John T. Lawler
Chief Financial Officer at Ford Motor
Thank you, Jim. In face of ongoing industry-wide supply chain disruption and unremitting pandemic hurdles. We continue to execute against our Ford+ plan including strengthening our product portfolio, investing in electrification and other new and exciting opportunities fundamental to growth and value creation. In the first quarter, we generated $2.3 billion in adjusted EBIT, resulting in a margin of 6.7%.
The year-over-year decline in total Company profits was driven by higher commodity prices and lower volume and mix, partially offset by higher net pricing as we take top-line pricing while remaining disciplined with our incentive spend. Importantly our operations outside of North America were profitable. Global wholesales were down 9%, consistent with our guidance in reflecting the continued supply chain issues. However, a run rate of vehicle production in North America improved significantly during the month of March, and we ended the quarter with an extremely healthy order bank, in fact in the U.S. alone our order bank is prime to deliver about $17 billion in revenue.
Ford Credit delivered another strong quarter EBT was our $900 million reflecting strong lease residuals in credit loss performance, free cash flow was $600 million negative more than explained by unfavorable timing differences and working capital deterioration due to the higher inventory levels which included about 53,000 vehicles on wheels, completed but awaiting installation of components affected by the semiconductor supply shortage. We ended the quarter with strong cash and liquidity, nearly $29 billion and $45 billion respectively. This includes our stake in Rivian which was valued at $5.1 billion at the end of the quarter. Our strong balance sheet provides a solid foundation to continue investing in our Ford+ priorities. Now, let me briefly touch on business unit performance for the quarter.
North America delivered $1.6 billion of EBIT with a margin of 7.1%. Now, this is down year-over-year as net pricing improvements were more than offset by higher commodity costs, higher warranty expense, unfavorable mix, and lower volume. The volume and mix impact primarily reflects supply constraints unique to full-size pickups and large utilities. South America continues to benefit from our global redesign efforts delivering its third consecutive profitable quarter and its highest quarterly EBIT margin in over 10 years. The region continues to focus on scaling its business for growth especially pickup trucks in commercial vehicles. In Europe, our operations delivered an EBIT margin of 3% despite the 9% decline in volumes. The underlying trajectory of our business continues to improve.
However, the adverse impact of the near-term supply chain disruption is dampening our overall results. Importantly, we continue to be the number one commercial vehicle brand in Europe the Transit has an extremely healthy order bank and we recently launched the all-electric E-Transit in Turkey. FORDLiive continues to grow, helping our commercial customers improve vehicle uptime and ultimately their bottom line and finally Mustang Mach-E is now being sold online in most major markets. Europe is building momentum towards a fully electric future expecting to reach 600,000 vehicles by the end of 2026. In China, we posted a modest loss in the quarter, however, our cost performance improved on both a year-over-year in sequential basis. Lincoln continues to be a bright spot and profit builder for the region.
Market share improved 20 basis points year-over-year and the all-new Zephyr is off to a fast start. In the first quarter, China also continued to make progress towards our electrification strategy. We opened 10 more customer experience centers, now 35 in total and made other investments to modernize our direct-to-consumer network. Our international markets group performed well in the first quarter, continuing to be solidly profitable despite supply constraints and suspension of our joint venture operations in Russia, the upcoming launch of the next-generation Ranger remains on track and in March we have availed the next-generation Ranger Raptor and Everest, and finally in mobility we continue to make steady progress towards scaled commercialization of moving people and moving goods.
In the first quarter, we divested our investments in both translating spin further rationalizing our portfolio with a focus on autonomous development. Now I'll share with you our current thinking about the remainder of 2022. For the full year, our guidance is unchanged. We expect to earn between $11.5 billion and $12.5 doing in adjusted EBIT, which is up 15% to 25% from 2021 with adjusted free cash flow of $5.5 billion to $6.5 billion this reflects year-over-year growth and wholesales of 10% to 15% and assumes that semiconductor availability will approve -- will improve in the second half, including the constraints that adversely impacted our full-size packed up pickups and large utilities in North America in Q1. We also assumed in our guidance that disruptions in the supply chain and local vehicle manufacturing operations resulting from the renewed COVID related health concerns and lockdowns in China, do not further deteriorate our supply chains.
Now relative to adjusted EBIT, on a year-over-year basis, our range assumes significantly higher profits in North America and collected profitability outside of North America. We also expect Ford Credit EBT to be strong, but lower than 2021 and mobility and corporate other EBIT to be roughly flat. Other assumptions factored into our guidance include, first, we have a very strong order bank as Jim mentioned, for our new iconic products such as Bronco, Bronco Sport, Maverick, along with a robust EV lineup Mustang Mach-E, E-Transit, F-150 Lightning, now -- now in production as well. Second pent-up demand, the under-order bank. Our continued strong pricing environment including the benefit of pricing actions taken in the first quarter and improved mix. The interplay though between volume and pricing will remain dynamic and third we expect commodity headwinds of about $4 billion, which we expect to offset by improvements in net pricing and mix.
Fourth, we anticipate other inflationary pressures to continue impacting a broad range of costs, we are aggressively looking at all opportunities to offset this reality including aggressively ramping up our efforts on additional cost reductions and fifth at Ford Credit we expect auction values to remain strong as supply constraints persist. However, as I mentioned, we anticipate strong but lower EBT, reflecting primarily the non-recurrence of reserve release, fewer returned off-lease vehicles, and more normalized credit losses. Our results in the quarter are balanced of year outlook and commitment to our medium-term targets demonstrating the power of our Ford+ plan as we 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 these investments will be substantial.
That wraps up our prepared remarks, we'll use the balance of the time to hear you hear your questions and address what's on your mind and so thank you. Operator, please open the line for questions.