XML 26 R12.htm IDEA: XBRL DOCUMENT v3.22.4
Investments in equity securities
12 Months Ended
Dec. 31, 2022
Investments, Debt and Equity Securities [Abstract]  
Investments in equity securities
(4)
Investments in equity securities

Investments in equity securities as of December 31, 2022 and 2021 are summarized based on the primary industry of the investee in the table below (in millions).

 

 

 

Cost
Basis

 

 

Net
Unrealized
Gains

 

 

Fair
Value

 

December 31, 2022 *

 

 

 

 

 

 

 

 

 

Banks, insurance and finance

 

$

25,893

 

 

$

43,663

 

 

$

69,556

 

Consumer products

 

 

40,508

 

 

 

112,384

 

 

 

152,892

 

Commercial, industrial and other

 

 

65,209

 

 

 

21,136

 

 

 

86,345

 

 

 

$

131,610

 

 

$

177,183

 

 

$

308,793

 

 

* Approximately 75% of the aggregate fair value was concentrated in five companies (American Express Company – $22.4 billion; Apple Inc. – $119.0 billion; Bank of America Corporation – $34.2 billion; The Coca-Cola Company – $25.4 billion and Chevron Corporation – $30.0 billion).

 

 

 

Cost
Basis

 

 

Net
Unrealized
Gains

 

 

Fair
Value

 

December 31, 2021 *

 

 

 

 

 

 

 

 

 

Banks, insurance and finance

 

$

26,822

 

 

$

62,236

 

 

$

89,058

 

Consumer products

 

 

36,076

 

 

 

154,945

 

 

 

191,021

 

Commercial, industrial and other

 

 

41,707

 

 

 

28,933

 

 

 

70,640

 

 

 

$

104,605

 

 

$

246,114

 

 

$

350,719

 

 

* Approximately 73% of the aggregate fair value was concentrated in four companies (American Express Company – $24.8 billion; Apple Inc. – $161.2 billion; Bank of America Corporation – $46.0 billion and The Coca-Cola Company – $23.7 billion).

During 2022, we began acquiring common stock of Occidental Petroleum Corporation (“Occidental”) and our aggregate voting interest exceeded 20% on August 4, 2022. We adopted the equity method with respect to our investment in Occidental common stock as of that date and included this investment in equity method investments at December 31, 2022. See Note 5. We continue to report our investments in Occidental Cumulative Perpetual Preferred Stock and Occidental common stock warrants at fair value as equity securities, as such interests are not in-substance common stock under GAAP and are not eligible for the equity method.

Notes to Consolidated Financial Statements (Continued)

(4)
Investments in equity securities (Continued)

Our investment in Occidental preferred stock has an aggregate liquidation value of $10 billion and our investment in Occidental warrants allows us to purchase up to 83.86 million shares of Occidental common stock at an exercise price of $59.62 per share. The preferred stock accrues dividends at 8% per annum and is redeemable at the option of Occidental commencing in 2029 at a redemption price equal to 105% of the liquidation preference plus any accumulated and unpaid dividends and is mandatorily redeemable at 110% of the liquidation preference plus accrued dividends under specified events. The warrants are exercisable in whole or in part until one year after the redemption of the preferred stock.

As of December 31, 2022, we owned 20.4% of the outstanding common stock of the American Express Company (“American Express”). Since 1995, we have been party to an agreement with American Express whereby we agreed to vote a significant portion of our shares in accordance with the recommendations of the American Express Board of Directors. We have also agreed to passivity commitments as requested by the Board of Governors of the Federal Reserve System, which collectively, in our judgment, restrict our ability to exercise significant influence over the operating and financial policies of American Express. Accordingly, we do not use the equity method with respect to our investment in American Express common stock and we continue to record our investment at fair value.