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Ford Provides Update on Certain Special Items for FY2021 Results
Rhea-AI Impact
(Neutral)
Rhea-AI Sentiment
(Very Positive)
Tags
Rhea-AI Summary
Ford revealed upcoming special items for its fourth-quarter and full-year 2021 financial results, including a projected $8.2 billion gain from its Rivian equity investment after its IPO. The company will reclassify a $900 million gain from Q1 2021 as a special item, excluding it from adjusted EBIT and EPS. Additionally, a non-cash pension re-measurement gain of $3.5 billion is expected, alongside $1.7 billion in costs from repurchasing high-cost debt, and a $3.6 billion tax special item. Full details will be available in the earnings release on Feb. 3.
Positive
Expected $8.2 billion gain from Rivian equity post-IPO.
Non-cash pension re-measurement gain of $3.5 billion.
Strengthened balance sheet from $1.7 billion in debt repurchases.
Negative
Reclassification of $900 million gain may lower adjusted EBIT and EPS outlook.
DEARBORN, Mich.--(BUSINESS WIRE)--
Ford today outlined 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.
On a preliminary basis, the special items are expected to include:
1)
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.
2)
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.
3)
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.
And,
4)
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 will be available in a Form 8-K furnished today to the U.S. Securities and Exchange Commission. Ford plans to issue its fourth-quarter and full-year 2021 earnings release on Thursday, Feb. 3.
About Ford Motor Company
Ford Motor Company (NYSE: F) is a global company based in Dearborn, Michigan, that is committed to helping build a better world, where every person is free to move and pursue their dreams. The company’s Ford+ plan for growth and value creation combines existing strengths, new capabilities and always-on relationships with customers to enrich experiences for and deepen the loyalty of those customers. Ford designs, manufactures, markets and services a full line of connected, increasingly electrified passenger and commercial vehicles: Ford trucks, utility vehicles, vans and cars, and Lincoln luxury vehicles. The company is pursuing leadership positions in electrification, connected vehicle services and mobility solutions, including self-driving technology, and provides financial services through Ford Motor Credit Company. Ford employs about 184,000 people worldwide. More information about the company, its products and Ford Motor Credit Company is available at corporate.ford.com.
Equity Investment
Community
Lynn Antipas Tyson 1.914.485.1150
ltyson4@ford.com
Fixed Income
Investment
Community
Karen Rocoff 1.313.621.0965
krocoff@ford.com
Shareholder
Inquiries
1.800.555.5259 or
1.313.845.8540
stockinf@ford.com
Source: Ford Motor Company
FAQ
What special items is Ford reporting for Q4 2021?
Ford is reporting several special items, including an $8.2 billion gain from Rivian, a non-cash pension gain of $3.5 billion, and costs related to debt repurchase.
When will Ford release its fourth-quarter 2021 earnings?
Ford plans to issue its fourth-quarter and full-year 2021 earnings release on February 3, 2022.
How will the Rivian investment impact Ford's financial results?
The Rivian investment is expected to contribute an $8.2 billion gain, but a previously reported $900 million gain will be reclassified, affecting adjusted EBIT and EPS.
What does the <b>NYSE:F</b> special item tax benefit consist of?
The $3.6 billion tax special item reflects changes in Ford’s global tax structure and its effect on deferred tax assets.
What is the impact of Ford's debt repurchase on its financial position?
Ford recorded about $1.7 billion in costs associated with repurchasing over $7.6 billion in debt to strengthen its balance sheet and reduce interest expenses.
