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Good afternoon ladies and gentlemen and welcome to the NewMarket Corporation Conference Call and webcast to review the Fourth Quarter 2021 and Full Year Financial Results. At this time all participants have been placed on a listen-only mode.
It is now my pleasure to turn the floor over to your host, Vice President and CFO, Brian Paliotti. Sir, the floor is yours.
Thank you, Mathew, and thanks to everyone for joining me this afternoon. As a reminder, some of the statements made during this conference call maybe forward-looking. Relevant factors that could cause actual results to differ materially from those forward-looking statements are contained in our earnings release and in our SEC filings, including our most recent Form 10-K.
During this call we may also discuss the non-GAAP financial measure included in our earnings release. The earnings release which can be found on our website includes a reconciliation of the non-GAAP financial measure to the comparable GAAP financial measure.
We intend to file our 2021 10-K towards the end of February. That will contain significantly more details on the operations and performance of our company. Please take time to review it. I will be referring to the data that was included in last night’s release.
Net income for the fourth quarter of 2021 was $17 million or $1.65 per share, compared to net income of $67 million or $6.12 per share for the fourth quarter of 2020. Net income for the year was $191 million or $17.71 per share compared to net income of $271 million or $24.64 for the full year of 2020.
Now on to our petroleum additives performance, sales for the quarter were $573 million, up 9.2% compared to the sales for the same period of last year. Petroleum additives operating profit for the quarter was $41 million, down 52% versus the fourth quarter of 2020.
Shipments decreased 1.6% between the periods with decreases in both lubricant and fuel additives. They are in this quarter in addition to funding $22 million of dividend, we spent $50 million on capital expenditures in support of our long range capital plan.
Turning to the full year, petroleum additive sales were $2.3 billion compared to sales in 2020 of $2 billion. The increase is mainly due to higher shipments, increased selling prices and changes in foreign currency.
Petroleum additives operating profit for 2021 was $281 million, a 16% decrease compared to 2020 operating profit of $333 million. The decrease was mainly due to higher raw materials and operating costs, partially offset by increased selling prices and higher shipments. Petroleum additives operating profit for 2020 was 12% compared to 16.7% for 2020.
Shipments increased 11.7% between the full year periods with increases in both, lubricant additives and fuel additive shipments. The effective tax rate for 2021 was 22.9% compared to 18.3% for 2020. The increase in the tax rate in 2021 was mainly the result of more foreign income and some one-time favorable adjustments affecting the 2020 rate.
Petroleum additives has continued to see operating margins decline mainly due to prolonged periods of escalating raw material costs. While we have made some progress in adjusting our selling prices to offset the effects of the higher cost, we have not been able to adjust significant sufficiently enough to offset the cost increases.
In addition, we continue to see a lag between when price increases go into effect and we begin to see margin recovery. This lag will continue until we see a period where raw material prices stabilized in the marketplace.
Also we have seen significant increases in many elements of our operating costs such as utilities, logistics, distribution, insurance and third party manufacturing services. In addition, the worldwide supply chain disruptions continue to negatively impact our business from a cost and service delivery perspective.
Margin recovery and cost control will be priorities throughout 2022, so that we will return to our historical profit margin range. We will also be working hard to resolve continuing supply chain issues to meet our customers growing needs and we expect to see improvement in the supply chain and in their performance as the year unfolds.
Our business continues to generate strong cash flow. During the year we funded capital expenditures of 75 – sorry, excuse me, $79 million and paid dividends of $86 million. We also repurchased shares of our common stock for a cost of $196 million.
Along with our substantial investments in petroleum additives from both the capital expenditures in R&D, we return value to our shareholders through dividend and share buybacks totaling $282 million in the year. We ended the year with a very healthy balance sheet, with net debt to EBITDA at 1.9x.
As we have stated before, we are very comfortable maintaining net debt to EBITDA in the 1.5x to 2x times range and at times may go outside that range. In 2022 we expect to see capital expenditures in the $75 million to $85 million range.
As we look back at our results for the year, we were faced with substantial headwinds concerning raw material price escalation and supply chain disruptions. While the entire chemical industry continues to see the same challenges as we enter 2022, we remain focused on our customers and delivering them value solutions in these challenging economic conditions.
As we look forward to 2022 and beyond, we expect continued strength in the petroleum additive sales and shipments. Our views toward the fundamentals of our industry remain unchanged with the petroleum additives market growing at a rate of 1% to 2% for the foreseeable future and we expect to exceed that growth rate. We will continue to work on margin management as costs continue to escalate in our business, both from raw material perspective and operating costs.
Our business decisions will continue to be focused on the long term success of our company, including emphasis on satisfying customer needs, generating solid operating results and promoting the greatest long term value for our shareholders, customers and employees. We believe the fundamental to how we run our business, a long term view, safety and people first culture, customer focused solutions, technology driven product offerings and a world class supply chain capability, continue to be beneficial to all of our stakeholders. We appreciate your support and we look forward to a very successful 2022.
Mathew, that concludes our planned comments. If there are questions, please contact us directly via email or via phone and we will expeditiously get back to you with a response. Thank you.
Thank you. Ladies and gentlemen, this conclude today’s event. You may disconnect at this time and have a wonderful day. Thank you for your participation.