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, 2016			gains		losses		Fair value
Fixed maturity securities:
Corporate	$	5,498	$	366	$	27	$	5,837
States, municipalities and political subdivisions	3,538		264		—		3,802
Commercial mortgage-backed	293		17		—		310
Government-sponsored enterprises	170		—		—		170
Foreign government	10		—		—		10
Convertibles and bonds with warrants attached	5		—		—		5
United States government	4		—		—		4
Subtotal	9,518		647		27		10,138
Equity securities:
Common equities	3,002		2,080		65		5,017
Nonredeemable preferred equities	187		38		—		225
Subtotal	3,189		2,118		65		5,242
Total	$	12,707	$	2,765	$	92	$	15,380
At December 31, 2015
Fixed maturity securities:
Corporate	$	5,294	$	255	$	96	$	5,453
States, municipalities and political subdivisions	3,440		172		1		3,611
Commercial mortgage-backed	287		4		2		289
Government-sponsored enterprises	284		—		6		278
Foreign government	10		—		—		10
Convertibles and bonds with warrants attached	5		—		—		5
United States government	4		—		—		4
Subtotal	9,324		431		105		9,650
Equity securities:
Common equities	2,749		1,787		51		4,485
Nonredeemable preferred equities	189		32		—		221
Subtotal	2,938		1,819		51		4,706
Total	$	12,262	$	2,250	$	156	$	14,356

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, 2016, and December 31, 2015. The seven largest unrealized investment gains in our common stock portfolio are from Exxon Mobil Corporation (NYSE:XOM), Honeywell International Incorporated (NYSE:HON), Johnson and Johnson (NYSE:JNJ), The Procter & Gamble Company (NYSE:PG), Hasbro Incorporated (Nasdaq:HAS), 3M Co (NYSE:MMM) and BlackRock Inc. (NYSE:BLK), which had a combined gross unrealized gain of $647 million. At June 30, 2016, Johnson and Johnson was our largest single common stock holding with a fair value of $153 million, which was 3.0 percent of our publicly traded common stock portfolio and 1.0 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, 2016	Fair value		Unrealized losses		Fair value		Unrealized losses		Fair value		Unrealized losses
Fixed maturity securities:
Corporate	$	252	$	9	$	258	$	18	$	510	$	27
States, municipalities and political subdivisions	2		—		1		—		3		—
Commercial mortgage-backed	5		—		9		—		14		—
Government-sponsored enterprises	20		—		—		—		20		—
Subtotal	279		9		268		18		547		27
Equity securities:
Common equities	546		65		—		—		546		65
Nonredeemable preferred equities	19		—		18		—		37		—
Subtotal	565		65		18		—		583		65
Total	$	844	$	74	$	286	$	18	$	1,130	$	92
At December 31, 2015
Fixed maturity securities:
Corporate	$	1,099	$	63	$	133	$	33	$	1,232	$	96
States, municipalities and political subdivisions	47		1		22		—		69		1
Commercial mortgage-backed	103		2		2		—		105		2
Government-sponsored enterprises	100		2		127		4		227		6
Subtotal	1,349		68		284		37		1,633		105
Equity securities:
Common equities	270		51		—		—		270		51
Nonredeemable preferred equities	35		—		—		—		35		—
Subtotal	305		51		—		—		305		51
Total	$	1,654	$	119	$	284	$	37	$	1,938	$	156

Contractual maturity dates for fixed-maturity investments were:



(Dollars in millions)	Amortized cost		Fair value		% of fair value
At June 30, 2016	Amortized cost		Fair value		% of fair value
Maturity dates:
Due in one year or less	$	446	$	454	4.5	%
Due after one year through five years	3,046		3,273		32.3
Due after five years through ten years	3,708		3,896		38.4
Due after ten years	2,318		2,515		24.8
Total	$	9,518	$	10,138	100.0	%

Actual maturities may differ from contractual maturities when there is a right to call or prepay obligations with or without call or prepayment penalties.

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,
	2016			2015			2016			2015
Investment income:
Interest	$	110		$	106		$	219		$	211
Dividends	41			35			78			71
Other	—			1			1			1
Total	151			142			298			283
Less investment expenses	2			2			4			4
Total	$	149		$	140		$	294		$	279

Realized investment gains and losses summary:
Fixed maturities:
Gross realized gains	$	4		$	7		$	7		$	10
Gross realized losses	—			—			(1		)	—
Other-than-temporary impairments	—			(3		)	(2		)	(3		)
Equity securities:
Gross realized gains	38			56			100			100
Gross realized losses	—			—			(1		)	(1		)
Other-than-temporary impairments	—			(1		)	—			(1		)
Other	2			1			2			2
Total	$	44		$	60		$	105		$	107

Change in unrealized investment gains and losses:
Fixed maturities	$	178		$	(184	)	$	294		$	(138	)
Equity securities	111			(135		)	285			(224		)
Less income taxes	(103		)	112			(203		)	127
Total	$	186		$	(207	)	$	376		$	(235	)

During the three months ended June 30, 2016, there were no equity securities and two new fixed-maturity securities other-than-temporarily impaired. During the six months ended June 30, 2016, there were no equity securities and four 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, 2016 and 2015. At June 30, 2016, 53 fixed-maturity investments with a total unrealized loss of $18 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. At June 30, 2016, two equity investments with a total unrealized loss of less than $1 million had been in an unrealized loss position for 12 months or more. Of that total, no equity investments had fair values below 70 percent of amortized cost.

During 2015, we other-than-temporarily impaired 20 securities. At December 31, 2015, 69 fixed-maturity investments with a total unrealized loss of $37 million had been in an unrealized loss position for 12 months or more. Of that total, five fixed-maturity investments had fair values below 70 percent of amortized cost. There were no equity security investments in an unrealized loss position for 12 months or more as of December 31, 2015.