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Ford Motor said today that there were several large special items that it intends to report in early February as part of the company’s 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.
Ford is warning shareholders and the capital markets that the $8.2 billion it earned from its Rivian investment after the public offering 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 Q3 results on Oct. 27, a ~$900 million gain was included in the forecast range of $10.5 billion to $11.5 billion.
On a preliminary basis, the special items are expected to include:
- A fourth-quarter gain of $8.2 billion on Ford’s equity investment in Rivian, following Rivian’s Nov. 10 initial public offering of common stock and a mark-to-market revaluation of the holdings.
Additionally, Ford will reclassify its ~$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 on Oct. 27, the ~$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.
- 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 re-measurement 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 changes in Ford’s global tax structure and its effect on deferred tax assets.
Additional details on Ford’s fourth-quarter and full-year 2021 special items are available in a Form 8-K sent today to the U.S. Securities and Exchange Commission.
About Ken Zino
Ken Zino, editor and publisher of AutoInformed, is a versatile auto industry participant with global experience spanning decades in print and broadcast journalism, as well as social media. He has automobile testing, marketing, public relations and communications experience. He is past president of The International Motor Press Assn, the Detroit Press Club, founding member and first President of the Automotive Press Assn. He is a member of APA, IMPA and the Midwest Automotive Press Assn.
He also brings an historical perspective while citing their contemporary relevance of the work of legendary auto writers such as Ken Purdy, Jim Dunne or Jerry Flint, or writers such as Red Smith, Mark Twain, Thomas Jefferson – all to bring perspective to a chaotic automotive universe.
Above all, decades after he first drove a car, Zino still revels in the sound of the exhaust as the throttle is blipped during a downshift and the driver’s rush that occurs when the entry, apex and exit points of a turn are smoothly and swiftly crossed. It’s the beginning of a perfect lap.
AutoInformed has an editorial philosophy that loves transportation machines of all kinds while promoting critical thinking about the future use of cars and trucks.
Zino builds AutoInformed from his background in automotive journalism starting at Hearst Publishing in New York City on Motor and MotorTech Magazines and car testing where he reviewed hundreds of vehicles in his decade-long stint as the Detroit Bureau Chief of Road & Track magazine. Zino has also worked in Europe, and Asia – now the largest automotive market in the world with China at its center.
Ford Motor Warns of Large FY 2021 Special Items
Click to Enlarge.
Ford Motor said today that there were several large special items that it intends to report in early February as part of the company’s 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.
Ford is warning shareholders and the capital markets that the $8.2 billion it earned from its Rivian investment after the public offering 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 Q3 results on Oct. 27, a ~$900 million gain was included in the forecast range of $10.5 billion to $11.5 billion.
On a preliminary basis, the special items are expected to include:
Additionally, Ford will reclassify its ~$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 on Oct. 27, the ~$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.
Additional details on Ford’s fourth-quarter and full-year 2021 special items are available in a Form 8-K sent today to the U.S. Securities and Exchange Commission.
About Ken Zino
Ken Zino, editor and publisher of AutoInformed, is a versatile auto industry participant with global experience spanning decades in print and broadcast journalism, as well as social media. He has automobile testing, marketing, public relations and communications experience. He is past president of The International Motor Press Assn, the Detroit Press Club, founding member and first President of the Automotive Press Assn. He is a member of APA, IMPA and the Midwest Automotive Press Assn. He also brings an historical perspective while citing their contemporary relevance of the work of legendary auto writers such as Ken Purdy, Jim Dunne or Jerry Flint, or writers such as Red Smith, Mark Twain, Thomas Jefferson – all to bring perspective to a chaotic automotive universe. Above all, decades after he first drove a car, Zino still revels in the sound of the exhaust as the throttle is blipped during a downshift and the driver’s rush that occurs when the entry, apex and exit points of a turn are smoothly and swiftly crossed. It’s the beginning of a perfect lap. AutoInformed has an editorial philosophy that loves transportation machines of all kinds while promoting critical thinking about the future use of cars and trucks. Zino builds AutoInformed from his background in automotive journalism starting at Hearst Publishing in New York City on Motor and MotorTech Magazines and car testing where he reviewed hundreds of vehicles in his decade-long stint as the Detroit Bureau Chief of Road & Track magazine. Zino has also worked in Europe, and Asia – now the largest automotive market in the world with China at its center.