HOUSTON, Feb. 11, 2021 /PRNewswire/ --
Full Year
2020:
|
Fourth Quarter
2020:
|
Sales
of $2,560 million
|
Sales of $579
million
|
Net loss
attributable to common stockholders of
($298) million
|
Net loss
attributable to common stockholders of ($11)
million
|
Adjusted Gross
Profit of 19.7%
|
Adjusted Gross
Profit of 19.7%
|
Adjusted EBITDA
of $97 million
|
Adjusted EBITDA
of $22 million
|
Cash Flow from
Operations $261 million
|
Cash Flow from
Operations of $83 million
|
Net debt of $264
million, a reduction of 49%
|
|
Total available
liquidity of $551 million
|
|
MRC Global Inc. (NYSE: MRC), the largest global distributor,
based on sales, of pipe, valves and fittings and other
infrastructure products and services to the energy industry, today
announced full year and fourth quarter 2020 results.
The company's sales were $579 million for the fourth
quarter of 2020, which was 1% lower than the third quarter of
2020 and 24% lower than the fourth quarter of 2019.
Sequential sales were essentially flat as both the gas
utilities and upstream production sectors experienced
growth, offset by declines in the midstream pipeline and
downstream and industrial sectors. The international segment also
experienced growth on a sequential basis. As compared to the
fourth quarter of 2019, the decline in sales was across all
sectors and segments, with the exception of the gas utilities
segment, which experienced significant growth.
Net loss attributable to common stockholders for the fourth
quarter of 2020 was ($11) million, or ($0.13) per diluted
share, as compared to a net loss of ($30) million, or
($0.37) per diluted share in the
fourth quarter of 2019. Please refer to the reconciliation of
adjusted net income (loss) (a non-GAAP measure) to net income
(loss) (a GAAP measure) included in this release.
Andrew R. Lane, MRC Global's
president and chief executive officer stated, "Overcoming enormous
challenges in 2020, I am proud of our MRC Global team for staying
focused and executing our strategy for long-term shareholder value.
We exceeded all the targets we set for 2020 including generating
$261 million of cash from operations and reducing our net debt
by almost half to $264 million, with
a leverage ratio of 2.7 times. We ended the year with
$119 million in cash and our term
loan does not mature until 2024. We set a new record for adjusted
gross margins in 2020 achieving 19.7% for the year. We also
reduced our normalized operating costs by $113 million in 2020, with a majority of these
structural, positioning the company well for higher
incremental margins going forward. I am also very happy that
despite the challenges of the pandemic, we stayed focused on our
employee safety and finished the year with the best recorded safety
performance in our history. As the oil and gas market
recovers, we are well-positioned with a great team, $551 million in liquidity and a lean cost
structure that will allow us to take full advantage of the
opportunities ahead.
"Next week, MRC Global celebrates a significant milestone, our
100-year anniversary, an achievement few can claim. It is just the
beginning however, and we look forward to remaining
the leading global PVF distributor to the oil and gas
industry providing world-class supply chain solutions for our
customers, creating new opportunities for our employees and
generating superior returns for our shareholders." Mr. Lane
added.
MRC Global's fourth quarter 2020 gross profit was
$90 million, or 15.5% of sales, as compared to gross
profit of $131 million, or 17.1% of sales, in the fourth
quarter of 2019. Gross profit for the fourth quarter of 2020 and
2019 each reflect expense of $1 million in cost of
sales relating to the use of the last-in, first out (LIFO) method
of inventory cost accounting. Gross profit for the fourth quarter
of 2020 and 2019 was also negatively impacted by $12 million and $5 million of pre-tax
charges related to the non-cash write-off of excess and
obsolete inventory, respectively. Adjusted gross profit, which
excludes these items as well as others, was 19.7% in
both the fourth quarter of 2020 and 2019. Please
refer to the reconciliation of adjusted gross profit (a
non-GAAP measure) to gross profit (a GAAP measure) included in this
release.
Selling, general and administrative (SG&A) expenses
were $97 million, or 16.8% of sales, for the fourth
quarter of 2020 compared to $141 million, or 18.4% of
sales, for the same period of 2019. SG&A expenses for the
fourth quarter of 2020 and 2019 include $2 million and
$4 million of pre-tax severance and
restructuring charges. SG&A expenses for the fourth quarter
of 2020 also include $1 million of pre-tax
sub-lease income.
For the three months ended December 31,
2020, the income tax benefit
was ($2) million on
a ($7) million pre-tax loss resulting in an effective tax rate
of 29%. The company's rates generally differ from the U.S. federal
statutory rate of 21% as a result of state income taxes and
differing foreign income tax rates. For the three months
ended December 31, 2019, the income
tax expense was $5 million on a
($19) million pre-tax loss. This
was due primarily to losses incurred in foreign jurisdictions with
no corresponding tax benefit and additional taxes related to
changes in tax regulations.
Adjusted EBITDA was $22 million in the fourth quarter of
2020 compared to $23 million for the same period in 2019.
Please refer to the reconciliation of non-GAAP measures (adjusted
EBITDA) to GAAP measures (net income) in this release.
Sales by Segment
U.S. sales in the fourth quarter of 2020 were $448 million,
down $160 million, or 26%, from the same quarter in 2019. Gas
utilities' sector sales were up $38
million or 21% as many customers increased spending in the
fourth quarter, which is uncommon compared to historical
trends, due to a budget catch-up from lower spending earlier
in the year related to pandemic restrictions. Downstream and
industrial sector sales declined by $68 million, or 36%, as
critical turnarounds were completed but overall spending was
reduced in response to lower demand created by the
pandemic. Upstream production sector sales declined
$77 million, or 55%, as a result of reduced spending from the
pandemic and a 57% reduction in well completions. Midstream
pipeline sector sales declined $53 million, or 51%, primarily
due to less customer spending as projects were canceled or delayed
associated with reduced demand for infrastructure as
production declined.
Canadian sales in the fourth quarter of 2020 were $23
million, down $20 million, or 47%, from the same quarter in
2019 driven by the upstream sector, which was adversely affected by
the pandemic and associated reduced demand.
International sales in the fourth quarter of 2020 were $108
million, down $7 million, or 6%, from the same period in
2019 driven primarily by weaker demand in the upstream sector
from the impact of the pandemic particularly in the
Middle East and
Norway. Stronger foreign currencies relative to the U.S.
dollar favorably impacted sales by $5 million.
Sales by Sector
Gas utilities sales in the fourth quarter of 2020
were $217 million, or 37% of total sales,
up $37 million, or 21%, from the fourth quarter of 2019
due primarily to the U.S. segment, as described above.
Downstream and industrial sales in the fourth quarter of 2020
were $174 million, or 30% of total sales,
down $70 million, or 29%, from the fourth quarter of 2019
due primarily to the U.S. segment, as described above.
Upstream production sales in the fourth quarter of 2020
were $126 million, or 22% of total sales, down $98
million, or 44%, from the fourth quarter of 2019. The decrease in
upstream sales was across all geographic segments, as described
above.
Midstream pipeline sales in the fourth quarter of 2020
were $62 million, or 11% of total sales, down $56
million, or 47%, from the fourth quarter of 2019 due primarily
to the U.S. segment, as described above.
Balance Sheet and Cash Flow
Cash balances were $119 million at December 31, 2020. Debt, net of cash,
was $264 million and excess availability under the
company's asset-based lending facility was $432 million as of
December 31, 2020. Cash provided by
operations was $83 million in the fourth quarter of 2020
resulting in $261 million of cash provided by operations in
2020. Free cash flow (cash provided by operations less capital
expenditures less preferred stock dividends) was $226 million
in 2020. The company believes MRC Global's liquidity position of
$551 million is sufficient to support
the business and capital needs of the company.
COVID-19 Pandemic Impact
The COVID-19 pandemic and related mitigation measures have
created significant volatility and uncertainty in the oil and gas
industry. Oil demand has significantly deteriorated as a
result. The unparalleled demand destruction has resulted in
lower spending by our customers and reduced demand for the
company's products and services. Although we have seen a modest
improvement in oil demand, uncertainty exists as to when a
more significant recovery will occur.
As a critical supplier to the global energy infrastructure and
an essential business, the company has remained operational with no
closures to any facilities. Our office staff initially worked from
home as the pandemic began but has returned to the office in
varying degrees depending on the stage of the pandemic at each
locality. As of February 2,
2021, the company had 10 active COVID-19 illnesses
reported, which is 0.4% of our global workforce. MRC Global has
implemented various safety measures for employees working in the
company's facilities and implemented remote working for those whose
jobs permit it. MRC Global is committed to a safe working
environment for all employees and is constantly monitoring its
response in the locations where the company operates.
From a supply chain perspective, given the company's inventory
position and the reduced demand, the company has fulfilled orders
with little disruption.
Conference Call
The company will hold a conference call to discuss its
fourth quarter and full year 2020 results at
10:00 a.m. Eastern Time (9:00 a.m. Central Time) on February 12, 2021. To participate in the call,
please dial 412-902-0003 and ask for the MRC Global
conference call at least 10 minutes prior to the start time. To
access the conference call, live over the Internet, please log onto
the web at www.mrcglobal.com and go to the "Investor Relations"
page of the company's website at least fifteen minutes early to
register, download and install any necessary audio software. For
those who cannot listen to the live call, a replay will be
available through February 26, 2021
and can be accessed by dialing 201-612-7415 and using pass code
13714607#. Also, an archive of the webcast will be available
shortly after the call at www.mrcglobal.com for 90 days.
About MRC Global Inc.
MRC Global is the largest distributor of pipe, valves and
fittings (PVF) and other infrastructure products and services to
the energy industry, based on sales. Through approximately 230
service locations worldwide, approximately 2,600 employees and with
100 years of history, MRC Global provides innovative supply chain
solutions and technical product expertise to customers globally
across diversified end-markets including the upstream production,
midstream pipeline, gas utility and downstream and industrial. MRC
Global manages a complex network of over 200,000 SKUs and over
10,000 suppliers simplifying the supply chain for approximately
12,000 customers. With a focus on technical products, value-added
services, a global network of valve and engineering centers and an
unmatched quality assurance program, MRC Global is the trusted PVF
expert. Find out more at www.mrcglobal.com.
This news release contains forward-looking statements within
the meaning of Section 27A of the Securities Act and
Section 21E of the Exchange Act. Words such as "will,"
"expect," "expected," "intend," "believes," "on-track," "well
positioned," "look forward," "guidance," "plans,"
"can," "target," "targeted" and similar expressions are
intended to identify forward-looking statements.
Statements about the company's business, including its
strategy, its industry, the company's future profitability, the
company's guidance on its sales, adjusted EBITDA, tax rate,
capital expenditures, achieving cost savings and cash flow,
debt reduction, liquidity, growth in the company's various markets
and the company's expectations, beliefs, plans, strategies,
objectives, prospects and assumptions are not guarantees of future
performance. These statements are based on management's
expectations that involve a number of business risks and
uncertainties, any of which could cause actual results to differ
materially from those expressed in or implied by the
forward-looking statements. These statements involve known and
unknown risks, uncertainties and other factors, most of which are
difficult to predict and many of which are beyond MRC Global's
control, including the factors described in the company's SEC
filings that may cause the company's actual results and performance
to be materially different from any future results or performance
expressed or implied by these forward-looking statements.
These risks and uncertainties include (among others)
decreases in oil and natural gas prices; decreases in oil and
natural gas industry expenditure levels, which may result from
decreased oil and natural gas prices or other factors; U.S. and
international general economic conditions; the company's ability to
compete successfully with other companies in MRC Global's industry;
the risk that manufacturers of the products the company distributes
will sell a substantial amount of goods directly to end users in
the industry sectors the company serves; unexpected supply
shortages; cost increases by the company's suppliers; the company's
lack of long-term contracts with most of its suppliers; suppliers'
price reductions of products that the company sells, which could
cause the value of the company's inventory to decline; decreases in
steel prices, which could significantly lower MRC Global's profit;
increases in steel prices, which the company may be unable to pass
along to its customers which could significantly lower its profit;
the company's lack of long-term contracts with many of its
customers and the company's lack of contracts with customers that
require minimum purchase volumes; changes in the company's customer
and product mix; risks related to the company's customers'
creditworthiness; the success of the company's acquisition
strategies; the potential adverse effects associated with
integrating acquisitions into the company's business and whether
these acquisitions will yield their intended benefits; the
company's significant indebtedness; the dependence on the company's
subsidiaries for cash to meet its obligations; changes in the
company's credit profile; a decline in demand for certain of the
products the company distributes if import restrictions on these
products are lifted or imposed; significant substitution of
alternative fuels for oil and gas; environmental, health and safety
laws and regulations and the interpretation or implementation
thereof; the sufficiency of the company's insurance policies to
cover losses, including liabilities arising from litigation;
product liability claims against the company; pending or future
asbestos-related claims against the company; the potential loss of
key personnel; adverse health events such as a pandemic;
interruption in the proper functioning of the company's information
systems and the occurrence of cyber security incidents; loss of
third-party transportation providers; potential inability to obtain
necessary capital; risks related to adverse weather events or
natural disasters; impairment of the company's goodwill or other
intangible assets; adverse changes in political or economic
conditions in the countries in which the company operates; exposure
to U.S. and international laws and regulations, including the U.S.
Foreign Corrupt Practices Act and the U.K. Bribery Act and other
economic sanction programs; risks associated with international
stability and geopolitical developments; risks relating to ongoing
evaluations of internal controls required by Section 404 of the
Sarbanes-Oxley Act; risks related to the company's intention not to
pay dividends; and risks arising from compliance with and changes
in law in the countries in which we operate, including (among
others) changes in tax law, tax rates and interpretation in tax
laws.
For a discussion of key risk factors, please see the risk
factors disclosed in the company's SEC filings, which are available
on the SEC's website at www.sec.gov and on the company's
website, www.mrcglobal.com. MRC Global's filings and other
important information are also available on the Investor Relations
page of the company's website at www.mrcglobal.com.
Undue reliance should not be placed on the company's
forward-looking statements. Although forward-looking statements
reflect the company's good faith beliefs, reliance should not be
placed on forward-looking statements because they involve known and
unknown risks, uncertainties and other factors, which may cause the
company's actual results, performance or achievements or future
events to differ materially from anticipated future results,
performance or achievements or future events expressed or implied
by such forward-looking statements. The company undertakes no
obligation to publicly update or revise any forward-looking
statement, whether as a result of new information, future events,
changed circumstances or otherwise, except to the extent required
by law.
Contact:
Monica Broughton
Investor Relations
MRC Global Inc.
Monica.Broughton@mrcglobal.com
832-308-2847
MRC Global
Inc.
|
Condensed
Consolidated Balance Sheets (Unaudited)
|
(in
millions)
|
|
|
December
31,
|
|
|
December
31,
|
|
|
2020
|
|
|
2019
|
|
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
Cash
|
$
|
119
|
|
|
$
|
32
|
|
Accounts receivable,
net
|
|
319
|
|
|
|
459
|
|
Inventories,
net
|
|
509
|
|
|
|
701
|
|
Other current
assets
|
|
19
|
|
|
|
26
|
|
Total current
assets
|
|
966
|
|
|
|
1,218
|
|
|
|
|
|
|
|
|
|
Long-term
assets:
|
|
|
|
|
|
|
|
Operating lease
assets
|
|
200
|
|
|
|
186
|
|
Property, plant and
equipment, net
|
|
103
|
|
|
|
138
|
|
Other
assets
|
|
19
|
|
|
|
19
|
|
|
|
|
|
|
|
|
|
Intangible
assets:
|
|
|
|
|
|
|
|
Goodwill,
net
|
|
264
|
|
|
|
483
|
|
Other intangible
assets, net
|
|
229
|
|
|
|
281
|
|
|
$
|
1,781
|
|
|
$
|
2,325
|
|
|
|
|
|
|
|
|
|
Liabilities and
stockholders' equity
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
Trade accounts
payable
|
$
|
264
|
|
|
$
|
357
|
|
Accrued expenses and
other current liabilities
|
|
94
|
|
|
|
91
|
|
Operating lease
liabilities
|
|
37
|
|
|
|
34
|
|
Current portion of
long-term debt
|
|
4
|
|
|
|
4
|
|
Total current
liabilities
|
|
399
|
|
|
|
486
|
|
|
|
|
|
|
|
|
|
Long-term
liabilities:
|
|
|
|
|
|
|
|
Long-term debt,
net
|
|
379
|
|
|
|
547
|
|
Operating lease
liabilities
|
|
187
|
|
|
|
167
|
|
Deferred income
taxes
|
|
70
|
|
|
|
91
|
|
Other
liabilities
|
|
41
|
|
|
|
37
|
|
|
|
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6.5% Series A
Convertible Perpetual Preferred Stock, $0.01 par value; authorized
363,000 shares; 363,000 shares issued and outstanding
|
|
355
|
|
|
|
355
|
|
|
|
|
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
|
|
|
Common stock, $0.01
par value per share: 500 million shares authorized, 106,315,296 and
105,624,750 issued, respectively
|
|
1
|
|
|
|
1
|
|
Additional paid-in
capital
|
|
1,739
|
|
|
|
1,731
|
|
Retained
deficit
|
|
(781)
|
|
|
|
(483)
|
|
Treasury stock at
cost: 24,216,330 shares
|
|
(375)
|
|
|
|
(375)
|
|
Accumulated other
comprehensive loss
|
|
(234)
|
|
|
|
(232)
|
|
|
|
350
|
|
|
|
642
|
|
|
$
|
1,781
|
|
|
$
|
2,325
|
|
MRC Global
Inc.
|
Condensed
Consolidated Statements of Operations (Unaudited)
|
(in millions,
except per share amounts)
|
|
|
Three Months
Ended
|
|
|
Year
Ended
|
|
|
December
31,
|
|
|
December
31,
|
|
|
December
31,
|
|
|
December
31,
|
|
|
2020
|
|
|
2019
|
|
|
2020
|
|
|
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
$
|
579
|
|
|
$
|
766
|
|
|
$
|
2,560
|
|
|
$
|
3,662
|
|
Cost of
sales
|
|
489
|
|
|
|
635
|
|
|
|
2,129
|
|
|
|
3,009
|
|
Gross
profit
|
|
90
|
|
|
|
131
|
|
|
|
431
|
|
|
|
653
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
|
97
|
|
|
|
141
|
|
|
|
449
|
|
|
|
550
|
|
Goodwill and
intangible asset impairment
|
|
-
|
|
|
|
-
|
|
|
|
242
|
|
|
|
-
|
|
Operating (loss)
income
|
|
(7)
|
|
|
|
(10)
|
|
|
|
(260)
|
|
|
|
103
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other (expense)
income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
(6)
|
|
|
|
(9)
|
|
|
|
(28)
|
|
|
|
(40)
|
|
Other, net
|
|
6
|
|
|
|
-
|
|
|
|
5
|
|
|
|
3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) income before
income taxes
|
|
(7)
|
|
|
|
(19)
|
|
|
|
(283)
|
|
|
|
66
|
|
Income tax (benefit)
expense
|
|
(2)
|
|
|
|
5
|
|
|
|
(9)
|
|
|
|
27
|
|
Net (loss)
income
|
|
(5)
|
|
|
|
(24)
|
|
|
|
(274)
|
|
|
|
39
|
|
Series A preferred
stock dividends
|
|
6
|
|
|
|
6
|
|
|
|
24
|
|
|
|
24
|
|
Net (loss) income
attributable to common stockholders
|
$
|
(11)
|
|
|
$
|
(30)
|
|
|
$
|
(298)
|
|
|
$
|
15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic (loss) earnings
per common share
|
$
|
(0.13)
|
|
|
$
|
(0.37)
|
|
|
$
|
(3.63)
|
|
|
$
|
0.18
|
|
Diluted (loss)
earnings per common share
|
$
|
(0.13)
|
|
|
$
|
(0.37)
|
|
|
$
|
(3.63)
|
|
|
$
|
0.18
|
|
Weighted-average
common shares, basic
|
|
82.1
|
|
|
|
81.8
|
|
|
|
82.0
|
|
|
|
83.0
|
|
Weighted-average
common shares, diluted
|
|
82.1
|
|
|
|
81.8
|
|
|
|
82.0
|
|
|
|
83.9
|
|
MRC Global
Inc.
|
Condensed
Consolidated Statements of Cash Flows (Unaudited)
|
(in
millions)
|
|
|
Year
Ended
|
|
|
December
31,
|
|
|
December
31,
|
|
|
2020
|
|
|
2019
|
|
|
|
|
|
|
|
|
|
Operating
activities
|
|
|
|
|
|
|
|
Net (loss)
income
|
$
|
(274)
|
|
|
$
|
39
|
|
Adjustments to
reconcile net income to net cash provided by (used in)
operations:
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
20
|
|
|
|
21
|
|
Amortization of
intangibles
|
|
26
|
|
|
|
42
|
|
Equity-based
compensation expense
|
|
12
|
|
|
|
16
|
|
Deferred income tax
benefit
|
|
(21)
|
|
|
|
(5)
|
|
Amortization of debt
issuance costs
|
|
1
|
|
|
|
1
|
|
Decrease in LIFO
reserve
|
|
(19)
|
|
|
|
(2)
|
|
Goodwill and
intangible asset impairment
|
|
242
|
|
|
|
-
|
|
Lease impairment and
abandonment
|
|
14
|
|
|
|
-
|
|
Inventory-related
charges
|
|
46
|
|
|
|
5
|
|
Provision for credit
losses
|
|
2
|
|
|
|
2
|
|
Gain on sale
leaseback
|
|
(5)
|
|
|
|
-
|
|
Other non-cash
items
|
|
(3)
|
|
|
|
5
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
141
|
|
|
|
127
|
|
Inventories
|
|
173
|
|
|
|
95
|
|
Other current
assets
|
|
7
|
|
|
|
10
|
|
Accounts
payable
|
|
(98)
|
|
|
|
(79)
|
|
Accrued expenses and
other current liabilities
|
|
(3)
|
|
|
|
(35)
|
|
Net cash provided by
operations
|
|
261
|
|
|
|
242
|
|
|
|
|
|
|
|
|
|
Investing
activities
|
|
|
|
|
|
|
|
Purchases of
property, plant and equipment
|
|
(11)
|
|
|
|
(18)
|
|
Proceeds from the
disposition of property, plant and equipment
|
|
30
|
|
|
|
1
|
|
Other investing
activities
|
|
-
|
|
|
|
1
|
|
Net cash provided by
(used in) investing activities
|
|
19
|
|
|
|
(16)
|
|
|
|
|
|
|
|
|
|
Financing
activities
|
|
|
|
|
|
|
|
Payments on revolving
credit facilities
|
|
(819)
|
|
|
|
(1,145)
|
|
Proceeds from
revolving credit facilities
|
|
658
|
|
|
|
1,016
|
|
Payments on long-term
obligations
|
|
(6)
|
|
|
|
(4)
|
|
Purchases of common
stock
|
|
-
|
|
|
|
(75)
|
|
Dividends paid on
preferred stock
|
|
(24)
|
|
|
|
(24)
|
|
Repurchases of shares
to satisfy tax withholdings
|
|
(4)
|
|
|
|
(6)
|
|
Net cash used in
financing activities
|
|
(195)
|
|
|
|
(238)
|
|
|
|
|
|
|
|
|
|
Increase (decrease)
in cash
|
|
85
|
|
|
|
(12)
|
|
Effect of foreign
exchange rate on cash
|
|
2
|
|
|
|
1
|
|
Cash beginning of
year
|
|
32
|
|
|
|
43
|
|
Cash end of
year
|
$
|
119
|
|
|
$
|
32
|
|
MRC Global
Inc.
|
Supplemental Sales
Information (Unaudited)
|
(in
millions)
|
|
Disaggregated
Sales by Segment
|
|
Three Months
Ended
|
December
31,
|
|
|
|
U.S.
|
|
|
Canada
|
|
|
International
|
|
|
Total
|
|
2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gas
utilities
|
|
$
|
216
|
|
|
$
|
1
|
|
|
$
|
-
|
|
|
$
|
217
|
|
Downstream &
industrial
|
|
|
119
|
|
|
|
3
|
|
|
|
52
|
|
|
|
174
|
|
Upstream
production
|
|
|
63
|
|
|
|
17
|
|
|
|
46
|
|
|
|
126
|
|
Midstream
pipeline
|
|
|
50
|
|
|
|
2
|
|
|
|
10
|
|
|
|
62
|
|
|
|
$
|
448
|
|
|
$
|
23
|
|
|
$
|
108
|
|
|
$
|
579
|
|
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gas
utilities
|
|
$
|
178
|
|
|
$
|
2
|
|
|
$
|
-
|
|
|
$
|
180
|
|
Downstream &
industrial
|
|
|
187
|
|
|
|
4
|
|
|
|
53
|
|
|
|
244
|
|
Upstream
production
|
|
|
140
|
|
|
|
32
|
|
|
|
52
|
|
|
|
224
|
|
Midstream
pipeline
|
|
|
103
|
|
|
|
5
|
|
|
|
10
|
|
|
|
118
|
|
|
|
$
|
608
|
|
|
$
|
43
|
|
|
$
|
115
|
|
|
$
|
766
|
|
|
|
Year
Ended
|
December
31,
|
|
|
|
U.S.
|
|
|
Canada
|
|
|
International
|
|
|
Total
|
|
2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gas
utilities
|
|
$
|
821
|
|
|
$
|
11
|
|
|
$
|
-
|
|
|
$
|
832
|
|
Downstream &
industrial
|
|
|
566
|
|
|
|
15
|
|
|
|
205
|
|
|
|
786
|
|
Upstream
production
|
|
|
329
|
|
|
|
89
|
|
|
|
182
|
|
|
|
600
|
|
Midstream
pipeline
|
|
|
307
|
|
|
|
13
|
|
|
|
22
|
|
|
|
342
|
|
|
|
$
|
2,023
|
|
|
$
|
128
|
|
|
$
|
409
|
|
|
$
|
2,560
|
|
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gas
utilities
|
|
$
|
841
|
|
|
$
|
16
|
|
|
$
|
-
|
|
|
$
|
857
|
|
Downstream &
industrial
|
|
|
854
|
|
|
|
22
|
|
|
|
229
|
|
|
|
1,105
|
|
Upstream
production
|
|
|
723
|
|
|
|
162
|
|
|
|
222
|
|
|
|
1,107
|
|
Midstream
pipeline
|
|
|
538
|
|
|
|
26
|
|
|
|
29
|
|
|
|
593
|
|
|
|
$
|
2,956
|
|
|
$
|
226
|
|
|
$
|
480
|
|
|
$
|
3,662
|
|
MRC Global
Inc.
|
Supplemental Sales
Information (Unaudited)
|
(in
millions)
|
|
Sales by Product
Line
|
|
|
|
Three Months
Ended
|
|
|
Year
Ended
|
|
|
|
December
31,
|
|
|
December
31,
|
|
|
December
31,
|
|
|
December
31,
|
|
Type
|
|
2020
|
|
|
2019
|
|
|
2020
|
|
|
2019
|
|
Line pipe
|
|
$
|
65
|
|
|
$
|
92
|
|
|
$
|
308
|
|
|
$
|
560
|
|
Carbon fittings and
flanges
|
|
|
76
|
|
|
|
109
|
|
|
|
340
|
|
|
|
565
|
|
Total carbon pipe,
fittings and flanges
|
|
|
141
|
|
|
|
201
|
|
|
|
648
|
|
|
|
1,125
|
|
Valves, automation,
measurement and instrumentation
|
|
|
216
|
|
|
|
309
|
|
|
|
1,018
|
|
|
|
1,434
|
|
Gas
products
|
|
|
138
|
|
|
|
126
|
|
|
|
517
|
|
|
|
551
|
|
Stainless steel and
alloy pipe and fittings
|
|
|
32
|
|
|
|
42
|
|
|
|
128
|
|
|
|
177
|
|
General
products
|
|
|
52
|
|
|
|
88
|
|
|
|
249
|
|
|
|
375
|
|
|
|
$
|
579
|
|
|
$
|
766
|
|
|
$
|
2,560
|
|
|
$
|
3,662
|
|
MRC Global
Inc.
|
Supplemental
Information (Unaudited)
|
Reconciliation of
Gross Profit to Adjusted Gross Profit (a non-GAAP
measure)
|
(in
millions)
|
|
|
Three Months
Ended
|
|
|
December
31,
|
|
|
Percentage
|
|
|
December
31,
|
|
|
Percentage
|
|
|
2020
|
|
|
of
Revenue
|
|
|
2019
|
|
|
of
Revenue*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit, as
reported
|
$
|
90
|
|
|
|
15.5
|
%
|
|
$
|
131
|
|
|
|
17.1
|
%
|
Depreciation and
amortization
|
|
5
|
|
|
|
0.9
|
%
|
|
|
5
|
|
|
|
0.7
|
%
|
Amortization of
intangibles
|
|
6
|
|
|
|
1.0
|
%
|
|
|
9
|
|
|
|
1.2
|
%
|
Increase in LIFO
reserve
|
|
1
|
|
|
|
0.2
|
%
|
|
|
1
|
|
|
|
0.1
|
%
|
Inventory-related
charges (1)
|
|
12
|
|
|
|
2.1
|
%
|
|
|
5
|
|
|
|
0.7
|
%
|
Adjusted Gross
Profit
|
$
|
114
|
|
|
|
19.7
|
%
|
|
$
|
151
|
|
|
|
19.7
|
%
|
|
|
|
Year
Ended
|
|
|
December
31,
|
|
|
Percentage
|
|
|
December
31,
|
|
|
Percentage
|
|
|
2020
|
|
|
of
Revenue
|
|
|
2019
|
|
|
of
Revenue*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit, as
reported
|
$
|
431
|
|
|
|
16.8
|
%
|
|
$
|
653
|
|
|
|
17.8
|
%
|
Depreciation and
amortization
|
|
20
|
|
|
|
0.8
|
%
|
|
|
21
|
|
|
|
0.6
|
%
|
Amortization of
intangibles
|
|
26
|
|
|
|
1.0
|
%
|
|
|
42
|
|
|
|
1.1
|
%
|
Decrease in LIFO
reserve
|
|
(19)
|
|
|
|
(0.7)
|
%
|
|
|
(2)
|
|
|
|
(0.1)
|
%
|
Inventory-related
charges (1)
|
|
46
|
|
|
|
1.8
|
%
|
|
|
5
|
|
|
|
0.1
|
%
|
Adjusted Gross
Profit
|
$
|
504
|
|
|
|
19.7
|
%
|
|
$
|
719
|
|
|
|
19.6
|
%
|
|
Notes to
above:
|
*
|
Does not foot due to
rounding
|
(1)
|
In the fourth quarter
of 2020, $12 million of non-cash charges (pre-tax) recorded for
excess and obsolete inventory recorded in cost of goods
sold; $9 million in the U.S., $2 million in Canada and $1
million in International. For the full
year 2020, $46 million of non-cash charges
(pre-tax) recorded in cost of goods sold. Charges of
$28 million in the U.S. and $2 million in Canada relate
to excess and obsolete inventory as a result of the current market
outlook for certain products. International segment charges of
$16 million relate to increased reserves for excess and
obsolete inventory as well as the exit of the Thailand
business. For each of the three months and year ended
December 31, 2019, $5 million of non-cash charges
(pre-tax) were recorded in cost of goods sold in
the international segment for excess and obsolete
inventory. For each of the three months and year ended
December 31, 2019, another $3 million of
charges (pre-tax) were recorded in U.S. sales for the final
settlement of a multi-year customer project. Excluding those
charges, adjusted gross profit for the three months ended and the
year ended December 31, 2019 would have been 20.1% and 19.7%,
respectively.
|
The company defines adjusted gross profit as sales, less cost of
sales, plus depreciation and amortization, plus amortization of
intangibles, plus inventory-related charges and plus or minus
the impact of its LIFO inventory costing methodology. The company
presents adjusted gross profit because the company believes it is a
useful indicator of the company's operating performance without
regard to items, such as amortization of intangibles, that can vary
substantially from company to company depending upon the nature and
extent of acquisitions of which they have been involved. Similarly,
the impact of the LIFO inventory costing method can cause results
to vary substantially from company to company depending upon
whether they elect to utilize LIFO and depending upon which method
they may elect. The company uses adjusted gross profit as a key
performance indicator in managing its business. The company
believes that gross profit is the financial measure calculated and
presented in accordance with U.S. generally accepted accounting
principles that is most directly comparable to adjusted gross
profit.
MRC Global
Inc.
|
Supplemental
Information (Unaudited)
|
Reconciliation of
Selling, General and Administrative Expenses to
|
Adjusted Selling,
General and Administrative Expenses (a non-GAAP
measure)
|
(in
millions)
|
|
|
Three Months
Ended
|
|
|
Year
Ended
|
|
|
December
31,
|
|
|
December
31,
|
|
|
December
31,
|
|
|
December
31,
|
|
|
2020
|
|
|
2019
|
|
|
2020
|
|
|
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
$
|
97
|
|
|
$
|
141
|
|
|
$
|
449
|
|
|
$
|
550
|
|
Severance and
restructuring (1)
|
|
(2)
|
|
|
|
(4)
|
|
|
|
(14)
|
|
|
|
(9)
|
|
Facility closures
(2)
|
|
1
|
|
|
|
-
|
|
|
|
(14)
|
|
|
|
-
|
|
Supplier bad debt and
recovery of supplier bad debt (3)
|
|
-
|
|
|
|
(5)
|
|
|
|
2
|
|
|
|
(5)
|
|
Adjusted Selling,
general and administrative expenses
|
$
|
96
|
|
|
$
|
132
|
|
|
$
|
423
|
|
|
$
|
536
|
|
|
Notes to
above:
|
(1)
|
Employee severance
and restructuring charges (pre-tax) associated with the
company's cost reduction initiatives were recorded in 2020 and
2019. Charges of $2 million recorded in the fourth quarter of
2020 with $1 million in each of the U.S. and International
segments. Charges of $14 million were recorded in 2020 with $8
million in the U.S., $5 million in International and $1 million in
Canada. In the fourth quarter of 2019, charges of
$4 million were recorded with $1 million in the U.S. segment
and $3 million in the International segment. For the year 2019,
charges of $9 million were recorded with $6 million in the U.S.
segment and $3 million in the International segment.
|
(2)
|
Sub-lease income and
charges (pre-tax) for lease impairments and abandonments
related to facility closures, substantially non-cash, were recorded
in 2020. In the fourth quarter, $1 million of
sub-lease income was recorded for an Australian property in
the International segment. In 2020, a net charge of $14
million was recorded with $10 million in the International
segment, $3 million in the U.S. segment and $1 million in
Canada segment.
|
(3)
|
Charges (pre-tax) in
2019 related to a product claim from a foreign supplier and income
(pre-tax) related to the collection of the same product claim in
2020.
|
The company defines adjusted selling, general and administrative
(SG&A) expenses as SG&A, less severance and
restructuring expenses, facility closures plus the recovery of
supplier bad debt. The company presents adjusted SG&A because
the company believes it is a useful indicator of the company's
operating performance without regard to items that can vary
substantially from company to company. The company presents
adjusted SG&A because the company believes Adjusted
SG&A is a useful indicator of the company's operating
performance. Among other things, adjusted SG&A measures
the company's operating performance without regard to certain
non-recurring, non-cash or transaction-related expenses. The
company uses adjusted SG&A as a key performance indicator
in managing its business. The company believes that SG&A is the
financial measure calculated and presented in accordance with U.S.
generally accepted accounting principles that is most directly
comparable to adjusted SG&A.
MRC Global
Inc.
|
Supplemental
Information (Unaudited)
|
Reconciliation of
Net Income to Adjusted EBITDA (a non-GAAP measure)
|
(in
millions)
|
|
|
Three Months
Ended
|
|
|
Year
Ended
|
|
|
December
31,
|
|
|
December
31,
|
|
|
December
31,
|
|
|
December
31,
|
|
|
2020
|
|
|
2019
|
|
|
2020
|
|
|
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss)
income
|
$
|
(5)
|
|
|
$
|
(24)
|
|
|
$
|
(274)
|
|
|
$
|
39
|
|
Income tax (benefit)
expense
|
|
(2)
|
|
|
|
5
|
|
|
|
(9)
|
|
|
|
27
|
|
Interest
expense
|
|
6
|
|
|
|
9
|
|
|
|
28
|
|
|
|
40
|
|
Depreciation and
amortization
|
|
5
|
|
|
|
5
|
|
|
|
20
|
|
|
|
21
|
|
Amortization of
intangibles
|
|
6
|
|
|
|
9
|
|
|
|
26
|
|
|
|
42
|
|
Goodwill and
intangible asset impairment (1)
|
|
-
|
|
|
|
-
|
|
|
|
242
|
|
|
|
-
|
|
Inventory-related
charges (2)
|
|
12
|
|
|
|
5
|
|
|
|
46
|
|
|
|
5
|
|
Facility closures
(3)
|
|
(1)
|
|
|
|
-
|
|
|
|
17
|
|
|
|
-
|
|
Severance and
restructuring (4)
|
|
2
|
|
|
|
4
|
|
|
|
14
|
|
|
|
9
|
|
Increase (decrease)
in LIFO reserve
|
|
1
|
|
|
|
1
|
|
|
|
(19)
|
|
|
|
(2)
|
|
Equity-based
compensation expense (5)
|
|
4
|
|
|
|
4
|
|
|
|
12
|
|
|
|
16
|
|
Gain on early
extinguishment of debt (6)
|
|
-
|
|
|
|
-
|
|
|
|
(1)
|
|
|
|
-
|
|
Supplier bad debt and
recovery of supplier bad debt (7)
|
|
-
|
|
|
|
5
|
|
|
|
(2)
|
|
|
|
5
|
|
Gain on sale
leaseback (8)
|
|
(5)
|
|
|
|
-
|
|
|
|
(5)
|
|
|
|
-
|
|
Foreign currency
(gains) losses
|
|
(1)
|
|
|
|
-
|
|
|
|
2
|
|
|
|
(1)
|
|
Adjusted
EBITDA
|
$
|
22
|
|
|
$
|
23
|
|
|
$
|
97
|
|
|
$
|
201
|
|
|
Notes to
above:
|
(1)
|
Non-cash charges
(pre-tax) recorded in the second quarter of 2020 for the impairment
of $217 million for goodwill and $25 million for the U.S.
indefinite-lived tradename asset. The goodwill impairment consisted
of $177 million for the U.S. segment and $40 million for the
International segment, resulting in a $0 balance for the
International segment.
|
(2)
|
In the fourth quarter
of 2020, $12 million of non-cash charges (pre-tax) recorded for
excess and obsolete inventory recorded in cost of goods
sold; $9 million in the U.S., $2 million in Canada and $1
million in International. For the full year in
2020, $46 million of non-cash charges
(pre-tax) recorded in cost of goods sold. Charges of
$28 million in the U.S. and $2 million in Canada relate
to excess and obsolete inventory as a result of the current market
outlook for certain products. International segment charges of
$16 million relate to increased reserves for excess and
obsolete inventory as well as the exit of the Thailand
business. For each of the three months and year ended
December 31, 2019, $5 million of non-cash charges
(pre-tax) were recorded in cost of goods sold in
the international segment for excess and obsolete
inventory.
|
(3)
|
Sub-lease income and
charges (pre-tax) for lease impairments and abandonments
related to facility closures, substantially non-cash, were recorded
in 2020. In the fourth quarter, $1 million of
sub-lease income was recorded for an Australian property in
the International segment. In 2020, a net charge of
$14 million was recorded with $10 million in the
International segment, $3 million in the U.S. segment and
$1 million in Canada segment. Also includes $3 million of
non-cash (pre-tax) charges for the write-down of assets for
facilities with $1 million in the International segment
and $2 million in the Canada segment, recorded in Other
expense.
|
(4)
|
Employee severance
and restructuring charges (pre-tax) associated with the
company's cost reduction initiatives were recorded in 2020 and
2019. Charges of $2 million recorded in the fourth quarter of
2020 with $1 million in each of the U.S. and International
segments. Charges of $14 million were recorded in 2020 with $8
million in the U.S., $5 million in International and $1 million in
Canada. In the fourth quarter of 2019, charges of $4 million
were recorded with $1 million in the U.S. segment and $3 million in
the International segment. For the year 2019, charges of $9 million
were recorded with $6 million in the U.S. segment and $3 million in
the International segment.
|
(5)
|
Recorded in
SG&A
|
(6)
|
Charge (pre-tax)
related to the purchase of the senior secured Term Loan recorded in
Other, net.
|
(7)
|
Charges (pre-tax) in
2019 related to a product claim from a foreign supplier and income
(pre-tax) related to the collection of the same product claim in
2020.
|
(8)
|
Income (pre-tax)
recorded in Other, net with $4 million in the U.S. and $1 million
in Canada.
|
The company defines adjusted EBITDA as net income plus interest,
income taxes, depreciation and amortization, amortization of
intangibles, and certain other expenses, including non-cash
expenses, (such as equity-based compensation, severance and
restructuring, changes in the fair value of derivative instruments
and asset impairments, including inventory) and plus or minus the
impact of its LIFO inventory costing methodology. The company
presents adjusted EBITDA because the company believes adjusted
EBITDA is a useful indicator of the company's operating
performance. Among other things, adjusted EBITDA measures the
company's operating performance without regard to certain
non-recurring, non-cash or transaction-related expenses. adjusted
EBITDA, however, does not represent and should not be considered as
an alternative to net income, cash flow from operations or any
other measure of financial performance calculated and presented in
accordance with GAAP. Because adjusted EBITDA does not account for
certain expenses, its utility as a measure of the company's
operating performance has material limitations. Because of these
limitations, the company does not view adjusted EBITDA in isolation
or as a primary performance measure and also uses other measures,
such as net income and sales, to measure operating performance. See
the company's Annual Report filed on Form 10-K for a more thorough
discussion of the use of adjusted EBITDA.
MRC Global
Inc.
|
Supplemental
Information (Unaudited)
|
Reconciliation of
Net Income Attributable to Common Stockholders to
|
Adjusted Net
Income Attributable to Common Stockholders (a non-GAAP
measure)
|
(in millions,
except per share amounts)
|
|
|
December 31,
2020
|
|
|
Three Months
Ended
|
|
|
Year
Ended
|
|
|
Amount
|
|
|
Per
Share
|
|
|
Amount
|
|
|
Per
Share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss attributable
to common stockholders
|
$
|
(11)
|
|
|
$
|
(0.13)
|
|
|
$
|
(298)
|
|
|
$
|
(3.63)
|
|
Goodwill and
intangible asset impairment, net of tax (1)
|
|
-
|
|
|
|
-
|
|
|
|
234
|
|
|
|
2.85
|
|
Inventory-related
charges, net of tax (2)
|
|
9
|
|
|
|
0.11
|
|
|
|
38
|
|
|
|
0.46
|
|
Facility closures,
net of tax (3)
|
|
(1)
|
|
|
|
(0.01)
|
|
|
|
15
|
|
|
|
0.18
|
|
Severance and
restructuring, net of tax (4)
|
|
2
|
|
|
|
0.02
|
|
|
|
12
|
|
|
|
0.15
|
|
Recovery of supplier
bad debt, net of tax (5)
|
|
-
|
|
|
|
-
|
|
|
|
(2)
|
|
|
|
(0.02)
|
|
Gain on sale
leaseback (6)
|
|
(4)
|
|
|
|
(0.05)
|
|
|
|
(4)
|
|
|
|
(0.05)
|
|
Increase (decrease)
in LIFO reserve, net of tax
|
|
1
|
|
|
|
0.01
|
|
|
|
(15)
|
|
|
|
(0.18)
|
|
Adjusted net loss
attributable to common stockholders
|
$
|
(4)
|
|
|
$
|
(0.05)
|
|
|
$
|
(20)
|
|
|
$
|
(0.24)
|
|
|
|
|
December 31,
2019
|
|
|
Three Months
Ended
|
|
|
Year
Ended
|
|
|
Amount
|
|
|
Per
Share
|
|
|
Amount
|
|
|
Per
Share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income
attributable to common stockholders
|
$
|
(30)
|
|
|
$
|
(0.37)
|
|
|
$
|
15
|
|
|
$
|
0.18
|
|
Inventory-related
charges, net of tax (2)
|
|
5
|
|
|
|
0.06
|
|
|
|
5
|
|
|
|
0.06
|
|
Severance and
restructuring, net of tax (4)
|
|
3
|
|
|
|
0.04
|
|
|
|
7
|
|
|
|
0.08
|
|
Supplier bad debt,
net of tax (5)
|
|
5
|
|
|
|
0.06
|
|
|
|
5
|
|
|
|
0.06
|
|
Decrease in LIFO
reserve, net of tax
|
|
-
|
|
|
|
-
|
|
|
|
(2)
|
|
|
|
(0.02)
|
|
Adjusted net (loss)
income attributable to common stockholders
|
$
|
(17)
|
|
|
$
|
(0.21)
|
|
|
$
|
30
|
|
|
$
|
0.36
|
|
|
|
Notes to
above:
|
(1)
|
Non-cash charges
(after-tax) recorded in the second quarter of 2020 for the
impairment of $215 million for goodwill and $19 million for the
U.S. indefinite-lived tradename asset. The after-tax goodwill
impairment consisted of $175 million for the U.S. segment and $40
million for the International segment, resulting in a
$0 balance for the International segment.
|
(2)
|
In the fourth quarter
of 2020, $9 million of non-cash charges (after-tax) recorded
for excess and obsolete inventory recorded in cost of goods
sold; $7 million in the U.S., $1 million in
Canada and $1 million in International. For the full year in
2020, $38 million of non-cash charges
(after-tax) recorded in cost of goods sold. Charges of
$22 million in the U.S. and $1 million in Canada relate
to excess and obsolete inventory as a result of the current market
outlook for certain products. International segment charges of
$15 million relate to increased reserves for excess and
obsolete inventory as well as the exit of the Thailand
business. For each of the three months and year ended
December 31, 2019, $5 million of non-cash charges
(after-tax) were recorded in cost of goods sold in
the international segment for excess and obsolete
inventory.
|
(3)
|
Sub-lease income and
charges (after-tax) for lease impairments and abandonments
related to facility closures, substantially non-cash, were recorded
in 2020. In the fourth quarter, $1 million of
sub-lease income was recorded for an Australian property in
the International segment. In 2020, a net charge (after-tax)
of $13 million was recorded with $10 million in the
International segment, $2 million in the U.S. segment and $1
million in the Canada segment. Also includes $2 million of
non-cash (after-tax) charges for the write-down of assets for
facilities in Canada, recorded in Other expense.
|
(4)
|
Employee severance
and restructuring charges (after-tax) associated with the
company's cost reduction initiatives were recorded in 2020 and
2019. Charges of $2 million recorded in the fourth quarter of 2020
with $1 million in each of the U.S. and International segments.
Charges of $12 million were recorded in 2020 with
$6 million in the U.S., $5 million in International and
$1 million in Canada. In the fourth quarter of 2019, charges
of $3 million were recorded with $1 million in the U.S.
segment and $2 million in the International segment. For the
full year 2019, charges of $7 million were recorded
with $5 million in the U.S. segment and $2 million in the
International segment.
|
(5)
|
Charges (after-tax)
in 2019 related to a product claim from a foreign supplier and
income (pre-tax) related to the collection of the same product
claim from a foreign supplier in 2020.
|
(6)
|
Income (after-tax)
recorded in Other, net with $3 million in the U.S. and $1 million
in Canada.
|
The company defines adjusted net income attributable to common
stockholders (a non-GAAP measure) as net income attributable to
common stockholders less after-tax goodwill and intangible
impairment, inventory-related charges, facility closures, severance
and restructuring, plus or minus the after-tax impact of its LIFO
inventory costing methodology. The company presents adjusted net
income attributable to common stockholders and related per share
amounts because the company believes it provides useful
comparisons of the company's operating results to other companies,
including those companies with whom we compete in the distribution
of pipe, valves and fittings to the energy industry, without regard
to the irregular variations from certain restructuring events not
indicative of the on-going business. Those items include goodwill
and intangible asset impairments, inventory-related charges,
facility closures, severance and restructuring as well as the LIFO
inventory costing methodology. The impact of the LIFO inventory
costing methodology can cause results to vary substantially from
company to company depending upon whether they elect to utilize
LIFO and depending upon which method they may elect. The
company believes that net income attributable to common
stockholders is the financial measure calculated and presented in
accordance with U.S. generally accepted accounting principles that
is most directly compared to adjusted net income attributable to
common stockholders.
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SOURCE MRC Global Inc.