Travelers 2008 Annual Report Download - page 198

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
3. INVESTMENTS (Continued)
securing outstanding letters of credit had a fair value of $104 million and $142 million at December 31,
2008 and 2007, respectively.
Equity Securities
The cost and fair value of investments in equity securities were as follows:
Gross Unrealized Fair
(at December 31, 2008, in millions) Cost Gains Losses Value
Common stock ......................................... $189 $2 $31 $160
Non-redeemable preferred stock ............................ 272 7 60 219
Total .............................................. $461 $9 $91 $379
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
Proceeds from sales of equity securities were $53 million, $106 million and $285 million in 2008,
2007 and 2006, respectively. Gross gains of $6 million, $10 million and $29 million and gross realized
losses of $4 million, $1 million and $4 million were realized on those sales in 2008, 2007 and 2006,
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 $25 million in 2008 and $11 million in
2007. Gross gains of $2 million and $1 million, respectively, 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.
Future minimum rental income expected on operating leases relating to the Company’s real estate
properties is $115 million, $97 million, $71 million, $43 million, $26 million, and $52 million for 2009,
2010, 2011, 2012, 2013 and 2014 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
$5.22 billion and $5.19 billion at December 31, 2008 and 2007, respectively, approximates their fair
value.
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