Paul Jacobson
Executive Vice President and Chief Financial Officer at General Motors
Thank you, Mary, and good morning, everyone, and thank you for joining us. I also want to start my remarks by thanking the entire GM team. They remain focused on execution and consistently meeting our commitments, no matter the obstacles, and this is exactly what they achieved in 2022.
We generated full year revenue of $156.7 billion, representing strong year-over-year growth of 23%. This improvement was driven by the team, overcoming numerous logistics challenges and collaborating with the supply chain to increase parts availability. As a result, we grew wholesale volumes 25% within our objective of 25% to 30% for the year. We continue to face some supply chain and logistics issues. But overall, things remain trending in the right direction.
For the full year, we achieved $14.5 billion in EBIT-adjusted, 9.2% EBIT-adjusted margins and $7.59 in EPS diluted adjusted. These results were above the record profits we achieved in 2021 and at the high-end of our revised EBIT-adjusted guidance range of USD13.5 billion to USD14.5 billion, as December revenue and FX came in better than expected. They also speak to the robust health of our underlying business, which allowed us to offset $5.5 billion of commodity and logistics headwinds, $2 billion of incremental EV and growth spend, and $1 billion lower GM Financial results.
We generated adjusted free cash flow of $10.5 billion, which allowed us to both reinvest in growth opportunities and return excess cash to shareholders. In the fourth quarter, we repurchased an additional $1 billion of stock, bringing the 2022 total to $2.5 billion and retiring 65 million shares. We also opportunistically early retired $1 billion of senior unsecured notes in the U.S. and $0.5 billion of unsecured term loans in GM International, both maturing in 2023. Our goal remains to be responsible stewards of your capital.
Getting into the fourth quarter results. Revenue was $43.1 billion, up 28% year-over-year. We achieved $3.8 billion in EBIT-adjusted, 8.8% EBIT-adjusted margins and $2.12 of EPS diluted adjusted. These results were driven by solid unit volume growth of 30% year-over-year during the quarter and robust pricing. North America delivered Q4 EBIT-adjusted of $3.7 billion, up $1.5 billion year-over-year; and EBIT-adjusted margins of 10.3%, primarily driven by higher volume and pricing, partially offset by mix and higher commodity and logistics costs.
Production in the second half of 2022 increased with strengthening supply chain and logistics, allowing us to improve dealer inventory for certain vehicles. We ended the year with total dealer inventory including in-transit vehicles running around 50 days, with the number of vehicles physically on dealer lots improving gradually, but still approximately one-third the level we were at in mid-2019, supporting a favorable supply-and-demand environment.
I'd also like to share our perspective on inventory levels going forward. We're committed to actively managing production levels to balance supply with demand and are targeting to end 2023 with 50 days to 60 days of total dealer inventory on a portfolio basis. This is down 20 days to 30 days from mid-2019 and is relying on a continued improvement in logistical challenges the industry has faced. Within this portfolio target, trucks are expected to run at higher levels, reflecting greater customer-driven variation requirements and sedans and SUVs are expected to run at this range or a lower. Throughout the year, sales seasonality, production schedules and timing of fleet deliveries may take us out of this range from time-to-time, but that is the targeted range at which we'll manage.
We continue to see strong demand for our EVs, with inventory turning on the Bolt EV and EUV in less than 10 days. The GMC HUMMER EV and Chevrolet Silverado EV have generated incredible demand and excitement, leading to over 250,000 combined reservations. We've also seen strong demand for the Cadillac LYRIQ, GMC Sierra EVs as well. Order books for the model year '23 LYRIQ and Denali Edition 1 Sierra EV were quickly filled with a waitlist that is growing daily.
And when you add in the interest we've seen for the Equinox EV and the Blazer EV, over a quarter million hand raisers, our EV momentum will only build as we enter the largest segments in the world. GM International delivered Q4 EBIT-adjusted of $300 million, flat year-over-year as the team did an impressive job executing in a volatile environment. This included $200 million of equity income in China, down slightly year-over-year due to lower volume and pricing pressure, partially offset by cost actions. EBIT-adjusted in GM International excluding China equity income was a $100 million, up slightly year-over-year, and profitable in all four quarters. These consistent results were driven by favorable pricing and volume, partially offset by mix and commodity costs.
I want to take a moment and recognize the transformation this team has executed over the last few years, achieving over $2 billion of EBIT-adjusted improvement since 2018. This was done by exiting unprofitable markets, strengthening the portfolio, leveraging our strong brands to significantly improve pricing and mix, all while simultaneously driving down costs. They've done amazing work as a team, and they should be lauded for that.
GM Financial delivered strong results with Q4 EBT-adjusted of $800 million, down $400 million year-over-year, primarily due to lower net leased vehicle income and higher cost of funds, partially offset by growth in the retail and commercial loan portfolios. Used vehicle prices have declined, but continue to run above the contract residual value with a Q4 off-lease return rate below 10%. Overall, portfolio credit metrics continue to be strong in part due to a predominantly prime credit mix with net charge-offs up slightly due to moderation in credit performance, but still running below pre-pandemic levels. GM Financial paid dividends of $1.7 billion in 2022 and we expect similar dividends in 2023.
Corporate expenses were $400 million in the quarter, flat year-over-year, as we continue to invest in growth initiatives and drive productivity. Cruise expenses were $500 million in the quarter, up $200 million year-over-year, driven mainly by modifications to equity awards, resulting in an accounting change in compensation expense. Our optimism continues to grow based on the great progress Cruise made in 2022, and their plans for rapid scaling and operationalizing of the business will result in a modest increase in cost during 2023.
Let's now look towards 2023 for GM overall, which I know is a key focal point for everyone. While the environment remains uncertain, at a high level, I'm pleased to report that when you exclude the impacts of lower pension income and GM Financial contribution, we expect to drive consistently strong core auto operating performance in 2023. This continues the trend we saw in 2022 and highlights the strong execution throughout the organization. Our plan is to continue to prioritize growth initiatives such as Cruise and BrightDrop, while investing to accelerate our transition to EVs to take advantage of our vertical integration and local sourcing strategies.
Assuming a 15 million total industry volume and under current conditions, we expect EBIT-adjusted in the USD10.5 billion to USD12.5 billion range, EPS diluted adjusted in the USD6 to USD7 per share range and adjusted automotive free cash flow in the USD5 billion to USD7 billion range. At GM Financial, the strong credit performance and historically high used vehicle prices resulted in extraordinary results over the last two years. For 2023, we expect earnings to normalize in the mid $2 billion range. We expect volume and mix combined to be a slight tailwind, with volumes up 5% to 10% year-over-year and mix partially offsetting, as we continue to increase production in the sedan, small SUV and crossover segments along with GM International volume growth.
Regarding North America pricing, while we anticipate incentives will increase from the record low levels we saw in 2022, we expect this headwind to be partially offset by realizing the full year benefit of MSRP increases on many model year '23 vehicles, particularly full-size SUVs and trucks as well as pricing we expect to achieve on our new launches in '23. We're also anticipating pricing actions outside North America, primarily to help offset FX headwinds. Overall, we see commodities and logistics costs as a slight tailwind. Our longer-term steel and logistics contracts which help protect us from higher market costs over the last two years, renewed at higher rates in the second half of last year. This combined with the strategic initiatives to locally source battery raw materials is expected to largely offset the tailwind we're seeing from lower raw material prices on our spot and indexed exposures.
The $1 billion lower pension income impacts our fixed costs. This noncash item does not impact our core auto operating results, but will be a headwind when comparing year-over-year in 2023. As Mary mentioned, we are very focused on keeping automotive controllable fixed costs in check, despite our growth initiatives, which is why we are announcing a cost reduction program to take out $2 billion of costs over the next two years. Included in our guidance is the expectation to achieve 30% to 50% of that in 2023 and the remainder in 2024. This initiative is the result of several factors, and demonstrates our continued commitment to closely manage our operations through this transformation and achieve North American margins in the 8% to 10% range through 2025.
We expect capital spend to be in the USD11 billion to USD13 billion range, inclusive of $1 billion invested in our Ultium Cells JV. We continue to shift resources to EVs with around 75% of our product-specific capital dedicated to EVs and AVs. Even with the increase in capital spending, we expect our adjusted free cash flow to remain strong in 2023. As we said back in November, we expect that clean energy tax credits will be a material tailwind for GM over time because of the work we've been doing on vertically integrating the supply chain.
For 2023, we anticipate at least $300 million in EBIT-adjusted benefit and expect this tailwind to increase significantly over the next few years as our cell production ramps and our North American focused supply chain comes fully into place. We're closely monitoring the dynamic macroenvironment as well as customer demand to make sure we're appropriately matching supply with demand. We will take quick and decisive actions on both the supply and the cost side to actively manage the business. What gives us confidence in our 2023 and long-term objectives is the work we've already done to position ourselves for success, repeatedly executing on our commitments and our ability to manage through a very challenging and dynamic environment.
With a compelling EV and ICE product portfolio, long-term supply chain commitments, extraordinary manufacturing capabilities, a strong balance sheet and our amazing team, I'm confident we'll continue to enhance the customer experience and deliver compelling growth on both the top- and the bottom-line.
Mary?
