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MERCURY GENERAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
A summary of net realized investment gains and losses is as follows:
Year Ended December 31,
2009 2008 2007
(Amounts in thousands)
Net realized gains (losses) from investments and other liabilities:
Fixed maturities ............................................. $255,195 $(280,522) $(12,830)
Equity securities ............................................ 83,452 (281,316) 32,141
Short-term investments ....................................... 76 (4,177) (8,342)
Other liabilities(1) ............................................ 7,721 15,495 9,839
Total .................................................. $346,444 $(550,520) $ 20,808
(1) Other liabilities include call option and short sale transactions
Net realized gains and losses from investments included gains of $338.7 million and losses of $527.7
million related to trading securities which were still held at December 31, 2009 and 2008, respectively. In 2007,
net realized investment gains and losses included investment impairment write-downs of $22.7 million and also
included gains of $2.0 million and losses of $1.4 million related to the change in the fair value of trading
securities and hybrid financial instruments, respectively.
Gross gains and losses realized on the sales of investments (excluding calls) are shown below:
Year Ended December 31,
2009 2008 2007
Gross
Realized
Gains
Gross
Realized
Losses Net
Gross
Realized
Gains
Gross
Realized
Losses Net
Gross
Realized
Gains
Gross
Realized
Losses Net
(Amounts in thousands)
Fixed maturities
Available-for-
sale ........... $ — $ — $ — $ — $ — $ — $ 1,626 $ (4,196) $ (2,570)
Trading .......... 1,918 (8,589) (6,671) 5,436 (11,855) (6,419) — — —
Equity securities
Available-for-
sale ........... — — — — — — 69,288 (20,773) 48,515
Trading .......... 20,558 (70,686) (50,128) 26,795 (54,489) (27,694) 7,145 (5,431) 1,714
Short-term
investments ........ 356 (3,902) (3,546) 152 (956) (804) 2,830 (11,172) (8,342)
Unrealized Investment Gains and Losses in 2007—A summary of the net increase and decrease in
unrealized investment gains and losses, less applicable income tax expense or benefit, for the year ended
December 31, 2007 is as follows (amounts in thousands):
Net (decrease) increase in net unrealized investment gains:
Fixed maturities available for sale ................................. $(18,612)
Income tax benefit .............................................. (6,514)
Total .................................................... $(12,098)
Equity securities ............................................... $35,382
Income tax expense ............................................. 12,379
Total .................................................... $23,003
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