0001439095-20-000027 | 10-Q | XBRL Viewer

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Long-Term Debt (Interest on Borrowings) (Details)	Mar. 31, 2020	Dec. 31, 2019
Debt Instrument [Line Items]
Weighted average interest rate	4.52%	4.91%
Global ABL Facility [Member]
Debt Instrument [Line Items]
Weighted average interest rate	2.55%	3.47%
Senior Secured Term Loan B [Member] \| Secured Term Loan [Member]
Debt Instrument [Line Items]
Weighted average interest rate	5.22%	5.50%

Condensed Consolidated Balance Sheets - USD ($) $ in Millions	Mar. 31, 2020	Dec. 31, 2019
Current assets:
Cash	$ 28	$ 32
Accounts receivable, net	476	459
Inventories, net	691	701
Other current assets	24	26
Total current assets	1,219	1,218
Long-term assets:
Operating lease assets	179	186
Property, plant and equipment, net	131	138
Other assets	19	19
Intangible assets:
Goodwill, net	480	483
Other intangible assets, net	273	281
Total assets	2,301	2,325
Current liabilities:
Trade accounts payable	399	357
Accrued expenses and other current liabilities	82	91
Operating lease liabilities	33	34
Current portion of long-term debt	4	4
Total current liabilities	518	486
Long-term liabilities:
Long-term debt, net	517	547
Operating lease liabilities	161	167
Deferred income taxes	90	91
Other liabilities	43	37
Commitments and contingencies
6.5% Series A Convertible Perpetual Preferred Stock, $0.01 par value; authorized 363,000 shares; 363,000 shares issued and outstanding	355	355
Stockholders' equity:
Common stock, $0.01 par value per share: 500 million shares authorized, 106,209,943 and 105,624,750 issued, respectively	1	1
Additional paid-in capital	1,730	1,731
Retained deficit	(480)	(483)
Less: Treasury stock at cost: 24,216,330 shares	(375)	(375)
Accumulated other comprehensive loss	(259)	(232)
Total stockholders' equity	617	642
Total liabilities and stockholders' equity	$ 2,301	$ 2,325

Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Condensed Consolidated Statements of Comprehensive Income [Abstract]
Net income	$ 9	$ 18
Other comprehensive (loss) income
Foreign currency translation adjustments	(21)	3
Hedge accounting adjustments, net of tax	(6)	(2)
Total other comprehensive (loss) income, net of tax	(27)	1
Comprehensive (loss) income	$ (18)	$ 19

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References + Details

Background and Basis of Presentation	3 Months Ended
Background and Basis of Presentation	Mar. 31, 2020
Background and Basis of Presentation [Abstract]
Background and Basis of Presentation	NOTE 1 – BACKGROUND AND BASIS OF PRESENTATION Business Operations: MRC Global Inc. is a holding company headquartered in Houston, Texas. Our wholly owned subsidiaries are global distributors of pipe, valves, fittings (“PVF”) and related infrastructure products and services across each of the upstream production (exploration, production and extraction of underground oil and gas), midstream pipeline (gathering and transmission of oil and gas), gas utilities (gas utilities and the storage and distribution of oil and gas) and downstream and industrial (crude oil refining and petrochemical and chemical processing and general industrials) sectors. We have branches in principal industrial, hydrocarbon producing and refining areas throughout the United States, Canada, Europe, Asia, Australasia, the Middle East and Caspian. We obtain products from a broad range of suppliers. 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 require for complete annual financial statements. However, the information in these statements reflects all normal recurring adjustments which are, in our opinion, necessary for a fair presentation of the results for the interim periods. The results of operations for the three months ended March 31, 2020 are not necessarily indicative of the results that will be realized for the fiscal year ending December 31, 2020. We have derived our condensed consolidated balance sheet as of December 31, 2019 from the audited consolidated financial statements for the year ended December 31, 2019. 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, 2019. The 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 such terms as “we,” “our” or “us”). All material intercompany balances and transactions have been eliminated in consolidation. Recent Issued Accounting Pronouncements: In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-04, Reference Rate Reform (Topic 848) ("ASU 2020-04"), which provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions affected by the discontinuation of the London Interbank Offered Rate ("LIBOR") or by another reference rate expected to be discontinued. The amendments are effective for all entities as of March 12, 2020 through December 31, 2022. We are currently evaluating the impacts of the the provisions of ASU 2020-04 on our consolidated financial statements. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, an update intended to simplify various aspects related to accounting for income taxes. This guidance removes certain exceptions to the general principles in Topic 740 and clarifies and amends existing guidance to improve consistent application. This accounting standards update will be effective for annual and interim financial statement periods beginning after December 15, 2020, with early adoption permitted. We are currently evaluating the impact of this accounting standards update, but do not expect the adoption to materially impact our consolidated financial statements. Adoption of New Accounting Standards: In June 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments, which requires that an entity measure impairment of certain financial instruments, including trade receivables, based on expected losses rather than incurred losses. We adopted ASU 2016-13 on January 1, 2020. The adoption of this new standard resulted in the recognition of $1 million of incremental bad debt expense in the three months ended March 31, 2020. Valuation of Goodwill and Indefinite-Lived Intangibles: We apply a fair value-based impairment test to the carrying value of goodwill and indefinite-lived intangible assets on an annual basis (as of October 1) and, if certain events or circumstances indicate that an impairment loss may have been incurred, on an interim basis. Our October 2019 quantitative impairment tests for goodwill and indefinite-lived intangible assets indicated there was no impairment as the fair value of each of our reporting units and indefinite-lived intangible assets exceeded carrying value by a significant margin, with the exception of our International reporting unit for which the excess was approximately 20%. As a result of our reduced forecasts and the significant decline in our market capitalization as a result of the coronavirus disease 2019 (“COVID-19”) pandemic, we qualitatively assessed whether it was more likely than not our goodwill or indefinite-lived intangible assets were impaired as of March 31, 2020. We reviewed our previous forecasts and assumptions based on our current projections that are subject to various risks and uncertainties, including: (1) forecasted revenues, expenses and cash flows, including the duration and extent of impact to our business from the COVID-19 pandemic, (2) current discount rates, (3) the reduction in our market capitalization, and (4) control premiums on observable market conditions. Based on our qualitative assessment, we concluded that our goodwill and indefinite-lived intangible assets were not impaired as of March 31, 2020. However, we are unable to predict how long current market conditions will persist, what additional measures may be introduced by governments or private parties or what effect any such additional measures may have on our business. To the extent we are unable to conclude in a future period that it is more likely than not our goodwill and indefinite-lived intangible assets are not impaired, we would be required to perform a full quantitative impairment test, the results of which could require recognition of an impairment charge in future periods.

Segment Information

3 Months Ended

Mar. 31, 2020

Segment Information [Abstract]

Segment, Geographic and Product Line Information

NOTE 8 – SEGMENT INFORMATION

Our business is comprised of three operating and reportable segments: U.S., Canada and International. Our International segment consists of our operations outside of the U.S. and Canada. These segments represent our business of selling PVF to the energy sector across each of the upstream production (exploration, production and extraction of underground oil and gas), midstream pipeline (gathering and transmission of oil and gas), gas utilities and downstream and industrial (crude oil refining and petrochemical and chemical processing and general industrials) sectors.

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


	Three Months Ended
	March 31,		March 31,
	2020		2019
Sales
U.S.	$	638	$	779
Canada		50		68
International		106		123
Consolidated sales	$	794	$	970

Operating income
U.S.	$	18	$	32
Canada		-		-
International		4		3
Total operating income		22		35

Interest expense		(8)		(11)
Other, net		-		-
Income before income taxes	$	14	$	24


	March 31,		December 31,
	2020		2019
Total assets
U.S.	$	1,913	$	1,915
Canada		95		91
International		293		319
Total assets	$	2,301	$	2,325

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


	Three Months Ended
	March 31,		March 31,
Type	2020		2019
Line pipe	$	100	$	154
Carbon fittings and flanges		115		153
Total carbon pipe, fittings and flanges		215		307
Valves, automation, measurement and instrumentation		323		383
Gas products		134		133
Stainless steel and alloy pipe and fittings		37		50
General products		85		97
	$	794	$	970

Segment Information (Tables)

3 Months Ended

Mar. 31, 2020

Segment Information [Abstract]

Schedule of Financial Information for Each Segment


	Three Months Ended
	March 31,		March 31,
	2020		2019
Sales
U.S.	$	638	$	779
Canada		50		68
International		106		123
Consolidated sales	$	794	$	970

Operating income
U.S.	$	18	$	32
Canada		-		-
International		4		3
Total operating income		22		35

Interest expense		(8)		(11)
Other, net		-		-
Income before income taxes	$	14	$	24


	March 31,		December 31,
	2020		2019
Total assets
U.S.	$	1,913	$	1,915
Canada		95		91
International		293		319
Total assets	$	2,301	$	2,325

Schedule of Net Sales by Product Line


	Three Months Ended
	March 31,		March 31,
Type	2020		2019
Line pipe	$	100	$	154
Carbon fittings and flanges		115		153
Total carbon pipe, fittings and flanges		215		307
Valves, automation, measurement and instrumentation		323		383
Gas products		134		133
Stainless steel and alloy pipe and fittings		37		50
General products		85		97
	$	794	$	970

Fair Value Measurements (Details) - USD ($)	3 Months Ended
Fair Value Measurements (Details) - USD ($)	Mar. 31, 2020	Dec. 31, 2019	Mar. 31, 2018
Long-term Debt [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Carrying value of debt	$ 521,000,000	$ 551,000,000
Long-term Debt [Member] \| Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of our debt	447,000,000	554,000,000
Foreign exchange forward contracts [Member] \| Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Notional amount	19,000,000	21,000,000
Interest Rate Swap [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value	$ 17,000,000	$ 9,000,000	$ 0
Notional amount			$ 250,000,000
Term of swap	5 years
Fixed interest rate	2.7145%

Stockholders' Equity (Tables)

3 Months Ended

Mar. 31, 2020

Stockholders' Equity [Abstract]

Summary of Share Repurchase Activity


The following table summarizes the share repurchase activity:

	Three Months Ended
	March 31,		March 31,
	2020		2019
Number of shares acquired on the open market		-		1,758,537
Average price per share	$	-	$	14.24
Total cost of acquired shares (in millions)	$	-	$	25

Accumulated Other Comprehensive Loss in Accompanying Consolidated Balance Sheets



	March 31,		December 31,
	2020		2019
Foreign currency translation adjustments	$	(245)	$	(224)
Hedge accounting adjustments		(13)		(7)
Pension related adjustments		(1)		(1)
Accumulated other comprehensive loss	$	(259)	$	(232)

Earnings Per Share



	Three Months Ended
	March 31,		March 31,
	2020		2019
Net income	$	9	$	18
Less: Dividends on Series A Preferred Stock		6		6
Net income attributable to common stockholders	$	3	$	12

Weighted average basic shares outstanding		81.7		84.3
Effect of dilutive securities		0.7		1.0
Weighted average diluted shares outstanding		82.4		85.3

Net income per share:
Basic	$	0.04	$	0.14
Diluted	$	0.04	$	0.14

Background and Basis of Presentation (Policy)	3 Months Ended
Background and Basis of Presentation (Policy)	Mar. 31, 2020
Background and Basis of Presentation [Abstract]
Business Operations	Business Operations: MRC Global Inc. is a holding company headquartered in Houston, Texas. Our wholly owned subsidiaries are global distributors of pipe, valves, fittings (“PVF”) and related infrastructure products and services across each of the upstream production (exploration, production and extraction of underground oil and gas), midstream pipeline (gathering and transmission of oil and gas), gas utilities (gas utilities and the storage and distribution of oil and gas) and downstream and industrial (crude oil refining and petrochemical and chemical processing and general industrials) sectors. We have branches in principal industrial, hydrocarbon producing and refining areas throughout the United States, Canada, Europe, Asia, Australasia, the Middle East and Caspian. We obtain products from a broad range of suppliers.
Basis of Presentation	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 require for complete annual financial statements. However, the information in these statements reflects all normal recurring adjustments which are, in our opinion, necessary for a fair presentation of the results for the interim periods. The results of operations for the three months ended March 31, 2020 are not necessarily indicative of the results that will be realized for the fiscal year ending December 31, 2020. We have derived our condensed consolidated balance sheet as of December 31, 2019 from the audited consolidated financial statements for the year ended December 31, 2019. 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, 2019. The 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 such terms as “we,” “our” or “us”). All material intercompany balances and transactions have been eliminated in consolidation.
Adoption of New Accounting Standards and Recently Issued Accounting Standards	Recent Issued Accounting Pronouncements: In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-04, Reference Rate Reform (Topic 848) ("ASU 2020-04"), which provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions affected by the discontinuation of the London Interbank Offered Rate ("LIBOR") or by another reference rate expected to be discontinued. The amendments are effective for all entities as of March 12, 2020 through December 31, 2022. We are currently evaluating the impacts of the the provisions of ASU 2020-04 on our consolidated financial statements. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, an update intended to simplify various aspects related to accounting for income taxes. This guidance removes certain exceptions to the general principles in Topic 740 and clarifies and amends existing guidance to improve consistent application. This accounting standards update will be effective for annual and interim financial statement periods beginning after December 15, 2020, with early adoption permitted. We are currently evaluating the impact of this accounting standards update, but do not expect the adoption to materially impact our consolidated financial statements. Adoption of New Accounting Standards: In June 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments, which requires that an entity measure impairment of certain financial instruments, including trade receivables, based on expected losses rather than incurred losses. We adopted ASU 2016-13 on January 1, 2020. The adoption of this new standard resulted in the recognition of $1 million of incremental bad debt expense in the three months ended March 31, 2020.
Valuation of Goodwill and Indefinite-Lived Intangibles	Valuation of Goodwill and Indefinite-Lived Intangibles: We apply a fair value-based impairment test to the carrying value of goodwill and indefinite-lived intangible assets on an annual basis (as of October 1) and, if certain events or circumstances indicate that an impairment loss may have been incurred, on an interim basis. Our October 2019 quantitative impairment tests for goodwill and indefinite-lived intangible assets indicated there was no impairment as the fair value of each of our reporting units and indefinite-lived intangible assets exceeded carrying value by a significant margin, with the exception of our International reporting unit for which the excess was approximately 20%. As a result of our reduced forecasts and the significant decline in our market capitalization as a result of the coronavirus disease 2019 (“COVID-19”) pandemic, we qualitatively assessed whether it was more likely than not our goodwill or indefinite-lived intangible assets were impaired as of March 31, 2020. We reviewed our previous forecasts and assumptions based on our current projections that are subject to various risks and uncertainties, including: (1) forecasted revenues, expenses and cash flows, including the duration and extent of impact to our business from the COVID-19 pandemic, (2) current discount rates, (3) the reduction in our market capitalization, and (4) control premiums on observable market conditions. Based on our qualitative assessment, we concluded that our goodwill and indefinite-lived intangible assets were not impaired as of March 31, 2020. However, we are unable to predict how long current market conditions will persist, what additional measures may be introduced by governments or private parties or what effect any such additional measures may have on our business. To the extent we are unable to conclude in a future period that it is more likely than not our goodwill and indefinite-lived intangible assets are not impaired, we would be required to perform a full quantitative impairment test, the results of which could require recognition of an impairment charge in future periods.

Redeemable Preferred Stock

3 Months Ended

Mar. 31, 2020

Redeemable Preferred Stock [Abstract]

Redeemable Preferred Stock

NOTE 6 – REDEEMABLE PREFERRED STOCK

Preferred Stock Issuance

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. The Preferred Stock ranks senior to our common stock with respect to dividend rights and rights on liquidation, winding-up and dissolution. The Preferred Stock has a stated value of $1,000 per share, and holders of Preferred Stock are entitled to cumulative dividends payable quarterly in cash at a rate of 6.50% per annum. In June 2018, the holders of Preferred Stock designated one member to our Board of Directors. If we fail to declare and pay the quarterly dividend for an amount equal to six or more dividend periods, the holders of the Preferred Stock would be entitled to designate an additional member to our Board of Directors. Holders of Preferred Stock are entitled to vote together with the holders of the common stock as a single class, in each case, on an as-converted basis, except where a separate class vote of the common stockholders is required by law. Holders of Preferred Stock have certain limited special approval rights, including with respect to the issuance of pari passu or senior equity securities of the Company.

The Preferred Stock is 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 represents an initial conversion price of $17.88 per share of common stock, subject to adjustment. On or after June 10, 2020, the Company will have the option to redeem, in whole but not in part, all the outstanding shares of Preferred Stock at 105% of par value, subject to certain redemption price adjustments. We may elect 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 has been at least 150% of the conversion price then in effect for a specified period. The conversion rate is subject to customary anti-dilution and other adjustments.

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

Leases (Tables)

3 Months Ended

Mar. 31, 2020

Leases [Abstract]

Maturity of Operating Lease Liabilities



Maturity of Operating Lease Liabilities
Remainder of 2020	$	30
2021		35
2022		27
2023		21
2024		17
After 2024		192
Total lease payments		322
Less: Interest		(128)
Present value of lease liabilities	$	194

Operating Lease Term and Discount Rate


	March 31,
Operating Lease Term and Discount Rate	2020
Weighted-average remaining lease term (years)		14
Weighted-average discount rate		7.0%

Stockholders' Equity

3 Months Ended

Mar. 31, 2020

Stockholders' Equity [Abstract]

Stockholders' Equity

NOTE 7 – STOCKHOLDERS’ EQUITY

Share Repurchase Program

From time to time, the Company’s board of directors has authorized repurchase programs for shares of the Company’s common stock. As of March 31, 2020, there were no remaining authorizations outstanding under these programs. There were 81,993,613 shares of common stock outstanding as of March 31, 2020.


The following table summarizes the share repurchase activity:

	Three Months Ended
	March 31,		March 31,
	2020		2019
Number of shares acquired on the open market		-		1,758,537
Average price per share	$	-	$	14.24
Total cost of acquired shares (in millions)	$	-	$	25

Equity Compensation Plans

Our 2011 Omnibus Incentive Plan originally had 3,250,000 shares reserved for issuance under the plan. In both April 2015 and 2019, our shareholders approved an additional 4,250,000 and 2,500,000 shares, respectively, for reservation for issuance under the plan. The 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 2011 Omnibus Incentive 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 to five 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. Vesting for directors generally occurs on the one year anniversary of the grant date. In 2020, 336,325 performance share unit awards and 696,777 shares of restricted stock units have been granted to

employees. To date, 8,744,461 shares have been granted under this plan. 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.

Accumulated Other Comprehensive Loss

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



	March 31,		December 31,
	2020		2019
Foreign currency translation adjustments	$	(245)	$	(224)
Hedge accounting adjustments		(13)		(7)
Pension related adjustments		(1)		(1)
Accumulated other comprehensive loss	$	(259)	$	(232)

Earnings per Share

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



	Three Months Ended
	March 31,		March 31,
	2020		2019
Net income	$	9	$	18
Less: Dividends on Series A Preferred Stock		6		6
Net income attributable to common stockholders	$	3	$	12

Weighted average basic shares outstanding		81.7		84.3
Effect of dilutive securities		0.7		1.0
Weighted average diluted shares outstanding		82.4		85.3

Net income per share:
Basic	$	0.04	$	0.14
Diluted	$	0.04	$	0.14

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 months ended March 31, 2020 and 2019, all of the shares of the Preferred Stock were anti-dilutive. We had approximately 3.4 million and 2.6 million anti-dilutive stock options, restricted units and performance units for the three months ended March 31, 2020 and 2019, respectively.

Stockholders' Equity (Accumulated Other Comprehensive Loss in Accompanying Consolidated Balance Sheets) (Details) - USD ($) $ in Millions	Mar. 31, 2020	Dec. 31, 2019
Foreign Currency Translation Adjustments [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest	$ (245)	$ (224)
Hedge Accounting Adjustments [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest	(13)	(7)
Pension Related Adjustments [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest	(1)	(1)
Accumulated Other Comprehensive Loss [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest	$ (259)	$ (232)

Long-Term Debt (Components of Long-Term Debt) (Details) - USD ($) $ in Millions	Mar. 31, 2020	Dec. 31, 2019
Debt Instrument [Line Items]
Long-term debt	$ 521	$ 551
Less: Current portion	(4)	(4)
Long-term debt, net	517	547
Secured Term Loan [Member]
Debt Instrument [Line Items]
Long-term debt	386	390
Original issue discount and issuance costs on senior secured Term Loan B	2	2
Global ABL Facility [Member]
Debt Instrument [Line Items]
Long-term debt	$ 135	$ 161

Segment Information (Narrative) (Details)	3 Months Ended
Segment Information (Narrative) (Details)	Mar. 31, 2020 segment
Segment Information [Abstract]
Number of operating segments	3
Number of Reportable Segments	3

Document and Entity Information - shares	3 Months Ended
Document and Entity Information - shares	Mar. 31, 2020	Apr. 22, 2020
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2020
Document Transition Report	false
Entity File Number	001-35479
Entity Registrant Name	MRC GLOBAL INC.
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	Fulbright Tower
Entity Address, Address Line Two	1301 McKinney Street, Suite 2300
Entity Address, City or Town	Houston
Entity Address, State or Province	TX
Entity Tax Identification Number	20-5956993
Entity Address, Postal Zip Code	77010
City Area Code	877
Local Phone Number	294-7574
Title of 12(b) Security	Common Stock, par value $0.01
Trading Symbol	MRC
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Document Fiscal Year Focus	2020
Amendment Flag	false
Document Fiscal Period Focus	Q1
Entity Central Index Key	0001439095
Current Fiscal Year End Date	--12-31
Common Stock [Member]
Entity Common Stock, Shares Outstanding		81,995
Restricted Stock [Member]
Entity Common Stock, Shares Outstanding		74,055

Leases (Maturity of Operating Lease Liabilities) (Details) $ in Millions	Mar. 31, 2020 USD ($)
Leases [Abstract]
Remainder of 2020	$ 30
2021	35
2022	27
2023	21
2024	17
After 2024	192
Total lease payments	322
Less: Interest	(128)
Present value of lease liabilities	$ 194

Inventories (Tables)

3 Months Ended

Mar. 31, 2020

Inventories [Abstract]

Composition of Inventory


	March 31,		December 31,
	2020		2019
Finished goods inventory at average cost:
Valves, automation, measurement and instrumentation	$	355	$	355
Carbon steel pipe, fittings and flanges		246		268
All other products		277		268
		878		891
Less: Excess of average cost over LIFO cost (LIFO reserve)		(152)		(155)
Less: Other inventory reserves		(35)		(35)
	$	691	$	701

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Mar. 31, 2020	Dec. 31, 2019
Condensed Consolidated Balance Sheets [Abstract]
Temporary Equity, Dividend Rate, Percentage	6.50%	6.50%
Temporary Equity, Par or Stated Value Per Share	$ 0.01	$ 0.01
Temporary Equity, Shares Authorized	363,000	363,000
Temporary Equity, Shares Issued	363,000	363,000
Temporary Equity, Shares Outstanding	363,000	363,000
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	500,000,000	500,000,000
Common stock, shares issued	106,209,943	105,624,750
Treasury stock, shares	24,216,330	24,216,330

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Operating activities
Net income	$ 9	$ 18
Adjustments to reconcile net income to net cash provided by (used in) operations:
Depreciation and amortization	5	5
Amortization of intangibles	7	11
Equity-based compensation expense	2	4
Deferred income tax benefit	1	1
(Decrease) increase in LIFO reserve	(3)
Provision for uncollectible accounts	6	2
Other	1	2
Changes in operating assets and liabilities:
Accounts receivable	(33)	(47)
Inventories	(4)	(42)
Other current assets	2	8
Accounts payable	49	27
Accrued expenses and other current liabilities	(5)	(29)
Net cash provided by (used in) operations	37	(40)
Investing activities
Purchases of property, plant and equipment	(2)	(2)
Net cash used in investing activities	(2)	(2)
Financing activities
Payments on revolving credit facilities	(228)	(256)
Proceeds from revolving credit facilities	205	319
Payments on long-term obligations	(4)	(1)
Purchase of common stock		(25)
Dividends paid on preferred stock	(6)	(6)
Repurchases of shares to satisfy tax withholdings	(3)	(6)
Other		1
Net cash (used in) provided by financing activities	(36)	26
Decrease in cash	(1)	(16)
Effect of foreign exchange rate on cash	(3)
Cash -- beginning of period	32	43
Cash -- end of period	28	27
Supplemental disclosures of cash flow information:
Cash paid for interest	8	10
Cash paid for income taxes	$ 1	$ 5

Stockholders' Equity (Summary of Share Repurchase Activity) (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Stockholders' Equity [Abstract]
Number of shares acquired on the open market		1,758,537
Average price per share		$ 14.24
Total cost of acquired shares		$ 25

Background and Basis of Presentation (Details) - USD ($) $ in Millions	1 Months Ended
	Oct. 31, 2019	Mar. 31, 2020
Concentration Risk [Line Items]
Margin	20.00%
Accounting Standards Update 2016-13 [Member]
Concentration Risk [Line Items]
Credit losses		$ 1

Long-Term Debt (Narrative) (Details) - USD ($)	1 Months Ended	3 Months Ended
Long-Term Debt (Narrative) (Details) - USD ($)	Mar. 31, 2020	Mar. 31, 2020	Mar. 31, 2019
Debt Instrument [Line Items]
Proceeds from revolving credit facilities		$ 205,000,000	$ 319,000,000
Term Loan [Member]
Debt Instrument [Line Items]
Debt returned	$ 3,000,000
Cost of extinguishment	2,000,000
Gain on extinguishment of debt	1,000,000
Global ABL Facility [Member]
Debt Instrument [Line Items]
Credit facility, maximum borrowing capacity	800,000,000	800,000,000
Credit facility, remaining borrowing capacity	437,000,000	437,000,000
Proceeds from revolving credit facilities		200,000,000
Global ABL Facility [Member] \| United States [Member]
Debt Instrument [Line Items]
Credit facility, maximum borrowing capacity	675,000,000	675,000,000
Global ABL Facility [Member] \| Canada [Member]
Debt Instrument [Line Items]
Credit facility, maximum borrowing capacity	65,000,000	65,000,000
Global ABL Facility [Member] \| United Kingdom [Member]
Debt Instrument [Line Items]
Credit facility, maximum borrowing capacity	7,000,000	7,000,000
Global ABL Facility [Member] \| Australia [Member]
Debt Instrument [Line Items]
Credit facility, maximum borrowing capacity	15,000,000	15,000,000
Global ABL Facility [Member] \| Belgium [Member]
Debt Instrument [Line Items]
Credit facility, maximum borrowing capacity	7,000,000	7,000,000
Global ABL Facility [Member] \| Norway [Member]
Debt Instrument [Line Items]
Credit facility, maximum borrowing capacity	18,000,000	18,000,000
Global ABL Facility [Member] \| Netherlands [Member]
Debt Instrument [Line Items]
Credit facility, maximum borrowing capacity	13,000,000	13,000,000
Secured Term Loan [Member] \| Senior Secured Term Loan B [Member]
Debt Instrument [Line Items]
Principal amount	400,000,000	$ 400,000,000
Term loan annual amortization percentage		1.00%
Term Loan accordion feature	$ 200,000,000	$ 200,000,000
Percentage of capital stock in foreign subsidiaries securing Term Loan B		65.00%
Secured Term Loan [Member] \| Senior Secured Term Loan B [Member] \| Base Rate [Member]
Debt Instrument [Line Items]
Variable interest rate		2.00%
Secured Term Loan [Member] \| Senior Secured Term Loan B [Member] \| London Interbank Offered Rate (LIBOR) [Member]
Debt Instrument [Line Items]
Variable interest rate		3.00%
Secured Term Loan [Member] \| Senior Secured Leverage Ratio Is No More Than 2.75 to 1.00 [Member] \| Senior Secured Term Loan B [Member]
Debt Instrument [Line Items]
Senior secured leverage ratio		2.75
Repayment of Term Loan, percentage		25.00%
Secured Term Loan [Member] \| Senior Secured Leverage Ratio Is No More Than 2.50 to 1.00 [Member] \| Senior Secured Term Loan B [Member]
Debt Instrument [Line Items]
Senior secured leverage ratio		2.50
Secured Term Loan [Member] \| Maximum [Member] \| Senior Secured Term Loan B [Member]
Debt Instrument [Line Items]
Senior secured leverage ratio		4.00
Repayment of Term Loan, percentage		50.00%

Commitments and Contingencies

3 Months Ended

Mar. 31, 2020

Commitments and Contingencies [Abstract]

Commitments and Contingencies

NOTE 10 – 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 March 31, 2020, we are named a defendant in approximately 591 lawsuits involving approximately 1,167 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 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 consolidated financial statements is remote.

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 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 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.

Revenue Recognition (Narrative) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2019
Revenue Recognition [Abstract]
Contract assets	$ 21		$ 26
Deferred revenue	5		$ 4
Deferred revenue recognized	$ 2	$ 5

Fair Value Measurements

3 Months Ended

Mar. 31, 2020

Fair Value Measurements [Abstract]

Fair Value Measurements

NOTE 9 – FAIR VALUE MEASUREMENTS

From time to time, we use derivative financial instruments to help manage our exposure to interest rate risk and fluctuations in foreign currencies.

Interest Rate Swap: In March 2018, we entered into a five year interest rate swap that became effective on March 31, 2018, with a notional amount of $250 million from which the Company will receive payments at 1-month LIBOR and make monthly payments at a fixed rate of 2.7145% with settlement and reset dates on or near the last business day of each month until maturity. The fair value of the swap at inception was zero.

We have designated the interest rate swap as an effective cash flow hedge utilizing the guidance under ASU 2017-12. As such, the valuation of the interest rate swap is recorded as an asset or liability, and the gain or loss on the derivative is recorded as a component of other comprehensive income. Interest rate swap agreements are reported on the accompanying balance sheets at fair value utilizing observable Level 2 inputs such as yield curves and other market-based factors. We obtain dealer quotations to value our interest rate swap agreements. The fair value of our interest rate swap is estimated based on the present value of the difference between expected cash flows calculated at the contracted interest rates and the expected cash flows at current market interest rates. The fair value of the interest rate swap was a liability of $17 million and $9 million as of March 31, 2020 and December 31, 2019, respectively.

Foreign Exchange Forward Contracts: Foreign exchange forward contracts are reported at fair value utilizing Level 2 inputs, as the fair value is based on broker quotes for the same or similar derivative instruments. Our foreign exchange derivative instruments are freestanding, have not been designated as hedges and, accordingly, changes in their fair market value are recorded in earnings. The total notional amount of our forward foreign exchange contracts and options was approximately $19 million and $21 million at March 31, 2020 and December 31, 2019, respectively. The fair value of our foreign exchange contracts was not material as of March 31, 2020 and December 31, 2019.

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 $521 million and $551 million at March 31, 2020 and December 31, 2019, respectively. We estimate the fair value of the Term Loan using Level 2 inputs, or quoted market prices. The fair value of our debt was $447 million and $554 million at March 31, 2020 and December 31, 2019 respectively.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Long-Term Debt (Tables)

3 Months Ended

Mar. 31, 2020

Long-Term Debt [Abstract]

Components of Long-Term Debt


	March 31,		December 31,
	2020		2019
Senior Secured Term Loan B, net of discount and issuance costs of $2	$	386	$	390
Global ABL Facility		135		161
		521		551
Less: Current portion		(4)		(4)
	$	517	$	547

Interest on Borrowings


	March 31,		December 31,
	2020		2019
Senior Secured Term Loan B		5.22%		5.50%
Global ABL Facility		2.55%		3.47%
Weighted average interest rate		4.52%		4.91%

- Definition

Tabular disclosure of long-debt instruments or arrangements, including identification, terms, features, collateral requirements and other information necessary to a fair presentation. These are debt arrangements that originally required repayment more than twelve months after issuance or greater than the normal operating cycle of the entity, if longer.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
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Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef
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-Name Accounting Standards Codification
-Topic 835
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-Section 45
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-URI http://asc.fasb.org/extlink&oid=114775744&loc=d3e28541-108399

Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef
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-Name Accounting Standards Codification
-Topic 505
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-Section 50
-Paragraph 6
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Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef
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-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08.(e),(f))
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Reference 7: http://fasb.org/us-gaap/role/ref/legacyRef
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Reference 8: http://fasb.org/us-gaap/role/ref/legacyRef
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-URI http://asc.fasb.org/extlink&oid=75038535&loc=d3e64711-112823

Reference 9: http://fasb.org/us-gaap/role/ref/legacyRef
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Reference 10: http://fasb.org/us-gaap/role/ref/legacyRef
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-URI http://asc.fasb.org/extlink&oid=109259400&loc=d3e21475-112644

+ Details

Condensed Consolidated Statements of Operations - USD ($) shares in Millions, $ in Millions	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Condensed Consolidated Statements of Operations [Abstract]
Sales	$ 794	$ 970
Cost of sales	646	796
Gross profit	148	174
Selling, general and administrative expenses	126	139
Operating income	22	35
Other (expense) income:
Interest expense	(8)	(11)
Other, net
Income before income taxes	14	24
Income tax expense	5	6
Net income	9	18
Series A preferred stock dividends	6	6
Net income attributable to common stockholders	$ 3	$ 12
Basic income per common share	$ 0.04	$ 0.14
Diluted income per common share	$ 0.04	$ 0.14
Weighted-average common shares, basic	81.7	84.3
Weighted-average common shares, diluted	82.4	85.3

Revenue Recognition (Tables)

3 Months Ended

Mar. 31, 2020

Revenue Recognition [Abstract]

Summary of Revenue Disaggregation


Three Months Ended
March 31,

	U.S.		Canada		International		Total
2020:
Upstream production	$	139	$	37	$	46	$	222
Midstream pipeline		110		4		5		119
Gas utilities		199		3		-		202
Downstream & industrial		190		6		55		251
	$	638	$	50	$	106	$	794
2019:
Upstream production	$	206	$	46	$	60	$	312
Midstream pipeline		133		6		8		147
Gas utilities		204		10		-		214
Downstream & industrial		236		6		55		297
	$	779	$	68	$	123	$	970

Inventories (Narrative) (Details) $ in Millions	3 Months Ended
Inventories (Narrative) (Details) $ in Millions	Mar. 31, 2020 USD ($)
Inventories [Abstract]
Effect of LIFO decrement on cost of sales	$ 3

Revenue Recognition

3 Months Ended

Mar. 31, 2020

Revenue Recognition [Abstract]

Revenue Recognition

NOTE 2 – REVENUE RECOGNITION

Revenue is recognized when control of promised goods or services is transferred to our customers in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods or services. Substantially all of our revenue is recognized 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. Returns are estimated and recorded 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, are excluded from sales in the accompanying consolidated statements of operations. 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 and amortization of intangible assets. In some cases, particularly with third-party pipe shipments, shipping and handling costs are considered separate performance obligations, and as such, the revenue and cost of sales are recorded when the performance obligation is fulfilled.

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 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 March 31, 2020 and December 31, 2019, was $21 million and $26 million, respectively. These contract asset balances are included within accounts receivable in the accompanying 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 March 31, 2020 and December 31, 2019 was $5 million and $4 million, respectively. During the three months ended March 31, 2020 and 2019, we recognized $2 million and $5 million of revenue that was deferred as of December 31, 2019 and 2018, respectively. Deferred revenue balances are included within accrued expenses and other current liabilities in the accompanying consolidated balance sheets.

Disaggregated Revenue: Our disaggregated revenue represents our business of selling PVF to the energy sector across each of the upstream production (exploration, production and extraction of underground oil and gas), midstream pipeline (gathering and transmission of oil and gas), gas utilities and downstream and industrial (crude oil refining and petrochemical and chemical processing and general industrials) 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 contracts with customers.

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


Three Months Ended
March 31,

	U.S.		Canada		International		Total
2020:
Upstream production	$	139	$	37	$	46	$	222
Midstream pipeline		110		4		5		119
Gas utilities		199		3		-		202
Downstream & industrial		190		6		55		251
	$	638	$	50	$	106	$	794
2019:
Upstream production	$	206	$	46	$	60	$	312
Midstream pipeline		133		6		8		147
Gas utilities		204		10		-		214
Downstream & industrial		236		6		55		297
	$	779	$	68	$	123	$	970

Leases

3 Months Ended

Mar. 31, 2020

Leases [Abstract]

Leases

NOTE 4 – LEASES

We lease certain distribution centers, warehouses, office space, land and equipment. Substantially all of these leases are classified as operating leases. We recognize lease 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 our 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. The depreciable life of assets and leasehold improvements are limited by 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.

Expense associated with our operating leases was $10 million for the three months ended March 31, 2020 and 2019, which is classified in selling, general and administrative expenses. Cash paid for leases recognized as liabilities was $11 million for the three months ended March 31, 2020 and 2019.

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



Maturity of Operating Lease Liabilities
Remainder of 2020	$	30
2021		35
2022		27
2023		21
2024		17
After 2024		192
Total lease payments		322
Less: Interest		(128)
Present value of lease liabilities	$	194

Amounts maturing after 2024 include expected renewals for leases of regional distribution centers and certain corporate offices through dates up to 2049.

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


	March 31,
Operating Lease Term and Discount Rate	2020
Weighted-average remaining lease term (years)		14
Weighted-average discount rate		7.0%

Commitments and Contingencies (Details)	Mar. 31, 2020 claim lawsuit
Commitments and Contingencies [Abstract]
Number of lawsuits \| lawsuit	591
Asbestos related pending claims \| claim	1,167

Inventories (Composition of Inventory) (Details) - USD ($) $ in Millions	Mar. 31, 2020	Dec. 31, 2019
Finished goods inventory at average cost:
Finished goods inventory at average cost	$ 878	$ 891
Less: Excess of average cost over LIFO cost (LIFO reserve)	(152)	(155)
Less: Other inventory reserves	(35)	(35)
Inventories, net	691	701
Valves, Automation, Measurement And Instrumentation [Member]
Finished goods inventory at average cost:
Finished goods inventory at average cost	355	355
Carbon Pipe, Fittings And Flanges [Member]
Finished goods inventory at average cost:
Finished goods inventory at average cost	246	268
All Other Products [Member]
Finished goods inventory at average cost:
Finished goods inventory at average cost	$ 277	$ 268

Revenue Recognition (Summary of Revenue Disaggregation) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Disaggregation of Revenue [Line Items]
Revenue	$ 794	$ 970
United States [Member]
Disaggregation of Revenue [Line Items]
Revenue	638	779
Canada [Member]
Disaggregation of Revenue [Line Items]
Revenue	50	68
International [Member]
Disaggregation of Revenue [Line Items]
Revenue	106	123
Upstream [Member]
Disaggregation of Revenue [Line Items]
Revenue	222	312
Upstream [Member] \| United States [Member]
Disaggregation of Revenue [Line Items]
Revenue	139	206
Upstream [Member] \| Canada [Member]
Disaggregation of Revenue [Line Items]
Revenue	37	46
Upstream [Member] \| International [Member]
Disaggregation of Revenue [Line Items]
Revenue	46	60
Midstream [Member]
Disaggregation of Revenue [Line Items]
Revenue	119	147
Midstream [Member] \| United States [Member]
Disaggregation of Revenue [Line Items]
Revenue	110	133
Midstream [Member] \| Canada [Member]
Disaggregation of Revenue [Line Items]
Revenue	4	6
Midstream [Member] \| International [Member]
Disaggregation of Revenue [Line Items]
Revenue	5	8
Gas Utilities [Member]
Disaggregation of Revenue [Line Items]
Revenue	202	214
Gas Utilities [Member] \| United States [Member]
Disaggregation of Revenue [Line Items]
Revenue	199	204
Gas Utilities [Member] \| Canada [Member]
Disaggregation of Revenue [Line Items]
Revenue	3	10
Downstream [Member]
Disaggregation of Revenue [Line Items]
Revenue	251	297
Downstream [Member] \| United States [Member]
Disaggregation of Revenue [Line Items]
Revenue	190	236
Downstream [Member] \| Canada [Member]
Disaggregation of Revenue [Line Items]
Revenue	6	6
Downstream [Member] \| International [Member]
Disaggregation of Revenue [Line Items]
Revenue	$ 55	$ 55

Condensed Consolidated Statements of Stockholders' Equity - USD ($) $ in Millions	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained (Deficit) [Member]	Treasury Stock [Member]	Accumulated Other Comprehensive (Loss) [Member]	Total
Balance at Dec. 31, 2018	$ 1	$ 1,721	$ (498)	$ (300)	$ (232)	$ 692
Balance (shares) at Dec. 31, 2018	105,000,000			19,000,000
Net income			18			18
Foreign currency translation adjustments					3	3
Hedge accounting adjustments					(2)	(2)
Shares withheld for taxes		(6)				(6)
Equity-based compensation expense		4				4
Dividends declared on preferred stock			(6)			(6)
Purchase of common stock				$ (25)		$ (25)
Purchase of common stock, shares				(2,000,000)		(1,758,537)
Balance at Mar. 31, 2019	$ 1	1,719	(486)	$ (325)	(231)	$ 678
Balance (shares) at Mar. 31, 2019	105,000,000			21,000,000
Balance at Dec. 31, 2019	$ 1	1,731	(483)	$ (375)	(232)	642
Balance (shares) at Dec. 31, 2019	106,000,000			24,000,000
Net income			9			9
Foreign currency translation adjustments					(21)	(21)
Hedge accounting adjustments					(6)	(6)
Shares withheld for taxes		(3)				(3)
Equity-based compensation expense		2				2
Dividends declared on preferred stock			(6)			(6)
Purchase of common stock
Purchase of common stock, shares
Balance at Mar. 31, 2020	$ 1	$ 1,730	$ (480)	$ (375)	$ (259)	$ 617
Balance (shares) at Mar. 31, 2020	106,000,000			24,000,000		81,993,613

Stockholders' Equity (Earnings Per Share) (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Stockholders' Equity [Abstract]
Net income	$ 9	$ 18
Less: Dividends on Series A Preferred Stock	6	6
Net income attributable to common stockholders	$ 3	$ 12
Weighted average basic shares outstanding	81.7	84.3
Effect of dilutive securities	0.7	1.0
Weighted average diluted shares outstanding	82.4	85.3
Net income per share:
Basic	$ 0.04	$ 0.14
Diluted	$ 0.04	$ 0.14

Leases (Operating Lease Term and Discount Rate) (Details)	Mar. 31, 2020
Leases [Abstract]
Weighted-average remaining lease term (years)	14 years
Weighted-average discount rate	7.00%

Segment Information (Schedule of Financial Information for Each Segment) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2019
Sales
Sales	$ 794	$ 970
Operating income
Operating income	22	35
Interest expense	(8)	(11)
Income before income taxes	14	24
Total assets
Total assets	2,301		$ 2,325
United States [Member]
Sales
Sales	638	779
Operating income
Operating income	18	32
Total assets
Total assets	1,913		1,915
Canada [Member]
Sales
Sales	50	68
Total assets
Total assets	95		91
International [Member]
Sales
Sales	106	123
Operating income
Operating income	4	$ 3
Total assets
Total assets	$ 293		$ 319

Redeemable Preferred Stock (Details) - USD ($) $ / shares in Units, $ in Millions	1 Months Ended
	Jun. 30, 2015	Mar. 31, 2020	Dec. 31, 2019
Stockholders' Equity [Abstract]
Preferred stock, issued	363,000	363,000	363,000
Gross proceeds from issuance of Series A Preferred Stock	$ 363
Preferred stock, stated value	$ 1,000
Preferred stock, dividend rate	6.50%	6.50%	6.50%
Percent of par value	105.00%
Preferred stock, initial conversion rate	55.9284
Preferred stock, initial conversion price	$ 17.88
Preferred stock, common stock as percentage of conversion price	150.00%

Inventories

3 Months Ended

Mar. 31, 2020

Inventories [Abstract]

Inventories

NOTE 3 – INVENTORIES

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


	March 31,		December 31,
	2020		2019
Finished goods inventory at average cost:
Valves, automation, measurement and instrumentation	$	355	$	355
Carbon steel pipe, fittings and flanges		246		268
All other products		277		268
		878		891
Less: Excess of average cost over LIFO cost (LIFO reserve)		(152)		(155)
Less: Other inventory reserves		(35)		(35)
	$	691	$	701

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, interim LIFO calculations are based on management’s estimates of expected year-end inventory levels and costs and are subject to the final year-end LIFO inventory determination. Our inventory quantities are expected to be reduced for the current year, resulting in a liquidation of a LIFO inventory layer that was carried at a lower cost prevailing from a prior year, as compared with current costs in the current year (a “LIFO decrement”). A LIFO decrement results in the erosion of layers created in earlier years, and, therefore, a LIFO layer is not created for years that have decrements. For the three months ended March 31, 2020, the effect of this LIFO decrement decreased cost of sales by approximately $3 million.

Stockholders' Equity (Narrative) (Details) - USD ($)	1 Months Ended		3 Months Ended		105 Months Ended
Stockholders' Equity (Narrative) (Details) - USD ($)	Apr. 30, 2019	Apr. 30, 2015	Mar. 31, 2020	Mar. 31, 2019	Sep. 30, 2019
Stockholders Equity [Line Items]
Remaining authorized amount			$ 0
Common stock, shares outstanding			81,993,613
2011 Omnibus Incentive Plan [Member]
Stockholders Equity [Line Items]
Shares reserved for Incentive Plan			3,250,000
Additional shares reserved for Incentive Plan	2,500,000	4,250,000
Stock granted					8,744,461
Director [Member] \| 2011 Omnibus Incentive Plan [Member]
Stockholders Equity [Line Items]
Vesting period			1 year
Minimum [Member] \| 2011 Omnibus Incentive Plan [Member]
Stockholders Equity [Line Items]
Vesting period			3 years
Maximum [Member] \| 2011 Omnibus Incentive Plan [Member]
Stockholders Equity [Line Items]
Vesting period			5 years
Stock Options [Member]
Stockholders Equity [Line Items]
Anti-dilutive securities			3,400,000	2,600,000
Stock Options [Member] \| 2011 Omnibus Incentive Plan [Member]
Stockholders Equity [Line Items]
Maximum term for stock option plan grant			10 years
Performance Shares [Member] \| 2011 Omnibus Incentive Plan [Member]
Stockholders Equity [Line Items]
Stock granted			336,325
Restricted Units [Member] \| 2011 Omnibus Incentive Plan [Member]
Stockholders Equity [Line Items]
Stock granted			696,777

Leases (Narrative) (Details) - USD ($) $ in Millions	3 Months Ended
Leases (Narrative) (Details) - USD ($) $ in Millions	Mar. 31, 2020	Mar. 31, 2019
Operating lease cost	$ 10	$ 10
Cash paid	$ 11	$ 11
Minimum [Member]
Renewal term	1 year
Maximum [Member]
Renewal term	15 years
Term	30 years

Long-Term Debt

3 Months Ended

Mar. 31, 2020

Long-Term Debt [Abstract]

Long-Term Debt

NOTE 5 – LONG-TERM DEBT

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


	March 31,		December 31,
	2020		2019
Senior Secured Term Loan B, net of discount and issuance costs of $2	$	386	$	390
Global ABL Facility		135		161
		521		551
Less: Current portion		(4)		(4)
	$	517	$	547

Senior Secured Term Loan B: We have a Senior Secured Term Loan B (the “Term Loan”) with an original principal amount of $400 million, which amortizes in equal quarterly installments of 1% per year with the balance payable in September 2024, when the facility matures. The Term Loan has an applicable interest rate margin of 300 basis points in the case of loans incurring interest based on LIBOR, and 200 basis points in the case of loans incurring interest based on the base rate. The Term Loan allows for incremental increases in facility size by up to an aggregate of $200 million, plus an additional amount such that the Company’s first lien leverage ratio (as defined under the Term Loan) would not exceed 4.00 to 1.00. MRC Global (US) Inc. is the borrower under this facility, which is guaranteed by MRC Global Inc. as well as all of its wholly owned U.S. subsidiaries. In addition, it is secured by a second lien on the assets securing our Global ABL Facility, defined below, (which includes accounts receivable and inventory) and a first lien on substantially all of the other assets of MRC Global Inc. and those of its U.S. subsidiaries, as well as a pledge of all of the capital stock of our domestic subsidiaries and 65% of the capital stock of first tier, non-U.S. subsidiaries. We are required to repay the Term Loan with certain asset sales and 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 2.75 to 1.00. No payment of excess cash flow is required if the first lien leverage ratio is less than or equal 2.50 to 1.00. In addition, the Term Loan contains a number of customary restrictive covenants.

In March 2019, we purchased and retired $3 million of the outstanding interests in the Term Loan at a cost of $2 million. We recognized a gain of $1 million on the extinguishment of the debt in the three months ended March 31, 2020.

Global ABL Facility: We have an $800 million multi-currency asset-based revolving credit (the “Global ABL Facility”) that matures in September 2022. This facility is comprised of revolver commitments of $675 million in the United States, $65 million in Canada, $18 million in Norway, $15 million in Australia, $13 million in the Netherlands, $7 million in the United Kingdom and $7 million in Belgium. It contains an accordion feature that allows us to increase the principal amount of the facility by up to $200 million, subject to securing additional lender commitments. MRC Global Inc. and each of its current and future wholly owned material U.S. subsidiaries guarantee the obligations of our borrower subsidiaries under the Global ABL Facility. Additionally, each of our non-U.S. borrower subsidiaries guarantees the obligations of our other non-U.S. borrower subsidiaries under the Global ABL Facility. Outstanding obligations are generally secured by a first priority security interest in accounts receivable and inventory. 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. Excess Availability, as defined under our Global ABL Facility and adjusted for the pro forma effect of an inventory appraisal completed in April 2020, was $437 million as of March 31, 2020.

Interest on Borrowings: The interest rates on our borrowings outstanding at March 31, 2020 and December 31, 2019, including a floating to fixed interest rate swap and amortization of debt issuance costs, are as set forth below:


	March 31,		December 31,
	2020		2019
Senior Secured Term Loan B		5.22%		5.50%
Global ABL Facility		2.55%		3.47%
Weighted average interest rate		4.52%		4.91%

Segment Information (Schedule of Net Sales by Product Line) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Segment Reporting, Revenue Reconciling Item [Line Items]
Sales	$ 794	$ 970
Line pipe [Member]
Segment Reporting, Revenue Reconciling Item [Line Items]
Sales	100	154
Carbon Fittings And Flanges [Member]
Segment Reporting, Revenue Reconciling Item [Line Items]
Sales	115	153
Carbon Pipe, Fittings And Flanges [Member]
Segment Reporting, Revenue Reconciling Item [Line Items]
Sales	215	307
Valves, Automation, Measurement And Instrumentation [Member]
Segment Reporting, Revenue Reconciling Item [Line Items]
Sales	323	383
Gas Products [Member]
Segment Reporting, Revenue Reconciling Item [Line Items]
Sales	134	133
Stainless Steel Alloy Pipe and Fittings [Member]
Segment Reporting, Revenue Reconciling Item [Line Items]
Sales	37	50
General Oilfield Products [Member]
Segment Reporting, Revenue Reconciling Item [Line Items]
Sales	$ 85	$ 97