Investments

On January 1, 2018, we adopted ASU 2016-01, which resulted in changes in the fair value of equity securities still held, being reported in net income instead of being reported in other comprehensive income. See Note 1, Accounting Policies, for additional discussion.

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, 2018	Cost or amortized cost		gains		losses		Fair value
Fixed maturity securities:
Corporate	$	5,625	$	110	$	57	$	5,678
States, municipalities and political subdivisions	4,316		78		36		4,358
Commercial mortgage-backed	283		2		4		281
Government-sponsored enterprises	277		—		8		269
United States government	41		—		1		40
Foreign government	10		—		—		10
Total	$	10,552	$	190	$	106	$	10,636
At December 31, 2017
Fixed maturity securities:
Corporate	$	5,420	$	246	$	13	$	5,653
States, municipalities and political subdivisions	4,316		155		6		4,465
Commercial mortgage-backed	280		7		1		286
Government-sponsored enterprises	257		1		4		254
United States government	31		—		—		31
Foreign government	10		—		—		10
Subtotal	10,314		409		24		10,699
Equity securities:
Common equities	2,918		3,135		14		6,039
Nonredeemable preferred equities	176		34		—		210
Subtotal	3,094		3,169		14		6,249
Total	$	13,408	$	3,578	$	38	$	16,948

The net unrealized investment gains in our fixed-maturity portfolio at June 30, 2018, 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, 2018, and December 31, 2017.

At June 30, 2018, Apple Inc. (Nasdaq:AAPL) was our largest single equity holding with a fair value of $259 million, which was 4.3 percent of our publicly traded common equities portfolio and 1.5 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
At June 30, 2018	Fair value		Unrealized losses		Fair value		Unrealized losses		Fair value		Unrealized losses
Fixed maturity securities:
Corporate	$	1,836	$	39	$	283	$	18	$	2,119	$	57
States, municipalities and political subdivisions	1,070		22		262		14		1,332		36
Commercial mortgage-backed securities	113		2		35		2		148		4
Government-sponsored enterprises	110		2		158		6		268		8
Foreign government	10		—		—		—		10		—
United States government	23		1		11		—		34		1
Total	$	3,162	$	66	$	749	$	40	$	3,911	$	106
At December 31, 2017
Fixed maturity securities:
Corporate	$	330	$	4	$	252	$	9	$	582	$	13
States, municipalities and political subdivisions	88		1		264		5		352		6
Commercial mortgage-backed	33		—		36		1		69		1
Government-sponsored enterprises	96		1		124		3		220		4
Foreign government	10		—		—		—		10		—
United States government	23		—		6		—		29		—
Subtotal	580		6		682		18		1,262		24
Equity securities:
Common equities	229		14		—		—		229		14
Subtotal	229		14		—		—		229		14
Total	$	809	$	20	$	682	$	18	$	1,491	$	38

Contractual maturity dates for fixed-maturity investments were:



(Dollars in millions)	Amortized cost		Fair value		% of fair value
At June 30, 2018	Amortized cost		Fair value		% of fair value
Maturity dates:
Due in one year or less	$	720	$	733	6.9	%
Due after one year through five years	2,745		2,781		26.1
Due after five years through ten years	3,630		3,641		34.3
Due after ten years	3,457		3,481		32.7
Total	$	10,552	$	10,636	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 and investment gains and losses, net:



(Dollars in millions)	Three months ended June 30,						Six months ended June 30,
	2018			2017			2018			2017
Investment income:
Interest	$	112		$	111		$	222		$	222
Dividends	44			42			86			81
Other	1			1			2			2
Total	157			154			310			305
Less investment expenses	3			3			6			5
Total	$	154		$	151		$	304		$	300

Investment gains and losses, net:
Equity securities:
Investment gains and losses on securities sold, net	$	4		$	—		$	7		$	—
Unrealized gains and losses on securities still held, net	101			—			(97		)	—
Gross realized gains	—			6			—			159
Gross realized losses	—			(10		)	—			(14		)
Other-than-temporary impairments	—			(3		)	—			(3		)
Subtotal	105			(7		)	(90		)	142
Fixed maturities:
Gross realized gains	3			3			7			13
Gross realized losses	(1		)	—			(1		)	—
Other-than-temporary impairments	—			(6		)	—			(6		)
Subtotal	2			(3		)	6			7

Other	(2		)	(1		)	(2		)	—
Total	$	105		$	(11	)	$	(86	)	$	149

During the three and six months ended June 30, 2018, there were no fixed-maturity securities other-than-temporarily impaired. 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, 2018 and 2017.

At June 30, 2018, 263 fixed-maturity securities with a total unrealized loss of $40 million had been in an unrealized loss position for 12 months or more. Of that total, no fixed-maturity security had a fair value below 70 percent of amortized cost. At December 31, 2017, 249 fixed-maturity securities 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 securities had fair values below 70 percent of amortized cost. There were no equity securities in an unrealized loss position for 12 months or more as of December 31, 2017.