Good day, ladies and gentlemen, and welcome to the NOV First Quarter 2021 Earnings Conference Call. I would now like to introduce your host for today's conference, Mr. Blake McCarthy, Vice President of Corporate Development and Investor Relations. Sir, you may begin. Welcome, everyone, to NOV's First Quarter 2021 Earnings Conference Call. With me today are Clay Williams, our Chairman, President and CEO; and Jose Bayardo, our Senior Vice President and CFO. Before we begin, I would like to remind you that some of today's comments are forward-looking statements within the meaning of the federal securities laws. They involve risks and uncertainty, and actual results may differ materially. No one should assume these forward-looking statements remain valid later in the quarter or later in the year. For a more detailed discussion of the major risk factors affecting our business, please refer to our latest forms 10-K and 10-Q filed with the Securities and Exchange Commission. Our comments also include non-GAAP measures. Reconciliations to the nearest corresponding GAAP measures are in our earnings release available on our website. On a U.S. GAAP basis for the first quarter of 2021, NOV reported revenues of $1.25 billion and a net loss of $115 million. Our use of the term EBITDA throughout this morning's call corresponds with the term adjusted EBITDA as defined in our earnings release. Later in the call, we will host a question-and-answer session. Now let me turn the call over to Clay.

Thank you, Blake. 2020 is one-two punch of an oil supply price war, followed closely by an oil-demand crushing global pandemic led to a sharp decline in demand for oilfield equipment and consumables through the year. NOV's results for its first quarter of 2021 reflect the full impact of the shock wave emanating from the combination of these events that led to this historically painful downturn in an industry noted for painful downturns. As we reported in our operational update on March 16, the quarter was further impacted by other factors: severe winter weather and power outages in Texas and Oklahoma led to 63 NOV facilities being shuttered for a week or more. Additionally, new pandemic control measures flared up overseas, which shut down another couple of large plants and disrupted our supply chains for certain raw materials, notably fiberglass and resin. And as if that weren't enough, the quarter also ended up being impacted by higher costs on two projects related to poor execution on our part. In one case, a new pipe design has proven more expensive to manufacture than expected. And another, an offshore platform component was delayed because our engineering took longer than expected. Both have been corrected. Despite these, the final quarterly results slightly exceeded our March forecast due to better progress on cost reductions overall as well as, and this is important, more and more green shoots emerging in the oil field, particularly in Wellbore Technologies and particularly in North America. Although we would still face headwinds in many markets, our confidence continues to mount that the worst is behind us. North American oilfield activity continued its recovery during the quarter, with March revenues up sharply from January for certain of our earlier cycle domestic businesses, while international results began to point to early signs of a recovery as well. Nevertheless, the first quarter sequential decline in capital equipment revenues reflect the pummeling our backlog took in 2020, which led to consolidated revenue declines of 6%. EBITDA fell to breakeven, which is unacceptable and is prompting further cost reductions. As a provider of capital equipment and spares to the oilfield, our results lag those of our customers, generally speaking. The first quarter of 2021 reflects the preceding nine months of crashing oil demand and a virtual cessation of capital spending, offset by substantial downsizing and cost reductions. We believe this down cycle is the worst our industry has ever seen. Oil prices went negative in April. In August, the U.S. rig count hit its lowest level since records began in World War II. North American frac fleet utilization hit single digits. By year-end, more than 100 North American oil and gas companies had filed for Chapter 11 bankruptcy protection with a combined debt of over $100 billion. Were it not for a couple of large projects that were awarded before the lockdown, FIDs for offshore projects in 2020 would have marked the lowest since 1960. Although the recovery has begun taking hold in many markets, average first quarter rig counts were down 46% for North America land, 36% for international land and down 31% for offshore year-over-year. When I say that it has been a historically bad downturn, what I mean is that it has been a measurably provably historically bad downturn. In this environment, our oilfield service customers are sticking to the tried and true survivor playbook of cannibalizing equipment, spares and consumables, deferring maintenance, reducing spending to bare substance levels and hoarding precious cash. NOV's largest competitor in this environment is idled equipment. By fall, every stacked rig had become an incremental source of drill pipe, shaker screens, handling tools, et cetera. That same dynamic applies across all categories of oilfield equipment when utilization collapses and service companies fight to keep the lights on. A year ago, day rates began racing to find bottom at daily cash costs, which were insufficient to cover long-term maintenance cash costs, much less the capital consumption costs represented by depreciation. For many sectors, year-end 2020 day rates reflected desperation. Companies discounted to keep some assets and crews working and spent cash only as a last resort. Consequently, NOV's oilfield backlogs fell throughout the year and first-quarter annualized revenue run rate is down 45% from just five quarters ago. Here's the good news. 160 years of oilfield history demonstrates that this dynamic is always temporary. The amount of idled equipment available to be parted out falls as activity resumes, and dwindling spares and consumables must be restocked as utilization improves. We're beginning to see the early signs of this in certain areas as rigs and frac fleets go back to work. Idled stripped drilling rigs must have cannibalized pumps and handling tools replaced to go back into service. And this rebuilding, restocking and reactivation phenomenon occurs at a time when service company desperation is evaporating and optimism is growing with rising oilfield activity. We know this because NOV has lived it through recovery cycles like this in the past. As the oilfield goes back to work, customers will soon start to worry about the nontrivial cash investment required to reactivate rigs and equipment. Think about the courage required to put your precious cash into the business that almost killed you last year. That's what these customers face when it comes to reactivations. We believe our customers will require higher pricing on their incremental assets going back to work in order to mitigate risk by achieving quicker paybacks on their reactivation investments. Plus they'll need to cover rising wage pressures and other inflationary forces and more on that in just a moment. And if oil prices remain constructive, pricing momentum will lift margins and return significantly, such is the nature of the cyclical business we serve. NOV will be a key recipient of this unit reactivation investment. As various basins and categories of equipment pass through the inflection to emerge into higher day rate regimes, their orders for capital equipment will accelerate. This is the sweet spot of our business model. The historical oilfield events of 2020 have led predictably to an enormous disassembly of well construction capability by the oilfield services industry, the tried and true playbook I referred to earlier. Every surviving oilfield service company on the planet has made it this far by downsizing extraordinarily well. Collectively, our surviving customers are the dream team of cost-cutters. And they have been hard at it for several years before, tripling their cost-cutting ferocity in 2020. It stands to reason that the aggregate capacity to construct wells has been materially diminished in our view. If the global economies continue to recover out of COVID and demand more oil, the oilfield services industry will be tested to get back to normalized levels of wellbore construction sufficient to meet rising oil demand. We think that's more likely than not. First, governments around the world responded to the economic turmoil of the pandemic with unprecedented stimulus packages. For instance, the G10 plus China passed more than $20 trillion of stimulus in the aggregate. This has led to stunning money supply growth. The U.S. M2 is up 27% year-over-year, as an example. Generally, money supply growth and low interest rates inflate asset prices, including commodity prices like oil. Next, drug companies invented a vaccine, several, actually. While there are fits and starts, global vaccination efforts are progressing, positioning the world to emerge from the pandemic lockdown. Huge economic stimulus and a powerful catalyst, vaccines, to more or less simultaneously open economies, coupled with sharply improved household balance sheets and a widespread desire to get our lives back to normal, well, I cannot conceptualize a more compelling recipe for a synchronized global economic recovery of a size that we have not seen since the 1950s post-war boom. We believe this synchronized recovery will lead to rising oil consumption. In fact, leading demand indicators for crude oil, gasoline and distillate already point to a stronger recovery than many economists expected, and global inventory levels appear to be normalizing ahead of schedule. On the whole, this is a highly constructive backdrop for oil prices for the next few years in our view. Key risk to this thesis include excess Saudi and OPEC capacity, which is scheduled to trickle in over the next several months, and the possibility of the return of Iranian crude production. We acknowledge that these both remain prominent unknowns. However, record levels of crude inventories achieved through the first half of 2020 have, to the extent we have visibility into them, largely dissipated. That only happens because withdrawals have exceeded additions. So supply, held artificially low by OPEC, has been less than demand, held artificially low by the pandemic lockdown. And the key question is, what will the picture look like as artificial constraints ease. Another risk is the productivity of U.S. shales which achieved extraordinary levels of growth off and on throughout the past decade. Simul fracs and other advancements point to the relentless march of the domestic E&P industry toward greater efficiencies. But to be fair, the domestic E&P industry was helped in the prior era by, one, gobs of cheap capital that fueled drilling programs seeking production growth; and two, duress in oilfield services that held pricing below that required to replace, let alone earn a return on the capital consumed in the construction of these wellbores. Things have changed. Capital, when they can get it, is far, far more expensive now. And it feels like it is becoming even more so as ESG factors play a more prominent role in investment decisions. And the incremental investments that will be required to restore oilfield service well construction capabilities will also demand higher returns. Layer in on top of that, the consolidation among domestic E&P operators, the higher cost of attracting labor back to the oilfield while a major economic expansion is underway, giving workers a lot of other high-paying options, and well, you get the picture; a return to material production growth from U.S. shales will be more challenging this time around from where we sit. Behind the artificial production constraints imposed by OPEC, Russia and Saudi Arabia, the artificial consumption restraints imposed by COVID economic lockdowns lies impressive depletion math. All oil wells decline. To what level has the aggregate natural decline of oil well has been obscured by these artificial constraints? We can debate about what the true supply demand picture looks like, but one thing we can all agree on is that both are far more opaque in 2021 than any prior year. After all, we've never had an economic shutdown like this before. My point is this, when the industry materially cuts its exploration, its development, its steady construction of the platforms, projects and wells that produce the oil that our global economy relies on, and further, eviscerates the tools of the oilfield services industry that actually do the work, there will be a day of reckoning. Throughout this historic period, NOV has been steadfast in: one, reducing our costs, which are down $12.6 billion since 2014, including approximately $2 billion in annual fixed cost reductions; two, improving our cash flow, which has delevered our balance sheet; and three, investing in the next-generation of technologies, both for the oilfield as well as emerging renewables opportunities. Whether it's the next-generation of rig floor technology, like our robotic pipe handling system controlled in our NOVOS digital environment; our ideal e-frac fleet, outfitted with our QuickLatch system and FlexConnect frac host system to remove both emissions and manpower from the completion process; or NOV Max, our digital platform that brings all the disparate data sources together for the operator to utilize as he or she sees fit. NOV remains at the forefront of the next-generation of oilfield technology. Our push into supporting the energy transition focuses on areas where we believe we can carve out significant competitive advantages while delivering superior economic returns for our customers in wind, solar, geothermal and other emerging energy sources. Finally, before I turn it over to Jose to go through our segments in detail, let me share some specific examples of the recovery that we believe is just getting started in the oilfield, beginning with Wellbore Technologies. Seven out of eight Wellbore Technologies business units posted sequential growth in the first quarter, reflecting surging demand for certain products. Consequently, we began to add shifts to manufacturing, and we achieved the highest level of absorption we've seen since the first quarter of 2020. NOV witnessed share gains for our ReedHycalog bits in West Texas and Saudi Arabia, despite increasing prices due to strong performance and rising activity. Drilling motor demand is also increasing and downhole friction reduction tools are completely sold out in certain North American markets as revenues were up more than 30% sequentially. We pushed drilling motor pricing up double digits in some areas. North American rig instrumentation and solids control services pricing is up double digits on new work back to pre-COVID levels and poised to rise further. In our international markets, we expect our wired drill pipe jobs to increase over 25% in the second quarter. As operators become increasingly convinced of the value of real-time, high-bandwidth data from the bottom of their drill strings, something that's only available through our proprietary IntelliServ Wired Drill Pipe technology. Global OCTG demand appears to be picking up, which led to double-digit sequential growth in NOV Tuboscope's pipe inspection services worldwide. And despite continuing day rate pressure on drilling contractors, Grant Prideco posted a book-to-bill greater than 100% as operators are requiring larger 5.5-inch drill pipe to accommodate better hydraulic performance, leading drilling contractors to purchase this pipe with our proprietary Delta premium connections. On the whole, higher oil prices and higher rig counts, particularly in North America, placed Wellbore Technologies at the forefront of the oilfield recovery. On the other hand, Completion & Production Solutions and Rig Technology segments continue to battle through low capital equipment backlogs and stingy customer spending. However, the CAPS segment saw its book-to-bill for new capital equipment orders above 100% for the first time since the fourth quarter of 2019, an indication of better results to come. The group's North American quick turn businesses began to see improvement. North American production chokes backlog popped 30% and our reciprocating pump backlog grew 69% sequentially. We won another Tier 4 dual fuel fleet upgrade for a domestic pressure pumping service provider and demand for coiled tubing strings tripled from its low point in the second quarter of last year. While we lost a large project in Alaska, we did win another large project for Brazil, and both projects are evidence that perhaps operators are moving forward with some decisions after protracted COVID-related malaise. Rig technology sees challenging conditions for rig CapEx in the near term, but it did see double-digit growth in spare parts orders, followed by two record low spare parts order quarters in a row. It is also seeing rising inquiries for rig engineering around offshore drilling rig reactivations. So while our first quarter results were terrible, I'm growing increasingly confident that results will improve significantly as the year progresses. Our spare parts, consumables and services businesses tied to activity are seeing it already, and our sales force is wasting no time repairing pricing to acceptable levels. And healing for our capital equipment businesses always begins with rising orders, which we started to see in many businesses for the first time in 1.5 years. To NOV employees listening, I again want to thank you for your perseverance and professionalism. You skillfully positioned the company to support our customers and to capitalize on opportunities to serve them better. Most importantly, through a year that has thrown a lot at our team, you've taken care of each other. I'm incredibly proud to serve with you and appreciate all that you do. Jose, Blake, and I look forward to better days with you as things improve through 2021. Now let me turn it over to Jose.

Thank you, Clay. NOV's consolidated revenue fell $78 million or 6% sequentially to $1.25 billion during the first quarter of 2021. The sequential decline was the result of ongoing austerity from our customer base, operational disruptions from severe weather and COVID-19 challenges, which continue to play global supply chains. A simple way to summarize the quarter is that January was extremely slow, February was a frozen disaster, and in March, orders began to pour in, and we made up a lot of lost ground, giving us confidence that our results will improve through the rest of the year. Ongoing cost-out initiatives, a higher-margin revenue mix, and better pricing limited sequential decremental margins to 22%. However, we take no comfort in this performance, given that we are breakeven EBITDA, which is unacceptable in any market environment. We continue to challenge our organization to look for new ways to drive incremental efficiencies. During Q1, we realized $52 million in annualized cost savings and identified an additional $31 million in opportunities, bringing the total we expect to achieve in 2021 to $106 million. During the first quarter, our operations used $27 million in cash, and capital expenditures totaled $49 million. It's typical for the organization to consume cash in the first quarter, and we expect to be free cash flow positive for the year. We ended the first quarter with $1.61 billion in cash and $1.85 billion in gross debt or net debt of $244 million. Following the end of the quarter, we fully redeemed the remaining $183 million of our senior notes due in December 2022 with cash on hand. As a result, our next bond maturity does not occur until December 2029, and interest expense should decline roughly $1 million per quarter. Moving on to our segment results. Our Wellbore Technologies segment generated $413 million in revenue during the first quarter, an increase of $40 million or 11% sequentially. Cost-cutting, improved absorption in our manufacturing plants, a more favorable sales mix and better pricing drove 55% incremental margins and a $22 million increase in EBITDA to $34 million or 8.2% of sales. Our ReedHycalog drill bit business achieved 20% revenue growth with strong improvements across the Western Hemisphere. ReedHycalog's technology leadership is driving market share gains in most markets, and the gains helped drive modest revenue growth in the Eastern Hemisphere during a quarter in which we typically see a seasonal slowdown. Share gains, improved absorption, better pricing and cost-cutting drove incremental margins of almost 50%. We expect our ReedHycalog business to post another solid sequential improvement in Q2, led by growing activity in the Middle East and Asia Pacific markets. Our Downhole Tool business realized a 13% sequential improvement in revenue, led by sales growth that meaningfully outpaced the increase in drilling activity in the Western Hemisphere, partially offset by seasonal declines in the Eastern Hemisphere. Operators working to reduce trips, maximize hydraulic flow and reduce friction are driving improved demand for our SelectShift drilling motor, fluid hammer, impulse axial pulse technology and agitator tools. A more favorable sales mix, higher volumes, improved operational efficiencies, and better pricing allowed the business to deliver 50% incremental margins during the quarter. Our WellSite Services business realized a 16% sequential increase in revenue, primarily from improving results in its solid control operations. The business unit has steadily recaptured market share in North America from desperate competitors that have fallen out of the market over the last several quarters and is now starting to claw back pricing. Our M/D Totco business realized low single-digit revenue growth in the first quarter. Revenue from surface sensor and data acquisition offerings in the Western Hemisphere improved in line with drilling activity but was partially offset by the seasonal falloff in capital equipment sales to the Eastern Hemisphere. The business unit's eVolve wire drill pipe optimization services achieved record rental service revenue, and as Clay mentioned, picked up additional jobs for Q2. Our track record of improving drilling efficiencies for operators is driving an increasing rate of adoption. However, the relatively high cost of wire drill pipe in a capital-constrained market has mostly restricted the service offering to operators that have complex wells with tight drilling parameters. We believe our new low-cost, next-generation wire drill pipe technology could significantly expand the market and accelerate the adoption of our wired drill pipe enabled services. Our Tuboscope pipe coating and inspection business posted a 10% sequential increase in revenue. Demand for inspection services improved globally and was particularly strong in the U.S., where piece counts from steel mills and outside processors improved 43%. Revenue from coating operations fell due to seasonal declines in the Eastern Hemisphere, which more than offset improving demand in North America. Our Grant Prideco drill pipe business achieved a high single-digit sequential increase in revenue. A higher proportion of large-diameter premium pipe in our sales mix drove outsized incremental margins despite meaningful costs associated with the winter storm, which included facility repairs, overtime pay and scrapping costs from power outages that occurred during sensitive heat-treating operations. The business unit achieved a 104% book-to-bill, which should allow for another sequential improvement in Q2. 31% of our orders came from North America, the highest percentage in quite a while. As Clay mentioned, we saw strong demand for 5.5-inch pipe driven by operators seeking greater hydraulic efficiencies consistent with the driver we're seeing for our high flow rate drilling tools at a time when there continues to be ample supplies of 4.5- and 5-inch customer-owned drill pipe in the U.S. For our Wellbore Technologies segment, we expect activity gains in the U.S. and Latin America to moderate and activity in the Eastern Hemisphere to recover, resulting in sequential revenue growth of 8% to 10% during the second quarter. We also expect continued improvement in the segment's cost structure and better pricing, which should allow incremental EBITDA margins near 50%. Our Completion & Production Solutions segment generated $439 million in revenue during the first quarter, a decrease of $107 million or 20% sequentially. The sharp decline was primarily due to depleted backlogs, severe weather-related disruptions and supply chain challenges. Efforts to reduce costs and improve operational efficiencies limited decremental margins to 30% and EBITDA declined $32 million to a loss of $4 million. Orders for the segment improved $57 million sequentially to $338 million, resulting in a book-to-bill of 127%; the segment's first book-to-bill greater than 100% since the fourth quarter of 2019. During the quarter, we began to include orders for subsurface fiberglass fuel storage tanks in our capital equipment backlog. Excluding this addition, our book-to-bill would have been 115%. Our Fiber Glass Systems business realized a 25% sequential decline in revenue. Difficulties faced by the unit were emblematic of what we saw in most of our capital equipment businesses during the first quarter. We anticipated absorption challenges resulting from five straight quarters with a book-to-bill below 1, but severe COVID-19 and weather-related disruptions also impacted operations. COVID outbreak shut down our two large manufacturing facilities in Malaysia for three weeks, and the pandemic's impact on global supply chains resulted in shortages of epoxy resin and glass fiber, which limited manufacturing output at our facilities. Severe winter weather further hampered operations and caused customers to defer deliveries due to transportation constraints and difficulties in installing large subsurface storage tanks in frozen soil. Despite demonstrating the near-perfect case study for Murphy's law, our team did everything within reason to protect the bottom line and was able to maintain positive EBITDA margins. While ongoing supply challenges may not be fully resolved until August, the outlook for this business seems to be improving with each passing day. A significant pickup in orders in March for our fuel handling products allowed the unit to post a book-to-bill north of 100%. We're also seeing demand return from marine scrubbers in Asia and fiberglass pipe in the Middle East, providing us with confidence that the business should realize steady improvement in its results throughout the remainder of 2021. Our Intervention & Stimulation Equipment business realized a mid-single-digit sequential decline in the first quarter, its fifth straight quarter of declining revenue. Despite continued weakness in the North American market, the segment achieved its second straight quarter with a book-to-bill greater than 1. Demand for wireline equipment, particularly in the Middle East, Europe and Africa, has been a bright spot. And while our global coiled tubing business experienced a sharp falloff in Q1, quoting activity from international markets remains healthy and improving completions activity in the U.S. is driving greater demand for consumables. In the pressure pumping space, activity levels have increased significantly, but pricing for our customer services remains well below pre-COVID levels, forcing cannibalization and low-cost purchases of distressed equipment to sustain operations. Opportunities to cannibalize are limited. And while equipment auctions continue, the quality of iron on the auction block is quickly deteriorating. As a result, we're seeing a significant increase in quotes, albeit off extremely low levels for new equipment. Our Q1 cementing equipment orders were double the amount we received the entire second half of 2020. And we're also seeing increasing demand for stimulation equipment with enhanced capabilities and reduced emissions. During Q1, we booked an order to convert 16 Tier 2 frac pumps to new Tier 4 DGB dual fuel units that can run on a combination of diesel fuel and natural gas, lowering operating costs and emissions. Additionally, we're seeing growing interest in our ideal e-frac stimulation equipment, which recently finished its first field trial where our pump completed more than 200 stages at rates up to 22 barrels per minute, nearly 3x that of a traditional 2,500 horsepower unit. With improved bookings and growing demand for aftermarket services, we expect our Intervention & Stimulation Equipment business will realize a meaningful pickup in revenue during the second quarter. Our XL Systems conductor pipe business experienced a sharp sequential decline in revenue during the quarter, resulting from a backlog that was depleted after eight straight quarters with a book-to-bill of less than 1. Our team limited decremental margins to only 17%, and we achieved a 143% book-to-bill indicative of improving market conditions. Interestingly, we've seen certain customers award work then delay deliveries, while other customers are scrambling hard with urgent orders for newly established near-term spud dates. So sentiment remains mixed, if not a little unusual, but we take the current dynamics as a net positive. Meanwhile, competition remains fierce with desperate competitors offering pricing and payment terms that we will not match. Fortunately, our technological and quality differentiation allows us to win a sufficient number of projects that are not entirely driven by pricing, such as the award we received associated with the industry's first 20,000-psi well development project. Our Subsea flexible pipe business realized a low double-digit sequential revenue decline with outsized decremental margins resulting from lower volumes, a less favorable product mix, and the manufacturing challenges associated with the new pipe design that Clay mentioned. While bookings remained light, customer dialogue and order outlook has improved, particularly in Brazil, where we expect large projects to advance later this year. However, exact timing remains somewhat uncertain as extreme COVID-19-related challenges in the country make it difficult to coordinate efforts and complete essential engineering work required to advance projects. We believe the offshore production-oriented components of our CAPS segment are at or near bottom. On our last several calls, we've mentioned how we've been pursuing a large number of offshore production-related projects that continue to push out quarter after quarter. We finally started to see some of these projects shake loose and remain hopeful that stronger oil prices could support more FIDs through the year. For the second quarter of 2021, we anticipate revenue from our Completion & Production Solutions segment will improve between 15% to 25% sequentially, with incremental margins in the mid-20% range. Our Rig Technologies segment generated revenues of $431 million in the first quarter, a decrease of $6 million or 1% sequentially. A small increase in capital equipment sales related to offshore wind was more than offset by the seasonal falloff in aftermarket services. A less favorable revenue mix and weather-related disruptions resulted in a $6 million decline in EBITDA to $13 million or 3% of sales. Orders for the segment declined $78 million sequentially to $112 million, yielding a book-to-bill of 59%; the segment's sixth quarter out of the last seven with a book-to-bill of less than 1. Orders for rig capital equipment remained weak as drilling contractors continued to cannibalize idle equipment and minimize spending. Despite improving activity and dialogue, there remains a distinct lack of urgency from our customers. Quotation levels increased 25% sequentially, and the conversion of quotes to orders also improved; however, only quotes for small orders converted to bookings. We aren't losing larger orders to competitors, and customers are not canceling projects. There's simply just a lack of urgency and potential orders keep sliding to the right. Ongoing waves of COVID-19 outbreaks in international markets do not inspire confidence, and neither does uncertainty around the timing of when several of our offshore drilling contractor customers will exit bankruptcy. While customers in the Middle East and Asia continue to express the need for newbuild rigs and offshore customers require meaningful upgrades for reactivations, we expect the lack of urgency will keep the book-to-bill for our traditional rig equipment business below 1x. However, we are optimistic that a few additional quarters of stability in commodity prices and improving activity levels will do quite a bit to move projects forward. On a more positive note, we began manufacturing the first two rigs from our new manufacturing plant in Saudi Arabia. Near-term revenue from these projects will help offset the expected weakness in our rig equipment order book. As a reminder, the plant has a commitment for 50 drilling rigs over the next 10 years and accounted for $1.8 billion in backlog. We expect to deliver the first rig at the end of this year, a rig in each quarter during 2022, and five rigs per year beginning in 2023. In our Aftermarket business, spare part bookings increased 22%, led by demand from the Middle East and U.S. land markets as the ability to cannibalize stacked rigs has nearly run its course. While the improvement is extremely welcome, spare part bookings are down 36% year-over-year and demand for our offshore customers was 43% lower than it was in Q1 2020. As previously mentioned, several of our larger offshore customers are in the late stages of restructuring processes, and we currently have a large amount of their equipment sitting in our shops. We're optimistic that once capital structures are reset and more FIDs advance, we will realize a meaningful pickup in service repair and recertification-related work. Our renewables business has a completely different feel than our traditional rig business. During the quarter, we booked an order for the design, jacking systems and crane for a European wind turbine installation vessel. Our Q1 offshore wind order intake was modest relative to the opportunities we are pursuing, which include over $400 million in potential projects that could be awarded before the end of the year. Looking ahead to Q2, we expect growth in our renewables business, improving aftermarket activity and progress on the rigs in Saudi Arabia to offset the impact of weak orders from our rig capital equipment business, which should lead to results for our Rig Technology segment that are in line with the first quarter.

Thank you, Sarah, and thanks to everybody for joining us today. It was obviously a very challenging quarter, but we're optimistic things should get brighter as the year progresses. And reflecting on what's been accomplished by our team, just can't thank them enough. Extraordinary reduction in our fixed costs out of our business, reduction in our working capital intensity, the strengthening of our balance sheet, all while continuing to develop new products and technologies, I think we're very well positioned. Thanks to the NOV team. And so I'm very grateful to how our employees are listening, and their colleagues have positioned the company for the recovery. So thanks to everybody for joining us today. We look forward to discussing our second quarter results with you in July. And in the meantime, please be safe. Thank you.

Our first question comes from the line of David Anderson with Barclays.

I have a short-term question and a broader question. Starting with the Wellbore side, which is a clear standout this quarter, could you provide more details about the international land aspect of this business and how you see it trending? Would you consider it a deflection yet? I'm curious if you're beginning to build capacity for your Middle East customers in anticipation of an increase in demand, as we are hearing a lot about this for the second half. Could you elaborate on that business a bit, please?

You bet. You bet. Happy to, David, and appreciate the question. Yes, we're optimistic that international is now starting to go back to work in certain markets, probably most excited about Latin America and the Middle East and as well expect Russia to pick up a bit. Typically, it's low seasonally through the winter period. But specifically, we're starting to see tenders for bulk sales of things like bits, fishing tools, downhole drilling motors, those sorts of things being let and an indication that we think a lot of national oil companies are getting ready to go back to work. Recently saw a compilation of NOC budgets for 2021 and some pretty solid double-digit year-over-year growth rates expected. And generally, the group that was included are getting back closer to where they were in 2019. And so we think that's indicative of the oilfield in international starting to recover in the way, hopefully, that North America has. I think higher crude prices are supportive of that. And so we're optimistic that, that should continue to unfold as we progress through the summer.

All right. That's great to hear. So my other question is kind of a bigger picture topic here. I think one of the things that investors tend to underappreciate is how the skill sets on the OFS sector are really transferable into other markets. And I think as energy markets adapt service companies, at least the best ones adapt right with them. You probably know that better than just about anybody. So I guess with this coming energy transition, I'd be really curious to know how certain product lines that you have could be repurposed or reengineered for this new type of customer emerging end markets? Offshore wind installation is a very clear example of this transferable skill set. But where else could you see this happening at NOV?

Yes. It's a great question. I do think that the skill sets and the technology that we employ in this space, the prosecution of large projects at scale and remote locations is very transferable to renewables in many instances. And so actually, very pleased as we started moving and exploring the renewables opportunities a few years ago here at NOV. I was very pleased to see the overlap in skill sets and the possibilities to put those skills to work in the renewables challenges that the world faces. And so yes, you correctly point out. The wind offshore space is almost a one-for-one application of things like jacking systems, lifting, handling systems. More specifically, we have a lot of experience, as you know well, in pipe handling and drilling operations, pipe rackers, those sorts of things that are tightly choreographed, industrial, mechanized and robotized processes in many instances. And so our scientists are working on applying those sorts of things to the process of handling blades offshore and attaching these very long blades to the nacelle on these turbines, for instance. So that's sort of a specific example of where we think we can bring a lot of value. Geothermal business, as you know well, is a direct application of oilfield drilling capabilities to hotspots around the globe that are that lend themselves to economically efficient electricity generation. And so we've developed more specialized products for the hot temperatures that those drilling operations encounter as well as the hard rock that they encounter. And so very pleased to put things like our fluid hammer downhole device into geothermal operations in Europe this quarter. We've developed composite piping systems that can handle the temperature and scale challenges in geothermal. More sort of fledgling opportunities. We're the largest provider of gas dehydration, gas processing systems to traditional natural gas-producing operations. And so our monoethylene glycol solvent-based dehydration technology is very analogous to the solvent-based CO2-stripping technologies that will be required, we think, for carbon capture and sequestration. And so we've got a team looking at opportunities there. Just all the way around from metallurgy to composites, to mechanical systems, to permanent magnets to you name it. I think there's a lot of expertise that not just in oilfield but, frankly, the whole oilfield services industry can bring to bear on the renewables challenges.

Our next question comes from Stephen Gengaro with Stifel.

Jose, do you mind maybe talking about the free cash flow expectations for this year and how we should think about movements in working capital as we think about free cash generation?

Sure, Stephen. As I noted in our prepared remarks, the first quarter is usually a time when we use some cash due to early-year activities. However, we are very confident that we will generate positive free cash flow for the entire year. This expectation has implications for the next three quarters, during which we anticipate producing significant amounts of free cash flow. We feel optimistic about this, even as we project an increase in top-line revenue in the latter half of the year. We believe we have made substantial progress in improving our internal processes related to better management of working capital. This suggests we can continue to lower the capital intensity of our business even as revenue improves. We ended last year with working capital as a percentage of revenue running in the low 30% range, which increased slightly due to a drop in revenue this quarter. However, as we move through the year, we certainly foresee getting back to that range, or even into the upper 20% to low 30% range, which should enable us to free up more cash from our working capital.

And just as a follow-up and a follow-up to a prior question as well. When you think about alternative opportunities, and I'm specifically thinking about in the near term, the offshore wind side. Any material incremental CapEx we should be thinking about as it pertains to those opportunities?

That's the good news. The same plants that manufacture jacking systems for offshore jack-up drilling rigs also produce the jacking systems for these vessels, as well as our cranes and lifting systems. Our engineering team continues to deliver innovative solutions, making this a great fit for our capabilities. Despite the challenges in the drilling sector, as Jose pointed out in his remarks, the wind sector is becoming increasingly promising. Last quarter, we highlighted how taller towers can access more consistent and stronger wind resources. The introduction of larger turbines with greater swept areas and improved efficiency is benefiting wind developers economically. Since our last call, we have become more optimistic about the opportunities in this area, particularly as OEMs are now offering larger towers ranging from 12 to 14 megawatts. Offshore project developers are achieving better outcomes with these higher load factors and evolving economics, leading to more projects moving towards final investment decisions for offshore wind development. This is generating significant excitement among our customers, some of whom are looking to exercise options, while new customers are also showing interest. Overall, we are very enthusiastic about the possibility of applying our oilfield expertise to this opportunity.

Our next question comes from Chase Mulvehill with Bank of America.

I guess, first thing I wanted to touch on was just the margin progression here. Obviously, your guidance implies about 3% EBITDA margin, so a nice little uptick without any help from Rig Tech, mind you. But as we kind of move forward, I don't know if you could kind of talk about how you see margins progressing in the back half of this year. And maybe just speaking to when you think we could actually get back to kind of double-digit EBITDA margins. And maybe there's a revenue number that you need to reach to be able to kind of get to double-digit EBITDA margins again. But just kind of want to understand the path of margins going forward and when we can get back to double digits.

Yes, Chase, it's Jose. I'll address that question. Thank you for asking, it's a valid concern. There is still some uncertainty regarding how the market environment will evolve. However, we are optimistic that things are moving in a positive direction, and we anticipate seeing good momentum starting in the latter half of the year, along with some improvement in Q2. As we look forward to the end of 2021 and into 2022, we believe our Wellbore Technologies business could return to mid-teens EBITDA margins, while the other two segments may range between mid- to upper single-digit percentages. I hope this provides some clarity. It will take some additional time for our backlogs in both CAPS and Rig Technologies to rebuild before we can reach double-digit and mid-teens ranges that we are confident are within reach. Furthermore, regarding the longer-term revenue targets, I won’t delve too deeply into specifics, but it's important to note the significant cost reductions we've implemented over the downturn. From the start of 2019 to the end of 2020, we cut $700 million in structural costs, with an additional $106 million expected in 2021. This means we should achieve margins comparable to our past performance even at a lower revenue level, leading to better returns on our capital employed. Overall, I feel positive about our company's future positioning, and we look forward to market improvements complementing our internal efforts that have been ongoing for several years here at NOV.

I appreciate the color. If I can kind of switch gears a little bit and just talk about Rig Aftermarket. During the prepared remarks, you obviously talked about the offshore drillers coming out of bankruptcy and a lot of equipment sitting in your service centers. If my math was right, in 2020, you did about $1.1 billion of Rig Aftermarket revenues. And at the peak in 2019, you did kind of $1.4 billion. So as these offshore drillers start coming out of bankruptcy and activity starts picking back up, how should we think about how aftermarket revenues progress over the next 2, 3 years? Do you think the $1.4 billion you did in 2019 that you'd be able to kind of get back there in the next 2, 3 years? Or do you think it's structurally a lower revenue run rate as we go forward?

I believe that the current situation is more representative of a steady-state level regarding the consumption of aftermarket spare parts and repair services. We are looking forward to returning to those levels. As Jose mentioned, many offshore drillers entering bankruptcy restructuring have significantly affected their aftermarket purchases. For instance, our Q1 2021 bookings for aftermarket spare parts were down 43% compared to the same quarter last year, which is a sharper decline than the 31% year-over-year decrease in the offshore rig count. I don't view this as a structural change; rather, it relates to their spending constraints during restructuring. As offshore drilling activity resumes and rig counts increase, we expect them to emerge from bankruptcy with healthier balance sheets and return to purchasing spare parts as they did previously. Additionally, many rigs have been stacked, some even cold stacked, and reactivating those rigs requires significant investment. Our aftermarket business will play a crucial role in the reactivation of both cold and warm stacked rigs. We're also seeing more inquiries, particularly for our engineering group, about potentially reactivating rigs, which serves as an encouraging early indicator that more rigs may soon return to work in the offshore sector.

Our next question comes from the line of Marc Bianchi with Cowen.

Maybe building on Chase's question there about aftermarket. If I just sort of look at orders broadly in Rig Tech and in CAPS, it sounds like you're maybe more optimistic about recovery in CAPS. But how would you characterize the kind of recurring level of orders that would be required for where the current level of oilfield activity is? So if we kind of get past this cannibalization period that might be occurring in both businesses, just not building any further rig count increase, but just to get back to normal where we are today, what would you say those types of order levels are?

One of the exciting aspects of producing capital equipment for the oilfield is its highly cyclical nature. It's a great question, but it's quite challenging to answer due to the phenomenon of cannibalization, which we actively study. I would say the situation differs by category of equipment within the oilfield. Our customers have become quite adept at navigating this cannibalization process, using it as their strategy. However, quantifying the normalized level of orders in specific categories is difficult. What we do know from past upturns is that the increase can be significant, often accompanied by pricing improvements from our customers. As we begin to see day rates rise in various categories, this could create a sense of urgency for them to place orders with us. On the flip side, our aftermarket business has provided stability during downturns. The demand for spare parts, consumables, and services in our aftermarket segment is more directly linked to activity and tends to be less volatile than capital equipment demand. This steady base has helped us through recent challenges. However, the decline in spare parts orders for the aftermarket during the end of 2020 and the beginning of 2021 has made navigating the situation even more difficult.

Yes, that makes sense. Perhaps the next question is for Jose. The CAPS guidance for the second quarter indicates that the incremental margin in the mid-20s seems a bit conservative, given how the last couple of quarters have progressed. There were some supply chain issues that affected the first quarter. I assume those have been resolved, but perhaps that's not the case and might be influencing the lower margin. I'm just curious if you could provide more insight on that.

Yes, Marc, it's a fair question, but really, what it has to do with is a shift in the mix of the business. And at this point, the orders that we've taken in, and some of those businesses have been at more challenged pricing. So near term here, a little bit of challenge related to incremental margins within the CAPS segment, but we anticipate that improving as we move through the course of the year.

We are continuing to face supply chain issues that will persist throughout the summer. Our teams are working hard to manage these challenges, but I believe they will remain a bit of a hurdle for the next few quarters.

Our next question comes from the line of Scott Gruber with Citigroup.

So looking at the Wellbore Tech guide, it does look like the second quarter guide is broadly on par with our expectation for spending growth by the global E&P industry. Is it fair to assume that when you guys think about a stronger second half that when we look at Wellbore, we should be thinking about growth rates that are in excess of the underlying E&P spending growth rate? It just seems that we're on the cusp of the normal cycle beta for that segment kicking in, but I wanted to get your thoughts.

Yes. Look...

Go ahead. Go ahead, Jose.

Scott, that's a great question. Generally, our Wellbore business's performance is closely tied to rig activity. In the coming quarters and over the next couple of years, we anticipate additional opportunities to exceed typical growth in several areas. Clay discussed the new products we are introducing to the market and the market share gains we've achieved recently. These factors are expected to contribute to significant growth as we emerge from the lowest point in the cycle, where we are starting to identify selective opportunities to improve pricing. This will further enhance our growth in the upcoming quarters.

Got you. And then just thinking about the recovery here, Wellbore picking up, accelerating off the bottom, Aftermarket business coming back. But obviously, you had some supply chain issues that were largely out of your control in fiberglass. But just given what we're hearing across the general economy with issues cropping up as the global economy starts to snap back, are there risks outside of fiberglass of supply chain issues? Is it confined to price inflation? Are the real kind of delivery delays that you could face due to the supply chain? Just some more color kind of around those issues as things ramp back up? And any commentary on your ability to secure net pricing above and beyond input cost inflation?

Yes, that’s a great question, Scott. We’ve been very focused on this. It’s been an unusual year, and the latest manifestation of that is evident in our supply chain. We’ve discussed resins and fiberglass extensively. We believe the resin situation will improve by the second quarter, and we hope to address the supply chain challenges regarding fiberglass by the third quarter. However, as you might expect, many of our business units rely on steel, and due to the diverse nature of our product offerings, we use various types of steel sourced from different mills around the world. This is where we’re experiencing pricing increases and supply chain challenges most significantly. To give you an idea, some business units are seeing stable steel prices, while others are facing very high double-digit price increases sequentially. It varies widely, depending on which mills have resumed operations post-COVID. Generally, the mills in Asia seem to be getting back to work faster than those in Europe. We are paying close attention to this to manage pricing effectively. Our business units have successfully implemented surcharges to offset the increased costs of raw materials. As economies recover and these mills, along with other raw material producers, ramp up their operations, I believe the supply chain issues will be resolved. I don’t see this as a long-term problem, but rather something we’ll need to navigate actively over the next quarter or two.

Our next question comes from the line of George O'Leary with Tudor, Pickering.

Lots of focus from the investor and the sell-side community on kind of the synergy transition side of the equation. But just curious from an inorganic growth standpoint, if you guys are looking a little bit counter to that popular view and maybe exploring some opportunities on the oil and gas side of the business given the very impressive balance sheet you guys have. And if there aren't some more attractive from a valuation standpoint opportunities within that legacy oil and gas space?

Yes, that's a great question, George. The short answer is yes, we are exploring options, but we've noticed a significant gap between the asking and offering prices. We have had discussions about interesting franchises, technologies, and opportunities. However, as we've mentioned in previous calls, we believe there's greater capital efficiency and better value in inorganic technology and product developments. Therefore, most of our focus has been there. We are open to transactions, opportunistic, and we continue to look for ways to enhance and grow our franchises in both oilfield and renewables. We're also looking for thoughtful and profitable ways to deploy capital in that direction. To summarize, we have not made an acquisition in the oilfield for quite some time mainly due to the differences in valuations.

Okay. Great. That's very helpful. And then the commentary in the press release and during the call on IntelliServ was interesting to me. Remember, that seemed to be gaining some momentum just a few short years ago. You spent some time with some land drillers in the U.S., in particular, that were looking at deploying it more frequently and then purchasing incremental strings. The cost reduction in 20 hours and 20 minutes seems like that could maybe reemerge as a theme. I'm curious how dialogue is going with customers post this change and whether you think that has a better shot at making a splash in onshore markets, the U.S. or offshore markets? Just kind of how you see that playing out and what the customer feedback has been.

Yes, good question. Another good question, George. Yes, it's an area that we are excited about. It's an area that has been steadily growing and becoming a more meaningful part of our business. And we're gaining more and more traction with it. We've worked on several different projects in several different continents, as you pointed out, U.S. land, offshore, and have recently started working for a major NOC in the Middle East on some high-profile land projects, and things are going very well. Also particularly excited about the latest generation of the IntelliServ wire drill pipe that you referenced. Technology that allows us to significantly reduce the total time to manufacture the product, and also, very importantly, significantly reduces the amount of time and effort needed to service, maintain and repair that technology out in the field. So the incremental cost to add the wiring technology to the drill pipe has been significantly reduced, which should lower capital cost requirements in a market where capital is very, very precious, and also lower day-to-day operating costs. So I think that certainly has potential to help open the doors to market opportunities where customers have been a little bit more challenged in terms of thinking the economics may or may not work for them. So more to come in that product. It's still early days, but it's ramping up pretty nicely.

This concludes today's question-and-answer session. I will now turn the call back to Mr. Clay Williams for closing remarks.

Thank you, Sarah, and thanks to everybody for joining us today. It was obviously a very challenging quarter, but we're optimistic things should get brighter as the year progresses. And reflecting on what's been accomplished by our team, just can't thank them enough. Extraordinary reduction in our fixed cost out of our business, reduction in our working capital intensity, the strengthening of our balance sheet, all while continuing to develop new products and technologies, I think we're very well positioned. Thanks to the NOV team. And so I'm very grateful to how our employees are listening, and their colleagues have positioned the company for the recovery. So thanks to everybody for joining us today. We look forward to discussing our second quarter results with you in July. And in the meantime, please be safe. Thank you.

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.