The following total realized gains and losses on investments exclude amounts required to adjust future policy benefits for the run-off settlement annuity business:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(In millions)	2014		2013		2014		2013
Fixed maturities	$	2	$	16	$	14	$	105
Equity securities		(3)		-		14		4
Commercial mortgage loans		(2)		-		(6)		(4)
Real estate		-		-		13		-
Other investments, including derivatives		26		11		95		87
Realized investment gains before income taxes		23		27		130		192
Less income taxes		8		10		45		65
Net realized investment gains	$	15	$	17	$	85	$	127

Included in the above realized investment gains (losses) before income taxes were asset write-downs as follows:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(In millions)	2014		2013		2014		2013
Credit-related (1)	$	(1)	$	-	$	(16)	$	(8)
Other		(9)		(3)		(10)		(11)
Total	$	(10)	$	(3)	$	(26)	$	(19)

(1) Credit-related losses include other-than-temporary declines in fair value of equity securities and increases in valuation reserves on commercial mortgage loans and asset write-downs related to investments in real estate entities.

The amortized cost and fair value by contractual maturity periods for fixed maturities were as follows at September 30, 2014:

		Amortized		Fair
(In millions)		Cost		Value
Due in one year or less	$	1,181	$	1,201
Due after one year through five years		5,483		5,887
Due after five years through ten years		6,669		7,020
Due after ten years		3,134		3,888
Mortgage and other asset-backed securities		704		801
Total	$	17,171	$	18,797

Actual maturities of these securities could differ from their contractual maturities used in the table above. This could occur because issuers may have the right to call or prepay obligations, with or without penalties, or because in certain cases the Company may have the option to unilaterally extend the contractual maturity date.

Gross unrealized appreciation (depreciation) on fixed maturities by type of issuer is shown below.

				Gross		Gross
				Unrealized		Unrealized
		Amortized		Appre-		Depre-		Fair
		Cost		ciation		ciation		Value
(In millions)	September 30, 2014
Federal government and agency	$	911	$	331	$	-	$	1,242
State and local government		1,768		182		(2)		1,948
Foreign government		1,759		106		(8)		1,857
Corporate		12,029		945		(25)		12,949
Federal agency mortgage-backed		12		-		-		12
Other mortgage-backed		72		3		(1)		74
Other asset-backed		620		95		-		715
Total	$	17,171	$	1,662	$	(36)	$	18,797

(In millions)	December 31, 2013
Federal government and agency	$	640	$	242	$	(2)	$	880
State and local government		1,983		167		(6)		2,144
Foreign government		1,392		64		(12)		1,444
Corporate		10,306		749		(74)		10,981
Federal agency mortgage-backed		77		-		(1)		76
Other mortgage-backed		76		3		(2)		77
Other asset-backed		799		87		(2)		884
Total	$	15,273	$	1,312	$	(99)	$	16,486

The above table includes investments with a fair value of $3.1 billion supporting the Company's run-off settlement annuity business, with gross unrealized appreciation of $687 million and gross unrealized depreciation of $3 million at September 30, 2014. Such unrealized amounts are required to support the future policy benefit liabilities of this business and, as such, are not included in accumulated other comprehensive income. At December 31, 2013, investments supporting this business had a fair value of $2.6 billion, gross unrealized appreciation of $478 million and gross unrealized depreciation of $20 million.

Included in equity securities are hybrid investments consisting of preferred stock with call features. These securities are carried at fair value with changes in fair value reported in other realized investment gains (losses) and dividends reported in net investment income. As of September 30, 2014, fair values of these securities were $58 million and amortized cost was $68 million. As of December 31, 2013, fair values of these securities were $56 million and amortized cost was $68 million.

Sales information for available-for-sale fixed maturities and equity securities was as follows:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(In millions)	2014		2013		2014		2013
Proceeds from sales	$	344	$	402	$	854	$	1,674
Gross gains on sales	$	13	$	10	$	38	$	93
Gross losses on sales	$	4	$	1	$	5	$	4

Review of declines in fair value. Management reviews fixed maturities with a decline in fair value from cost for impairment based on criteria that include:

As of September 30, 2014, fixed maturities with a decline in fair value from amortized cost (primarily corporate securities) were, by length of time of decline, as follows:

	September 30, 2014

	Fair		Amortized		Unrealized		Number
(Dollars in millions)	Value		Cost		Depreciation		of Issues
Fixed maturities:
One year or less:
Investment grade	$	1,307	$	1,321	$	(14)	276
Below investment grade	$	319	$	325	$	(6)	301
More than one year:
Investment grade	$	285	$	296	$	(11)	123
Below investment grade	$	63	$	68	$	(5)	21

The unrealized depreciation of investment grade fixed maturities is due primarily to increases in market yields since purchase. Excluding hybrid investments, there were no equity securities with a fair value significantly lower than cost as of September 30, 2014.

Mortgage loans held by the Company are made exclusively to commercial borrowers and are diversified by property type, location and borrower. Loans are generally issued at a fixed rate of interest and are secured by high quality, primarily completed and substantially leased operating properties.

Credit quality. The Company regularly evaluates and monitors credit risk, beginning with the initial underwriting of a mortgage loan and continuing throughout the investment holding period. Mortgage origination professionals employ an internal credit quality rating system designed to evaluate the relative risk of the transaction at each loan's origination that is then updated each year as part of the annual portfolio loan review. The Company evaluates and monitors credit quality on an ongoing basis, classifying each loan as a loan in good standing, potential problem loan or problem loan.

Quality ratings are based on our evaluation of a number of key inputs related to the loan, including real estate market-related factors such as rental rates and vacancies, and property-specific inputs such as growth rate assumptions and lease rollover statistics. However, the two most significant contributors to the credit quality rating are the debt service coverage and loan-to-value ratios. The debt service coverage ratio measures the amount of property cash flow available to meet annual interest and principal payments on debt, with a ratio below 1.0 indicating that there is not enough cash flow to cover the required loan payments. The loan-to-value ratio, commonly expressed as a percentage, compares the amount of the loan to the fair value of the underlying property collateralizing the loan.

The following tables summarize the credit risk profile of the Company's commercial mortgage loan portfolio based on loan-to-value and debt service coverage ratios, as of September 30, 2014 and December 31, 2013:

(In millions)				September 30, 2014
		Debt Service Coverage Ratio
		1.30x or		1.20x to		1.10x to		1.00x to		Less than
Loan-to-Value Ratios		Greater		1.29x		1.19x		1.09x		1.00x		Total
Below 50%	$	364	$	-	$	-	$	6	$	-	$	370
50% to 59%		686		55		-		-		-		741
60% to 69%		340		-		15		-		61		416
70% to 79%		68		36		33		-		80		217
80% to 89%		7		41		-		-		58		106
90% to 100%		-		-		54		-		154		208
Total	$	1,465	$	132	$	102	$	6	$	353	$	2,058

(In millions)					December 31, 2013
		Debt Service Coverage Ratio
		1.30x or		1.20x to		1.10x to		1.00x to		Less than
Loan-to-Value Ratios		Greater		1.29x		1.19x		1.09x		1.00x		Total
Below 50%	$	314	$	-	$	-	$	6	$	-	$	320
50% to 59%		581		131		-		18		-		730
60% to 69%		438		16		29		-		24		507
70% to 79%		79		113		-		-		-		192
80% to 89%		65		42		34		28		143		312
90% to 100%		-		-		58		50		83		191
Total	$	1,477	$	302	$	121	$	102	$	250	$	2,252

The Company's annual in-depth review of its commercial mortgage loan investments is the primary mechanism for identifying emerging risks in the portfolio. The most recent review was completed by the Company's investment professionals in the second quarter of 2014 and included an analysis of each underlying property's most recent annual financial statements, rent rolls, operating plans, budgets, a physical inspection of the property and other pertinent factors. Based on historical results, current leases, lease expirations and rental conditions in each market, the Company estimates the current year and future stabilized property income and fair value, and categorizes the investments as loans in good standing, potential problem loans or problem loans. Based on property valuations and cash flows estimated as part of this review, and considering updates for loans where material changes were subsequently identified, the portfolio's average loan-to-value ratio improved slightly to 62% at September 30, 2014 from 64% at December 31, 2013. The portfolio's average debt service coverage ratio was estimated to be 1.66 at September 30, 2014, a modest improvement from 1.62 at December 31, 2013.

The Company will reevaluate a loan's credit quality between annual reviews if new property information is received or an event such as delinquency or a borrower's request for restructure causes management to believe that the Company's estimate of financial performance, fair value or the risk profile of the underlying property has been impacted.

During 2013, the Company restructured its subordinate interest in two cross-collateralized pools of industrial loans totaling $31 million by extending the maturity dates and reducing the interest rates. This modification was considered a troubled debt restructuring and the loans were classified as problem mortgage loans because the borrower was experiencing financial difficulties and an interest rate concession was granted. No valuation reserves were required because the fair values of the underlying properties exceeded the carrying values of the outstanding loans.

Certain other loans were modified during the nine months ended September 30, 2014 and the twelve months ended December 31, 2013. However, these were not considered troubled debt restructures and the impact of such modifications was not material to the Company's results of operations, financial condition or liquidity.

Potential problem mortgage loans are considered current (no payment more than 59 days past due), but exhibit certain characteristics that increase the likelihood of future default. The characteristics management considers include, but are not limited to, the deterioration of debt service coverage below 1.0, estimated loan-to-value ratios increasing to 100% or more, downgrade in quality rating and requests from the borrower for restructuring. In addition, loans are considered potential problems if principal or interest payments are past due by more than 30 but less than 60 days. Problem mortgage loans are either in default by 60 days or more or have been restructured as to terms, which could include concessions on interest rate, principal payment or maturity date. The Company monitors each problem and potential problem mortgage loan on an ongoing basis, and updates the loan categorization and quality rating when warranted.

Problem and potential problem mortgage loans, net of valuation reserves, totaled $208 million at September 30, 2014 and $158 million at December 31, 2013. At September 30, 2014 and December 31, 2013, industrial loans located in the South Atlantic region represented the most significant component of problem and potential problem mortgage loans.

Impaired commercial mortgage loans. A commercial mortgage loan is considered impaired when it is probable that the Company will not collect all amounts due (principal and interest) according to the terms of the original loan agreement. These loans are included in either problem or potential problem loans. The Company assesses each loan individually for impairment, using the information obtained from the quality review process discussed above. Impaired loans are carried at the lower of unpaid principal balance or the fair value of the underlying real estate. In some cases when it is probable that the Company will not collect the interest due under the original agreements, the loan will be considered impaired but a related valuation reserve will not be recorded because the fair value of the underlying real estate is higher than the remaining carrying value of the loan.

The carrying value of the Company's impaired commercial mortgage loans and related valuation reserves were as follows:

(In millions)		September 30, 2014					December 31, 2013
		Gross		Reserves		Net		Gross		Reserves		Net
Impaired commercial mortgage loans with valuation reserves	$	147	$	(12)	$	135	$	89	$	(8)	$	81
Impaired commercial mortgage loans with no valuation reserves		31		-		31		31		-		31
Total	$	178	$	(12)	$	166	$	120	$	(8)	$	112

The average recorded investment in impaired loans was $149 million during the nine months ended September 30, 2014 and $128 million during the nine months ended September 30, 2013. Because of the risk profile of the underlying investment, the Company recognizes interest income on problem mortgage loans only when payment is actually received. Interest income that would have been reflected in net income if interest on non-accrual commercial mortgage loans had been received in accordance with the original terms was not significant for the nine months ended September 30, 2014 or 2013. Interest income on impaired commercial mortgage loans was not significant for the nine months ended September 30, 2014 or 2013.

The following table summarizes the changes in valuation reserves for commercial mortgage loans:

Short-term investments and cash equivalents include corporate securities of $661 million, federal government securities of $154 million and money market funds of $45 million as of September 30, 2014. The Company's short-term investments and cash equivalents as of December 31, 2013 included corporate securities of $2.2 billion, federal government securities of $323 million and money market funds of $35 million.