INVESTMENTS

Investments in debt and marketable securities, other than investments accounted for under the equity method, are classified as trading, available-for-sale or held-to-maturity. Our marketable equity investments are classified as either trading or available-for-sale with their cost basis determined by the specific identification method. Our investments in debt securities are carried at either amortized cost or fair value. Investments in debt securities that the Company has the positive intent and ability to hold to maturity are carried at amortized cost and classified as held-to-maturity. Investments in debt securities that are not classified as held-to-maturity are carried at fair value and classified as either trading or available-for-sale. Realized and unrealized gains and losses on trading securities and realized gains and losses on available-for-sale securities are included in net income. Unrealized gains and losses, net of deferred taxes, on available-for-sale securities are included in our consolidated balance sheets as a component of AOCI, except for the change in fair value attributable to the currency risk being hedged. Refer to Note 5 for additional information related to the Company's fair value hedges of available-for-sale securities.

Trading Securities

As of December 31, 2014 and 2013, our trading securities had a fair value of $409 million and $372 million, respectively, and consisted primarily of equity securities. The Company had net unrealized gains on trading securities of $40 million, $12 million, and $19 million as of December 31, 2014, 2013 and 2012, respectively.

The Company's trading securities were included in the following line items in our consolidated balance sheets (in millions):



December 31,	2014		2013
Marketable securities	$	315	$	286
Other assets	94		86
Total trading securities	$	409	$	372

Available-for-Sale and Held-to-Maturity Securities

As of December 31, 2014 and 2013, the Company did not have any held-to-maturity securities. Available-for-sale securities consisted of the following (in millions):



			Gross Unrealized						Estimated Fair Value
	Cost		Gains		Losses				Estimated Fair Value
2014
Available-for-sale securities:¹
Equity securities	$	2,687	$	1,463	$	(29	)		$	4,121
Debt securities	3,796		68		(106		)	²	3,758
	$	6,483	$	1,531	$	(135	)		$	7,879
2013
Available-for-sale securities:¹
Equity securities	$	1,097	$	373	$	(17	)		$	1,453
Debt securities	3,388		24		(23		)		3,389
	$	4,485	$	397	$	(40	)		$	4,842


¹	Refer to Note 16 for additional information related to the estimated fair value.

² Includes $101 million recognized in the consolidated income statement line item other income (loss) — net during the year ended December 31, 2014. The amount was primarily offset by changes in the fair value of foreign currency contracts designated as fair value hedges. Refer to Note 5 for additional information.

The sale and/or maturity of available-for-sale securities resulted in the following activity (in millions):



Year Ended December 31,	2014			2013			2012
Gross gains	$	38		$	12		$	41
Gross losses	(21		)	(24		)	(35		)
Proceeds	4,157			4,212			5,036

In 2014 and 2013, the Company had investments classified as available-for-sale securities in which our cost basis exceeded the fair value of our investment. Management assessed each of these investments on an individual basis to determine if the decline in fair value was other than temporary. Management's assessment as to the nature of a decline in fair value is based on, among other things, the length of time and the extent to which the market value has been less than our cost basis; the financial condition and near-term prospects of the issuer; and our intent and ability to retain the investment for a period of time sufficient to allow for any anticipated recovery in market value. As a result of these assessments, management determined that the decline in fair value of these investments was not other than temporary and did not record any impairment charges.

The Company uses insurance captives to reinsure group annuity insurance contracts that cover the pension obligations of certain of our European and Canadian pension plans. In accordance with local insurance regulations, our insurance captive is required to meet and maintain minimum solvency capital requirements. The Company elected to invest its solvency capital in a portfolio of available-for-sale securities, which have been classified in the line item other assets in our consolidated balance sheets because the assets are not available to satisfy our current obligations. As of December 31, 2014, and December 31, 2013, the Company's available-for-sale securities included solvency capital funds of $836 million and $667 million, respectively.

In 2014 and 2013, the Company did not have any held-to-maturity securities. The Company's available-for-sale securities were included in the following line items in our consolidated balance sheets (in millions):



December 31,	2014		2013
Cash and cash equivalents	$	43	$	245
Marketable securities	3,350		2,861
Other investments	3,512		958
Other assets	974		778
	$	7,879	$	4,842

The contractual maturities of these investments as of December 31, 2014, were as follows (in millions):



	Available-for-Sale Securities
	Cost		Fair Value
Within 1 year	$	1,589	$	1,489
After 1 year through 5 years	1,709		1,747
After 5 years through 10 years	118		130
After 10 years	380		392
Equity securities	2,687		4,121
	$	6,483	$	7,879

The Company expects that actual maturities may differ from the contractual maturities above because borrowers have the right to call or prepay certain obligations.

Cost Method Investments

Cost method investments are initially recorded at cost, and we record dividend income when applicable dividends are declared. Cost method investments are reported as other investments in our consolidated balance sheets, and dividend income from cost method investments is reported in other income (loss) — net in our consolidated statements of income. We review all of our cost method investments quarterly to determine if impairment indicators are present; however, we are not required to determine the fair value of these investments unless impairment indicators exist. When impairment indicators exist, we generally use discounted cash flow analyses to determine the fair value. We estimate that the fair values of our cost method investments approximated or exceeded their carrying values as of December 31, 2014 and 2013. Our cost method investments had a carrying value of $166 million and $162 million as of December 31, 2014 and 2013, respectively.