MRC Global Announces Third Quarter 2019 Results



Sales of $942 million

Net income attributable to common stockholders of $15 million

Diluted earnings per common share of $0.18

Adjusted EBITDA of $62 million

Cash flow from operations of $126 million





Houston, TX – October 31, 2019 – MRC Global Inc. (NYSE: MRC), the largest global distributor, based on sales, of pipe, valves and fittings and related products and services to the energy industry, today announced third quarter 2019 results.



The company’s sales were $942 million for the third quarter of 2019, which was 4% lower than the second quarter of 2019 and 12% lower than the third quarter of 2018. The sequential decline was driven by a decrease in the midstream sector, partially offset by a slight increase in the upstream and downstream sectors. As compared to the third quarter of 2018, sales decreased across all segments and end-markets.



Net income attributable to common stockholders for the third quarter of 2019 was $15 million, or $0.18 per diluted share, as compared to $18 million, or $0.20 per diluted share in the third quarter of 2018. The third quarter of 2019 included after-tax severance charges of $4 million, or $0.05 per diluted share.



Andrew R. Lane, MRC Global’s president and chief executive officer stated, “We are pleased to see progress from our strategy to increase margins, as we achieved 20% adjusted gross profit this quarter. Revenue in the third quarter, however, was lower due to progressively weaker market conditions and unusually low customer spending patterns. We remain focused on maximizing shareholder returns throughout the cycle as we repurchased $13 million of our stock during the third quarter. So far in 2019, we have generated $134 million of cash from operations, reduced debt, improved working capital efficiency and executed cost reduction initiatives, including headcount reductions of 180 in the third quarter. This first phase of cost reductions is expected to yield annual savings of approximately $12 million, and we have more initiatives underway. In total, our headcount is down 230 since the end of 2018.  In periods of slower growth, our business continues to generate cash, and we expect to generate at least $200 million of cash from operations in 2019.”  



MRC Global’s third quarter 2019 gross profit was $174 million, or 18.5% of sales, as compared to gross profit of $172 million, or 16.1% of sales, in the third quarter of 2018. Gross profit for the third quarter of 2019 and 2018 reflects income of $2 million and expense of $26 million, respectively, in cost of sales relating to the use of the last-in, first out (LIFO) method of inventory cost accounting. The improvement in gross profit percent was attributable primarily to the lower LIFO expense.



Selling, general and administrative expenses were $137 million, or 14.5% of sales, for the third quarter of 2019 compared to $140 million, or 13.1% of sales, for the same period of 2018. SG&A expenses for the third quarter of 2019 included $5 million of pre-tax severance charges.



Adjusted EBITDA was $62 million in the third quarter of 2019 compared to $80 million for the same period in 2018. Please refer to the reconciliation of non-GAAP measures (adjusted gross profit and adjusted EBITDA) to GAAP measures (gross profit and net income) in this release.









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Sales by Segment



U.S. sales in the third quarter of 2019 were $763 million, down $96 million, or 11%, from the same quarter in 2018. Midstream declined $50 million, or 12%, due to lower transmission and gathering activity. Upstream declined $24 million, or 11%, as a result of increased capital discipline by our customers. Downstream declined by $22 million, or 9%, due to non-recurring project work that resulted in a $20 million decrease in sales.



Canadian sales in the third quarter of 2019 were $57 million, down $21 million, or 27%, from the same quarter in 2018 driven by the upstream sector, which continues to be negatively impacted by low Canadian oil prices and government-imposed production limits.



International sales in the third quarter of 2019 were $122 million, down $12 million, or 9%, from the same period in 2018 reflecting the conclusion of a major upstream project in Kazakhstan, as well as, the impact of weaker foreign currencies relative to the U.S. dollar, which unfavorably impacted sales by $6 million. Excluding the impact of the project and weaker foreign currencies, sales increased $23 million, or 23%, due to improving market conditions, particularly in Norway and the United Kingdom.





Sales by Sector



Upstream sales in the third quarter of 2019 decreased 15% from the third quarter of 2018 to $287 million, or 31% of total sales. The decrease in upstream sales was across all geographic segments, as described above.

 

Midstream sales in the third quarter of 2019 were $370 million, or 39% of total sales, down $52 million, or 12%, from the third quarter of 2018. Sales to gas utility customers were flat for the quarter, while sales to transmission and gathering customers were down 26% over the same quarter in 2018. Gas utility sales are up 7% for the first nine months of 2019 compared to the same period last year as we continue to grow our share in this market.



Downstream sales in the third quarter of 2019 were $285 million, or 30% of total sales, down $26 million, or 8%, from the third quarter of 2018 due primarily to the U.S. segment as described above.





Balance Sheet



Cash balances were $25 million at September 30, 2019. Debt, net of cash, was $602 million and excess availability under our asset-based lending facility was $477 million as of September 30, 2019. Cash provided by operations was $126 million in the third quarter of 2019 bringing cash provided by operations for the first nine months of 2019 to $134 million. MRC Global’s liquidity position of $502 million is sufficient to support the business and capital needs of the Company.





Share Repurchase Programs



In October 2018, the board of directors authorized a share repurchase program for common stock of up to $150 million. As previously reported, during the third quarter of 2019, the Company purchased $13 million of its common stock at an average price of $13.59 per share. There is $12 million remaining available under the current authorization. This program is scheduled to expire on December 31, 2019. Shares may be repurchased at management’s discretion in the open market. Depending on market conditions and other factors, these repurchases may be commenced or suspended from time to time without prior notice.



Since 2015, the Company has repurchased $363 million or 23.4 million shares at an average price of $15.49 per share. The outstanding share count as of September 30, 2019 was 82.2 million shares.











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Conference Call



The Company will hold a conference call to discuss its third quarter 2019 results at 10:00 a.m. Eastern Time (9:00 a.m. Central Time) on November 1, 2019. To participate in the call, please dial 412‑902-0003 and ask for the MRC Global conference call at least 10 minutes prior to the start time. To access the conference call, live over the Internet, please log onto the web at www.mrcglobal.com and go to the “Investor Relations” page of the company’s website at least fifteen minutes early to register, download and install any necessary audio software. For those who cannot listen to the live call, a replay will be available through November 15, 2019 and can be accessed by dialing 201-612-7415 and using pass code 13693589#. Also, an archive of the webcast will be available shortly after the call at www.mrcglobal.com for 90 days.





About MRC Global Inc.



MRC Global is the largest distributor of pipe, valves and fittings (PVF) and related infrastructure products and services to the energy industry, based on sales. Through approximately 260 service locations worldwide, approximately 3,350 employees and with nearly 100 years of history, MRC Global provides innovative supply chain solutions and technical product expertise to customers globally across diversified end-markets including the upstream, midstream (including gas utilities) and downstream (including industrials). MRC Global manages a complex network of over 200,000 SKUs and 11,000 suppliers simplifying the supply chain for its over 15,000 customers. With a focus on technical products, value-added services, a global network of valve and engineering centers and an unmatched quality assurance program, MRC Global is the trusted PVF expert. Find out more at

www.mrcglobal.com.  





This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. Words such as “expect,” “expected,” “intend,” “believes,” “looking forward,” “guidance,” “plans” and similar expressions are intended to identify forward-looking statements.

Statements about the company’s business, including its strategy, its industry, the company’s future profitability, the company’s expectations regarding its sales, including (without limitation) sales to utility customers, sales through e-commerce, sales from services provided by the Company’s Midstream Valve & Engineering Center and sales of valves, adjusted EBITDA, tax rate, achievement of working capital targets, capital expenditures, savings from cost reductions and cash from operations,  growth in the company’s various markets and the company’s expectations, beliefs, plans, strategies, objectives, prospects and assumptions are not guarantees of future performance. These statements are based on management’s expectations that involve a number of business risks and uncertainties, any of which could cause actual results to differ materially from those expressed in or implied by the forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors, most of which are difficult to predict and many of which are beyond our control, including the factors described in the company’s SEC filings 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.

These risks and uncertainties include (among others) decreases in oil and natural gas prices; decreases in oil and natural gas industry expenditure levels, which may result from decreased oil and natural gas prices or other factors; increased usage of alternative fuels, which may negatively affect oil and natural gas industry expenditure levels; U.S. and international general economic conditions; the company’s ability to compete successfully with other companies in MRC Global’s industry; the risk that manufacturers of the products the company distributes will sell a substantial amount of goods directly to end users in the industry sectors the company serves;  unexpected supply shortages;  cost increases by the company’s suppliers; the company’s lack of long-term contracts with most of its suppliers; suppliers’ price reductions of products that the company sells, which could cause the value of the company’s inventory to decline;  decreases in steel prices, which could significantly lower MRC Global’s profit;  increases in steel prices, which the company may be unable to pass along to its customers which could significantly lower its profit; the company’s lack of long-term contracts with many of its customers and the company’s lack of contracts with customers that require minimum purchase volumes;  changes in the company’s customer and product mix;  risks related to the company’s customers’ creditworthiness; the success of the company’s acquisition strategies;  the potential adverse effects associated with integrating acquisitions into the company’s business and whether these acquisitions will yield their intended benefits; the company’s significant indebtedness;  the dependence on the company’s subsidiaries for cash to meet its obligations;  changes in the company’s credit profile;  a decline in demand for certain of the products the company distributes if import restrictions on these products are lifted; environmental, health and safety laws and regulations and the interpretation or implementation thereof; the sufficiency of the company’s insurance policies to cover losses, including liabilities arising from litigation;  product liability claims against the company;  pending or future asbestos-related claims against the company; the potential loss of key personnel; interruption in the proper functioning of the company’s information systems and the occurrence of cyber security incidents; loss of third-party transportation providers;  potential inability to obtain necessary capital;  risks related to adverse weather events or natural disasters;  impairment of our goodwill or other intangible assets;  adverse changes in political or

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economic conditions in the countries in which the company operates; exposure to U.S. and international laws and regulations, including the U.S. Foreign Corrupt Practices Act and the U.K. Bribery Act and other economic sanction programs; risks associated with international stability and geopolitical developments, risks relating to ongoing evaluations of internal controls required by Section 404 of the Sarbanes-Oxley Act; risks related to the company’s intention not to pay dividends; and risks arising from compliance with and changes in law in the countries in which we operate, including (among others) changes in tax law, tax rates and interpretation in tax laws. In addition, the Company’s intention to continue to repurchase shares of common stock is also subject to the trading price of the stock being at prices that the Company believes are favorable to stockholders and to the Company’s debt and liquidity levels being at levels the Company deems sufficient to repurchase shares.  In addition, the company’s expectation of sales from contract awards are subject to completion of the award through agreement of final terms and conditions of the award in a final and binding executed contract.

For a discussion of key risk factors, please see the risk factors disclosed in the company’s SEC filings, which are available on the SEC’s website at www.sec.gov and on the company’s website, www.mrcglobal.com. Our filings and other important information are also available on the Investor Relations page of our website at www.mrcglobal.com.

Undue reliance should not be placed on the company’s forward-looking statements. Although forward-looking statements reflect the company’s good faith beliefs, reliance should not be placed on forward-looking statements because they involve known and unknown risks, uncertainties and other factors, which may cause the company’s actual results, performance or achievements or future events to differ materially from anticipated future results, performance or achievements or future events expressed or implied by such forward-looking statements. The company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, changed circumstances or otherwise, except to the extent required by law.



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MRC Global Inc.

Condensed Consolidated Balance Sheets (Unaudited)

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MRC Global Inc.

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MRC Global Inc.

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MRC Global Inc.

Supplemental Information (Unaudited)

Reconciliation of Net Income to Adjusted EBITDA (a non-GAAP measure)

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Notes to above:



The company defines Adjusted EBITDA as net income plus interest, income taxes, depreciation and amortization, amortization of intangibles, and certain other expenses, including non-cash expenses, (such as equity-based compensation, severance and restructuring, changes in the fair value of derivative instruments and asset impairments, including inventory) and plus or minus the impact of its LIFO inventory costing methodology.  The company presents Adjusted EBITDA because the company believes Adjusted EBITDA is a useful indicator of the company’s operating performance. Among other things, Adjusted EBITDA measures the company’s operating performance without regard to certain non-recurring, non-cash or transaction-related expenses.  Adjusted EBITDA, however, does not represent and should not be considered as an alternative to net income, cash flow from operations or any other measure of financial performance calculated and presented in accordance with GAAP. Because Adjusted EBITDA does not account for certain expenses, its utility as a measure of the company’s operating performance has material limitations. Because of these limitations, the company does not view Adjusted EBITDA in isolation or as a primary performance measure and also uses other measures, such as net income and sales, to measure operating performance.  See the Company's Annual Report filed on Form 10-K for a more thorough discussion of the use of Adjusted EBITDA.

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MRC Global Inc.

Supplemental Information (Unaudited)

Reconciliation of Gross Profit to Adjusted Gross Profit (a non-GAAP measure)

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Notes to above:



The company defines Adjusted Gross Profit as sales, less cost of sales, plus depreciation and amortization, plus amortization of intangibles, and plus or minus the impact of its LIFO inventory costing methodology. The company presents Adjusted Gross Profit because the company believes it is a useful indicator of the company’s operating performance without regard to items, such as amortization of intangibles, that can vary substantially from company to company depending upon the nature and extent of acquisitions of which they have been involved. Similarly, the impact of the LIFO inventory costing method can cause results to vary substantially from company to company depending upon whether they elect to utilize LIFO and depending upon which method they may elect. The company uses Adjusted Gross Profit as a key performance indicator in managing its business. The company believes that gross profit is the financial measure calculated and presented in accordance with U.S. generally accepted accounting principles that is most directly comparable to Adjusted Gross Profit.

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MRC Global Inc.

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Disaggregated Sales by Segment













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MRC Global Inc.

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Sales by Product Line









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MRC Global Inc.

Supplemental Information (Unaudited)

Reconciliation of Net Income Attributable to Common Stockholders to

Adjusted Net Income Attributable to Common Stockholders (a non-GAAP measure)

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Notes to above:

*Does not foot due to rounding



The Company defines Adjusted Net Income Attributable to Common Stockholders (a non-GAAP measure) as Net Income Attributable to Common Stockholders plus or minus the after-tax impact of its LIFO inventory costing methodology. The Company presents Adjusted Net Income Attributable to Common Stockholders and related per share amounts because the Company believes it provides useful comparisons of the Company’s operating results to other companies, including those companies with whom we compete in the distribution of pipe, valves and fittings to the energy industry, without regard to the LIFO inventory costing methodology. The impact of the LIFO inventory costing methodology can cause results to vary substantially from company to company depending upon whether they elect to utilize LIFO and depending upon which method they may elect.  The Company believes that Net Income Attributable to Common Stockholders is the financial measure calculated and presented in accordance with U.S. generally accepted accounting principles that is most directly compared to Adjusted Net Income Attributable to Common Stockholders.    







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MRC Global 3Q 2019 Earnings Presentation October 31, 2019 We Make Energy Flow 1

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3Q 2019 Earnings Presentation MRC Global Forward Looking Statements and Non-GAAP Disclaimer This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. Words such as “will,” “expect,” “looking forward,” “guidance,” “targeting”, and similar expressions are intended to identify forward-looking statements. Statements about the company’s business, including its strategy, its industry, the company’s future profitability, the company’s guidance on its sales, Adjusted EBITDA, gross profit, gross profit percentage, Adjusted Gross Profit, Adjusted Gross Profit percentage, tax rate, capital expenditures and cash from operations, growth in the company’s various markets and the company’s expectations, beliefs, plans, strategies, objectives, prospects and assumptions are not guarantees of future performance. These statements are based on management’s expectations that involve a number of business risks and uncertainties, any of which could cause actual results to differ materially from those expressed in or implied by the forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors, most of which are difficult to predict and many of which are beyond our control, including the factors described in the company’s SEC filings 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, including the Company’s Current Report on Form 8-K dated October 31, 2019. For a discussion of key risk factors, please see the risk factors disclosed in the company’s SEC filings, which are available on the SEC’s website at www.sec.gov and on the company’s website, www.mrcglobal.com. Our filings and other important information are also available on the Investor Relations page of our website at www.mrcglobal.com. Undue reliance should not be placed on the company’s forward-looking statements. Although forward-looking statements reflect the company’s good faith beliefs, reliance should not be placed on forward-looking statements because they involve known and unknown risks, uncertainties and other factors, which may cause the company’s actual results, performance or achievements or future events to differ materially from anticipated future results, performance or achievements or future events expressed or implied by such forward-looking statements. The company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, changed circumstances or otherwise, except to the extent required by law. Statement Regarding Use of Non-GAAP Measures: The Non-GAAP financial measures contained in this presentation (Adjusted EBITDA and Adjusted Gross Profit) are not measures of financial performance calculated in accordance with U.S. Generally Accepted Accounting Principles (GAAP) and should not be considered as alternatives to net income or gross profit.  They should be viewed in addition to, and not as a substitute for, analysis of our results reported in accordance with GAAP.  Management believes that these non-GAAP financial measures provide investors a view to measures similar to those used in evaluating our compliance with certain financial covenants under our credit facilities and provide meaningful comparisons between current and prior year period results.  They are also used as a metric to determine certain components of performance-based compensation. They are not necessarily indicative of future results of operations that may be obtained by the Company. 2

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3Q 2019 Earnings Presentation MRC Global Key Points – Third Quarter 2019 Results Returned $63M of cash to shareholders in 2019 through 3Q Repurchased $363M since 2015 3Q19 revenue decline of 4% from 2Q19 in line with expectations on slowing customer spend Strong adjusted gross profit of 20.0% up 70 basis points from 2Q19 Adjusted gross profit percentage YTD 2019 19.6%, up from 19.5% YTD 2018 Adjusted EBITDA of $62M or 6.6% of revenue Lowered operating costs Excluding severance, 3Q19 lower by $8 million from 3Q18 and lower by $1 million from 2Q19 Net debt of $602 million down $101 million from 2Q19 Generated $126M of cash from operations in 3Q19 and $134 million YTD 2019 YTD = Nine-months ended September 30 for the indicated year. Note: Adjusted Gross Profit and Adjusted EBITDA are non-GAAP measures. For a reconciliation to their closest GAAP measures, see our Current Report on Form 8-K dated October 31, 2019. 3

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3Q 2019 Earnings Presentation MRC Global Summary Highlights from Third Quarter 2019 Results $942M in revenue – 4% sequential decrease SG&A $137M – down $8M from 3Q18, excluding severance of $5 million Segment revenue highlights 3Q19 v 3Q18 Market sector revenue highlights 3Q19 v 3Q18 U.S. – declined 11% on upstream and midstream weakness and downstream project revenue. Canada – declined 27% in poor market conditions. International – declined 9% on the conclusion of a project and weak foreign currency. Underlying business grew 23% excluding project & currency impact. Upstream – decreased 15% driven by all segments. Midstream –declined 12% on transmission and gathering revenue decline. Revenue from gas utilities was flat. Downstream – decreased 8% on non-recurring project revenue. 4

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3Q 2019 Earnings Presentation MRC Global Quarterly & YTD Financial Performance ($ millions, except per share data) Sales 3Q18 $1.071 2Q19 $984 3Q19 $942 YTD 2018 $3,163 YTD 2019 $2,896 Adjusted Gross Profit and % Margin1 3Q18 20.1% $215 2Q19 19.3% $190 3Q19 20.0% $188 YTD 2018 19.5% $617 YTD 2019 19.6% $568 Adjusted EBITDA and % Margin1 3Q18 7.5% $80 2Q19 6.1% $60 3Q19 6.6% $62 YTD 2018 6.9% $217 YTD 2019 6.1% $178 Diluted EPS 3Q2018 $0.20 2Q19 $0.21 3Q19 $0.18 YTD 2018 $0.50 YTD 2019 $0.53 1. See reconciliation of non-GAAP measures to GAAP measures in the appendix 5

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3Q 2019 Earnings Presentation MRC Global Strong Balance Sheet Provides Financial Flexibility ($ millions) Total Debt Net Leverage1: 2.7X 2.7X 2.5X 3Q18 $719 2Q19 $738 3Q19 $627 Capital Structure Cash and Cash Equivalents $25 Total Debt (including current portion): Term Loan B due 2024 (net of discount & deferred financing costs) $391 Global ABL Facility due 2022 236 Total Debt $627 Preferred stock 355 Common stockholders’ equity 671 Total Capitalization $1,653 Liquidity $502 Cash Flow from Operations 3Q18 $(7) 2Q19 $48 3Q19 $126 YTD 2019 $(146) YTD 2019 $134 Return on Average Net Capital Employed2 2012 8.2% 2013 8.1% 2014 7.2% 2015 -12.8% 2016 -3.6% 2017 4.4% 2018 6.2% 1. Multiples represent Net Debt / trailing twelve months Adjusted EBITDA. Net Debt is Total Debt less Cash.2. Return on Average Net Capital Employed is defined as net income plus interest expense after-tax, divided by average net capital employed (debt plus equity). 6

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3Q 2019 Earnings Presentation MRC Global Strategy for Creating Shareholder Value Grow Market Share Provide superior customer service & cost-saving supply chain solutions Focus on blue chip customers who demand value-added service and technical expertise Leverage market leadership position and global footprint Provide multi-channel engagement to capture buying Opportunistic M&A Maximize Profitability Focus on higher margin products, end-markets & sales strategies Leverage scale & global supply chain Expand offering of value-added services to capture enhanced margin Focus on controlling costs & operating leverage Maximize Working Capital Efficiency Reduce cash conversion cycle Optimize inventory to maximize turnover and margin Continual operational efficiency improvements Optimize Capital Structure Optimize capital structure with financial flexibility throughout the cycle Invest for growth Return capital to shareholders Target leverage ratio   ~2-3x net debt to adjusted EBITDA 7

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3Q 2019 Earnings Presentation MRC Global Strategy - 3Q19 Accomplishments Grow Market Share Added new customer contracts and awards (e.g. Oneok, SoCal Gas, CenterPoint) Maximize Profitability On-track to increase valves to 40% of total revenue in 2019 / 2020 Maximize Working Capital Efficiency Inventory peaked 2Q19 & reduced by $56 in 3Q19 Targeting 20% working capital to sales by end of 2019 Optimize Capital Structure Repurchased stock of $13 million in 3Q19 and $63 million in YTD 2019 (through 9/30/19) Reduced net debt by $101 million in 3Q19 Generated $126M cash from operations in 3Q19 8

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3Q 2019 Earnings Presentation MRC Global Concluding Key Points Focused on operating cost reductions, cash flow, balance sheet management Lowered annual SG&A by    $12 million with 3Q19 reductions Expect at least $200 million of cash from operations in 2019 and >15% FCF yield for 2019 Inventory peaked 2Q19 - targeting 20% working capital/ revenue by year end Net debt to adjusted EBITDA expected to be at 2.5x at year-end Delivering on strategic objectives Optimal balance sheet usage – reducing debt and returning cash to shareholders Growing market share – added and renewed customer contracts Note: Free cash flow yield is defined as Cash flow from operations less capital expenditures and preferred stock dividend divided by shares outstanding and stock price. 9

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3Q 2019 Earnings Presentation MRC Global Appendix 10

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3Q 2019 Earnings Presentation MRC Global Adjusted Gross Profit Reconciliation ($ millions) Gross profit Depreciation and amortization Amortization of intangibles (Decrease) increase in LIFO reserve Adjusted Gross Profit Three Months ended Nine months ended Sept 30, 2019 June 30, 2019 Sept 30, 2018 Sept 30, 2019 Sept 30, 2018 $174 $174 $172 $522 $518 5 6 5 16 17 11 11 12 33 34 (2) (1) 26 (3) 48 $188 $190 $215 $568 $617 Note: Adjusted Gross Profit is a non-GAAP measure. For a discussion of the use of Adjusted Gross Profit, see our Current Report on Form 8-K dated October 31, 2019. 11

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3Q 2019 Earnings Presentation MRC Global Adjusted EBITDA Reconciliation ($ millions) Net income (loss) Income tax expense (benefit) Interest expense Depreciation and amortization Amortization of intangibles (Decrease) increase in LIFO reserve Change in fair value of derivative instructions Equity-based compensation expense Severance & restructuring charges Write off of debt issuance costs Foreign currency (gains) losses Adjusted EBITDA Three Months ended Nine months ended Sept 30, 2019 June 30, 2019 Sept 30, 2018 Sept 30, 2019 Sept 30, 2018 $21 $24 $24 $63 $34 8 8 – 22 15 10 10 10 31 28 5 6 5 16 17 11 11 12 33 34 (2) (1) 26 (3) 48 - - - - (1) 5 3 4 12 11 5 - - 5 - - - - - 1 (1) (1) (1) (1) - $62 $60 $80 $178 $217 Note: Adjusted EBITDA is a non-GAAP measure. For a discussion of the use of Adjusted EBITDA, see our Current Report on Form 8-K dated October 31, 2019. 12

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