Ride-sharing giant Uber ($UBER) wheeled its first-quarter earnings report up to the curb this week, and of course the company reported a net loss for the period. Some things never change, after all.

More interesting to us was Uber’s adjusted EBITDA for Q1 — which was a loss even larger than the company’s official net loss as reported under U.S. Generally Accepted Accounting Principles. You don’t see that too often.

Figure 1, below, tells the tale. The net loss for Uber in Q1 2021 was $108 million. Then Uber declared 12 adjustments to that number, both upward and downward, to arrive at an adjusted EBITDA loss of $359 million for the quarter.

Don’t die of surprise at this news, but most non-GAAP metrics tend to make a company’s financial performance look better: “Under formal accounting rules we lost money, but if you exclude all these items for various reasons, we actually made a killing!”

That’s not always the case, however. Thanks to quirks of financial operations at a firm and how non-GAAP numbers are allowed to be reported, sometimes you wind up with a non-GAAP metric that looks worse than its closest GAAP-approved correspondent.

First let’s consider the rules for non-GAAP metrics, as prescribed by the Securities and Exchange Commission. Firms are allowed to report a wide range of non-GAAP numbers, but they need to calculate those numbers consistently from one quarter to the next.

So while Uber’s adjusted EBITDA improved the picture for Q1 2020 (whittling down a $2.9 billion loss to a $612 million loss), Uber would have to perform the same calculations one year later — that is, for Q1 2021.

Enter the Numbers

That brings us to the actual adjustments that Uber made. It seems that the crucial line item in Figure 1 is “Other (income) expense,” which swung from a $1.795 billion expense one year ago to $1.71 billion in income this year. It was, by far, the biggest change from Q1 2020 to Q1 2021. What’s that about?

Uber explains that in another table earlier in the earnings release. See Figure 2, below.

As we can see, a big part of that Other Income (Expense) total in 2020 came from $1.86 billion in impairment charges. In footnote disclosures accompanying this table, Uber says most of that amount was a $1.9 billion impairment charge related to the company’s investments in Didi, a ride-hailing firm in China; and a $173 million allowance for credit loss recorded on our investment in Grab, another ride-hailing firm in Southeast Asia.

Those impairments drove Uber’s $1.79 billion Other expense in 2020, which Uber then used as an adjustment for EBITDA, which led to its non-GAAP adjusted EBITDA loss one year ago of $612 million.

This year, however, the picture for the Other Income (Expense) line item looked quite different. Uber had no impairments, but did have a $1.68 billion gain on the sale of its self-driving car unit to Aurora, a tech startup that hopes to deliver self-driving cars some day in the future.

That sale to Aurora drove Uber’s $1.71 billion gain in Other Income for the quarter. Which had to be reported as a negative number on the adjusted EBITDA reconciliation in Figure 1. Which led to Uber reporting a non-GAAP loss even larger than its formal net income loss at the top of the reconciliation. Which, as we mentioned earlier, you don’t see too often.

That’s why we love parsing non-GAAP numbers so much around here: because you see something new every day.

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