Notes to Financial Statements
5. Investments
At December 31, 2006 and 2005 the cost and fair values of the investments are summarized as follows (in thousands):
| 2006 | 2005 | |||
|---|---|---|---|---|
| Cost | Fair Value | Cost | Fair Value | |
| Johnson & Johnson common stock 55,983,308 and 63,355,808 shares in 2006 and 2005, respectively | $33,434 | $3,696,018 | $37,837 | $3,807,684 |
| Other equity investments | ||||
| Domestic equities | 1,816,493 | 2,034,872 | 1,664,812 | 1,937,403 |
| International equities | 436,570 | 657,184 | 490,938 | 663,580 |
| Alternative investments-limited partnerships | 2,125,153 | 2,459,712 | 1,303,525 | 1,562,349 |
| Fixed income investments | 744,896 | 729,630 | 807,427 | 795,275 |
| $5,156,546 | $9,577,416 | $4,304,539 | $8,766,291 | |
Other equity investments include approximately $73 million and $100 million transferred at year-end and held in non-interest bearing accounts and a money market account, respectively, by several limited partnerships pending investment subscription start dates of January 1, 2007.
Included in Domestic equities and International equities at December 31, 2006 and 2005 were approximately $198 million and $148 million, respectively, of securities on loan pursuant to a securities lending agreement. Cash collateral received for securities on loan was $207 million and $157 million at December 31, 2006 and 2005, respectively. Original collateral received on domestic and international securities lent was at least 102 percent of market value. All cash collateral received is invested in approved money market and short-term funds.
Pursuant to its limited partnership agreements, as of December 31, 2006 and 2005, the Foundation had commitments of approximately $1,955 million and $1,562 million, respectively, which are expected to be funded over the next three to five years.
The Foundation purchases and sells forward foreign currency contracts whereby the Foundation agrees to exchange one currency for another on an agreed-upon date at an agreed-upon exchange rate to minimize the exposure of certain of its investments to adverse fluctuations in currency markets. At December 31, 2006 and 2005, the Foundation had open forward foreign currency contracts with notional amounts totaling $650,000 and $4.2 million, respectively. Included in the statement of financial position at December 31, 2006 at fair value were pending receivables and pending payables of approximately $660,000 and $680,000, respectively, and pending receivables and pending payables of approximately $4.1 million at December 31, 2005. Such contracts involve, to varying degrees, the possible inability of counterparties to meet the terms of their contracts. Changes in the value of forward foreign currency contracts are recognized as unrealized gains or losses until such contracts are closed.
The net realized gains on sales of securities for 2006 and 2005 were as follows (in thousands):
| 2006 | 2005 | |
|---|---|---|
| Johnson & Johnson common stock | $460,441 | $427,603 |
| Other securities, net | 605,660 | 399,848 |
| Less, Federal and state tax | (21,201) | (7,344) |
| $1,044,900 | $820,107 |