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 June 30, 2014	cost		gains		losses		value
Fixed maturity securities:
States, municipalities and political subdivisions	$	3,205	$	170	$	5	$	3,370
Convertibles and bonds with warrants attached	7		—		—		7
United States government	7		—		—		7
Government-sponsored enterprises	221		—		13		208
Foreign government	10		—		—		10
Commercial mortgage-backed	220		7		1		226
Corporate	5,049		509		3		5,555
Subtotal	8,719		686		22		9,383
Equity securities:
Common equities	2,458		1,992		3		4,447
Nonredeemable preferred equities	124		35		1		158
Subtotal	2,582		2,027		4		4,605
Total	$	11,301	$	2,713	$	26	$	13,988
At December 31, 2013
Fixed maturity securities:
States, municipalities and political subdivisions	$	3,107	$	125	$	21	$	3,211
Convertibles and bonds with warrants attached	17		—		—		17
United States government	7		—		—		7
Government-sponsored enterprises	227		—		27		200
Foreign government	10		—		—		10
Commercial mortgage-backed	148		—		5		143
Corporate	5,122		433		22		5,533
Subtotal	8,638		558		75		9,121
Equity securities:
Common equities	2,396		1,818		1		4,213
Nonredeemable preferred equities	127		38		3		162
Subtotal	2,523		1,856		4		4,375
Total	$	11,161	$	2,414	$	79	$	13,496

The net unrealized investment gains in our fixed-maturity portfolio are primarily the result of the continued low interest rate environment that increased the fair value of our fixed-maturity portfolio. The seven largest unrealized investment gains in our common stock portfolio are from Exxon Mobil Corporation (NYSE:XOM), Chevron Corporation (NYSE:CVX), Dover Corporation (NYSE:DOV), The Procter & Gamble Company (NYSE:PG), Honeywell International Incorporated (NYSE:HON), Johnson & Johnson (NYSE:JNJ), and RPM International (NYSE:RPM), which had a combined gross unrealized gain of $599 million. At June 30, 2014, we had $7 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 $18 million fair value of hybrid securities at December 31, 2013. 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 gross unrealized losses by investment category and by the duration of the securities’ continuous unrealized loss positions:



(In millions)	Less than 12 months				12 months or more				Total		Total
	Fair		Unrealized		Fair		Unrealized		fair		unrealized
At June 30, 2014	value		losses		value		losses		value		losses
Fixed maturity securities:
States, municipalities and political subdivisions	$	61	$	1	$	267	$	4	$	328	$	5
United States government	—		—		1		—		1		—
Government-sponsored enterprises	10		—		175		13		185		13
Foreign government	—		—		10		—		10		—
Commercial mortgage-backed	—		—		32		1		32		1
Corporate	49		—		127		3		176		3
Subtotal	120		1		612		21		732		22
Equity securities:
Common equities	39		—		79		3		118		3
Nonredeemable preferred equities	5		—		17		1		22		1
Subtotal	44		—		96		4		140		4
Total	$	164	$	1	$	708	$	25	$	872	$	26
At December 31, 2013
Fixed maturity securities:
States, municipalities and political subdivisions	$	490	$	18	$	42	$	3	$	532	$	21
United States government	1		—		—		—		1		—
Government-sponsored enterprises	199		27		1		—		200		27
Foreign government	10		—		—		—		10		—
Commercial mortgage-backed	125		5		—		—		125		5
Corporate	572		20		43		2		615		22
Subtotal	1,397		70		86		5		1,483		75
Equity securities:
Common equities	77		1		—		—		77		1
Nonredeemable preferred equities	42		3		—		—		42		3
Subtotal	119		4		—		—		119		4
Total	$	1,516	$	74	$	86	$	5	$	1,602	$	79

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 June 30,						Six months ended June 30,
	2014			2013			2014			2013
Investment income summary:
Interest on fixed maturities	$	103		$	103		$	207		$	205
Dividends on equity securities	34			30			66			57
Other investment income	1			—			2			1
Total	138			133			275			263
Less investment expenses	2			2			4			4
Total	$	136		$	131		$	271		$	259

Realized investment gains and losses summary:
Fixed maturities:
Gross realized gains	$	4		$	2		$	6		$	4
Gross realized losses	—			—			—			—
Other-than-temporary impairments	—			—			—			(2		)
Equity securities:
Gross realized gains	16			12			34			49
Gross realized losses	—			—			—			—
Other-than-temporary impairments	—			—			(1		)	—
Securities with embedded derivatives	(3		)	—			(4		)	1
Other	(3		)	—			1			3
Total	$	14		$	14		$	36		$	55

Change in unrealized gains and losses summary:
Fixed maturities	$	93		$	(282	)	$	181		$	(307	)
Equity securities	142			38			171			419
Net change in pension actuarial loss and prior service cost	—			3			(1		)	5
Adjustment to deferred acquisition costs and life policy reserves	(5		)	26			(8		)	29
Other	6			(2		)	8			(5		)
Income taxes on above	(82		)	76			(123		)	(49		)
Total	$	154		$	(141	)	$	228		$	92

During the three and six months ended June 30, 2014 and 2013, 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 three months ended June 30, 2014, there was one equity security and no fixed-maturity securities other-than-temporarily impaired. During the six months ended June 30, 2014, there were three equity securities and one fixed-maturity security other-than-temporarily impaired. At June 30, 2014, 247 fixed-maturity investments with a total unrealized loss of $21 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. Four equity investments with a total unrealized loss of $4 million had been in an unrealized loss position for 12 months or more as of June 30, 2014. Of that total, no equity investments were trading below 70 percent of cost.

During 2013, we other-than-temporarily impaired seven fixed-maturity securities. At December 31, 2013, 40 fixed-maturity investments with a total unrealized loss of $5 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, 2013.