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 June 30, 2017			gains		losses		Fair value
Fixed maturity securities:
Corporate	$	5,530	$	281	$	14	$	5,797
States, municipalities and political subdivisions	4,029		142		17		4,154
Commercial mortgage-backed	282		8		1		289
Government-sponsored enterprises	235		—		3		232
United States government	15		—		—		15
Foreign government	10		—		—		10
Convertibles and bonds with warrants attached	5		—		—		5
Subtotal	10,106		431		35		10,502
Equity securities:
Common equities	3,038		2,559		16		5,581
Nonredeemable preferred equities	180		38		—		218
Subtotal	3,218		2,597		16		5,799
Total	$	13,324	$	3,028	$	51	$	16,301
At December 31, 2016
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
United States government	10		—		—		10
Foreign 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

The net unrealized investment gains in our fixed-maturity portfolio at June 30, 2017, 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, 2017 and December 31, 2016. At June 30, 2017, the seven largest unrealized investment gains in our common stock portfolio are from Honeywell International Incorporated (NYSE:HON), JP Morgan Chase & Co. (NYSE:JPM), Hasbro Inc. (Nasdaq:HAS), Blackrock Inc. (Nasdaq: BLK), Apple Inc. (Nasdaq:AAPL), Johnson & Johnson (NYSE:JNJ) and Microsoft Corporation (Nasdaq: MSFT), which had a combined gross unrealized gain of $829 million. At June 30, 2017, JP Morgan Chase & Co. was our largest single equity holding with a fair value of $206 million, which was 3.7 percent of our publicly traded common equities portfolio and 1.3 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, 2017	Fair value		Unrealized losses		Fair value		Unrealized losses		Fair value		Unrealized losses
Fixed maturity securities:
Corporate	$	290	$	8	$	136	$	6	$	426	$	14
States, municipalities and political subdivisions	665		17		2		—		667		17
Commercial mortgage-backed securities	53		1		3		—		56		1
Government-sponsored enterprises	190		3		—		—		190		3
United States government	7		—		—		—		7		—
Subtotal	1,205		29		141		6		1,346		35
Equity securities:
Common equities	354		16		—		—		354		16
Subtotal	354		16		—		—		354		16
Total	$	1,559	$	45	$	141	$	6	$	1,700	$	51
At December 31, 2016
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

Contractual maturity dates for fixed-maturity investments were:



(Dollars in millions)	Amortized cost		Fair value		% of fair value
At June 30, 2017	Amortized cost		Fair value		% of fair value
Maturity dates:
Due in one year or less	$	699	$	714	6.8	%
Due after one year through five years	2,690		2,830		26.9
Due after five years through ten years	3,822		3,970		37.8
Due after ten years	2,895		2,988		28.5
Total	$	10,106	$	10,502	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:



(Dollars in millions)	Three months ended June 30,						Six months ended June 30,
	2017			2016			2017			2016
Investment income:
Interest	$	111		$	110		$	222		$	219
Dividends	42			41			81			78
Other	1			—			2			1
Total	154			151			305			298
Less investment expenses	3			2			5			4
Total	$	151		$	149		$	300		$	294

Realized investment gains and losses:
Fixed maturities:
Gross realized gains	$	3		$	4		$	13		$	7
Gross realized losses	—			—			—			(1		)
Other-than-temporary impairments	(6		)	—			(6		)	(2		)
Equity securities:
Gross realized gains	6			38			159			100
Gross realized losses	(10		)	—			(14		)	(1		)
Other-than-temporary impairments	(3		)	—			(3		)	—
Other	(1		)	2			—			2
Total	$	(11	)	$	44		$	149		$	105

Change in unrealized investment gains and losses:
Fixed maturities	$	76		$	178		$	110		$	294
Equity securities	145			111			242			285
Income tax (provision) benefit	(77		)	(103		)	(123		)	(203		)
Total	$	144		$	186		$	229		$	376

During the three and six months ended June 30, 2017, there were five equity securities and one fixed-maturity security 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, 2017 and 2016.

At June 30, 2017, 23 fixed-maturity investments with a total unrealized loss of $6 million had been in an unrealized loss position for 12 months or more. Of that total, no fixed-maturity investment had a fair value below 70 percent of amortized cost. At June 30, 2017, no equity investment had been in an unrealized loss position for 12 months or more. There were no equity investments with a fair value below 70 percent of amortized cost. 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. There were no equity investments with a fair value below 70 percent of amortized cost at December 31, 2016.