Thanks, Camille, and good afternoon, everyone. We appreciate you joining us for MRC Global's conference call today to review 2012 third quarter results.

We'd also like to welcome the Internet participants listening to the call as it is being simulcast live over the web.

Before I turn the call over to management, I have the normal housekeeping details to run through. For those of you who did not receive an email of the earnings release this afternoon and would like to be added to our distribution list, please call our offices at DRG&L at (713) 529-6600 and provide us your contact information, or you can email me at the address on the Contacts section of the press release.

There will be a replay of today's call that will be available via webcast on the company's website, which has been renamed www.mrcglobal.com. And there will be a recorded replay available by phone, which will be available until November 9, 2012, and that information is in today's release.

Please note that the information reported on this call speaks only as of today, October 26, 2012, and therefore, you are advised that time-sensitive information may no longer be accurate as of the time of any replay listening. In addition, the comments made today by MRC management during the conference call may contain forward-looking statements within the meaning of the United States federal securities laws.

These forward-looking statements reflect the current views of management of MRC. However, various risks, uncertainties and contingencies could cause MRC's actual results, performance or achievements to differ materially from those expressed in the statements made by management.

The listener is encouraged to read the company's annual report on Form 10-K, its quarterly reports on Form 10-Q and current reports on Form 8-K to understand certain of those risks, uncertainties and contingencies.

In addition, this presentation includes various non-GAAP financial measures. The disclosures related to such non-GAAP measures, including reconciliations to the most directly comparable GAAP measures, are included in the company's earnings release.

And now with all that said, I'd like to turn the call over to MRC Global's CEO, Mr. Andrew Lane.

Andrew?

Thanks, Ken. Good afternoon, and thank you all for joining us today for our third quarter 2012 investor call.

We'd like to welcome you all and thank you for your interest in MRC Global. Before I review our third quarter performance, I'd like to first apologize for the short notice given for moving our conference call up from November 2 to today.

As we indicated in recent press releases, we have been working diligently to refinance our debt and reduce our interest expense, as well as prepare for a potential secondary share offering by our majority shareholder.

In order to provide the selling shareholder with maximum flexibility, we moved up our earnings call and conference call. We appreciate your understanding and hope the rescheduling didn't inconvenience you too much.

Now let me begin by highlighting some of our third quarter results before turning the call over to our CFO, Jim Braun, who'll go through our financial results in more detail.

I am pleased that we were again able to achieve excellent financial results in the third quarter, continuing to build on the strength of our recent financial performance since our IPO in April this year. Our third quarter revenues were $1.45 billion, which was a 6% increase over the same quarter a year ago and the third highest revenue for any quarter in the company's history.

The month of August was the second highest monthly revenue on record, with only October 2008 being higher.

The revenue increase was distributed among all 3 of our business sectors, upstream, midstream and downstream, as year-over-year percentage revenue gains for all 3 were in the mid- to upper-single-digit range. Adjusted EBITDA for the third quarter was up $125 million or 8.6% of revenues, representing an increase of 14% over third quarter 2011 adjusted EBITDA of $110 million or 8% of revenues.

The 60 basis point margin improvement was driven by an increase in gross profit, which benefited from a more favorable product mix and the leveraging of our fixed costs. We reported 2012 third quarter net income of $55.5 million or $0.54 per diluted share compared to last year's third quarter results of $21.9 million or $0.26 per diluted share.

Our 2012 results were affected by a $6.5 million after-tax charge or $0.06 per diluted share for the early extinguishment of debt. Excluding the impact of this charge, third quarter net income was $62 million or $0.61 per diluted share.

As we mentioned in our previous call, we are continuing to rebalance our inventories towards higher-margin products while reducing our more volatile, lower-margin oil country tubular goods or OCTG business. The OCTG business continues to shrink as a percentage of our sales, making up just less than 13% of our total revenues in the current quarter versus 17% in the third quarter of 2011.

Also, OCTG made up 9% of our total inventory at the end of September 2012. We continue to expect OCTG to be approximately 10% of both our revenues and our total inventory going forward in 2013.

The merits of this rebalancing are evident with the recent fall in U.S. drilling activity and the resulting softness in OCTG pricing, which is down 7% since the end of 2011.

Our repositioning puts us in excellent position to minimize the impact of continued OCTG weakness.

The implementation of our 5-year global Enterprise Framework Agreement with Shell signed during the second quarter is progressing nicely. As we stated during our last call, we expect to see some benefits on the contract during the fourth quarter, but we expect more meaningful contributions to come in 2013 and beyond.

As a reminder, the scope of this agreement, it is the largest distribution contract we've entered into with a global customer, and MRC will be the exclusive supplier of Shell's upstream, midstream and downstream project and MRO valve requirements in North America, Europe, Asia, Australia, the Middle East and Africa. We believe this kind of comprehensive global distribution platform will become increasingly prevalent in the energy industry going forward.

And given the scale and global footprint of our operations, we are well positioned to benefit from this changing landscape.

Lastly, as recently disclosed, we have notified the holders of our 9 1/2% senior secured notes of our intent to redeem in full the $861 million outstanding, contingent on the funding of a $650 million term loan and a draw on our global ABL facility. We expect the initial interest rate on the term loan to be 6 1/4% and coupled with the sub-2% interest on our global ABL and the retirement of a portion of the senior secured notes in the second and third quarter, we expect to reduce our annual interest expense by more than $50 million a year.

Our success with the refinancing was supported with an upgrade of our corporate rating to B1 from B2 by Moody's in October, and this came on the heels of a similar upgrade to B+ from the B by Standard & Poor's in July of this year.

With that, let me turn the call over to Jim Braun to review our third quarter results in more detail. Jim?

Thanks, Andrew, and good afternoon, everyone. First, let me begin with some comments on the third quarter market conditions.

The average U.S. rig count in the third quarter was down 2% from a year ago, and the Canadian rig count was off more significantly, down 27% over the same time period, due to the weakness in the natural gas markets.

Combined, the North American rig count was down 6%.

After a long uptrend, the U.S. oil rig count has leveled off, but the mix of rigs in the U.S.

continues to shift to oil due to the decline in natural gas drilling, and oil rigs made up 74% of all the U.S. rigs in the third quarter.

However, despite this falling rig count, sales from our North American segment were up 3% year-over-year to $1.3 billion due to sustained activity levels in our upstream and midstream sectors, which have continued to benefit from the infrastructure activity in the shale regions in the U.S., as well as the heavy oil and oil sands region in Canada. While broadly tied directionally to the rig count, we are less sensitive to near-term changes due to our focus on MRO and infrastructure activities across our 3 end market sectors.

In the third quarter of 2012, our total sales reached $1,450,000,000, an increase of 6.2% versus the $1.37 billion we earned in the third quarter of last year and up 1.4% from the second quarter. This performance marks our 10th consecutive increase in year-over-year quarterly revenues.

Again, our North American segment had revenues of $1.3 billion in the third quarter, which was up 3% from a year ago and up 1.4% sequentially. This increase was substantially all organic.

Internationally, revenues were up more than 47% to $154 million from $104 million a year ago due to the acquisition of OneSteel Piping Systems in March of this year, which now operates as MRC Piping Systems Australia. Sequentially, our International revenues were up 2%.

In the upstream sector, third quarter sales increased 7% from the third quarter of 2011 to $654 million. There remains strong activity in the oily and wet gas areas in various U.S.

shale plays, as well as Canadian heavy oil and oil sands regions. This was a key driver in our strong year-over-year revenue growth of 21% in our upstream MRO sales.

Revenues in our OCTG business declined 20% over the same period, reflecting our continuing efforts to reduce this part of our business. Third quarter sales in the midstream sector increased 8% to $404 million.

Revenues from our gathering and transmission customers were up 11% year-over-year, and revenues from our natural gas utility customers increased 3%. We continue to see the build-out of oil and gas gathering infrastructure and trans-ambition pipelines within the shale basins, as well as increased pipeline integrity work and expenditures by natural gas utilities.

In the downstream sector, third quarter 2012 revenues increased by 4% to $394 million. Nearly all of the year-over-year growth was attributed to our international acquisition of MRC Piping Systems Australia, which is more heavily weighted towards the downstream sector than our business as a whole.

Our North American downstream sales for the quarter were down 5% year-over-year. The expected tick-up in turnaround activity in this sector failed to materialize, even though refiners ran at record utilization rates during most of the summer.

We now expect this increase in turnaround activity to be realized in the first half of 2013.

In terms of sales by product class, our energy carbon steel tubular products accounted for $481 million or 33% of our sales during the third quarter of 2012, with line pipe sales of $295 million and OCTG sales of $186 million. Overall, sales from this product class decreased 9% in the quarter from Q3 a year ago, driven by a 20% decline in OCTG sales.

Sales of valves, fittings, flanges and other products reached $970 million in the third quarter or 67% of sales. This represents an increase of 16% over the third quarter of 2011 results.

Once again, carbon steel fitting and flanges and alloy pipe had the strongest growth of all product classes, growing 23% over last year's third quarter to $311 million, driven in large part by our acquisition of MRC Piping Systems Australia.

Turning to margins. The gross profit percentage in the third quarter of 2012 grew 440 basis points to 19.1%, up from 14.7% in last year's third quarter.

Although margins benefited from a more favorable product mix and the leveraging of the fixed cost component of cost of sales, a large portion of the year-over-year improvement was from a positive LIFO adjustment, an additive item to income, of $15.4 million in the quarter compared with an $18.3 million expense in the third quarter of 2011.

Given the magnitude of this LIFO effect, let me take a minute to address it. Each quarter, we determine our LIFO reserve based on an estimate of projected year-end inventory levels, as well as current rate of inflation, which we derive from indices reported by the Bureau of Labor Statistics.

This quarter's LIFO effect was driven by a change in those indices, which, on a weighted average basis, showed deflation of 4% since the end of June.

Prior to the quarter's change in the indices, we had booked $18.5 million in LIFO expense in the first half of 2012, and we're on pace to record $36 million for the full year. Based on the revised indices, the full year LIFO expense would be only $4 million.

To adjust for this change, we recorded a $15.4 million reduction to cost of sales in the third quarter, reversing most of the $18.5 million in expense previously booked. This action nets out the LIFO effect for the first 9 months of year-to-date to $3.1 million of LIFO expense, which puts us on the pace for the projected $4 million LIFO expense for the full year.

That said, it is possible that we may see continued deflation in the fourth quarter, which could result in a LIFO credit or a further reduction of cost of sales for the fourth quarter and for the full year.

And now returning to our financial results. Our adjusted gross profit percentage, which is gross profit plus depreciation and amortization and removing the impact of LIFO, increased to 19.2% from 17.3% in the third quarter of 2011.

Third quarter SG&A costs were $155 million or 10.7% of sales compared to $134.7 million or 9.9% of sales in the third quarter of 2011. The increase in expense year-over-year was evenly split between North America and International segments and was due to the MRC Piping Systems Australia acquisition, additional personnel and other costs directly related to the increasing business activity in North America, as well as additional corporate expense related to being a public company in 2012.

Operating income for the third quarter improved to $122.2 million or 8.4% of sales from $66.4 million or 4.9% of sales in last year's third quarter. Both the higher gross profit and increased leverage over our fixed cost contributed to the operating income improvement.

Our interest expense totaled $28.2 million in the third quarter, which was an 18% reduction from the $34.3 million in the third quarter of 2011. This reduction was primarily due to the retirement of a portion of our 9 1/2% senior secured notes in the second and third quarters of the year, as well as the reduction in our global ABL borrowings with the proceeds from our April 2012 IPO.

During the third quarter, we purchased 86.7 million of senior secured notes in the open market for $94.6 million, consistent with our strategy following the IPO to reduce our long-term debt, reduce interest expense and improve our cash flow. The purchases were funded from drawings against our global ABL facility and were made at an average price of $109.09 per $100 of face value.

In connection with this purchase, we incurred a pretax charge of $10.3 million or $6.5 million after tax. This charge impacted our results by approximately $0.06 per diluted share.

As stated in our October 25 press release, we are in the process of refinancing the outstanding amounts on our senior secured notes by entering into a new $650 million 7-year term loan and using the proceeds, together with the draw under our global ABL facility, to redeem the notes. We expect to close on the new term loan and redeem the $861 million 9 1/2% senior secured notes on November 9, 2012.

The redemption will require us to pay a premium of approximately $69 million. And as a result, if the redemption is completed as planned, the company would expect to record a fourth quarter pretax charge of approximately $93 million, which includes the premium and the write-off of other financing-related costs.

We expect the interest rate on the new term loan to be LIBOR plus 500 basis points, with a 1.25% LIBOR floor, effectively putting the initial rate at 6 1/4%. The cash interest savings from this refinancing is expected to be approximately $36 million a year, and together with the open market purchases of the senior secured notes in the second and third quarter of this year, we expect to realize interest savings of more than $50 million a year.

Our effective tax rate for the third quarter of 2012 was 35.3% compared to 33.8% for the same period in the prior year. The increase over the year was due to differing foreign income tax rates.

Our full year expectations for the tax rate continues to be in the 35.5% to 36.5% range.

Net income was $55.5 million for the third quarter or $0.54 per share on a fully diluted basis as compared to $21.9 million or $0.26 per share in the third quarter of 2011. Again, included in our third quarter net income is the $6.5 million after-tax charge or $0.06 per diluted share that's related to the purchase of our senior secured notes.

Excluding the impact of this charge, net income was $62 million or $0.61 per diluted share.

Consistent with the solid revenue and profit performance, adjusted EBITDA improved over the prior period. Adjusted EBITDA was $125.3 million in the third quarter of 2012 compared to $109.6 million for the same period in 2011.

As a percent of sales, adjusted EBITDA grew to 8.6% in the third quarter from 8% a year ago, and on an incremental basis, the $15.7 million year-over-year improvement in adjusted EBITDA is 18.5% of the $85 million revenue growth.

Taking a quick look at our 9-month results ended September 30, 2012, we achieved total revenue of $4.3 billion. This was up 21% over the same period a year ago.

North American sales were up 17% to $3.8 billion, and International sales were up 79% to $427 million mostly due to acquisitions. Upstream revenue was up 21% to $2 billion.

Midstream revenue was up 25% to $1,160,000,000, and downstream was up 16% to $1.14 billion. Our adjusted gross profit of $808.9 million [ph] was up 31%.

Our adjusted EBITDA of $364.1 million was up 40%, and our diluted EPS was $1.31 versus $0.30 a year ago.

Our outstanding debt was $1,268,000,000 at September 30, 2012, decreasing $87 million from the end of the second quarter. At the end of the third quarter, our leverage ratio, defined as debt net of cash to trailing 12 months adjusted EBITDA, was 2.7x as compared to 4.1x at 2011 year end.

Our operations generated cash of $112 million in the third quarter of 2012, which was mostly due to higher net income, as well as a substantial reduction in inventory, mostly from our OCTG business. And as we stated during our previous call, there was an inventory build during the first half of the year, so we made inventory reduction and cash flow generation a priority for the second half of 2012.

Through the first 9 months of 2012, we generated cash flow from operations of $66 million, and our guidance for the full year 2012 of $125 million to $150 million remains unchanged.

Our working capital at the end of the third quarter was $1,277,000,000 compared to $1,283,000,000 at the end of June. And our total liquidity, including cash on hand, at the end of the quarter was $693 million.

Cash used in investing activities totaled $6.6 million for the third quarter and included capital expenditures of $6.1 million. Our expectation for the full year CapEx remains between $26 million and $27 million.

And now I'll turn it over to Andrew for his closing comments.

Thanks, Jim. Let me conclude with some thoughts on the current business environment.

Our backlog at September 30 was $749 million, including $591 million in North America and $158 million in our International segment. The backlog at the end of the second quarter was $857 million.

Approximately 3/4 of the backlog decrease is reflective of our inventory rebalancing efforts and the repositioning of our OCTG business.

During the quarter, crude prices were as high as $99 a barrel in mid-September before trending back down, while natural gas prices averaged about $2.88 per MCF during the quarter and have rallied past the $3.40 level through October. Commodity prices at these levels should continue to support our upstream businesses.

Although drilling in Canada is weaker this year than last year, we're still seeing strength in our MRO activity, particularly in the heavy oil and oil sands region. And this will help to mitigate some of the downturn.

Demand for midstream infrastructure to transport oil and natural gas liquids to markets remains healthy, and we should continue to benefit from the need for gathering and transmission lines within the shale basins. Within the gas utilities market, there's also the need for pipeline integrity in the repair and replacement of aging pipeline infrastructure, which should continue to have a positive impact on our results.

For the downstream sector, we should see some additional benefit in the form of more turnaround activity in the first half of 2013 from our domestic refinery business as many large customers that withheld spending the second half 2012 should look to address some of these issues which were delayed.

The underlying fundamentals for our business remain on solid footing. And in accordance with this view, we raised our full year 2012 guidance earlier in the month.

We expect 2012 revenues to be between $5.55 billion and $5.68 billion. We expect our adjusted gross profit percentage to be between 18.6% and 19.2%.

And we also expect our adjusted EBITDA percentage to be between 8.4% and 8.7% in 2012.

As we've emphasized in the past, we will continue to focus on our higher-margin product lines and downsize our OCTG business, which should improve our margins and help stabilize our earnings going forward. We will also work to expand the footprint of our higher-margin valves, fittings and flanges business and migrate towards a more MRO-focused business model.

Our goal is to reduce volatility and exposure to rig counts, as well as improve overall profitability.

With that, we'll now take your questions.

First off, just for the record here, could you give us organic sales growth upstream, midstream, downstream by geography, both North America and rest of the world, just so we have the organic numbers?

Yes, on a quarterly basis, the 6% total revenue growth was split fairly evenly between organic and acquisitions. The revenue growth in the up and the mid was primarily organic, and downstream was all acquisitions.

I don't have all the specific numbers, David, but that's directionally the makeup.

Okay, that helps, yes. Second, can you discuss the competitive process you went through in the Shell contract?

And how does profitability for you work on that contract? Are these -- are the margins set by some factor, or can they move around based on your ability to buy and so forth?

Yes, Dave. Let me take that one.

It was a long process. It was roughly a year and a half of work with Shell.

The approach they took was to first lock in prices directly with the valve manufacturers. And they went through a process of reducing their valve manufacturers they were buying from globally to the kind of the mid-20s down to 11 or so.

And so that happened first. And then the negotiations and the bidding went for distributors, where they had approximately 12 or so, 12 to 14 regionally-based distributors supporting that previous mid-20s on the valve manufacturers.

So we went through that process against everyone who's anyone in our sector and came out as a winner, as the sole exclusive distributor for Shell for the 5-year contract plus 5-year option. And so to your other point, it is adding a margin, a fixed percentage above the cost that we've negotiated with the valve manufacturers.

So we have -- the contract has no cost risk over the 5- or 10-year life, if you want to. It's a good margin contract for us.

And the big win for us was adding the pipe, flange and fitting in Canada that we didn't have, the alloy and chromes up there. And it also added, of course, globally the valves that were in projects that normally, when they were going out for bids through EPCs, that's very discreet basis with long lead times.

We were not participating in that marketplace. So it ties the MRO and the projects together.

It expanded our U.S. PFF to be a North America-wide PFF contract.

And what we hope to do in early 2013 is add Australia, which is a key market, as you know, for us, the PFF portion there to the contract. And then that's just the next step.

And our goal over the term of this contract would be to convert it into a full PVF contract globally, which we think is the step going forward. And then this is -- it's very important.

As we've talked before, we were the first company to kind of break ground and be a first mover to North America-wide contract for up, mid and downstream in 2008 with ConocoPhillips. And by far, this is the first-mover advantage with adding a PFF contract in North America-wide and a global valve contract.

So we see this as a big step where we think the future of this industry is going, and of course, with our scale and position globally now, we're in the leading position to provide best operation. We only have to add one branch globally in Qatar to service all of Shell's needs with our current view of the contract.

So it's not requiring a lot of facilities. It's just ramping up of a volume through our existing infrastructure.

And so we factored that into the value on the contract, too, for us.

Andy, the first question I've got, I'm hoping you can maybe talk a little bit more about how you guys are growing as much as you are in upstream. You back out the decline that you're seeing in OCTG, and I think you said, you were up 27%, more of the infrastructure side of upstream.

What types of projects are driving that, or what activity is it that's helping drive that kind of growth for you outside of OCTG in the upstream business?

Yes, Matt, it's been our strategy, and it's taken us a while through last year and early part of this year to really get to where we wanted to, but it's a strategy that decoupled directly from the rig count, to only have OCTG focused on our major customers and our major accounts, where they buy broad PVF from us. And they also -- they're most likely to continue with the drilling programs.

So really have high-graded our customer accounts and high-graded our broad one-stop shop PVF with that side of the upstream. And what you're seeing, though, is still continued growth, and it's driven by the rest of our upstream business, which is the majority.

And that's the pipes, valves and fittings that goes into the infrastructure. So we're not -- when you stop at the -- if you take OCTG as a shrinking and a very isolated part of our business that we're going to focus on, and then we do everything else from there, from the well head on.

So we do the flow lines. They're tying all the well.

There's multi-well pad drilling in the shales. We're doing the flow lines to tie those into the production facilities.

Lots of production facilities are either being expanded or de-bottlenecked or additions are being put in place, just a lot of investment between all the equipment and tanks to put the PVF in place to expand those facilities. And then we do the tie-ins for the midstream trunk lines.

So from the production facilities, whether it's oil or an NGL or gas production facilities, there's a huge amount of both hook-up work on these new wells and also just expansion of infrastructure for future wells. So that's driving our upstream business, and as you see, we'll be around 10% OCTG going in 2013, but we see a lot of growth, still, from that kind of fundamental infrastructure upstream that we have.

And it's really the company we want to be.

So, Andy, you think then, if I'm hearing you correctly, that this type of infrastructure spend, that's going to continue next year and you guys can continue growing in that upstream business as we look out to next year.

Yes, Matt. That infrastructure, primarily around the shales but also the Permian, the West Coast, the oil plays in the U.S.

We see that continuing. Our heavy oil in Canada, continuing investment there.

And that, along with our midstream, we still see a very positive outlook going forward.

Okay. And then the last thing I've got, Jim, a little bit more on the new interest expense going forward.

When you guys get done -- post November 9, what type of quarterly interest expense are you going to have going forward, when you include all the amortization of debt issuance cost, all that type of stuff that gets amortized over the life of the term loan? Is it kind of $19 million to $20 million a quarter?

Am I in the ballpark there?

I think it will be lower than that, Matt. I mean, if you look at our debt profile at the end of September and just on a weighted average cash basis, we're going to be less than 4%.

So I think you're looking at like $55 million to $60 million a year interest expense based on the debt we've got today.

A question. This is probably going to be hard to determine, but could you talk about your market share a bit?

We saw with NOV the other day, I guess if we added in the Wilson and CE Franklin business from the prior year, it looks like they're growing their business in the aggregate in the low double digits. Now I know they have some offshore exposure, and obviously, you're deemphasizing OCTG, which will explain some of that.

But, Andy, if you could talk or give some color on what you're seeing from a market share standpoint near term, that would be helpful.

Yes, I mean, this is their first quarter of full results, and I think they did $1.315 billion or so and 5.9% operating income margin, and we're $1.450 billion and 8.4%. And the difference, they'll have, they'll be heavily weighted to upstream.

They'll be weighted to the rig environment. And the third quarter, from a rig equipment marketplace, was still very strong for them.

So I think that's going to be their focus. Their focus is going to be on the rig activity and rig equipment.

Midstream, we're doing very well competitively with them. And really, in the upstream MRO world, we're talking about the infrastructure world, we're much stronger than the new NOV Wilson there.

And then downstream, which hasn't been a high-growth area for us, we have a much, much stronger position in downstream compared to their footprint. So they're going to be weighted to the drilling contractors, the drilling rig construction and upstream activity.

So we still like our competitive position because we think we're in the right part of the market.

And then talk about what you're seeing sequentially in pricing. I understand pipe in OCTG pricing is off.

I know we were talking about valves pricing last quarter being a little bit more firm. What are you seeing from a competitive dynamic standpoint with pricing sequentially?

Yes, I mean, the only thing you're seeing is that -- and really, Jim addressed this both in the LIFO and you see it in the spot pricing, you're seeing some softness in this mid-year of both OCTG, which we've talked about, and then also, really, ERW line pipe. Both of them in kind of the 6% to 7% range off on spot pricing this year.

And one of the things we've done, we have a very little spot business in our market. And so we're on contract and we're on program on the OCTG business we have.

We have 0% spot buy. So we're not being impacted by that kind of competitive nature of the spot pricing.

But for the rest of our product lines, as we've seen in previous cycles, they're very firm and still a strong demand. There's still long lead times on valves, so that's still our lead product line and very important to us.

And the same thing, strength in fittings, flanges and the rest of our products. So it's really unique as it has been before, a unique deflation environment just for carbon steel products, primarily 2 pipe groups.

So If I can paraphrase, the mix should continue to generally offset any sort of deflationary pressures you might be seeing on an ex-LIFO basis from gross margins?

Yes.

Could you just touch on, I guess, how you guys are thinking about acquisitions just given restructuring the balance sheet, what you're sort of seeing out there at this point?

Yes, we still look and very active in the acquisition market. We closed on Chaparral.

We're very pleased with that one. And we've developed, in a very short time a long-- a good relationship with SandRidge.

And so that's worked out very well and fits our model. So we still look at those.

We looked at a couple of them, and we're still going to be very disciplined on the price we'll pay. So we've looked at a couple of them.

They just wouldn't -- were outside the multiple that we will be willing to pay, so we passed on those. But we continue to look at -- the priority in the last couple of months has been addressing our debt.

We've had a huge focus on that, and you've heard from Jim the significant savings year-on-year on our interest expense. That was the priority right now.

And so we've spent a lot of time on that. But we continue to look at the bolt-ons in North America and I continue to look at the bolt-ons internationally that fit our strategy.

So there's not a shortage, but we will be disciplined buyers, and that's the approach we've taken.

Yes, Allison, I might add, as you look out towards the end of the year with our projected cash flow, we should have roughly $400 million of availability on our ABL facility. So that gives us ample room to make the bolt-on acquisitions that we've talked about.

The other way we've looked at it is the interest savings that we've talked about of $50 million a year. That's typically one acquisition right in our sweet spot, so we feel comfortable that we've got the liquidity to continue those -- that acquisition path.

Great. And then just one last quick one.

Could you just remind us again about the seasonality of your business, I guess, through the quarters? I mean, are we looking for a seasonally weaker Q4, if I remember correctly?

Yes, Allison, that's exactly right. It's not a dramatic seasonality, but we usually, the third quarter is our peak activity, lots of construction -- lots of projects.

And so we thought it's usually always our best quarter. We have some tailing off that's usually related to weather, and some holidays -- but we have less billing days in total in the fourth quarter.

And you usually have some of your customers far back in the December time frame on the budgets of either they were too active early on. So we always have a little bit of seasonality in the fourth quarter.

So we expect the same. And if you look at our new guidance -- the guidance we reaffirmed today on the annual guidance, it shows a little bit of that seasonality if you look at the midpoint of that guidance with the 3 quarters that we've booked.

Andy, maybe just stepping back -- maybe if you could just talk about what you're hearing generally from customers today about CapEx plans, drilling activity, and are you seeing any delays in projects or anything pushing to the right?

No, that hasn't been a big impact for us. And you're seeing some slight fall-off in the overall rig count, but we went through a lot of volatility in the last 3 quarters in shifting from the gas to oil drilling.

And you can see from our results that it has very little, if any, impact on our ability as a -- our distribution model to redirect the inventory and move very quickly with the change in activity. So we're not seeing that.

It hasn't been -- as long as the activity there has been oil and wet gas, it has not impacted us. I mean, we're just about a month away, month and a half away.

We really get a real good view on 2013 when there are major customer group come out with their CapEx plans for 2013. So at this point, we're not giving guidance for 2013.

But we don't hear a lot of noise around decreasing budgets. The general view would be a little bit slower in the first quarter to the first half of the year and a stronger in the second half.

But when we see their CapEx budgets, we'll have a real have a good handle on the spending levels for next year.

Got it. Okay.

Then second question, it sounds like organically, the International business is flattish. What's the different dynamics there?

What are the drivers there? And maybe talk about the outlook a bit.

Yes, if you remember, our business internationally before -- let me talk about our Australia separate from the rest. The rest of it is really about business.

It's heavily weighted to refining and industrial sector, downstream and industrial. So we're like all companies.

Europe is not a growth story for us. It's flattish there.

The U.K. is doing really good.

And it's fine, but our Western Europe business is flat. And really, we're doing well in Singapore.

And the Southeast Asia, we see that good. And Australia, we just -- it was a big acquisition for us here.

And so we have to get all those groups together, get them on one platform and one management team, and I think you're going to see good organic growth as we go forward with Australia because as we've talked about previously, we built around a $300 million top line business there, and we believe that market is $600 million to $800 million. So we haven't hit our full stride in taking organic growth in Australia, but we will.

We're thrilled with the platform we have there now with the 3 companies combined. It's just a matter of a little time there.

So we see, to your point, that is it's really a flat Europe business, which was a big -- before our Australia expansion, was a big part of our International segment.

Okay. And just lastly, on SG&A, if I can.

Can you just talk about some of the pieces there? Because it was up quite a bit year-over-year.

You mentioned public company expenses. There were deal costs in there.

So just what were the biggest drivers there? I'm just trying to pull apart what's really core SG&A growth.

Yes, I think the core SG&A growth there was probably just several million dollars. I mean, we made a big push at the end of last year when business started ramping up to get some hirings.

So we've increased the headcount in our North American operations about 12% from a year ago. And then that was the biggest piece of it that was driving it, Ryan.

Yes, Ryan, just to clarify. The headcount total is up 12% this year, but our North America is up 2%.

The big spike is from our acquisition in Australia, and that's driving the SG&A. But we feel very good about it.

I mean, there was some fixed expense we had to add as moving into the public world this year, but we feel very good about our ability to leverage this SG&A structure we have as we continue to grow.

So you guys did a great job kind of laying out the OCTG ramp-down, and what I want to understand a little bit better, it doesn't sound like you're getting much contribution at this point from Shell. So maybe talk about how that contract ramps up and when you start hitting kind of the full run rate of the incremental business.

Yes, we are seeing a little bit of pickup in Shell in Canada. And then that was the first thing because it was an expansion of our U.S.

PFF business. We are going to see some projects pick up in both U.S.

and Canada because we -- as you remember, we're mostly all MRO. And now that Shell's project spend, part of the contract, we're seeing that in the U.S.

But it's small projects right now. It's going to be kind of mid-2013 and through the whole year that we really start cycling in on some new projects.

And their spend is significant, so it's going to be $25 billion to $30 billion a year. It's going to be a while for those existing projects to ramp, finish up and the new projects to come in stream.

And we'll have the valves on all the new projects. So I think you have to think about the project side of that being a multiyear, but a consistent growth as -- because they start a series of projects every year, and we're in the mix of those now.

So I think you have to think about it in kind of 2013 and '14. By the end of 2014, I would expect us to be significantly up on the full amount of that contract.

But you'll see more impact, short term, with U.S. and Canada, both projects and overall activity.

Okay, great. And then just as you think about these larger contracts, I mean, what's kind of your visibility in your pipeline, and how do you think about the sales cycle as you try to sign up and look at other contracts?

I mean, how quickly might we see something else, maybe not that this magnitude but of similar nature?

Yes, one of the things we did this quarter is we moved the 2 Executive Vice Presidents, Rory Isaac and Gary Ittner, who were critical to getting the Shell contract in place, and it was a long sales cycle. It was a year, year and a half.

But that was to standardize on one distributor globally, which was a big effort for Shell. We see a lot of room still with other customers to get contracts either on a multi-region basis or adding to our North American contract with one extra region or 2 extra regions.

So it will take different forms with each customer, but we took 2 executives and put them in full-time both aligning our M&A and our corporate strategy, but their primary goal over the next 3 years is to add multiple more global-type contracts to us. And they have between them 75 years with the company, and we're dedicating some real senior talent to pursue these because we know we have a strong position there, and we believe it's the future.

We're the first mover, so we want to take advantage of that.

Okay, thank you for joining us today on the call and your interest in MRC Global. We look forward to talking to you again at the conclusion of the fourth quarter.