| Investments | 5 . Investments Fixed Maturity Securities Available-for-Sale Fixed Maturity Securities Available-for-Sale by Sector The following table presents the fixed maturity securities AFS by sector. U.S. corporate and foreign corporate sectors include redeemable preferred stock. Residential mortgage-backed securities (“RMBS”) includes Agency, prime, alternative and sub-prime mortgage-backed securities. Asset-backed securities (“ABS”) includes securities collateralized by corporate loans and consumer loans. Municipals includes taxable and tax-exempt revenue bonds and, to a much lesser extent, general obligations of states, municipalities and political subdivisions. Commercial mortgage-backed securities (“CMBS”) primarily includes securities collateralized by multiple properties. RMBS, ABS and CMBS are collectively, “Structured Securities.” June 30, 2019 December 31, 2018 Amortized Gross Unrealized Estimated Amortized Gross Unrealized Estimated Temporary OTTI Temporary OTTI (In millions) U.S. corporate $ 52,042 $ 5,084 $ 300 $ — $ 56,826 $ 53,927 $ 2,440 $ 1,565 $ — $ 54,802 U.S. government and agency 25,195 3,483 22 — 28,656 28,139 2,388 366 — 30,161 Foreign corporate 27,852 1,787 694 — 28,945 26,592 674 1,303 — 25,963 RMBS 22,187 1,261 76 (36 ) 23,408 22,186 831 305 (25 ) 22,737 ABS 9,449 52 49 — 9,452 8,599 40 112 — 8,527 Municipals 5,983 1,390 — — 7,373 6,070 907 30 — 6,947 CMBS 5,396 222 16 — 5,602 5,471 48 75 — 5,444 Foreign government 4,242 641 43 — 4,840 4,191 408 107 — 4,492 Total fixed maturity securities AFS $ 152,346 $ 13,920 $ 1,200 $ (36 ) $ 165,102 $ 155,175 $ 7,736 $ 3,863 $ (25 ) $ 159,073 __________________ (1) Noncredit OTTI losses included in AOCI in an unrealized gain position are due to increases in estimated fair value subsequent to initial recognition of noncredit losses on such securities. See also “— Net Unrealized Investment Gains (Losses).” The Company held non-income producing fixed maturity securities AFS with an estimated fair value of $25 million and $14 million , and unrealized gains (losses) of $1 million and ($1) million at June 30, 2019 and December 31, 2018 , respectively. Maturities of Fixed Maturity Securities AFS The amortized cost and estimated fair value of fixed maturity securities AFS, by contractual maturity date, were as follows at June 30, 2019 : Due in One Year or Less Due After One Year Through Five Years Due After Five Years Through Ten Years Due After Ten Years Structured Securities Total Fixed Maturity Securities AFS (In millions) Amortized cost $ 9,778 $ 25,123 $ 25,828 $ 54,585 $ 37,032 $ 152,346 Estimated fair value $ 9,734 $ 25,726 $ 27,617 $ 63,563 $ 38,462 $ 165,102 Actual maturities may differ from contractual maturities due to the exercise of call or prepayment options. Fixed maturity securities AFS not due at a single maturity date have been presented in the year of final contractual maturity. Structured Securities are shown separately, as they are not due at a single maturity. Continuous Gross Unrealized Losses for Fixed Maturity Securities AFS by Sector The following table presents the estimated fair value and gross unrealized losses of fixed maturity securities AFS in an unrealized loss position by sector and aggregated by length of time that the securities have been in a continuous unrealized loss position at: June 30, 2019 December 31, 2018 Less than 12 Months Equal to or Greater Less than 12 Months Equal to or Greater Estimated Gross Estimated Gross Estimated Gross Estimated Gross (Dollars in millions) U.S. corporate $ 3,379 $ 91 $ 3,005 $ 209 $ 23,398 $ 1,176 $ 3,043 $ 389 U.S. government and agency 1,483 1 2,270 21 4,322 29 7,948 337 Foreign corporate 1,976 119 4,955 575 12,911 893 2,138 410 RMBS 1,154 13 2,420 27 5,611 107 4,482 173 ABS 3,718 28 1,636 21 5,958 105 223 7 Municipals 21 — 16 — 675 22 94 8 CMBS 381 1 265 15 2,455 45 344 30 Foreign government 56 3 280 40 1,364 83 191 24 Total fixed maturity securities AFS $ 12,168 $ 256 $ 14,847 $ 908 $ 56,694 $ 2,460 $ 18,463 $ 1,378 Total number of securities in an unrealized loss position 1,208 1,042 5,263 1,125 Evaluation of Fixed Maturity Securities AFS for OTTI and Evaluating Temporarily Impaired Fixed Maturity Securities AFS As described more fully in Notes 1 and 8 of the Notes to the Consolidated Financial Statements included in the 2018 Annual Report, the Company performs a regular evaluation of all investment classes for impairment, including fixed maturity securities AFS and perpetual hybrid securities, in accordance with its impairment policy, in order to evaluate whether such investments are other-than-temporarily impaired. Current Period Evaluation Based on the Company’s current evaluation of its securities in an unrealized loss position in accordance with its impairment policy, and the Company’s current intentions and assessments (as applicable to the type of security) about holding, selling and any requirements to sell these securities, the Company concluded that these securities were not other-than-temporarily impaired at June 30, 2019 . Future OTTI will depend primarily on economic fundamentals, issuer performance (including changes in the present value of future cash flows expected to be collected), and changes in credit ratings, collateral valuation and foreign currency exchange rates. If economic fundamentals deteriorate or if there are adverse changes in the above factors, OTTI may be incurred in upcoming periods. Gross unrealized losses on fixed maturity securities AFS decreased $2.7 billion for the six months ended June 30, 2019 to $1.2 billion . The decrease in gross unrealized losses for the six months ended June 30, 2019 was primarily attributable to decreases in interest rates and narrowing credit spreads. At June 30, 2019 , $127 million of the total $1.2 billion of gross unrealized losses were from 20 fixed maturity securities AFS with an unrealized loss position of 20% or more of amortized cost for six months or greater. Investment Grade Fixed Maturity Securities AFS Of the $127 million of gross unrealized losses on fixed maturity securities AFS with an unrealized loss of 20% or more of amortized cost for six months or greater, $85 million , or 67% , were related to gross unrealized losses on 11 investment grade fixed maturity securities AFS. Unrealized losses on investment grade fixed maturity securities AFS are principally related to widening credit spreads since purchase and, with respect to fixed-rate fixed maturity securities AFS, rising interest rates since purchase. Below Investment Grade Fixed Maturity Securities AFS Of the $127 million of gross unrealized losses on fixed maturity securities AFS with an unrealized loss of 20% or more of amortized cost for six months or greater, $42 million , or 33% , were related to gross unrealized losses on nine below investment grade fixed maturity securities AFS. Unrealized losses on below investment grade fixed maturity securities AFS are principally related to U.S. and foreign corporate securities (primarily industrial) and CMBS and are the result of significantly wider credit spreads resulting from higher risk premiums since purchase, largely due to economic and market uncertainty. Management evaluates U.S. corporate and foreign corporate securities based on factors such as expected cash flows, financial condition and near-term and long-term prospects of the issuers. Management evaluates CMBS based on actual and projected cash flows after considering the quality of underlying collateral, expected prepayment speeds, current and forecasted loss severity, the payment terms of the underlying assets backing a particular security and the payment priority within the tranche structure of the security. Equity Securities Equity securities are summarized as follows at: June 30, 2019 December 31, 2018 Estimated Fair Value % of Total Estimated Fair Value % of Total (Dollars in millions) Common stock $ 472 58.6 % $ 442 57.2 % Non-redeemable preferred stock 333 41.4 331 42.8 Total equity securities $ 805 100.0 % $ 773 100.0 % Mortgage Loans Mortgage Loans by Portfolio Segment Mortgage loans are summarized as follows at: June 30, 2019 December 31, 2018 Carrying Value % of Total Carrying Value % of Total (Dollars in millions) Mortgage loans: Commercial $ 38,270 59.2 % $ 38,123 59.9 % Agricultural 14,523 22.5 14,164 22.2 Residential 11,916 18.4 11,392 17.9 Total recorded investment 64,709 100.1 63,679 100.0 Valuation allowances (300 ) (0.5 ) (291 ) (0.5 ) Subtotal mortgage loans, net 64,409 99.6 63,388 99.5 Residential — FVO (1) 262 0.4 299 0.5 Total mortgage loans, net $ 64,671 100.0 % $ 63,687 100.0 % __________________ (1) Information on residential mortgage loans — fair value option (“FVO”) is presented in Note 7 . The Company elects the FVO for certain residential mortgage loans that are managed on a total return basis. The amount of net discounts, included within total recorded investment, primarily residential, was $904 million and $907 million at June 30, 2019 and December 31, 2018 , respectively. Purchases of mortgage loans, primarily residential, were $472 million and $1.8 billion for the three months and six months ended June 30, 2019 , respectively, and $666 million and $954 million for the three months and six months ended June 30, 2018 , respectively . Mortgage Loans, Valuation Allowance and Impaired Loans by Portfolio Segment Mortgage loans by portfolio segment, by method of evaluation of credit loss, impaired mortgage loans including those modified in a troubled debt restructuring, and the related valuation allowances, were as follows at: Evaluated Individually for Credit Losses Evaluated Collectively for Credit Losses Impaired Loans Impaired Loans with a Valuation Allowance Impaired Loans without a Valuation Allowance Unpaid Principal Balance Recorded Investment Valuation Unpaid Principal Balance Recorded Recorded Valuation Carrying (In millions) June 30, 2019 Commercial $ — $ — $ — $ — $ — $ 38,270 $ 193 $ — Agricultural 31 31 3 191 190 14,302 43 218 Residential — — — 504 403 11,513 61 403 Total $ 31 $ 31 $ 3 $ 695 $ 593 $ 64,085 $ 297 $ 621 December 31, 2018 Commercial $ — $ — $ — $ — $ — $ 38,123 $ 190 $ — Agricultural 31 31 3 169 169 13,964 41 197 Residential — — — 431 386 11,006 57 386 Total $ 31 $ 31 $ 3 $ 600 $ 555 $ 63,093 $ 288 $ 583 The average recorded investment for impaired commercial, agricultural and residential mortgage loans was $0 , $172 million and $401 million , respectively, for the three months ended June 30, 2019 and $0 , $181 million and $396 million , respectively, for the six months ended June 30, 2019 . The average recorded investment for impaired commercial, agricultural and residential mortgage loans was $0 , $122 million and $351 million , respectively, for the three months ended June 30, 2018 , and $0 , $97 million and $342 million , respectively, for the six months ended June 30, 2018 . Valuation Allowance Rollforward by Portfolio Segment The changes in the valuation allowance, by portfolio segment, were as follows: Six Months 2019 2018 Commercial Agricultural Residential Total Commercial Agricultural Residential Total (In millions) Balance, beginning of period $ 190 $ 44 $ 57 $ 291 $ 173 $ 40 $ 58 $ 271 Provision (release) 3 2 8 13 10 — 2 12 Charge-offs, net of recoveries — — (4 ) (4 ) — — (4 ) (4 ) Balance, end of period $ 193 $ 46 $ 61 $ 300 $ 183 $ 40 $ 56 $ 279 Credit Quality of Commercial Mortgage Loans The credit quality of commercial mortgage loans was as follows at: Recorded Investment Estimated % of Debt Service Coverage Ratios % of > 1.20x 1.00x - 1.20x < 1.00x Total (Dollars in millions) June 30, 2019 Loan-to-value ratios: Less than 65% $ 31,529 $ 612 $ 152 $ 32,293 84.4 % $ 33,456 84.6 % 65% to 75% 4,548 26 152 4,726 12.3 4,849 12.3 76% to 80% 309 210 55 574 1.5 566 1.4 Greater than 80% 482 195 — 677 1.8 653 1.7 Total $ 36,868 $ 1,043 $ 359 $ 38,270 100.0 % $ 39,524 100.0 % December 31, 2018 Loan-to-value ratios: Less than 65% $ 31,282 $ 723 $ 85 $ 32,090 84.2 % $ 32,440 84.3 % 65% to 75% 4,759 — 21 4,780 12.5 4,829 12.6 76% to 80% 340 210 56 606 1.6 585 1.5 Greater than 80% 480 167 — 647 1.7 613 1.6 Total $ 36,861 $ 1,100 $ 162 $ 38,123 100.0 % $ 38,467 100.0 % Credit Quality of Agricultural Mortgage Loans The credit quality of agricultural mortgage loans was as follows at: June 30, 2019 December 31, 2018 Recorded Investment % of Total Recorded Investment % of Total (Dollars in millions) Loan-to-value ratios: Less than 65% $ 13,555 93.3 % $ 13,075 92.3 % 65% to 75% 876 6.0 1,034 7.3 76% to 80% 69 0.5 32 0.2 Greater than 80% 23 0.2 23 0.2 Total $ 14,523 100.0 % $ 14,164 100.0 % Credit Quality of Residential Mortgage Loans The credit quality of residential mortgage loans was as follows at: June 30, 2019 December 31, 2018 Recorded Investment % of Total Recorded Investment % of Total (Dollars in millions) Performance indicators: Performing $ 11,555 97.0 % $ 10,990 96.5 % Nonperforming (1) 361 3.0 402 3.5 Total $ 11,916 100.0 % $ 11,392 100.0 % __________________ (1) Includes residential mortgage loans in process of foreclosure of $123 million and $140 million at June 30, 2019 and December 31, 2018 , respectively. Past Due and Nonaccrual Mortgage Loans The Company has a high quality, well performing mortgage loan portfolio, with 99% of all mortgage loans classified as performing at both June 30, 2019 and December 31, 2018 . The Company defines delinquency consistent with industry practice, when mortgage loans are past due as follows: commercial and residential mortgage loans — 60 days and agricultural mortgage loans — 90 days. The past due and nonaccrual mortgage loans at recorded investment, prior to valuation allowances, by portfolio segment, were as follows at: Past Due Greater than 90 Days Past Due and Still Accruing Interest Nonaccrual June 30, 2019 December 31, 2018 June 30, 2019 December 31, 2018 June 30, 2019 December 31, 2018 (In millions) Commercial $ — $ — $ — $ — $ 167 $ 167 Agricultural 134 204 52 109 105 105 Residential 361 402 — — 361 402 Total $ 495 $ 606 $ 52 $ 109 $ 633 $ 674 Real Estate and Real Estate Joint Ventures The Company’s real estate investment portfolio is diversified by property type, geography and income stream, including income from operating leases, operating income and equity method income from real estate joint ventures. Real estate investments, by income type, as well as income earned, are as follows at and for the periods indicated: June 30, 2019 December 31, 2018 Three Months Six Months 2019 2018 2019 2018 Carrying Value Income (In millions) Leased real estate investments $ 1,246 $ 1,134 $ 40 $ 57 $ 81 $ 113 Other real estate investments 477 460 50 53 80 84 Real estate joint ventures 4,691 4,558 23 32 18 56 Total real estate and real estate joint ventures $ 6,414 $ 6,152 $ 113 $ 142 $ 179 $ 253 The carrying value of real estate investments acquired through foreclosure was $41 million and $42 million at June 30, 2019 and December 31, 2018 , respectively. Depreciation expense on real estate investments was $17 million and $32 million for the three months and six months ended June 30, 2019 , respectively, and $15 million and $34 million for the three months and six months ended June 30, 2018 , respectively. Real estate investments were net of accumulated depreciation of $700 million and $671 million at June 30, 2019 and December 31, 2018 , respectively. Leases Leased Real Estate Investments - Operating Leases The Company, as lessor, leases investment real estate, principally commercial real estate for office and retail use, through a variety of operating lease arrangements, which typically include tenant reimbursement for property operating costs and options to renew or extend the lease. In some circumstances, leases may include an option for the lessee to purchase the property. In addition, certain leases of retail space may stipulate that a portion of the income earned is contingent upon the level of the tenants’ revenues. The Company has elected a practical expedient of not separating non-lease components related to reimbursement of property operating costs from associated lease components. These property operating costs have the same timing and pattern of transfer as the related lease component, because they are incurred over the same period of time as the operating lease. Therefore, the combined component is accounted for as an operating lease. Risk is managed through lessee credit analysis, property type diversification, and geographic diversification, primarily across the United States. Leased real estate investments and income earned, by property type, are as follows at and for the periods indicated: June 30, 2019 December 31, 2018 Three Months Six Months 2019 2018 2019 2018 Carrying Value Income (In millions) Leased real estate investments: Office $ 373 $ 373 $ 12 $ 18 $ 26 $ 34 Retail 532 450 18 15 35 33 Apartment (1) — — — 16 — 29 Industrial 262 209 10 8 20 17 Other 79 102 — — — — Total leased real estate investments $ 1,246 $ 1,134 $ 40 $ 57 $ 81 $ 113 __________________ (1) The Company sold its investment in apartment properties in the fourth quarter of 2018. Future contractual receipts under operating leases at June 30, 2019 are $64 million for the remainder of 2019, $120 million in 2020, $97 million in 2021, $77 million in 2022, $60 million in 2023, $149 million thereafter, and in total are $567 million . Leveraged and Direct Financing Leases The Company has diversified leveraged lease and direct financing lease portfolios. Its leveraged leases principally include renewable energy generation facilities, rail cars, commercial real estate and commercial aircraft, and its direct financing leases principally include renewable energy generation facilities. These assets are leased through a variety of lease arrangements, which may include options to renew or extend the lease and options for the lessee to purchase the property. Residual values are estimated using available third-party data at inception of the lease. Risk is managed through lessee credit analysis, asset allocation, geographic diversification, and ongoing reviews of estimated residual values, using available third-party data. Generally, estimated residual values are not guaranteed by the lessee or a third party. Investment in leveraged and direct financing leases consisted of the following at: June 30, 2019 December 31, 2018 Leveraged Direct Leveraged Direct (In millions) Lease receivables, net (1) $ 707 $ 244 $ 715 $ 256 Estimated residual values 618 42 618 42 Subtotal 1,325 286 1,333 298 Unearned income (383 ) (91 ) (401 ) (100 ) Investment in leases $ 942 $ 195 $ 932 $ 198 __________________ (1) Future contractual receipts under direct financing leases at June 30, 2019 are $11 million for the remainder of 2019, $21 million in 2020, $21 million in 2021, $21 million in 2022, $21 million in 2023, $149 million thereafter, and in total are $244 million . Lease receivables are generally due in periodic installments, with payment periods generally ranging from one to 15 years, but in certain circumstances can be over 25 years . For lease receivables, the primary credit quality indicator is whether the lease receivable is performing or nonperforming, which is assessed monthly. The Company generally defines nonperforming lease receivables as those that are 90 days or more past due. At both June 30, 2019 and December 31, 2018 , all lease receivables were performing. The Company’s deferred income tax liability related to leveraged leases was $459 million and $465 million at June 30, 2019 and December 31, 2018 , respectively. Cash Equivalents The carrying value of cash equivalents, which includes securities and other investments with an original or remaining maturity of three months or less at the time of purchase, was $7.5 billion and $5.0 billion at June 30, 2019 and December 31, 2018 , respectively. Net Unrealized Investment Gains (Losses) Unrealized investment gains (losses) on fixed maturity securities AFS and derivatives and the effect on DAC, VOBA, deferred sales inducements (“DSI”), future policy benefits and the policyholder dividend obligation, that would result from the realization of the unrealized gains (losses), are included in net unrealized investment gains (losses) in AOCI. The components of net unrealized investment gains (losses), included in AOCI, were as follows: June 30, 2019 December 31, 2018 (In millions) Fixed maturity securities AFS $ 12,733 $ 3,890 Fixed maturity securities AFS with noncredit OTTI losses included in AOCI 36 25 Total fixed maturity securities AFS 12,769 3,915 Derivatives 2,292 1,742 Other 162 231 Subtotal 15,223 5,888 Amounts allocated from: Future policy benefits (641 ) (5 ) DAC, VOBA and DSI (979 ) (571 ) Policyholder dividend obligation (1,834 ) (428 ) Subtotal (3,454 ) (1,004 ) Deferred income tax benefit (expense) related to noncredit OTTI losses recognized in AOCI (7 ) (5 ) Deferred income tax benefit (expense) (2,436 ) (982 ) Net unrealized investment gains (losses) $ 9,326 $ 3,897 The changes in net unrealized investment gains (losses) were as follows: Six Months (In millions) Balance, beginning of period $ 3,897 Cumulative effects of changes in accounting principles, net of income tax (Note 1) 17 Fixed maturity securities AFS on which noncredit OTTI losses have been recognized 11 Unrealized investment gains (losses) during the period 9,302 Unrealized investment gains (losses) relating to: Future policy benefits (636 ) DAC, VOBA and DSI (408 ) Policyholder dividend obligation (1,406 ) Deferred income tax benefit (expense) related to noncredit OTTI losses recognized in AOCI (2 ) Deferred income tax benefit (expense) (1,449 ) Balance, end of period $ 9,326 Change in net unrealized investment gains (losses) $ 5,429 Concentrations of Credit Risk There were no investments in any counterparty that were greater than 10% of the Company’s equity, other than the U.S. government and its agencies, at both June 30, 2019 and December 31, 2018 . Securities Lending and Repurchase Agreements Securities, Collateral and Reinvestment Portfolio A summary of the securities lending and repurchase agreements transactions is as follows: June 30, 2019 December 31, 2018 Securities on Loan (1) Securities on Loan (1) Amortized Cost Estimated Fair Value Cash Collateral Received from Counterparties (2), (3) Reinvestment Portfolio at Estimated Fair Value Amortized Cost Estimated Fair Value Cash Collateral Received from Counterparties (2), (3) Reinvestment Portfolio at Estimated Fair Value (In millions) Securities lending $ 11,061 $ 12,500 $ 12,778 $ 12,936 $ 12,521 $ 13,138 $ 13,351 $ 13,376 Repurchase agreements $ 1,458 $ 1,565 $ 1,535 $ 1,553 $ 974 $ 1,020 $ 1,000 $ 1,001 __________________ (1) Securities on loan in connection with securities lending are included within fixed maturities securities AFS and cash equivalents and securities on loan in connection with repurchase agreements are included within fixed maturities securities AFS, short-term investments and cash equivalents. (2) In connection with securities lending, in addition to cash collateral received, the Company received from counterparties security collateral of $8 million and $64 million at June 30, 2019 and December 31, 2018 , respectively , which may not be sold or re-pledged, unless the counterparty is in default, and is not reflected on the consolidated financial statements. (3) The securities lending liability for cash collateral is included within payables for collateral under securities loaned and other transactions, and the repurchase agreements liability for cash collateral is included within payables for collateral under securities loaned and other transactions and other liabilities. Contractual Maturities A summary of the remaining contractual maturities of securities lending agreements and repurchase agreements is as follows: June 30, 2019 December 31, 2018 Remaining Maturities Remaining Maturities Open (1) 1 Month or Less Over 1 to 6 Months Total Open (1) 1 Month or Less Over 1 to 6 Months Total (In millions) Cash collateral liability by loaned security type: Securities lending: U.S. government and agency $ 2,168 $ 3,137 $ 7,473 $ 12,778 $ 1,970 $ 7,426 $ 3,955 $ 13,351 Repurchase agreements: U.S. government and agency $ — $ 1,535 $ — $ 1,535 $ — $ 1,000 $ — $ 1,000 __________________ (1) The related loaned security could be returned to the Company on the next business day, which would require the Company to immediately return the cash collateral. The estimated fair value of the securities on loan related to this cash collateral at June 30, 2019 was $2.1 billion , all of which were U.S. government and agency securities which, if put back to the Company, could be immediately sold to satisfy the cash requirement. If the Company is required to return significant amounts of cash collateral on short notice and is forced to sell securities to meet the return obligation, it may have difficulty selling such collateral that is invested in securities in a timely manner, be forced to sell securities in a volatile or illiquid market for less than what otherwise would have been realized under normal market conditions, or both. The securities lending and repurchase agreements reinvestment portfolios acquired with the cash collateral consist principally of high quality, liquid, publicly-traded fixed maturity securities AFS, short-term investments, cash equivalents or held in cash. If the securities on loan or the reinvestment portfolio become less liquid, the Company has the liquidity resources of most of its general account available to meet any potential cash demands when securities on loan are put back to the Company. Invested Assets on Deposit and Pledged as Collateral Invested assets on deposit and pledged as collateral are presented below at estimated fair value for all asset classes, except mortgage loans, which are presented at carrying value at: June 30, 2019 December 31, 2018 (In millions) Invested assets on deposit (regulatory deposits) $ 47 $ 47 Invested assets pledged as collateral (1) 20,756 20,207 Total invested assets on deposit and pledged as collateral $ 20,803 $ 20,254 __________________ (1) The Company has pledged invested assets in connection with various agreements and transactions, including funding agreements (see Note 4 of the Notes to the Consolidated Financial Statements included in the 2018 Annual Report) and derivative transactions (see Note 6 ). See “— Securities Lending and Repurchase Agreements” for information regarding securities supporting securities lending and repurchase agreement transactions and Note 4 for information regarding investments designated to the closed block. In addition, the restricted investment in Federal Home Loan Bank common stock was $727 million and $724 million , at redemption value, at June 30, 2019 and December 31, 2018 , respectively. Variable Interest Entities The Company has invested in legal entities that are VIEs. In certain instances, the Company holds both the power to direct the most significant activities of the entity, as well as an economic interest in the entity and, as such, is deemed to be the primary beneficiary or consolidator of the entity. The determination of the VIE’s primary beneficiary requires an evaluation of the contractual and implied rights and obligations associated with each party’s relationship with or involvement in the entity, an estimate of the entity’s expected losses and expected residual returns and the allocation of such estimates to each party involved in the entity. Consolidated VIEs Creditors or beneficial interest holders of VIEs where the Company is the primary beneficiary have no recourse to the general credit of the Company, as the Company’s obligation to the VIEs is limited to the amount of its committed investment. The following table presents the total assets and total liabilities relating to investment-related VIEs for which the Company has concluded that it is the primary beneficiary and which are consolidated at: June 30, 2019 December 31, 2018 Total Assets Total Liabilities Total Assets Total Liabilities (In millions) Real estate joint ventures (1) $ 1,409 $ — $ 1,394 $ — Renewable energy partnership (2) 99 — 102 — Investment fund (primarily mortgage loans) (3) 228 — 219 — Other investments 20 5 21 5 Total $ 1,756 $ 5 $ 1,736 $ 5 __________________ (1) The Company’s investment in these affiliated real estate joint ventures was $1.3 billion at both June 30, 2019 and December 31, 2018 . Other affiliates’ investments in these affiliated real estate joint ventures were $130 million and $123 million at June 30, 2019 and December 31, 2018 , respectively. (2) Assets of the renewable energy partnership primarily consisted of other invested assets. (3) The Company’s investment in this affiliated investment fund was $186 million and $178 million at June 30, 2019 and December 31, 2018 , respectively. An affiliate had an investment in this affiliated investment fund of $42 million and $41 million at June 30, 2019 and December 31, 2018 , respectively. Unconsolidated VIEs The carrying amount and maximum exposure to loss relating to VIEs in which the Company holds a significant variable interest but is not the primary beneficiary and which have not been consolidated were as follows at: June 30, 2019 December 31, 2018 Carrying Amount Maximum Exposure to Loss (1) Carrying Amount Maximum Exposure to Loss (1) (In millions) Fixed maturity securities AFS: Structured Securities (2) $ 36,871 $ 36,871 $ 35,112 $ 35,112 U.S. and foreign corporate 920 920 669 669 Other limited partnership interests 4,141 6,959 3,979 6,405 Other invested assets 1,796 1,905 1,914 2,066 Real estate joint ventures 25 29 33 37 Total $ 43,753 $ 46,684 $ 41,707 $ 44,289 __________________ (1) The maximum exposure to loss relating to fixed maturity securities AFS is equal to their carrying amounts or the carrying amounts of retained interests. The maximum exposure to loss relating to other limited partnership interests and real estate joint ventures is equal to the carrying amounts plus any unfunded commitments. For certain of its investments in other invested assets, the Company’s return is in the form of income tax credits which are guaranteed by creditworthy third parties. For such investments, the maximum exposure to loss is equal to the carrying amounts plus any unfunded commitments, reduced by income tax credits guaranteed by third parties of $73 million and $93 million at June 30, 2019 and December 31, 2018 , respectively. Such a maximum loss would be expected to occur only upon bankruptcy of the issuer or investee. (2) For these variable interests, the Company’s involvement is limited to that of a passive investor in mortgage-backed or asset-backed securities issued by trusts that do not have substantial equity. As described in Note 13 , the Company makes commitments to fund partnership investments in the normal course of business. Excluding these commitments, the Company did not provide financial or other support to investees designated as VIEs for both the six months ended June 30, 2019 and 2018 . For the three months ended June 30, 2019 , the Company securitized certain residential mortgage loans and acquired an interest in the related RMBS issued. While the Company has a variable interest in the issuer of the securities, it is not the primary beneficiary of the issuer of the securities since it does not have any rights to remove the servicer or veto rights over the servicer’s actions. For the three months ended June 30, 2019 , the carrying value and the estimated fair value of mortgage loans securitized were $443 million and $467 million , respectively, resulting in a gain of $24 million , which was included within net investment gains (losses). The estimated fair value of the RMBS acquired in connection with the securitizations was $133 million , which was included in the carrying amount and maximum exposure to loss for Structured Securities presented above. See Note 7 for information on how the estimated fair value of mortgage loans and RMBS is determined, the valuation approaches and key inputs, their placement in the fair value hierarchy, and, for certain RMBS, quantitative information about the significant unobservable inputs and the sensitivity of their estimated fair value to changes in those inputs. Net Investment Income The components of net investment income were as follows: Three Months Six Months 2019 2018 2019 2018 (In millions) Investment income: Fixed maturity securities AFS $ 1,780 $ 1,816 $ 3,548 $ 3,601 Equity securities 10 10 19 21 Mortgage loans 786 688 1,550 1,359 Policy loans 77 73 153 145 Real estate and real estate joint ventures 113 |
