Travelers 2006 Annual Report Download - page 188

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
176
3. INVESTMENTS (Continued)
Equity Securities
The cost and fair value of investments in equity securities were as follows:
Gross Unrealized Fair
(at December 31, 2006, in millions)Cost Gains LossesValue
Common stock.................................................$88 $ 27 $ — $115
Non-redeemable preferredstock.................................. 348 155358
Total ........................................................$436 $ 4 2 $ 5 $473
Gross UnrealizedFair
(at December 31, 2005, in millions)Cost Gains Losses Value
Common stock.................................................$ 1 36 $24$ 3 $157
Non-redeemable preferredstock..................................402 24 4422
Total........................................................$ 5 38 $48$ 7 $579
Proceeds from sales of equity securities were $285 million, $403 million and$265 million in 2006, 2005
and 2004, respectively, resulting in gross realized gains of $29 million, $43 million and $37 million and
gross realized losses of $4 million, $9 million and$8 million, respectively.
Real Estate
The Company’s real estate investments include warehouses, office buildings, land, and other
commercial real estate assets that are directly owned. The Company negotiates commercial leases with
individual tenants through unrelated, licensed real estate brokers. Negotiated terms and conditions
include, among others, rental rates, length of lease period and improvements to thepremises to be
provided by the landlord.
Proceeds from the sale of real estate investments totaled $37 million in 2005. Gross gains of
$15 million were realized on those sales, and no gross losses were recognized. The Company did not sell
any real estate investments in 2006 or 2004.
Future minimum rental income expected on operatingleases relating to the Company’s real estate
properties is $97 million, $85 million, $68 million, $53 million, $35 million, and $51 million for 2007, 2008,
2009, 2010, 2011 and 2012 and thereafter, respectively.
Short-term Investments
Short-term investments consist primarily of money market instruments and other debt securities
purchased with a maturity of less than one year. The amortized cost of these securities, which totaled
$4.94 billion and$4.80 billion at December 31, 2006 and 2005, respectively, approximates their fair value.