Senior Vice President and Chief Financial Officer at NOV
Thank you, Clay. NOV's consolidated revenue in the fourth quarter of 2021 was $1.52 billion, a 13% sequential increase compared to the third quarter with both North American and international revenues achieving double-digit growth. Adjusted EBITDA for the fourth quarter was $69 million or 4.5% of sales. As Clay mentioned, our fourth quarter results included $11 million in charges related to ongoing operational challenges on projects in Asian shipyards.
Reported SG&A decreased $11 million sequentially due primarily to lower third-party expenses, a reduction in bad debt expense and a small reclass between SG&A and cost of goods sold, partially offset by increasing wage rates. Looking forward, we expect the reinstatement of certain employee benefit programs and continued labor pressures will result in reported SG&A increasing modestly in 2022. Despite Q4 revenue increasing 14% over the prior year, working capital decreased $244 million during 2021 as we achieved good success turning working capital into cash and reducing working capital intensity across the organization. Through 2021, we generated $291 million in cash flow from operations, with capital expenditures totaling $201 million, resulting in $90 million cash flow.
In 2022, we expect capital expenditures to total $255 million with $20 million of the capital budget dedicated to the completion of our new rig manufacturing facility in Saudi Arabia. During the fourth quarter we reinstated our quarterly dividend at $0.05 per share representing approximately $20 million per quarter and we also used $41 million in cash to acquire a leading provider of managed pressure drilling equipment that is highly complimentary to our existing operations. We ended the fourth quarter with net debt of $122 million comprised of $1.71 billion in debt netted against $1.59 billion in cash.
Moving on to segment results. Our Wellbore Technologies segment capitalized on broad-based activity improvement and market share gains to generate $576 million in revenue during the fourth quarter, an increase of $69 million or 14% sequentially. Through share gains and the need for customers to restock depleted inventories, the segment continued to outpace the growth in global drilling activity levels. We've achieved this growth despite ongoing operational and logistical challenges.
While EBITDA improved $11 million to $88 million or 15.3% of sales, the operational and logistical related challenges, along with a less favorable product mix, limited incremental margins to 16%. Our ReedHycalog drill bit business posted revenue growth in the mid-teens with strong incremental margins. The business unit realized 24% sequential revenue growth in North America, significantly outpacing drilling activity levels due to market share gains, net pricing improvements and an increasing number of projects in the Gulf of Mexico.
Revenue in international markets grew 8%, also exceeding the growth in drilling activity. ReedHycalog's cutter technology leadership is allowing us to steadily gain market share in many markets, including the Middle East, an impressive feat considering we're not able to directly participate in the growing share of lump sum turnkey projects. Our downhole business reported double-digit revenue growth resulting from strong sales across the Western Hemisphere, Asia and the North Sea, partially offset by lower sales in the Middle East resulting from a larger delivery of drilling tools during the third quarter that did not repeat.
Unfortunately, shortages of key product components and in labor within certain regions led to higher costs, including overtime as our teams scramble to find substitute vendors and materials at higher costs in order to take care of our customers. We and other global manufacturers provide plenty of examples of supply chain challenges in the current environment, but I'd like to provide some color on the challenges we and others are facing with labor. One of our global business units in Wellbore Technologies has seen its revenue increase 49% year-on-year, while its labor force has only increased 2%. Some of this disparity is due to cost savings and efficiency improvements we've made within the business. However, many of our operations are simply shorthanded, resulting in cost inefficiencies, primarily in the form of wage escalation and over time.
For instance, in this case, over time is up 109% year-over-year and in the form of operational disruptions and shutdowns, which have resulted when several machinists within a plant came down with COVID simultaneously. While these are transitory issues and our team is doing a fantastic job of dealing with unprecedented challenges, we know that our sales team needs to push pricing to offset inflationary pressures and preserve the type of margin profile warranted by the value of our technology portfolio provides our customers.
Our Grant Prideco drill pipe business delivered double-digit revenue growth driven by strong volumes in drill pipe sales for the US land market. As anticipated, EBITDA flow-through was hampered by continued inflationary pressures and a less favorable smaller diameter land-oriented sales mix. Earlier this year, certain of our higher volume land customers recognize that extended lead times for 5.5 inch green tubes which we use to make drill pipe would not allow us to meet their near-term needs. Despite their preference for larger diameter pipe, they could not wait and place sizable orders for 4.5 inch and 5 inch strings which we're able to turn and deliver in Q4 and into Q1 of 2022 because we had access to those size of green tubes. Despite the temporary unfavorable mix shift as customers begin to better understand lead times in this new world, we're seeing a meaningful pickup in both land and offshore tendering activity for larger premium pipe. As a result, Q4 bookings improved 39% and were characterized by more favorable pricing and a greater mix of large diameter premium pipe, leaving the business well-positioned for significantly improved results as we progress through 2022.
Our Tuboscope business experienced a sequential revenue increase in the high single-digits with strong incremental margins, a meaningful recovery from the third quarter that was plagued by the inability to access resin for its coating operations and operational disruptions caused by hurricanes and COVID outbreaks. While performance improved considerably, labor cost and availability, along with ongoing shortages of resins remain a drag on the business unit's results.
Looking ahead, we expect continued slow but steady improvements in our ability to access key raw materials and expect pricing improvements to offset inflationary pressures. Our WellSite Services business saw mid-teens revenue growth with modest incremental margins. Revenue in our North American solids control operations improved 10% with limited EBITDA flow-through, the result of a transitory decline in higher-margin offshore projects, offset by increased revenue and lower margin US land-based work.
International revenues increased 18% sequentially with outsized incrementals led by increasing project awards in the Middle East and Latin America. As a nascent recovery in international markets advances, we anticipate continued growth from the Middle East and an acceleration in demand from the Far East. Our M/D Totco business realized a mid-single-digit sequential improvement in revenue with solid incremental margins. Revenues from our surface sensor data acquisition systems in North America increased 15% sequentially on higher drilling activity levels, market share gains and improved pricing.
In international markets, continued growth in our eVolve Wired drill pipe optimization services was modestly offset by a decline in capital sales of surface sensor data acquisition systems, which resulted from strong shipments to the Middle East and Far East in Q3 that did not repeat and challenges procuring electrical components, which deferred deliveries into 2022. While we believe we are in the early phase of a multiyear recovery for the oil field, we expect supply chain and inflationary challenges to continue into 2022. For our Wellbore Technologies segment, we expect increasing global activities to be partially offset by seasonal declines in certain geo markets and continued supply chain disruptions to result in sequential revenues that will range from flat to up 5% during the first quarter.
We also expect Q1 margins to be in line with Q4 as inflationary costs and the resumption of our benefit programs will offset pricing gains. We expect Wellbore Technologies to return to normalized incremental margins of 35%-plus after the first quarter. Assuming a normalization of supply chain related challenges, we believe EBITDA margins for our Wellbore Technologies segment will move into the high teens by year end.
Our Completion & Production Solutions segment generated $549 million in revenue during the fourth quarter, an increase of $71 million or 15% sequentially. While all global capital equipment businesses are suffering from unprecedented supply chain disruptions, this segment has been disproportionately challenged due to the heavy concentration of its business taking place in Asian shipyards. After taking $12 million in charges during the third quarter, we were disappointed that our pandemic-related challenges continued into the fourth quarter and affected two additional projects. As Clay mentioned, operational shutdowns, supply chain challenges and spiraling costs resulted in an additional $11 million in expense.
Additionally, our subsea flexible pipe business struggled with the availability of certain raw materials and extraordinary freight charges that were required to meet certain deadlines. The additional expense in our Process and Flow Technologies and Subsea flexible pipe businesses limited incremental margins to 10% and EBITDA totaled $2 million for the quarter. Notwithstanding the extreme difficulties this segment encountered in 2021, the outlook for each of our businesses within Completion & Production Solutions is rapidly improving and is reflected in our bookings.
The segment achieved its fourth straight quarter with a book-to-bill of above 100%. Order intake in Q4 reached the highest level since 2019 and every business unit within the segment posted a book-to-bill greater than 1. Fourth quarter orders for the segment totaled $495 million, resulting in a book-to-bill of 159%. Backlog at the end of the year was $1.3 billion, an 85% increase over year-end 2020.
Our Fiber Glass business unit posted a mid-single-digit percentage sequential increase in revenue. Higher sales to midstream oil and gas markets, which recovered from near record lows and improved deliveries into the marine and offshore markets were partially offset by lower fuel handling revenue. While our backlog for fuel handling equipment is healthy, as Clay mentioned, customers are struggling to obtain peripheral equipment often sourced from Asia and cannot hire the construction crews required to provide installation resulting in customer deferrals.
We, like others, are struggling with labor challenges. Specific to our Fiber Glass business, wage inflation and three plant shutdowns, which occurred when lines couldn't be staffed after several employees contracted COVID, limited incremental margins to the low single digits. Notwithstanding the ongoing operational challenges, which we expect to ease by mid-2022, demand for our Fiber Glass products is strong. Unit posted its fourth straight quarter with a book-to-bill greater than 1, and as 2021 year-end backlog improved 184% over 2020.
Our Intervention & Stimulation Equipment business achieved sequential revenue growth in the mid-teens on higher deliveries of coiled tubing equipment and improving aftermarket revenue. Incremental margins were limited by low margin sales of prior generation capital equipment and higher costs of raw materials and subcontracted components. While pricing and cash flows for our pressure pumping customers are improving, difficulties associated with staffing incremental crews and pricing that is still below what is required to achieve an appropriate return on capital are resulting in minimal capacity additions by our customers. As a result, over 80% of our pressure pumping revenues, which have more than tripled from Q4 of 2020 came from aftermarket sales in the fourth quarter.
We're busy upgrading Tier 2 fleets to Tier 4 dual fuel fleets that can utilize up to 85% natural gas. And we expect the pursuit of ESG friendly operations, efficiency gains and the industry's existing tired fleet of equipment will lead to continued demand for such rebuilds. Coiled tubing continues to be the main driver for capital equipment sales as we continue to see strong demand from international markets for new units, support pumps and nitrogen equipment, which helped drive a 48% sequential increase in orders for the business unit.
Our Subsea flexible pipe business realized mid-single-digit sequential revenue growth as growing backlog and increasing throughput in our Brazilian operation more than offset lower volumes from our Denmark plant that resulted from significant raw material shortages that will continue into the first quarter. Bookings remained a bright spot, with orders during the fourth quarter reaching their highest levels since 2019.
Our Process and Flow Technologies business posted a double-digit sequential increase in revenue. However, as previously discussed, profitability was challenged due to the ongoing operational disruptions on projects in Asia. Despite these near-term challenges, the market outlook is improving rapidly as operators become more confident in a multiyear upturn in commodity prices. We're beginning to see a greater number of the offshore project tenders that we've been tracking shake loose, resulting in orders during the fourth quarter that more than doubled our Q3 total achieving a book-to-bill exceeding 200%.
For the first quarter of 2022, we anticipate that ongoing supply chain disruptions will limit our ability to capitalize on a rapidly improving backlog. As a result of acute raw material shortages, we expect financial results for our Completion & Production Solutions segment in the first quarter to remain more or less flat with Q4. The COVID-affected project that drove most of our charges in the fourth quarter and prior quarter is approximately 80% complete and should finish in the third quarter of 2022. Assuming this project and the broader global supply chain challenges normalize during the first half of 2022, we believe our Completion & Production Solutions segment should achieve a mid to upper single-digit EBITDA margin by year-end.
Our Rig Technologies segment generated revenues of $431 million in the fourth quarter, an increase of $41 million or 11% sequentially. The accelerating progress on our growing backlog of offshore wind installation vessels, increasing revenue from our rig manufacturing plant in Saudi Arabia and the seasonal improvement in service and repair work drove the sequential growth. Adjusted EBITDA declined $4 million to $21 million or 4.9% of sales, primarily due to less favorable sales mix in our aftermarket operations. The lower margin contribution from a higher volume of service and repair work was more than offset by a decrease in higher-margin sales of spare parts. Despite continued healthy order intake and a growing backlog, spare part sales declined due to growing production lead times and shipping challenges. Inflationary forces and start-up costs in Saudi Arabia also weighed down margins. Orders for the segment totaled $191 million, yielding a book-to-bill of 102%. Bookings in our marine and offshore operations remained robust with two-pedestal crane orders for floating production vessels and another order for a design license and jacking system for a wind installation vessel.
During 2021, NOV booked wind installation equipment orders of more than $400 million, and we exceeded our annualized revenue run rate target of $200 million during the quarter. Of equal, if not greater importance, is that we're seeing growing interest for rig equipment. Orders for rig equipment in the second half of 2021 achieved a level almost 2 times the pace of what we realize in the second half of 2020.
We're encouraged that the composition of the orders we are now receiving is representative of the type of bookings we would expect in the early days of a market recovery. We are seeing rising in the inquiries for top drives, high-torque handling equipment and pressure control gear. Additionally, as Clay mentioned, we are realizing growing demand for our digital products and then received an order for 30 NOVOS packages from a single US rig contractor. Following the installation of these packages, this contractor will have its entire active fleet outfitted with NOVOS.
The underlying macro conditions for our base rig business have improved significantly over the past year. As Clay mentioned, in the US land market, day rates have steadily improved and are now in the mid $20,000 a day range. While we still see a few old rigs getting parted out, the opportunity to cannibalize assets diminishes as more rigs go back to work. Customer balance sheets are beginning to improve and while we don't expect to see near-term demand for new rigs in the US land market, we're having more conversations regarding rig upgrades that provide larger setbacks and higher torque handling equipment.
International land markets are also showing more signs of life. We previously stated that there is significant pent-up demand in international markets for leading-edge drilling technology, with a large disparity between the capability of an average rig in international markets and the average rig in the US. The improvement in commodity prices is resulting in customers reengaging in discussions regarding rig tenders in the Middle East and Far East, several of which we believe will advance this year.
Similarly, in offshore markets, NOCs are beginning to respond to the markedly improved commodity price environment with renewed interest in previously deferred offshore projects. We've seen backlogs for our offshore drilling contractor customers increase 33% over the past year, and they're finally realizing improvements in day rates. Additionally, during the fourth quarter, offshore rig utilization exceeded 70% for the first time since 2015 due to a combination of slowly increasing activity levels and rig retirements. As a result of the improving dynamics, our opportunity set is shifting for small-scale projects associated with reactivating warm stacked rigs to large projects that will involve upgrading and reactivating cold-stacked rigs.
Despite the near-term headwinds posed by the current supply chain turmoil, the outlook for Rig Technologies segment is improving. The combination of our growing renewables footprint and a recovery and reactivation spending for our legacy rig business should lead to solid top line growth with an improving margin profile. However, looking ahead to the first quarter for our Rig Technologies segment, typical seasonal declines and continued supply chain challenges should lead to results that are expected to be flat with the fourth quarter. Assuming pandemic-related inefficiencies ease as we move through 2022, we believe EBITDA margins for our Rig Technologies segment will move into the 10% range by year-end.
Throughout 2021, the people of NOV overcame numerous obstacles to deliver critical products for our customers while continuing to make great strides in improving our operational efficiencies and advancing our portfolio of conventional, digital and renewable technologies. Although there continues to be much uncertainty in the near-term outlook and we expect pandemic induced supply chain challenges to continue to affect all global manufacturers through the first half of 2022, we're seeing dramatic improvements in the macro environment, which is setting the stage for what we believe will be a multiyear recovery for our industry and for much improved results for all the stakeholders of NOV.
With that, we'll now open the call to questions.