Travelers 2009 Annual Report Download - page 200

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
3. INVESTMENTS (Continued)
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
Proceeds from sales of equity securities were $65 million, $53 million and $106 million in 2009,
2008 and 2007, respectively. Gross gains of $13 million, $6 million and $10 million and gross realized
losses of $2 million, $4 million and $1 million were realized on those sales in 2009, 2008 and 2007,
respectively.
Real Estate
The Company’s real estate investments include warehouses, office buildings and other commercial
land and properties 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.
In 2009, there were no sales of real estate investments. 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 had no real estate held for sale at December 31, 2009 and 2008. Accumulated
depreciation on real estate held for investment purposes was $170 million and $140 million at
December 31, 2009 and 2008, respectively.
Future minimum rental income expected on operating leases relating to the Company’s real estate
properties is $109 million, $84 million, $60 million, $43 million, $32 million, and $50 million for 2010,
2011, 2012, 2013, 2014 and 2015 and thereafter, respectively.
Short-term Securities
The Company’s short-term securities consist of Aaa-rated registered money market funds and
high-quality commercial paper (primarily A1/P1) with a combined average of 27 days to maturity at
December 31, 2009. The amortized cost of these securities, which totaled $4.85 billion and $5.22 billion
at December 31, 2009 and 2008, respectively, approximated their fair value.
Variable Interest Entities (VIEs)
The following entities are consolidated:
• Municipal trusts—The Company owns interests in various municipal trusts that were formed for
the purpose of allowing more flexibility to generate investment income in a manner consistent
with the Company’s investment objectives and tax position. At December 31, 2009 and 2008,
there were 3 and 24 such trusts, respectively, which held a combined total of $16 million and
$277 million, respectively, in municipal securities, of which less than $1 million and $32 million,
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