Travelers 2007 Annual Report Download - page 188

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
3. INVESTMENTS (Continued)
Equity Securities
The cost and fair value of investments in equity securities were as follows:
Gross Unrealized Fair
(at December 31, 2007, in millions) Cost Gains Losses Value
Common stock .......................................... $160 $24 $ 1 $183
Non-redeemable preferred stock ............................. 313 8 16 305
Total ................................................ $473 $32 $17 $488
Gross Unrealized Fair
(at December 31, 2006, in millions) Cost Gains Losses Value
Common stock .......................................... $ 88 $27 $— $115
Non-redeemable preferred stock ............................. 348 15 5 358
Total ................................................ $436 $42 $ 5 $473
Proceeds from sales of equity securities were $106 million, $285 million and $403 million in 2007,
2006 and 2005, respectively, resulting in gross realized gains of $10 million, $29 million and $43 million
and gross realized losses of $1 million, $4 million and $9 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 the premises to be
provided by the landlord.
Proceeds from the sale of real estate investments totaled $12 million in 2007. Gross gains of
$1 million were realized on those sales and no gross losses were recognized on those sales. The
Company did not sell any real estate investments in 2006. 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.
Future minimum rental income expected on operating leases relating to the Company’s real estate
properties is $110 million, $94 million, $74 million, $53 million, $30 million, and $40 million for 2008,
2009, 2010, 2011, 2012 and 2013 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
$5.19 billion and $4.94 billion at December 31, 2007 and 2006, respectively, approximates their fair
value.
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