Ford Records $8.2 Billion Fourth-Quarter Gain From Rivian Investment

By Reuters
January 19, 2022 Updated: January 19, 2022

Ford Motor Co. said on Tuesday its fourth-quarter results would include an $8.2 billion gain on its investment in Rivian Automotive Inc., following the electric-vehicle maker’s blockbuster market debut in November.

Rivian had soared as much as 53 percent to cross $100 billion in the biggest initial public offering of 2021, but the company’s shares have dropped over 27 percent since then.

The stock closed 8.5 percent lower on Tuesday after hitting its weakest since the IPO amid a broader tech selloff on Wall Street.

Ford, an early investor in Rivian, currently owns about 12 percent of the California-based company and has itself been racing toward electrification in a shift away from traditional gasoline-powered cars as demand for green transport surges.

It has pledged to invest more than $30 billion on EVs by 2030.

In 2019, the 118-year-old Detroit automaker invested $500 million in Rivian, with plans to use the EV maker’s platform to build a new Ford-branded electric vehicle, but the companies dropped those plans in 2021.

Ford, which is reporting its fourth-quarter results on Feb. 3, also said on Tuesday that it would reclassify its $900 million first-quarter 2021 non-cash gain on the Rivian investment as a special item.

The reclassification will change the automaker’s full-year adjusted earnings before interest and taxes (EBIT) guidance that was previously forecast between $10.5 billion and $11.5 billion including the gain.

Ford also said it would record about $1.7 billion in costs associated with buying back and redeeming more than $7.6 billion in high-cost debt in the fourth quarter.

It will also mark a non-cash gain of about $3.5 billion in the fourth quarter and $3.9 billion for the full year related to the re-measurement of its global pension and other post-retirement employee benefits.

Ford also said it would report a $3.6 billion non-cash benefit, mostly due to changes in its global tax structure.