John Lawler
Chief Financial Officer at Ford Motor
Thank you, Jim. In the face of ongoing challenges with semiconductor constraints and industry-wide supply chain disruptions, we executed our Ford+ plan, including closing out our global redesign, strengthening our product portfolio and investing in exciting new opportunities fundamental to growth and value creation. For the year, we posted a $10 billion -- an $10 billion in adjusted EBIT, with a margin of 7.3%, that's our strongest performance since 2016. We delivered right at the midpoint of our guidance range adjusting for the reclass of our first quarter Rivian gain to a special item. And despite a 6% decline in wholesales, our automotive business posted its strongest EBIT margin since 2016.
North America delivered an 8.4% EBIT margin and is firmly on the glide path to a 10% EBIT margin. In addition, our operations outside the U.S. collectively posted their best results since 2017. I'm very proud of the team's hard work, the resiliency last year as we rose to the challenge and optimized constrained production to protect customer orders, new launches, our electrification strategy, and our most profitable vehicles. We also remain highly disciplined with our incentive spend and mix management, which combined with improvement in warranty costs, more than offset commodity headwinds and supply chain-related production losses.
Ford Credit, whose profits and dividends are an important source of capital for us delivered a strong year. EBT was $4.7 billion, as auction values were at record highs and credit losses were near record lows. Free cash flow was $4.6 billion, and we ended the year with strong cash and liquidity more than $36 billion and $52 billion respectively, which now includes our stake in Rivian valued at $10.6 billion at the end of the year. In 2021, we continue to advance our capital strategy given the improvements we're seeing in the underlying business. We reinstated the regular dividend at $0.10 per share in the fourth quarter as we continue to focus on creating value for our shareholders. We also further strengthened our balance sheet by repurchasing $7.6 billion of high-cost debt, deleveraging the balance sheet and significantly reducing our ongoing interest expense.
We introduced the industry's first fully integrated sustainable financing framework covering both in auto OEM and its captive finance company. And in November, following the launch of the framework, we completed our inaugural $2.5 billion green bond issuance, which was met with incredible investor demand and will help fund our exciting BEV portfolio. Our strong balance sheet including cash provides a solid foundation to continue to invest in our Ford+ priorities.
So let me briefly touch on the fourth quarter. With a margin of 5.4%, adjusted EBIT was $2 billion and we generated $2.3 billion in free cash flow. Some modeled stronger EBIT for us in this quarter, we know that was largely driven by higher volume expectations relative to the 10% sequential increase we guided -- we guided to in October and lower corporate other expenses. North America delivered $1.8 billion of profit with a margin of 7.1%. Volume was up 10% on a sequential basis, as supply chain constraints eased and customer demand for our products remained strong. South America delivered a modest profit for the second consecutive quarter and the business is now set up to deliver sustainable profitability. With restructuring of the legacy business complete, the region is now focused on strengthening Ford's position in the truck market, growing its new commercial vehicle business and enriching customer experiences.
In Europe, the underlying trajectory of our business continues to accelerate towards a 6% EBIT margin. However, the adverse effect of near-term supply chain disruption continues to mask that improvement. Importantly, we were the number one commercial vehicle brand in Europe for the seventh consecutive year and Transit continues to have an extremely healthy order bank. Mustang Mach-E sales in the region are off to a strong start with the order bank building momentum as we accelerate the transition to BEVs. In China, Lincoln continues to be a real bright spot and gained share in the highly profitable and growing premium segment. In the fourth quarter, we achieved record sales of the brand in China, contributing to an almost 50% increase for the year. We are expanding the Lincoln portfolio in 2022 with the launch of the all-new Zephyr. The order bank for that vehicle opened recently and is off to a fast start.
In the fourth quarter, we also achieved an important electrification milestone in China, as we began local production and customer deliveries of the Mustang Mach-E. Our direct-to-customer model for Mach-E allows people to order online and through 25 Ford select city stores. Our International Markets Group performed well in fourth quarter and had a record year playing to its strengths, especially from our flagship Ranger pickup, which delivered full-year segment share of 14.9% up 1.1 percentage points year-over-year. We also announced major investments in both South Africa and Thailand to modernize production and launch the next-generation Ranger from four assembly plants later this year. And in mobility, we've made steady progress towards the scaled commercialization of moving people and moving goods, and we are confident in Argo's progress in delivering a Level 4 autonomous vehicle solution. And in addition, we are rationalizing our investment portfolio and focusing on autonomous development.
Now I'll share with you our current thinking about 2022. We expect supply constraints to remain fluid throughout the year, reflecting a variety of factors, including semiconductors and COVID. Based on what we see now, we believe our full-year wholesales will be up about 10% to 15% in 2022, with a high single to low digit decline in the first quarter, reflecting supplier shortages related to Omicron shutdown and semiconductors. For the full-year, we expect to earn between $11.5 billion and $12.5 billion in adjusted EBIT, and that's up 15% to 25% versus 2021. And the high end of the range equates to an adjusted Company EBIT margin of 8% and our North America business at 10% EBIT margin, which if we achieve would be one year earlier than the target we shared with you last May.
Now turning to GAAP results for a minute. It's important to point out that each quarter we will mark-to-market our investment in Rivian, which sits in cash and marketable securities on our balance sheet. This is not something we can forecast. The mark-to-market may cause volatility in our quarterly GAAP net income and EPS results. So looking at how our adjusted EBIT guidance rolls up. Our range assumes significantly higher profits in North America and collected profitability outside of North America, as we realize the full benefits of our global redesign efforts.
We also expect Ford Credit EBT to be strong, but lower than '21 -- 2021 profits, and we expect mobility and corporate other EBIT to be roughly flat. Lastly, we expect to generate adjusted free cash flow of between $5.5 billion and $6.5 billion. Now other assumptions we factored into our guidance include, first, we expect customer demand enthusiasm to remain strong for our new and iconic nameplates. We will have a full-year of production of the award-winning Bronco and Maverick, in addition to a robust BEV lineup, with Mustang Mach-E, E-Transit and F-150 Lightning all in production.
Second, with wholesales up about 10% to 15%, we anticipate the pricing environment to remain strong, although the interplay between volume and pricing will remain dynamic. Third, we expect commodity headwinds of about $1.5 billion to $2 billion. Fourth, we anticipate other inflationary pressures, which will impact a broad range of costs. And fifth, at Ford Credit, we expect auction values to remain strong in 2022, as supply constraints persist. However, as I mentioned, we anticipate lower EBT reflecting primarily non-recurrence of reserve releases, fewer returned off-lease vehicles and more normalized credit losses. Most importantly, we're committed to our Ford+ plan and we'll continue to invest aggressively to drive growth and value creation. This includes devoting resources to customer-facing technology, connectivity, our always-on relationships with customers and electrification. We are confident the long-term payback from those investments will be substantial.
So that wraps up our prepared remarks. We'll use the balance of the time to hear and address what's on your mind. Thank you. Operator, please open the line for questions.
