Meritor Acquisition and 2022 Financial Results
Table of Contents
NOTE 6. MARKETABLE SECURITIES
A summary of marketable securities, all of which are classified as current, was as follows:
In millions
Equity securities
December 31,
2022
Cost
Gross unrealized
gains/(losses) (1)
Estimated
fair value
Cost
2021
Gross unrealized
gains/(losses) (¹)
Estimated
fair value
209
$
299
$
(5)
233
254
3
28
29
2
1
(2)
$
472
$
583 $
$
299
2
256
10
39
1
12
$
595
Certificates of deposit
$
209
$
Debt mutual funds
238
Equity mutual funds
25
Debt securities
2
Marketable securities
$
474
$
(1) Unrealized gains and losses for debt securities are recorded in other comprehensive income while unrealized gains and losses for equity securities are recorded in our Consolidated Statements of
Net Income.
All debt securities are classified as available-for-sale. All marketable securities presented use a Level 2 fair value measure. The fair value of Level 2 securities is estimated using
actively quoted prices for similar instruments from brokers and observable inputs where available, including market transactions and third-party pricing services, or net asset
values provided to investors. We do not currently have any Level 3 securities, and there were no transfers between Level 2 or 3 during 2022 or 2021.
A description of the valuation techniques and inputs used for our Level 2 fair value measures is as follows:
•
•
Certificates of deposit-These investments provide us with a contractual rate of return and generally range in maturity fromthree months to five years. The
counterparties to these investments are reputable financial institutions with investment grade credit ratings. Since these instruments are not tradable and must be settled
directly by us with the respective financial institution, our fair value measure is the financial institution's month-end statement.
Debt mutual funds The fair value measures for the vast majority of these investments are the daily net asset values published on a regulated governmental
website. Daily quoted prices are available from the issuing brokerage and are used on a test basis to corroborate this Level 2 input measure.
Equity mutual funds The fair value measures for these investments are the net asset values published by the issuing brokerage. Daily quoted prices are available from
reputable third-party pricing services and are used on a test basis to corroborate this Level 2 input measure.
Debt securities The fair value measures for these securities are broker quotes received from reputable firms. These securities are infrequently traded on a national
exchange and these values are used on a test basis to corroborate our Level 2 input measure.
The proceeds from sales and maturities of marketable securities were as follows:
In millions
Proceeds from sales of marketable securities
Proceeds from maturities of marketable securities
Investments in marketable securities - liquidations
91
Years ended December 31,
2022
2021
2020
$
750 $
401
494 $
179
343
126
$
1,151 $
673
$
469View entire presentation