Tuesday, 18 January 2022 15:53

Ford to Include $8.2B Gain on Rivian Investment in Upcoming Report


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Ford recorded a fourth-quarter gain of $8.2 billion on its equity investment in Rivian, following Rivian’s Nov. 10 initial public offering.

Those gains are among the several large special items Ford said Jan. 18 it intends to report in early February as part of its fourth-quarter and full-year 2021 financial results. 


Special items are included in Ford’s reported GAAP net income and earnings per share, but are excluded from its non-GAAP adjusted earnings before interest and taxes and adjusted EPS.


Additionally, Ford will reclassify its approximately $900 million first-quarter 2021 non-cash gain on the Rivian investment as a special item---a step Ford said in October it would take after Rivian’s IPO.


The reclassification means the gain from first-quarter 2021 will not be included in Ford’s full-year adjusted EBIT or adjusted EPS. When Ford last provided full-year adjusted EBIT guidance with its third-quarter results Oct. 27, the roughly $900 million gain was included in the forecast range of $10.5 billion to $11.5 billion.


Going forward, mark-to-market revaluations to account for changes in Rivian’s stock price could result in related gains or losses each quarter reported as special items.


The special items in the report are also expected to include:


  • An annual revaluation of Ford’s global pension and other post-retirement employee benefits---resulting in a non-cash, pre-tax accounting re-measurement gain of about $3.5 billion in the fourth quarter and about $3.9 billion for the full year. Overall, the remeasurement gain is mostly attributable to higher discount rates and asset returns.
  • Recording about $1.7 billion in costs associated with Ford repurchasing and redeeming more than $7.6 billion in high-cost debt in the fourth quarter. The repurchases and redemptions were made to further strengthen the company’s balance sheet and reduce ongoing interest expenses.
  • Reporting a $3.6 billion tax special item---a non-cash benefit---primarily resulting from...

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