Investments

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



(Dollars in millions)	Cost or amortized cost
			Gross unrealized				Fair value
At June 30, 2015			gains		losses		Fair value
Fixed maturity securities:
Corporate	$	5,243	$	350	$	16	$	5,577
States, municipalities and political subdivisions	3,426		136		15		3,547
Commercial mortgage-backed	278		7		2		283
Government-sponsored enterprises	253		—		9		244
Foreign government	10		—		—		10
Convertibles and bonds with warrants attached	7		—		—		7
United States government	7		—		—		7
Subtotal	9,224		493		42		9,675
Equity securities:
Common equities	2,628		1,882		8		4,502
Nonredeemable preferred equities	200		33		1		232
Subtotal	2,828		1,915		9		4,734
Total	$	12,052	$	2,408	$	51	$	14,409
At December 31, 2014
Fixed maturity securities:
Corporate	$	5,117	$	420	$	11	$	5,526
States, municipalities and political subdivisions	3,267		178		2		3,443
Commercial mortgage-backed	250		9		—		259
Government-sponsored enterprises	213		—		5		208
Foreign government	10		—		—		10
Convertibles and bonds with warrants attached	7		—		—		7
United States government	7		—		—		7
Subtotal	8,871		607		18		9,460
Equity securities:
Common equities	2,583		2,099		3		4,679
Nonredeemable preferred equities	145		35		1		179
Subtotal	2,728		2,134		4		4,858
Total	$	11,599	$	2,741	$	22	$	14,318

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. Our commercial mortgage-backed securities had an average rating of Aa1/AA at June 30, 2015 and December 31, 2014. At June 30, 2015, we had $75 million of short-term investments, consisting of commercial paper, that had no gross unrealized gains or losses. At December 31, 2014, we held no short-term investments. The seven largest unrealized investment gains in our common stock portfolio are from Exxon Mobil Corporation (NYSE:XOM), Honeywell International Incorporated (NYSE:HON), Apple Inc. (Nasdaq:AAPL), BlackRock Inc. (NYSE:BLK), The Procter & Gamble Company (NYSE:PG), RPM International Inc. (NYSE:RPM), and JPMorgan Chase & Co. (NYSE:JPM), which had a combined gross unrealized gain of $594 million. At June 30, 2015, Apple was our largest single common stock holding with a fair value of 3.9 percent of our publicly traded common stock portfolio and 1.2 percent of the total investment portfolio.

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



(Dollars in millions)	Less than 12 months				12 months or more				Total
	Fair value		Unrealized losses		Fair value		Unrealized losses		Fair value		Unrealized losses
At June 30, 2015	Fair value		Unrealized losses		Fair value		Unrealized losses		Fair value		Unrealized losses
Fixed maturity securities:
Corporate	$	715	$	14	$	65	$	2	$	780	$	16
States, municipalities and political subdivisions	693		14		56		1		749		15
Commercial mortgage-backed	74		2		2		—		76		2
Government-sponsored enterprises	90		2		152		7		242		9
Foreign government	10		—		—		—		10		—
Subtotal	1,582		32		275		10		1,857		42
Equity securities:
Common equities	165		8		—		—		165		8
Nonredeemable preferred equities	66		1		5		—		71		1
Subtotal	231		9		5		—		236		9
Total	$	1,813	$	41	$	280	$	10	$	2,093	$	51
At December 31, 2014
Fixed maturity securities:
Corporate	$	261	$	8	$	90	$	3	$	351	$	11
States, municipalities and political subdivisions	17		—		135		2		152		2
Commercial mortgage-backed	3		—		23		—		26		—
Government-sponsored enterprises	11		—		181		5		192		5
Subtotal	292		8		429		10		721		18
Equity securities:
Common equities	85		3		—		—		85		3
Nonredeemable preferred equities	16		—		17		1		33		1
Subtotal	101		3		17		1		118		4
Total	$	393	$	11	$	446	$	11	$	839	$	22

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



(Dollars in millions)	Three months ended June 30,						Six months ended June 30,
	2015			2014			2015			2014
Investment income:
Interest	$	106		$	103		$	211		$	207
Dividends	35			34			71			66
Other	1			1			1			2
Total	142			138			283			275
Less investment expenses	2			2			4			4
Total	$	140		$	136		$	279		$	271

Realized investment gains and losses summary:
Fixed maturities:
Gross realized gains	$	7		$	4		$	10		$	6
Gross realized losses	—			(3		)	—			(4		)
Other-than-temporary impairments	(3		)	—			(3		)	—
Equity securities:
Gross realized gains	56			16			100			34
Gross realized losses	—			—			(1		)	—
Other-than-temporary impairments	(1		)	—			(1		)	(1		)
Other	1			(3		)	2			1
Total	$	60		$	14		$	107		$	36

Change in unrealized investment gains and losses:
Fixed maturities	$	(184	)	$	93		$	(138	)	$	181
Equity securities	(135		)	142			(224		)	171
Less income taxes	112			(82		)	127			(123		)
Total	$	(207	)	$	153		$	(235	)	$	229

During the three and six months ended June 30, 2015, there were two equity securities and three fixed-maturity securities other-than-temporarily impaired. 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 for the three and six months ended June 30, 2015 and 2014. At June 30, 2015, 71 fixed-maturity investments with a total unrealized loss of $10 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. One equity investment with a total unrealized loss of less than $1 million had been in an unrealized loss position for 12 months or more as of June 30, 2015. Of that total, no equity investments were trading below 70 percent of cost.

During 2014, we other-than-temporarily impaired six fixed-maturity securities. At December 31, 2014, 144 fixed-maturity investments with a total unrealized loss of $10 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 three equity security investments in an unrealized loss position for 12 months or more with a total unrealized loss of $1 million as of December 31, 2014. Of that total, no equity security investments had fair values below 70 percent of cost.