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Progressive Revises June 2007 Balance Sheet to Recognize Declaration of Extraordinary Dividend
The Progressive Corporation corrected its June 30, 2007 consolidated balance sheet, which was originally issued on July 12, 2007. The correction recognizes the accrual for the future payment of the Company’s $2.00 per Common Share extraordinary cash dividend that was declared by the Board of Directors on June 13, 2007. This extraordinary dividend is payable on September 14, 2007, to shareholders of record as of the close of business on August 31, 2007. The revised balance sheet, which is attached to the complete release at http://investors.progressive.com/releases/2007/pdf/mreport_0607r.pdf , reflects the corresponding reduction in shareholders’ equity of approximately $1.4 billion, along with the recalculation of the applicable ratios (book value per share, return on equity and debt-to-total capital).

In connection with this correction, management has determined that a material weakness existed at June 30, 2007 in the Company’s internal control over financial reporting limited to the accounting for declared dividends. Subsequent to the discovery of this issue, management has implemented changes in its internal controls related to the recording of declared dividends to address this weakness and believes that the material weakness has been remediated at this time.

As previously disclosed, the extraordinary dividend is part of Progressive’s recapitalization plan that includes the June 2007 issuance of $1 billion of 6.70% Fixed-to-Floating Rate Junior Subordinated Debentures due 2067, as well as the Board’s authorization to purchase up to 100 million of the Company’s Common Shares over the next two years.