NOTE 3. INVESTMENT SECURITIES

All of our debt securities are classified as available-for-sale and substantially all are investment-grade debt securities supporting obligations to annuitants and policyholders in our run-off insurance operations. All of our equity securities have readily determinable fair values and changes in fair value are recorded to earnings.



	March 31, 2019									December 31, 2018
(In millions)	Amortized cost		Gross unrealized gains		Gross unrealized losses (a)			Estimated fair value (b)		Amortized cost		Gross unrealized gains		Gross unrealized losses (a)			Estimated fair value (b)

Debt
U.S. corporate	$	21,390	$	2,903	$	(71	)	$	24,222	$	21,306	$	2,257	$	(357	)	$	23,206
Non-U.S. corporate	1,848		96		(12		)	1,932		1,906		53		(76		)	1,883
State and municipal	3,136		455		(37		)	3,555		3,320		367		(54		)	3,633
Mortgage and asset-backed	3,184		75		(15		)	3,244		3,325		51		(54		)	3,322
Government and agencies	1,604		79		(1		)	1,682		1,603		63		(20		)	1,645
Equity(a)	3,639		—		—			3,639		146		—		—			146
Total	$	34,802	$	3,608	$	(134	)	$	38,275	$	31,605	$	2,792	$	(561	)	$	33,835


(a)	Primarily comprises interest in Wabtec that was received as consideration from the merger of our Transportation business with Wabtec as described in Note 2. Net unrealized gains (losses) recorded to earnings for equity securities were $19 million and $(29) million for the three months ended March 31, 2019 and 2018, respectively.

At March 31, 2019 estimated fair values have increased primarily due to our interest in Wabtec and decreases in market yields since December 31, 2018. Total pre-tax, other-than-temporary impairments on debt securities recognized in earnings were $35 million and zero for the three months ended March 31, 2019 and 2018, respectively.

Gross unrealized losses of $(18) million and $(116) million are associated with securities with a fair value of $1,756 million and $3,416 million that have been in a loss position for less than 12 months and 12 months or more, respectively, at March 31, 2019. Gross unrealized losses of $(310) million and $(251) million of gross unrealized losses are associated with securities with a fair value of $7,231 million and $3,856 million that have been in a loss position for less than 12 months and 12 months or more, respectively, at December 31, 2018. Unrealized losses are not indicative of the amount of credit loss that would be recognized and we presently do not intend to sell these debt securities until anticipated recovery of our amortized cost.

Investments with a fair value of $4,431 million and $4,301 million were classified within Level 3 (significant inputs to the valuation model are unobservable) at March 31, 2019 and December 31, 2018, respectively. During the three months ended March 31, 2019 and 2018, there were no significant transfers into or out of Level 3. The remaining investments are substantially all classified within Level 2 (determined based on significant observable inputs).



CONTRACTUAL MATURITIES OF INVESTMENT IN AVAILABLE-FOR-SALE DEBT SECURITIES (EXCLUDING MORTGAGE AND ASSET-BACKED SECURITIES) (In millions)	Amortized cost		Estimated fair value

Due(a)
Within one year	$	434	$	436
After one year through five years	2,957		3,092
After five years through ten years	6,117		6,741
After ten years	18,532		21,195


(a)	We expect actual maturities to differ from contractual maturities because borrowers have the right to call or prepay certain obligations.

Although we generally do not have the intent to sell any specific securities at the end of the period, in the ordinary course of managing our debt securities portfolio, we may sell securities prior to their maturities for a variety of reasons, including diversification, credit quality, yield and liquidity requirements and the funding of claims and obligations to policyholders. Proceeds from investment securities sales and early redemptions by issuers totaled $1,421 million and $322 million in the three months ended March 31, 2019 and 2018, respectively. Gross realized gains on investment securities were $44 million and $16 million, and gross realized losses were $(39) million and $(1) million in the three months ended March 31, 2019 and 2018, respectively.

In addition to the equity securities described above, we hold $1,115 million and $1,085 million of equity securities without readily determinable fair value at March 31, 2019 and December 31, 2018, respectively that are classified within "All other assets". We recognize these assets at cost and have recorded insignificant fair value increases, net of impairment, for the three months ended March 31, 2019 and 2018, respectively and cumulatively based on observable transactions for securities owned as of March 31, 2019.