Investments

The following table provides cost or amortized cost, gross unrealized gains, gross unrealized losses and fair value for our fixed-maturity and equity securities:



(Dollars in millions)	Cost or amortized cost		Gross unrealized				Fair value
At December 31, 2016	Cost or amortized cost		gains		losses		Fair value
Fixed-maturity securities:
Corporate	$	5,555	$	252	$	26	$	5,781
States, municipalities and political subdivisions	3,770		100		42		3,828
Commercial mortgage-backed	282		7		2		287
Government-sponsored enterprises	167		—		3		164
Foreign government	10		—		—		10
United States government	10		—		—		10
Convertibles and bonds with warrants attached	5		—		—		5
Subtotal	9,799		359		73		10,085
Equity securities:
Common equities	2,812		2,320		9		5,123
Nonredeemable preferred equities	183		28		—		211
Subtotal	2,995		2,348		9		5,334
Total	$	12,794	$	2,707	$	82	$	15,419

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 at December 31, 2016, 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 December 31, 2016 and 2015. The seven largest net unrealized investment gains in our common stock portfolio are from JP Morgan Chase & Co. (NYSE:JPM), Exxon Mobil Corporation (NYSE:XOM), Honeywell International Incorporated (NYSE:HON), BlackRock Inc. (NYSE:BLK), Microsoft Corporation (Nasdaq:MFST), Johnson and Johnson (NYSE:JNJ), and The Procter & Gamble Company (NYSE:PG), which had a combined gross unrealized gain of $698 million. At December 31, 2016, JP Morgan Chase & Co. was our largest single equity holding with a fair value of 3.8 percent of our publicly traded common equities portfolio and 1.3 percent of the total investment portfolio.

The table below provides fair values and 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
At December 31, 2016	Fair value		Unrealized losses		Fair value		Unrealized losses		Fair value		Unrealized losses
Fixed-maturity securities:
Corporate	$	733	$	15	$	189	$	11	$	922	$	26
States, municipalities and political subdivisions	989		42		—		—		989		42
Commercial mortgage-backed	89		2		2		—		91		2
Government-sponsored enterprises	155		3		—		—		155		3
United States government	6		—		—		—		6		—
Subtotal	1,972		62		191		11		2,163		73
Equity securities:
Common equities	103		9		—		—		103		9
Nonredeemable preferred equities	4		—		—		—		4		—
Subtotal	107		9		—		—		107		9
Total	$	2,079	$	71	$	191	$	11	$	2,270	$	82
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 December 31, 2016	Amortized cost		Fair value		% of fair value
Maturity dates:
Due in one year or less	$	462	$	469	4.6	%
Due after one year through five years	2,974		3,135		31.1
Due after five years through ten years	3,850		3,941		39.1
Due after ten years	2,513		2,540		25.2
Total	$	9,799	$	10,085	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.

At December 31, 2016, fixed-maturity investments with amortized cost of $70 million and fair value of $72 million were on deposit with various states in compliance with regulatory requirements. At December 31, 2015,

fixed-maturity investments with amortized cost of $74 million and fair value of $77 million were on deposit with various states in compliance with regulatory requirements.

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



(Dollars in millions)	Years ended December 31,
	2016			2015			2014
Investment income:
Interest	$	440		$	428		$	417
Dividends	161			150			138
Other	3			3			2
Total	604			581			557
Less investment expenses	9			9			8
Total	$	595		$	572		$	549

Realized investment gains and losses:
Fixed maturities:
Gross realized gains	$	26		$	18		$	21
Gross realized losses	(1		)	—			(3		)
Other-than-temporary impairments	(2		)	(18		)	(15		)
Equity securities:
Gross realized gains	152			129			136
Gross realized losses	(53		)	(26		)	—
Other-than-temporary impairments	—			(34		)	(9		)
Other	2			1			3
Total	$	124		$	70		$	133

Change in unrealized investment gains and losses:
Fixed maturities	$	(40	)	$	(263	)	$	106
Equity securities	571			(362		)	278
Less deferred income taxes	186			(220		)	134
Total	$	345		$	(405	)	$	250

For the years ended December 31, 2016, 2015 and 2014, there were no credit losses on fixed-maturity securities for which a portion of OTTI has been recognized in other comprehensive income.

During 2016, we other-than-temporarily impaired four securities. At December 31, 2016, 32 fixed-maturity investments with a total unrealized loss of $11 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 security investments in an unrealized loss position for 12 months or more as of December 31, 2016.

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.

During 2014, we other-than-temporarily impaired six 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.