Investments

9 Months Ended

Sep. 30, 2019

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



(Dollars in millions)	Amortized cost		Gross unrealized				Fair value
At September 30, 2019	Amortized cost		gains		losses		Fair value
Fixed maturity securities:
Corporate	$	6,108	$	315	$	13	$	6,410
States, municipalities and political subdivisions	4,322		268		—		4,590
Commercial mortgage-backed	290		15		—		305
Government-sponsored enterprises	162		—		—		162
United States government	106		3		—		109
Foreign government	24		—		—		24
Total	$	11,012	$	601	$	13	$	11,600
At December 31, 2018
Fixed maturity securities:
Corporate	$	5,712	$	85	$	87	$	5,710
States, municipalities and political subdivisions	4,251		84		31		4,304
Commercial mortgage-backed	287		3		2		288
Government-sponsored enterprises	316		1		7		310
United States government	67		1		1		67
Foreign government	10		—		—		10
Total	$	10,643	$	174	$	128	$	10,689

The net unrealized investment gains in our fixed-maturity portfolio at September 30, 2019, are primarily due to a decrease in interest rates. Our commercial mortgage-backed securities had an average rating of Aa1/AA at September 30, 2019, and December 31, 2018. At September 30, 2019, Microsoft Corporation (Nasdaq:MSFT) was our largest single equity holding with a fair value of $349 million, which was 5.0% of our publicly traded common equities portfolio and 1.9% 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 September 30, 2019	Fair value		Unrealized losses		Fair value		Unrealized losses		Fair value		Unrealized losses
Fixed maturity securities:
Corporate	$	254	$	4	$	198	$	9	$	452	$	13
States, municipalities and political subdivisions	9		—		13		—		22		—
Government-sponsored enterprises	19		—		78		—		97		—
United States government	5		—		4		—		9		—
Foreign government	12		—		—		—		12		—
Total	$	299	$	4	$	293	$	9	$	592	$	13
At December 31, 2018
Fixed maturity securities:
Corporate	$	2,082	$	51	$	501	$	36	$	2,583	$	87
States, municipalities and political subdivisions	823		18		340		13		1,163		31
Commercial mortgage-backed	77		—		64		2		141		2
Government-sponsored enterprises	49		1		211		6		260		7
United States government	—		—		33		1		33		1
Total	$	3,031	$	70	$	1,149	$	58	$	4,180	$	128

Contractual maturity dates for fixed-maturities investments were:



(Dollars in millions)	Amortized cost		Fair value		% of fair value
At September 30, 2019	Amortized cost		Fair value		% of fair value
Maturity dates:
Due in one year or less	$	470	$	475	4.1	%
Due after one year through five years	3,058		3,165		27.3
Due after five years through ten years	3,868		4,081		35.2
Due after ten years	3,616		3,879		33.4
Total	$	11,012	$	11,600	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 September 30,						Nine months ended September 30,
	2019			2018			2019			2018
Investment income:
Interest	$	110		$	111		$	332		$	333
Dividends	50			45			146			131
Other	5			1			10			3
Total	165			157			488			467
Less investment expenses	4			3			10			9
Total	$	161		$	154		$	478		$	458

Investment gains and losses, net:
Equity securities:
Investment gains and losses on securities sold, net	$	—		$	8		$	27		$	17
Unrealized gains and losses on securities still held, net	89			450			1,084			351
Subtotal	89			458			1,111			368
Fixed maturities:
Gross realized gains	6			2			9			9
Gross realized losses	(1		)	(1		)	(3		)	(2		)
Other-than-temporary impairments	(6		)	—			(6		)	—
Subtotal	(1		)	1			—			7

Other	(2		)	(1		)	2			(3		)
Total	$	86		$	458		$	1,113		$	372

During the three and nine months ended September 30, 2019, there were two fixed-maturity securities other-than-temporarily impaired. During the three and nine months ended September 30, 2018, there were no 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 nine months ended September 30, 2019 and 2018.

At September 30, 2019, 62 fixed-maturity securities with a total unrealized loss of $9 million had been in an unrealized loss position for 12 months or more. Of that total, two fixed-maturity securities had a fair value below 70% of amortized cost. At December 31, 2018, 400 fixed-maturity securities with a total unrealized loss of $58 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% of amortized cost.