INVESTMENTS

The following table provides cost or amortized cost, gross unrealized gains, gross unrealized losses and fair value for our invested assets:



(In millions)	Cost or
	amortized		Gross unrealized				Fair
At September 30, 2013	cost		gains		losses		value
Fixed maturities:
States, municipalities and political subdivisions	$	3,046	$	146	$	17	$	3,175
Convertibles and bonds with warrants attached	16		—		—		16
United States government	7		—		—		7
Government-sponsored enterprises	209		—		19		190
Foreign government	10		—		—		10
Commercial mortgage-backed securities	79		—		3		76
Corporate securities	5,135		454		25		5,564
Subtotal	8,502		600		64		9,038
Equity securities:
Common equities	2,394		1,482		3		3,873
Preferred equities	77		34		—		111
Subtotal	2,471		1,516		3		3,984
Total	$	10,973	$	2,116	$	67	$	13,022
At December 31, 2012
Fixed maturities:
States, municipalities and political subdivisions	$	3,040	$	250	$	1	$	3,289
Convertibles and bonds with warrants attached	31		—		—		31
United States government	7		1		—		8
Government-sponsored enterprises	164		—		—		164
Foreign government	3		—		—		3
Commercial mortgage-backed securities	27		1		—		28
Corporate securities	4,950		622		2		5,570
Subtotal	8,222		874		3		9,093
Equity securities:
Common equities	2,270		977		9		3,238
Preferred equities	99		37		1		135
Subtotal	2,369		1,014		10		3,373
Total	$	10,591	$	1,888	$	13	$	12,466

The net unrealized investment gains in our fixed-maturity portfolio are primarily the result of the current low interest rate environment that increased the fair value of our fixed-maturity portfolio. The three largest net unrealized investment gains in our common stock portfolio are from Exxon Mobil Corporation (NYSE:XOM), Chevron Corporation (NYSE:CVX) and The Procter & Gamble Company (NYSE:PG), which had a combined net gain position of $264 million. At At September 30, 2013, we had $16 million fair value of hybrid securities included in fixed maturities that follow Accounting Standards Codification (ASC) 815-15-25, Accounting for Certain Hybrid Financial Instruments, compared with $31 million fair value of hybrid securities at December 31, 2012. The hybrid securities are carried at fair value, and the changes in fair value are included in realized investment gains and losses.

The table below provides fair values and unrealized losses by investment category and by the duration of the securities’ continuous unrealized loss position:



(In millions)	Less than 12 months				12 months or more				Total		Total
	Fair		Unrealized		Fair		Unrealized		fair		unrealized
At September 30, 2013	value		losses		value		losses		value		losses
Fixed maturities:
States, municipalities and political subdivisions	$	371	$	17	$	8	$	—	$	379	$	17
United States government	1		—		—		—		1		—
Government-sponsored enterprises	190		19		—		—		190		19
Foreign government	9		—		—		—		9		—
Commercial mortgage-backed securities	62		3		—		—		62		3
Corporate securities	526		22		35		3		561		25
Subtotal	1,159		61		43		3		1,202		64
Equity securities:
Common equities	74		3		—		—		74		3
Preferred equities	4		—		—		—		4		—
Subtotal	78		3		—		—		78		3
Total	$	1,237	$	64	$	43	$	3	$	1,280	$	67
At December 31, 2012
Fixed maturities:
States, municipalities and political subdivisions	$	53	$	1	$	—	$	—	$	53	$	1
Government-sponsored enterprises	1		—		—		—		1		—
Corporate securities	58		1		17		1		75		2
Subtotal	112		2		17		1		129		3
Equity securities:
Common equities	107		9		—		—		107		9
Preferred equities	4		1		—		—		4		1
Subtotal	111		10		—		—		111		10
Total	$	223	$	12	$	17	$	1	$	240	$	13

The following table provides investment income, realized investment gains and losses, the change in unrealized investment gains and losses, and other items:



(In millions)	Three months ended September 30,						Nine months ended September 30,
	2013			2012			2013			2012
Investment income summary:
Interest on fixed maturities	$	104		$	105		$	309		$	317
Dividends on equity securities	30			28			87			81
Other investment income	1			1			2			3
Total	135			134			398			401
Less investment expenses	2			2			6			6
Total	$	133		$	132		$	392		$	395

Realized investment gains and losses summary:
Fixed maturities:
Gross realized gains	$	5		$	14		$	9		$	30
Gross realized losses	—			—			—			—
Other-than-temporary impairments	—			—			(2		)	—
Equity securities:
Gross realized gains	15			1			64			30
Gross realized losses	—			—			—			(1		)
Other-than-temporary impairments	—			(2		)	—			(32		)
Securities with embedded derivatives	—			(4		)	1			1
Other	2			1			5			1
Total	$	22		$	10		$	77		$	29

Change in unrealized gains and losses summary:
Fixed maturities	$	(28	)	$	110		$	(335	)	$	188
Equity securities	90			143			509			240
Amortization of pension actuarial loss and prior service cost	2			2			7			5
Adjustment to deferred acquisition costs and life policy reserves	9			(6		)	38			(21		)
Other	(2		)	—			(7		)	5
Income taxes on above	(25		)	(88		)	(74		)	(147		)
Total	$	46		$	161		$	138		$	270

During the three and nine months ended September 30, 2013 and 2012, there were no credit losses on fixed-maturity securities for which a portion of other-than-temporary impairment (OTTI) has been recognized in other comprehensive income.

During the quarter ended September 30, 2013, there were no other-than-temporarily impaired securities. At September 30, 2013, nine fixed-maturity investments with a total unrealized loss of $3 million had been in an unrealized loss position for 12 months or more. Of that total, no fixed-maturity investments had fair values below

70 percent of amortized cost. There were no equity investments in an unrealized loss position for 12 months or more as of September 30, 2013.

At December 31, 2012, four fixed-maturity investments with a total unrealized loss of $1 million had been in an unrealized loss position for 12 months or more. Of that total, no fixed-maturity investments had fair values below

70 percent of amortized cost. There were no equity investments in an unrealized loss position for 12 months or more as of December 31, 2012.