DNOW Inc.

The effective tax rates for the three and nine months ended September 30, 2025, were 21.9% and 22.3%, respectively, compared to 40.9% and 29.8%, respectively, for the corresponding periods of 2024. In general, the Company's effective tax rate differs from the U.S. statutory rate due to recurring items, such as differing tax rates on income earned in foreign jurisdictions, nondeductible expenses, and state income taxes. For the three and nine months ended September 30, 2024, the effective tax rates were also impacted by foreign currency translation losses and other charges incurred as a result of substantially completing the liquidation of certain foreign subsidiaries with no associated tax benefit. The effective tax rates for the three and nine months ended September 30, 2025, were lower than the effective tax rates for the three and nine months ended September 30, 2024, primarily due to the aforementioned foreign currency translation losses and other charges incurred in 2024 which did not repeat in the corresponding periods in 2025, as well as due to an increase in tax benefits related to stock-based compensation and utilization of U.S. foreign tax credits.

The Company is subject to taxation in the U.S., various states, and foreign jurisdictions. The Company has significant operations in the U.S. and Canada and to a lesser extent in various other international jurisdictions. Tax years that remain subject to examination vary by legal entity but are generally open in the U.S. for the tax years ending after 2020 and outside the U.S. for the tax years ending after 2019.

The One Big Beautiful Bill Act (the “OBBBA”) was signed into law in the U.S. on July 4, 2025. The OBBBA contains several tax law changes for corporations, which the Company determined do not have a material impact on its tax provision.