Paul A. Jacobson
Executive Vice President, Chief Financial Officer at General Motors
Thank you, Mary, and I appreciate you all joining us this morning as we summarize another year of strong financial results for GM. Our full-year EBIT adjusted of $14.9 billion was at the high-end of the range we guided to in October, driven by a particularly strong November and December. This resulted in $10.60 of EPS diluted adjusted, up 38% year-over-year and partially aided by a significantly lower share count as we continue to return excess capital to shareholders. We increased our full-year revenue by 9% to $187 billion with a 6% rise in wholesale volumes and ATPs above $50,000.
Throughout the year, our incentives as a percentage of ATP steadily improved, starting the first-quarter nearly one percentage point below the industry average and ending the year at the lowest incentive levels in the industry and more than three points below average. Our strategy of disciplined pricing and incentives continues to separate us from most of our peers. And at the same time, we are growing market-share. Our US market-share for the full-year was up 30 basis-points to 16.5%, and we ended the year on a positive note at 17.5% in the 4th quarter, the highest since the 4th-quarter of 2018, excluding the impacts of the pandemic in 2020. Our performance was fueled by strong EV growth and a refreshed ICE portfolio.
ICE dealer inventory ended at 53 days at the low-end of our 50 to 60-day year-end target, driven by strong sales and appropriately balancing our production to demand. And we are also making significant progress on EVs. In 2024, we wholesaled 189,000 EVs and delivered more than 146,000 units. Recall, at the end-of-the 3rd-quarter, we had around 100 days of EV dealer inventory so that customers would have the opportunity to see and experience our products. This strategy paid-off and we successfully reduced this to 70 days by year-end as our EV deliveries rose.
As Mary highlighted, a big focus for the company has been improving EV profitability. We achieved variable profit positive on our EVs in the 4th-quarter through continued manufacturing scale and efficiencies from higher production, improved material costs, including lower cell costs from scale and performance and expansion of our EV portfolio with the launch of the Cadillac Escalade IQ and Sierra EV. There's more work to achieve our goal of a positive EBIT margin, but we believe we're making good progress. For instance, the Equinox EV has seen a $1,000 improvement in variable profit since its launch in just the second-quarter of last year.
Next, I'd like to discuss capital allocation. We continue to balance three key elements: investing in our business, maintaining a strong balance sheet and returning excess capital to our shareholders. First, we believe that the amount of capital we are investing back into the business is appropriate to efficiently support long-term profitable growth. Our forecasted capital spend in 2025, including battery JV investments remains similar year-over-year at $10 billion to $11 billion. Second, we paid-off $750 million of senior notes in the 4th-quarter ahead of their maturity in 2025. We have another $1.75 billion maturing later this year. We will assess refinancing opportunities or debt extinguishment as we progress throughout the year.
Third, we returned a substantial amount of capital to our shareholders during 2024. We generated full-year adjusted auto free-cash flow of $14 billion and returned nearly 55% of this free-cash flow or approximately $7.6 billion. In the 4th-quarter, we completed the ASR retiring an additional 25 million shares. We also repurchased 87 million shares in the open-market during the quarter at an average price of $53.84 a share. This resulted in us ending the year with an outstanding share count of 995 million, achieving our goal from early last year to reduce our share count below of 1 billion shares earlier than scheduled. On a diluted basis, this represents 1.02 billion shares, a decrease of 28% since the end of 2022 and a decrease of 12% compared to the end of 2023. Moving forward, we expect to continue returning excess capital to our shareholders and further reducing the share count.
Getting into the 4th-quarter results, total company revenue was $48 billion, up 11% year-over-year, driven by higher wholesales and consistent pricing. We achieved $2.5 billion in EBIT adjusted, 5.3% EBIT adjusted margins and $1.92 in an EPS diluted adjusted. We completed the net $2 billion fixed-cost reduction program. Compared to the end of 2022, we realized $900 million in lower marketing spend and $700 million in lower automotive engineering costs. The remainder was realized through rationalization across some of our earlier-stage initiatives, which was partially offset by higher depreciation and amortization.
A quick update on our EV inventory valuation allowances. We ended the year with a balance of $1.4 billion, which includes a small reduction in the 4th-quarter. We expect further reductions as we move through 2025, but the pace and magnitude will be dependent on EV demand. We achieved adjusted automotive free-cash flow of $1.8 billion during the 4th-quarter, up $500 million year-over-year, primarily driven by EBIT performance. North-America delivered 4th-quarter EBIT adjusted of $2.3 billion, up $300 million year-over-year. We benefited from the absence of 2023's 4th-quarter strike in inventory adjustments. Additionally, the fixed-cost program contributed to offsetting higher labor and warranty costs. While we remain disciplined on pricing, we faced a slight headwind from full-size truck incentives.
I want to take a moment to emphasize the strong full-year North American margin of 9.2%, well within our targeted 8% to 10% range. We are executing well on our product launches along with being disciplined on costs, pricing and inventory levels. Our broad and refreshed product portfolio is a key factor driving these strong results. In the 4th-quarter, we achieved a margin of 5.8%. This included certain discrete items, including breach of warranty and legal reserves, which roughly impacted margin by 1.3 percentage points.
I'd now like to discuss the continued higher warranty costs, which include the initial product warranty accrual, recall campaigns and breach of warranty exposure. Despite our success, we know we have an opportunity to improve our results by aggressively targeting our warranty expense. The first priority is always our customers, focusing on parts availability. At the same time, the team is actively working to tackle the root cause of issues as they arise. Our commitment starts with the initial quality of our products, an area where we are a leader in the industry. We've achieved a significant reduction in claims with a decrease in the US of over 30% since 2018. However, this benefit has been more than offset by a 100% increase in the cost of repair, driven by both parts and labor inflation over the same-period. Rest assured, we remain committed to finding ways to mitigate inflationary pressures and navigate the strict regulatory and legal landscape. We are optimistic that our intense focus on driving down repair costs and improving quality will reduce our warranty costs over-time.
GM International delivered 4th-quarter EBIT adjusted of $200 million, driven by strong execution and tight cost controls in South America and the Middle-East, along with positive China equity income of $17 million, excluding the restructuring charge. The team in China has done a great job of reducing inventory with SGM's inventories down over 60% from the end of 2023. They have implemented effective cost reductions and have been focusing on enhancing product competitiveness, which helped 4th-quarter sales increase 40% sequentially versus the 3rd-quarter. We recorded a $4.1 billion special item in our Auto China equity income, approximately half of this related to an impairment, while the rest is connected to various restructuring actions we have taken so-far in China. It's important to note that these charges are not expected to require any capital from GM as the joint-venture has sufficient cash to cover these costs. We believe these actions, along with a comprehensive product launch plan in 2025 that ensures at least one NEV option per product program will help us achieve our target of the China business returning to profitability in 2025.
GM Financial also had a strong year of profitability and capital return to GM. 4th-quarter EBT adjusted was consistent year-over-year at $700 million. Higher net financing revenue offset lower lease termination gains and higher provision expense driven by increased loan origination volume. GM Financial's full-year EBT adjusted was $3.0 billion at the top of their guidance range, and they paid dividends of $1.8 billion to GM. Cruise expenses, excluding the special items for the restructuring charge were $400 million in the quarter, down from $800 million in 2023. As Mary said, we believe our refocused autonomous driving strategy will lead to efficiencies and a $1 billion annual run-rate savings in our investment relative to the $1.7 billion we spent on cruise in 2024. These decisions led to a $500 million restructuring charge in the 4th-quarter, which was classified as a special item with approximately two-thirds being cash-based.
Additionally, later this year, we plan to include the expenditures for the cruise employees in our North-America segment. This will impact our North-America margin by around 50 basis-points this year. However, we still expect to remain within our 8% to 10% range. It will also increase our auto fixed costs and reduce our adjusted automotive cash-flow as the cash used by cruise was excluded previously.
Moving to our 2025 guidance, we expect EBIT adjusted in the $13.7 billion to $15.7 billion range. EPS diluted adjusted to be in the $11 to $12 per share range and adjusted automotive free-cash flow-in the $11 billion to $13 billion range. It's important to note that our guidance does not account for the impact of future policy changes by the new administration, including tariffs, tax reform or other regulation changes. We do anticipate some headwinds in both volume and mix, stemming from a modest decline in ICE wholesale volume in North-America as we appropriately balance dealer inventory levels. However, this will be partially offset by higher EV volume. We're optimistic in our robust product portfolio and our ability to drive market-share expansion through strong ICE sales, complemented by a strategically diverse lineup of EVs. Additionally, we are planning for a similar US industry year-over-year to 2024.
In terms of pricing, we're assuming a decline in North-America of 1% to 1.5% year-over-year to capture potentially higher incentives or a moderation in ATPs. While we are not seeing this at the moment, we believe it's a prudent way to plan our budget as we have in years past. Offsetting these headwinds, we anticipate EV profitability improvements at the low-end of our $2 billion to $4 billion EBIT year-over-year target. This improvement is based on wholesales of around 300,000 units and is predicted to come from scale, fixed-cost absorption and a continued focus on-cell and vehicle cost reductions. Regarding cruise, our guidance includes around $500 million of the $1 billion annual savings we previously discussed. This is based on our assumption that Cruise employees will be fully-integrated into GM by midyear. We anticipate other costs outside of Cruise and the EV profitability improvements to be favorable. This is mainly due to variable costs such as commodities and logistics, which are expected to more than offset headwinds from depreciation and amortization and higher labor costs. For GM International, we expect a tailwind from restructuring the China business and are targeting profitable equity income for the full-year. GM International outside of China should be similar to what was delivered in 2024. For GM Financial, we expect EBT adjusted to be in the $2.5 billion to $3 billion range, reflecting the targeted return for the credit risk profile and asset mix in a largely stable economic environment. We expect an increase in earning assets driven by both loan and lease portfolios.
We are forecasting another year of robust adjusted automotive free-cash flow. However, we anticipate year-over-year headwinds in the range of $1 billion to $3 billion from the non-repeat of working capital benefits realized in 2024, primarily from dealer inventory restocking, the timing of payments for previously accrued liabilities, notably warranty and the inclusion of crew spend.
Capital spending is expected to be similar year-over-year and in the $10 billion to $11 billion range, including battery JV investments. We continue to strategically spend on our ICE portfolio and build flexibility into our manufacturing capabilities to maintain agility to adapt to consumer preferences between ICE and EV powertrains. Our full-year EPS guidance assumes weighted-average diluted share count of approximately 1 billion shares, which excludes the impact of any future open-market purchases.
In closing, I want to express my sincere gratitude to every GM team member. Their hard work and dedication have been pivotal in driving our strong financial performance in 2024. Our relentless focus on execution, discipline and adaptability has enabled us to successfully navigate a dynamic and challenging landscape. And we believe these key success factors are going to continue to support our efforts towards another promising year in 2025. This concludes our opening comments, and we'll now move to the Q&A portion of the call.
