SecProbe.io

March 26, 2014

Via E -mail
Mr. R aymond W. Chang
Vice President and General Counsel
NOW Inc.
7402 North Eldridge Parkway
Houston , Texas  77041

Re: NOW Inc.
Registration Statement on Form 10-12B
Filed February 26, 2014
  File No.  1-36325

Dear Mr. Chang :

We have reviewed your filing an d have the following comments.  In some of our
comments, we may ask you to provide us with information so we may better understand your
disclosure.

Please respond to this letter within ten business days by amending your filing, by
providing the requested information, or by advising us when you will provide the requested
response.   If you do not believe our comments apply t o your facts and circumstances or do not
believe an amendment is appropriate, please tell us why in your response.

After reviewing any amendment to your filing and the information you provide in
response to these  comments, we may have  additional comment s.

Registration Statement on Form 10 -12B

General

1. We note your statement in several places in the document that you will provide in
subsequent amendments certain information, such as information regarding your
compensation programs, the description o f indebtedness and terms of your credit facility,
and the treatment of outstanding N ational Oilwell Varco (“NOV”)  equity awards and
stock options.  Please file all omitted exhibits and provide other omitted disclosure as
soon as possible.  We will need ade quate time to review and, if necessary, comment upon
your disclosure.

Raymond W. Chang
NOW Inc.
March 26, 2014
Page 2

 Information Statement

Our Competitive Strengths, page 6

2. We note your disclosure here that you are one of the “global market leaders ” in the
distribution of MRO products to the energy market.  You make similar disclosures
regarding your leadership position elsewhere in your information statement, including on
pages 7 and 45.   Please provide the basis for these statements .

Our Business  Strategy, page 7

Questions and Answers about the Separation and the Distribution, page 9

3. Please add a question and answer discussing  the estimated costs you expect to incur  in
connection with the separation and distribution .

Risks Relating to Our Business, page 21

4. We note your disclosure on page 24 under the risk factor titled “If steel prices rise...” that
you manufacture many of your products from steel.  To help the investor assess the
magnitude of this risk, please disclose the proportion of overall revenue derived  from
your sale of products  manufactured from steel .

Cautionary Statement Concerning Forward -Looking Statements, page 32

5. It does not appear appropriate to suggest that the word ''will'' identifies the uncertainties
associated with forward -looking statements.  Please revise accordingly.

Management’s Discussion and Analysis, page 62

6. Your MD&A should provide a disclosure of all material trends  or uncertainties that have
reasonably  affected or are likely to impact your operating resul ts.  In this regard, please
consider supplementing your discussion of rig counts and hydrocarbon prices with a
discussion of the trends in steel prices.  We note your related disclosure  on pages 24, 25,
66, and 79.

Results of Operations, page 66

7. Please revise and expand your disclosure for each period presented to quantify underlying
activities that generated income statement variances.  For example, please quantify the
year-over-year changes in revenues and costs attributable to the Wilson and CE  Franklin
acquisitions versus other factors, if material.  Your revised disclosure should address
causal factors impacting each income statement line item.  Please also consider this

Raymond W. Chang
NOW Inc.
March 26, 2014
Page 3

 comment as it relates to the pro forma analysis beginning on page 70 of y our filing.
Refer to Item 303(A)(3) of Regulation S -K and related guidance.

8. Please expand this section to include a discussion of your operating expenses .  In this
regard, we note the disclosure on page F -4 that you incurred $3.9 billion in cost of
revenue during the fiscal year ended December 31, 2013. Describe any significant
components of your expenses that are necessary to an understanding of your operating
results.

9. Your discussion under this section s hould provide enough detail to allow investors to
gauge whether your past operating results are indicative of future performance.  In this
regard, we  note your attribution of operating profit percentage gains on page 69 to
“synergies realized in the business.”  Please explain the nature of these synergies.

Pro Forma Results of Operations , page 70

10. We note that you have provided a supplemental discussion regarding operating results
based upon pro forma information.   Please expand your disclosure to explain why you
believe the presentation of a pro forma discussion is useful and identify any potential
risks asso ciated with using such a presentation.  In addition, please provide narrative
disclosure explaining the adjustments made to calculate the pro forma information
presented .

11. In connection with the preceding comment , we note that you have provided pro forma
analysis comparing the fiscal years ended December 31, 2012 and December 31, 2011.
However, it appears that a n analy sis for these periods should be limited to a discussion of
pro forma revenue and costs of revenue.  Please revise your disclosure accordingly.

Non-GAAP Financial M easures and Reconciliations, page 73

12. Please revise your disclosure to explain the nature of  the “Other costs” that are added to
GAAP operating profit as part of the non -GAAP reconciliation presented in your filing.
Refer to Item 10(e)(i)(B) of Regulation S -K.

Liquidity and Capital Resources, page 74

13. Please expand your discussion of capital expenditures to disclose how much you have
spent and anticipate spending in 2014 and how you intend to finance such expenditures
following your separation from NOV .

14. You state that “ Net cash flows provided by operat ing activities in 2013 were $317
million, up from $12 million used in 2012 driven by net income of $147 million, a $23
million reduction in receivables as a result of improved collections and a decrease of
$158 million in inventory as management actively r educed inventory levels in line with

Raymond W. Chang
NOW Inc.
March 26, 2014
Page 4

 lower market volumes.”  Please expand your discussion to better explain the variance in
net cash provided by operating activities in 2013 and the net cash used in operating
activities in 2012.  In this regard, we note t hat net income in 2012 was $108 million, such
that the difference in net income, reduction in receivables and decrease in inventory
would not adequately explain the $329 million variance between 2012 and 2013.

15. Once you enter into the credit facility contemplated in the “Description of Indebtedness”
section on page 95, please be sure to expand this section to discuss any terms or
restrictive covenants that may have a material impact on your ability to fulfill you r
commitments for capital expenditures .

16. You state on page 75 your belief that “cash on hand, cash generated from operations and
amounts available under our credit facilities will be sufficient to fund operations .  .  .”
As it appears you currently intend to secure only  one credit facility, p lease  revise this
statement.

Certain Relationships and Related -Party Transactions, page 86

Financial Statements of NOW, Inc.

Combined Statements of Income, page F -4

17. Disclosure in your filing regarding your Energy Branches states that you have a team of
technical professionals wh o provide expertise in applied products, and applications, such
as artificial lift systems, coatings, electrical products, gas meter runs, and valve actuation.
Please tell us whether  you offer services to your customers and explain your
consideration of t he requirement to separately present revenues from the sale of tangible
products and revenues from services on the face of your statement of income.   Refer to
Rules 5 -03(b)(1) and 5 -03(b)(2) of Regulation S -X.

Note 2 - Summary of Significant Accounting Policies, page F -8

Revenue Recognition, page F -10

18. Please revise to provide revenue recognition policy disclosure tailored to your business.
Your revised policy should address your policies with regard to both products and
services offered to your custom ers.  With regard to product sales, please address sales
from supply stores, sales from your website, and sales from dedicated customer on -site
locations.  Refer to SAB Topic 13 .

Note 9 – Commitments and C ontingencies, page F -15

19. You refer here to “the specific case referred to above ,” but it is not clear to which case
you are referring.  Please revise your disclosure for clarity.

Raymond W. Chang
NOW Inc.
March 26, 2014
Page 5

Note 12 – Business Segments and Primary End -Market, page F -21

20. We note that you have provided disclosure of revenues by primary end -market  (i.e.,
Energy Branches and Supply C hain locations ).  Please provide us with your analysis of
FASB ASC 280 -10-50-40 to explain your basis for grouping multiple products offered to
your customers.   In this connection, it appears that simil ar products are offered by both
your Energy Branches and Supply C hain locations  such as pipe, valves, fittings, tools ,
and safety supplies.

We urge all persons who are responsible for the accuracy and adequacy of the disclosure
in the filing to be certain  that the filing includes the information the Securities Exchange Act of
1934 and all applicable Exchange Act rules require.   Since the company and its management are
in possession of all facts relating to a company’s disclosure, they are responsible for t he accuracy
and adequacy of the disclosures they have made.

 In responding to our comments, please provide  a written statement from the company
acknowledging that:

 the company is responsible for the adequacy and accuracy of the disclosure in the filing ;

 staff comments or changes to disclosure in response to staff comments do not foreclose
the Commission from taking any action with respect to the filing; and

 the company may not assert staff comments as a defense in any proceeding initiated by
the Commi ssion or any person under the federal securities laws of the United States.

You may contact Sandra Eisen  at (202) 551 -3864 or Ethan Horowitz  at (202) 551 -3311  if
you have questions regarding comments on the financial statements and related matters .  Pleas e
contact PJ Hamidi at (202) 551 -3421 , or, in his absence, the undersigned  at (202) 551 -3611 with
any other questions.

Sincerely,

 /s/ A.N. Parker

Anne Nguyen Parker
Branch Chief
cc: J. Eric Johnson
 Locke Lord LLP