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 September 30, 2017			gains		losses		Fair value
Fixed maturity securities:
Corporate	$	5,514	$	280	$	11	$	5,783
States, municipalities and political subdivisions	4,103		144		13		4,234
Commercial mortgage-backed	280		8		—		288
Government-sponsored enterprises	207		—		3		204
United States government	16		—		—		16
Foreign government	10		—		—		10
Convertibles and bonds with warrants attached	5		—		—		5
Subtotal	10,135		432		27		10,540
Equity securities:
Common equities	3,084		2,762		38		5,808
Nonredeemable preferred equities	180		37		—		217
Subtotal	3,264		2,799		38		6,025
Total	$	13,399	$	3,231	$	65	$	16,565
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 September 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 September 30, 2017, and December 31, 2016. At September 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), Apple Inc. (Nasdaq:AAPL), Blackrock Inc. (Nasdaq:BLK), Microsoft Corporation (Nasdaq:MSFT), Johnson & Johnson (NYSE:JNJ) and 3M Company (NYSE:MMM), which had a combined gross unrealized gain of $864 million. At September 30, 2017, Apple Inc. was our largest single equity holding with a fair value of $216 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 September 30, 2017	Fair value		Unrealized losses		Fair value		Unrealized losses		Fair value		Unrealized losses
Fixed maturity securities:
Corporate	$	231	$	4	$	193	$	7	$	424	$	11
States, municipalities and political subdivisions	508		8		122		5		630		13
Commercial mortgage-backed securities	43		—		3		—		46		—
Government-sponsored enterprises	152		3		43		—		195		3
United States government	7		—		—		—		7		—
Subtotal	941		15		361		12		1,302		27
Equity securities:
Common equities	276		38		—		—		276		38
Subtotal	276		38		—		—		276		38
Total	$	1,217	$	53	$	361	$	12	$	1,578	$	65
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 September 30, 2017	Amortized cost		Fair value		% of fair value
Maturity dates:
Due in one year or less	$	674	$	686	6.5	%
Due after one year through five years	2,668		2,803		26.6
Due after five years through ten years	3,853		4,009		38.0
Due after ten years	2,940		3,042		28.9
Total	$	10,135	$	10,540	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 September 30,						Nine months ended September 30,
	2017			2016			2017			2016
Investment income:
Interest	$	112		$	111		$	334		$	330
Dividends	43			39			124			117
Other	1			1			3			2
Total	156			151			461			449
Less investment expenses	3			3			8			7
Total	$	153		$	148		$	453		$	442

Realized investment gains and losses:
Fixed maturities:
Gross realized gains	$	3		$	10		$	16		$	17
Gross realized losses	—			—			—			(1		)
Other-than-temporary impairments	—			—			(6		)	(2		)
Equity securities:
Gross realized gains	1			47			160			147
Gross realized losses	—			—			(14		)	(1		)
Other-than-temporary impairments	—			—			(3		)	—
Other	3			(1		)	3			1
Total	$	7		$	56		$	156		$	161

Change in unrealized investment gains and losses:
Fixed maturities	$	9		$	(20	)	$	119		$	274
Equity securities	180			82			422			367
Income tax provision	(66		)	(21		)	(189		)	(224		)
Total	$	123		$	41		$	352		$	417

During the three months ended September 30, 2017, there were no equity securities and no fixed-maturity securities other-than-temporarily impaired. During the nine months ended September 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 nine months ended September 30, 2017 and 2016.

At September 30, 2017, 94 fixed-maturity investments with a total unrealized loss of $12 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 September 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.