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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

__________________________________________

FORM 10-Q

(Mark One)


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

	FOR THE QUARTERLY PERIOD ENDED September 30, 2025

	OR

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM _______ TO _______

Commission file number: 001-35479

MRC GLOBAL INC.

(Exact name of registrant as specified in its charter)

Delaware	20-5956993
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)

1301 McKinney Street, Suite 2300 Houston, Texas	77010
(Address of Principal Executive Offices)	(Zip Code)

(877) 294-7574
(Registrant’s Telephone Number, including Area Code)

________________

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01	MRC	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

Large Accelerated Filer ☒ Accelerated Filer ☐ Non-Accelerated Filer ☐ Smaller Reporting Company ☐ Emerging Growth Company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

There were 84,992,662 shares of the registrant’s common stock (excluding 95,979 unvested restricted shares), par value $0.01 per share, issued and outstanding as of October 29, 2025.

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INDEX TO QUARTERLY REPORT ON FORM 10-Q

Page
PART I – FINANCIAL INFORMATION

ITEM 1.	financial statements (UNAUDITED)	3

	Condensed Consolidated Balance Sheets – SEPTEMBER 30, 2025 AND DECEMBER 31, 2024	3

	cONdENSED cONSOLIDATED STATEMENTS OF OPERATIONS – THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2025 AND SEPTEMBER 30, 2024	4

	Condensed Consolidated Statements of cOMPREHENSIVE INCOME – three AND NINE months ended SEPTEMBER 30, 2025 AND SEPTEMBER 30, 2024	5

	Condensed CONSOLIDATED STATEMENTS OF STOCKHOLDERs’ EQUITY – three AND NINE MONTHS ENDED SEPTEMBER 30, 2025 AND SEPTEMBER 30, 2024	6

	Condensed CONSOLIDATED STATEMENTS OF cash flows – NINE MONTHS ENDEd SEPTEMBER 30, 2025 AND SEPTEMBER 30, 2024	7

	Notes to the Condensed Consolidated Financial Statements – SEPTEMBER 30, 2025	8

ITEM 2.	management’s discussion and analysis of financial condition and results of operations	21

ITEM 3.	quantitative and qualitative disclosures about market risk	36

ITEM 4.	controls and procedures	36

PART II – OTHER INFORMATION

ITEM 1.	LEGAL PROCEEDINGS	37

ITEM 1a.	RISK FACTORS	37

ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	37

ITEM 3.	Defaults Upon Senior Securities	37

ITEM 4.	MINING SAFETY DISCLOSURES	37

ITEM 5.	other information	37

ITEM 6.	Exhibits	38

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ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

MRC GLOBAL INC.

(in millions, except per share amounts)

	*September 30,*			*December 31,*
	*2025*			*2024*
Assets
Current assets:
Cash	$	59		$	63
Accounts receivable, net		473			378
Inventories, net		523			415
Other current assets		49			29
Current assets of discontinued operations		1			36
Total current assets		1,105			921

Long-term assets:
Operating lease assets		160			170
Property, plant and equipment, net		100			89
Other assets		36			37

Intangible assets:
Goodwill, net		264			264
Other intangible assets, net		130			143
Total assets	$	1,795		$	1,624

Liabilities and stockholders' equity
Current liabilities:
Trade accounts payable	$	433		$	329
Accrued expenses and other current liabilities		119			124
Operating lease liabilities		31			31
Current portion of debt obligations		4			3
Current liabilities of discontinued operations		1			21
Total current liabilities		588			508

Long-term liabilities:
Long-term debt		472			384
Operating lease liabilities		141			153
Deferred income taxes		35			35
Other liabilities		28			28

Commitments and contingencies

Stockholders' equity:
Common stock, $0.01 par value per share: 500 million shares authorized, 110,424,832 and 109,460,293 issued, respectively		1			1
Additional paid-in capital		1,785			1,779
Retained deficit		(670	)		(652	)
Less: Treasury stock at cost: 25,433,286 and 24,216,330 shares, respectively		(390	)		(375	)
Accumulated other comprehensive loss		(195	)		(237	)
Total stockholders' equity		531			516
Total liabilities and stockholders' equity	$	1,795		$	1,624

See notes to condensed consolidated financial statements.

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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

MRC GLOBAL INC.

(in millions, except per share amounts)

	*Three Months Ended*						*Nine Months Ended*
	*September 30,*			*September 30,*			*September 30,*			*September 30,*
	*2025*			*2024*			*2025*			*2024*
Sales	$	678		$	771		$	2,188		$	2,347
Cost of sales		553			614			1,770			1,862
Gross profit		125			157			418			485

Selling, general and administrative expenses		128			120			382			362
Operating (loss) income		(3	)		37			36			123

Other (expense) income:
Interest expense		(10	)		(4	)		(29	)		(19	)
Other, net		—			(1	)		7			(2	)

(Loss) income from continuing operations before income taxes		(13	)		32			14			102
Income tax (benefit) expense from continuing operations		(4	)		3			2			23
Net (loss) income from continuing operations		(9	)		29			12			79
Loss from discontinued operations, net of tax		—			—			(30	)		(1	)
Net (loss) income		(9	)		29			(18	)		78
Series A preferred stock dividends		—			6			—			18
Net (loss) income attributable to common stockholders	$	(9	)	$	23		$	(18	)	$	60


Basic (loss) earnings per common share:
(Loss) income from continued operations	$	(0.11	)	$	0.27		$	0.14		$	0.72
Loss from discontinued operations		—			—			(0.35	)		(0.01	)
Basic (loss) earnings per common share	$	(0.11	)	$	0.27		$	(0.21	)	$	0.71

Diluted (loss) earnings per common share:
(Loss) income from continued operations	$	(0.11	)	$	0.27		$	0.14		$	0.71
Loss from discontinued operations		—			—			(0.35	)		(0.01	)
Diluted (loss) earnings per common share	$	(0.11	)	$	0.27		$	(0.21	)	$	0.70

Weighted-average common shares, basic		84.5			85.2			85.2			85.0
Weighted-average common shares, diluted		84.5			86.2			85.2			86.2

See notes to condensed consolidated financial statements.

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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)

MRC GLOBAL INC.

(in millions)

	*Three Months Ended*					*Nine Months Ended*
	*September 30,*			*September 30,*		*September 30,*			*September 30,*
	*2025*			*2024*		*2025*			*2024*
Net (loss) income from continuing operations	$	(9	)	$	29	$	12		$	79
Loss from discontinued operations, net of tax		—			—		(30	)		(1	)
Net (loss) income	$	(9	)	$	29	$	(18	)	$	78

Other comprehensive income
Foreign currency translation adjustments		—			7	$	14		$	3
Reclassification of foreign currency translation adjustments to net income as a result of the sale of Canada		—			—		28			—
Total other comprehensive income, net of tax		—			7		42			3
Comprehensive (loss) income	$	(9	)	$	36	$	24		$	81

See notes to condensed consolidated financial statements.

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CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (UNAUDITED)

MRC GLOBAL INC.

(in millions)

																	*Accumulated*
					*Additional*			*Retained*									*Other*			*Total*
	*Common Stock*				*Paid-in*			*Earnings*			*Treasury Stock*						*Comprehensive*			*Stockholders'*
	*Shares*		*Amount*		*Capital*			*(Deficit)*			*Shares*			*Amount*			*Income (Loss)*			*Equity*
Balance at December 31, 2024		109	$	1	$	1,779		$	(652	)		(24	)	$	(375	)	$	(237	)	$	516
Net loss		-		-		-			(22	)		-			-			-			(22	)
Foreign currency translation		-		-		-			-			-			-			5			5
Reclassification of foreign currency translation adjustments to net income as a result of the sale of Canada		-		-		-			-			-			-			28			28
Vesting of restricted stock		1		-		-			-			-			-			-			—
Shares withheld for taxes		-		-		(6	)		-			-			-			-			(6	)
Equity-based compensation expense		-		-		4			-			-			-			-			4
Balance at March 31, 2025		110	$	1	$	1,777		$	(674	)		(24	)	$	(375	)	$	(204	)	$	525
Net income		-		-		-			13			-			-			-			13
Common stock repurchased		-		-		-			-			(1	)		(15	)		-			(15	)
Foreign currency translation		-		-		-			-			-			-			9			9
Equity-based compensation expense		-		-		4			-			-			-			-			4
Balance at June 30, 2025		110	$	1	$	1,781		$	(661	)		(25	)	$	(390	)	$	(195	)	$	536
Net loss		-		-		-			(9	)		-			-			-			(9	)
Foreign currency translation		-		-		-			-			-			-			-			-
Equity-based compensation expense		-		-		4			-			-			-			-			4
Balance at September 30, 2025		110	$	1	$	1,785		$	(670	)		(25	)	$	(390	)	$	(195	)	$	531

																	*Accumulated*
					*Additional*			*Retained*									*Other*			*Total*
	*Common Stock*				*Paid-in*			*Earnings*			*Treasury Stock*						*Comprehensive*			*Stockholders'*
	*Shares*		*Amount*		*Capital*			*(Deficit)*			*Shares*			*Amount*			*Loss*			*Equity*
Balance at December 31, 2023		109	$	1	$	1,768		$	(678	)		(24	)	$	(375	)	$	(228	)	$	488
Net income		-		-		-			19			-			-			-			19
Foreign currency translation		-		-		-			-			-			-			(5	)		(5	)
Shares withheld for taxes		-		-		(5	)		-			-			-			-			(5	)
Equity-based compensation expense		-		-		4			-			-			-			-			4
Dividends declared on preferred stock		-		-		-			(6	)		-			-			-			(6	)
Balance at March 31, 2024		109	$	1	$	1,767		$	(665	)		(24	)	$	(375	)	$	(233	)	$	495
Net income		-		-		-			30			-			-			-			30
Foreign currency translation		-		-		-			-			-			-			1			1
Equity-based compensation expense		-		-		3			-			-			-			-			3
Dividends declared on preferred stock		-		-		-			(6	)		-			-			-			(6	)
Balance at June 30, 2024		109	$	1	$	1,770		$	(641	)		(24	)	$	(375	)	$	(232	)	$	523
Net income		-		-		-			29			-			-			-			29
Foreign currency translation		-		-		-			-			-			-			7			7
Equity-based compensation expense		-		-		4			-			-			-			-			4
Dividends declared on preferred stock		-		-		-			(6	)		-			-			-			(6	)
Balance at September 30, 2024		109	$	1	$	1,774		$	(618	)		(24	)	$	(375	)	$	(225	)	$	557

See notes to condensed consolidated financial statements.

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

MRC GLOBAL INC.

(in millions)

	*Nine Months Ended*
	*September 30,*			*September 30,*
	*2025*			*2024*
Operating activities
Net income	$	12		$	79
Adjustments to reconcile net income from continuing operations to net cash (used in) provided by continuing operations:
Depreciation and amortization		18			16
Amortization of intangibles		13			15
Equity-based compensation expense		12			11
Deferred income tax (benefit)		(2	)		(6	)
Increase (decrease) in LIFO reserve		24			(4	)
Other non-cash items		(1	)		8
Changes in operating assets and liabilities:
Accounts receivable		(84	)		(41	)
Inventories		(129	)		88
Other current assets		(6	)		(3	)
Accounts payable		102			31
Accrued expenses and other current liabilities		(20	)		1
Operating cash flows from continuing operations		(61	)		195
Operating cash flows from discontinued operations		(6	)		2
Net cash (used in) provided by operating activities		(67	)		197

Investing activities
Purchases of property, plant and equipment		(30	)		(23	)
Other investing activities		5			1
Investing cash flows from continuing operations		(25	)		(22	)
Investing cash flows from discontinued operations		18			—
Net cash used in investing activities		(7	)		(22	)

Financing activities
Payments on revolving credit facilities		(504	)		(276	)
Proceeds from revolving credit facilities		595			352
Payments on debt obligations		(2	)		(295	)
Debt issuance costs paid		(1	)		—
Dividends paid on preferred stock		—			(18	)
Repurchases of common stock		(15	)		—
Repurchases of shares to satisfy tax withholdings		(7	)		(5	)
Other financing activities		(1	)		—
Financing cash flows from continuing operations		65			(242	)
Financing cash flows from discontinued operations		—			—
Net cash provided by (used in) financing activities		65			(242	)

Decrease in cash		(9	)		(67	)
Effect of foreign exchange rate on cash		5			(2	)
Cash -- beginning of period		63			131
Cash -- end of period	$	59		$	62

Supplemental disclosures of cash flow information:
Cash paid for interest, net of capitalized interest	$	31		$	17
Cash paid for income taxes	$	10		$	38
Supplemental non-cash transactions:
Change in accrued purchases of property, plant and equipment	$	(1	)	$	—

See notes to condensed consolidated financial statements.

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

MRC GLOBAL INC.

NOTE 1 – BACKGROUND AND BASIS OF PRESENTATION

Business Operations: MRC Global Inc. ("MRC Global") is a holding company headquartered in Houston, Texas. Our wholly owned subsidiaries are global distributors of pipe, valves, fittings (“PVF”) and infrastructure products and services across each of the following sectors:

●		Gas Utilities: (storage and distribution of natural gas)
●		DIET: downstream, industrial and energy transition (crude oil refining, petrochemical and chemical processing, general industrials and energy transition projects)
●		PTI: production and transmission infrastructure (exploration, production extraction, gathering, processing and transmission of oil and gas)

We have service centers in industrial, chemical, gas distribution and hydrocarbon producing and refining areas throughout the United States, Europe, Asia, Australasia and the Middle East. We obtain products from a broad range of suppliers.

Planned Merger with DNOW Inc.

On June 26, 2025, MRC Global entered into an Agreement and Plan of Merger (the "Merger Agreement") with DNOW Inc., a Delaware Corporation ("DNOW"), Buck Merger Sub, Inc., a Delaware corporation and a wholly owned, direct subsidiary of DNOW ("Merger Sub") and Stag Merger Sub, LLC, a Delaware limited liability company and a wholly owned, direct subsidiary of DNOW ("LLC Sub"). The Merger Agreement provides that, among other things and subject to the terms and conditions of the Merger Agreement:

(1)		Merger Sub will be merged with and into MRC Global, with MRC Global continuing as the surviving corporation (the "First Merger" and the time the First Merger becomes effective, the "Effective Time") and
(2)		immediately following the First Merger, MRC Global will be merged with and into LLC Sub (the "Second Merger" and, together with the First Merger, the "Mergers"), with LLC Sub continuing as the surviving company at the effective time of the Second Merger as a wholly owned, direct subsidiary of DNOW.

At the Effective Time, each share of common stock of MRC Global issued and outstanding (other than certain excluded shares) immediately prior to the Effective Time will be converted into the right to receive 0.9489 shares of common stock, $0.01 par value, of DNOW, subject to certain adjustments, with cash paid in lieu of the issuance of fractional shares, if any (collectively, the "Merger Consideration"). The Merger Agreement also specifies the treatment of outstanding MRC Global equity awards in connection with the Mergers. As of the date of this filing, the completion of the Mergers remain subject to customary mutual closing conditions.

On September 9, 2025, each of MRC Global and DNOW held a special meeting of stockholders at which their respective stockholders approved the Mergers and related matters. In addition, on October 6, 2025, the statutory waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act") expired. The required regulatory approvals were received on November 3, 2025. The Mergers, which remain subject to customary mutual closing conditions, are expected to be consummated during the fourth quarter of 2025.

The Merger Agreement contains termination rights for each of MRC Global and DNOW, including, among others, if the consummation of the First Merger does not occur on or before June 26, 2026.

During the three and nine months ended September 30, 2025, we recorded third party legal and consulting costs of $6 million and $13 million, respectively, in connection with the Merger Agreement with DNOW. These costs are reflected in selling, general and administrative expenses within our condensed consolidated statement of operations.

Basis of Presentation: We have prepared our unaudited condensed consolidated financial statements in accordance with Rule 10-01 of Regulation S-X for interim financial statements. These statements do not include all information and footnotes that generally accepted accounting principles ("GAAP") require for complete annual financial statements. However, the information in these statements reflects all normal recurring adjustments that are, in our opinion, necessary for a fair presentation of the results for the interim periods. The results of operations for the three and nine months ended September 30, 2025, are not necessarily indicative of the results that will be realized for the fiscal year ending December 31, 2025. We have derived our condensed consolidated balance sheet as of September 30, 2025, from the audited consolidated financial statements for the year ended December 31, 2024. You should read these condensed consolidated financial statements in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2024.

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The condensed consolidated financial statements include the accounts of MRC Global Inc. and its wholly owned and majority owned subsidiaries (collectively referred to as the "Company" or by terms such as "we", "our" or "us"). The Company is a primary beneficiary of a variable interest entity, and the assets, liabilities and results of operations of the variable interest entity are included in the Company's condensed consolidated financial statements. All intercompany balances and transactions have been eliminated in consolidation.

Recently Issued Accounting Standards: In September 2025, the Financial Accounting Standards Board ("FASB") issued ASU 2025-06, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software ("ASU 2025-06"), which is intended to modernize the accounting for internal-use software costs by removing the previous "development stage" model and introducing a model that aligns with current software development methods, such as the agile approach. Capitalization of eligible costs will begin when management has authorized and committed to funding the software project and it is probable the project will be completed and the software will be used for the function intended. This update will be effective for annual periods beginning after December 15, 2027, and interim reporting periods within those annual periods. Entities may apply the guidance using a prospective, retrospective or modified transition approach. Early adoption is permitted as of the beginning of an annual period. We are currently evaluating the impact of the provisions of ASU 2025-06 on our consolidated financial statements.

In November 2024, the Financial Accounting Standards Board ("FASB") issued ASU 2024-03, Income Statement - Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses ("ASU 2024-03"), which requires public entities to include more detailed disclosures about specific categories of expenses such as inventory purchases, employee compensation, depreciation, amortization and selling costs within the notes to the financial statements. This update will be effective for annual periods beginning after December 15, 2026 and interim periods within fiscal years beginning after December 15, 2027. We are currently evaluating the impact of the provisions of ASU 2024-03 on our consolidated financial statements.

Adoption of New Accounting Standards: In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) ("ASU 2023-09"), which aims to enhance the transparency and decision usefulness of income tax disclosures through requiring improvements in those disclosures primarily related to the rate reconciliation and income taxes paid information. This update will be effective for annual periods beginning after December 15, 2024. We adopted ASU 2023-09 on January 1, 2025. We do not expect ASU 2023-09 to impact our consolidated financial statements, and we are currently evaluating the impact of new disclosure requirements beginning with the Form 10-K for the year ended December 31, 2025.

NOTE 2 – Discontinued Operations

On December 13, 2024, we entered into a definitive agreement to sell assets associated with our Canada operations to EMCO Corporation, and on March 14, 2025, we completed the sale. Net cash proceeds for the sale were $18 million. The historical results of the Disposal Group have been reflected as discontinued operations in our condensed consolidated financial statements for all periods prior to the definitive agreement. As a result of the executed sale agreement in December of 2024, a pre-tax, non-cash loss on discontinued operations of approximately $22 million was recorded in the fourth quarter of 2024. Upon completion of the sale in March 2025, the cumulative foreign currency translation adjustment of $28 million was released from accumulated other comprehensive income and recognized in the condensed consolidated statement of operations. The total amount was included in loss from discontinued operations, net of tax for the nine months ended September 30, 2025. Assets and liabilities associated with the Disposal Group are classified as assets and liabilities of discontinued operations in our condensed consolidated balance sheets as of September 30, 2025 and December 31, 2024.

In connection with the agreement to sell the Disposal Group and effective March 14, 2025, the Company entered into a Transition Services Agreement (“TSA”) under which the Company provides EMCO Corporation certain transition services related to operational systems, finance and accounting, human resources, information technology, treasury, data transfer services and licenses to use certain intellectual property rights. The time period in which the transition services are provided varies from closing to a period not to exceed one year from closing. For the three and nine months ended September 30, 2025, we recognized zero and $1 million from the provision of these services pursuant to the TSA, respectively. This income was included in other, net on the condensed consolidated statement of operations for the three and nine months ended September 30, 2025. Additionally, the Company has assigned certain operating lease agreements to EMCO corporation as part of the sale. Refer to Note 5 for additional disclosures regarding these lease assignments.

Details of the "Loss from discontinued operations, net of tax" are as follows (in millions):

	*Three Months Ended*				*Nine Months Ended*
	*September 30,*		*September 30,*		*September 30,*			*September 30,*
	*2025*		*2024*		*2025*			*2024*
Sales	$	—	$	26	$	16		$	88
Cost of sales		—		23		14			77
Gross profit		—		3		2			11

Selling, general and administrative expenses		—		3		5			12
Operating loss		—		—		(3	)		(1	)

Reclassification of foreign currency translation adjustments to net income as a result of the sale of Canada		—		—		(28	)		—
Other, net		—		—		—			—

Loss from discontinued operations		—		—		(31	)		(1	)
Income tax benefit from discontinued operations		—		—		(1	)		—
Loss from discontinued operations, net of tax	$	—	$	—	$	(30	)	$	(1	)

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The following table summarizes the Disposal Group assets and liabilities classified as discontinued operations in the Company's Condensed Consolidated Balance Sheets (in millions):

	*September 30,*		*December 31,*
	*2025*		*2024*
Assets
Current assets:
Cash	$	1	$	—
Accounts receivable, net		—		19
Inventories, net		—		30
Property, plant and equipment, net		—		1
Operating lease assets		—		8
Loss recognized on classification as held for sale		—		(22	)
Current assets of discontinued operations	$	1	$	36

Liabilities
Current liabilities:
Trade accounts payable	$	—	$	12
Accrued expenses and other current liabilities		1		1
Operating lease liabilities		—		8
Current liabilities of discontinued operations	$	1	$	21

NOTE 3 – REVENUE RECOGNITION

We recognize revenue when we transfer control of promised goods or services to our customers in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods or services. We generally recognize our revenue when products are shipped or delivered to our customers, and payment is due from our customers at the time of billing with a majority of our customers having 30-day terms. We estimate and record returns as a reduction of revenue. Amounts received in advance of shipment are deferred and recognized when the performance obligations are satisfied. Sales taxes collected from customers and remitted to governmental authorities are accounted for on a net basis and, therefore, we exclude these taxes from sales in the accompanying condensed consolidated statements of operations. In some cases, particularly with third party pipe shipments, we consider shipping and handling costs to be separate performance obligations, and as such, we record the revenue and cost of sales when the performance obligation is fulfilled. While a small proportion of our sales, we occasionally recognize revenue under a bill and hold arrangement. Recognition of revenue on bill and hold arrangements occurs when control transfers to the customer provided that the reason for the bill and hold arrangement is substantive, and the product is separately identified as belonging to the customer, ready for physical transfer and unavailable to be used or directed to another customer. Cost of sales includes the cost of inventory sold and related items, such as vendor rebates, inventory allowances and reserves and shipping and handling costs associated with inbound and outbound freight, as well as depreciation and amortization of intangible assets.

Our contracts with customers ordinarily involve performance obligations that are one year or less. Therefore, we have applied the optional exemption that permits the omission of information about our unfulfilled performance obligations as of the balance sheet dates.

Contract Balances: Variations in the timing of revenue recognition, invoicing and receipt of payment result in categories of assets and liabilities that include invoiced accounts receivable, uninvoiced accounts receivable, contract assets and deferred revenue (contract liabilities) on the condensed consolidated balance sheets.

Generally, revenue recognition and invoicing occur simultaneously as we transfer control of promised goods or services to our customers. We consider contract assets to be accounts receivable when we have an unconditional right to consideration, and only the passage of time is required before payment is due. In certain cases, particularly those involving customer-specific documentation requirements, invoicing is delayed until we are able to meet the documentation requirements. In these cases, we recognize a contract asset separate from accounts receivable until those requirements are met, and we are able to invoice the customer. Our contract asset balance associated with these requirements as of September 30, 2025 and December 31, 2024 was $63 million and $18 million, respectively. These contract asset balances are included within accounts receivable in the accompanying condensed consolidated balance sheets.

We record contract liabilities, or deferred revenue, when cash payments are received from customers in advance of our performance, including amounts which are refundable. The deferred revenue balance at September 30, 2025 and December 31, 2024 was $20 million and $16 million, respectively. During the three and nine months ended September 30, 2025, we recognized $1 million and $15 million, respectively, of the revenue that was deferred as of December 31, 2024. During the three and nine months ended September 30, 2024, we recognized less than $1 million and $6 million, respectively, of the revenue that was deferred as of December 31, 2023. Deferred revenue balances are included within accrued expenses and other current liabilities in the accompanying condensed consolidated balance sheets.

Disaggregated Revenue: Our disaggregated revenue represents our business of selling PVF to energy and industrial end users across each of the Gas Utilities, DIET, and PTI sectors in each of our reportable segments. Each of our end markets and geographical reportable segments are impacted and influenced by varying factors, including macroeconomic environment, commodity prices, maintenance and capital spending and exploration and production activity. As such, we believe that this information is important in depicting the nature, amount, timing and uncertainty of our revenue from contracts with customers.

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The following table presents our revenue disaggregated by revenue source (in millions):

*Three Months Ended*
*September 30,*

	*U.S.*		*International*		*Total*
2025:
Gas Utilities	$	292	$	—	$	292
DIET		131		68		199
PTI		127		60		187
	$	550	$	128	$	678
2024:
Gas Utilities	$	293	$	—	$	293
DIET		170		69		239
PTI		181		58		239
	$	644	$	127	$	771

*Nine Months Ended*
*September 30,*

	*U.S.*		*International*		*Total*
2025:
Gas Utilities	$	864	$	—	$	864
DIET		455		187		642
PTI		480		202		682
	$	1,799	$	389	$	2,188
2024:
Gas Utilities	$	845	$	—	$	845
DIET		560		202		762
PTI		583		157		740
	$	1,988	$	359	$	2,347

Allowance for Credit Losses: We estimate the adequacy of the allowance for credit losses on receivables based upon periodic evaluation of accounts that may have a higher credit risk using information available about the customer, current economic conditions, volume, growth and composition of the account, and other factors such as financial statements, news reports and published credit ratings. The amount of the allowance for the remainder of the trade balance is not evaluated individually but is based upon historical loss experience. As of September 30, 2025 and December 31, 2024, the allowance for credit losses totaled $3 million and $3 million, respectively.

NOTE 4 – INVENTORIES

The composition of our inventory is as follows (in millions):

	*September 30,*			*December 31,*
	*2025*			*2024*
Finished goods inventory at average cost:
Valves, automation, measurement and instrumentation	$	273		$	206
Carbon steel pipe, fittings and flanges		183			135
Gas products		295			265
All other products		93			104
		844			710
Less: Excess of weighted-average cost over LIFO cost (LIFO reserve)		(304	)		(280	)
Less: Other inventory reserves		(17	)		(15	)
	$	523		$	415

The Company uses the last-in, first-out (“LIFO”) method of valuing U.S. inventories. The use of the LIFO method has the effect of reducing net income during periods of rising inventory costs (inflationary periods) and increasing net income during periods of falling inventory costs (deflationary periods). Valuation of inventory under the LIFO method can be made only at the end of each year based on the inventory levels and costs at that time. Accordingly, we base interim LIFO calculations using current month end perpetual inventory balances, except in those instances where better information regarding projected year-end balances is available.

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NOTE 5 – LEASES

We lease certain distribution centers, warehouses, office space, land, automobiles and equipment. The majority of these leases are classified as operating leases. We recognize operating fixed lease expense and finance lease amortization expense on a straight-line basis over the lease term. Leases with an initial term of 12 months or less are not recorded on the balance sheet.

Many of our facility leases include one or more options to renew, with renewal terms that can extend the lease term from one year to 15 years with a maximum lease term of 30 years, including renewals. The exercise of lease renewal options is at our sole discretion; therefore, renewals to extend the terms of most leases are not included in our right of use (“ROU”) assets and lease liabilities as they are not reasonably certain of exercise. In the case of certain regional distribution centers and certain corporate offices, where the renewal is reasonably certain of exercise, we include the renewal period in our lease term. Leases with escalation adjustments based on an index, such as the consumer price index, are expensed based on current rates. Leases with specified escalation steps are expensed based on the total lease obligation ratably over the life of the lease. Leasehold improvements are depreciated over the expected lease term. Non-lease components, such as payment of real estate taxes, maintenance, insurance and other operating expenses, have been excluded from the determination of our lease liability.

As most of our leases do not provide an implicit rate, we use an incremental borrowing rate based on the information available at the commencement date in determining the present value of the lease payments using a portfolio approach. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.

Our leases are presented in our condensed consolidated balance sheets as follows:

		*September 30,*		*December 31,*
	*Balance Sheet Classification*	*2025*		*2024*
Assets
Operating lease assets	Operating lease assets	$	160	$	170
Finance lease assets (1)	Other assets		9		8
Total lease assets		$	169	$	178
Liabilities
Current
Operating lease liabilities	Operating lease liabilities	$	31	$	31
Finance lease liabilities	Accrued expenses and other current liabilities		2		1
Long-term
Operating lease liabilities	Operating lease liabilities		141		153
Finance lease liabilities	Other liabilities		8		8
Total lease liabilities		$	182	$	193

_____________________

(1)	Finance lease assets are recorded net of accumulated amortization of $4 million and $2 million as of September 30, 2025 and December 31, 2024, respectively.

Expense associated with our operating leases was $11 million and $34 million for the three and nine months ended September 30, 2025, respectively, and $12 million and $34 million for the three and nine months ended September 30, 2024, respectively, which we have classified in selling, general and administrative expenses. For the three and nine months ended September 30, 2025, expense associated with our finance leases was less than $1 million and $2 million, respectively, related to the amortization of ROU Assets, which we have classified in cost of sales, and $1 million related to the interest on finance lease liabilities, which we have classified in interest expense. For the three and nine months ended September 30, 2024, expense associated with our finance leases was $2 million related to the amortization of ROU Assets, which we have classified in cost of sales, and less than $1 million related to the interest on finance lease liabilities, which we have classified in interest expense. Cash paid for operating leases recognized as liabilities was $9 million and $30 million for the three and nine months ended September 30, 2025, respectively, and $9 million and $29 million for the three and nine months ended September 30, 2024, respectively. Cash paid for finance leases was less than $1 million and $2 million for the three and nine months ended September 30, 2025, respectively, and $1 million for the three and nine months ended September 30, 2024.

The maturity of lease liabilities is as follows (in millions):

Maturity of Lease Liabilities	*Operating*			*Finance*
Remainder of 2025	$	11		$	1
2026		40			3
2027		34			2
2028		27			2
2029		21			2
After 2029		114			2
Total lease payments		247			12
Less: Interest		(75	)		(2	)
Present value of lease liabilities	$	172		$	10

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The term and discount rate associated with leases are as follows:

	*September 30,*			*September 30,*
Lease Term and Discount Rate	*2025*			*2024*
Weighted-average remaining lease term (years)
Operating leases		10			11
Finance leases		5			6
Weighted-average discount rate
Operating leases		6.8	%		6.7	%
Finance leases		6.8	%		6.6	%

Amounts maturing after 2029 include expected renewals for leases of certain regional distribution centers and certain corporate offices through dates up to 2048. Excluding these optional renewals, our weighted-average remaining lease term for operating leases is 5 years and 6 years for the periods ended September 30, 2025 and 2024, respectively. Excluding optional renewals, our weighted average remaining lease term for finance leases is 5 years and 6 years for the periods ended September 30, 2025 and 2024, respectively.

Canada Lease Agreements

In connection with the sale of the Canada business, three operating lease commitments were assigned to the buyers where the Company has not been released from the covenants, liabilities and responsibilities under the lease agreements. The Company is obligated to perform under these agreements if the buyers fail to perform at any time during the remainder of the lease, which are set to expire on or before December 31, 2030. At the close date of the sale and as of September 30, 2025, the undiscounted remaining lease payments under the agreement totaled $8 million and $7 million, respectively. The Company has not recorded a liability with respect to the obligations as of September 30, 2025, as the Company concluded the provisions of these lease assignments were not probable.

NOTE 6 – DEBT

The components of our debt are as follows (in millions):

	*September 30,*		*December 31,*
	*2025*		*2024*
Senior Secured Term Loan B (1)	$	342	$	344
Global ABL Facility		134		43
		476		387
Less: current portion		4		3
	$	472	$	384

(1)	The Senior Secured Term Loan B is net of discount and issuance costs of $6 million and $7 million as of September 30, 2025 and December 31, 2024, respectively.

Senior Secured Term Loan B: The Company has a Senior Secured Term Loan "B" (the “Term Loan”) with an original principal amount of $350 million, which amortizes in equal quarterly installments of 1% per year with the balance payable in October 2031, when the facility matures. The Term Loan was issued at an original issue discount of 99.5%. The Company used the proceeds from the Term Loan to repurchase all of its issued and outstanding shares of its Preferred Stock as discussed in Note 8. Pursuant to the Merger Agreement, the Company will deliver, at the option of DNOW, a payoff letter with respect to the Term Loan for payment in full of the Term Loan at the closing of the Mergers, or an amendment, or a consent from the requisite holders, of the Term Loan, permitting the transactions contemplated by the Merger Agreement.

Interest Rate. The Term Loan accrues interest at a margin plus either Term SOFR or a base rate, depending on the Company’s election at the time of a loan. For loans incurring interest based on Term SOFR, the margin is (a) 350 basis points if either or both of the ratings (i) by Moody’s Investors Service, Inc. (“Moody’s”) is B2, or lower, or (ii) by Standard & Poor’s Ratings Services (“S&P”) is B, or lower, and (b) 325 basis points if either or both of the ratings (i) by Moody’s is B1, or better, or (ii) by S&P is B+, or better. For loans incurring interest based on the base rate, the margin is (a) 250 basis points if either or both of the ratings (i) by Moody’s is B2, or lower, or (ii) by S&P is B, or lower, and (b) 225 basis points if either or both of the ratings (i) by Moody’s is B1, or better, or (ii) by S&P is B+, or better. The Term Loan provides certain provisions if ratings are unavailable.

Facility Size Increases. The Term Loan allows for incremental increases in facility size (subject to additional lender commitments) up to an aggregate amount equal to the greater of $225 million and 100% of Consolidated EBITDA for the most recent trailing four consecutive fiscal quarters then ended, plus an additional amount such that the Company’s first lien leverage ratio (as defined under the Term Loan) would not exceed 3.75 to 1.00. MRC Global (US) Inc. is the borrower under the Term Loan facility, which is guaranteed by MRC Global Inc. and certain of its wholly owned U.S. subsidiaries.

Security. The Term Loan is secured by a second lien on the assets of MRC Global Inc., MRC Global (US) Inc. and those U.S. subsidiaries guaranteeing the Term Loan facility (collectively, the "Term Loan Credit Parties") securing the Global ABL Facility (defined below), which includes accounts receivable and inventory. The Term Loan is secured by a first lien on substantially all of the other assets of the Term Loan Credit Parities. The Term Loan is further secured by a first lien pledge of all of the capital stock of certain of the direct domestic subsidiaries of Term Loan Credit Parties and 65% of the capital stock of certain of the direct, non-U.S. subsidiaries of the Term Loan Credit Parties.

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Prepayments. We are required to repay the Term Loan with the proceeds from certain asset sales and certain insurance proceeds. In addition, on an annual basis, we are required to repay an amount equal to 50% of excess cash flow, as defined in the Term Loan, reducing to 25% if our first lien leverage ratio is no more than 3.25 to 1.00 but greater than 3.00 to 1.00. No payment of excess cash flow is required if the first lien leverage ratio is less than or equal to 3.00 to 1.00. The amount of cash used in the determination of the first lien secured leverage ratio is limited to $125 million.

Restrictive Covenants. The Term Loan does not include any financial maintenance covenants. The Term Loan contains restrictive covenants (in each case, subject to exclusions) that limit, among other things, the ability of the Company and its restricted subsidiaries to:

	●	make investments, including acquisitions;
	●	prepay certain indebtedness;
	●	grant liens;
	●	incur additional indebtedness;
	●	sell assets;
	●	make fundamental changes to our business;
	●	enter into transactions with affiliates; and
	●	pay dividends.

The Term Loan also contains other customary restrictive covenants. The covenants are subject to various baskets and materiality thresholds, with certain of the baskets permitted by the restrictions on the repayment of subordinated indebtedness, restricted payments and investments being available only when the various leverage ratio calculations of the Company and its restricted subsidiaries is less than 3.75 to 1.00 or 3.50 to 1.00, as applicable.

The Term Loan provides that the Company and its restricted subsidiaries may incur any first lien indebtedness that is pari passu to the Term Loan so long as the pro forma first lien secured leverage ratio of the Company and its restricted subsidiaries is less than or equal to 3.75 to 1.00. The Company and its restricted subsidiaries may incur any second lien indebtedness so long as the pro forma junior secured leverage ratio of the Company and its restricted subsidiaries is less than or equal to 4.50 to 1.00. The Company and its restricted subsidiaries may incur any unsecured indebtedness so long as the total leverage ratio of the Company and its restricted subsidiaries is less than or equal to 4.75 to 1.00 or the pro forma consolidated interest coverage ratio of the Company and its restricted subsidiaries is greater than or equal to 2.00 to 1.00. Additionally, under the Term Loan, the Company and its restricted subsidiaries may incur indebtedness under the Global ABL Facility (or any replacement facility) in an amount not to exceed the greater of $1.3 billion and the borrowing base under the Global ABL Facility at such time.

The Term Loan contains certain customary representations and warranties, affirmative covenants and events of default, including, among other things, payment defaults, breaches of representations and warranties, covenant defaults, cross-defaults to certain indebtedness, certain events of bankruptcy, certain events under ERISA, judgment defaults, actual or asserted failure of any material guaranty or security documents supporting the Term Loan to be in full force and effect and change of control. If such an event of default occurs, the Agent under the Term Loan is entitled to take various actions, including the acceleration of amounts due under the Term Loan and all other actions that a secured creditor is permitted to take following a default.

Global ABL Facility: The Company is a party to a multi-currency, global asset-based lending facility (the “Global ABL Facility”), including certain of its subsidiaries, its lenders and Bank of America, N.A. as administrative agent, security trustee and collateral agent. The Global ABL Facility is a revolving credit facility of $750 million, which matures in November 2029. The Global ABL Facility is comprised of $705 million in revolver commitments in the United States, which includes a $30 million sub-limit for Canada, $12 million in Norway, $10 million in Australia, $10.5 million in the Netherlands, $7.5 million in the United Kingdom and $5 million in Belgium. The Global ABL Facility contains an accordion feature that allows us to increase the principal amount of the facility by up to $250 million, subject to securing additional lender commitments. Upon closing of the Mergers, the combined company must pay the Global ABL Facility in full, discharge and terminate it or amend the Global ABL Facility to avoid an event of default precipitated by the change in control of the Company. DNOW has obtained a debt commitment letter and has represented that it will have sufficient liquidity to pay off and discharge the Global ABL Facility at closing out of available funds, other sources and from the debt financing that the debt commitment letter outlines.

Guarantees. Obligations of the U.S. Borrowers under the Global ABL Facility are guaranteed by the Company, each of the U.S. Borrowers, each of the Canadian Borrowers, certain of the wholly owned material U.S. subsidiaries of the U.S. Borrowers from time to time party to the ABL Agreement (the “U.S. Guarantors”) and certain of the wholly owned Canadian subsidiaries of the Company from time to time party to the ABL Agreement (the “Canadian Guarantors”). The obligations of the Foreign Borrowers under the Global ABL Facility are guaranteed by the U.S. Borrowers, the U.S. Guarantors and, subject to certain limitations the ABL Agreement more particularly describes, the Foreign Borrowers (collectively, the “ABL Guarantors”).

Security. Obligations under the U.S./Canadian Facility are primarily secured, subject to certain exceptions, by a first-priority security interest in the accounts receivable, inventory and related assets of the U.S. Borrowers, U.S. Guarantors, the Canadian Borrowers and the Canadian Guarantors. In connection with the Company’s sale of its Canadian operations, the security interests in the Company’s Canadian accounts receivable and inventory that were sold were released, and as these Canadian operations were sold, the Company does not expect the Canadian Borrowers to actively utilize the facility for borrowings. The obligations of any Foreign Borrower are primarily secured, subject to certain exceptions, by a first-priority security interest in the accounts receivable, inventory and related assets of the Foreign Borrowers and the ABL Guarantors and a first-priority pledge by the Foreign Borrower of the equity interests in its direct, wholly owned restricted subsidiaries incorporated in the relevant borrower jurisdictions and intercompany debt instruments the Foreign Borrower holds. No property of a Foreign Borrower or its subsidiaries (other than the Canadian Borrowers) secures the U.S./Canadian Facility. The security interest in accounts receivable, inventory and related assets of the U.S. Borrowers ranks prior to the security interest in this collateral which secures the Term Loan.

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Borrowing Bases. Each Foreign Borrower has a separate stand-alone Borrowing Base that limits the Foreign Borrower’s ability to borrow under its respective Facility, subject to an exception allowing the Foreign Borrowers to utilize excess availability under the U.S./Canadian Facility to borrow amounts in excess of their respective borrowing bases, which utilization will reduce excess availability under the U.S./Canadian Facility dollar for dollar.

Interest Rates. Prior to December 1, 2024, the applicable margin for borrowings under the Global ABL Facility will be set at Level II of the definition of “Applicable Margin” under the ABL Agreement as determined by a consolidated fixed charge ratio greater than 1.50 to 1.00 but less than or equal to 2.25 to 1.00, which means that borrowings will bear interest at a rate equal to:

•

in the case of U.S. dollar and euro advances,

•

Term SOFR plus 1.50%,

•

EURIBOR plus 1.50%,

•

for base rate advances in the U.S. or Canada, the U.S. Base Rate (or Canadian Base Rate if in Canada) plus 0.50%, or

•

for base rate advances outside the U.S. and Canada, an applicable Base Rate plus 1.50%;

•

in the case of Norwegian Kroner advances, NIBOR plus 1.50% or the Norwegian Base Rate plus 1.50%;

•

in the case of Canadian dollar advances, Term CORRA plus 1.50% or the Canadian Prime Rate or Canadian Base Rate plus 0.50%;

•

in the case of British pound sterling advances, SONIA plus 1.50%, or the UK Base Rate plus 1.50%; or

•

in the case of Australian dollar advances, the Australian Bank Bill Rate plus 1.50% or the Australian Base Rate plus 1.50%.

On and after December 1, 2024 as of the end of the fiscal quarter that most recently ended, the applicable margins will be subject to a 0.25% step-down to Level III of the definition of “Applicable Margin” under the ABL Agreement as determined by a consolidated fixed charge ratio greater than 2.25 to 1.00 or a 0.25% step-up to Level I of the definition of “Applicable Margin” under the ABL Agreement as determined by a consolidated fixed charge ratio less than or equal to 1.50 to 1.00.

In addition to paying interest on outstanding principal under the Global ABL Facility, the ABL Borrowers are required to pay a commitment fee in respect of unutilized commitments, which is equal to 0.375% per annum for each Facility (or 0.25% per annum if utilization of a Facility exceeds 35% of the aggregate commitments under the Facility).

Excess Availability. At September 30, 2025, availability under our Global ABL Facility was $477 million.

Interest on Borrowings: The interest rates on our outstanding borrowings at September 30, 2025 and December 31, 2024, including amortization of debt issuance costs, were as follows:

	*September 30,*			*December 31,*
	*2025*			*2024*
Senior Secured Term Loan B		7.44	%		8.02	%
Global ABL Facility		6.07	%		5.95	%
Weighted average interest rate		7.05	%		7.79	%

NOTE 7 – INCOME TAXES

For the three and nine months ended September 30, 2025 we generated a $13 million loss and $14 million of income, respectively, from continuing operations before taxes and recorded a provision for income taxes of $4 million benefit and $2 million expense, respectively, resulting in an effective tax rate of 31% and 14%, respectively. Our rates generally differ from the U.S. federal statutory rates of 21% as a result of state income taxes, non-deductible expenses and differing foreign income tax rates. The tax rates for three and nine months ended September 30, 2025 were impacted by discrete tax benefits including unamortized research and development costs. The effective tax rate for the three months ended September 30, 2025 was unfavorably impacted due to discrete tax benefits against low pretax loss, while the effective tax rate for the nine months ended September 30, 2025 was favorably impacted due to discrete tax benefits against low pretax profit.

For the three and nine months ended September 30, 2024, we generated $32 million and $102 million, respectively, of income from continuing operations before taxes and recorded a provision for income taxes of $3 million and $23 million, respectively, resulting in an effective tax rate of 9% and 23%, respectively. Our rates generally differ from the U.S. federal statutory rates of 21% as a result of state income taxes, non-deductible expenses and differing foreign income tax rates. The effective tax rate for the three months ended September 30, 2024 was lower than the U.S. federal statutory rate due to a net reduction in the valuation allowance provision, partially offset by foreign losses with no tax benefit due to valuation allowances. The effective tax rate for the nine months ended September 30, 2024 was higher than the U.S. federal statutory rate due to a net reduction in the valuation allowance provision, partially offset by foreign losses with no tax benefit due to valuation allowances.

On July 4, 2025, the One Big Beautiful Bill Act was enacted which included provisions related to bonus depreciation, research and development, foreign derived intangible income and modifications to the calculation for excess business interest expense limitation under §163(j) to the current tax estimate. The Company's effective tax rate for the nine months ended September 30, 2025 was favorably impacted by changes related to research and development costs. The Company will continue to evaluate the impact of these policies in future periods, and the Company does not expect a material impact to the financial statements.

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NOTE 8 – REDEEMABLE PREFERRED STOCK

Preferred Stock Repurchase

In June 2015, we issued 363,000 shares of Series A Convertible Perpetual Preferred Stock (the “Preferred Stock”) and received gross proceeds of $363 million. On October 29, 2024, the Company repurchased all of the outstanding shares of the Preferred Stock for $361 million plus $4 million in accrued dividends, and all of the Preferred Stock was retired on October 30, 2024. The Company used the proceeds from the Term Loan, cash on hand and drawings from its Global ABL Facility to fund the repurchase. Before its repurchase, the Preferred Stock ranked senior to our common stock with respect to dividend rights and rights on liquidation, winding-up and dissolution. The Preferred Stock had a stated value of $1,000 per share, and holders of Preferred Stock were entitled to cumulative dividends payable quarterly in cash at a rate of 6.50% per annum.

The Preferred Stock was convertible at the option of the holders into shares of common stock at an initial conversion rate of 55.9284 shares of common stock for each share of Preferred Stock, which represented an initial conversion price of $17.88 per share of common stock, subject to adjustment. The Company had the option to redeem, in whole but not in part, all the outstanding shares of Preferred Stock at par value, subject to certain redemption price adjustments. We had the election to convert the Preferred Stock, in whole but not in part, into the relevant number of shares of common stock if the last reported sale price of the common stock had been at least 150% of the conversion price then in effect for a specified period. The conversion rate was subject to customary anti-dilution and other adjustments.

Holders of the Preferred Stock could have at their option, required the Company to repurchase their shares in the event of a fundamental change, as defined in the agreement. The repurchase price was based on the original $1,000 per share purchase price except in the case of a liquidation, in which case the holders would have received the greater of $1,000 per share and the amount that would have been received if they held common stock converted at the conversion rate in effect at the time of the fundamental change. Because this feature could have required redemption as a result of the occurrence of an event not solely within the control of the Company, the Preferred Stock was classified as temporary equity on our balance sheet.

NOTE 9 – STOCKHOLDERS’ EQUITY

Share Repurchase Program

In January 2025, the Company’s board of directors authorized a share repurchase program for common stock up to $125 million. The program is scheduled to expire January 2, 2028. The shares may be repurchased at management’s discretion in the open market. The amount and timing of any repurchase will depend on several factors, including share price, general business and market conditions, and alternative investment opportunities. The share repurchase program does not obligate the Company to repurchase shares and may be modified, discontinued, or suspended at any time at the Company’s discretion. Share repurchases made are subject to a 1% excise tax. The impact of this 1% excise tax was less than $1 million for the three and nine months ended September 30, 2025.

During the nine months ended September 30, 2025, we repurchased 1,216,956 shares at an average price per share of $12.35 for a total cost of $15 million, which excludes the 1% excise tax on share repurchases. As of September 30, 2025, we had 84,991,546 shares of common stock outstanding. Pursuant to the Merger Agreement, the Company agreed not to repurchase any more shares of its common stock between signing on June 26, 2025 and the earlier of the closing or termination of the Merger Agreement.

Equity Compensation Plans

The Company's Omnibus Incentive Plan permits the issuance of stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares, performance units and other stock-based and cash-based awards. Since the adoption of the plan, the Company’s Board of Directors has periodically granted stock options, restricted stock awards, restricted stock units and performance share units to directors and employees, but no other types of awards have been granted under the plan. Options and stock appreciation rights may not be granted at prices less than the fair market value of our common stock on the date of the grant, nor for a term exceeding ten years. For employees, vesting generally occurs over a three-year period on the anniversaries of the date specified in the employees’ respective agreements, subject to accelerated vesting under certain circumstances set forth in the agreements, and in any event, no less than one year. Vesting for directors generally occurs on the one-year anniversary of the grant date. A Black-Scholes option-pricing model is used to estimate the fair value of the stock options. A Monte Carlo simulation is completed to estimate the fair value of performance share unit awards with a stock price performance component. We expense the fair value of all equity grants, including performance share unit awards, on a straight-line basis over the vesting period. In 2025, 294,607 performance share unit awards, 95,979 restricted stock awards and 665,474 shares of restricted stock units have been granted to executive management, members of our Board of Directors and employees. Additional performance share unit awards of 101,107 and 35,427 were granted during the first nine months of 2025 and 2024, respectively, based on performance above the specified target of achievement for performance share unit awards granted in 2021 and 2020, respectively.

Accumulated Other Comprehensive Loss

Accumulated other comprehensive loss in the accompanying condensed consolidated balance sheets consists of the following (in millions):

	*September 30,*			*December 31,*
	*2025*			*2024*
Currency translation adjustments	$	(194	)	$	(236	)
Other adjustments		(1	)		(1	)
Accumulated other comprehensive loss	$	(195	)	$	(237	)

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Earnings per Share

Earnings per share are calculated in the table below (in millions, except per share amounts):

	*Three Months Ended*					*Nine Months Ended*
	*September 30,*			*September 30,*		*September 30,*			*September 30,*
	*2025*			*2024*		*2025*			*2024*
Numerator
Net (loss) income from continuing operations	$	(9	)	$	29	$	12		$	79
Less: Dividends on Series A Preferred Stock		—			6		—			18
Net (loss) income from continuing operations attributable to common stockholders used in earnings per share		(9	)		23		12			61
Loss from discontinued operations, net of tax		—			—		(30	)		(1	)
Net (loss) income attributable to common stockholders	$	(9	)	$	23	$	(18	)	$	60

Denominator
Average basic shares outstanding		84.5			85.2		85.2			85.0
Effect of dilutive securities		—			1.0		—			1.2
Average diluted shares outstanding		84.5			86.2		85.2			86.2

Basic (loss) earnings per common share:
(Loss) income from continued operations	$	(0.11	)	$	0.27	$	0.14		$	0.72
Loss from discontinued operations		—			—		(0.35	)		(0.01	)
Basic (loss) earnings per common share	$	(0.11	)	$	0.27	$	(0.21	)	$	0.71

Diluted (loss) earnings per common share:
(Loss) income from continued operations	$	(0.11	)	$	0.27	$	0.14		$	0.71
Loss from discontinued operations		—			—		(0.35	)		(0.01	)
Diluted (loss) earnings per common share	$	(0.11	)	$	0.27	$	(0.21	)	$	0.70

Equity awards and shares of Preferred Stock are disregarded in the calculation of diluted earnings per share if they are determined to be anti-dilutive. For the three and nine months ended September 30, 2025, we had 1.6 million and 1.4 million anti-dilutive restricted stock units and performance share units, respectively. For the three and nine months ended September 30, 2024, we had less than 0.1 million and 0.1 million anti-dilutive stock options, restricted stock units and performance share units, respectively. For the three and nine months ended September 30, 2024, the shares of Preferred Stock were anti-dilutive.

NOTE 10 – SEGMENT INFORMATION

Our business is comprised of two operating and reportable segments as of September 30, 2025: U.S. and International. Our International segment consists of our operations outside of the U.S. These segments represent our business of selling PVF to the energy sector across each of the following sectors:

	●	Gas Utilities: (storage and distribution of natural gas),
	●	DIET: downstream, industrial and energy transition (crude oil refining, petrochemical processing, general industrials and energy transition projects), and
	●	PTI: production and transmission infrastructure (exploration, production, extraction, gathering, processing and transmission of oil and gas).

The Company has identified its Chief Operating Decisions Maker ("CODM") as our President and Chief Executive Officer. The CODM regularly reviews gross profit and operating income (loss) by reportable segment to make operating decisions, allocate resources and assess performance of the business. Gross profit is sales less total cost of sales, which includes depreciation and amortization expense and amortization of intangibles expense. Operating income (loss) is gross profit less selling, general and administrative expenses and impairment and other charges. The CODM is provided with consolidated information on cost of sales, selling, general and administrative expenses, interest expense and income tax expense. There are no other significant expense categories regularly provided to the CODM beyond those disclosed in the condensed consolidated statements of operations. The CODM manages the business using consolidated expense information, as well as regularly provided budgeted or forecasted revenue, cost of sales and operating expenses information on a consolidated basis.

On December 13, 2024, we entered into a definitive agreement to sell assets associated with our Canada operations, which was previously considered an operating and reportable segment of the business. The operating results and cash flows for the assets sold and liabilities assumed as part of the agreement have been classified as discontinued operations within the condensed consolidated financial statements for all periods presented. Additional disclosures regarding the sale of the assets associated with our Canada operations are provided in Note 2.

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The following table presents financial information for each segment (in millions):

	*Three Months Ended*						*Nine Months Ended*
	*September 30,*			*September 30,*			*September 30,*			*September 30,*
	*2025*			*2024*			*2025*			*2024*
Sales
U.S.	$	550		$	644		$	1,799		$	1,988
International		128			127			389			359
Total consolidated sales	$	678		$	771		$	2,188		$	2,347

Cost of Sales
U.S.	$	449		$	507		$	1,452		$	1,567
International		94			96			287			264
Total cost of sales	$	543		$	603		$	1,739		$	1,831

Depreciation and amortization (1)
U.S.	$	5		$	6		$	16		$	15
International		1			—			2			1
Total depreciation and amortization expense	$	6		$	6		$	18		$	16

Amortization of intangibles (1)
U.S.	$	4		$	5		$	13		$	14
International		—			—			—			1
Total amortization of intangibles expense	$	4		$	5		$	13		$	15

Gross Profit
U.S.	$	92		$	126		$	318		$	392
International		33			31			100			93
Total gross profit	$	125		$	157		$	418		$	485

Selling, general and administrative expenses
U.S.	$	106		$	96		$	316		$	290
International		22			22			66			68
Corporate and other (2)		—			2			—			4
Total selling, general and administrative expenses	$	128		$	120		$	382		$	362

Operating (loss) income
U.S.	$	(14	)	$	30		$	2		$	102
International		11			9			34			25
Corporate and other (2)		—			(2	)		—			(4	)
Total operating (loss) income	$	(3	)	$	37		$	36		$	123

Interest expense		(10	)		(4	)	$	(29	)	$	(19	)
Other, net		—			(1	)		7			(2	)
(Loss) income from continuing operations before income taxes	$	(13	)	$	32		$	14		$	102

____________

(1)	The balances for depreciation and amortization and amortization of intangibles are included within total cost of sales on the condensed consolidated statements of operations.
(2)	The balances included in corporate and other represent the operating activity previously identified in our Canada segment that do not meet the criteria for discontinued operations. Additional disclosures regarding the sale of assets associated with our Canada operations are provided in Note 2.

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Total assets by segment are as follows (in millions):

	*September 30,*		*December 31,*
	*2025*		*2024*
Total assets
U.S.	$	1,471	$	1,278
International		315		301
Corporate and other (1)		8		9
Discontinued operations		1		36
Total assets	$	1,795	$	1,624

____________

(1)	The balances included in corporate and other represent the operating activity previously identified in our Canada segment that do not meet the criteria for discontinued operations. Additional disclosures regarding the sale of assets associated with our Canada operations are provided in Note 2.

The percentages of our property, plant and equipment relating to the following geographic areas are as follows:

	*September 30,*			*December 31,*
	*2025*			*2024*
Property, plant and equipment
U.S.		96	%		94	%
International		4	%		6	%
Total property, plant and equipment		100	%		100	%

Our sales by product line are as follows (in millions):

	*Three Months Ended*				*Nine Months Ended*
	*September 30,*		*September 30,*		*September 30,*		*September 30,*
Type	*2025*		*2024*		*2025*		*2024*
Line Pipe	$	79	$	99	$	245	$	337
Carbon Fittings and Flanges		80		96		276		294
Total Carbon Pipe, Fittings and Flanges		159		195		521		631
Valves, Automation, Measurement and Instrumentation		252		275		823		838
Gas Products		198		193		594		573
Stainless Steel and Alloy Pipe and Fittings		26		51		100		124
General Products		43		57		150		181
	$	678	$	771	$	2,188	$	2,347

NOTE 11 – FAIR VALUE MEASUREMENTS

With the exception of long-term debt, the fair values of our financial instruments, including cash and cash equivalents, accounts receivable, trade accounts payable and accrued liabilities, approximate carrying value. The carrying value of our debt was $476 million and $387 million at September 30, 2025 and December 31, 2024, respectively. The fair value of our debt was $486 million and $394 million at September 30, 2025 and December 31, 2024, respectively. We estimate the fair value of our debt using Level 2 inputs or quoted market prices.

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NOTE 12 – COMMITMENTS AND CONTINGENCIES

Litigation

Asbestos Claims. We are one of many defendants in lawsuits that plaintiffs have brought seeking damages for personal injuries that exposure to asbestos allegedly caused. Plaintiffs and their family members have brought these lawsuits against a large volume of defendant entities as a result of the defendants’ manufacture, distribution, supply or other involvement with asbestos, asbestos containing-products or equipment or activities that allegedly caused plaintiffs to be exposed to asbestos. These plaintiffs typically assert exposure to asbestos as a consequence of third-party manufactured products that our MRC Global (US) Inc. subsidiary purportedly distributed. As of September 30, 2025, we are named a defendant in approximately 478 lawsuits involving approximately 1,043 claims. No asbestos lawsuit has resulted in a judgment against us to date, with a majority being settled, dismissed or otherwise resolved. Applicable third-party insurance has substantially covered these claims, and insurance should continue to cover a substantial majority of existing and anticipated future claims. Accordingly, we have recorded a liability for our estimate of the most likely settlement of asserted claims and a related receivable from insurers for our estimated recovery, to the extent we believe that the amounts of recovery are probable. It is not possible to predict the outcome of these claims and proceedings. However, in our opinion, the likelihood that the ultimate disposition of any of these claims and legal proceedings will have a material adverse effect on our condensed consolidated financial statements is remote.

Other Legal Claims and Proceedings. From time to time, we have been subject to various claims and involved in legal proceedings incidental to the nature of our businesses. We maintain insurance coverage to reduce financial risk associated with certain of these claims and proceedings. It is not possible to predict the outcome of these claims and proceedings. However, in our opinion, the likelihood that the ultimate disposition of any of these claims and legal proceedings will have a material adverse effect on our condensed consolidated financial statements is remote.

Unclaimed Property Audit. The Company is subject to state laws relating to abandoned and unclaimed property. States routinely audit the records of companies to assess compliance with such laws. The Company is currently undergoing a multi-state unclaimed property audit. The timing and outcome of the multi-state unclaimed property audit cannot be predicted. We have reserved all of our rights, claims, and defenses. Given the nature of these matters, we are unable to reasonably estimate the total possible loss or ranges of loss, if any. If the Company is found to be in noncompliance with applicable unclaimed property laws or the manner in which those laws are interpreted or applied, states may determine that they are entitled to the Company's remittance of unclaimed or abandoned property and further may seek to impose other costs on the Company, including penalties and interest. We intend to vigorously contest the above matter; however, an adverse decision in this matter could have an adverse impact on us, our financial condition, results of operations and cash flows.

Product Claims. From time to time, in the ordinary course of our business, our customers may claim that the products that we distribute are either defective or require repair or replacement under warranties that either we or the manufacturer may provide to the customer. These proceedings are, in the opinion of management, ordinary and routine matters incidental to our normal business. Our purchase orders with our suppliers generally require the manufacturer to indemnify us against any product liability claims, leaving the manufacturer ultimately responsible for these claims. In many cases, state, provincial or foreign law provides protection to distributors for these sorts of claims, shifting the responsibility to the manufacturer. In some cases, we could be required to repair or replace the products for the benefit of our customer and seek our recovery from the manufacturer for our expense. In our opinion, the likelihood that the ultimate disposition of any of these claims and legal proceedings will have a material adverse effect on our condensed consolidated financial statements is remote.

Customer Contracts

We have contracts and agreements with many of our customers that dictate certain terms of our sales arrangements (pricing, deliverables, etc.). While we make every effort to abide by the terms of these contracts, certain provisions are complex and often subject to varying interpretations. Under the terms of these contracts, our customers have the right to audit our adherence to the contract terms. Historically, any settlements that have resulted from these customer audits have not been material to our condensed consolidated financial statements.

Purchase Commitments

We have purchase obligations consisting primarily of inventory purchases made in the normal course of business to meet operating needs. While our vendors often allow us to cancel these purchase orders without penalty, in certain cases, cancellations may subject us to cancellation fees or penalties depending on the terms of the contract.

NOTE 13 – Subsequent Events

On June 26, 2025, MRC Global entered into the Merger Agreement with DNOW, Merger Sub and LLC sub. Pursuant to the Merger Agreement, the Mergers are conditioned on, among other things, the expiration or early termination of the statutory waiting period under the HSR Act and other required regulatory approvals. The statutory waiting period under the HSR Act expired on October 6, 2025. The required regulatory approvals were received on November 3, 2025. The Mergers, which remain subject to customary mutual closing conditions, are expected to be consummated during the fourth quarter of 2025.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our financial statements and related notes included elsewhere in this report. This discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. As used in this Form 10-Q, unless otherwise indicated or the context otherwise requires, all references to the “Company”, “MRC Global”, “we”, “our” or “us” refer to MRC Global Inc. and its consolidated subsidiaries.

Cautionary Note Regarding Forward-Looking Statements

Management’s Discussion and Analysis of Financial Condition and Results of Operations (as well as other sections of this Quarterly Report on Form 10-Q) contain 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”). Forward-looking statements include those preceded by, followed by or including the words “will,” “expect,” “intended,” “anticipated,” “believe,” “project,” “forecast,” “propose,” “plan,” “estimate,” “enable” and similar expressions, including, for example, statements about the Mergers, future events, plans and anticipated results of the operations, business strategies, the anticipated benefits of the Mergers, the anticipated impact of the Mergers on the combined Company's business and future financial operating results, the expected amount and timing of synergies from the Mergers, the anticipated closing date for the Mergers, our business strategy, our industry, our future profitability, growth in the industry sectors we serve, our expectations, beliefs, plans, strategies, objectives, prospects and assumptions, and estimates and projections of future activity and trends in the oil and natural gas industry. These forward-looking statements 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 our control, including the factors described under “Risk Factors,” that may cause our actual results and performance to be materially different from any future results or performance expressed or implied by these forward-looking statements. Such risks and uncertainties include, among other things:

	●	the risk associated with the timing of the closing of the Mergers, including the risk that the conditions to the transaction are not satisfied on a timely basis or at all or the failure of the transaction to close for any other reason or to close on the anticipated terms;
	●	the effect of the announcement, pendency or completion of the Mergers on our business relationships and business operations generally;
	●	the risk that the expected benefits and synergies of the Mergers may not be fully achieved in a timely manner, or at all;
	●	decreases in capital and other expenditure levels in the industries that we serve;
	●	U.S. and international general economic conditions;
	●	global geopolitical events;
	●	decreases in oil and natural gas prices;
	●	unexpected supply shortages;
	●	loss of third-party transportation providers;
	●	cost increases by our suppliers and transportation providers;
	●	increases in steel prices, which we may be unable to pass along to our customers which could significantly lower our profit;
	●	our lack of long-term contracts with most of our suppliers;
	●	suppliers’ price reductions of products that we sell, which could cause the value of our inventory to decline;
	●	decreases in steel prices, which could significantly lower our profit;
	●	an increase in the price of goods sold if tariffs are imposed or a decline in demand for certain of the products we distribute if tariffs and duties on these products are lifted;
	●	holding more inventory than can be sold in a commercial time frame;
	●	significant substitution of renewables and low-carbon fuels for oil and gas, impacting demand for our products;
	●	risks related to adverse weather events or natural disasters;
	●	environmental, health and safety laws and regulations and the interpretation or implementation thereof;
	●	changes in our customer and product mix;
	●	the risk that manufacturers of the products we distribute will sell a substantial amount of goods directly to end users in the industry sectors we serve;
	●	failure to operate our business in an efficient or optimized manner;
	●	our ability to compete successfully with other companies in our industry;
	●	our lack of long-term contracts with many of our customers and our lack of contracts with customers that require minimum purchase volumes;

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	●	inability to attract and retain our team members or the potential loss of key personnel;
	●	adverse health events, such as a pandemic;
	●	interruption in the proper functioning of our information systems, including (among other reasons) adverse impacts resulting from our implementation of a new enterprise resource planning ("ERP") system in our U.S. segment;
	●	the occurrence of cybersecurity incidents;
	●	risks related to our customers’ creditworthiness;
	●	the success of our acquisition strategies;
	●	the potential adverse effects associated with integrating acquisitions into our business and whether these acquisitions will yield their intended benefits;
	●	impairment of our goodwill or other intangible assets;
	●	adverse changes in political or economic conditions in the countries in which we operate;
	●	our significant indebtedness;
	●	the dependence on our subsidiaries for cash to meet our parent company's obligations;
	●	changes in our credit profile;
	●	potential inability to obtain necessary capital;
	●	the potential share price volatility and costs incurred in response to any shareholder activism campaigns;
	●	the sufficiency of our insurance policies to cover losses, including liabilities arising from litigation;
	●	product liability claims against us;
	●	pending or future asbestos-related claims against us;
	●	exposure to U.S. and international laws and regulations, regulating corruption, limiting imports or exports or imposing economic sanctions;
	●	risks relating to ongoing evaluations of internal controls required by Section 404 of the Sarbanes-Oxley Act, a material weakness related to the operating effectiveness of our inventory cycle count control if it remains unremediated and the risk that controls embedded in our newly implemented ERP system in our U.S. segment fail in their design or operating effectiveness; and
	●	risks related to changing laws and regulations, including trade policies and tariffs.

Undue reliance should not be placed on our forward-looking statements. Although forward-looking statements reflect our 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. We undertake 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 law requires.

Overview

We are the leading global distributor of pipe, valves, fittings ("PVF") and other infrastructure products and services to diversified energy, industrial and gas utility sectors. We provide innovative supply chain solutions, technical product expertise and a robust digital platform to customers globally through our leading position across each of our diversified end-markets including the following sectors:

	●	Gas Utilities: (storage and distribution of natural gas)
	●	DIET: downstream, industrial and energy transition (crude oil refining, petrochemical and chemical processing, general industrials and energy transition projects)
	●	PTI: production and transmission infrastructure (exploration, production, extraction, gathering, processing and transmission of oil and gas)

We offer approximately 200,000 SKUs, including an extensive array of PVF, oilfield supply, valve automation and modification, measurement, instrumentation and other general and specialty products from our global network of over 7,100 suppliers. With over 100 years of experience, our over 2,500 employees (or "team members") serve over 8,300 customers through approximately 200 service locations including regional distribution centers, service centers, corporate offices and third-party pipe yards, where we often store and deploy pipe near customer locations.

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Key Drivers of Our Business

We derive our revenue predominantly from the sale of PVF and other infrastructure supplies to gas utility, energy and industrial customers globally. Our business is dependent upon both the current conditions and future prospects in these industries and, in particular, our customers' maintenance and expansionary operating and capital expenditures. The outlook for PVF spending is influenced by numerous factors, including the following:

●

Gas Utility and Energy Infrastructure Integrity and Modernization. Ongoing maintenance and upgrading of existing energy facilities, pipelines and other infrastructure equipment is a meaningful driver for business across the sectors we serve. This is particularly true for the Gas Utilities sector. Activity with customers in this sector is driven by upgrades and replacement of existing infrastructure as well as new residential and commercial development. Continual maintenance of an aging network of pipelines and local distribution networks is a critical requirement for these customers irrespective of broader economic conditions. As a result, this business tends to be more stable over time than our traditional oilfield-dependent businesses and moves independently of commodity prices.


	●	Oil and Natural Gas Demand and Prices. Sales of PVF and infrastructure products to the oil and natural gas industry constitute a significant portion of our sales. As a result, we depend upon the maintenance and capital expenditures of oil and natural gas companies to explore for, produce and process oil, natural gas and refined products. Demand for oil and natural gas, current and projected commodity prices and the costs necessary to produce oil and gas impact customer capital spending, additions to and maintenance of pipelines, refinery utilization and petrochemical processing activity. Additionally, as these participants rebalance their capital investment away from traditional, carbon-based energy toward alternative sources, we expect to continue to supply them and enhance our product and service offerings to support their changing requirements, including in areas such as carbon capture utilization and storage, biofuels, offshore wind and hydrogen processing.

	●	Economic Conditions. Changes in the general economy or in the energy sector (domestically or internationally) can cause demand for fuels, feedstocks and petroleum-derived products to vary, thereby causing demand for the products we distribute to materially change.


	●	Manufacturer and Distributor Inventory Levels of PVF and Related Products. Manufacturer and distributor inventory levels of PVF and related products can change significantly from period to period. Increased inventory levels by manufacturers or other distributors can cause an oversupply of PVF and related products in the industry sectors we serve and reduce the prices that we are able to charge for the products we distribute. Reduced prices, in turn, would likely reduce our profitability. Conversely, decreased manufacturer inventory levels may ultimately lead to increased demand for our products and often result in increased revenue, higher PVF pricing and improved profitability.


	●	Steel Prices, Availability and Supply and Demand. Fluctuations in steel prices can lead to volatility in the pricing of the products we distribute, especially carbon steel line pipe products, which can influence the buying patterns of our customers. A majority of the products we distribute contain various types of steel. The worldwide supply and demand for these products and other steel products that we do not supply impact the pricing and availability of our products and, ultimately, our sales and operating profitability. Additionally, supply chain disruptions with key manufacturers or in markets in which we source products can impact the availability of inventory we require to support our customers. Furthermore, logistical challenges, including inflation and availability of freight providers and containers for shipping can also significantly impact our profitability and inventory lead-times. These constraints can also present an opportunity, as our supply chain expertise allows us to meet customer expectations when the competition may not.

Planned Merger with DNOW Inc.

On June 26, 2025, MRC Global entered into an Agreement and Plan of Merger (the "Merger Agreement") with DNOW Inc., a Delaware Corporation ("DNOW"), Buck Merger Sub, Inc., a Delaware corporation and a wholly owned, direct subsidiary of DNOW ("Merger Sub") and Stag Merger Sub, LLC, a Delaware limited liability company and a wholly owned, direct subsidiary of DNOW ("LLC Sub"). The Merger Agreement provides that, among other things and subject to the terms and conditions of the Merger Agreement:

(1)		Merger Sub will be merged with and into MRC Global, with MRC Global continuing as the surviving corporation (the "First Merger" and the time the First Merger becomes effective, the "Effective Time") and
(2)		immediately following the First Merger, MRC Global will be merged with and into LLC Sub (the "Second Merger" and, together with the First Merger, the "Mergers"), with LLC Sub continuing as the surviving company at the effective time of the Second Merger as a wholly owned, direct subsidiary of DNOW.

On September 9, 2025, each of MRC Global and DNOW held a special meeting of stockholders, at which their respective stockholders approved the Mergers and related matters. In addition, on October 6, 2025, the statutory waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act") expired. The required regulatory approvals were received on November 3, 2025. The Mergers, which remain subject to customary mutual closing conditions, are expected to be consummated during the fourth quarter of 2025.

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MRC Global Sale of Canada Business

On March 14, 2025, the Company completed its sale of its Canadian operations to EMCO Corporation, and we used the proceeds to reduce debt. As a result of the executed sale agreement in December of 2024, a pre-tax, non-cash loss on discontinued operations of approximately $22 million was recorded in the fourth quarter of 2024. Upon completion of the sale in March 2025, the cumulative foreign currency translation adjustment of $28 million was released from accumulated other comprehensive income and recognized in the condensed consolidated statement of operations. The total amount was included in loss from discontinued operations, net of tax for the nine months ended September 30, 2025. The historical results of the Canada segment have been reflected as discontinued operations in our condensed consolidated financial statements for all periods prior to the definitive agreement. Assets and liabilities associated with the Canada segment are classified as assets and liabilities of discontinued operations in our condensed consolidated balance sheets as of September 30, 2025 and December 31, 2024. Additional disclosures regarding the sale of our Canada operations are provided in Note 2 of the Notes to the Condensed Consolidated Financial Statements included in Item 1 of this Form 10-Q.

ERP system implementation

In August 2025, the Company commenced the implementation of its new cloud-based enterprise resource planning ("ERP") system for the U.S. segment. This ERP system replaced the Company's mainframe system, which had been in use for over 30 years and utilized older technology. During the ERP implementation, significant, unexpected challenges arose, which, while temporary in nature, adversely affected our ability to process orders, fulfill customer shipments, integrate with other necessary software systems and issue timely invoices. The issues adversely impacted revenue, profitability and cash flow in the U.S. segment for the quarter ended September 30, 2025. In an effort to resolve the adverse impacts and resulting temporary disruptions in business processes that the ERP implementation caused, management has taken comprehensive measures, including hiring employees, enhanced training and redeployed internal resources to the ERP project. At the end of September 2025, customer service levels had largely returned to normalized levels. Additionally, the elevated revenue backlog at the end of the third quarter 2025 of $571 million is expected to manifest as revenue in the coming quarters. The Company continues to expect that the ERP system will deliver long-term benefits to the Company's operations.

Recent Trends and Outlook

In January 2025, the U.S. President took office for the second time, and a new U.S. Congress was seated. The new President has executed a number of executive orders or signed certain legislation that maintain and enhance expiring tax code changes that were originally due to expire in 2025. The President and his party have also announced an aggressive policy agenda to raise tariffs on imported goods, cancel or modify trade treaties and remake relationships with other countries. It is unclear what impact these policies will have on our business. While these policies could decrease the regulatory and tax burden on our business and the businesses of our U.S. customers, increase oil and gas production in the U.S. and, as a result, increase our U.S. business activity and the sales of products from our U.S. suppliers, it is not clear that all impacts will be positive. Our customers that are oil and gas producers have generally remained disciplined in their capital expenditures and have generally not increased production beyond their ability to fund their expenditures from prudent borrowings and cash flow from operations. The President has imposed significant tariffs on steel products, which have taken effect in mid-March 2025. A significant portion of the products that we sell are made from steel. In addition, the President has announced significant tariffs on products from China and other countries where we currently source products. The majority of the products that we purchase is from U.S. suppliers, but a portion is sourced from China, including certain valve sub-assemblies that our suppliers finish in the U.S. The tariffs on products from other countries, outside of the U.S. and China, have a lesser direct impact on our business as they do not represent a significant portion of the products that we purchase from those countries for resale to our customers. The short-term impacts of tariffs on our business depends upon whether we can pass price increases to cover the tariffs to our customers. If tariffs significantly raise the price of infrastructure buildouts to our customers, our customers may delay or cancel projects, depressing demand for our products. Even so, a significant portion of our U.S. inventory and products are domestically made (especially in our gas products product line) but some products, such as valves, often have a significant portion of non-U.S. components, and we do import some valve and other products. However, given the rapidly changing tariff landscape and the government's generally supportive stance for the oil and gas industry, we are cautiously optimistic that these policies will be supportive of our business.

During the three months ended September 30, 2025, revenue decreased $120 million sequentially from the three months ended June 30, 2025, and decreased $93 million from the three months ended September 30, 2024. The decrease was primarily a combination of the temporary and unforeseen operational challenges created by the U.S. ERP system implementation that impacted all of our sectors and market activity declines in PTI and DIET sectors.

Gas Utilities

Our Gas Utilities sector makes up 40% of our total Company revenue for the first nine months of 2025, with a 2% increase in revenue compared to the nine months ended September 30, 2024. Sequentially, this sector experienced decreased revenue of 2% in the third quarter, compared to the second quarter of 2025. In 2023 and 2024, several of our key Gas Utilities customers have been focused on reducing their own product inventory levels due to more certainty in the supply chain and associated lead times. However, we believe this concern has diminished in 2025 and our customers appear to have returned to more traditional spending patterns. Although we have experienced lower sales activity in this sector in prior years, the long-term market drivers remain positive due to distribution integrity upgrade programs as well as new home construction in certain U.S. states. The majority of the work we perform with our Gas Utilities customers are multi-year programs where they continually evaluate, monitor and implement measures to improve their pipeline distribution networks, ensuring the safety and the integrity of their system. As of 2024, which is the most recently available information, the Pipeline and Hazardous Materials Safety Administration ("PHMSA") estimates approximately 34% of the gas distribution main and service line miles are over 40 years old or of unknown origin. This infrastructure requires continuous replacement and maintenance as these gas distribution networks continue to age. We supply many of the replacement products including valves, line pipe, smart meters, risers and other gas products. A large percentage of the line pipe we sell is sold to our gas utilities customers for line replacement and new sections of their distribution network. As our gas utility customers connect new homes and businesses to their gas distribution network, this creates new revenue opportunities for our business to supply the related infrastructure products. Some of our customers in this sector support both gas and electric distribution, and certain customers have announced allocating a higher proportion of their capital budget to electric distribution. Given market fundamentals, increased natural gas demand for new power plants and business development opportunities, the Gas Utilities sector is expected to grow steadily in the coming years. Additionally, this sector is less volatile than others because it relies less on energy demand and commodity prices.

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Downstream, Industrial and Energy Transition (DIET)

DIET generated 29% of our total Company revenue for the first nine months of 2025 and decreased 16% compared to the nine months ended September 30, 2024. This sector has a significant amount of project activity, which can create substantial variability between quarters. Also, due to the recent tariff announcements in the U.S., some of our customers have delayed or canceled projects as a result of higher steel prices that are impacting the economics of their investments. This combined with the temporary operational challenges created by the U.S. ERP system implementation caused the decline in revenue. We continue to expect this sector to deliver growth in the coming years driven by increased customer activity levels related to new energy transition-related projects, maintenance, repair and operations ("MRO") activities and project turnaround activity in refineries and chemical plants. Additionally, we have expanded into new markets, including mining and data centers. To support this growth, we established a new service center in Arizona in 2024, strategically positioned to accelerate our entry into the western U.S. mining sector. We are also negotiating master service agreements with targeted owners and subcontractors for PVF work in new data center cooling systems. While still early, we are seeing encouraging momentum in both areas.

The energy transition portion of our business is a small portion of our DIET business today, but it is expected to have meaningful growth in the coming years. The outlook for energy transition projects is supported by government incentives and policies. Many of our customers have made commitments to net zero emissions to address climate change. Our customer base represents many of the primary leaders in the energy transition movement, and they are positioned to lead the effort to decarbonize through nearer-term efforts such as renewable or biodiesel refineries and offshore wind power generation as well as longer-term efforts such as carbon capture and storage and hydrogen. However, as U.S. government support is waning for these projects even while European government support continues, we are monitoring our customers plans for and the pace of development of these projects.

Production and Transmission Infrastructure (PTI)

The PTI sector of our business, which consists of the traditional upstream and midstream oil and gas markets, is the most cyclical, and in the first nine months of 2025 this sector represented 31% of our Company revenues with a 8% decrease compared to the nine months ended September 30, 2024. During the first nine months of 2025, Brent crude oil prices averaged approximately $71 per barrel and West Texas Intermediate ("WTI") oil prices averaged approximately $67 per barrel. Oil prices and natural gas prices drive customer activity, and both prices have experienced recent volatility. OPEC+ recently announced increased production plans, leading to a decrease in prices and adversely affecting our U.S. PTI sector. The challenges encountered from the U.S. ERP system implementation also contributed to the decline in revenue.

Recent industry reports have signaled potential risk in oil prices and projected lower customer spending levels in the near-term, due to current supply and demand projections. However, larger public exploration and production companies are expected to drive a higher percentage of the activity in the coming years, which is positive for our Company as our revenue for these sectors is driven primarily from this customer base. We also expect our larger public customers will remain disciplined and consistent with their commitments to their budgets, maintaining returns to their shareholders and operating within their cash flow requirements. Additionally, we believe the recent announcements by several of our large customers related to acquisitions of their smaller peers has potential for us in the coming years due to our current relationships with the acquiring companies.

Our major midstream customers have announced significant investment growth in natural gas infrastructure projects, aided by what is expected to be a more favorable and streamlined regulatory approval process under the current administration. The increase in LNG project approvals creates additional opportunities for gas gathering, processing and transmission, as well as participation in the LNG conversion process. We believe that natural gas will be a primary fuel for electrification to support re-shored manufacturing, transportation mobility and artificial intelligence applications.

Supply Chain and Labor

Inflation for the majority of our products eased during 2024. However, in 2025, the U.S. has imposed wide-spread tariffs on our products causing the prices for products to increase. We are able to react quickly to these price increases by actively seeking ways to pass these increases on to our customers. To the extent further pricing fluctuations impact our products, the effect on our revenue and cost of goods sold, which for the U.S. is determined using the last-in first-out ("LIFO") inventory costing methodology, remains subject to uncertainty and volatility. However, our supply chain expertise, relationships with our key suppliers and inventory position has allowed us to manage the supply chain for both inflationary and deflationary pressures. In addition, our contracts with customers generally allow us to pass price increases on to customers within a reasonable time after they occur.

There has been little impact to our supply chain directly from the conflicts in Ukraine or the Middle East. However, geopolitical conflicts could have the potential to further constrain the global supply chain and impact the availability of component parts, particularly valves and meters.

Although conditions are improving, we continue to be affected by labor constraints. Labor market dynamics vary by region and role type—while we have seen some easing in certain areas, competition remains in others. We closely monitor these trends and, through our efficient sourcing practices, have maintained customer support.

Backlog

We determine backlog by the amount of unshipped customer orders, which the customer may revise or cancel in certain instances. The table below details our backlog by segment (in millions):

	September 30,		December 31,		September 30,
	2025		2024		2024
U.S.	$	348	$	304	$	288
International		223		254		261
	$	571	$	558	$	549

There can be no assurance that the backlog amounts will ultimately be realized as revenue or that we will earn a profit on the backlog of orders, but we expect that substantially all of the sales in our backlog will be realized within twelve months.

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Results of Operations

Three Months Ended September 30, 2025 Compared to the Three Months Ended September 30, 2024

The breakdown of our sales by sector for the three months ended September 30, 2025 and 2024 was as follows (in millions):

	Three Months Ended
	September 30, 2025				September 30, 2024
Gas Utilities	$	292	43	%	$	293	38	%
DIET		199	29	%		239	31	%
PTI		187	28	%		239	31	%
	$	678	100	%	$	771	100	%

For the three months ended September 30, 2025 and 2024, the following table summarizes our results of operations (in millions):

	Three Months Ended
	September 30,			September 30,
	2025			2024			$ Change			% Change
Sales:
U.S.	$	550		$	644		$	(94	)		(15	)%
International		128			127			1			1	%
Consolidated	$	678		$	771		$	(93	)		(12	)%

Operating (loss) income:
U.S.	$	(14	)	$	30		$	(44	)		N/M
International		11			9			2			22	%
Corporate and other (1)		—			(2	)		2			N/M
Consolidated	$	(3	)	$	37		$	(40	)		N/M

Interest expense	$	(10	)	$	(4	)	$	(6	)		N/M
Other, net		—			(1	)		1			N/M
(Loss) income from continuing operations before income taxes		(13	)		32			(45	)		N/M
Income tax benefit (expense)		4			(3	)		7			N/M
Net (loss) income from continuing operations		(9	)		29			(38	)		N/M
Loss from discontinued operations, net of tax		—			—			—			N/M
Net (loss) income		(9	)		29			(38	)		N/M
Series A preferred stock dividends		—			6			(6	)		N/M
Net (loss) income attributable to common stockholders	$	(9	)	$	23		$	(32	)		N/M

Gross profit	$	125		$	157		$	(32	)		(20	)%
Adjusted Gross Profit (2)	$	148		$	162		$	(14	)		(9	)%
Adjusted EBITDA (2)	$	36		$	47		$	(11	)		(23	)%

_____________________

(1)

The balances included in corporate and other represent the operating activity previously identified in our Canada segment that do not meet the criteria for discontinued operations. Additional disclosures regarding the sale of certain assets and assumed liabilities within our Canada operations are provided in Note 2 of the Notes to the Condensed Consolidated Financial Statements included in Item 1 of this Form 10-Q.

(2)

Adjusted Gross Profit and Adjusted EBITDA are non-GAAP financial measures. For a reconciliation of these measures to an equivalent GAAP measure, see pages 27-29 herein.

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Sales. Our sales were $678 million for the three months ended September 30, 2025, as compared to $771 million for the three months ended September 30, 2024, a decrease of $93 million. This decrease is due to a decline in the PTI sector of $52 million followed by a decrease of $40 million in the DIET sector and a reduction in the Gas Utilities sector of $1 million.

U.S. Segment—Our U.S. sales decreased to $550 million for the three months ended September 30, 2025, from $644 million for the three months ended September 30, 2024. This $94 million, or 15%, decrease is primarily due to the unexpected operational challenges created by the ERP system implementation, which impacted all of our U.S. sectors. The decrease by sector is as follows:

	●	a decrease in PTI sector sales of $54 million also due, in part, to lower commodity prices and activity slowdown;
	●	a decrease in DIET sector sales of $39 million, which has experienced an increase in tariffs and softness in the refining and chemicals market resulting in project cancellations and delays; and
	●	a decrease in Gas Utilities sector sales of $1 million.

International Segment—Our International sales increased to $128 million for the three months ended September 30, 2025, from $127 million for the same period in 2024. This International sales increase of $1 million was primarily driven by the increase in PTI sector sales of $2 million, offset by a decrease in DIET sector sales of $1 million. In addition, the strengthening of foreign currencies in areas where we operate relative to the U.S. dollar favorably impacted sales by $5 million, or 4%.

Gross Profit. Our gross profit was $125 million (18.4% of sales) for the three months ended September 30, 2025, as compared to $157 million (20.4% of sales) for the three months ended September 30, 2024. This decrease of $32 million was primarily due to the decrease in sales. As compared to average cost, our LIFO inventory costing methodology increased cost of sales by $13 million for the third quarter of 2025 compared to a $6 million decrease in cost of sales in the three months ended September 30, 2024.

Adjusted Gross Profit. Adjusted Gross Profit decreased to $148 million (21.8% of sales) for the three months ended September 30, 2025, from $162 million (21.0% of sales) for the three months ended September 30, 2024, a decrease of $14 million due to lower sales. Adjusted Gross Profit is a non-GAAP financial measure. We define Adjusted Gross Profit as sales, less cost of sales, plus depreciation and amortization, plus amortization of intangibles, plus inventory-related charges incremental to normal operations, plus transaction costs associated with acquisitions and plus or minus the impact of our LIFO inventory costing methodology. We present Adjusted Gross Profit because we believe it is a useful indicator of our 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. Similarly, the impact of the LIFO inventory costing method can cause results to vary substantially from company to company depending upon which costing method they may elect. We use Adjusted Gross Profit as a key performance indicator in managing our business. We believe 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.

The following table reconciles Adjusted Gross Profit, a non-GAAP financial measure, with gross profit, as derived from our financial statements (in millions):

	Three Months Ended
	September 30,		Percentage			September 30,			Percentage
	2025		of Revenue			2024			of Revenue
Gross profit, as reported	$	125		18.4	%	$	157			20.4	%
Depreciation and amortization		6		0.9	%		6			0.8	%
Amortization of intangibles		4		0.6	%		5			0.6	%
Increase (decrease) in LIFO reserve		13		1.9	%		(6	)		(0.8	)%
Adjusted Gross Profit	$	148		21.8	%	$	162			21.0	%

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Selling, General and Administrative (“SG&A”) Expenses. Our SG&A expenses were $128 million (18.9% of sales) for the three months ended September 30, 2025, as compared to $120 million (15.6% of sales) for the three months ended September 30, 2024. The $8 million increase in SG&A was primarily driven by a $6 million increase in legal and professional fees associated with the Mergers and $6 million increase in non-capitalized expenses associated with our U.S. ERP system implementation. These increases were partially offset by a decrease in personnel expenses.

Operating (Loss) Income. Operating loss was $3 million for the three months ended September 30, 2025, as compared to operating income of $37 million for the three months ended September 30, 2024, a decrease of $40 million, primarily due to lower sales caused by operating challenges from our ERP system implementation.

U.S. Segment—Operating loss for our U.S. segment was $14 million for the three months ended September 30, 2025, compared to operating income of $30 million for the three months ended September 30, 2024, a $44 million decrease. The $44 million decrease was primarily attributable to lower sales caused by operating challenges from our ERP system implementation, a $6 million increase in SG&A expense due to legal and professional fees associated with the Mergers and $6 million increase in non-capitalizable expenses associated with our ERP system implementation.

International Segment—Operating income for our International segment was $11 million for the three months ended September 30, 2025, as compared to operating income of $9 million for the three months ended September 30, 2024, primarily due to increased sales and margins.

Corporate and other—We did not have any operating activity for the three months ended September 30, 2025, as compared to an operating loss of $2 million for the three months ended September 30, 2024, primarily attributable to lower corporate overhead allocation expenses as a result of the close of the sale of the Canada business in March 2025.

Interest Expense. Our interest expense was $10 million and $4 million expense for the three months ended September 30, 2025 and 2024, respectively. The increase of $6 million was primarily due to higher average debt balances as well as higher average interest rates. The Company entered into a new $350 million senior secured term loan in October 2024 with higher benchmark interest rates as compared to the prior senior secured term loan that was repaid in May 2024.

Other, net. Other, net was less than $1 million expense for the three months ended September 30, 2025 compared to $1 million expense for the three months ended September 30, 2024, which consisted primarily of foreign exchange losses.

Income Tax Expense. Our income tax benefit was $4 million for the three months ended September 30, 2025, as compared to $3 million expense for the three months ended September 30, 2024. The decrease in expense is primarily due to decreased profitability. Our effective tax rates were 31% and 9% for the three months ended September 30, 2025 and 2024, respectively. Our rates differ from the U.S. federal statutory rate of 21% as a result of state income taxes, non-deductible expenses and differing foreign income tax rates. In addition, the effective tax rate for the three months ended September 30, 2025 increased due to a loss before tax and the impact of discrete tax benefits.

Pillar Two. The Organization for Economic Co-operation and Development has enacted model rules for a new global minimum tax framework, also known as Pillar Two and continues to release additional guidance on how Pillar Two rules should be interpreted and applied by jurisdictions as they adopt Pillar Two. A number of countries have utilized the administrative guidance as a starting point for legislation that went into effect January 1, 2024. These rules did not have a material impact on our taxes for the three months ended September 30, 2025.

Net (Loss) Income from Continuing Operations. Our net loss from continuing operations was $9 million for the three months ended September 30, 2025, as compared to net income from continuing operations of $29 million for the three months ended September 30, 2024, a decrease of $38 million due to lower sales and higher SG&A expenses.

(Loss) from Discontinued Operations, net of tax. Our net loss from discontinued operations, net of tax, was less than $1 million for the three months ended September 30, 2025, as compared to a net loss of less than $1 million for the three months ended September 30, 2024. Additional disclosures regarding the sale of certain assets and liabilities within our Canada operations are provided in Note 2 of the Notes to the Condensed Consolidated Financial Statements included in Item 1 of this Form 10-Q.

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Adjusted EBITDA. Adjusted EBITDA, a non-GAAP financial measure, was $36 million (5.3% of sales) for the three months ended September 30, 2025, as compared to $47 million (6.1% of sales) for the three months ended September 30, 2024.

We define 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, long-lived asset impairments (including goodwill and intangible assets), inventory-related charges incremental to normal operations, charges related to our internal control remediation, the Mergers and non-capitalizable expenses related to the U.S. ERP system implementation and plus or minus the impact of our LIFO inventory costing methodology.

We believe Adjusted EBITDA provides investors with a helpful measure for comparing our operating performance with the performance of other companies that may have different financing and capital structures or tax rates. We believe it is a useful indicator of our operating performance without regard to items, such as amortization of intangibles, which can vary substantially from company to company depending upon the nature and extent of acquisitions. Similarly, the impact of the LIFO inventory costing method can cause results to vary substantially from company to company depending upon which costing method they may elect. We use Adjusted EBITDA as a key performance indicator in managing our business. We believe that net income is the financial measure calculated and presented in accordance with U.S. generally accepted accounting principles that is most directly comparable to Adjusted EBITDA.

The following table reconciles Adjusted EBITDA, a non-GAAP financial measure, with net income, as derived from our financial statements (in millions):

	Three Months Ended
	September 30,			September 30,
	2025			2024
Net (loss) income	$	(9	)	$	29
Loss from discontinued operations, net of tax		—			—
Net (loss) income from continuing operations		(9	)		29
Income tax (benefit) expense		(4	)		3
Interest expense		10			4
Depreciation and amortization		6			6
Amortization of intangibles		4			5
Increase (decrease) in LIFO reserve		13			(6	)
Equity-based compensation expense		4			4
ERP system implementation		6			—
Non-recurring other legal and consulting costs (1)		6			—
Foreign currency losses		—			2
Adjusted EBITDA	$	36		$	47

____________

(1)

For the three months ended September 30, 2025, non-recurring other legal and consulting costs includes expenses of $6 million associated with the pending Mergers. Additional disclosures regarding the Mergers are provided in Note 1 of the Notes to the Condensed Consolidated Financial Statements included in Item 1 of this Form 10-Q.

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Nine Months Ended September 30, 2025 Compared to the Nine Months Ended September 30, 2024

The breakdown of our sales by sector for the nine months ended September 30, 2025 and 2024 was as follows (in millions):

	Nine Months Ended
	September 30, 2025				September 30, 2024
Gas Utilities	$	864	40	%	$	845	36	%
DIET		642	29	%		762	32	%
PTI		682	31	%		740	32	%
	$	2,188	100	%	$	2,347	100	%

For the nine months ended September 30, 2025 and 2024, the following table summarizes our results of operations (in millions):

	Nine Months Ended
	September 30,			September 30,
	2025			2024			$ Change			% Change
Sales:
U.S.	$	1,799		$	1,988		$	(189	)		(10	)%
International		389			359			30			8	%
Consolidated	$	2,188		$	2,347		$	(159	)		(7	)%

Operating income (loss):
U.S.	$	2		$	102		$	(100	)		(98	)%
International		34			25			9			36	%
Corporate and other (1)		—			(4	)		4		N/M
Consolidated	$	36		$	123		$	(87	)		(71	)%

Interest expense	$	(29	)		(19	)		(10	)		53	%
Other, net		7			(2	)		9		N/M
Income from continuing operations before income taxes		14			102			(88	)		(86	)%
Income tax expense		(2	)		(23	)		21			(91	)%
Net income from continuing operations		12			79			(67	)		(85	)%
Loss from discontinued operations, net of tax		(30	)		(1	)		(29	)	N/M
Net (loss) income		(18	)		78			(96	)	N/M
Series A preferred stock dividends		—			18			(18	)	N/M
Net (loss) income attributable to common stockholders	$	(18	)	$	60		$	(78	)	N/M

Gross profit	$	418		$	485		$	(67	)		(14	)%
Adjusted Gross Profit (2)	$	473		$	512		$	(39	)		(8	)%
Adjusted EBITDA (2)	$	126		$	169		$	(43	)		(25	)%

_____________________

(1)

(2)

Adjusted Gross Profit and Adjusted EBITDA are non-GAAP financial measures. For a reconciliation of these measures to an equivalent GAAP measure, see pages 31-33 herein.

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Sales. Our sales were $2,188 million for the nine months ended September 30, 2025, as compared to $2,347 million for the nine months ended September 30, 2024, a decrease of $159 million, or 7%. This decrease is due to a decrease in the DIET sector and decrease in PTI sector of $120 million and $58 million, respectively, offset by an increase in the Gas Utilities sector of $19 million.

U.S. Segment—Our U.S. sales decreased to $1,799 million for the nine months ended September 30, 2025, from $1,988 million for the nine months ended September 30, 2024. This $189 million, or 10%, decrease is primarily due to the unexpected operational challenges created by the ERP system implementation, which impacted all of our U.S. sectors. The decrease by sector is as follows:

	●	a decrease in PTI sector sales of $103 million also due, in part, to lower commodity prices and activity slowdown;
	●	a decrease in DIET sector sales of $105 million, which has experienced an increase in tariffs and softness in the refining and chemicals market resulting in project cancellations and delays; and
	●	an increase in Gas Utilities sector sales of $19 million.

International Segment—Our International sales increased to $389 million for the nine months ended September 30, 2025, from $359 million for the same period in 2024. This International sales increase of $30 million was primarily driven by an increase in PTI sector sales of $45 million, offset by a decrease in DIET sector sales of $15 million. In addition, the strengthening of foreign currencies in areas where we operate relative to the U.S. dollar favorably impacted sales by $6 million.

Gross Profit. Our gross profit was $418 million (19.1% of sales) for the nine months ended September 30, 2025, as compared to $485 million (20.7% of sales) for the nine months ended September 30, 2024. This decrease of $67 million was primarily due to the decrease in sales. As compared to average cost, our LIFO inventory costing methodology increased cost of sales by $24 million for the nine months ended September 30, 2025 compared to a $4 million decrease in cost of sales in the nine months ended September 30, 2024.

Adjusted Gross Profit. Adjusted Gross Profit declined to $473 million (21.6% of sales) for the nine months ended September 30, 2025, from $512 million (21.8% of sales) for the nine months ended September 30, 2024, a decrease of $39 million due to lower sales. Adjusted Gross Profit is a non-GAAP financial measure. We define Adjusted Gross Profit as sales, less cost of sales, plus depreciation and amortization, plus amortization of intangibles, plus inventory-related charges incremental to normal operations, plus transaction costs associated with acquisitions and plus or minus the impact of our LIFO inventory costing methodology. We present Adjusted Gross Profit because we believe it is a useful indicator of our 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. Similarly, the impact of the LIFO inventory costing method can cause results to vary substantially from company to company depending upon which costing method they may elect. We use Adjusted Gross Profit as a key performance indicator in managing our business. We believe 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.

The following table reconciles Adjusted Gross Profit, a non-GAAP financial measure, with gross profit, as derived from our financial statements (in millions):

	Nine Months Ended
	September 30,		Percentage			September 30,			Percentage
	2025		of Revenue			2024			of Revenue
Gross profit, as reported	$	418		19.1	%	$	485			20.7	%
Depreciation and amortization		18		0.8	%		16			0.7	%
Amortization of intangibles		13		0.6	%		15			0.6	%
Increase (decrease) in LIFO reserve		24		1.1	%		(4	)		(0.2	)%
Adjusted Gross Profit	$	473		21.6	%	$	512			21.8	%

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SG&A Expenses. Our SG&A expenses were $382 million (17.5% of sales) for the nine months ended September 30, 2025, as compared to $362 million (15.4% of sales) for the nine months ended September 30, 2024. The $20 million increase in SG&A was primarily driven by a $13 million increase in legal and professional fees associated with the Mergers and a $6 million increase in non-capitalizable expenses associated with our U.S. ERP system implementation.

Operating Income (Loss). Operating income was $36 million for the nine months ended September 30, 2025, as compared to operating income of $123 million for the nine months ended September 30, 2024, a decrease of $87 million, primarily due to lower sales.

U.S. Segment—Operating income for our U.S. segment was $2 million for the nine months ended September 30, 2025, compared to operating income of $102 million for the nine months ended September 30, 2024, a $100 million decrease. The $100 million decrease was primarily attributable to lower sales caused by operating challenges from our ERP system implementation, a $13 million increase in SG&A expense due to legal and professional fees associated with the Mergers and $6 million increase in non-capitalizable expenses associated with our ERP system implementation.

International Segment—Operating income for our International segment was $34 million for the nine months ended September 30, 2025, as compared to operating income of $25 million for the nine months ended September 30, 2024. The $9 million increase was primarily due to increased sales.

Corporate and other—We did not have any operating activity for the nine months ended September 30, 2025 as compared to an operating loss of $4 million for the nine months ended September 30, 2024, primarily attributable to lower corporate overhead allocation expenses as a result of the close of the sale of the Canada business in March 2025.

Interest Expense. Our interest expense was $29 million and $19 million expense for the nine months ended September 30, 2025 and 2024, respectively. The increase of $10 million was primarily due higher average debt balances as well as higher average interest rates. The Company entered into a new $350 million senior secured term loan in October 2024 with higher benchmark interest rates as compared to the prior senior secured term loan that was repaid in May 2024.

Other, net. Other, net was $7 million income for the nine months ended September 30, 2025, as compared to $2 million expense for the nine months ended September 30, 2024, which consisted primarily of income of $3 million for an asset disposal in our International segment, $2 million foreign exchange gains and income of $1 million recognized as part of transition services provided to EMCO as part of the sale of the Canada business.

Income Tax Expense. Our income tax expense was $2 million for the nine months ended September 30, 2025, as compared to $23 million expense for the nine months ended September 30, 2024. The decrease in expense is primarily due to decreased profitability, reduction in unbenefited foreign losses and a tax windfall on stock vestings. Our effective tax rates were 14% and 23% for the nine months ended September 30, 2025 and 2024, respectively. Our rates differ from the U.S. federal statutory rate of 21% as a result of state income taxes, non-deductible expenses and differing foreign income tax rates. In addition, the effective tax rate for the nine months ended September 30, 2025 was favorably impacted by unamortized research and development costs, vesting of stock awards and lower income before tax.

Net Income from Continuing Operations. Our net income from continuing operations was $12 million for the nine months ended September 30, 2025, as compared to net income from continuing operations of $79 million for the nine months ended September 30, 2024, a decrease of $67 million due to lower sales.

(Loss) from Discontinued Operations, net of tax. Our net loss from discontinued operations, net of tax, was $30 million for the nine months ended September 30, 2025, as compared to a net loss of $1 million for the nine months ended September 30, 2024. The decrease of $29 million was primarily attributable to the loss recorded related to the reclassification of foreign currency translation adjustments to net income and decreased revenues as a result of the sale of the Canada business in March 2025. Additional disclosures regarding the sale of certain assets and liabilities within our Canada operations are provided in Note 2 of the Notes to the Condensed Consolidated Financial Statements included in Item 1 of this Form 10-Q.

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Adjusted EBITDA. Adjusted EBITDA, a non-GAAP financial measure, was $126 million (5.8% of sales) for the nine months ended September 30, 2025, as compared to $169 million (7.2% of sales) for the nine months ended September 30, 2024.

The following table reconciles Adjusted EBITDA, a non-GAAP financial measure, with net income, as derived from our financial statements (in millions):

	Nine Months Ended
	September 30,			September 30,
	2025			2024
Net (loss) income	$	(18	)	$	78
Loss from discontinued operations, net of tax		30			1
Net income from continuing operations		12			79
Income tax expense		2			23
Interest expense		29			19
Depreciation and amortization		18			16
Amortization of intangibles		13			15
Facility closures		—			1
Increase (decrease) in LIFO reserve		24			(4	)
Equity-based compensation expense		12			11
Internal control remediation		2			—
ERP system implementation		6			—
Non-recurring other legal and consulting costs (1)		13			—
Activism response legal and consulting costs		—			4
Write off of debt issuance costs		—			1
Asset disposal		(3	)		1
Foreign currency (gains) losses		(2	)		3
Adjusted EBITDA	$	126		$	169

____________

(1)

For the nine months ended September 30, 2025, non-recurring other legal and consulting costs includes expenses of $13 million associated with the pending Mergers. Additional disclosures regarding the Mergers are provided in Note 1 of the Notes to the Condensed Consolidated Financial Statements included in Item 1 of this Form 10-Q.

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Liquidity and Capital Resources

Our primary credit facilities as of September 30, 2025 consist of a $750 million global asset-based lending facility (the "Global ABL Facility") and a Senior Secured Term Loan "B" (the "Term Loan") maturing in October 2031 with an original principal amount of $350 million.

Our Global ABL Facility matures in November 2029. The Global ABL Facility is comprised of $705 million in revolver commitments in the United States, which includes a $30 million sub-limit for Canada, $12 million in Norway, $10 million in Australia, $10.5 million in the Netherlands, $7.5 million in the United Kingdom and $5 million in Belgium. The Global ABL Facility contains an accordion feature that allows us to increase the principal amount of the facility by up to $250 million, subject to securing additional lender commitments. Under the Global ABL Facility, U.S. borrowings bear interest at Term SOFR plus a margin varying between 1.25% and 1.75% based on our fixed charge coverage ratio. Canadian borrowings under the facility bear interest at the Canadian Dollar Bankers' Acceptances Rate ("BA Rate") plus a margin varying between 1.25% and 1.75% based on our fixed charge coverage ratio. Borrowings under our foreign borrower subsidiaries bear interest at a benchmark rate, which varies based on the currency in which such borrowings are made, plus a margin varying between 1.25% and 1.75% based on our fixed charge coverage ratio. Availability is dependent on a borrowing base comprised of a percentage of eligible accounts receivable and inventory which is subject to redetermination from time to time. As of September 30, 2025, we had $134 million in borrowings and $477 million of Excess Availability, as defined under our Global ABL Facility. Upon closing of the Mergers, the combined company must pay the Global ABL Facility in full, discharge and terminate it or amend the Global ABL Facility to avoid an event of default precipitated by the change in control of the Company. DNOW has obtained a debt commitment letter and has represented that it will have sufficient liquidity to pay off and discharge the Global ABL Facility at closing out of available funds, other sources and from the debt financing that the debt commitment letter outlines.

As of September 30, 2025, the outstanding balance on our Term Loan, net of original issue discount and issuance costs, was $342 million. We are required to repay the Term Loan with the proceeds from certain asset sales and certain insurance proceeds. In addition, on an annual basis, we are required to repay an amount equal to 50% of excess cash flow, as defined in the Term Loan, reducing to 25% if our first lien leverage ratio is no more than 3.25 to 1.00 but greater than 3.00 to 1.00. The Term Loan accrues interest at a margin plus either Term SOFR or a base rate, depending on the Company’s election at the time of a loan. For loans incurring interest based on Term SOFR, the margin is (a) 350 basis points if either or both of the ratings (i) by Moody’s Investors Service, Inc. (“Moody’s”) is B2, or lower, or (ii) by Standard & Poor’s Ratings Services (“S&P”) is B, or lower, and (b) 325 basis points if either or both of the ratings (i) by Moody’s is B1, or better, or (ii) by S&P is B+, or better. For loans incurring interest based on the base rate, the margin is (a) 250 basis points if either or both of the ratings (i) by Moody’s is B2, or lower, or (ii) by S&P is B, or lower, and (b) 225 basis points if either or both of the ratings (i) by Moody’s is B1, or better, or (ii) by S&P is B+, or better. The Term Loan provides certain provisions if ratings are unavailable. Pursuant to the Merger Agreement, the Company will deliver, at the option of DNOW, a payoff letter with respect to the Term Loan for payment in full of the Term Loan at the closing of the Mergers, or an amendment, or a consent from the requisite holders, of the Term Loan, permitting the transactions contemplated by the Merger Agreement.

Our primary sources of liquidity consist of cash generated from our operating activities, existing cash balances and borrowings under our Global ABL Facility. Our ability to generate sufficient cash flows from our operating activities will continue to be primarily dependent on our sales of products and services to our customers at margins sufficient to cover our fixed and variable expenses. Significant challenges arose during the implementation of our U.S. ERP system, which is temporarily impacting our operating cash flow, resulting in increased borrowings, which we expect to normalize in 2026. At September 30, 2025, our total liquidity, consisting of cash on hand and amounts available under our Global ABL Facility, was $536 million. As of September 30, 2025 and December 31, 2024, we had cash of $59 million and $63 million, a significant portion of which was maintained in the accounts of our various foreign subsidiaries and, if transferred among countries or repatriated to the U.S., may be subject to additional tax liabilities, which would be recognized in our financial statements in the period during which the transfer decision was made.

Our credit ratings are below "investment grade" and, as such, could impact both our ability to raise new funds as well as the interest rates on our future borrowings. In October 2024, Moody's upgraded the Company's corporate family rating to 'B1' from 'B2' with a stable outlook. Moody's based its ratings upgrade, in part, on the Company's moderate leverage and ample interest coverage, modest capital spending requirements and solid operating performance. Moody's affirmed the outlook as 'stable' based on their view that the Company's performance will remain strong and continue to generate positive free cash flow, and the Company's credit metrics will remain robust. In addition, S&P affirmed the Company's issuer-credit rating of 'B' with a 'stable' outlook. In April 2025, S&P affirmed the Company's issuer-credit rating of 'B' with a revised outlook of 'positive'. In June 2025, as a result of the announcement of the DNOW merger agreement, S&P affirmed the Company's issuer-credit rating of 'B' with 'CreditWatch Positive' rating, with positive implications pending regulatory approval of the transaction. Our existing obligations restrict our ability to incur additional debt under certain circumstances. We were in compliance with covenants contained in our various credit facilities as of and during the nine months ended September 30, 2025, and based on our current forecasts, we expect to remain in compliance.

We believe our sources of liquidity will be sufficient to satisfy the anticipated cash requirements associated with our existing operations for the foreseeable future. However, our future cash requirements could be higher than we currently expect as a result of various factors. Additionally, our ability to generate sufficient cash from our operating activities depends on our future performance, which is subject to general economic, political, financial, competitive and other factors beyond our control. We may, from time to time, seek to raise additional debt or equity financing or re-price or refinance existing debt in the public or private markets, based on market conditions. Any such capital markets activities would be subject to market conditions, reaching final agreement with lenders or investors, and other factors, and there can be no assurance that we would successfully consummate any such transactions.

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Cash Flows

The following table sets forth our cash flows for the periods indicated below (in millions):

	Nine Months Ended
	September 30,			September 30,
	2025			2024
Net cash (used in) provided by:
Operating cash flows from continuing operations	$	(61	)	$	195
Operating cash flows from discontinued operations		(6	)		2
Operating activities		(67	)		197

Investing cash flows from continuing operations		(25	)		(22	)
Investing cash flows from discontinued operations		18			—
Investing activities		(7	)		(22	)

Financing cash flows from continuing operations		65			(242	)
Financing cash flows from discontinued operations		—			—
Financing activities		65			(242	)

Net decrease in cash and cash equivalents	$	(9	)	$	(67	)

Operating Activities

Net cash used in operating activities from continuing operations was $61 million during the nine months ended September 30, 2025, as compared to $195 million provided by operating activities from continuing operations during the nine months ended September 30, 2024. Net cash used in operating activities from discontinued operations was $6 million during the nine months ended September 30, 2025 compared to $2 million provided by operating activities from discontinued operations during the nine months ended September 30, 2024. Net cash used in operating activities was $67 million during the nine months ended September 30, 2025, compared to $197 million generated during the nine months ended September 30, 2024. The change in operating cash flows was primarily the result of increases in inventory, and lower profitability driven by the challenges from our new U.S. ERP system going live, partially offset by an increase in payables.

Investing Activities

Net cash used in investing activities from continuing operations was $25 million during the nine months ended September 30, 2025, as compared to $22 million used in investing activities from continuing operations for the nine months ended September 30, 2024. The increase in net cash used was primarily related to the replacement of our U.S. ERP system that the Company implemented in August 2025. We experienced an increase in net cash provided by investing activities from discontinued operations of $18 million during the nine months ended September 30, 2025 as compared to less than $1 million in cash provided by investing activities for the nine months ended September 30, 2024 due to proceeds from the sale of the Canada business.

Financing Activities

Net cash provided by financing activities was $65 million for the nine months ended September 30, 2025, as compared to $242 million used in financing activities for the nine months ended September 30, 2024. The change is primarily due to less payments on debt obligations and no payment of preferred dividends for the nine months ended September 30, 2025 as compared to payment of preferred dividends for the nine months ended September 30, 2024 of $18 million. These changes were offset by repurchases of common stock of $15 million for the nine months ended September 30, 2025.

Critical Accounting Policies

The preparation of financial statements, in conformity with accounting principles generally accepted in the United States of America, requires management to make judgments, estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expense in the financial statements. Management bases its estimates on historical experience and other assumptions, which it believes are reasonable. If actual amounts are ultimately different from these estimates, the revisions are included in our results of operations for the period in which the actual amounts become known.

Accounting policies are considered critical when they require management to make assumptions about matters that are highly uncertain at the time the estimates are made and when there are different estimates that management reasonably could have made, which would have a material impact on the presentation of our financial condition, changes in our financial condition or results of operations. For a description of our critical accounting policies, see “Item 7: Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are primarily exposed to market risk associated with unfavorable movements in interest rates, foreign currencies and steel price volatility. There have been no material changes to our market risk policies or our market risk sensitive instruments and positions as described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of disclosure controls and procedures.

As required by the Exchange Act Rule 13a-15(e), we maintain disclosure controls and procedures designed to provide assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms. Our disclosure controls and procedures include (among other things) controls and procedures designed to provide assurance that the information that we are required to disclose in reports that we file or submit under the Exchange Act is accumulated and communicated to our management including our principal executive officer (our "CEO") and principal financial officer (our "CFO"), as appropriate to allow timely decisions regarding required disclosure. Our management, with the participation of our CEO and CFO, has evaluated our disclosure controls and procedures as of September 30, 2025, and has concluded that our disclosure controls and procedures were not effective as of September 30, 2025, solely due to the material weakness regarding our internal controls over financial reporting regarding the operating effectiveness of our inventory cycle count control identified in our 2024 Annual Report on Form 10-K on page F-1.

Management's remediation plan.

To address the material weakness, management of the company is implementing the following remediation program to enhance the operating effectiveness of its inventory cycle count control:

	●	The Company has hired additional resources with expertise to oversee inventory management and develop improved monitoring capabilities related to the cycle count process;
	●	The Company engaged a consulting firm with supply chain expertise to review and provide recommendations to improve our process;
	●	The Company enhanced its training program for operational leaders and warehouse staff on our cycle count process;
	●	The Company implemented a new modern cloud-based ERP system in the third quarter of 2025, which will provide additional controls and improved monitoring capabilities compared to our previous mainframe ERP system.

The Company anticipates the actions described above and resulting improvements in the operating effectiveness of the cycle count control will strengthen the Company's processes and procedures and will address the related material weakness described above. However, the material weakness cannot be considered fully remediated until the remediation processes have been in operation for a period of time and successfully tested.

Changes in internal control over financial reporting.

During the third quarter of 2025, we completed the implementation of our new ERP system for our U.S. segment, which is expected to automate and streamline many of our existing processes and improve the efficiency of numerous operational and support function processes. This implementation included changes to our processes and reporting impacting key controls related to our internal controls over financial reporting. We have updated our internal controls as appropriate in light of the system and will continue to monitor the impact of the implementation on our processes, procedures and internal controls over financial reporting.

Other than with respect to the remediation efforts described above in connection with the previously identified material weakness and the implementation of our new U.S. ERP system, there were no changes in our internal control over financial reporting that occurred during the third quarter of 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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Part II—other information

ITEM 1. LEGAL PROCEEDINGS

From time to time, we have been subject to various claims and involved in legal proceedings incidental to the nature of our businesses. We maintain insurance coverage to reduce financial risk associated with certain of these claims and proceedings. It is not possible to predict the outcome of these claims and proceedings. However, in our opinion, there are no pending legal proceedings that are likely to have a material effect on our business, financial condition, results of operations or cash flows, although it is possible that the resolution of certain actual, threatened or anticipated claims or proceedings could have a material adverse effect on our results of operations in the period of resolution.

Also, from time to time, in the ordinary course of our business, our customers may claim that the products that we distribute are either defective or require repair or replacement under warranties that either we or the manufacturer may provide to the customer. These proceedings are, in the opinion of management, ordinary and routine matters incidental to our normal business. Our purchase orders with our suppliers generally require the manufacturer to indemnify us against any product liability claims, leaving the manufacturer ultimately responsible for these claims. In many cases, state, provincial or foreign law provides protection to distributors for these sorts of claims, shifting the responsibility to the manufacturer. In some cases, we could be required to repair or replace the products for the benefit of our customer and seek recovery from the manufacturer for our expense. In the opinion of management, the ultimate disposition of these claims and proceedings is not expected to have a material adverse effect on our financial condition, results of operations or cash flows.

For information regarding asbestos cases in which we are a defendant and other claims and proceedings, see “Note 12-Commitments and Contingencies” to our unaudited condensed consolidated financial statements.

Item 1A. Risk Factors

We are affected by risks specific to us as well as factors that affect all businesses operating in a global market. The significant factors known to us that could materially adversely affect our business, financial condition or operating results are contained in Part II, Item 1A of our Quarterly Report on Form 10-Q for the quarter ended June 30, 2025 and in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2024.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. MINING SAFETY DISCLOSURES

None.

Item 5. Other Information

During the quarter ended September 30, 2025, no director or executive officer of the Company adopted or terminated a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement," as each term is defined in Item 408(a) of Regulation S-K.

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Item 6. Exhibits

Number		Description

2.1 †		Agreement and Plan of Merger, dated as of June 26, 2025, by and among DNOW Inc., Buck Sub, Inc., Stag Merger Sub, LLC and MRC Global Inc. (Incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K of MRC Global Inc. filed with the SEC on June 26, 2025, File No. 001-35479).

3.1.1		Amended and Restated Certificate of Incorporation of MRC Global Inc. dated April 11, 2012 (Incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K of MRC Global Inc. filed with the SEC on April 17, 2012, File No. 001-35479).

3.1.2		Certificate of Amendment to the Amended and Restated Certificate of Incorporation of MRC Global Inc. dated May 13, 2024 (Incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K of MRC Global Inc. filed with the SEC on May 13, 2024, File No. 001-35479).

3.2		Amended and Restated Bylaws of MRC Global Inc. dated November 3, 2023 (Incorporated by reference to Exhibit 3.2 of the Form 10-Q for the quarter ended September 30, 2023, filed with the SEC on November 8, 2023, File No. 001-35479).

31.1*		Certification of the Chief Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) promulgated under the Securities Exchange Act of 1934, as amended, and Item 601(b)(31) of Regulation S-K, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2*		Certification of the Chief Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) promulgated under the Securities Exchange Act of 1934, as amended, and Item 601(b)(31) of Regulation S-K, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32**		Certification of the Chief Executive Officer and the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101*		The following financial information from MRC Global Inc.’s Quarterly Report on Form 10-Q for the period ended September 30, 2025, formatted in Inline Extensible Business Reporting Language (iXBRL): (i) the Condensed Consolidated Balance Sheets at September 30, 2025 and December 31, 2024, (ii) the Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2025 and 2024, (iii) the Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2025 and 2024, (iv) the Condensed Statements of Stockholders’ Equity for the nine months ended September 30, 2025 and 2024, (v) the Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2025 and 2024 and (vi) Notes to Condensed Consolidated Financial Statements.

104*		The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2025 formatted in Inline XBRL.

† Exhibits and schedules omitted pursuant to Item 601(a)(5) of Regulation S-K. A copy of any omitted exhibit or schedule will be furnished supplementally to the SEC upon request.

* Filed herewith.

** Furnished herewith.

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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, thereunto duly authorized.

Date: November 5, 2025

	MRC GLOBAL INC.

	By: /s/ Kelly Youngblood
	Kelly Youngblood Executive Vice President and Chief Financial Officer

MRC GLOBAL INC. 10-Q