPI, a widely followed measure of core inflation, rose to a year- over -year rate of 3.7% in November, a level not seen since April 2002. Most analysts believe that due to the slowing in housing and in employment growth, the Fed will reduce the funds rate this year. Fed funds futures are currently pricing in approximately 50 basis points of easing in 2007. However, we feel that the Fed has been very clear: inflation remains above their comfort zone, and there will be no easing until core inflation eases. A The yield spread between Corporate bonds and US Treasuries narrowed during 2006. Low interest rate volatility and solid corporate profits have been the primary drivers of these historically tight spreads. Given the modest additional yield offered by Corporate debt, and the likelihood that spreads will widen as interest rate volatility increases, we recommend underweighting Corporate bonds. A We have become less defensive from a duration standpoint, and our portfolios maintain durations near their respective benchmarks. Market sentiment has changed dramatically, with many analysts anticipating a Fed ease in 2007. We are not so certain. We feel that the economy maintains a good deal of vigor, while inflation remains above the upper bound of the Fed's comfort zone. ,4&R0CKW00D CAPITAL ADVISORS 8 LOOZ /T /T 90OZ /T /T SOOZ /T /T YOOZ /T /T EOOZ /T /T ZOOZ /T /T TOOZ /T /T OOOZ /T /T Oti 666T /T /T 866T /T /T •,.".1000 L66T /T /T L 966T /T /T O a t � � �C O O O M U W +J pot O ~ _ O ^'� �cz L 12 a � S66T /i /T O vi 966T /T /T E66T /T /T •� Z66T /T /T O i66T /T /T Q 066T /T /T 886T /T /T L86i /T /i O 9861/T/i 4. 586T /T /T _ ' ^ y / 6861/T/i I CL� O � C� E86i /T /T Z86i /T /T T861/T /T 086T /T /T U6L6T /T /T 8L6T /T /T o 0 LL6T /T /T 9L6T /T /T ro 7 [ ro h SL6T /T /T dr ae 0 0 0 — — 1L6T /T /T .x AM 0 0 N M w ae 0 0 w 0 • O00 O �I O 0 •— a a W Cf a cc o CA I ti 0 0 c 0 V a Cdr A�CC/ W C 0 O W 6�i O L �a F 0 00 o v c o r.1 -r o 00 � � fn CO !O � o O W N � Cn M oiS CA � � � N � <'? � J �_ N � CA � J (7 � Z •c`D w 3 c -p W x ° m ° •o C) x o o x x x m C O V 3 D C - r d -c tr O D 4 a o y m y 0 -0 x y y W W LL m y U o a O U) 7 cc 7 WN z y U) �'j uai D N °• a ° 'c _ ° cr a CD u U Y � ° � Y ° O CA ,�' to c U N C r co N M LL o O N � ~ � O CD � � r � .3 � to to O O • �� J Cn co -o `U CL � Y a U� o � O CA Q o Q T . _ � C-4 U� � o U -,e o �o 0 N co m � rn Y o tm 0 o a o0 � N O r, �� cn r� in � �N � �> co c `w cm �� cn °� `* Ein v z n W L Q a Q o 3 � 3 � U V N V � �_. to O U O CA 1� N O N V i is � � O O _U � O O � LL LO � O` � � W N � CA N Vi r CA r J > O to O Z t0 � U' O fn J O a a a a M Co Cl Ac 0 CD I O coo � °c: � °o =o .�ema .2 v a L N Z� � N N� _ Cl) M p w W , �o N � co U � er � lC M R N a� Q) �- •�a��• ^ o a U Cu ' � cQO y � L o t3• o Q) ._ o �+ o 3 � Y o C) •Y �.. 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N rl o N U � o> a M r1 O O L y Wn � � N O 1( U l 0 0 Q N O O 0 \ 0 0 \ 0 0 \ \ 0 0 \ c\ 0 0 \ \ O o N \ O 000 �°p0 O N 000 Q M c0 U c C) o _° a) o O L — a� C: ob O M � (U Efl . �... > a Qa J �2 U) Q o o O M �- m N � � OD O . - M � W U a) a) '+J U Q O J cn M M 0 4 N O O M (0 m 0 d' Q 0' � M Efl — a� > > � Q E Q U J U) Q O L c) M c CU C: o o D o � o o (1) 2 co N a a) CY) cu cu 69 70 Q Ad lk � Palm Beach Gardens General Employees' Pension Plan t Fourth Quarter 2006 International Fund Portfolio Summary Change in Market Value Net Dividends /Interest Contributions Disbursements Net Realized & Unrealized (G /L) Portfolio Allocation EBA- Emerging Cash M is 2% EPP- Pacific ex- Japan 20°/ EFA -SAFE 38% 1 ILF -Latin Amer. ' 10% EWJ -Japan 10% R 0 C K W 0 0 D CAPITAL A D V I S 0 R S 1 ° $2,503 $104,000 ($0) $4,423 International Fund Performance Palm Beach 6.7 %` Gardens GE Policy (EAFE) 6.2% Diff +/- I +0.5% 11/9/06 inception 9 International Equity Holdings — Fourth Quarter 2006 J& R0CKW 0 0 D CAPITAL ADVISORS 10 iShares MSCI EAFE Index Fund All data as of December 31, 2006 FUND DESCRIPTION The iShares MSCI EAFE Index Fund seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the European, Australasian, and Far Eastern markets, as measured by the MSCI EAFE Index ( "the Index "). INDEX DESCRIPTION The Index has been developed by MSCI as an equity benchmark for international stock performance. It is a capitalization- weighted index that aims to capture 85% of the (publicly available) total market capitalization. Component companies are adjusted for available float and must meet objective criteria for inclusion to the Index, taking into consideration unavailable strategic shareholdings and limitations to foreign ownership. MSCI reviews its indexes quarterly. Fund Performance History as of December 31, 2006 S' F Quarter 1 Year 3 Year 5 Years 10 Years tnce Inception Fund 10.21% 26.01% 19.60% 14.86% n/a 12.35% Index 10.35% 26.34% 19.93% 15.06% 7.75% 12.54% After Tax Held n/a 25.09% 19.01% 14.31% n/a 11.84% After Tax Sold n/a 16.90% 16.74% 12.75% n/a 10.54% Market Returns n/a 25.95% 19.26% 14.88% n/a 12.44% The performance quoted represents past performance and does not guarantee future results. Investment return and principal value of an investment will fluctuate so that an investor's shares, when sold or redeemed, may be worth more or less than the original cost. Current performance may be lower or higher than the performance quoted. Performance data current to the most recent month end may be obtained by calling toll -free 1- 8004Shares or by visiting www.iShares.com After Tax Held Returns represent return after taxes on distributions. Assumes shares have not been sold. After Tax Sold Returns represent the return after taxes on distributions and the sale of fund shares. Returns are average annualized total returns, except those for periods of less than one year, which are cumulative. Market returns are based upon the midpoint of the bid /ask spread at 4:00 PM Eastern time (when NAV is normally determined for most iShares Funds), and do not represent the returns you would receive if you traded shares at other times. Performance information for the Index assumes reinvestment of all income and excludes management fees, transaction costs and expenses. After -tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after -tax returns depend on the investor's tax situation and may differ from those shown. The after -tax returns shown are not relevant to investors who hold their fund shares through tax - deferred arrangements such as 401(k) plans or individual retirement accounts. Sector Breakdown 464287465 Top 10 Holdings AMEX E Firta.isls 27.99% BP PLC 1.69% E Consumer Discretionary 11.64% HSBC HOLDINGS PLC 1.58% Industrials 10.64% Toyota Motor Corp. 1.48% -� Materials 9.20% Total SA 1.21% Consumer Staples 7.51% GLaxoSmithl(kne PLC 1.16% Health Care 5.93% Group Vodafone Group PLC 1.13% Energy 5.62% Nestle SA 1.09% Utilities 5.56% Nmnis AG 1.03% Telecommunication Services 5.20% Royal Dutch Shell PLCCIns A 1.01% Information Technology 4.56% Roche Folding AG 0.97% Holdings are subject to change. 14 Mares - Fund Details Ticker Symbol EFA Inception Date 08/14/01 Expense Ratio 0.35% IOPV Ticker EFA.IV IOPV, or Indicative Optimized Portfolio Value, is a calculation disseminated by the stock exchange that approximates the Fund's NAV every fifteen seconds throughout the trading day. CUSIP 464287465 Stock Exchange AMEX WSJ Name iShrsMSCI EAFE Index Bloomberg Ticker n/a Net Assets $37.08 Billion P/E 19.03 P/B 3.38 Number of Holdings 825 Beta 1.32 Please call 1 OG4Shares (1- 800-474 -2737) or visit www.iShares.com for more information. BARCLAYS iShares MSCI EAFE Index Fund All data as of December 31, 2006 Holdings by Country United Kingdom 23.59% Japan 22.39% France 9.54% tea► 0 Germany 7.34% SWIIZedand 6.89% '. Australla 5.69% Spain 4.15% Bay 3.94% Netherlands 3.89% Sweden 2.63% Hong Kong 1.76% Finland 1.43% Belgium 1.31% Ireland 1.00% Singapore 0.96% Norway 0.89% Denmark 018% Austria 0.62% Greece 0.47% Portugal 0.43% United States 0.06% i-I iShares- iShares Funds ('Funds') are distributed by SO Investments Distribution Co. (SEI). Barclays Global Fund Advisors (BGFA) serves as an advisor to the Funds. Barclays Global Investors Services (BGIS) assists in the marketing of the Funds. BGFA and BGIS are subsidiaries of Barclays Global Investors, N.A., which is a majority-owned subsidiary of Barclays Bank PLC, none of which is affiliated with SEI. Investing involves risk, including the possible loss of principal. In addition to the normal risks associated with investing, international investments may involve risk of capital loss from unfavorable fluctuation in currency values, from differences in generally accepted accounting principles or from economic or political instability in other nations. Shares of the iShares Funds may be sold throughout the day on the exchange through any brokerage account. However, shares may only be redeemed directly from the fund by Authorized Participants, in very large creation /redemption units. There are special risks associated with margin investing. As with stocks, you may be called upon to deposit additional cash or securities if your account equity, including that which is attributable to iShares Funds, declines. With short sales, you risk paying more for a security than you received from its sale. Transactions in shares of the iShares Funds will result in brokerage commissions and will generate tax consequences. Mutual funds and iShares Funds are obliged to distribute portfolio gains to shareholders. MSCI, Morgan Stanley Capital International and MSCI Index are servicemarks of MSCI and have been licensed for use by Barclays Global Investors, N.A. iShares Funds are not sponsored, endorsed, issued, sold or promoted by MSCI. Nor does this company make any representation regarding the advisability of investing in iShares Funds. Index data source: Morgan Stanley Capital International. Carefully consider the Funds' investment objectives, risk factors and charges and expenses before investing. This and other information can be found in the Funds' prospectuses, which may be obtained by calling 1- 800 - iShares (1- 800 -474 -2737) or by visiting www.iShares.com. Read the prospectus carefully before investing. 02007 Barclays Global Investors. All rights reserved. iShares® is a registered trademark of Barclays Global Investors, N.A. All other trademarks, servicemarks or registered trademarks are the property of their respective owners. Not FDIC Insured o Have no bank guarantee a May lose value BARCLAYS iShares MSCI Pacific ex -Japan Index Fund All data as of December 31, 2006 FUND DESCRIPTION Fund Details iShares- The iShares MSCI Pacific ex -Japan Index Fund seeks to provide investment results that correspond generally Ticker Symbol EPP to the price and yield performance, before fees and expenses, of publicly traded securities in the Australia, Inception Date 10/25/01 Hong Kong, New Zealand, and Singapore markets, as represented by the MSCI Pacific Free ex -Japan Index Expense Ratio 0.50% ( "the Index "). IOPV Ticker EPP.IV INDEX DESCRIPTION The Index seeks to measure the performance of the Australian, Hong Kong, New Zealand, and Singapore equity markets. It is a capitalization- weighted index that aims to capture 85% of the (publicly available) total market capitalization. Component companies are adjusted for available float and must meet objective criteria for inclusion to the Index, taking into consideration unavailable strategic shareholdings and limitations to foreign ownership. MSCI reviews its indexes quarterly. Fund Performance History as of December 31, 2006 Sinc F nd Quarter 1 Year 3 Year 5 Years 10 Years e u Inception Fund 16.62% 32.06% 24.67% 21.63% n/a 22.93% Index 16.70% 32.02% 24.51% 21.56% 6.42% 22.89% After Tax Held n/a 30.19% 23.38% 20.62% n/a 21.90% After Tax Sold n/a 20.83% 20.84% 18.63% n/a 19.84% Market Returns n/a 32.14% 24.54% 21.76% n/a 22.94% The performance quoted represents past performance and does not guarantee future results. Investment return and principal value of an investment will fluctuate so that an investor's shares, when sold or redeemed, may be worth more or less than the original cost. Current performance may be lower or higher than the performance quoted. Performance data current to the most recent month end may be obtained by calling toll -free 1- 8004Shares or by visiting www.iShares.com After Tax Held Returns represent return after taxes on distributions. Assumes shares have not been sold. After Tax Sold Returns represent the return after taxes on distributions and the sale of fund shares. Retums are average annualized total returns, except those for periods of less than one year, which are cumulative. Market returns are based upon the midpoint of the bid /ask spread at 4:00 PM Eastern time (when NAV is normally determined for most iShares Funds), and do not represent the returns you would receive if you traded shares at other times. Performance information for the Index assumes reinvestment of all income and excludes management fees, transaction costs and expenses. After -tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after -tax returns depend on the investor's tax situation and may differ from those shown. The after -tax returns shown are not relevant to investors who hold their fund shares through tax -deferred arrangements such as 401(k) plans or individual retirement accounts. Sector Breakdown Top 10 Holdings 0 Coar oercial Bank, 23.071 BHP Billiton, Ltd. 6.45% Metals a Mining 10.06% National Australia Bank, Ltd. 4.67% ® Real Estate Management 6 8.67% Commonwea lth Bank or 4.56% sent Australia Real Estate Irrvestnlent Trusts 7.34% - -� � Australia a New Zealand 3.72% (REns) Banking Group, Ltd. S Insurance ?W 4.98% Westpac aanitkng Corp 3.19% , industrial Conglomerates 4.49% WestReid Group 2.24% Dhwsi0ed Tek .am rkstion 3.36% Wodwortns, Ltd. 2.01% Services Hutchison Whampoe, Ltd. 1.99% Food 6 Staples Retailing 3.24% Cheurtg Kong Hold Ltd. 171% Oil Gas a Comumeak Fuels 2.81% OBE insurance G.W. up. Ltd. 1.61% Diversified Firwnciel Services 2.39% Holdings are subject to change. IOPV, or Indicative Optimized Portfolio Value, is a calculation disseminated by the stock exchange that approximates the Fund's NAV every fifteen seconds throughout the trading day. CUSIP Stock Exchange WSJ Name Index Bloomberg Ticker Net Assets P/E P/B Number of Holdings Beta 464286665 AMEX iShrs MSCI Pac n/a $2.50 Billion 19.92 4.40 178 1.85 Please call 1- 8004Shares (1- 800 -474 -2737) or visit www.iShares.com for more information. * BARCLAYS iShares MSCI Pacific ex -Japan Index Fund All data as of December 31, 2006 Holdings by Country k � Australia 65.70% Hong Kong 21 01*1 Singapore 11.17% New Zealand 1.87% United Slates 0.05% il iShares- iShares Funds ('Funds ') are distributed by SEI Investments Distribution Co. (SEI). Barclays Global Fund Advisors iBGFA) serves as an advisor to the Funds. Barclays Global Investors Services (BGIS) assists in the marketing of the Funds. BGFA and BGIS are subsidiaries of Barclays Global Investors, N.A., which is a majority-owned subsidiary of Barclays Bank PLC, none of which is affiliated with SEI. Investing involves risk, including the possible loss of principal. In addition to the normal risks associated with investing, international investments may involve risk of capital loss from unfavorable fluctuation in currency values, from differences in generally accepted accounting principles or from economic or political instability in other nations. Shares of the iShares Funds may be sold throughout the day on the exchange through any brokerage account. However, shares may only be redeemed directly from the fund by Authorized Participants, in very large creation /redemption units. There are special risks associated with margin investing. As with stocks, you may be called upon to deposit additional cash or securities if your account equity, including that which is attributable to iShares Funds, declines. With short sales, you risk paying more for a security than you received from its sale. Transactions in shares of the iShares Funds will result in brokerage commissions and will generate tax consequences. Mutual funds and iShares Funds are obliged to distribute portfolio gains to shareholders. MSCI, Morgan Stanley Capital International and MSCI Index are servicemarks of MSCI and have been licensed for use by Barclays Global Investors, N.A. iShares Funds are not sponsored, endorsed, issued, sold or promoted by MSCI. Nor does this company make any representation regarding the advisability of investing in iShares Funds. Index data source: Morgan Stanley Capital International. Carefully consider the Funds' investment objectives, risk factors and charges and expenses before investing. This and other information can be found in the Funds' prospectuses, which may be obtained by calling 1- 800 - iShares (1 -800 -474 -2737) or by visiting www.iShares.com. Read the prospectus carefully before investing. ©2007 Barclays Global Investors. All rights reserved. iShares'%' is a registered trademark of Barclays Global Investors, N.A. All other trademarks, servicemarks or registered trademarks are the property of their respective owners. Not FDIC Insured •Have no bank guarantee •May lose value I BARCLAYS °o N vi 0 m o_ 4 rn A iShares MSCI Emerging Markets Index Fund All data as of December 31, 2006 FUND DESCRIPTION The iShares MSCI Emerging Markets Index Fund seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in emerging markets, as represented by the MSCI Emerging Markets Index ( "the Index "). INDEX DESCRIPTION The Index was developed by Morgan Stanley Capital International Inc. as an equity benchmark for emerging market stock performance. It is a capitalization- weighted index that aims to capture 85% of the (publicly available) total market capitalization. Component companies are adjusted for available float and must meet objective criteria for inclusion to the Index, taking into consideration unavailable strategic shareholdings and limitations to foreign ownership. MSCI reviews its indexes quarterly. Fund Performance History as of December 31, 2006 Quarter 1 Year 1 3 Year 5 Years 10 Years Inception` Fund 19.05% 30.70% 29.96% n/a n/a 40.11% Index 17.60% 32.17% 30.52% 26.59% 9.18% 39.79% After Tax Held n/a 30.07% 29.69% n/a n/a 39.86% After Tax Sold n/a 19.95% 26.24% n/a n/a 35.83% Market Returns n/a 31.20% 29.41% n/a n/a 40.13% The performance quoted represents past performance and does not guarantee future results. Investment return and principal value of an investment will fluctuate so that an investor's shares, when sold or redeemed, may be worth more or less than the original cost. Current performance may be lower or higher than the performance quoted. Performance data current to the most recent month end may be obtained by calling toll -free 1- 8004Shares or by visiting www.iShares.com After Tax Held Returns represent return after taxes on distributions. Assumes shares have not been sold. After Tax Sold Returns represent the return after taxes on distributions and the sale of fund shares. Returns are average annualized total returns, except those for periods of less than one year, which are cumulative. Market returns are based upon the midpoint of the bid /ask spread at 4:00 PM Eastern time (when NAV is normally determined for most iShares Funds), and do not represent the returns you would receive if you traded shares at other times. Performance information for the Index assumes reinvestment of all income and excludes management fees, transaction costs and expenses. After -tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after -tax returns depend on the investor's tax situation and may differ from those shown. The after -tax returns shown are not relevant to investors who hold their fund shares through tax - deferred arrangements such as 401(k) plans or individual retirement accounts. Sector Breakdown Top 10 Holdings ■ Oil Gas Cons Fuels 1.26% SAO ADR Reg S 4.57% Commei cial Ranks 15.73% SamwLung Electronics CO.. Lld., 1.17% Semic tona 11.90% FF��- GDR 111A S.mic- ducto Equipmt Tartan Semiconductor 3.54% 44 ■ Metals a Mining 9.48% Manulacturdng Co., Ltd., Sponsored AN Sponso Sennees Telecommunication Services 6.17% ADR 2.96% Or-.. Telecommunication 6.12% Kookmin Rank, Sponsored 2.60% Services AN Electric Utillies 19411 LUKOIL, Sponsored ADR 2.13% IT Services 2.66% United Microelectronics Corp., 2.00% Insurance 1.99% K9ma Electric Power Corp., 1.95% Food a Staples Retailing 1.95% Sponsored ADR Chunghwa Telecom Co., Ltd., 1.95% Sponwred ADR Sill-are Preclslon 1.90% Industries Co., ADR Holdings are sublect to change. Mares - Fund Details Ticker Symbol EEM Inception Date 04/07/03 Expense Ratio 0.75% IOPV Ticker EEM.IV IOPV, or Indicative Optimized Portfolio Value, is a calculation disseminated by the stock exchange that approximates the Fund's NAV every fifteen seconds throughout the trading day. CUSIP Stock Exchange WSJ Name Index Bloomberg Ticker Net Assets P/E P/B Number of Holdings Beta 464287234 AMEX iShrsMSEmrgMkt n/a $15.69 Billion 19.43 3.75 275 2.98 Please call 1- 8004Shares (1- 800 - 474 -2737) or visit www.iShares.com for more information. * BARCLAYS iShares MSCI Emerging Markets Index Fund All data as of December 31, 2006 Holdings by Country ■ south Korea5.18% China 1 1.8311 10.75% &a[it fkwt lO.IJ% South Africa 10.07% R.— 9.39% Mexico 7.20% India Israel 6.14% 3.33% Indonesia Thailand 2.071 Chile 1.96% if Hungary 1.96% Czech Republic 1.92% Philippines 1.06% Hong Kong 0.97% Argentina 0.97% Turkey 0.95% Egypt 0.55% PeN 0.29% United States 0.06% Malaysia 0.05% j� iShares- iShares Funds ('Funds') are distributed by SEI Investments Distribution Co. (SEI). Barclays Global Fund Advisors (BGFA) serves as an advisor to the Funds. Barclays Global Investors Services (BGIS) assists in the marketing of the Funds. BGFA and BGIS are subsidiaries of Barclays Global Investors, N.A., which is a majority-owned subsidiary of Barclays Bank PLC, none of which is affiliated with SEI. Investing involves risk, including the possible loss of principal. In addition to the normal risks associated with investing, international investments may involve risk of capital loss from unfavorable fluctuation in currency values, from differences in generally accepted accounting principles or from economic or political instability in other nations. Emerging markets involve heightened risks related to the same factors as well as increased volatility and lower trading volume. Shares of the iShares Funds may be sold throughout the day on the exchange through any brokerage account. However, shares may only be redeemed directly from the fund by Authorized Participants, in very large creation/ redemption units. There are special risks associated with margin investing. As with stocks, you may be called upon to deposit additional cash or securities if your account equity, including that which is attributable to iShares Funds, declines. With short sales, you risk paying more for a security than you received from its sale. Transactions in shares of the iShares Funds will result in brokerage commissions and will generate tax consequences. Mutual funds and iShares Funds are obliged to distribute portfolio gains to shareholders. MSCI, Morgan Stanley Capital International and MSCI Index are servicemarks of MSCI and have been licensed for use by Barclays Global Investors, N.A. iShares Funds are not sponsored, endorsed, issued, sold or promoted by MSCI. Nor does this company make any representation regarding the advisability of investing in iShares Funds. Index data source: Morgan Stanley Capital International. Carefully consider the Funds' investment objectives, risk factors and charges and expenses before investing. This and other information can be found in the Funds' prospectuses, which may be obtained by calling 1 -800- iShares (1- 800 -474 -2737) or by visiting www.iShares.com. Read the prospectus carefully before investing. ©2007 Barclays Global Investors. All rights reserved. iSharesl' is a registered trademark of Barclays Global Investors, N.A. All other trademarks, servicemarks or registered trademarks are the property of their respective owners. Not FDIC Insured • Have no bank guarantee • May lose value BA RC LAYS �YS iShares MSCI Japan Index Fund All data as of December 31, 2006 FUND DESCRIPTION The iShares MSCI Japan Index Fund seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the Japanese market, as measured by the MSCI Japan Index ( "the Index "). INDEX DESCRIPTION The Index seeks to measure the performance of the Japanese equity market. It is a capitalization- weighted index that aims to capture 85% of the (publicly available) total market capitalization. Component companies are adjusted for available float and must meet objective criteria for inclusion to the Index, taking into consideration unavailable strategic shareholdings and limitations to foreign ownership. MSCI reviews their indexes quarterly. Fund Performance History as of December 31, 2006 co..,.., c Quarter 1 Year 3 Year 5 Years 10 Years Inception Fund 4.87% 5.49% 14.71% 12.87% 1.36% 0.13% Index 5.01% 6.24% 15.61% 13.50% 2.14% 0.88% After Tax Held n/a 5.23% 14.59% 12.80% 1.27% 0.05% After Tax Sold n/a 3.57% 12.70% 11.26% 1.16% 0.11% Market Returns n/a 5.92% 14.50% 13.32% 1.46% 0.19% The performance quoted represents past performance and does not guarantee future results. Investment return and principal value of an investment will fluctuate so that an investor's shares, when sold or redeemed, may be worth more or less than the original cost. Current performance may be lower or higher than the performance quoted. Performance data current to the most recent month end may be obtained by calling toll -free 1- 800 - iShares or by visiting www.iShares.com After Tax Held Returns represent return after taxes on distributions. Assumes shares have not been sold. After Tax Sold Returns represent the return after taxes on distributions and the sale of fund shares. Returns are average annualized total retums, except those for periods of less than one year, which are cumulative. Market returns are based upon the midpoint of the bid /ask spread at 4:00 PM Eastern time (when NAV is normally determined for most iShares Funds), and do not represent the returns you would receive if you traded shares at other times. Performance information for the Index assumes reinvestment of all income and excludes management fees, transaction costs and expenses. After -tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after -tax returns depend on the investor's tax situation and may differ from those shown. The after -tax returns shown are not relevant to investors who hold their fund shares through tax - deferred arrangements such as 401(k) plans or individual retirement accounts. Sector Breakdown EWJ 03/12/96 0.59% Top 10 Holdings EWJ.IV IOPV, or Indicative Optimized Portfolio ■rn Commercial Banks 11.51% exchange . Toyota Motor Corp. 6.70% NNW Automobiles 10.01% Stock Exchange � Mitsubishi Un Financial Group, 3.61% iShrMSJpn Pharmaceuticals 5.03% � Inc. P/E 24.56 E Household Durables 4.83% Number of Holdings n MUuho Financial Group, Inc. 2.36% 1.39 Chemical, Sumitomo Mitsui Financial Group, Inc. 2.17% Electronic Equipment a 4.66% Honda Motor Co., Ltd. 2.14% Inatrument9 0 Machinery 46% .2 Canon.Inc. 2.09% Metals 6 Mining 4.24% raked. Pharmaceutical Co., Ltd. 2.02% Electric Utilities 3.65% Sony Corp. 1.52% Trading Companies a 3.27% Matsushita Electric Industrial 1.41% Distributors Co., Ltd. Tokyo Electric Power Go. IThel, Inc. 1.33% Holdings are subject to change. 41 iShares- Fund Details Ticker Symbol Inception Date Expense Ratio EWJ 03/12/96 0.59% IOPV Ticker EWJ.IV IOPV, or Indicative Optimized Portfolio Value, is a calculation disseminated by the stock exchange that approximates the Fund's NAV every fifteen seconds throughout the trading day. CUSIP 464286848 Stock Exchange NYSE WSJ Name iShrMSJpn Index Bloomberg Ticker n/a Net Assets $13.79 Billion P/E 24.56 P/B 2.35 Number of Holdings 350 Beta 1.39 Please call 1- 8004Shares (1- 800 -474 -2737) or visit www.iShares.com for more information. # BARCLAYS iShares MSCI Japan Index Fund All data as of December 31, 2006 i 1 iShares- iShares Funds ('Funds') are distributed by SEI Investments Distribution Co. (SEI). Barclays Global Fund Advisors (BGFA) serves as an advisor to the Funds. Barclays Global Investors Services (BGIS) assists in the marketing of the Funds. BGFA and BGIS are subsidiaries of Barclays Global Investors, N.A., which is a majority-owned subsidiary of Barclays Bank PLC, none of which is affiliated with SEI. Investing involves risk, including the possible loss of principal. In addition to the normal risks associated with investing, international investments may involve risk of capital loss from unfavorable fluctuation in currency values, from differences in generally accepted accounting principles or from economic or political instability in other nations. Securities focusing on a single country may be subject to higher volatility. Shares of the iShares Funds may be sold throughout the day on the exchange through any brokerage account. However, shares may only be redeemed directly from the fund by Authorized Participants, in very large creation/ redemption units. There are special risks associated with margin investing. As with stocks, you may be called upon to deposit additional cash or securities if your account equity, including that which is attributable to iShares Funds, declines. With short sales, you risk paying more for a security than you received from its sale. Transactions in shares of the iShares Funds will result in brokerage commissions and will generate tax consequences. Mutual funds and iShares Funds are obliged to distribute portfolio gains to shareholders. MSCI, Morgan Stanley Capital International and MSCI Index are servicemarks of MSCI and have been licensed for use by Barclays Global Investors, N.A. iShares Funds are not sponsored, endorsed, issued, sold or promoted by MSCI. Nor does this company make any representation regarding the advisability of investing in iShares Funds. Index data source: Morgan Stanley Capital International. Carefully consider the Funds' investment objectives, risk factors and charges and expenses before investing. This and other information can be found in the Funds' prospectuses, which may be obtained by calling 1- 800 - iShares (1- 800 -474 -2737) or by visiting www.iShares.com. Read the prospectus carefully before investing. ©2007 Barclays Global Investors. All rights reserved. iShares is a registered trademark of Barclays Global Investors, N.A. All other trademarks, servicemarks or registered trademarks are the property of their respective owners. Not FDIC Insured • Have no bank guarantee • May lose value BARCLAYS 0 °o N CO v Q C7 CO _o Q r; to Cl) iShares S &P Latin America 40 Index Fund All data as of December 31, 2006 FUND DESCRIPTION The iShares S &P Latin America 40 Index Fund seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of companies in the Mexican and South American equity markets as represented by the Standard & Poor's Latin America 40 Index ( "the Index "). INDEX DESCRIPTION The Index is comprised of selected equities trading on the exchanges of four Latin American Countries. Companies from Mexico, Brazil, Argentina and Chile are represented in the index. Constituent companies are float- adjusted and reconstitution is a continuous process. Fund Performance History as of December 31, 2006 c1.. ., c Quarter 1 Year 3 Year 5 Years 10 Years Inception Fund 21.64% 40.84% 45.10% 31.05% n/a 33.46% Index 22.15% 42.57% 45.64% 31.45% 20.17% 34.14% After Tax Held n/a 39.89% 44.66% 30.55% n/a 32.92% After Tax Sold n/a 26.53% 39.84% 27.67% n/a 29.95% Market Returns n/a 41.00% 44.63% 31.10% n/a 33.45% The performance quoted represents past performance and does not guarantee future results. Investment return and principal value of an investment will fluctuate so that an investor's shares, when sold or redeemed, may be worth more or less than the original cost. Current performance may be lower or higher than the performance quoted. Performance data current to the most recent month end may be obtained by calling toll -free 1- 8004Shares or by visiting www.!Shares.com After Tax Held Returns represent return after taxes on distributions. Assumes shares have not been sold. After Tax Sold Returns represent the return after taxes on distributions and the sale of fund shares. Returns are average annualized total returns, except those for periods of less than one year, which are cumulative. Market returns are based upon the midpoint of the bid /ask spread at 4:00 PM Eastern time (when NAV is normally determined for most iShares Funds), and do not represent the returns you would receive if you traded shares at other times. Performance information for the Index assumes reinvestment of all income and excludes management fees, transaction costs and expenses. After -tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after -tax returns depend on the investor's tax situation and may differ from those shown. The after -tax returns shown are not relevant to investors who hold their fund shares through tax -deferred arrangements such as 401(k) plans or individual retirement accounts. Sector Breakdown Materials 26.45% ■ Telecommunication Service, 17.16% Fi -tals 16.19% Energy 14.42% co-- Staples 12.86% Utilities 6.70X Conaumer Discretionary 3.14% Industrial, 2.58% ST Securities 0.07% Top 10 Holdings 464287390 ■America MoNI SA de CVCl,is 10.97% L iShrs Tr 40 Petroleo arasileiro SA, ADR 8101, Cis Vale do Rio Doce, 7.43% Sponsored ADR 19.54 ® Cia 6.25% VaSAOeo Cia Vale 4o Rio Doce, ADR 1 6.15% Banco Itau Holding Financier, 6.17% SA, ADR Banco Bradesco SA, 4.74% Sllorrsored ADR Wal-Mart de Mexico SA de 4.64% CV-Glass V Telefonos de Mexico SA de 3.77% CVClase L Ten arts SA, ADR 3.58% Holdings are wbject to change. iShares- Fund Details Ticker Symbol ILF Inception Date 10/25/01 Expense Ratio 0.50% IOPV Ticker ILF.IV IOPV, or Indicative Optimized Portfolio Value, is a calculation disseminated by the stock exchange that approximates the Fund's NAV every fifteen seconds throughout the trading day. CUSIP 464287390 Stock Exchange AMEX WSJ Name iShrs Tr 40 Index Bloomberg Ticker n/a Net Assets $1.58 Billion P/E 19.54 P/B 5.09 Number of Holdings 39 Beta 3.44 Please call 1- 800 - iShares (1- 800 - 474 -2737) or visit www.iShares.com for more information. * BARCLAYS iShares S &P Latin America 40 Index Fund All data as of December 31, 2006 Holdings by Country Eirazil 52.59% Mexico 34.98x -' Chile 792% Argent— 4.02% United States 0.07% 4 iShares- iShares Funds ('Funds') are distributed by SEI Investments Distribution Co. (SEI). Barclays Global Fund Advisors (BGFA) serves as an advisor to the Funds. Barclays Global Investors Services (BGIS) assists in the marketing of the Funds. BGFA and BGIS are subsidiaries of Barclays Global Investors, N.A., which is a majority-owned subsidiary of Barclays Bank PLC, none of which is affiliated with SEI. Investing involves risk, including the possible loss of principal. In addition to the normal risks associated with investing, international investments may involve risk of capital loss from unfavorable fluctuation in currency values, from differences in generally accepted accounting principles or from economic or political instability in other nations. Emerging markets involve heightened risks related to the same factors as well as increased volatility and lower trading volume. Shares of the iShares Funds may be sold throughout the day on the exchange through any brokerage account. However, shares may only be redeemed directly from the fund by Authorized Participants, in very large creation /redemption units. There are special risks associated with margin investing. As with stocks, you may be called upon to deposit additional cash or securities if your account equity, including that which is attributable to iShares Funds, declines. With short sales, you risk paying more for a security than you received from its sale. Transactions in shares of the iShares Funds will result in brokerage commissions and will generate tax consequences. Mutual funds and iShares Funds are obliged to distribute portfolio gains to shareholders. S &P and Standard & Poor's are trademarks of The McGraw -Hill Companies, Inc. and have been licensed for use by Barclays Global Investors, N.A. iShares Funds are not sponsored, endorsed, issued, sold or promoted by Standard & Poor's. Nor does this company make any representation regarding the advisability of investing in iShares Funds. Index data source: Standard & Poors. Carefully consider the Funds' investment objectives, risk factors and charges and expenses before investing. This and other information can be found in the Funds' prospectuses, which may be obtained by calling 1- 800 - iShares (1- 800 -474 -2737) or by visiting www.iShares.com. Read the prospectus carefully before investing. ©2007 Barclays Global Investors. All rights reserved. iShares is a registered trademark of Barclays Global Investors, N.A. All other trademarks, servicemarks or registered trademarks are the property of their respective owners. Not FDIC Insured - Have no bank guarantee* May lose value # BARCLAYS 0 0 N v om Ci 0 4 o) 0 0 It