8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): May 29, 2013

MRC GLOBAL INC.

(Exact name of registrant as specified in its charter)

Delaware	001-35479	20-5956993
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification Number)

2 Houston Center, 909 Fannin, Suite 3100,

Houston, TX 77010

(Address of principal executive offices, including zip code)

Registrant’s telephone number, including area code: (877) 294-7574

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 7.01 Regulation FD Disclosure.

The executive management of MRC Global Inc. (the “Company”) is scheduled to make a presentation on May 30, 2013 (the “Presentation”) to attendees of the KeyBanc Capital Markets’ Industrial, Automotive and Transportation Conference regarding, among other things, the Company’s operations and performance. A copy of the materials to be used at the presentation (the “Presentation Materials”) is included as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference. The Presentation Materials, possibly with modifications, may also be used from time to time after May 30, 2013 in presentations about the Company’s operations and performance to current and potential investors, lenders, creditors, insurers, vendors, customers, employees and others with an interest in the Company and its business.

The information contained in the Presentation Materials is summary information that should be considered in the context of the Company’s filings with the Securities and Exchange Commission (“SEC”) and other public announcements that the Company may make by press release or otherwise from time to time. The Presentation Materials speak as of the date of this Current Report on Form 8-K. While the Company may elect to update the Presentation Materials in the future or reflect events and circumstances occurring or existing after the date of this Current Report on Form 8-K, the Company specifically disclaims any obligation to do so. The Presentation Materials will also be posted in the Investor Relations section of the Company’s website, http://www.mrcglobal.com for 90 days.

In connection with the Presentation, the Company is providing the following information regarding its projected quarter to date sales for April and May of 2013 (“April/May 2013”), based upon actual sales for April 2013 and projected sales for May 2013. April/May 2013 sales are expected to be approximately 10% below the same period in 2012. In particular, based on sales to date of line pipe in the United States for April/May 2013 and the Company’s revised outlook for the remainder of May and June 2013, line pipe sales are expected to be approximately $100 million below the Company’s expectations for the second quarter 2013. Capital expenditure spending of the Company’s major customers in the United States on line pipe in the first quarter of 2013 as well as April/May 2013 has not occurred to the extent that the Company expected. Some of the Company’s largest midstream customers have been impacted by lower upstream drilling activity and lower natural gas liquid (“NGL”) prices, which have resulted in lower spending in both natural gas and NGL pipelines. In addition, the permitting environment for new crude oil pipelines has slowed, resulting in the continued use by many customers of rail and trucks to transport oil. For the full year 2013, the Company now expects line pipe sales will be down approximately $300 million when compared to 2012.

Sales of valves, valve automation, carbon fittings and general MRO oilfield supplies continue to grow. In line with the Company’s planned reduction of its oil country tubular goods (“OCTG”) product line and the re-balancing of the Company’s business to other product lines, the Company’s OCTG sales are expected to be down approximately $70 million in the second quarter 2013 from the same period in 2012, and approximately $200 million for the full year 2013 as compared to 2012. On a seasonal basis, the months of May through October have historically been the best sales months for the Company. The Company continues to believe that the second half of 2013 should be stronger than the first half. Even so, given the softness in midstream spending to date, second quarter 2013 revenue is now expected to be in the range of $1.25-1.35 billion, and full-year 2013 revenue is now expected to be in the range of $5.4-5.8 billion. The Company has recently experienced some margin pressure with respect to its line pipe products. Accordingly, the company’s second quarter adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”) are expected to between $87 - $97 million. The Company will update its expectations for full year 2013 revenue, Adjusted EBITDA and diluted earnings per share (“EPS”) in connection with the reporting of results for the second quarter 2013 in August. Accordingly, the Company’s prior expectations (other than those provided in this Form 8-K) should no longer be relied upon. The Company is actively pursuing potential acquisitions to add to its business. The Company’s revenue and Adjusted EBITDA expectations do not include any such acquisitions.

2

This Form 8-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Words such as “projected,” “expects,” “expected,” believe,” “should” 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 expectations for revenue for 2013 and for the second quarter of 2013, the Company’s expectations for line pipe sales, and OCTG sales, the Company’s expectations for Adjusted EBITDA in the second quarter of 2013, the possibility of growth in the Company’s various markets and product lines and the Company’s expectations, beliefs, plans, strategies, objectives, prospects and assumptions are not guarantees of future performance. These statements involve known and unknown risks, uncertainties and other factors 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 industry expenditure levels, which may result from decreased oil and natural gas prices or other factors; increased usage of alternative fuels, which may negatively affect oil and natural gas industry expenditure levels; U.S. and international general economic conditions; the Company’s ability to compete successfully with other companies in the Company’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 industries it serves; unexpected supply shortages; cost increases by the Company’s suppliers; the Company’s lack of long-term contracts with most of its suppliers; increases in customer, manufacturer and distributor inventory levels; suppliers’ price reductions of products that the Company sells, which could cause the value of its inventory to decline; decreases in steel prices, which could significantly lower the Company’s profit; increases in steel prices, which it 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 its 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’ credit; the potential adverse effects associated with integrating acquisitions into the Company’s business and whether these acquisitions will yield their intended benefits; the success of the Company’s acquisition strategies; the Company’s significant indebtedness; the dependence on the Company’s subsidiaries for cash to meet its debt obligations; changes in the Company’s credit profile; a decline in demand for certain of the products that the Company distributes if import restrictions on these products are lifted; environmental, health and safety laws and regulations; 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; interruption in the proper functioning of the Company’s information systems; 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; changes in tax laws or adverse positions taken by taxing authorities in the countries in which the Company operates; and adverse changes in political or economic conditions in the countries in which the Company operates. 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.

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.

The information referenced under Item 7.01 (including Exhibit 99.1 referenced in the Item 9.01 below) of this Current Report on Form 8-K is being “furnished” under “Item 7.01. Regulation FD Disclosure” and, as such, shall not be deemed to be “filed” for the purposes of Section 18 of the Securities

3

Exchange Act, or otherwise subject to the liabilities of that section. The information set forth in this Current Report on Form 8-K (including Exhibit 99.1 referenced in Item 9.01 below) shall not be incorporated by reference into any registration statement, report or other document filed by the Company pursuant to the Securities Act, except as shall be expressly set forth by specific reference in such filing.

Item 8.01 Other Events.

Capital expenditure spending of the Company’s major customers in the United States on line pipe in the first quarter of 2013 as well as during April and May of 2013 has not occurred to the extent that the Company expected. Some of the Company’s largest midstream customers have been impacted by lower upstream drilling activity and lower natural gas liquid (“NGL”) prices, which have resulted in lower spending in both natural gas and NGL pipelines. In addition, the permitting environment for new crude oil pipelines has slowed, resulting in the continued use by many customers of rail and trucks to transport oil rather than pipelines. Accordingly, the Company has seen slower line pipe sales during April and May of 2013 compared to the same period in 2012 and expects that line pipe sales during the second quarter and full year of 2013 will be lower than during the second quarter and full year of 2012. The Company has also recently experienced some margin pressure with respect to its line pipe products.

Sales of valves, valve automation, carbon fittings and general MRO oilfield supplies continue to grow. However, in line with the Company’s planned reduction of its oil country tubular goods (“OCTG”) product line and the re-balancing of the Company’s business to other product lines, the Company expects that OCTG sales will decrease significantly during the second quarter 2013 compared to the same period in 2012 and during the full year 2013 compared to the full year 2012.

This Form 8-K contains forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. The fifth and sixth paragraphs of Item 7.01 of this 8-K are incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

99.1 Presentation Materials, dated May 30, 2013

4

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: May 29, 2013

MRC GLOBAL INC.
By:	/s/ James E. Braun
	James E. Braun
	Executive Vice President and Chief Financial Officer

5

INDEX TO EXHIBITS

Exhibit No.	Description
99.1	Presentation Materials, dated May 30, 2013

6

EX-99.1

KeyBanc Capital Markets

May 30, 2013

1

May 30, 2013

Jim Braun

EVP & CFO

MRC Global Inc.  //   KeyBanc Capital Markets’

Industrial

Automotive and Transportation Conference

Exhibit 99.1

KeyBanc Capital Markets

May 30, 2013

2

2

This presentation contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and

Section 27A of the Securities Act, as amended, including, for example, statements about the Company’s business strategy, its industry, its future

profitability, growth in the Company’s various markets, and the Company’s expectations, beliefs, plans, strategies, objectives, prospects and

assumptions.  These forward-looking statements are not guarantees of future performance.  These statements involve known and unknown risks,

uncertainties

and

other

factors

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.

For

a

discussion

of

key

risk

factors,

please

see

the

risk

factors

disclosed

in

the

Company’s annual report on Form 10-K for the year ended December 31, 2012 and the registration statement (including a prospectus and prospectus

supplement)

for

the

offering

to

which

this

communication

relates,

which

are

available

on

the

SEC’s

website

at

www.sec.gov

and

on

the

Company’s

website, 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 our actual results, performance or achievements to differ materially from anticipated future results, performance or

achievements 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.

Statement Regarding Use of Non-GAAP Measures:

The Non-GAAP financial measures contained in this presentation (EBITDA, Adjusted EBITDA, Adjusted EPS and variations thereof) are not measures of

financial performance calculated in accordance with GAAP and should not be considered as alternatives to net income (loss) or any other performance

measure derived in accordance with GAAP or as alternatives to cash flows from operating activities as a measure of our liquidity.  They should be viewed

in addition to, and not as a substitute for, analysis of our results reported in accordance with GAAP, or as alternative measures of liquidity.  Management

believes that certain non-GAAP financial measures provide a view to measures similar to those used in evaluating our compliance with certain financial

covenants under our credit facilities and provide financial statement users meaningful comparisons between current and prior year period results.  They

are also used as a metric to determine certain components of performance-based compensation.  The adjustments and Adjusted EBITDA are based on

currently available information and certain adjustments that we believe are reasonable and are presented as an aid in understanding our operating

results. They are not necessarily indicative of future results of operations that may be obtained by the Company.

Forward Looking Statements and Non-GAAP Disclaimer

KeyBanc Capital Markets

May 30, 2013

3

By the Numbers

Industry Sectors

Product Categories

Business Model

2012 Sales

$5.57 B

Upstream

Line Pipe / OCTG

Locations

400+

Countries

44+

Midstream

Valves

Customers

18,000+

Suppliers

18,000+

Downstream/

Industrial

Fittings / Flanges

SKU’s

175,000+

Employees

4,750+

Company Snapshot

Canada

14%

Europe / Asia Pacific

10%

MRC is the largest global distributor of pipe, valves and fittings (PVF) to the energy industry

MRO

70%

Projects

30%

U.S.

76%

KeyBanc Capital Markets

May 30, 2013

4

Founded

1921

1989

Acquires

Appalachian

Pipe & Supply

2007

Goldman Sachs

Capital Partners

Strategic

Investment

1977

Founded

2005

Acquires

Midfield

Supply

2007

Merger of

McJunkin

and Red Man

to form

MRC

2009

MRC opens

Houston HQ

2011

MRC

acquires

SPF

2011

MRC

acquires

VSC

2012

MRC

acquires

OneSteel

Piping

Systems

2009

MRC

acquires

Transmark

2010

MRC

acquires

South

Texas

Supply

2010

MRC

acquires

Dresser

Oil Tools

MRC’s 92 Year History  //  The Road to the Fortune 500

2012

MRC

Global

IPO;

begins

trading

on NYSE

2012

MRC

listed on

Fortune 500

2012

MRC

signs the

industry’s

first global

valve

contract with

Shell

2008

MRC

acquires

LaBarge

2012

MRC

acquires

Chaparral

Supply

2012

MRC

acquires

Production

Specialty

Services

(now #451, up from #493 after IPO

and #10

on the Barron’s 500 of Top Companies)

KeyBanc Capital Markets

May 30, 2013

5

Clear Market Leader Globally and in the Shales

•

~2/3 of sales are under contracts

1 

with a 95%

renewal rate since 2000

•

Continue to grow “share”

and “size of wallet”

with

major existing customers while adding new ones

•

North American Shales as much as 5x PVF

intensive as conventional activity

Leading

industrial

distributor

of

PVF

globally

to

the

energy

and

industrials

sectors

Note: As of 31-Dec-2012

1

Including contracts and pricing arrangements.

2

International locations include sales offices and pipe yards at MRC locations.

Ecuador

Equatorial Guinea

Finland

France

Germany

India

Indonesia

Iraq

Italy

Kazakhstan

Kuwait

Malaysia

Mexico

Netherlands

New Zealand

Nigeria

Norway

Pakistan

Peru

Poland

Russia

Saudi Arabia

44+ Countries & 400+ Locations

Angola

Aruba

Australia

Austria

Belgium

Brunei

Cameroon

Canada

China

Colombia

Denmark

Branch operations and significant direct export sales

Singapore

South Africa

South Korea

Spain

Sweden

Thailand

Trinidad

Turkey

United Arab Emirates

United Kingdom

United States

2

North America

International

Branches

190+

50+

Distribution Centers

8 = U.S.

1 = Canada

1 = U.K.

1 = Singapore

1 = Netherlands

1 = Australia

Valve Automation Centers

12

12

Pipe Yards

120

10

KeyBanc Capital Markets

May 30, 2013

6

By Geography

Note: Business mix based on fiscal year 2012.

By Product Line

By Industry Sector

MRC Diversification

1 -

Approximately 17% (or $200 M) of total

for valves is valve automation

Industry leading product, end market and geographic diversification

KeyBanc Capital Markets

May 30, 2013

7

Core Distribution Processes

•

Cost Savings and Efficiencies

•

Order Management and Product

Bundling

•

Quality Assurance

•

Supplier Registration

•

Logistics Management

•

Customer Reporting

Integrated Services

•

Technical Assistance / Product

Recommendation

•

Inventory Consignment / Just-in-

Time Delivery

•

Customized IT Solutions

•

Warehouse Management

Service Offerings

Products

Delivery of Mission Critical Products and Value Added Services

Generating savings and efficiencies for our customers

while enabling them to focus on their core competencies

•

175,000+ unique, mission-critical products

used in high pressure, high stress or

abrasive operating environments

•

Low cost relative to overall cost of

maintenance or project spend so service is

paramount

KeyBanc Capital Markets

May 30, 2013

8

Supplier Benefits

Customer Benefits

MRC plays a critical role in the complex, technical, global energy supply chain

Strong

Long-Term

Relationships

with

“Blue

Chip”

Customers

and

Suppliers

Mutual Benefits

•

Access to over 18,000+

customers

•

Manufacturing and scale

efficiencies

•

Leverage MRC’s technical

sales force

•

Trusted long-term partnerships

•

Financial stability

•

MRC Approved Supplier List /

Quality Program

•

Access to over 18,000+ suppliers

worldwide

•

Efficiencies and inventory

management

•

Access to a broad product offering

(~$1B inventory)

•

Access to global sourcing from 35

countries

KeyBanc Capital Markets

May 30, 2013

9

Positive Energy and Industrial Spending Trends

•

Global:

Energy demand continues to grow with sizable MRO/project opportunities given the age of

global energy infrastructure and slowly improving global economy

•

Upstream:

Shales

extremely

active,

shift

to

Oil/NGL

E&P,

Natural

Gas

MRO

production,

Oil

Sands

activity seeing strong growth

•

Midstream:

Shale activity in new unsupported areas; increased pipeline integrity regulation plus aging

pipeline infrastructure accelerating MRO rates; gas utilities continue to outsource PVF procurement

•

Downstream:

MRO and infrastructure projects accelerating; strong growth in chemical/industrial with

low natural gas prices and steady PMI; rebound in refinery utilization / margins

Multi-Year Exploration & Production Spending Forecast

Source: Barclays Global 2013 E&P Spending Outlook Dec 2012

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

900,000

2009A

2010A

2011A

2012E

2013E

2014E

2015E

US

Canada

Outside North America

KeyBanc Capital Markets

May 30, 2013

10

(US$  in millions)

1

Reflects reported revenues for the year of acquisition

MRC has completed and successfully acquired $3 billion of revenues since 2007

M&A Driven Growth: Track Record of Success

Date

Acquisition

Rationale

Region

Revenue

1

Apr-07

Midway Tristate

Appalachian

/ Rockies PVF

U.S.

$150

Oct-07

Jul

-08

Red Man

Midfield

(49%)

Transformational

Merger

100% Ownership

of Canadian

Subsidiary

U.S.

Canada

1,982

Oct-08

LaBarge

Midstream

U.S.

233

Oct-09

Transmark

International

MRO Platform

Europe and Asia

346

May-10

South Texas Supply

Eagle Ford

South Texas

9

Aug

-10

Dresser

Oil Tools Supply

Bakken

North Dakota

13

Jun

-11

SPF

Australia / SE Asia Projects

Australia

91

Jul

-11

VSC

Valve Automation

U.S.

13

Mar-12

On

eSteel

Piping Systems

Australia PVF MRO

Australia

174

Jun

-12

Chaparral Supply

Mississippian Lime MRO

Oklahoma / Kansas

71

Dec-12

Production Specialty Services

Permian Basin / Eagle Ford

U.S.

127

Total

$3,209

KeyBanc Capital Markets

May 30, 2013

11

Today

10 –

15 Years Ago

Next 1 to 5 Years

Changing PVF Energy Distribution Landscape

Consolidating energy industry benefits global players

Procurement

•

PVF purchasing handled

locally

•

Facility-by-facility basis

•

Separate contracts

by product class:

•

Pipe

•

Valves

•

Fittings

•

Flanges

•

Supplies

Centralized

Procurement

•

Purchasing more

consolidated

•

Contracts by end

segment:

•

Upstream

•

Midstream

•

Downstream

•

Contracts cover PVF

•

Customers align with

suppliers with size/scale

Global

Procurement

•

Global upstream /

midstream /

downstream PVF

contracts

Decentralized

KeyBanc Capital Markets

May 30, 2013

12

MRC & Shell  //  Global Valve Contract for MRO and Projects

Industry’s first valve and combined North American PFF contract

Shell has one of the top 5 global CAPEX budgets

Deepwater

GOM

NA Tight Gas

& Liquids

Brazil

Offshore

BC-10

West

Africa

Future

Middle

East

RDC

FLNG

/ LNG

Oceania

Sakhalin

Shell

Offshore

Coal Bed

Methane

Cracker Unit

Pittsburgh, PA

Tar Sands

Kashagan

Ph1

Alaska

Offshore

LNG /

GTL

North America

Includes PFF

Salym

Development

LNG

China

Tight Gas

KeyBanc Capital Markets

May 30, 2013

13

•

Global

Energy Demand Favorable:

Continued

general economic recovery, commodity price

environment, global supply constraints and

increased energy consumption

•

Shale

Activity

Unprecedented:

Shale

gas,

as

a

percentage

of

total

natural

gas

production,

has

rapidly

increased

from

less

than

2%

of

total

U.S.

natural

gas

production

in

2001

to

30%

in

2011

and

is

projected

to

increase

to

49%

by

2035

•

Accelerating

MRO:

Increased

utilization

of

processing

facilities

and

decreasing

quality

of

energy

feedstocks

accelerating

PVF

replacement

rates

•

Recovering

Project

Outlook:

Infrastructure

and

E&P

projects

rebounding

with

economic

growth

and

need

for

capacity

expansions

Large,

Fragmented

Market

with

Significant

Growth

Opportunities

•

One-Stop

Solution:

Leverage

extensive

product

offering

and

be

“one-stop”

PVF

solution

•

Cross-Selling:

Introduce

existing

customers

to

complete

PVF

product

portfolio

•

Projects:

Further

penetrate

existing

customer’s

project

activity

•

Investments:

Add

incremental

branches,

DCs

and

sales

people

•

International:

Expand

further

globally with existing customers

•

Adjacencies:

Add

new

products

to

existing

PVF

“bundle”

or

target

new

complimentary

end

markets

•

Core

Competency:

Proven

ability

to

identify,

execute

and

integrate

strategic

and

tuck-in

acquisitions

•

Highly

Fragmented:

Opportunities

to

extend

product

offering,

end

markets

and/or

geographic

coverage

MRC is in an excellent position to continue to exceed industry growth

Long-term

Targets:

Revenue

Growth:

10-12%

|

Adjusted

EBITDA

Margin:

10+%

|

Leverage:

2.0

–

3.0x

Note: All targets are long term.

Global E&P Spending Growth –

Positive Secular Trends

(Target 6 –

7% Annually)

Organic Growth –

Leverage Scale

(Target: 8 –

9% Annually)

Acquisitions –

Accretive Expansion

(Target: 2 –

3% Annually)

KeyBanc Capital Markets

May 30, 2013

14

Financial Overview

KeyBanc Capital Markets

May 30, 2013

15

Strong Growth and Margin Drive Attractive Returns

Sales

Adjusted Gross Profit and % Margin

Adjusted EBITDA and % Margin

Adjusted EBITDA RONA

Y-o-Y Growth

5%

26%

15%

(US$ in millions)

Y-o-Y Growth

34%

28%

24%

Y-o-Y Growth

3%

61%

29%

6.0%

5.8%

7.5%

8.3%

13.5%

17.2%

17.6%

19.0%

Strong growth and continued improving profitability

1

Source:  Company management; Company Filings

1

Adjusted

EBITDA

RONA

calculation

=

Adjusted

EBITDA

/

(EOY

Inventory

+

EOY

LIFO

reserve

+

EOY

Receivables

+

EOY

PP&E

–

Payables).

KeyBanc Capital Markets

May 30, 2013

16

Significant Cash Flow for Deleveraging and Growth Investments

Capital Structure

Cumulative FCF

Net Leverage

(US$ in millions)

1

Strong cash flows allow for continued deleveraging

($ in millions)

March 31, 2013

Cash and Cash Equivalents

$ 27

Total Debt (including current portion):

Term Loan B due 2019, net of discount

641

Global ABL Facility due 2017

426

Other

6

Total Debt

$ 1,073

Total Equity

1,231

Total Capitalization

$ 2,304

$495

$597

$479

$695

2009

2010

2011

2012

1

6.4 x

5.8 x

4.1 x

2.6 x

2.3 x

2009

2010

2011

2012

Since 2008, Free Cash Flow defined as cash from operations, less fixed asset purchases (net of disposals).

$202

$210

$342

$437

2009

2010

2011

2012

5.5%                      5.5%

7.8%       

7.1%                     

Mar

-

13

Adjusted

EBITDA

–

Capex

and

%

Margin

KeyBanc Capital Markets

May 30, 2013

17

Sales

Margins

Net Income

Q1 2013 Financial Summary

(In millions except per share data)

Q1

2012

2013

OCTG

$221

$126

All Other

1,162

1,179

2%

Total

$1,383

$1,305

Adjusted Gross Profit

Adjusted EBITDA

Net Income

EPS

$ 260

$ 262

Q1 2012

Q1 2013

18.8%

20.1%

$ 115

$ 104

Q1 2012

Q1 2013

8.3 %

8.0%

$ 38

$ 46

Q1 2012

Q1 2013

$ 0.44

$ 0.45

Q1 2012

Q1 2013

•

Total revenue was impacted by strategic OCTG

reduction

•

Acquisition related revenue offset slowdown in

customer spending

•

Year-on-year adjusted gross profit margin expansion of

~130 bps due to emphasis on higher margin products

•

Adjusted EBITDA margins reflected lower sales

•

Net Income improvement driven by $18 million interest

expense savings

•

EPS reflects additional shares outstanding in 2013

KeyBanc Capital Markets

May 30, 2013

18

Appendix

KeyBanc Capital Markets

May 30, 2013

19

March 31

December 31

($ in millions)

2013

2012

2012

2011

2010

2009

Net income (loss)

$ 46.2

$ 37.5

$118.0

$ 29.0

$(51.8)

$(339.8)

Income taxes

25.0

21.1

63.7

26.8

(23.4)

(15.0)

Interest expense

15.3

33.7

112.5

136.8

139.6

116.5

Write off of debt issuance costs

-

1.7

1.7

9.5

-

-

Depreciation and amortization

5.4

4.1

18.6

17.0

16.6

14.5

Amortization of intangibles

13.2

12.3

49.5

50.7

53.9

46.6

Amortization of purchase price

accounting

-

-

-

-

-

15.7

Change in fair value of derivative

instruments

(0.6)

(2.1)

(2.2)

(7.0)

4.9

(8.9)

Closed locations

-

-

-

-

(0.7)

1.4

Share based compensation

1.9

1.8

8.5

8.4

3.7

7.8

Franchise taxes

-

-

-

0.4

0.7

1.4

Loss (gain) on early extinguishment of

debt

-

-

114.0

-

-

(1.3)

Goodwill and intangibles impairment

-

-

-

-

-

386.1

Inventory write-down

-

-

-

-

0.4

46.5

IT system conversion costs

-

-

-

-

-

2.4

M&A transaction & integration expenses

-

-

-

0.5

1.4

17.5

Pension settlement

-

-

4.4

-

-

-

Legal and consulting expenses

-

-

(1.2)

9.9

4.2

1.9

Joint venture termination

-

-

-

1.7

-

-

Provision for uncollectible accounts

-

-

-

0.4

(2.0)

1.0

Severance and related costs

-

-

-

1.1

3.2

4.4

MRC Transmark pre-Acquisition

contribution

-

-

-

-

-

38.5

LIFO

(3.1)

6.9

(24.1)

73.7

74.6

(115.6)

Other expenses

0.6

(1.8)

(0.2)

1.6

(1.1)

(3.1)

Adjusted EBITDA

$ 103.9

$ 115.2

$ 463.2

$ 360.5

$ 224.2

$ 218.5

EBITDA Adjustments

KeyBanc Capital Markets

May 30, 2013

20

December 31

($ in millions)

EBITDA

$

463.2

$

360.5

$

224.2

$

218.5

AR

$

823.2

$

791.3

$

596.4

$

506.2

Inventory at AC

1,121.2

1,074.2

866.8

898.5

Fixed Assets

122.5

107.4

104.7

111.5

(-) AP

(438.4)

(479.6)

(426.6)

(338.5)

PSS Adjustment

(28.0)

—  

—  

—  

Total Adjusted Net Assets

$

1,600.5

$

1,493.3

$

1,141.3

$

1,177.7

Inventory at LIFO

970.2

899.1

765.4

871.6

(+) LIFO reserve

151.0

175.1

101.4

26.9

Total Inventory

$

1,121.2

$

1,074.2

$

866.8

$

898.5

RONA

28.9

%

24.1

%

19.6

%

18.6

%

2011

2010

2009

2012

December 31

($ in millions)

Stockholders' Equity

$

1,185.9

$

720.8

$

689.8

$

743.9

Long term debt

1,256.6

1,526.7

1,360.2

1,452.6

Deferred taxes

334.5

357.2

373.7

377.9

Other liabilities

147.7

143.3

140.8

170.2

Intangible assets

(1,359.7)

(1,333.1)

(1,366.5)

(1,425.7)

LIFO reserve

151.0

175.1

101.4

26.9

Other assets

(50.4)

(50.6)

(101.9)

(111.9)

Cash

(37.1)

(46.1)

(56.2)

(56.2)

PSS Adjustment

(28.0)

—  

—  

—  

Total Adjusted Net Assets

$

1,600.5

$

1,493.3

$

1,141.3

$

1,177.7

Net income (loss)

$

118.0

$

29.0

$(51.8)

$(339.8)

Stockholders' equity

1,185.9

720.8

689.8

743.9

Net income / stockholders'equity

10.0

%

4.0

%

(7.5)%

(45.7)%

2012

2011

2010

2009

Adjusted EBITDA RONA

Calculation

Total Adjusted Net Assets

GAAP Reconciliation

KeyBanc Capital Markets

May 30, 2013

21

March 31

December 31

($ in millions)

2013

2012

2012

2011

2010

2009

Gross Profit

$ 246.6

$ 236.6

$ 1,013.7

$ 708.2

$ 518.1

$ 548.0

Depreciation and amortization

5.4

4.1

18.6

17.0

16.6

14.5

Amortization of intangibles

13.2

12.3

49.5

50.7

53.9

46.6

(Decrease) increase in LIFO reserve

(3.1)

6.9

(24.1)

73.7

74.6

(115.6)

Adjusted Gross Profit

$ 262.1

$ 259.9

$ 1,057.7

$ 849.6

$ 663.2

$ 493.5

December 31

($ in millions)

2012

2011

2010

2009

Cash from operations

$ 240.1

$(102.9)

$ 112.7

$ 505.5

Fixed asset purchases

(26.2)

(18.1)

(14.3)

(16.7)

Disposal of fixed assets

2.3

3.1

3.1

6.5

Free cash flow

$216.2

$(117.9)

$ 101.5

$ 495.3

Cummulative free cash flow

$ 695.1

$ 478.9

$ 596.8

$ 495.3

Adjusted Gross Profit GAAP Reconciliation

Free Cash Flow Calculation