Earnings Conference Call

November 2, 2022

8:00 a.m. CT

1 (844) 200-6205 (within North America)

1 (929) 526-1599 (outside of North America)

Access Code: 950354

Webcast: ir.dnow.com

Revenue was $577 million for the third quarter of 2022

Net income attributable to NOW Inc. was $40 million and non-GAAP net income attributable to NOW Inc. excluding other costs was $34 million for the third quarter of 2022

Diluted earnings per share attributable to NOW Inc. stockholders was $0.35 and non-GAAP diluted earnings per share attributable to NOW Inc. stockholders excluding other costs was $0.30 for the third quarter of 2022

Non-GAAP EBITDA excluding other costs for the third quarter of 2022 was $53 million or 9.2 percent of revenue

Cash and cash equivalents was $267 million and long-term debt was zero at September 30, 2022

Free cash flow for the third quarter of 2022 was $44 million

Repurchased $4 million of common stock in the first partial quarter of our share repurchase program

ASSETS

Current assets:

Cash and cash equivalents

Receivables, net

Inventories, net

Prepaid and other current assets

Total current assets

Property, plant and equipment, net

Goodwill

Intangibles, net

Other assets

Total assets

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

Accounts payable

Accrued liabilities

Other current liabilities

Total current liabilities

Long-term operating lease liabilities

Other long-term liabilities

Total liabilities

Commitments and contingencies

Stockholders’ equity:

Preferred stock - par value $0.01; 20 million shares authorized; no shares issued and outstanding

Common stock - par value $0.01; 330 million shares authorized; 110,635,461 and 110,558,831 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively

Additional paid-in capital

Accumulated deficit

Accumulated other comprehensive loss

NOW Inc. stockholders’ equity

Noncontrolling interest

Total stockholders’ equity

Total liabilities and stockholders’ equity

Revenue

Operating expenses:

Cost of products

Warehousing, selling and administrative

Impairment and other charges

Operating profit

Other income (expense)

Income (loss) before income taxes

Income tax provision

Net income (loss)

Net income attributable to noncontrolling interest

Net income (loss) attributable to NOW Inc.

Earnings (loss) per share attributable to NOW Inc. stockholders:

Basic

Diluted

Weighted-average common shares outstanding, basic

Weighted-average common shares outstanding, diluted

Revenue:

United States

Canada

International

Total revenue

GAAP net income (loss) attributable to NOW Inc. ⁽¹⁾

Net income attributable to noncontrolling interest

Interest expense (income), net

Income tax provision

Depreciation and amortization

Other costs:

Stock-based compensation

Other ⁽²⁾

EBITDA excluding other costs

EBITDA % excluding other costs ⁽³⁾

GAAP net income (loss) attributable to NOW Inc. ⁽¹⁾

Other, net of tax ^{(4) (5)}

Net income (loss) attributable to NOW Inc. excluding other costs ⁽⁵⁾

GAAP diluted earnings (loss) per share attributable to NOW Inc. stockholders ⁽¹⁾

Other, net of tax ^{(4) (5)}

Diluted earnings (loss) per share attributable to NOW Inc. stockholders excluding other costs ⁽⁵⁾

In an effort to provide investors with additional information regarding our results as determined by GAAP, we disclose various non-GAAP financial measures in our quarterly earnings press releases and other public disclosures. The non-GAAP financial measures include: (i) earnings before interest, taxes, depreciation and amortization (EBITDA) excluding other costs, (ii) net income (loss) attributable to NOW Inc. excluding other costs and (iii) diluted earnings (loss) per share attributable to NOW Inc. stockholders excluding other costs. Each of these financial measures excludes the impact of certain other costs and therefore has not been calculated in accordance with GAAP. A reconciliation of each of these non-GAAP financial measures to its most comparable GAAP financial measure is included in the schedules herein.

Net income attributable to noncontrolling interest represents the income retained by the noncontrolling party of a joint venture in our international segment which we consolidate into our financials as we are the primary beneficiary and controlling member.

For the three months ended September 30, 2022, Other of approximately $2 million, included in warehousing, selling and administrative, was related to legal fees for litigation matters that were not ordinary or routine to the operations of the business where the Company is seeking damages.

EBITDA % excluding other costs is defined as EBITDA excluding other costs divided by Revenue.

For the three months ended September 30, 2022, Other, net of tax included a benefit of approximately $8 million from changes in the valuation allowance recorded against the Company’s deferred tax assets, partially offset by approximately $2 million related to legal fees for litigation matters that were not ordinary or routine to the operations of the business where the Company is seeking damages.

Totals may not foot due to rounding.