INVESTMENT SECURITIES

Investment securities classified as current and long-term were as follows at June 30, 2018 and December 31, 2017, respectively:



	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(in millions)
June 30, 2018
U.S. Treasury and other U.S. government corporations and agencies:
U.S. Treasury and agency obligations	$	631	$	—	$	(4	)	$	627
Mortgage-backed securities	2,327		—		(69		)	2,258
Tax-exempt municipal securities	3,045		3		(49		)	2,999
Mortgage-backed securities:
Residential	17		—		—			17
Commercial	533		—		(16		)	517
Asset-backed securities	574		1		(2		)	573
Corporate debt securities	2,946		2		(96		)	2,852
Total debt securities	$	10,073	$	6	$	(236	)	$	9,843

December 31, 2017
U.S. Treasury and other U.S. government corporations and agencies:
U.S. Treasury and agency obligations	$	532	$	1	$	(2	)	$	531
Mortgage-backed securities	1,625		4		(19		)	1,610
Tax-exempt municipal securities	3,884		33		(28		)	3,889
Mortgage-backed securities:
Residential	26		—		—			26
Commercial	455		3		(2		)	456
Asset-backed securities	407		1		—			408
Corporate debt securities	5,175		244		(37		)	5,382
Total debt securities	$	12,104	$	286	$	(88	)	$	12,302

Gross unrealized losses and fair values aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position were as follows at June 30, 2018 and December 31, 2017, respectively:



	Less than 12 months					12 months or more					Total
	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
	(in millions)
June 30, 2018
U.S. Treasury and other U.S. government corporations and agencies:
U.S. Treasury and agency obligations	$	437	$	(2	)	$	114	$	(2	)	$	551	$	(4	)
Mortgage-backed securities	1,596		(40		)	583		(29		)	2,179		(69		)
Tax-exempt municipal securities	2,245		(34		)	456		(15		)	2,701		(49		)
Mortgage-backed securities:
Residential	16		—			1		—			17		—
Commercial	457		(14		)	27		(2		)	484		(16		)
Asset-backed securities	334		(2		)	4		—			338		(2		)
Corporate debt securities	2,037		(62		)	533		(34		)	2,570		(96		)
Total debt securities	$	7,122	$	(154	)	$	1,718	$	(82	)	$	8,840	$	(236	)

December 31, 2017
U.S. Treasury and other U.S. government corporations and agencies:
U.S. Treasury and agency obligations	$	273	$	(1	)	$	130	$	(1	)	$	403	$	(2	)
Mortgage-backed securities	581		(2		)	672		(17		)	1,253		(19		)
Tax-exempt municipal securities	1,590		(16		)	661		(12		)	2,251		(28		)
Mortgage-backed securities:
Residential	20		—			3		—			23		—
Commercial	131		(1		)	28		(1		)	159		(2		)
Asset-backed securities	107		—			10		—			117		—
Corporate debt securities	1,297		(10		)	804		(27		)	2,101		(37		)
Total debt securities	$	3,999	$	(30	)	$	2,308	$	(58	)	$	6,307	$	(88	)

Approximately 98% of our debt securities were investment-grade quality, with a weighted average credit rating of AA+ by Standard & Poor's Rating Service, or S&P, at June 30, 2018. Most of the debt securities that were below investment-grade were rated BB, the higher end of the below investment-grade rating scale. Tax-exempt municipal securities were diversified among general obligation bonds of states and local municipalities in the United States as well as special revenue bonds issued by municipalities to finance specific public works projects such as utilities, water and sewer, transportation, or education. Our general obligation bonds are diversified across the United States with no individual state exceeding 9%. In addition, 2% of our tax-exempt securities were insured by bond insurers and had an equivalent weighted average S&P credit rating of AA exclusive of the bond insurers’ guarantee. Our investment policy limits investments in a single issuer and requires diversification among various asset types.

Our unrealized losses from all securities were generated from approximately 1,180 positions out of a total of approximately 1,480 positions at June 30, 2018. All issuers of securities we own that were trading at an unrealized loss at June 30, 2018 remain current on all contractual payments. After taking into account these and other factors previously described, we believe these unrealized losses primarily were caused by an increase in market interest rates in the current markets since the time the securities were purchased. At June 30, 2018, we did not intend to sell the securities with an unrealized loss position in accumulated other comprehensive income, and it is not likely that we will be required to sell these securities before recovery of their amortized cost basis. As a result, we believe that the securities with an unrealized loss were not other-than-temporarily impaired at June 30, 2018.

The detail of realized gains (losses) related to investment securities and included within investment income was as follows for the three and six months ended June 30, 2018 and 2017:



	Three months ended June 30,						Six months ended June 30,
	2018			2017			2018			2017
	(in millions)
Gross realized gains	$	63		$	4		$	94		$	31
Gross realized losses	(10		)	(2		)	(12		)	(3		)
Net realized capital gains	$	53		$	2		$	82		$	28

There were no material other-than-temporary impairments for the three and six months ended June 30, 2018 or 2017.

The contractual maturities of debt securities available for sale at June 30, 2018, regardless of their balance sheet classification, are shown below. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.



	Amortized Cost		Fair Value
	(in millions)
Due within one year	$	722	$	720
Due after one year through five years	3,016		2,964
Due after five years through ten years	2,100		2,022
Due after ten years	784		772
Mortgage and asset-backed securities	3,451		3,365
Total debt securities	$	10,073	$	9,843