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What changed in DNOW Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of DNOW Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+525 added−284 removedSource: 10-K (2026-02-26) vs 10-K (2025-02-18)

Top changes in DNOW Inc.'s 2025 10-K

525 paragraphs added · 284 removed · 178 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

38 edited+88 added−43 removed13 unchanged
Biggest changeOur EcoVapor TM branded vapor recovery systems provide our customers the ability to reduce their scope 1 emissions by enabling customers to retain and sell residual flash gas commonly found in storage tanks resulting in reduced flaring and a decrease in greenhouse gas emissions. 6 Customers Our primary customers are companies active in the upstream, midstream and downstream sectors of the energy industry, including drilling contractors, well servicing companies, independent and national oil and gas companies, midstream operators, refineries, petrochemical, chemical, utilities, RNG facilities and other downstream energy processors.
Biggest changeOperators directly benefit through the reduction of their scope 1 emissions by enabling customers to retain and sell residual flash gas commonly found in storage tanks resulting in reduced flaring and a decrease in greenhouse gas emissions. These vapor recovery systems capture and transfer volatile organic compounds during oil, gas and produced water storage, reducing carbon emissions.
We have developed expertise in providing application systems, work processes, parts integration, optimization solutions and after-sales support that provide more efficient and productive solutions for our customers. Our solutions include outsourcing portions or entire functions of our customers’ procurement, warehouse and inventory management, logistics, point of issue technology, project management, business process and performance metrics reporting.
We have developed expertise in application systems, work processes, parts integration, optimization solutions and after-sales support that provide more efficient and productive solutions for our customers. Our solutions include outsourcing portions or entire functions of our customers’ procurement, warehouse and inventory management, logistics, point of issue technology, project management, business process and performance metrics reporting.
Our approach in these markets and the products we offer is similar to our strategy in the U.S. and Canada, with the addition of the distribution of electrical products in the UK, Australia and international export markets.
Our approach in these markets and the products we offer is similar to our strategy in the U.S. and Canada, with the addition of the distribution of electrical products in the UK, Singapore, Australia and international export markets.
Examples of these include pumps, valves and valve actuation, process and production equipment, fluid transfer products, measurement, automation and controls, spoolable and coated steel-pipe and composite pipe, along with many other products required by our customers, which enable them to focus on their core business while we manage varying degrees of their supply chain.
Examples of these include pumps, valves and valve actuation, process and production equipment, fluid transfer 9 products, measurement, automation and controls, spoolable and coated steel-pipe and composite pipe, gas products, along with many other products required by our customers, which enable them to focus on their core business while we manage varying degrees of their supply chain.
These solutions allow us to leverage the infrastructure of our SAP™ Enterprise Resource Planning (“ERP”) system and other technologies to streamline our customers’ purchasing process, from requisition to procurement to payment, by digitally managing workflow, improving approval routing and providing robust reporting functionality.
These solutions allow us to leverage the infrastructure of our Enterprise Resource Planning (“ERP”) systems and other technologies to streamline our customers’ purchasing process, from requisition to procurement to payment, by digitally managing workflow, improving approval routing and providing robust reporting functionality.
Additional examples of products we offer our customers to help reduce their scope 1 emissions may be found in our annual sustainability report. 8 Environmental Matters We are subject to a variety of federal, state, local, foreign and provincial environmental, health and safety laws, regulations and permitting requirements, including those governing the discharge of pollutants or hazardous substances into the air, soil or water, the generation, handling, use, management, storage and disposal of, or exposure to, hazardous substances and wastes, the responsibility to investigate, remediate, monitor and clean up contamination and occupational health and safety.
Additional examples of products we offer our customers to help reduce their scope 1 emissions may be found in our annual sustainability report. 11 Environmental Matters We are subject to a variety of federal, state, local, foreign and provincial environmental, health and safety laws, regulations and permitting requirements (collectively, “environmental laws”), including those governing the following: • the discharge of pollutants or hazardous substances into the air, soil or water; • the generation, handling, use, management, storage and disposal of, or exposure to, hazardous substances and wastes; • the responsibility to investigate, remediate, monitor and clean up contamination; and • occupational health and safety.
ITEM 1. B USINESS Overview DNOW Inc., (“DNOW” or the “Company”), headquartered in Houston, Texas, was incorporated in Delaware on November 22, 2013. On June 2, 2014, DNOW stock began regular trading on the New York Stock Exchange under the ticker symbol “DNOW”.
ITEM 1. BUSINESS Overview DNOW Inc., (“DNOW” or the “Company”), headquartered in Houston, Texas, was incorporated in Delaware on November 22, 2013. On June 2, 2014, DNOW stock began regular trading on the New York Stock Exchange under the ticker symbol “DNOW”.
Process Solutions also provides modular oil and gas wellsite facility solutions, also known as tank battery solutions, that positively impact our operator customers by enabling them to design a modular tank battery that allows flexibility and scalability for current and future production, while expediting revenue generation by reducing the time to complete a tank battery and getting oil and gas into the pipeline earlier.
We also provide modular oil and gas wellsite facility solutions, also known as tank battery solutions, that positively impact our operator customers by enabling them to design a modular tank battery that allows flexibility and scalability for current and future production, while expediting revenue generation by reducing the time to complete a tank battery and getting oil and gas into the pipeline earlier.
Examples of such products include: domestically produced goods; low emission rated valves; steel piping products produced from recycled scrap; glass reinforced epoxy piping systems; vapor recovery units that capture volatile organic compounds in an effort to limit and reduce emissions to the atmosphere; produced water transfer and water injection packages that dispose of produced water in an environmentally safe manner; and pipe produced using wind power, recycled water and wood pellet inputs.
Examples of such products include: domestically produced goods; low emission rated valves; steel piping products produced from recycled scrap; glass reinforced epoxy piping systems; vapor recovery units and valve actuation technologies that capture or control volatile organic compounds (“VOCs”) in an effort to limit and reduce emissions to the atmosphere; produced water transfer and water injection packages that dispose of produced water in an environmentally safe manner; and pipe produced using wind power, recycled water and wood pellet inputs.
In addition, we offer an expanding suite of emissions reduction technology through our EcoVapor branded product line that reduces the venting and flaring of greenhouse gas, targeting the oil and gas and the growing RNG markets. As a distributor, we perform minimal manufacturing operations. We do not utilize large amounts of water.
For gas treating, we offer an expanding suite of emissions reduction technology through our EcoVapor TM branded product line that reduces the venting and flaring of greenhouse gas, targeting the oil and gas and the growing RNG markets. As a distributor, we perform minimal manufacturing operations. We do not utilize large amounts of water.
Sustainability We can assist in reducing emissions of greenhouse gases in our operations by creating a more efficient supply chain. An efficient supply chain can help reduce the carbon footprint of deliveries to our supercenters and branches and ultimately to our customers.
Sustainability We can assist in reducing emissions of greenhouse gases in our operations by creating a more efficient supply chain. An efficient supply chain can help reduce the carbon footprint of deliveries to our RDCs, super centers and branches and ultimately to our customers.
Alternatively, you may access these reports at the SEC’s website at www.sec.gov . 9
Alternatively, you may access these reports at the SEC’s website at www.sec.gov . 12
Use of our regional supercenters allow us to aggregate products across multiple suppliers and customers, which, in turn, prevents each customer from separately creating duplicative supply chains that require fuel for deliveries and resources to manage. Many of the products we distribute are used by our customers to aid their efforts to reduce their greenhouse gas emissions.
Use of our RDCs and super centers allows us to aggregate products across multiple suppliers and customers, which, in turn, prevents each customer from separately creating duplicative supply chains that require fuel for deliveries and resources to manage. Many of the products we distribute are used by our customers to aid their efforts to reduce their greenhouse gas emissions.
We offer a variety of fluid movement solutions ranging from standard to engineered pump packages and a wide variety of American Society of Mechanical Engineers (“ASME”) fabricated process and production equipment to remove water and contaminants prior to the midstream transfer of oil, NGLs and other refined products within the midstream sector.
We offer a variety of fluid movement solutions ranging from standard to engineered pump packages and a wide variety of ASME fabricated process and production equipment to remove water and contaminants prior to the midstream transfer of oil, NGLs and other refined products within the midstream sector.
United States We have approximately 110 locations in the U.S., which are geographically positioned to best serve the upstream, midstream, downstream and renewable energy and industrial markets. We offer higher value solutions in key product lines in the U.S. which broaden and deepen our customer relationships and related product line value.
United States We have approximately 210 locations in the U.S., which are strategically positioned to serve the upstream, midstream, gas utility, downstream and renewable energy and industrial markets. We offer higher value solutions in key product lines in the U.S. which broaden and deepen our customer relationships and related product line value.
We award Milestone Service Awards to employees for their years of service and dedication of time to our Company, which recognize employees at each five-year service anniversary. 7 Workforce Diversity and Inclusion We believe that a diverse and inclusive workplace is a key driver of innovation, creativity and overall success.
We award Milestone Service Awards to employees for their years of service and dedication of time to our Company, which recognize employees at each five-year service anniversary. Workforce Inclusion We believe that our people are a key driver of innovation, creativity and overall success.
We are committed to advancing an inclusive environment where diversity is appreciated and encouraged and all employees have a sense of belonging throughout our organization. We recognize the opportunity to drive diversity in our workforce through talent acquisition and retention because we know that one of our greatest strengths is the diverse perspectives of our team members.
We are committed to maintaining an inclusive environment where all employees are appreciated and have a sense of belonging throughout our organization. We recognize the opportunity to enhance our workforce through talent acquisition and retention because we know that one of our greatest strengths is the diverse perspectives of our employees.
Process Solutions Process Solutions has a team of distribution experts, technical professionals and licensed engineers who provide expertise related to pumps, compressors, fluid movement packages, fabricated liquid and gas measurement systems and process and production equipment. Process Solutions distributes OEM equipment including pumps, generator sets, air compressors, dryers, blowers, mixers and valves.
For our pumps, production and process solutions products, we have a team of distribution experts, technical professionals and licensed engineers who provide expertise and field repair services related to pumps, compressors, fluid movement packages, fabricated liquid and gas measurement systems and process and production equipment. We distribute OEM equipment including pumps, generator sets, air compressors, dryers, blowers, mixers and valves.
To maintain and acquire talented employees in the marketplace, we invest in employee development programs that incorporate training courses and programs, including a growing online learning platform, which provides our employees an opportunity for professional development.
Training and Development Programs The acquired skills, knowledge and capabilities of our people are central to our success. To maintain and acquire talented employees in the marketplace, we invest in employee development programs that incorporate training courses and programs, including a growing online learning platform, which provides our employees an opportunity for professional development.
Our safety culture is driven by our health, safety and environment (“HSE”) training catalog and through our HSE management system beginning with our HSE Policy Statement, which sets the tone for our company’s commitment to safety.
We act with high priority on health and safety in our workplace and in the communities where we operate. Our safety culture is driven by our health, safety and environment (“HSE”) training catalog and through our HSE management system beginning with our HSE Policy Statement, which sets the tone for our company’s commitment to safety.
The segment data included in our Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) are presented on a basis consistent with our internal management reporting. Segment information appearing in Note 17 “Business Segments” of the Notes to Consolidated Financial Statements (Part IV, Item 15 of this Form 10-K) is also presented on this basis.
The segment data included in our MD&A is presented on a basis consistent with our internal management reporting. Segment information appearing in Note 16 “Business Segments” of the Notes to Consolidated Financial Statements (Part IV, Item 15 of this Form 10-K) is also presented on this basis.
We continually seek opportunities to expand our portfolio of products we offer to customers to aid in reducing their scope 1 emissions. We offer our customers a variety of scope 1 emission reducing products like sealless pumps and industrial air compressors that are used to replace methane gas pneumatic systems with compressed air pneumatic systems.
We continually assess market opportunities to offer our customers a variety of scope 1 emission reducing products like gas treating technology, sealless pumps and industrial air compressors that are used to replace historically used methane gas pneumatic systems with compressed air pneumatic systems.
Through a network of approximately 165 locations and approximately 2,575 employees worldwide, our operating locations utilize a complementary suite of technology, systems, order and fulfillment processes and sourcing and procurement channels to provide products and services to a variety of customers operating in the energy and industrial markets.
Our team of approximately 5,300 employees supports customers from a strategic network of approximately 300 locations. These locations utilize a complementary suite of technology, systems, order and fulfillment processes and sourcing and procurement channels to provide products and services to a variety of customers operating in the energy and industrial markets.
We are not aware of any pending environmental compliance or remediation matters that, in the opinion of management, are reasonably likely to have a material effect on our business, financial position or results of operations or cash flows. Available Information Our website address is www.dnow.com .
Historically, the costs to comply with environmental laws have not been material to our financial position, results of operations or cash flows. We are not aware of any pending environmental compliance or remediation matters that, in the opinion of management, are reasonably likely to have a material effect on our business, financial position or results of operations or cash flows.
By directly engaging people in the communities we serve, we create a transparent dialogue to try to listen and learn from alternative views in how we conduct our business. Workforce Health and Safety Safety is at the center of our actions. We act with high priority on health and safety in our workplace and in the communities where we operate.
By directly engaging people in the communities we serve, we create a transparent dialogue to listen and learn from alternative views on how we conduct our business. Workforce Health and Safety In our business, safety is of paramount importance to us and to our customers.
We also provide additional value to our customers through the engineering, design, construction, assembly, fabrication and optimization of products and equipment essential to the safe and efficient production, transportation and processing of oil and gas and produced water.
We also provide additional value to our customers through engineering, design, construction, assembly, fabrication and optimization of products and equipment essential to safe and efficient production, transportation and processing of oil and gas and produced water. Canada We have a network of approximately 35 locations in the Canadian oilfield, predominantly in the oil rich provinces of Alberta, Saskatchewan and Manitoba.
This product line is supported by inventory, as well as product and installation expertise to serve our customers. 4 International We serve the needs of our international customers from approximately 15 locations outside the U.S. and Canada, which are strategically located in major oil and gas development areas.
International We serve the needs of our international customers from approximately 55 locations outside the U.S. and Canada, which are strategically located in major oil and gas development and downstream processing areas.
In addition, we provide our products, services and supply chain solutions to non-oil and gas end markets such as mining and minerals, municipal water and wastewater and industrial manufacturing. We provide drilling products, MRO consumables, safety and original equipment manufacturer (“OEM”) equipment for land drilling rigs, workover rigs and initial offshore drilling rig load outs.
In addition, we provide our products, services and supply chain solutions to non-oil and gas end markets such as power generation, data centers, mining and minerals, municipal water and wastewater and industrial manufacturing.
To find the best employees, we must have a diverse pipeline of talent. We commit to advancing an inclusive environment where diversity is encouraged. We create a culture where all employees can strive to be their best, to achieve company goals and to deliver superior service to our customers.
We create a culture where all employees can strive to be their best, to achieve company goals and to deliver superior service to our customers. 10 We recognize that we are an integral part of the communities in which we operate.
Our ethos determines how we act and interact, what we value, what we tolerate, how we treat one another, our customers and communities and the drive to continue to surpass expectations. Training and Development Programs The acquired skills, knowledge and capabilities of our people are central to our success.
We place a strong emphasis on employee growth and development and provide opportunities for valued contribution and innovation. Our ethos determines how we act and interact, what we value, what we tolerate, how we treat one another, our customers and communities and the drive to continue to surpass expectations.
We provide a full suite of process and production equipment, pumps and compressor packages, artificial lift, steel, fiberglass and composite pipe, valves and fittings (“PVF”), instrumentation and measurement, and safety and personal protective equipment (“PPE”) in the exploration, production, separation, storage and gathering of oil and gas, as well as the separation, removal, storage and transfer of produced water.
Across upstream production and midstream applications, we serve oil and gas operators with a full suite of steel, fiberglass and composite PVF, pumps, process and production equipment, artificial lift, instrumentation and measurement, and safety and personal protective equipment (“PPE”).
We are a distributor to the oil and gas, energy transition and industrial markets with a legacy of over 160 years. We operate primarily under the DNOW brand along with several affiliated brands operating in local, regional or international markets that are tied to prior acquisitions.
Through our DigitalNOW® and MRCGO™ e-commerce platforms, customers can leverage technology across applications to solve a wide array of complex operational and product sourcing challenges. We operate primarily under the DNOW and MRC Global brands along with several affiliated brands operating in local, regional or international markets which are tied to prior acquisitions.
These LACT units are associated with routine flaring originating from low pressure storage tanks and renewable fuels such as biogas and landfill gas marketed as RNG facilities, gas meter runs, ASME code vessels in the form of separators, heater treaters, gas conditioning systems, towers, reactors, condensate stabilizers, slug catchers and pressurized bullet tanks, pig launchers and receivers and water transfer and disposal units.
Additionally, we can supply a wide range of specialized production equipment including tanks and separators. 6 We fabricate, assemble and test customer lease automatic custody transfer (“LACT”) units, gas meter runs, ASME code vessels in the form of separators, heater treaters, gas conditioning systems, towers, reactors, condensate stabilizers, slug catchers and pressurized bullet tanks, pig launchers and receivers and water transfer and disposal units as part of our pumps, production and process solutions products.
Our long legacy of operating in select international regions provides a competitive advantage as few of our competitors have a presence in most of the global energy producing areas. In the third quarter of 2024, we began a plan to restructure operations in the International segment to optimize efficiencies and to improve operating margins.
Our long legacy of operating in select international regions provides us strategic benefits as few of our competitors have a presence in most of the global energy producing areas. Human Capital As of December 31, 2025, we had approximately 5,300 employees, of which approximately 355 were temporary employees. We offer market-competitive benefits for employees and opportunities for growth and advancement.
Many of the terminals and tank farms used in the midstream space to facilitate the storage and distribution of oil, gas, NGLs, LNG, and other hydrocarbon-based fluids utilize our products. Across many of the process industries where we provide valves, we offer low emission stem packing options to help reduce emissions.
Our products are widely employed at terminals and tank farms within the midstream end-market to support the storage and distribution of oil, gas, NGLs, LNG and other hydrocarbon-based fluids.
To minimize carbon based effluent emissions, we provide vapor recovery systems to capture and transfer gas and volatile organic compounds during the separation and storage of oil, gas and produced water from operating reservoirs. For produced water, we provide fluid movement products which help our customers dispose of produced water in an environmentally safe manner.
Additionally, our EcoVapor TM products provide RNG customers with gas treatment and gas drying solutions enabling the RNG operators the ability to sell their gas after treatment to the midstream gas operator. For produced water, we provide fluid movement products which help our customers dispose of produced water in an environmentally safe manner.
Within our process and production equipment category, we produce customer lease automatic custody transfer (“LACT”) units, Zero2 TM EcoVapor TM and Sulfur Sentinel TM units to reduce greenhouse gas emissions.
We produce customer LACT units, Zero2 TM , EcoVapor TM and Sulfur Sentinel TM units to reduce greenhouse gas emissions. We provide a variety of field services to customers who lease from our fleet of Flex Flow, Trojan Rentals and EcoVapor TM branded pumps, automation and process units deployed to various process applications across a variety of sectors.
We employ advanced information technologies, including a common ERP platform across most of our business, to provide complete procurement, warehouse and inventory management and logistics coordination to our customers around the globe. Having a common ERP platform allows immediate visibility into our inventory assets, operations and financials worldwide, enhancing decision making and efficiency.
Where practical and cost effective, we deliver directly from our RDCs and super centers to the customer delivery location, supporting our efforts to consolidate inventory and increase working capital efficiency. We employ advanced information technologies, including ERP 8 business technology platforms, to provide complete procurement, warehouse and inventory management and logistics coordination to our customers around the world.
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Additionally, through our DigitalNOW® platform, customers can leverage technology across applications to solve a wide array of complex operational and product sourcing challenges to assist in maximizing their return on assets.
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We are a premier provider of energy and industrial solutions, serving as a global leader in the distribution of pipe, valves and fittings (“PVF”), and pumps, as well as in the fabrication, assembly and testing of process and production equipment.
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Our product and service offerings are consumed throughout the energy industry – from upstream drilling and completion, exploration and production (“E&P”), midstream transmission, gas and crude oil processing infrastructure development to downstream petroleum refining and petrochemicals – as well as in other industries, such as chemical processing, mining, water/wastewater, food and beverage, gas utilities and the evolution of energy transition markets inclusive of greenhouse gas reduction and emissions capture and storage, renewable fuels such as biofuels and renewable natural gas ("RNG"), wind, solar, production of hydrogen as a fuel to power equipment and select industrial markets.
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We provide a broad mix of quality products customers require to build and maintain essential infrastructure and operating equipment across the upstream, midstream, gas utilities, downstream, energy transition and industrial markets. We deliver a comprehensive range of value-added supply chain solutions and technical product expertise, supported by advanced digital offerings to customers globally.
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The energy and industrial distribution end markets we serve are inclusive of engineering and construction firms that perform capital and maintenance projects for their clients. We also provide supply chain and materials management solutions to the same markets where we sell products.
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On June 26, 2025, DNOW entered into an Agreement and Plan of Merger (the “Merger Agreement”) with MRC Global Inc. (“MRC Global”) in an all-stock transaction, inclusive of MRC Global’s debt. On November 6, 2025 (the “Closing Date”), DNOW completed its acquisition of MRC Global.
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Our global product offering includes pipe, manual and automated valves, fittings, flanges, gaskets, fasteners, electrical, instrumentation, artificial lift, pumping solutions and modular process, production, measurement, automation, control equipment, and consumable maintenance, repair and operating (“MRO”) supplies. We also offer sourcing, procurement, warehouse and inventory management solutions as part of our supply chain and materials management offering.
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See Note 20 “Acquisitions” of the Notes to Consolidated Financial Statements (Part IV, Item 15 of this Form 10-K) for additional information.
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We support land and offshore operations for the major oil and gas producing regions through our network of locations.
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Following the acquisition, we continue to leverage the existing brand equity, reputation and customer loyalty of MRC Global, including its MRCGO™ digital commerce platform and established supply chain and distribution leadership, while operating under DNOW corporate stewardship. 3 General We are a premier provider of energy and industrial solutions with a legacy of more than 160 years as a leading distributor of PVF, gas products, pumps, fabricated process and production equipment and a wide range of MRO consumables and related products.
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Our key markets include the United States ("U.S."), Canada, the United Kingdom ("UK"), Norway, Australia, the Netherlands, Singapore and the Middle East area with the ability to provide products through an export model to operators with operations in Southeast Asia and West Africa.
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We operate across diversified sectors of the energy value chain and industrial end-markets, including: • Upstream: exploration, production and extraction of oil and gas, as well as the use and disposal of produced water • Midstream: transmission and gathering infrastructure for processing and transmission of oil, gas or water • Gas Utilities: gas utilities (storage and distribution of natural gas) • Downstream and Industrial: downstream and industrial including crude oil refining, petrochemical and chemical processing, general industrials, pharmaceutical, mining, water/wastewater treatment, data centers, liquefied natural gas (“LNG”) terminals and renewable natural gas (“RNG”) facilities The distribution industry is highly fragmented, with both large global participants and numerous smaller regional and local competitors.
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Products sold through our locations support brownfield and greenfield expansion upstream capital projects, midstream infrastructure and transmission and MRO consumables used in day-to-day production.
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As a supply chain partner, we deliver value by managing vendor networks and aggregating, stocking and distributing a broad assortment of products from numerous manufacturers near customer operating locations. Across the energy and industrial markets, our customers rely on our extensive inventory, product expertise and comprehensive supply chain solutions for mission-critical process applications.
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We provide downstream energy and industrial 3 products for petroleum refining, chemical processing, liquefied natural gas (“LNG”) terminals, power generation, gas utilities serviced by a combination of customer on-site locations and off-site service locations in combination with our digital offerings. Our supplier network consists of thousands of vendors in approximately 30 countries.
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We offer an extensive portfolio of products, including PVF, gas products, valve automation, valve modification, gaskets, fasteners, electrical components, instrumentation, artificial lift, pumping systems, process and production equipment, production measurement technology, maintenance, repair and operating (“MRO”) consumables and a variety of both general and specialty products.
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From our operations, we sell to customers operating in approximately 80 countries. The supplies and equipment stocked by each of our locations are customized to meet varied and changing local customer demands. The breadth, scale and availability of our product offering enhances our value proposition to our customers, suppliers and shareholders.
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In the Upstream and Midstream sectors, we provide MRO consumables, safety and original equipment manufacturer (“OEM”) equipment to land drilling rigs, workover rigs and initial offshore drilling rig load-outs.
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U.S., Canada and International Operations Demand for our products is driven primarily by the level of oil and gas drilling, completions, servicing, production, transmission, refining and petrochemical activities. It is also influenced by the global supply and demand for energy, the economy in general and geopolitics.
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These offerings support the exploration, production, separation, storage, gathering and transportation of oil and gas, as well as the separation, treatment, storage and transfer of produced water. In the Gas Utilities sector, we provide a wide array of PVF, gas meters, instrumentation and measurement equipment and general products.
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Several factors drive spending, such as investment in energy infrastructure, the North American conventional and shale plays, Organization of Petroleum Exporting Countries (“OPEC”) and non-OPEC supply and investments, market expectations of future developments in the oil, natural gas, liquids, refined products, petrochemical, plant maintenance and other industrial, manufacturing and energy sectors.
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In the Downstream and Industrial sectors, we provide API valves to the refining, petrochemical, chemical and process industries in a variety of carbon steel, stainless steel, alloys and specialty and critical valve applications. In addition, we provide pipe, fittings and flanges in various metallurgies to meet customer requirements.
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We primarily have operations in the U.S. and Canada, complemented with a number of strategic international operations, through acquisitions and organic investments, in Australia, England, Kuwait, the Netherlands, Norway, Scotland, Singapore and the United Arab Emirates (“UAE”). Summary of Reportable Segments We operate through three reportable segments: United States (“U.S.”), Canada and International.
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We serve both land and offshore operations from a local presence in the United States (“U.S.”), Canada, the United Kingdom (“UK”), Europe, Australia, New Zealand, Singapore and the Middle East, and further extend our reach by exporting to regions such as Southeast Asia, Latin America and West Africa.
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Canada We have a network of approximately 40 locations in the Canadian oilfield, predominantly in the oil rich provinces of Alberta, Saskatchewan, and Manitoba. Our Canada segment primarily serves energy exploration, production, mining and drilling businesses, offering customers many of the same products and value-added solutions that we perform in the U.S.
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Our supplies and equipment offerings are tailored to meet the unique demands of local markets and customers' operations. In addition to supplying products, we provide sourcing, procurement, warehouse and inventory management solutions as part of our supply chain and materials management offering.
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In Canada, we also provide training for, and supervise the installation of, jointed and spoolable composite pipe.
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We seek to be the premier solutions provider to the energy and industrial markets by delivering best-in-class service, extensive product breadth, global scale, innovative supply chain solutions and the technical expertise required to support our customers' most complex, multi-site needs.
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For the year ended December 31, 2024, the Company recognized $9 million in charges, including approximately $6 million of foreign currency translation losses included in impairment and other charges, approximately $2 million of inventory write-downs included in cost of products and $1 million of other exit costs included in warehousing, selling and administrative.
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Our critical role in the supply chain, coupled with our broad product and service offerings, global presence, scalable information systems and efficient distribution capabilities, reinforces the long-standing strategic relationships we have built with our customers and supports our continued growth. 4 Business Strategy As a premier solutions provider, distributor of PVF, gas products, pumps, production and process solutions and other infrastructure and general products and services to diversified upstream, midstream, gas utility, downstream and industrial sectors, our strategy is focused on growth, creating efficiencies, targeted acquisitions and the development of long-term customer relationships.
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We could incur additional non-cash foreign currency translation losses as we complete the International restructuring; however, we do not expect the remaining restructuring related liabilities to be material. Distribution Industry Overview The distribution industry is highly fragmented, comprised of large companies with global reach and numerous small, local and regional competitors.
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Our strategic objectives are to: • execute the integration, create value and capture synergies from the MRC Global merger, • create value through successful acquisition integrations recognizing both revenue and cost synergies, • create scale through targeted mergers and acquisitions primarily in higher margin and higher growth markets, • generate robust cash flow and opportunistically return capital to shareholders, • diversify across resilient end-markets, • supply critical products to develop midstream infrastructure to support power demand driven by data centers, • invest in technology systems and distribution center infrastructure to achieve improved operational excellence, • safely and sustainably increase our efficiency and lower our operating costs to enhance our margins, • invest in efficient operations, • optimize our working capital, • continue our reach and expansion of digital interaction with new and existing customers through digital connections and e-commerce, • maintain superior customer service and, • provide our products and services to companies engaged in energy transition We conduct detailed account planning and educate potential customers on the product and service offerings and logistics services we provide.
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Distribution companies act both as supply stores and supply chain management providers for their customers. Distributors deliver value to their customers by serving as a supply chain partner by managing vendor networks and aggregating, carrying and distributing a wide range of product inventory from numerous vendors in locations close to the end-user.
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In addition, through digital system integration with our customers and suppliers, we believe transactions can be streamlined and lower the cost of transactions for both parties. We take a multi-faceted approach to expanding existing markets and accessing new markets. We seek to optimize our geographic footprint through organic investments, pursue strategic acquisitions and cultivate relationships with our existing customer base.
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As a distributor to the energy and industrial markets, we offer a wide array of products and supply chain services.
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We develop innovative supply chain solutions that enable us to consistently deliver the high-quality products that our customers require. By being a consistent and reliable supplier and innovative solution provider, we are able to maintain and grow our sales with both new and existing customers.
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We offer our products, services and supply chain solutions across the energy value chain, from onshore and offshore drilling of oil and gas, to the exploration and production of oil and gas, the separation, transfer, and disposal of produced water, to the midstream gathering, processing and transmission of oil, gas, water, natural gas liquids (“NGLs”), LNG, and refined petroleum products, to the downstream refining of oil, and the manufacturing of petrochemicals and specialty chemicals.
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We source from a diverse base of suppliers that allows us to strategically partner with the largest manufacturers of the products we distribute while simultaneously providing our customers with access to alternative sources of supply and high-quality products across the entire spectrum of their product needs. We continually evaluate, broaden and optimize our product and service offerings and supplier base.
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We provide products and services to the energy evolution and new energy markets driven by the public's desire to reduce greenhouse gas levels and emissions, and to replace higher sources of greenhouse gas emitting forms of energy with lower emitting alternative forms to produce energy.
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Sales and Marketing We distribute our products to a variety of end-users by leveraging a broad inventory offering and distribution network that allows us to serve large customers with consistent, high-quality service that is unrivaled in our industry.
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Once rigs are contracted, commissioned and deployed, we seek to replace material and inventory consumed during drilling operations. We couple the sale of products with supply chain services in the form of inventory planning, inventory management and warehouse management.
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Local relationships, depth and availability of inventory, responsive service and timely delivery are critical to the sales process in the energy and industrial distribution industry. Our sales efforts are customer and product driven and provide a system that is more responsive to changing customer and product needs than a traditional, fully centralized structure.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIn addition, any future acquisitions may entail significant transaction costs and risks associated with entry into new markets. 13 Even when acquisitions are completed, integration of acquired entities can involve significant difficulties, such as: • failure to achieve cost savings or other financial or operating objectives with respect to an acquisition; • complications and issues resulting from the integration/conversion of ERP systems; • strain on the operational and managerial controls and procedures of our business, and the need to modify systems or to add management resources; • difficulties in the integration and retention of customers or personnel and the integration and effective deployment of operations or technologies; • amortization of acquired assets, which would reduce future reported earnings; • possible adverse short-term effects on our cash flows or operating results; • diversion of management’s attention from the ongoing operations of our business; • integrating personnel with different organizational cultures; • coordinating sales and marketing functions; • failure to obtain and retain key personnel of an acquired business; and • assumption of known or unknown material liabilities or regulatory non-compliance issues.
Biggest changeEven when acquisitions are completed, integration of acquired entities can involve significant difficulties, such as: • failure to achieve cost savings or other financial or operating objectives with respect to an acquisition; • complications and issues resulting from the integration/conversion of ERP systems, including data-migration errors or loss of information, disruption across order-to-cash and procure-to-pay processes (for example, order entry, inventory visibility, shipping and receiving, invoicing and collections and vendor payments), instability of customer and supplier integrations, the need for manual workarounds, increased error rates and delays and the risk that anticipated benefits are delayed or not realized); • strain on the operational and managerial controls and procedures of our business, and the need to modify systems or to add management resources; • difficulties in the integration and retention of customers or personnel and the integration and effective deployment of operations or technologies; • amortization of acquired assets, which would reduce future reported earnings; • possible adverse short-term effects on our cash flows or operating results; • diversion of management’s attention from the ongoing operations of our business; • integrating personnel with different organizational cultures; • coordinating sales and marketing functions; • failure to obtain and retain key personnel of an acquired business; and • assumption of known or unknown material liabilities or regulatory non-compliance issues.
These include provisions: • providing our Board of Directors with the right to issue preferred stock without stockholder approval; • prohibiting stockholders from taking action by written consent; • restricting the ability of our stockholders to call a special meeting; • providing that the number of directors will be filled by the Board of Directors and vacancies on the Board of Directors, including those resulting from an enlargement of the Board of Directors, will be filled by the Board of Directors; • requiring cause and an affirmative vote of at least 80 percent of the voting power of the then-outstanding voting stock to remove directors; • requiring the affirmative vote of at least 80 percent of the voting power of the then-outstanding voting stock to amend certain provisions of our certificate of incorporation and bylaws; and • establishing advance notice requirements for nominations of candidates for election to our Board of Directors or for stockholder proposals.
These include provisions: • providing our Board of Directors with the right to issue preferred stock without stockholder approval; • prohibiting stockholders from taking action by written consent; 29 • restricting the ability of our stockholders to call a special meeting; • providing that the number of directors will be filled by the Board of Directors and vacancies on the Board of Directors, including those resulting from an enlargement of the Board of Directors, will be filled by the Board of Directors; • requiring cause and an affirmative vote of at least 80 percent of the voting power of the then-outstanding voting stock to remove directors; • requiring the affirmative vote of at least 80 percent of the voting power of the then-outstanding voting stock to amend certain provisions of our certificate of incorporation and bylaws; and • establishing advance notice requirements for nominations of candidates for election to our Board of Directors or for stockholder proposals.
We face the following risks with respect to our insurance coverage: • we may not be able to continue to obtain insurance on commercially reasonable terms; 18 • we may incur losses from interruption of our business that exceed our insurance coverage; • we may be faced with types of liabilities that will not be covered by our insurance; • our insurance carriers may not be able to meet their obligations under the policies; or • the dollar amount of any liabilities may exceed our policy limits.
We face the following risks with respect to our insurance coverage: • we may not be able to continue to obtain insurance on commercially reasonable terms; • we may incur losses from interruption of our business that exceed our insurance coverage; • we may be faced with types of liabilities that will not be covered by our insurance; • our insurance carriers may not be able to meet their obligations under the policies; or • the dollar amount of any liabilities may exceed our policy limits.
Our failure to comply with 17 applicable environmental, health and safety requirements could result in fines, penalties, enforcement actions, third-party claims for property damage and personal injury, requirements to clean up property or to pay for the costs of cleanup or regulatory or judicial orders requiring corrective measures, including the installation of pollution control equipment or remedial actions.
Our failure to comply with applicable environmental, health and safety requirements could result in fines, penalties, enforcement actions, third-party claims for property damage and personal injury, requirements to clean up property or to pay for the costs of cleanup or regulatory or judicial orders requiring corrective measures, including the installation of pollution control equipment or remedial actions.
As a result of doing business in foreign countries and with foreign partners, we are exposed to a heightened risk of violating anti-corruption and trade control laws and sanctions regulations. 19 The FCPA prohibits us from providing anything of value to foreign officials for the purposes of obtaining or retaining business or securing any improper business advantage.
As a result of doing business in foreign countries and with foreign partners, we are exposed to a heightened risk of violating anti-corruption and trade control laws and sanctions regulations. The FCPA prohibits us from providing anything of value to foreign officials for the purposes of obtaining or retaining business or securing any improper business advantage.
While tariffs and other retaliatory trade measures imposed by other countries on U.S. goods have not yet had a significant impact on our business or results of operations, we cannot predict further developments, and such existing or future tariffs could have a material adverse effect on our results of operations, financial position and cash flows.
While tariffs and other retaliatory trade measures imposed by other countries on U.S. goods have not yet had a significant impact on our 25 business or results of operations, we cannot predict further developments, and such existing or future tariffs could have a material adverse effect on our results of operations, financial position and cash flows.
These or other developments that remove us from, or limit our role in, the distribution chain, may harm our competitive position in the marketplace and reduce our sales and earnings and adversely affect our business. 12 We may need additional capital in the future, and it may not be available on acceptable terms, or at all.
These or other developments that remove us from, or limit our role in, the distribution chain, may harm our competitive position in the marketplace and reduce our sales and earnings and adversely affect our business. We may need additional capital in the future, and it may not be available on acceptable terms, or at all.
Examples of risks inherent in conducting business in markets outside of the U.S. and Canada include: • changes in the political and economic conditions in the countries in which we operate, including civil uprisings and terrorist acts; • unexpected changes in regulatory requirements; • changes in tariffs; • the adoption of foreign or domestic laws limiting exports to or imports from certain foreign countries; • fluctuations in currency exchange rates and the value of the U.S. dollar; • restrictions on repatriation of earnings; • expropriation of property without fair compensation; • governmental actions that result in the deprivation of contract or proprietary rights; and • the acceptance of business practices which are not consistent with or are antithetical to prevailing business practices we are accustomed to in North America including export compliance and anti-bribery practices and governmental sanctions.
Examples of risks inherent in conducting business in markets outside of the U.S. and Canada include: • changes in the political and economic conditions in the countries in which we operate, including civil uprisings and terrorist acts; • unexpected changes in regulatory requirements; • changes in tariffs and duties; • the adoption of foreign or domestic laws limiting exports to or imports from certain foreign countries; • fluctuations in currency exchange rates and the value of the U.S. dollar; • restrictions on repatriation of earnings; • expropriation of property without fair compensation; 27 • governmental actions that result in the deprivation of contract or proprietary rights; and • the acceptance of business practices which are not consistent with or are antithetical to prevailing business practices we are accustomed to in North America including export compliance and anti-bribery practices and governmental sanctions.
Stock markets in general have also experienced volatility that has often been unrelated to the operating performance of a particular company. These broad market fluctuations could negatively affect the trading price of our common stock. 20 Your percentage ownership in us may be diluted in the future.
Stock markets in general have also experienced volatility that has often been unrelated to the operating performance of a particular company. These broad market fluctuations could negatively affect the trading price of our common stock. Your percentage ownership in us may be diluted in the future.
However, these provisions apply even if the offer may be considered beneficial by some stockholders and could delay or prevent an acquisition that our Board of Directors determines is not in the best interests of our company and our stockholders. 21 ITEM 1B. UNRESOLVED STAFF COMMENTS None.
However, these provisions apply even if the offer may be considered beneficial by some stockholders and could delay or prevent an acquisition that our Board of Directors determines is not in the best interests of our company and our stockholders. ITEM 1B. UNRESOLVED STAFF COMMENTS None.
In addition, the United Kingdom Bribery Act (the “Bribery Act”) extends beyond bribery of foreign public officials and also apply to transactions with individuals that a government does not employ. The provisions of the Bribery Act are also more onerous than the FCPA in a number of other respects, including jurisdiction, non-exemption of facilitation payments and penalties.
In addition, the United Kingdom Bribery Act (the “Bribery Act”) extends beyond bribery of foreign public officials and also applies to transactions with individuals that a government does not employ. The provisions of the Bribery Act are also more onerous than the FCPA in a number of other respects, including jurisdiction, non-exemption of facilitation payments and penalties.
We have experienced in the past, and we will likely experience in the future, significant fluctuations in operating results based on these changes. 11 General economic and geopolitical conditions may adversely affect our business. U.S. and global general economic conditions affect many aspects of our business, including demand for the products we distribute and the pricing and availability of supplies.
We have experienced in the past, and we will likely experience in the future, significant fluctuations in operating results based on these changes. 16 General economic and geopolitical conditions may adversely affect our business. U.S. and global general economic conditions affect many aspects of our business, including demand for the products we distribute and the pricing and availability of supplies.
The implementation of these agreements, including the Paris Agreement, the Europe Climate Law, and other existing or future regulatory mandates, may adversely affect the demand for our products and services, impose taxes on us or our customers, require us or our customers to reduce GHG emissions from our technologies or operations, or accelerate the obsolescence of our products or services.
The implementation of these agreements, including the Paris Agreement, the European Climate Law, and other existing or future regulatory mandates, may adversely affect the demand for our products and services, impose taxes on us or our customers, require us or our customers to reduce GHG emissions from our technologies or operations, or accelerate the obsolescence of our products or services.
Many factors affect the supply of and demand for energy and, therefore, influence oil and natural gas prices, including: • the level of domestic and worldwide oil and natural gas production and inventories; • the level of drilling activity and the availability of attractive oil and natural gas field prospects, which governmental actions may affect, such as regulatory actions or legislation, or other restrictions on drilling, including those related to environmental concerns (e.g., a temporary moratorium on deepwater drilling in the Gulf of Mexico following a rig accident or oil spill); • the discovery rate of new oil and natural gas reserves and the expected cost of developing new reserves; • the actual cost of finding and producing oil and natural gas; • depletion rates; • domestic and worldwide refinery over capacity or under capacity and utilization rates; • the availability of transportation infrastructure and refining capacity; • increases in the cost of products that the oil and gas industry uses, such as those that we provide, which may result from increases in the cost of raw materials such as steel; • shifts in end-customer preferences toward fuel efficiency and the use of natural gas; • the economic or political attractiveness of alternative fuels, such as coal, hydrocarbon, battery power, wind, solar energy and biomass-based fuels; • increases in oil and natural gas prices or historically high oil and natural gas prices, which could lower demand for oil and natural gas products; • worldwide economic activity including growth in non-Organization for Economic Co-operation and Development countries, including China and India; • increased interest rates and the cost of capital; • national government policies, including government policies that could nationalize or expropriate oil and natural gas, E&P, refining or transportation assets; • the ability of OPEC and non-OPEC countries to set and maintain production levels and prices for oil; • the level of production by non-OPEC countries; • the impact of armed hostilities, or the threat or perception of armed hostilities; • public health crises, such as the emergence of any new virus strains that result in the return of lockdowns or other government restrictions; • environmental regulation; • import duties and tariffs; • technological advances; • global weather conditions and natural disasters; • currency fluctuations; and • tax policies.
Any such reduction in operating budgets, reduction in activity and/or pricing pressures, would adversely affect our revenue and operating performance. 15 Many factors affect the supply of and demand for energy and, therefore, influence oil and natural gas prices, including: • the level of domestic and worldwide oil and natural gas production and inventories; • the level of drilling activity and the availability of attractive oil and natural gas field prospects, which governmental actions may affect, such as regulatory actions or legislation, or other restrictions on drilling, including those related to environmental concerns (e.g., a temporary moratorium on deepwater drilling in the Gulf of Mexico following a rig accident or oil spill); • the discovery rate of new oil and natural gas reserves and the expected cost of developing new reserves; • the actual cost of finding and producing oil and natural gas; • depletion rates; • domestic and worldwide refinery over capacity or under capacity and utilization rates; • the availability of transportation infrastructure and refining capacity; • increases in the cost of products that the oil and gas industry uses, such as those that we provide, which may result from increases in the cost of raw materials such as steel; • shifts in end-customer preferences toward fuel efficiency and the use of natural gas; • the economic or political attractiveness of alternative fuels, such as coal, hydrocarbon, battery power, wind, solar energy and biomass-based fuels; • increases in oil and natural gas prices or historically high oil and natural gas prices, which could lower demand for oil and natural gas products; • worldwide economic activity including growth in non-Organization for Economic Co-operation and Development countries, including China and India; • increased interest rates and the cost of capital; • national government policies, including government policies that could nationalize or expropriate oil and natural gas, E&P, refining or transportation assets; • the ability of OPEC and non-OPEC countries to set and maintain production levels and prices for oil; • the level of production by non-OPEC countries; • the impact of armed hostilities, or the threat or perception of armed hostilities; • public health crises, such as the emergence of any new virus strains that result in the return of lockdowns or other government restrictions; • environmental regulation; • import duties and tariffs; • technological advances; • global weather conditions and natural disasters; • currency fluctuations; and • tax policies.
As of December 31, 2024, we had $230 million of goodwill recorded on our balance sheet. Under generally accepted accounting principles in the U.S., goodwill is not amortized, but must be reviewed for possible impairment annually, or more often in certain circumstances where events indicate that the asset values are not recoverable.
As of December 31, 2025, we had $617 million of goodwill recorded on our balance sheet. Under generally accepted accounting principles in the U.S., goodwill is not amortized, but must be reviewed for possible impairment annually, or more often in certain circumstances where events indicate that the asset values are not recoverable.
Compliance with and changes in laws and regulations in the countries in which we operate could have a significant financial impact and effect how and where we conduct our operations.
Compliance with and changes in laws and regulations in the countries in which we operate could have a significant financial impact and affect how and where we conduct our operations.
Changes that could have a significant cost to us include new legislation, new regulations, or a differing interpretation of existing laws and regulations, changes in tax law or tax rates, the unfavorable resolution of tax assessments or audits by various taxing authorities, the expansion of currency exchange controls, export controls or additional restrictions on doing business in countries subject to sanctions in which we operate or intend to operate.
Changes that could have a significant cost to us include new legislation, new regulations, or a differing interpretation of existing laws and regulations, changes in tax law or tax rates, the unfavorable resolution of tax assessments or audits by various taxing authorities, the expansion of currency exchange controls, export controls or additional restrictions on doing business in countries subject to sanctions in which we operate or intend to operate. 28 We are a defendant in asbestos-related lawsuits.
Also, decreases in the market prices of products that we sell could cause customers to demand lower sales prices from us. These price reductions could reduce our margins and profitability on sales with respect to the lower-priced products.
Also, decreases in the market prices of products that we sell could cause customers to demand lower sales prices from us. These price reductions could reduce our margins and profitability on sales with respect to the lower-priced products. Reductions in our margins and profitability on sales could have a material adverse effect on us.
If any of these risks were realized, we could experience interruptions in supply or increases in costs that might result in our being unable to meet customer demand for our products and services, damage our relationships with our customers and reduce our market share, all of which could adversely affect our results of operations and financial condition.
If any of these risks were realized, we could experience interruptions in supply or increases in costs that might result in our being unable to meet customer demand for our products and services, damage our relationships with our customers and reduce our market share, all of which could adversely affect our results of operations and financial condition. 26 We may not have adequate insurance for potential liabilities, including liabilities arising from litigation.
In addition, certain foreign jurisdictions and government-owned petroleum companies located in some of the countries in which we operate have adopted policies or regulations which may give local nationals in these countries competitive advantages. Competition in our industry could lead to lower revenues and earnings.
In addition, certain foreign jurisdictions and government-owned petroleum companies located in some of the countries in which we operate have adopted policies or regulations which may give local nationals in these countries competitive advantages.
The price for West Texas Intermediate crude was $73.79 per barrel at January 2, 2025, $70.62 per barrel on January 2, 2024 and $76.87 per barrel on January 3, 2023.
The price for West Texas Intermediate crude was $57.21 per barrel at January 2, 2026, $73.79 per barrel on January 2, 2025 and $70.62 per barrel on January 2, 2024.
Changes in our customer mix may result from business acquisitions, geographic expansion, daily selling activities within current geographic markets and targeted selling activities to new customer segments. Changes in our product mix may result from business acquisitions, marketing activities to existing customers and needs communicated to us from existing and prospective customers.
Changes in our customer mix may result from business acquisitions, geographic expansion, routine selling activities within existing markets and targeted efforts to reach new customer segments. Product mix changes may also arise from acquisitions, marketing initiatives and evolving needs communicated by existing and prospective customers.
Given the large dollar amounts and volume of our purchases from suppliers, a change in payment terms may have a material adverse effect on our liquidity and our ability to make payments to our suppliers and, consequently, may have a material adverse effect on us.
Given the large dollar amounts and volume of our purchases from suppliers, a change in payment terms may have a material adverse effect on our liquidity and our ability to make payments to our suppliers and, consequently, may have a material adverse effect on us. 24 Price reductions by suppliers of products that we sell could cause the value of our inventory to decline.
Any sustained decrease in capital expenditures in the oil and natural gas industry could have a material adverse effect on us. 10 Prices for oil and natural gas are subject to large fluctuations in response to relatively minor changes in the supply of and demand for oil and natural gas, market uncertainty and a variety of other factors that are beyond our control.
Prices for oil and natural gas are subject to large fluctuations in response to relatively minor changes in the supply of and demand for oil and natural gas, market uncertainty and a variety of other factors that are beyond our control.
One of our key operating strategies is to selectively pursue acquisitions, including large scale acquisitions, to continue to grow and increase profitability.
We may be unable to successfully execute or effectively integrate acquisitions. One of our key operating strategies is to selectively pursue acquisitions, including large scale acquisitions, to continue to grow and increase profitability.
Nevertheless, in the future we may have difficulty obtaining the products we need from suppliers and manufacturers as a result of unexpected demand or production difficulties that might extend lead times. Also, products may not be available to us in quantities sufficient to meet our customer demand.
We distribute products from a wide variety of manufacturers and suppliers. Nevertheless, in the future we may have difficulty obtaining the products we need from suppliers and manufacturers as a result of unexpected demand or production difficulties that might extend lead times.
Oil and natural gas prices have been and are expected to remain volatile. U.S. rig count decreased from 621 rigs on January 5, 2024 to 589 rigs on December 27, 2024. U.S. rig count averaged 599 rigs in 2024. U.S. rig count at January 24, 2025 was 576 rigs.
Oil and natural gas prices have been and are expected to remain volatile. U.S. rig count decreased from 589 rigs on January 3, 2025 to 546 rigs on December 30, 2025. U.S. rig count averaged 561 rigs in 2025.
If there is a significant reduction in demand for drilling services, in cash flows of drilling contractors, well servicing companies or production companies, or in drilling or well servicing rig utilization rates, then demand for our products will decline. Volatile oil and gas prices affect demand for our products.
If there is a significant reduction in demand for drilling services, in cash flows of drilling contractors, well servicing companies or production companies, or in drilling or well servicing rig utilization rates, then demand for our products will decline. Demand for our gas utilities products and services depends on our customers’ capital investment programs, which may be reduced or delayed.
If customers were to purchase the products that we sell directly from manufacturers, or if manufacturers sought to increase their efforts to sell directly to end-users, we could experience a significant decrease in profitability.
Historically, users of pipes, valves and fittings and related products have purchased certain amounts of these products through distributors and not directly from manufacturers. If customers were to purchase the products that we sell directly from manufacturers, or if manufacturers sought to increase their efforts to sell directly to end-users, we could experience a significant decrease in profitability.
As a result, the price and supply of steel can affect our business and, in particular, our pipe product category. When steel prices are lower, the prices that we charge customers for products may decline, which affects our product margin and cash flow.
When steel prices are lower, the prices that we charge customers for products may decline, which affects our product margin and cash flow.
The following competitive actions can each adversely affect our revenues and earnings: • price changes; • vendors with better terms; • consolidation in the industry; • investments in technology and fulfillment; and • improvements in availability and delivery.
Certain of these competitors may have greater financial, technical and marketing resources than us, and may be in a better competitive position. The following competitive actions can each adversely affect our revenues and earnings: • price changes; • vendors with better terms; • consolidation in the industry; • investments in technology and fulfillment; and • improvements in availability and delivery.
Any such breach or unauthorized access could result in significant legal and financial exposure, damage to our reputation, and potentially have an adverse effect on our business and results of operations. 15 We have goodwill recorded on our balance sheet. If our goodwill becomes impaired, we may be required to recognize charges that would reduce our income.
Any such breach or unauthorized access could result in significant legal and financial exposure, damage to our reputation, and potentially have an adverse effect on our business and results of operations.
Additionally, these economic variables could lead to a renegotiation of contracts and/or supply agreements, among others. These economic variables are beyond our control and may adversely impact our business, financial condition, results of operations and future cash flows. We may be unable to compete successfully with other companies in our industry. We sell products in very competitive markets.
Additionally, these economic variables could lead to a renegotiation of contracts and/or supply agreements, among others. These economic variables are beyond our control and may adversely impact our business, financial condition, results of operations and future cash flows. We may be adversely impacted by holding more inventory than can be sold in a commercial time frame.
While we maintain reserves for expected credit losses, we cannot assure these reserves will be sufficient to meet write-offs of uncollectible receivables or that our losses from such receivables will be consistent with our expectations. We may be unable to successfully execute or effectively integrate acquisitions.
We perform ongoing credit evaluations of our customers and do not generally require collateral in support of our trade receivables. While we maintain reserves for expected credit losses, we cannot assure these reserves will be sufficient to meet write-offs of uncollectible receivables or that our losses from such receivables will be consistent with our expectations.
We depend on our information management systems to process orders, track credit risk, manage inventory and monitor accounts receivable collections. Our information systems also allow us to efficiently purchase products from our vendors and ship products to our customers on a timely basis, maintain cost-effective operations and provide superior service to our customers.
The proper functioning of our information systems is critical to the successful operation of our business. We increasingly rely on complex information technology systems and third-party service providers to process orders, track credit risk, manage inventory, monitor accounts receivable collections, purchase products from our vendors, ship products to our customers on a timely basis and maintain cost-effective operations.
Changes in trade policies, including the imposition or elimination of additional tariffs and duties, could negatively impact our business, financial condition and results of operations. The U.S. government has continued to impose Section 232 tariffs, Section 301 tariffs and various dumping duties on steel and aluminum and a broad range of other products imported into the U.S.
The U.S. government has continued to impose Section 232 tariffs, Section 301 tariffs and various dumping duties on steel and aluminum and a broad range of other products imported into the U.S. Changes in tariffs and duties affect our material input costs. These tariffs and duties are subject to change.
Demand for our sales of the products we distribute could decrease if the manufacturers of those products were to instead sell a substantial amount of goods directly to our customers in the sectors we serve. Historically, users of pipes, valves and fittings and related products have purchased certain amounts of these products through distributors and not directly from manufacturers.
Competition in our industry could lead to lower revenues and earnings. 17 Demand for our sales of the products we distribute could decrease if the manufacturers of those products were to instead sell a substantial amount of goods directly to our customers in the sectors we serve.
Reductions in our margins and profitability on sales could have a material adverse effect on us. 16 A substantial decrease in the price of steel could significantly lower our product margin or cash flow. We distribute many products manufactured from steel.
A substantial decrease in the price of steel could significantly lower our product margin or cash flow. We distribute many products manufactured from steel. As a result, the price and supply of steel can affect our business and, in particular, our pipe product category.
In some cases, we compete with large companies with substantial resources. In other cases, we compete with smaller regional companies that may increasingly be willing to provide similar products at lower prices. Certain of these competitors may have greater financial, technical and marketing resources than us, and may be in a better competitive position.
We may be unable to compete successfully with other companies in our industry. We sell products in very competitive markets. In some cases, we compete with large companies with substantial resources. In other cases, we compete with smaller regional companies that may increasingly be willing to provide similar products at lower prices.
In addition, there could be additional trade actions or rate increases imposed by the U.S. and these could also result in additional retaliatory actions by the U.S.’ trade partners.
If these tariffs or duties were removed or adjusted down, it could drive down the costs of certain products and affect our inventory value which could affect our margin negatively. In addition, there could be additional trade actions or rate increases imposed by the U.S. and these could also result in additional retaliatory actions by the U.S.’ trade partners.
Changes in our customer and product mix could cause our product margin to fluctuate or affect our competitive position. From time to time, we may experience changes in our customer mix or in our product mix.
Changes in our customer and product mix, as well as the timing, complexity and cyclical nature of our project-based work, could cause our margins and operating results to fluctuate and adversely affect our competitive position. From time to time, we may experience changes in our customer mix and product mix.
Given that we procure significant materials that we resell directly or indirectly from outside of the U.S., potential changes in U.S. trade policy could increase the cost or limit the availability of such raw materials, which could hurt our competitive position and adversely impact our business, financial condition and results of operations.
In addition, support for protectionism and rising anti-globalization sentiment in the U.S. and in other countries could lead to cost increases or limit the availability of such raw materials, which could hurt our competitive position and adversely impact our business, financial condition and results of operations.
These reviews could result in an earnings charge for impairment, which would reduce our net income even though there would be no impact on our underlying cash flow. Risks Relating to Our Supply Chain and International Trade Policies We may experience unexpected supply shortages. We distribute products from a wide variety of manufacturers and suppliers.
These reviews could result in an earnings charge for impairment, which would reduce our net (loss) income even though there would be no impact on our underlying cash flow. Our indebtedness may affect our ability to operate our business, and this could have a material adverse effect on us. We have now and will likely continue to have indebtedness.
The loss of third-party transportation providers upon whom we depend, or conditions negatively affecting the transportation industry, could increase our costs or cause a disruption in our operations. We depend upon third-party transportation providers for delivery of products to our customers.
We depend upon third-party transportation providers for delivery of products to our customers.
Increasing volatility in financial markets may cause these factors to change with a greater degree of frequency or increase in magnitude. In addition, worldwide economic conditions could have an adverse effect on our business, prospects, operating results, financial condition and cash flows.
Currency volatility could also affect the valuation of inventory and receivables and complicate working capital management. In addition, worldwide economic conditions could have an adverse effect on our business, prospects, operating results, financial condition and cash flows.
Failure to manage these acquisition risks could have an adverse effect on us. We are a holding company and depend upon our subsidiaries for our cash flow. We are a holding company. Our subsidiaries conduct all of our operations and own substantially all of our assets.
We are a holding company. Our subsidiaries conduct all of our operations and own substantially all of our assets.
If customers begin to require more lower-margin products from us, our business, results of operations and financial condition may suffer. Customer credit risks could result in losses. The concentration of our customers in the energy industry may impact our overall exposure to credit risk as customers may be similarly affected by prolonged changes in economic and industry conditions.
The concentration of our customers in the energy industry may impact our overall exposure to credit risk as customers may be similarly affected by prolonged changes in economic and industry conditions. Further, laws in some jurisdictions in which we operate could make collection difficult or time consuming.
Price reductions by suppliers of products that we sell could cause the value of our inventory to decline.
Such a loss may have an adverse effect on our product offerings and our business. • Changes in our credit profile may affect our relationship with our suppliers, which could have a material adverse effect on our liquidity. • Price reductions by suppliers of products that we sell could cause the value of our inventory to decline.
Even though the prices as of the beginning of January for the last three years have been relatively stable, prices have historically been very volatile, and this historical volatility has caused oil and natural gas companies to change their strategies and expenditure levels from year to year.
As seen in January 2026 as compared to January 2025, there was a decrease of $16.58, or 22%, indicating the price volatility and this historical volatility has caused oil and natural gas companies to change their strategies and expenditure levels from year to year.
Risks Relating to Our Business Decreased capital and other expenditures in the energy industry, which can result from decreased oil and natural gas prices, among other things, can adversely impact our customers’ demand for our products and our revenue.
Risks Relating to Our Common Stock • The market price of our shares may fluctuate widely. • Your percentage ownership in us may be diluted in the future. • We cannot assure you that we will pay dividends on our common stock. • Certain provisions in our corporate documents and Delaware law may prevent or delay an acquisition of our company, even if that change may be considered beneficial by some of our stockholders. 14 Risks Relating to Our Business Decreased capital and other expenditures in the energy industry, which can result from decreased oil and natural gas prices, among other things, can adversely impact our customers’ demand for our products and our revenue.
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Any such reduction in operating budgets, reduction in activity and/or pricing pressures, would adversely affect our revenue and operating performance.
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Risk Factors Summary The following is a summary of the certain risks that we believe apply to our business and the industry in which we operate: Risks Relating to Our Business • Decreased capital and other expenditures in the energy industry, which can result from decreased oil and natural gas prices, among other things, can adversely impact our customers’ demand for our products and our revenue. • Demand for our gas utilities products and services depends on our customers’ capital investment programs, which may be reduced or delayed. • Volatile oil and gas prices affect demand for our products. • General economic and geopolitical conditions may adversely affect our business. • If our product costs became subject to significant future inflationary pressures, then we may not be able to fully offset these higher costs through price increases. • We may be adversely impacted by holding more inventory than can be sold in a commercial time frame. • We may be unable to compete successfully with other companies in our industry. • Demand for our sales of the products we distribute could decrease if the manufacturers of those products were to instead sell a substantial amount of goods directly to our customers in the sectors we serve. • We may need additional capital in the future, and it may not be available on acceptable terms, or at all. • We do not have long-term contracts or agreements with many of our customers.
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Further, laws in some jurisdictions in which we operate could make collection difficult or time consuming. We perform ongoing credit evaluations of our customers and do not generally require collateral in support of our trade receivables.
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The contracts and agreements that we do have generally do not commit our customers to any minimum purchase volume.
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We may be unsuccessful in attracting, hiring, training and retaining qualified personnel. Interruptions in the proper functioning of our information systems could disrupt operations and cause increases in costs or decreases in revenues. The proper functioning of our information systems is critical to the successful operation of our business.
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The loss of a significant customer may have a material adverse effect on us. • Changes in our customer and product mix, as well as the timing, complexity and cyclical nature of our project-based work, could cause our margins and operating results to fluctuate and adversely affect our competitive position. • Customer credit risks could result in losses. • We may be unable to successfully execute or effectively integrate acquisitions. • We may continue to experience challenges with the stabilization of the U.S.
Removed
However, our information systems could be vulnerable to natural disasters, power losses, telecommunication failures, security breaches and other problems.
Added
ERP system inherited from MRC Global. • We are a holding company and depend upon our subsidiaries for our cash flow. • If we lose any of our key personnel, we may be unable to effectively manage our business or continue our growth. • Interruptions in the proper functioning of our information systems, including as a result of cyber incidents, deficiencies in our cybersecurity or disruptions involving third-party service providers, could compromise data, disrupt operations, impair financial reporting, expose us to liability and regulatory scrutiny, and adversely affect our financial results and the market price of our stock. • The loss of third-party transportation providers upon whom we depend, or conditions negatively affecting the transportation industry, could increase our costs or cause a disruption in our operations. • Adverse weather events or natural disasters could negatively affect local economies and disrupt operations. • Privacy concerns relating to our personal and business information being potentially breached could damage our reputation and deter current and potential users or customers from using our products and services. • We have goodwill recorded on our balance sheet.
Removed
If critical information systems fail or are otherwise unavailable, our ability to procure products to sell, process and ship customer orders, identify business opportunities, maintain proper levels of inventories, collect accounts receivable and pay accounts payable and expenses could be adversely affected. Our ability to integrate our systems with our customers’ systems would also be significantly affected.
Added
If our goodwill becomes impaired, we may be required to recognize charges that would reduce our income. • Our indebtedness may affect our ability to operate our business, and this could have a material adverse effect on us.
Removed
If our information systems are damaged or fail to function properly, we may incur substantial costs to repair or replace them, and may experience loss of critical data and interruptions or delays in our ability to manage inventories or process transactions, which could result in lost sales, inability to process purchase orders and/or a potential loss of customer loyalty, which could adversely affect our results of operations.
Added
Risks Relating to the MRC Global Merger • We may not be able to successfully integrate the business of MRC Global into our business or realize the anticipated benefits of the mergers. • MRC Global may initially operate outside our existing control environment, and delays in integrating their systems and processes could expose us to control deficiencies and financial reporting risks. 13 • The failure to successfully combine the businesses of DNOW and MRC Global may adversely affect our business. • The future results of DNOW following the merger will suffer if the combined company does not effectively manage its expanded operations. • The financial forecasts disclosed in connection with the merger are based on various assumptions that may not be realized. • The combined company’s ability to use the existing U.S. federal capital loss carryforwards, net operating loss carryforwards and other tax attributes could be limited.
Removed
We maintain information systems controls designed to protect against, among other things, unauthorized 14 program changes and unauthorized access to data on our information systems. If our information systems controls do not function properly, we face increased risks of unexpected errors and unreliable financial data or theft of proprietary Company information.
Added
Risks Relating to Our Supply Chain and International Trade Policies • We may experience unexpected supply shortages. • We may experience cost increases from suppliers, which we may be unable to pass on to our customers. • We do not have contracts with most of our suppliers.
Removed
The occurrence of cyber incidents, or a deficiency in our cybersecurity, could negatively impact our business by causing a disruption to our operations, a compromise or corruption of our confidential information or damage to our Company’s image, all of which could negatively impact our financial results.
Added
The loss of a significant supplier would require us to rely more heavily on our other existing suppliers or to develop relationships with new suppliers.
Removed
A cyber incident is any adverse event that threatens the confidentiality, integrity, or availability of our information resources. More specifically, a cyber incident is an intentional attack or an unintentional event that can include gaining unauthorized access to systems to disrupt operations, corrupt data or steal confidential information.
Added
Also, these price reductions could cause our customers to demand lower sales prices for these products, possibly decreasing our margins and profitability on sales to the extent that we purchased our inventory of these products at the higher prices prior to supplier price reductions. • A substantial decrease in the price of steel could significantly lower our product margin or cash flow. • If steel prices rise, we may be unable to pass along the cost increases to our customers. • If existing tariffs and duties on imports of line pipe or certain of the other products that we sell are lifted, the U.S. market could see an increased supply of less expensive products, which could adversely affect our business and results of operations. • Changes in trade policies, including the imposition or elimination of additional tariffs and duties, and risks with governmental instability in certain parts of the world could negatively impact our business, financial condition and results of operations.
Removed
As our reliance on technology has increased, so have the risks posed to our systems, both internal and those we have outsourced. In addition, the rapid evolution and increased adoption of artificial intelligence technologies may intensify our cybersecurity risks.
Added
Risks Relating to Legal and Regulatory Matters • We are subject to strict environmental, health and safety laws and regulations that may lead to significant liabilities and have a material adverse effect on our business, financial condition and results of operations. • Existing or future laws, regulations, court orders or other public- or private-sector initiatives to limit greenhouse gas emissions or relating to climate change may reduce demand for our products and services and the physical effects of climate change could damage our assets or facilities, adversely impacting our business, results of operations, and financial condition. • We may not have adequate insurance for potential liabilities, including liabilities arising from litigation. • Due to our position as a distributor, we are subject to personal injury, product liability and environmental claims involving allegedly defective products. • We face risks associated with conducting business in markets outside of the U.S. and Canada. • We are subject to U.S. and other anti-corruption laws, trade controls, economic sanctions, and similar laws and regulations, including those in the jurisdictions where we operate.
Removed
Our four primary risks that could directly result from the occurrence of a cyber incident include operational interruption, damage to our Company’s image, financial loss and private data exposure.
Added
Our failure to comply with these laws and regulations could subject us to civil, criminal and administrative penalties and harm our reputation. • Compliance with and changes in laws and regulations in the countries in which we operate could have a significant financial impact and affect how and where we conduct our operations. • We are a defendant in asbestos-related lawsuits.
Removed
We have implemented solutions, processes, and procedures to help mitigate this risk, but these measures, as well as our organization’s increased awareness of our risk of a cyber incident, do not guarantee that our financial results will not be negatively impacted by such an incident.
Added
Exposure to these and any future lawsuits could have a material adverse effect on us.
Removed
Our security measures may be undermined due to the rapid evolution and increased adoption of artificial intelligence and machine learning technologies, actions of outside parties, employee error, internal or external malfeasance, or otherwise, and, as a result, an unauthorized party may obtain access to our data systems and misappropriate business and personal information.
Added
Gas utilities must obtain regulatory approval for many infrastructure and maintenance projects. As a result, our revenues depend in part on the timing and magnitude of our customers’ capital expenditure programs. Regulatory delays, adverse rate case outcomes, political considerations, or changes in economic conditions may cause utilities to postpone, scale back, or cancel projects.
Removed
Our systems are subject to repeated attempts by third parties to access information or to disrupt our systems. Such disruptions or misappropriations and the resulting repercussions, including reputational damage and legal claims or proceedings, may adversely affect our results of operations, cash flows and financial condition, and the trading price of our common stock.
Added
Any such reductions or delays could reduce demand for our products and services and materially adversely affect our business. Volatile oil and gas prices affect demand for our products.
Removed
Changes in tariffs and duties affect our material input costs. These tariffs and duties are subject to change. If these tariffs or duties were removed or adjusted down, it could drive down the costs of certain products and affect our inventory value which could affect our margin negatively.
Added
Any sustained decrease in capital expenditures in the oil and natural gas industry could have a material adverse effect on us.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeNo unauthorized access to customer, vendor, supplier, joint venture, employee or our data occurred as a result of cybersecurity incidents against us that has had a material adverse effect on our business, operations, or consolidated financial condition. See additional information about our cybersecurity risks under Risks Relating to Our Business in Item1(a) Risk Factors. 22
Biggest changeNo unauthorized access to customer, vendor, supplier, joint venture, employee or our data has occurred as a result of cybersecurity incidents that have had a material adverse effect on our business, operations, or consolidated financial condition. See additional information about our cybersecurity risks under Risks Relating to Our Business in Item1(a) Risk Factors. 31
Governance Our governance structure is designed to ensure effective oversight and management of cybersecurity risks: • The Board of Directors is actively engaged in overseeing cybersecurity matters, receiving regular briefings and ensuring alignment between cybersecurity strategy and overall business strategy. • A dedicated committee oversees cybersecurity governance, assessing policies, practices and risk mitigation strategies and ensuring alignment with industry best practices. • Our executive leadership team actively participates in the development and execution of cybersecurity strategy, reinforcing the importance of cybersecurity at the highest levels of the organization. • IT and Cybersecurity reports to the Chief Administrative and Information Officer (CAIO) who provides updates to the dedicated committee.
Governance Our governance structure is designed to ensure effective oversight and management of cybersecurity risks: • The Board of Directors is actively engaged in overseeing cybersecurity matters, receiving regular briefings and ensuring alignment between cybersecurity strategy and overall business strategy. • A dedicated committee oversees cybersecurity governance, assessing policies, practices and risk mitigation strategies and ensuring alignment with industry best practices. • Our executive leadership team actively participates in the development and execution of cybersecurity strategy, reinforcing the importance of cybersecurity at the highest levels of the organization. 30 • IT and Cybersecurity reports to the Chief Administrative and Information Officer (CAIO) who provides updates to the dedicated committee.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeITEM 2. P ROPERTIES As of December 31, 2024, our three reporting segments, the United States, Canada and International, had approximately 110 locations, 40 locations and 15 locations, respectively. International countries include: Australia, England, Kuwait, the Netherlands, Norway, Scotland, Singapore and UAE. Our properties are comprised of offices, supercenters and branches, approximately 85% of which are leased.
Biggest changeITEM 2. P ROPERTIES As of December 31, 2025, our three reporting segments, the United States, Canada and International, had approximately 210 locations, 35 locations and 55 locations, respectively. International countries include: Australia, Belgium, Finland, France, Germany, Italy, Kuwait, the Netherlands, New Zealand, Norway, Oman, Saudi Arabia, Singapore, the United Arab Emirates, and the UK.
One owned facility is pledged as collateral under our senior secured revolving credit facility discussed in Note 11 “Debt” of the Notes to Consolidated Financial Statements (Part IV, Item 15 of this Form 10-K); none of our owned facilities are subject to mortgages.
Our properties are comprised of offices, branches, super centers and RDCs, approximately 91% of which are leased. One owned facility is pledged as collateral under our senior secured revolving credit facility discussed in Note 11 “Debt” of the Notes to Consolidated Financial Statements (Part IV, Item 15 of this Form 10-K); none of our owned facilities are subject to mortgages.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeSee Note 14 “Commitments and Contingencies” of the Notes to Consolidated Financial Statements (Part IV, Item 15 of this Form 10-K) for additional information. ITEM 4. MINE SAF ETY DISCLOSURES Not Applicable. 23 PART II
Biggest changeFor information regarding asbestos cases in which we are a defendant and other claims and proceedings, see Management’s Discussion and Analysis of Financial Condition and Results of Operations (Part II, Item 7 of this Form 10-K) and Note 14 “Commitments and Contingencies” of the Notes to Consolidated Financial Statements (Part IV, Item 15 of this Form 10-K). ITEM 4.
Although no assurance can be given with respect to the outcome of these or any other pending legal and administrative proceedings and the effect such outcomes may have, we believe any ultimate liability resulting from the outcome of such claims, lawsuits or administrative proceedings will not have a material adverse effect on our consolidated financial position, results of operations or cash flows.
In the opinion of management, the ultimate disposition of these claims and proceedings are not expected to have a material adverse effect on our financial position, results of operations or cash flows.
Removed
ITEM 3. LEGAL PROCEEDINGS We have various claims, lawsuits and administrative proceedings that are pending or threatened, all arising in the ordinary course of business, with respect to commercial, product liability and employee matters.
Added
ITEM 3. LEGAL PROCEEDINGS From time to time, we have been subject to various claims and involved in legal proceedings incidental to the nature of our businesses. We maintain insurance coverage to reduce financial risk associated with certain of these claims and proceedings. It is not possible to predict the outcome of these claims and proceedings.
Added
However, in our opinion, there are no pending legal proceedings that upon resolution are likely to have a material effect on our business, financial condition, results of operations or cash flows.
Added
Also, from time to time, in the ordinary course of our business, our customers may claim that the products that we distribute are either defective or require repair or replacement under warranties that either we or the manufacturer may provide to the customer. These proceedings are, in the opinion of management, ordinary and routine matters incidental to our normal business.
Added
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.
Added
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.
Added
MINE SAF ETY DISCLOSURES Not Applicable. 32 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

6 edited+0 added−0 removed4 unchanged
Biggest change(2) On August 3, 2022, the Company’s Board of Directors approved a share repurchase program, under which the Company is authorized to purchase up to $80 million of its outstanding common stock through December 31, 2024. 24 Performance Graph The graph below compares the cumulative five year total return provided shareholders on DNOW Inc.'s common stock relative to the cumulative total returns of the S&P Midcap 400 index and the PHLX Oil Service Sector index.
Biggest change(2) On January 24, 2025, the Company’s Board of Directors authorized a new share repurchase program to purchase up to $160 million of its outstanding common stock. 33 Performance Graph The graph below compares the cumulative five year total return provided shareholders on DNOW Inc.'s common stock relative to the cumulative total returns of the S&P MidCap 400 Index and the PHLX Oil Service Sector Index.
This information shall not be deemed to be ‘‘soliciting material’’ or to be ‘‘filed’’ with the Commission or subject to Regulation 14A (17 CFR 240.14a-1-240.14a-104), other than as provided in Item 201(e) of Regulation S-K, or to the liabilities of section 18 of the Exchange Act (15 U.S.C. 78r). ITEM 6. RESERVED Not applicable. 25
This information shall not be deemed to be ‘‘soliciting material’’ or to be ‘‘filed’’ with the Commission or subject to Regulation 14A (17 CFR 240.14a-1-240.14a-104), other than as provided in Item 201(e) of Regulation S-K, or to the liabilities of section 18 of the Exchange Act (15 U.S.C. 78r). ITEM 6. RESERVED Not applicable. 34
Our Board of Directors has not declared any dividends during 2022, 2023 or 2024 and currently has no intention to declare dividends. As of January 31, 2025, there were 1,663 holders of record of our common stock.
Our Board of Directors has not declared any dividends during 2023, 2024 or 2025 and currently has no intention to declare dividends. As of January 31, 2026, there were 1,688 holders of record of our common stock.
An investment of $100 (with reinvestment of all dividends) is assumed to have been made in our common stock and in each index on December 31, 2019 and its relative performance is tracked through December 31, 2024. *$100 invested on 12/31/19 in stock or index, including reinvestment of dividends. Fiscal year ending December 31.
An investment of $100 (with reinvestment of all dividends) is assumed to have been made in our common stock and in each index on December 31, 2020 and its relative performance is tracked through December 31, 2025. *$100 invested on 12/31/20 in stock or index, including reinvestment of dividends. Fiscal year ending December 31.
The following table presents a summary of share repurchases made during the three months ended December 31, 2024: Period Total number of shares purchased Average price paid per share (1) Total number of shares purchased as part of publicly announced program (2) Approximate dollar value of shares that may yet be purchased under the program (1)(2) (in millions) October 1 - 31, 2024 181,022 $ 12.34 181,022 $ 4 November 1 - 30, 2024 263,207 $ 14.72 263,207 $ — December 1 - 31, 2024 — $ — — $ — Total 444,229 $ 13.75 444,229 (1) Excludes 1% excise tax on share repurchases.
The following table presents a summary of share repurchases made during the three months ended December 31, 2025: Period Total number of shares purchased Average price paid per share (1) Total number of shares purchased as part of publicly announced program (2) Approximate dollar value of shares that may yet be purchased under the program (1)(2) (in millions) October 1 - 31, 2025 — $ — — $ 133 November 1 - 30, 2025 240,114 $ 12.51 240,114 $ 130 December 1 - 31, 2025 513,740 $ 13.65 513,740 $ 123 Total 753,854 $ 13.29 753,854 (1) Excludes 1% excise tax on share repurchases.
All rights reserved. 12/19 12/20 12/21 12/22 12/23 12/24 DNOW Inc. $ 100 $ 64 $ 76 $ 113 $ 101 $ 116 S&P Midcap 400 $ 100 $ 114 $ 142 $ 123 $ 144 $ 164 PHLX Oil Service Sector $ 100 $ 58 $ 70 $ 113 $ 115 $ 102 The stock price performance included in this graph is not necessarily indicative of future stock price performance.
All rights reserved. 12/20 12/21 12/22 12/23 12/24 12/25 DNOW Inc. $ 100 $ 119 $ 177 $ 158 $ 181 $ 185 S&P Midcap 400 $ 100 $ 125 $ 108 $ 126 $ 144 $ 155 PHLX Oil Service Sector $ 100 $ 121 $ 195 $ 199 $ 176 $ 182 The stock price performance included in this graph is not necessarily indicative of future stock price performance.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

67 edited+161 added−43 removed27 unchanged
Biggest changeFor the year ended December 31, 2023, Other of $9 million included approximately $5 million (included in warehousing, selling and administrative) 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 and approximately $3 million (included in warehousing, selling and administrative) related to separation and transaction-related charges; as well as approximately $1 million (included in other income and expense) related to settlements of the plan assets and benefit obligations of the Company's defined benefit pension plans.
Biggest change(4) For the year ended December 31, 2023, other costs included $5 million (included in SG&A expenses) 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; as well as approximately $1 million (included in other (expense) income) related to settlements of the plan assets and benefit obligations of the Company's defined benefit pension plans. 47 Financial Condition and Cash Flows The following table summarizes our net cash flows provided by (used in) operating activities, investing activities and financing activities for the periods presented ( in millions ): Year Ended December 31, 2025 2024 (Revised) 2023 (Revised) Net cash provided by operating activities $ 155 $ 298 $ 188 Net cash used in investing activities (590 ) (304 ) (48 ) Net cash provided by (used in) financing activities 339 (33 ) (55 ) Fiscal Year 2025 Compared to Fiscal Year 2024 Net cash provided by operating activities was $155 million in 2025 compared to $298 million provided in 2024.
We see the evolution in energy transition investments to reduce atmospheric carbon, source carbon capture, storage and new energy streams as an opportunity for DNOW to supply many of the current products and services we provide, as well as an opportunity to partner and source from new suppliers to expand our offering and to meet our customers’ needs for their energy evolution investments.
We see the evolution in energy transition investments to reduce atmospheric carbon, source carbon capture, storage and new energy streams as an opportunity for DNOW to supply many of the current products and services we provide, as well as an opportunity to partner and source from new suppliers to expand our offering and to meet our customers’ needs for their energy evolution 37 investments.
Under this method, deferred tax assets and liabilities are determined on the basis of the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse.
Under this method, deferred tax assets and liabilities are determined on the basis of the differences between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse.
The Company makes a determination each period concerning its intent and ability to indefinitely reinvest the cash held by its foreign subsidiaries. The Company has not recorded deferred income taxes on undistributed foreign earnings that it considers to be indefinitely reinvested. The Company makes a determination each period whether to indefinitely reinvest these earnings.
The Company makes a determination each period concerning its intent and ability to indefinitely reinvest the cash held by its foreign subsidiaries. The Company has not recorded deferred income taxes on undistributed foreign earnings that it considers to be indefinitely reinvested.
As of December 31, 2024, we were in compliance with all covenants. We continuously monitor compliance with debt covenants. A default, if not waived or amended, would prevent us from taking certain actions, such as incurring additional debt.
As of December 31, 2025, we were in compliance with all covenants. We continuously monitor compliance with debt covenants. A default, if not waived or amended, would prevent us from taking certain actions, such as incurring additional debt.
For the year ended December 31, 2024, operating profit decreased primarily due to an increase in expense of $9 million related to the restructuring plan in the International segment and revenue decline discussed above.
For the year ended December 31, 2024, operating profit decreased primarily due to an increase in expense of $9 million related to the restructuring plan in the International segment and revenue decline discussed above. Other income (expense).
For the year ended December 31, 2024, the Company recognized approximately $6 million of foreign currency translation losses as a result of substantially completing the liquidation of certain foreign subsidiaries in the International segment.
For the year ended December 31, 2024, the Company recognized approximately $6 million of foreign currency translation losses as a result of substantially completing the liquidation of certain foreign subsidiaries in the International segment. Operating profit.
Operating profit was $13 million for the year ended December 31, 2024, a decline of $8 million compared to operating profit of $21 million for the year ended December 31, 2023. Operating profit decreased primarily due to the decline in revenue discussed above.
Canada Segment —Operating profit was $13 million for the year ended December 31, 2024, a decline of $8 million compared to operating profit of $21 million for the year ended December 31, 2023. Operating profit decreased primarily due to the decline in revenue discussed above.
Warehousing, selling and administrative expenses include branch location, distribution center and regional expenses (including costs such as compensation, benefits and rent) as well as depreciation and corporate general selling and administrative expenses. Impairment and other charges Impairment and other charges were $6 million for the year ended December 31, 2024 compared to nil for the year ended December 31, 2023.
SG&A expenses include branch location, distribution center and regional expenses (including costs such as compensation, benefits and rent) as well as depreciation and corporate selling, general and administrative expenses. Impairment and other charges. Impairment and other charges were $6 million for the year ended December 31, 2024 compared to nil for the year ended December 31, 2023.
These solutions allow us to leverage the infrastructure of our SAP™ ERP system and other technologies to streamline our customers’ purchasing process, from requisition to procurement to payment, by digitally managing workflow, improving approval routing and providing robust reporting functionality.
These solutions allow us to leverage the infrastructure of our ERP systems and other technologies to streamline our customers’ purchasing process, from requisition to procurement to payment, by digitally managing workflow, improving approval routing and providing robust reporting functionality.
As of December 31, 2024, the Company has recognized a valuation allowance of $21 million on certain identified deferred tax assets in the U.S. and non-U.S. jurisdictions where management believes that it is not more-likely-than-not that the Company would be able to realize the benefits of those specific deferred tax assets.
As of December 31, 2025, the Company has recognized a valuation allowance of $88 million on certain identified deferred tax assets in the U.S. and non-U.S. jurisdictions where management believes that it is not more-likely-than-not that the Company would be able to realize the benefits of those specific deferred tax assets.
Cash provided in 2024 was primarily driven by $82 million of net income, plus $97 million of reconciling adjustments, primarily depreciation and amortization, stock-based compensation and deferred income taxes, and a net decrease of $119 million in working capital. The improvement in 2024 was primarily driven by improved inventory efficiency and better collections on our receivables compared to 2023.
Cash provided in 2024 was primarily driven by $79 million of net income, plus $100 million of reconciling adjustments, primarily depreciation and amortization, stock-based compensation and deferred income taxes, and a net decrease of $119 million in working capital. The improvement in 2024 was primarily driven by improved inventory efficiency and better collections on our receivables compared to 2023.
Net cash used in investing activities was $304 million in 2024 compared to $48 million in 2023. Cash used primarily related to business acquisitions of $299 million, net of cash acquired, in 2024 compared to $32 million, net of cash acquired, in 2023. Net cash used in financing activities was $33 million in 2024 compared to $55 million in 2023.
Net cash used in investing activities was $304 million in 2024 compared to $48 million used in 2023. Cash used primarily related to business acquisitions of $299 million, net of cash acquired, in 2024 compared to $32 million, net of cash acquired, in 2023.
For the year ended December 31, 2023, the effective tax rate benefit was primarily driven by a $148 million deferred tax benefit from the release of the valuation allowance against certain U.S. and non-U.S. deferred tax assets and the recognition of tax expense from earnings in Canada and the United Kingdom.
For the year ended December 31, 2023, the effective tax rate benefit was primarily driven by a $148 million deferred tax benefit from the release of the valuation allowance against certain U.S. and non-U.S. deferred tax assets and the recognition of tax expense from earnings in Canada and the United Kingdom. Net income attributable to DNOW Inc.
The combination of these factors forms the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results are likely to differ from our current estimates and those differences may be material.
The combination of these factors forms the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results are likely to differ from our current estimates and those differences may be material. Inventories Inventories consist primarily of oilfield and industrial finished goods.
Variable interest entities for which the Company is the primary beneficiary are fully consolidated with the equity held by the outside stockholders and their portion of net income (loss) reflected as noncontrolling interest in the accompanying consolidated financial statements.
All intercompany transactions and accounts have been eliminated. Variable interest entities for which the Company is the primary beneficiary are fully consolidated with the equity held by the outside stockholders and their portion of net (loss) income reflected as noncontrolling interest in the accompanying consolidated financial statements.
The Company periodically evaluates its estimates and judgments that are most critical in nature, which are related to allowance for credit losses, inventory reserves, goodwill, purchase price allocation of acquisitions and income taxes. Its estimates are based on historical experience and on its future expectations that the Company believes are reasonable.
The Company periodically evaluates its estimates and judgments that are most critical in nature, which are related to inventories, goodwill, purchase price allocation of acquisitions and income taxes. Its estimates are based on historical experience and on its future expectations that the Company believes are reasonable.
Accordingly, no further testing was required. 35 Purchase Price Allocation of Acquisitions The Company allocates the fair value of the purchase price consideration of an acquired business to its identifiable assets and liabilities based on estimated fair values. The excess of the purchase price over the fair value of the acquired assets and liabilities, if any, is recorded as goodwill.
Purchase Price Allocation of Acquisitions The Company allocates the fair value of the purchase price consideration of an acquired business to its identifiable assets and liabilities based on estimated fair values. The excess of the purchase price over the fair value of the acquired assets and liabilities, if any, is recorded as goodwill.
Warehousing, selling and administrative expenses Warehousing, selling and administrative expenses were $416 million for the year ended December 31, 2024 compared to $395 million for the year ended December 31, 2023, an increase of $21 million. The increase was primarily driven by an increase in expenses related to acquisitions completed in 2024.
SG&A expenses were $416 million for the year ended December 31, 2024 compared to $395 million for the year ended December 31, 2023, an increase of $21 million. The increase was primarily driven by an increase in expenses related to acquisitions completed in 2024.
The Company has recorded $230 million of goodwill as of December 31, 2024. We performed the qualitative assessment described above for the annual goodwill impairment test in 2024 and concluded it was more likely than not that the fair value of each of its reporting units was greater than its carrying amount.
The Company has recorded $617 million of goodwill as of December 31, 2025. We performed the qualitative assessment described above for the annual goodwill impairment test in 2025 and concluded it was more likely than not that the fair value of each of its reporting units was greater than its carrying amount. Accordingly, no further testing was required.
Our Canadian revenue is favorably impacted as the U.S. dollar weakens relative to the Canadian dollar, and unfavorably impacted as the U.S. dollar strengthens relative to the Canadian dollar. Our Canadian segment revenue was unfavorably impacted by approximately $4 million due to changes in foreign currency exchange rates over the prior year.
Our international revenue is favorably impacted as the U.S. dollar weakens relative to other foreign currencies, and unfavorably impacted as the U.S. dollar strengthens relative to other foreign currencies. Our international segment revenue was favorably impacted by approximately $2 million due to changes in foreign currency exchange rates over the prior year. Gross Profit.
At December 31, 2024 and 2023, inventory reserves totaled $17 million and $21 million, or 4.6% and 5.4% of gross inventory, respectively. Changes in our estimates can be material under different market conditions.
At December 31, 2025 and 2024, inventory reserves totaled $13 50 million and $17 million, or 1.1% and 4.6% of gross inventory, respectively. Changes in our estimates can be material under different market conditions.
At December 31, 2024 and 2023, we had cash and cash equivalents of $256 million and $299 million, respectively. As of December 31, 2024, $93 million of our cash and cash equivalents were maintained in the accounts of our various foreign subsidiaries. For the year ended December 31, 2024, we repatriated $9 million from our foreign subsidiaries.
At December 31, 2025 and 2024, we had cash and cash equivalents of $164 million and $256 million, respectively. As of December 31, 2025, $149 million of our cash and cash equivalents were maintained in the accounts of our various foreign subsidiaries. For the year ended December 31, 2025, we repatriated $52 million from our foreign subsidiaries.
Operating profit decreased primarily due to an increase in expenses related to acquisitions completed in 2024, partially offset by the increase in revenue discussed above. Canada Revenue was $253 million for the year ended December 31, 2024, a decline of $29 million or 10.3% compared to the year ended December 31, 2023.
Segment —Operating profit was $91 million for the year ended December 31, 2024, a decline of $17 million compared to operating profit of $108 million for the year ended December 31, 2023. Operating profit decreased primarily due to an increase in expenses related to acquisitions completed in 2024, partially offset by the increase in revenue discussed above.
We are subject to fluctuations in foreign currency exchange rates relative to the U.S. dollar. Our international revenue is favorably impacted as the U.S. dollar weakens relative to other foreign currencies, and unfavorably impacted as the U.S. dollar strengthens relative to other foreign currencies.
Our international revenue was approximately 10% of total revenue in 2024, compared to 12% in 2023. We are subject to fluctuations in foreign currency exchange rates relative to the U.S. dollar. Our international revenue is favorably impacted as the U.S. dollar weakens relative to other foreign currencies, and unfavorably impacted as the U.S. dollar strengthens relative to other foreign currencies.
The increase in the period was primarily driven by incremental revenue from acquisitions completed in 2024 partially offset by a decline in U.S. rigs and completions. 29 Operating profit was $95 million for the year ended December 31, 2024, a decline of $9 million compared to operating profit of $104 million for the year ended December 31, 2023.
Segment —Revenue was $1,880 million for the year ended December 31, 2024, an increase of $131 million or 7.5% compared to the year ended December 31, 2023. The increase in the period was primarily driven by incremental revenue from acquisitions completed in 2024 partially offset by a decline in U.S. rigs and completions.
These arrangements are made in our normal course of business and they are not reasonably likely to have a current or future material adverse effect on our financial condition, results of operations, liquidity or cash flows.
These arrangements are made in our normal course of business and they are not reasonably likely to have a current or future material adverse effect on our financial condition, results of operations, liquidity or cash flows. Critical Accounting Estimates In preparing the financial statements, the Company makes assumptions, estimates and judgments that affect the amounts reported.
We expect capital expenditures for fiscal year 2025 to approximate $20 million, primarily related to purchases of property, plant and equipment. We will continue to maintain capital discipline and monitor market dynamics, and we may adjust our capital expenditures accordingly.
We expect capital expenditures for fiscal year 2026 to approximate $55 million, primarily related to the MRC Global implementation of a new Enterprise Resource Planning system and purchases of property, plant and equipment. We will continue to maintain capital discipline and monitor market dynamics, and we may adjust our capital expenditures accordingly.
International Revenue was $240 million for the year ended December 31, 2024, a decline of $50 million or 17.2% compared to the year ended December 31, 2023. The decrease was primarily driven by weaker project activity. Our international revenue was approximately 10% of total revenue in 2024, compared to 12% in 2023.
Our Canadian segment revenue was unfavorably impacted by approximately $4 million due to changes in foreign currency exchange rates over the prior year. International Segment —Revenue was $240 million for the year ended December 31, 2024, a decline of $50 million or 17.2% compared to the year ended December 31, 2023. The decrease was primarily driven by weaker project activity.
Other income (expense) Other income was $1 million for the year ended December 31, 2024 compared to other expense of $2 million for the year ended December 31, 2023.
Other income was $1 million for the year ended December 31, 2024 compared to other expense of $2 million for the year ended December 31, 2023. For the year ended December 31, 2024, other income improvement was primarily attributable to an increase in interest income. Income tax (benefit) provision.
Key industry indicators for the past three years include the following: % % 2024 v 2024 v 2024* 2023* 2023 2022* 2022 Active Drilling Rigs: U.S. 599 689 (13.1 %) 721 (16.9 %) Canada 188 177 6.2 % 176 6.8 % International 948 948 0.0 % 851 11.4 % Worldwide 1,735 1,814 (4.4 %) 1,748 (0.7 %) West Texas Intermediate Crude Prices (per barrel) $ 76.55 $ 77.64 (1.4 %) $ 94.79 (19.2 %) Natural Gas Prices ($/MMBtu) $ 2.19 $ 2.54 (13.8 %) $ 6.42 (65.9 %) Hot-Rolled Coil Prices (steel) ($/short ton) $ 781.00 $ 887.47 (12.0 %) $ 1,097.24 (28.8 %) U.S.
Key industry indicators for the past three years include the following: % % 2025 v 2025 v 2025* 2024* 2024 2023* 2023 Active Rigs: U.S. 561 599 (6.3 %) 689 (18.6 %) Canada 177 188 (5.9 %) 177 0.0 % International 1,080 1,161 (7.0 %) 948 13.9 % Worldwide 1,818 1,948 (6.7 %) 1,814 0.2 % West Texas Intermediate Crude Prices (per barrel) $ 65.46 $ 76.55 (14.5 %) $ 77.64 (15.7 %) Natural Gas Prices ($/MMBtu) $ 3.53 $ 2.19 61.2 % $ 2.54 39.0 % Hot-Rolled Coil Prices (steel) ($/short ton) $ 831.52 $ 781.00 6.5 % $ 887.47 (6.3 %) U.S.
See Note 13 “Leases” of the Notes to Consolidated Financial Statements (Part IV, Item 15 of this Form 10-K) for additional information on our obligations and timing of expected future lease payments.
See Note 13 “Leases” of the Notes to Consolidated Financial Statements (Part IV, Item 15 of this Form 10-K) for additional information on our obligations and timing of expected future lease payments. In connection with acquisitions in 2024 and 2025, the Company is committed to total future retention payments of up to $14 million payable in 2026, 2027 and 2028.
We are often party to certain transactions that require off-balance sheet arrangements such as standby letters of credit and performance bonds and guarantees that are not reflected in our consolidated balance sheets.
See Note 14 “Commitments and Contingencies” of the Notes to Consolidated Financial Statements (Part IV, Item 15 of this Form 10-K). Off-Balance Sheet Arrangements We are often party to certain transactions that require off-balance sheet arrangements such as standby letters of credit and performance bonds and guarantees that are not reflected in our consolidated balance sheets.
Finished goods are stated at the lower of cost or net realizable value and using average cost methods. Allowances for excess and obsolete inventories are determined based on the Company’s historical usage of inventory on hand as well as its future expectations.
Allowances for excess and obsolete inventories are determined based on the Company’s historical usage of inventory on hand as well as its future expectations.
The Company reviews these liabilities quarterly and to the extent audits or other events result in an adjustment to the liability accrued for a prior year, the effect will be recognized in the period of the event. 36 As of December 31, 2024, the Company has an immaterial amount of undistributed foreign earnings that may be subject to taxation upon a future distribution.
The Company reviews these liabilities quarterly and to the extent audits or other events result in an adjustment to the liability accrued for a prior year, the effect will be recognized in the period of the event.
The Company has not recorded deferred income taxes on undistributed foreign earnings that it considers to be indefinitely reinvested. The Company makes a determination each period whether to indefinitely reinvest these earnings. If, as a result of these reassessments, the Company distributes these earnings in the future, additional tax liabilities may result, offset by any available foreign tax credits.
As of December 31, 2025, the Company has not recorded deferred income taxes on undistributed foreign earnings that it considers to be indefinitely reinvested. The Company makes a determination each period whether to indefinitely reinvest these earnings.
The decrease was due to lower project related activity as well as an unfavorable foreign exchange rate impact. Our Canadian revenue was approximately 11% of total revenue in 2024, compared to 12% in 2023. We are subject to fluctuations in foreign currency exchange rates relative to the U.S. dollar.
Our Canadian revenue was approximately 11% of total revenue in 2024, compared to 12% in 2023. We are subject to fluctuations in foreign currency exchange rates relative to the U.S. dollar. Our Canadian revenue is favorably impacted as the U.S. dollar weakens relative to the Canadian dollar, and unfavorably impacted as the U.S. dollar strengthens relative to the Canadian dollar.
We expect resources to be available to reinvest in existing businesses, strategic acquisitions and capital expenditures to meet short and long-term objectives.
Liquidity and Capital Resources We assess liquidity in terms of our ability to generate cash to fund operating, investing and financing activities. We expect resources to be available to reinvest in existing businesses, strategic acquisitions and capital expenditures to meet short and long-term objectives.
Our international segment revenue was favorably impacted by approximately $2 million due to changes in foreign currency exchange rates over the prior year. Operating profit was $5 million for the year ended December 31, 2024, a decline of $10 million compared to operating profit of $15 million for the year ended December 31, 2023.
Our Canadian segment revenue was unfavorably impacted by approximately $5 million due to changes in foreign currency exchange rates over the prior year. International Segment —Revenue was $312 million for the year ended December 31, 2025, an increase of $72 million or 30.0% compared to the year ended December 31, 2024.
For the year ended December 31, 2024, operating profit was $113 million compared to $140 million for the corresponding period of 2023.
International Segment —Operating profit was $5 million for the year ended December 31, 2024, a decline of $10 million compared to operating profit of $15 million for the year ended December 31, 2023.
The average price of WTI crude declined 1.4% (from $77.64 per barrel to $76.55 per barrel), and natural gas prices declined 13.8% (from $2.54 per MMBtu to $2.19 per MMBtu) in 2024 compared to 2023. The average price of Hot-Rolled Coil declined 12.0% (from $887.47 per short ton to $781.00 per short ton) in 2024 compared to 2023. U.S.
The average price of WTI crude declined 14.5% (from $76.55 per barrel to $65.46 per barrel), and natural gas prices increased 61.2% (from $2.19 per MMBtu to $3.53 per MMBtu) in 2025 compared to 2024. The average price of Hot-Rolled Coil increased 6.5% (from $781.00 per short ton to $831.52 per short ton) in 2025 compared to 2024. U.S.
The worldwide average rig count declined 4.4% (from 1,814 rigs to 1,735 rigs) and the U.S. declined 13.1% (from 689 rigs to 599 rigs) in 2024 compared to 2023.
The worldwide average rig count declined 6.7% (from 1,948 rigs to 1,818 rigs) and the U.S. declined 6.3% (from 599 rigs to 561 rigs) in 2025 compared to 2024.
If, as a result of these reassessments, the Company distributes these earnings in the future, additional tax liabilities offset by any available foreign tax credits may result. We maintain a $500 million five-year senior secured revolving credit facility that will mature on December 14, 2026.
If, as a result of these reassessments, the Company distributes these earnings in the future, additional tax liabilities may result, offset by any available foreign tax credits.
Wells Completed 11,731 12,847 (8.7 %) 13,102 (10.5 %) * Averages for the years indicated, except for U.S. Wells Completed. See sources on following page. 27 The following table details the U.S., Canadian, and international rig activity and West Texas Intermediate (“WTI”) oil prices for the past nine quarters ended December 31, 2024: Sources: Rig count: Baker Hughes, Inc.
Wells Completed 11,859 11,901 (0.4 %) 13,222 (10.3 %) * Monthly averages for the years indicated, except for U.S. Wells Completed. See sources on the following page. 39 The following table details the U.S., Canadian and international rig activity and WTI oil prices for the past nine quarters ended December 31, 2025.
For the year ended December 31, 2024, other income improvement was primarily attributable to an increase in interest income. 30 Provision (benefit) for income taxes The effective tax rate for the years ended December 31, 2024, and December 31, 2023 was 28.1% and (79.7%), respectively.
For the year ended December 31, 2025, other expense was primarily attributable to interest expense on borrowings as compared to the year ended December 31, 2024, other income was primarily attributable to interest income. Income tax (benefit) provision. The effective tax rate for the years ended December 31, 2025 and December 31, 2024 was 12.0% and 28.2%, respectively.
Cash used primarily related to the Company's payment of approximately $23 million for share repurchases in 2024 compared to $50 million in 2023. 33 Effect of the Change in Exchange Rates For the year ended December 31, 2024, the effect of the change in exchange rates on cash flows was $4 million unfavorable compared to $2 million favorable for the years ended December 31, 2023.
Net cash used in financing activities was $33 million in 2024 compared to $55 million used in 2023. Cash used primarily related to the Company's payment of approximately $23 million for share repurchases in 2024 compared to $50 million in 2023.
We have developed expertise in providing application systems, work processes, parts integration, optimization solutions and after-sales support that provide more efficient and productive solutions for our customers. Our solutions include outsourcing portions or entire functions of our customers’ procurement, warehouse and inventory management, logistics, point of issue technology, project management, business process and performance metrics reporting.
Our solutions include outsourcing portions or entire functions of our customers’ procurement, warehouse and inventory management, logistics, point of issue technology, project management, business process and performance metrics reporting.
Unless indicated otherwise, results of operations data are presented in accordance with accounting principles generally accepted in the United States (“GAAP”). In an effort to provide investors with additional information regarding our results as determined by GAAP, we may disclose non-GAAP financial measures.
In an effort to provide investors with additional information regarding our results as determined by GAAP, we may disclose non-GAAP financial measures. The primary non-GAAP financial measures we disclose are Adjusted Gross Profit, Adjusted Gross Profit as a percentage of revenue, Adjusted EBITDA and Adjusted EBITDA as a percentage of revenue.
Oil and gas prices have been and are likely to continue to be volatile. See Item 1A. “Risk Factors.” We conduct our operations through three business segments: U.S., Canada and International. See Item 1. “Business—Summary of Reportable Segments” for a discussion of each of these business segments.
“Risk Factors.” We conduct our operations through three business segments: U.S., Canada and International. See Item 1. “Business—Summary of Reportable Segments” for a discussion of each of these business segments. Unless indicated otherwise, results of operations data are presented in accordance with accounting principles generally accepted in the United States (“GAAP”).
As of December 31, 2024, we had no borrowings against our revolving credit facility and had approximately $433 million in availability (as defined in the Credit Agreement) resulting in the excess availability (as defined in the Credit Agreement) of 99%, subject to certain restrictions. Availability excluding certain cash deposits was approximately $300 million.
As of December 31, 2025, we had $411 million borrowings against our revolving credit facility and had approximately $424 million in aggregate availability (as defined in the Credit Agreement).
For the year ended December 31, 2024, Other included International restructuring charges of $9 million of which approximately $6 million of foreign currency translation losses included in impairment and other charges, approximately $2 million of inventory write-downs included in cost of products and $1 million of other exit costs included in warehousing, selling and administrative.
(2) For the year ended December 31, 2024, impairment and other charges included $6 million of foreign currency translation losses as a result of substantially completing the liquidation of certain foreign subsidiaries in the International segment. (3) Inventory-related transaction charges are included in cost of products.
See Note 17 “Business Segments” of the Notes to Consolidated Financial Statements (Part IV, Item 15 of this Form 10-K) for additional information. 37
Prior period amounts were updated to conform to the current year presentation for the change in accounting principle. See Note 1 “Organization and Basis of Presentation” of the Notes to Consolidated Financial Statements (Part IV, Item 15 of this Form 10-K) for additional information.
Borrowings that result in the excess availability dropping below the greater of 10% of the borrowing base or $40 million are conditioned upon compliance with or waiver of a minimum fixed charge ratio (as defined in the Credit Agreement). The credit facility contains usual and customary affirmative and negative covenants for credit facilities of this type including financial covenants.
The credit facility includes a springing financial covenant that requires us to maintain, during any period when availability falls below specified thresholds, a minimum fixed charge coverage ratio (as defined in the Credit Agreement). The credit facility contains usual and customary affirmative and negative covenants for credit facilities of this type including financial covenants.
Capital Spending We intend to pursue additional acquisition candidates, but the timing, size or success of any acquisition effort and the related potential capital commitments cannot be predicted. We continue to expect to fund future cash acquisitions primarily with cash on hand, cash flow from operations and the usage of the available portion of the revolving credit facility.
We continue to expect to fund future cash acquisitions primarily with cash on hand, cash flow from operations and the usage of the available portion of the revolving credit facility. There can be no assurance that additional financing will be available at terms acceptable to us.
EBITDA excluding other costs has important limitations as an analytical tool and should not be considered in isolation or as a substitute for analysis of the Company’s results as reported under GAAP. (2) Other includes certain income and expenses not included in stock-based compensation.
We use Adjusted EBITDA internally to evaluate and manage the Company’s operations because we believe it provides useful supplemental information regarding the Company’s ongoing operating performance. Adjusted EBITDA has important limitations as an analytical tool and should not be considered in isolation or as a substitute for analysis of the Company’s results as reported under GAAP.
Results of Operations Consolidated Results Years Ended December 31, 2024 and December 31, 2023 The results of operations are presented before consideration of the noncontrolling interest.
(5) For the year ended December 31, 2025, other costs included approximately $2 million related to foreign currency losses (included in other (expense) income). 44 Years Ended December 31, 2024 and December 31, 2023 The results of operations are presented before consideration of the noncontrolling interest.
We expect to fund share repurchases primarily with cash on hand, cash flow from operations and the usage of the available portion of the revolving credit facility. The timing and amount of any repurchases will be made at our discretion, taking into account a number of factors, including market conditions.
The timing and amount of any repurchases will be made at our discretion, taking into account a number of factors, including market conditions. The share repurchase program does not obligate the Company to repurchase shares and may be suspended or discontinued at any time at our discretion.
For the year ended December 31, 2024, we repurchased 1,823,249 shares of our common stock for a total of $23 million. On January 24, 2025, the Company’s Board of Directors authorized a new share repurchase program to purchase up to $160 million of its outstanding common stock.
Share Repurchase Program On January 24, 2025, the Company’s Board of Directors authorized a new share repurchase program to purchase up to $160 million of its outstanding common stock. We expect to fund share repurchases primarily with cash on hand, cash flow from operations and the usage of the available portion of the revolving credit facility.
Availability under the revolving credit facility is determined by a borrowing base comprised of eligible receivables, eligible inventory and certain cash deposits in the U.S. and Canada.
Availability under the revolving credit facility is limited to the lesser of the commitments and a borrowing base comprised of eligible account receivables, eligible inventory and eligible rental equipment assets of the Borrowers and subsidiary guarantors.
Cost of products Cost of products was $1,838 million for the year ended December 31, 2024 compared to $1,786 million for the year ended December 31, 2023, an increase of $52 million. The increase was primarily due to the increase in revenue in the period.
Segment —Revenue was $2,294 million for the year ended December 31, 2025, an increase of $414 million or 22.0% compared to the year ended December 31, 2024.
See “Non-GAAP Financial Measures and Reconciliations” in Results of Operations for an explanation of our use of non-GAAP financial measures and reconciliations to the corresponding measures calculated in accordance with GAAP.
See Results of Operations for an explanation of our use of non-GAAP financial measures and reconciliations to the corresponding measures calculated in accordance with GAAP. Recent Trends and Outlook On January 3, 2026, the U.S. government intervened in Venezuela and announced it intends to support a new Venezuela leader while managing their oil resources inviting American companies to assist.
A reconciliation of this non-GAAP financial measure, to its most comparable GAAP financial measure, is included below. We use EBITDA excluding other costs internally to evaluate and manage the Company’s operations because we believe it provides useful supplemental information regarding the Company’s ongoing operating performance.
We use Adjusted EBITDA internally to evaluate and manage the Company’s operations because we believe it provides useful supplemental information regarding the Company’s ongoing operating performance. Adjusted EBITDA has important limitations as an analytical tool and should not be considered in isolation or as a substitute for analysis of the Company’s results as reported under GAAP.
The following table summarizes our net cash flows provided by (used in) operating activities, investing activities and financing activities for the periods presented ( in millions ): Year Ended December 31, 2024 2023 2022 Net cash provided by (used in) operating activities $ 298 $ 188 $ — Net cash provided by (used in) investing activities (304 ) (48 ) (87 ) Net cash provided by (used in) financing activities (33 ) (55 ) (10 ) Fiscal Year 2024 Compared to Fiscal Year 2023 Net cash provided by operating activities was $298 million in 2024 compared to $188 million in 2023.
Fiscal Year 2024 Compared to Fiscal Year 2023 Net cash provided by operating activities was $298 million in 2024 compared to $188 million provided in 2023.
Additionally, Other also included transaction-related charges of approximately $12 million, of which approximately $5 million were included in cost of products and approximately $7 million included in warehousing, selling and administrative. Transaction-related charges include transaction costs, inventory fair value step-up, retention bonus accruals and integration expenses associated with acquisitions.
Transaction-related charges include transaction costs, inventory fair value step-up or write-down, retention bonus accruals and integration expenses associated with acquisitions. This financial measure excludes the impact of certain amounts and is not calculated in accordance with GAAP.
A summary of the Company’s revenue and operating profit by segment in 2024 and 2023 follows ( in millions ): Year Ended December 31, Variance 2024 2023 $ Revenue: United States $ 1,880 $ 1,749 $ 131 Canada 253 282 (29 ) International 240 290 (50 ) Total revenue $ 2,373 $ 2,321 $ 52 Operating profit: United States $ 95 $ 104 $ (9 ) Canada 13 21 (8 ) International 5 15 (10 ) Total operating profit $ 113 $ 140 $ (27 ) United States Revenue was $1,880 million for the year ended December 31, 2024, an increase of $131 million or 7.5% compared to the year ended December 31, 2023.
Our results of operations for 2024 and 2023 are as follows ( in millions ): Year Ended December 31, 2024 (Revised) 2023 (Revised) $ Change Revenue: United States $ 1,880 $ 1,749 $ 131 Canada 253 282 (29 ) International 240 290 (50 ) Total revenue $ 2,373 $ 2,321 $ 52 Operating profit: United States $ 91 $ 108 $ (17 ) Canada 13 21 (8 ) International 5 15 (10 ) Total operating profit $ 109 $ 144 $ (35 ) Other income (expense) 1 (2 ) 3 Income before income taxes 110 142 (32 ) Income tax provision (benefit) 31 (109 ) 140 Net income 79 251 (172 ) Net income attributable to noncontrolling interest 1 1 — Net income attributable to DNOW Inc. 78 250 (172 ) Gross Profit $ 531 $ 539 $ (8 ) Adjusted Gross Profit (1) $ 549 $ 540 $ 9 Adjusted EBITDA (1) $ 176 $ 184 $ (8 ) (1) Adjusted Gross Profit and Adjusted EBITDA are non-GAAP financial measures.
(1) $ 81 3.4 % $ 247 10.6 % $ 128 6.0 % Net income attributable to noncontrolling interest 1 1 1 Interest expense (income), net (6 ) (4 ) (1 ) Income tax provision (benefit) 32 (110 ) 10 Depreciation and amortization 34 26 19 Other costs: Stock-based compensation 13 15 11 Other (2) 21 9 7 EBITDA excluding other costs $ 176 7.4 % $ 184 7.9 % $ 175 8.2 % (1) We believe that net income (loss) attributable to DNOW Inc. is the financial measure calculated and presented in accordance with GAAP that is most directly comparable to EBITDA excluding other costs.
We believe that net (loss) income attributable to DNOW Inc. is the financial measure calculated and presented in accordance with GAAP that is most directly comparable to Adjusted EBITDA.
In connection with acquisitions in 2024, the Company is committed to total future retention payments of up to $13 million payable in 2026 and 2027. Payments are due to various employees if non-financial post combination service conditions are met pursuant to the terms and conditions of the retention agreements.
Payments are due to various employees if non-financial post combination service conditions are met pursuant to the terms and conditions of the retention agreements. Capital Spending We intend to pursue additional acquisition candidates, but the timing, size or success of any acquisition effort and the related potential capital commitments cannot be predicted.
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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Basis of Presentation The accompanying consolidated financial information include the accounts of the Company and its consolidated subsidiaries. All significant intercompany transactions and accounts have been eliminated.
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Management's Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) and other parts of this report contain certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and information relating to us that are based on the beliefs of our management as well as assumptions made by, and information currently available to, us.
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General Overview We are a distributor to the oil and gas, energy transition and industrial markets with a legacy of over 160 years. We operate primarily under the DNOW brand along with several affiliated brands operating in local, regional or international markets that are tied to prior acquisitions.
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Generally, words such as “anticipates”, “assumes”, “believes”, “budget”, “estimates”, “expects”, “goal”, “guidance”, “plans”, “may”, “will”, “might”, “would”, “should”, “seeks”, “project”, “predict”, “potential”, “objective”, “currently”, “continue”, “intends”, “outlook”, “forecasts”, “targets”, “reflects,” “could”, or other similar words and phrases identify forward-looking statements, although some forward-looking statements could be expressed differently.
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Through our network of approximately 165 locations and approximately 2,575 employees worldwide, we stock and sell a comprehensive offering of energy products as well as a selection of products for industrial applications.
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These statements reflect our current views and beliefs with respect to future events as of the date hereof, are not historical facts or guarantees of future performance and involve risks and uncertainties that are difficult to predict and many of which are outside of our control.
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Our product and service offerings are consumed throughout the energy industry – from upstream drilling and completion, E&P, midstream transmission, gas and crude oil processing infrastructure development to downstream petroleum refining and petrochemicals – as well as in other industries, such as chemical processing, mining, water/wastewater, food and beverage, gas utilities and the evolution of energy transition markets inclusive of greenhouse gas reduction and emissions capture and storage, renewable fuels such as biofuels, RNG, wind, solar, production of hydrogen as a fuel to power equipment and select industrial markets.
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Further, certain forward-looking statements are based upon assumptions as to future events that may not prove to be accurate. See “Note About Forward-Looking Statements” at the beginning of this report for further discussion.
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The energy and industrial distribution end markets we serve are inclusive of engineering and construction firms that perform capital and maintenance projects for their clients. We also provide supply chain and materials management solutions to the same markets where we sell products.
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All forward-looking statements made in this report are made as of the date hereof, and the risk that actual results will differ materially from expectations expressed in this report will increase with the passage of time.
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Our global product offering includes pipe, manual and automated valves, fittings, flanges, gaskets, fasteners, electrical, instrumentation, artificial lift, pumping solutions and modular process, production, measurement, automation, control equipment and consumable MRO supplies. We also offer sourcing, procurement, warehouse and inventory management solutions as part of our supply chain and materials management offering.
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We undertake no obligation, and disclaim any duty, to publicly update or revise any forward-looking statements, whether as a result of new information, future events, changes in our expectations or otherwise, except to the extent required by applicable law. Basis of Presentation The accompanying consolidated financial information includes the accounts of the Company and its consolidated subsidiaries.
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We support land and offshore operations for the major oil and gas producing regions around the world through our network of locations. Our key markets include the U.S., Canada, UK, Norway, Australia, the Netherlands, Singapore and the Middle East area with the ability to provide products through an export model to operators with operations in Southeast Asia and West Africa.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeWhile we cannot predict steel prices, we mitigate this risk by managing our inventory levels, including maintaining sufficient quantity on hand to meet demand, while limiting the risk of overstocking. 38 ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Attached hereto and a part of this report are financial statements and supplementary data listed in Item 15.
Biggest changeCommodity Steel Pricing Our business is sensitive to steel prices, which can impact our product pricing, with steel tubular prices generally having the highest degree of sensitivity. While we cannot predict steel prices, we mitigate this risk by managing our inventory levels, including maintaining sufficient quantity on hand to meet demand, while limiting the risk of overstocking. ITEM 8.
The financial statements of foreign subsidiaries are translated into their U.S. dollar equivalents at end-of-period exchange rates for assets and liabilities, while revenue, costs and expenses are translated at average monthly exchange rates. Translation gains and losses are components of other comprehensive income (loss) as reported in the consolidated statements of comprehensive income (loss).
The financial statements of foreign subsidiaries are translated into their U.S. dollar equivalents at end-of-period exchange rates for assets and liabilities, while revenue, costs and expenses are translated at average monthly exchange rates. Translation gains and losses are components of other comprehensive (loss) income as reported in the consolidated statements of comprehensive (loss) income.
In the event that the counterparties fail to meet the terms of a foreign currency contract, our exposure is limited to the foreign currency rate differential. The average foreign exchange rate for 2024 compared to the average for 2023 remained flat compared to the U.S. dollar based on the aggregated weighted average revenue of our foreign-currency denominated foreign operations.
In the event that the counterparties fail to meet the terms of a foreign currency contract, our exposure is limited to the foreign currency rate differential. The average foreign exchange rate for 2025 compared to the average for 2024 remained flat compared to the U.S. dollar based on the aggregated weighted average revenue of our foreign-currency denominated foreign operations.
We are a net receiver of foreign currencies, and therefore, benefit from a weakening of the U.S. dollar and are adversely affected by a strengthening of the U.S. dollar relative to the foreign currency. As of December 31, 2024, our most significant foreign currency exposure was to the Canadian dollar, followed by the British pound and the Australian dollar.
We are a net receiver of foreign currencies, and therefore, benefit from a weakening of the U.S. dollar and are adversely affected by a strengthening of the U.S. dollar relative to the foreign currency. As of December 31, 2025, our most significant foreign currency exposure was to the Canadian dollar, followed by the British pound.
For the years ended December 31, 2024, 2023 and 2022, we reported a net foreign currency transaction loss of $1 million, $1 million and $2 million, respectively.
For the years ended December 31, 2025, 2024 and 2023, we reported a net foreign currency transaction loss of $2 million, $1 million and $1 million, respectively.
The Canadian dollar and Australian dollar decreased in relation to the U.S. dollar by 1% while the British pound increased in relation to the U.S dollar by approximately 3%. We utilized a sensitivity analysis to measure the potential impact on earnings based on a hypothetical 10% change in foreign currency rates.
The Canadian dollar decreased in relation to the U.S. dollar by 2% while the British pound increased in relation to the U.S. dollar by approximately 3%. We utilized a sensitivity analysis to measure the potential impact on earnings based on a hypothetical 10% change in foreign currency rates.
Because we operate globally and approximately one-fourth of our 2024 net sales were outside the U.S., foreign currency exchange rates can impact our financial position, results of operations and competitive position.
Because we operate globally and approximately 19% of our 2025 net sales were outside the U.S., foreign currency exchange rates can impact our financial position, results of operations and competitive position.
Our net assets as well as our revenues and costs and expenses denominated in foreign currencies, expose us to the risk of fluctuations in foreign currency exchange rates against the U.S. dollar.
Foreign Currency Exchange Rate Risk We have operations in foreign countries and transact business globally in multiple currencies. Our net assets as well as our revenues, costs and expenses denominated in foreign currencies expose us to the risk of fluctuations in foreign currency exchange rates against the U.S. dollar.
Foreign currency exchange rate fluctuations generally do not materially affect our earnings since the functional currency is typically the local currency; however, our operations also have net assets not denominated in their functional currency, which exposes us to changes in foreign currency exchange rates that impact our net income as foreign currency transaction gains and losses.
During 2025, we reported a net foreign currency translation gain of $27 million, after the reclassification of accumulated foreign currency translation losses of approximately $12 million related to the substantial liquidation of certain foreign subsidiaries. 52 Foreign currency exchange rate fluctuations generally do not materially affect our earnings since the functional currency is typically the local currency; however, our operations also have net assets not denominated in their functional currency, which exposes us to changes in foreign currency exchange rates that impact our net (loss) income as foreign currency transaction gains and losses.
We may enter into derivative financial instrument transactions to manage or reduce market risk but do not enter into derivative financial instrument transactions for speculative purposes. We do not currently have any material outstanding derivative instruments. See Note 15 “Derivative Financial Instruments” of the Notes to Consolidated Financial Statements (Part IV, Item 15 of this Form 10-K) for additional information.
We may enter into derivative financial instrument transactions to manage or reduce market risk but do not enter into derivative financial instrument transactions for speculative purposes. We do not currently have any material outstanding derivative instruments. A discussion of our primary market risk exposure in financial instruments is presented below.
A 10% change from the levels experienced during 2024 of the U.S. dollar relative to foreign currencies that affected the Company would have resulted in $1 million change in net income for 2024. Commodity Steel Pricing Our business is sensitive to steel prices, which can impact our product pricing, with steel tubular prices generally having the highest degree of sensitivity.
A 10% change from the levels experienced during 2025 in the U.S. dollar relative to foreign currencies that affected the Company would have resulted in a $2 million change in net (loss) income for 2025. Interest Rate Risk As of December 31, 2025, all borrowings outstanding under our senior secured revolving credit facility bore interest at floating rates.
Removed
A discussion of our primary market risk exposure in financial instruments is presented below. Foreign Currency Exchange Rate Risk We have operations in foreign countries and transact business globally in multiple currencies.
Added
Borrowings under this facility may be made as either base rate loans or non-base rate loans, each of which accrues interest based on a benchmark rate plus an applicable margin. The applicable margin varies based on our Fixed Charge Coverage Ratio, ranging from 0.25% to 0.75% for base rate loans and 1.25% to 1.75% for non-base rate loans.
Removed
During 2024, we reported a net foreign currency translation loss of $8 million, after the reclassification of accumulated foreign currency translation losses of approximately $6 million related to the substantial liquidation of certain foreign subsidiaries.
Added
The revolving credit facility includes rate structures tied to prevailing market indices such as U.S. base rates and non-base rate (e.g., SOFR-based) reference rates. Because interest rates applicable to our borrowings fluctuate with changes in these benchmark rates, our interest expense is sensitive to short-term rate movements.
Removed
“Exhibits, Financial Statement Schedules.” ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOU NTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None.
Added
Based on the amounts outstanding under our revolving credit facility as of December 31, 2025, a 1% increase in the underlying benchmark rate would result in an increase in our annual interest expense of approximately $4 million, assuming borrowing levels remained constant for an entire year.
Added
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Attached hereto and a part of this report are financial statements and supplementary data listed in Item 15. “Exhibits, Financial Statement Schedules.”

Other DNOW 10-K year-over-year comparisons